`[Federal Register Volume 80, Number 73 (Thursday, April 16, 2015)]
[Proposed Rules]
[Pages 20690-20966]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-05530]



[[Page 20689]]

Vol. 80

Thursday,

No. 73

April 16, 2015

Part III





 Department of Labor





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Employment and Training Administration





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20 CFR Parts 601, 651, 652 et al.





 Workforce Innovation and Opportunity Act; Notice of Proposed 
Rulemaking; Proposed Rules

  Federal Register / Vol. 80 , No. 73 / Thursday, April 16, 2015 / 
Proposed Rules  

[[Page 20690]]


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DEPARTMENT OF LABOR

Employment and Training Administration

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

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


Workforce Innovation and Opportunity Act; Notice of Proposed 
Rulemaking

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

ACTION: Notice of Proposed Rulemaking (NPRM).

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SUMMARY: The Department of Labor (DOL) is proposing, through 
rulemaking, to implement titles I and III of the Workforce Innovation 
and Opportunity Act of 2014 (WIOA). Through these regulations, the 
Department proposes to implement job training system reform and 
strengthen the workforce investment system of the nation to put 
Americans, particularly those individuals with barriers to employment, 
back to work and make the United States more competitive in the 21st 
Century. This proposed rule intends to provide guidance for statewide 
and local workforce investment systems that increase the employment, 
retention and earnings of participants, and increase occupational skill 
attainment by participants, and as a result, improve the quality of the 
workforce, reduce welfare dependency, and enhance the productivity and 
competitiveness of the nation.

DATES: To be ensured consideration, comments must be submitted in 
writing on or before June 15, 2015.

ADDRESSES: You may submit comments, identified by docket number ETA-
2015-0001, for Regulatory Information Number (RIN) 1205-AB73, by one of 
the following methods:
    Federal e-Rulemaking Portal: http://www.regulations.gov. Follow the 
Web site instructions for submitting comments.
    Mail and hand delivery/courier: Written comments, disk, and CD-ROM 
submissions may be mailed to Adele Gagliardi, Administrator, Office of 
Policy Development and Research, U.S. Department of Labor, 200 
Constitution Avenue NW., Room N-5641, Washington, DC 20210.
    Instructions: Label all submissions with ``RIN 1205-AB73.''
    Please submit your comments by only one method. Please be advised 
that the Department will post all comments received that related to 
this NPRM on http://www.regulations.gov without making any change to 
the comments or redacting any information. The http://www.regulations.gov Web site is the Federal e-rulemaking portal and all 
comments posted there are available and accessible to the public. 
Therefore, the Department recommends that commenters remove personal 
information such as Social Security Numbers (SSNs), personal addresses, 
telephone numbers, and email addresses included in their comments as 
such information may become easily available to the public via the 
http://www.regulations.gov Web site. It is the responsibility of the 
commenter to safeguard personal information.
    Also, please note that due to security concerns, postal mail 
delivery in Washington, DC may be delayed. Therefore, the Department 
encourages the public to submit comments on http://www.regulations.gov.
    Docket: All comments on this proposed rule will be available on the 
http://www.regulations.gov Web site and can be found using RIN 1205-
AB73. The Department also will make all the comments it receives 
available for public inspection by appointment during normal business 
hours at the above address. If you need assistance to review the 
comments, the Department will provide appropriate aids such as readers 
or print magnifiers. The Department will make copies of this proposed 
rule available, upon request, in large print and electronic file on 
computer disk. To schedule an appointment to review the comments and/or 
obtain the proposed rule in an alternative format, contact the Office 
of Policy Development and Research (OPDR) at (202) 693-3700 (this is 
not a toll-free number). You may also contact this office at the 
address listed below.
    Comments under the Paperwork Reduction Act (PRA): In addition to 
filing comments with ETA, persons wishing to comment on the information 
collection (IC) aspects of this rule may send comments to: Office of 
Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL-ETA, 
Office of Management and Budget, Room 10235, 725 17th Street NW., 
Washington, DC 20503, Fax: 202-395-6881 (this is not a toll-free 
number), email: [email protected].

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

SUPPLEMENTARY INFORMATION: 

Preamble Table of Contents

I. Executive Summary
II. Acronyms and Abbreviations
III. Background
    A. Workforce Innovation and Opportunity Act Principles
    B. Major Changes From Current Workforce Investment Act of 1998
    C. Rule Format
    D. Legal Basis
IV. Section-by-Section Discussion of Proposal
    A. Part 603--Federal-State Unemployment Compensation Program
    B. Part 675--Introduction to the Regulations for the Workforce 
Innovation and Opportunity Systems Under Title I of the Workforce 
Innovation and Act
    C. Part 679--Statewide and Local Governance of the Workforce 
Innovation and Opportunity System Under Title I of the Workforce 
Innovation and Opportunity Act
    D. Part 680--Adult and Dislocated Worker Activities Under Title 
I of the Workforce Innovation and Opportunity Act
    E. Part 681--Youth Activities Under Title I of the Workforce 
Innovation and Opportunity Act
    F. Part 682--Statewide Activities Under Title I of the Workforce 
Innovation and Opportunity Act
    G. Part 683--Administrative Provisions Under Title I of the 
Workforce Innovation and Opportunity Act
    H. Part 684--Indian and Native American Programs Under Title I 
of the Workforce Innovation and Opportunity Act
    I. Part 685--National Farmworker Jobs Program Under Title I of 
the Workforce Innovation and Opportunity Act
    J. Part 686--The Job Corps Under Title I of the Workforce 
Innovation and Opportunity Act
    K. Part 687--National Dislocated Worker Grants
    L. Part 688--Provisions Governing the YouthBuild Program
    M. Part 651--General Provisions Governing the Federal-State 
Employment Service System
    N. Part 652--Establishment and Functioning of State Employment 
Services
    O. Part 653--Services of the Employment Service System
    P. Part 654--Special Responsibilities of the Employment Service 
System
    Q. Part 658--Administrative Provisions Governing the Employment 
Service System
V. Rulemaking Analyses and Notices
    A. Executive Orders 12866 and 13563: Regulatory Planning and 
Review
    B. Paperwork Reduction Act
    C. Executive Order 13132 (Federalism)
    D. Unfunded Mandates Reform Act of 1995
    E. Plain Language
    F. Assessment of Federal Regulations and Policies on Families
    G. Regulatory Flexibility Act

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    H. Small Business Regulatory Enforcement Fairness Act of 1996
    I. Executive Order 13175 (Indian Tribal Governments)
    J. Executive Order 12630 (Government Actions and Interference 
With Constitutionally Protected Property Rights)
    K. Executive Order 12988 (Civil Justice Reform)
    L. Executive Order 13211 (Energy Supply)

I. Executive Summary

    On July 22, 2014, President Obama signed the Workforce Innovation 
and Opportunity Act (WIOA) (Pub. L. 113-128), comprehensive legislation 
that reforms and modernizes the public workforce system. It reaffirms 
the role of the public workforce system, and brings together and 
enhances several key employment, education, and training programs. WIOA 
provides resources, services, and leadership tools for the workforce 
system to help individuals find good jobs and stay employed and 
improves employer prospects for success in the global marketplace. It 
ensures that the workforce system operates as a comprehensive, 
integrated and streamlined system to provide pathways to prosperity for 
those it serves and continuously improves the quality and performance 
of its services.
    The Department of Labor is publishing this NPRM to implement those 
provisions of WIOA that affect the core programs under titles I and 
III, and the Job Corps and national programs authorized under title I 
which will administered by the Department. In addition to this NPRM, 
the Departments of Education (ED) and Labor (DOL) are jointly 
publishing an NPRM to implement those provisions of WIOA that affect 
all of the WIOA core programs (titles I-IV) and which will have to be 
jointly overseen and administered by both Departments. Readers should 
note that there are a number of cross-references to the Joint NPRM 
published by ED and DOL, with particular focus on those provisions in 
the Joint NPRM that have to do with performance reporting among all the 
core programs. Finally, this NPRM has been structured so that the 
proposed Code of Federal Regulations (CFR) parts will align with the 
Joint NPRM CFR parts in once all of the proposed rules of have been 
finalized.
    WIOA seeks to deliver a broad array of integrated services to 
individuals seeking jobs and skills training, as well as employers 
seeking skilled workers by improving the workforce system, more closely 
aligning it with regional economies and strengthening the network of 
about 2,500 one-stop centers. Customers must have access to a seamless 
system of high-quality services through coordination of programs, 
services and governance structures. The Act builds closer ties among 
key workforce partners--business leaders, workforce boards, labor 
unions, community colleges, non-profit organizations, youth-serving 
organizations, and State and local officials--in striving for a more 
job-driven approach to training and skills development.
    WIOA will help job seekers and workers access employment, 
education, training, and support services to succeed in the labor 
market and match employers with the skilled workers they need to 
compete in the global economy. The purposes of WIOA described in the 
Act include:
     Increasing access to and opportunities for the employment, 
education, training, and support services that individuals need, 
particularly those with barriers to employment.
     Supporting the alignment of workforce investment, 
education, and economic development systems, in support of a 
comprehensive, accessible, and high-quality workforce development 
system.
     Improving the quality and labor market relevance of 
workforce investment, education, and economic development efforts.
     Promoting improvement in the structure and delivery of 
services.
     Increasing the prosperity of workers and employers.
     Providing workforce development activities that increase 
employment, retention, and earnings of participants and that increase 
post-secondary credential attainment and as a result, improve the 
quality of the workforce, reduce welfare dependency, increase economic 
self-sufficiency, meet skill requirements of employers, and enhance 
productivity, and competitiveness of the nation.
    WIOA is complemented by the groundwork laid by the Administration-
wide review of employment, education, and training programs to ensure 
Federal agencies do everything possible to prepare ready-to-work-
Americans with ready-to-be-filled jobs. The review identified seven 
priorities for these Federal programs:
     Work up-front with employers to determine local or 
regional hiring needs and design training programs that are responsive 
to those needs;
     Offer work-based learning opportunities with employers--
including on-the-job training, internships, and pre-apprenticeships and 
registered apprenticeships--as training paths to employment;
     Make better use of data to drive accountability, inform 
what programs are offered and what is taught, and offer user-friendly 
information for job seekers to choose what programs and pathways work 
for them and are likely to result in a job;
     Measure and evaluate employment and earnings outcomes;
     Promote a seamless progression from one educational 
stepping stone to another, and across work-based training and 
education, so individuals' efforts result in progress;
     Break down barriers to accessing job-driven training and 
hiring for any American who is willing to work, including access to 
supportive services and relevant guidance; and
     Create regional collaborations among American Job Centers, 
education institutions, labor, and nonprofits.
    As WIOA implementation progresses, success in accomplishing the 
purposes of WIOA at the State, local, and regional levels, will be 
assessed by whether:
     One-stop centers are recognized as a valuable community 
resource and are known for high quality, comprehensive services for 
customers.
     The core programs and one-stop partners provide seamless, 
integrated customer service.
     Program performance, labor market and related data drive 
policy and strategic decisions and inform customer choice.
     Youth programs reconnect out-of-school youth (OSY) to 
education and jobs.
     Job seekers access quality career services either online 
or in a one-stop career center through a ``common front door'' that 
connects them to the right services.
     One-stop centers facilitate access to high quality, 
innovative education and training.
     Services to businesses are robust and effective, meeting 
businesses' workforce needs across the business lifecycle.

II. Acronyms and Abbreviations

AEFLA Adult Education and Family Literacy Act
ALJ Administrative Law Judge
ANVSA Alaska Native Village Service Area
AOP Agricultural Outreach Plan
ARS Agricultural Recruitment System
AWOL Absent Without Official Leave
BLS Bureau of Labor Statistics
CBO Community-based organization
CCC Civilian Conservation Center
CEO Chief elected official
CFR Code of Federal Regulations
Complaint System Employment Service and Employment-Related Law 
Complaint System

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COSO Committee of Sponsoring Organizations of the Treadway 
Commission
CTT Career Technical Training
DINAP Division of Indian and Native American Programs
DOL Department of Labor
ED Department of Education
E.O. Executive Order
EO Equal opportunity
ES Employment Service
ESA Employment Standards Administration
ESARS Employment Security Automated Reporting System
ETA Employment and Training Administration
ETP Eligible training provider
ETPL Eligible training provider list
FECA Federal Employees Compensation Act
FEIN Federal employer identification number
FEMA Federal Emergency Management Agency
FERPA Family Educational Rights and Privacy Act
FLSA Fair Labor Standards Act
FOA Funding Opportunity Announcement
FR Federal Register
GED General Educational Development
GIS Geographic information system
GPRA Government Performance and Results Act
HEARTH Homeless Emergency Assistance and Rapid Transition to Housing 
Act of 2009
HHS Department of Health and Human Services
HSD High School Diploma
HUD U.S. Department of Housing and Urban Development
IC Information collection
IEVS Income and Eligibility Verification System
INA Indian and Native American
ISDEAA Indian Self-Determination and Education Assistance Act
ISY In-school youth
ITA Individual Training Account
JIS Job Information Service
JS Job Service
JTPA Job Training Partnership Act
JVSG Jobs for Veterans State Grants
LEHD Longitudinal Employer-Household Dynamics
LEP Limited English proficiency
MOU Memorandum of Understanding
MSFW Migrant and Seasonal Farmworker
NAACP National Association for the Advancement of Colored People
NAFTA North American Free Trade Agreement
NAICS North American Industry Classification System
NDWG National Dislocated Worker Grant
NEG National Emergency Grant
NFJP National Farmworker Jobs Program
NICRA Negotiated Indirect Cost Rate Agreement
NPRM Notice of Proposed Rulemaking
OALJ Office of Administrative Law Judges
OBS On-board strength
OFLC Office of Foreign Labor Certification
OJT On-the-job training
OMB Office of Management and Budget
OMS Outcome Measurement System
OPDR Office of Policy Development and Research
OSHA Occupational Safety and Health Administration
OSY Out-of-school youth
OTSA Oklahoma Tribal Service Area
OWI Office of Workforce Investment
PART Program Assessment and Rating Tool
PBP Program Budget Plan
PRA Paperwork Reduction Act of 1995
PRH Policy and Requirements Handbook
Pub. L. Public Law
PY Program year
RFA Regulatory Flexibility Act
RFP Requests for proposals
Richey Order Judge Richey Court Order
RIN Regulatory Information Number
SBA Small Business Administration
SBREFA Small Business Regulatory Enforcement Fairness Act of 1996
SDA Service delivery area
sec. Section of a Public Law or the United States Code
SESA State Employee Security Act
SMA State Monitor Advocate
SOC Standard Occupational Classification
SNAP Supplemental Nutrition Assistance Program
SSA Social Security Act
SSN Social Security Number
State Board State Workforce Development Board
STAWRS Simplified Tax and Wage Reporting System
SWA State Workforce Agency
TAA Trade Adjustment Assistance
TANF Temporary Assistance for Needy Families
TEGL Training and Employment Guidance Letter
TEN Training and Employment Notice
UC Unemployment Compensation
UCX Unemployment Compensation for Ex-service members
UI Unemployment insurance
U.S.C. United States Code
VA Department of Veterans Affairs
VETS Veterans' Employments and Training Service
VR Vocational rehabilitation
Wagner-Peyser Wagner-Peyser Act of 1933
WARN Worker Adjustment and Retraining Notification
WDB Workforce Development Board
WHD Wage and Hour Division
WIA Workforce Investment Act of 1998
WIAC Workforce Information Advisory Council
WIC Workforce Information Council
WIOA Workforce Innovation and Opportunity Act of 2014
WLMI Workforce and Labor Market Information
WLMIS Workforce and Labor Market Information System
WRIS Wage Record Interchange System

III. Background

A. Workforce Innovation and Opportunity Act Principles

    On July 22, 2014, President Obama signed the WIOA, the first 
legislative reform of the public workforce system in more than 15 
years, which passed Congress by a wide bipartisan majority. WIOA 
supersedes the Workforce Investment Act of 1998 (WIA) and amends the 
Adult Education and Family Literacy Act (AEFLA), the Wagner-Peyser Act, 
and the Rehabilitation Act of 1973. WIOA presents an extraordinary 
opportunity for the workforce system to accelerate its transformational 
efforts and demonstrate its ability to improve job and career options 
for our citizens through an integrated, job-driven public workforce 
system that links diverse talent to our nation's businesses. It 
supports the development of strong, vibrant regional economies where 
businesses thrive and people want to live and work.
    WIOA reaffirms the role of the customer-focused one-stop delivery 
system, a cornerstone of the public workforce investment system, and 
enhances and increases coordination among several key employment, 
education, and training programs. Most provisions in WIOA take effect 
on July 1, 2015, the first full program year (PY) after enactment, 
although the new State plans and performance accountability system take 
effect July 1, 2016. Title IV, however, took effect upon enactment.
    WIOA presents an extraordinary opportunity for the workforce system 
to accelerate its transformational efforts and demonstrate its ability 
to improve job and career options for our citizens through an 
integrated, job-driven public workforce system that links diverse 
talent to our nation's businesses. It supports the development of 
strong, vibrant regional economies where businesses thrive and people 
want to live and work.
    WIOA is designed to help job seekers access employment, education, 
training, and support services to succeed in the labor market and to 
match employers with the skilled workers they need to compete in the 
global economy. WIOA has six main purposes: (1) Increasing access to 
and opportunities for the employment, education, training, and support 
services for individuals, particularly those with barriers to 
employment; (2) supporting the alignment of workforce investment, 
education, and economic development systems in support of a 
comprehensive, accessible, and high-quality workforce development 
system; (3) improving the quality and labor market relevance of 
workforce investment, education, and economic development efforts; (4) 
promoting improvement in the structure and delivery of services; (5) 
increasing the prosperity of workers and employers; and (6) providing 
workforce development activities that increase

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employment, retention, and earnings of participants and that increase 
post-secondary credential attainment and as a result, improve the 
quality of the workforce, reduce welfare dependency, increase economic 
self-sufficiency, meet skill requirements of employers, and enhance 
productivity and competitiveness of the nation.
    Beyond achieving the requirements of the new law, WIOA offers an 
opportunity to continue to modernize the workforce system, and achieve 
key hallmarks of a customer centered workforce system, where the needs 
of business and workers drive workforce solutions, where one-stop 
career centers and partners provide excellent customer service to job 
seekers and businesses, where the workforce system pursues continuous 
improvement through evaluation and data-driven policy, and where the 
workforce system supports strong regional economies.
    Regulations and guidance implementing titles I and III are issued 
by DOL, with the exception of joint regulations that will be issued by 
DOL and ED on the provisions in title I relating to unified and 
combined planning, performance, and the one-stop delivery system. 
Regulations and guidance on implementing titles II and IV will be 
issued by ED.
    WIOA retains much of the structure of WIA, but with critical 
changes to advance greater coordination and alignment. Under title I-A, 
each State will be required to develop a single, unified strategic plan 
that is applicable to four core workforce development programs. The 
core programs consist of (1) the adult, dislocated worker, and youth 
formula programs administered by the Department under title I of WIOA; 
(2) the Adult Education and Family Literacy program administered by ED 
under title II of WIOA; (3) the Wagner-Peyser Act employment services 
(ES) program administered by the Department, as amended by title III of 
WIOA; and (4) the vocational rehabilitation (VR) programs under title I 
of the Rehabilitation Act administered by ED, as amended by title IV of 
WIOA. In addition to core programs, WIOA provides States the 
opportunity to include other key one-stop partner programs such as the 
Supplemental Nutrition Assistance Program (SNAP), Unemployment 
Insurance (UI), Temporary Assistance for Needy Families (TANF), and 
Perkins Career Technical Education in a Combined State Plan. The law 
also includes a common performance accountability system applicable to 
all of the core programs.
    The remainder of WIOA title I authorizes the adult, dislocated 
worker, and youth formula programs; the State and local workforce 
development (formerly investment) boards; the designation of regions 
and local areas; local plans; the one-stop system; national programs, 
including Job Corps, YouthBuild, Indian and Native American programs, 
and Migrant and Seasonal Farmworker (MSFW) programs; technical 
assistance and evaluations; and general administrative provisions 
currently authorized under title I of WIA. Title II retains and amends 
the Adult Education and Family Literacy Program currently authorized 
under title II of WIA. Title III contains amendments to the Wagner-
Peyser Act relating to the ES and Workforce and Labor Market 
Information System (WLMIS), and requires the Secretary to establish a 
Workforce Information Advisory Council (WIAC). Title IV contains 
amendments to the Rehabilitation Act of 1973, which were also included 
under title IV of WIA; it also requires the Secretary of Labor to 
establish an Advisory Committee on Increasing Competitive Integrated 
Employment for Individuals with Disabilities. Finally, title V contains 
general provisions similar to the provisions applicable under title V 
of WIA as well as the effective dates and transition provisions.
    Since the enactment of WIOA, the Department has used a variety of 
means to coordinate with other Federal agencies that have roles and 
responsibilities under the Act. The Department works closely with staff 
at ED and the Department of Health and Human Services (HHS) on all 
shared policy and implementation matters. Key areas of collaboration 
include the Unified State Plan, performance reporting, one-stop service 
delivery, and services to disconnected youth and to individuals with 
disabilities. WIOA created an opportunity to enhance coordination and 
collaboration across other Federal programs through the Combined State 
Plan and the Department meets with the other Federal agencies regarding 
those plans.
    Before publishing the NPRM, the Department solicited broad input 
through a variety of mechanisms including:
     Issued Training and Employment Notice (TEN) No. 05-14 to 
notify the public workforce system that WIOA was enacted, accompanied 
by a statutory implementation timeline, a fact sheet that identified 
key reforms to the public workforce system, and a list of frequently 
asked questions.
     Issued TEN No. 06-14 to announce a series of webinars to 
engage WIOA stakeholders in implementation of WIOA.
     Issued TEN No. 12-14 to provide guidance to States and 
other recipients of funds under title I of WIA on the use and reporting 
of PY 2014 funds for planning and implementation activities associated 
with the transition to WIOA.
     Established a WIOA Resource Page (www.doleta.gov/WIOA) to 
provide updated information related to WIOA implementation to the 
public workforce system and stakeholders;
     Established a dedicated email address for the public 
workforce system and stakeholders to ask questions and offer ideas 
related to WIOA ([email protected]);
     Conducted, in conjunction with ED and HHS outreach calls, 
webinars, and stakeholder and in-person town halls in each ETA region. 
The Department and its Federal partners hosted 10 town halls across the 
country, reaching over 2,000 system leaders and staff representing core 
programs and one-stop partners, employers, and performance staff. This 
included a town hall with Indian and Native American leaders and 
membership organizations serving Indians and Native Americans, 
Hawaiians, and Alaskan Natives as well as a formal consultation with 
members of the Native American Employment and Training Advisory Council 
to the Secretary of Labor.
     Conducted readiness assessments to implement WIOA in all 
States and 70 local workforce areas to inform technical assistance.

B. Major Changes From Current Workforce Investment Act of 1998

    This section contains a summary of the major changes from the 
current WIA. As indicated above, WIOA retains much of the structure of 
WIA.
    Major changes in WIOA are:
     Aligns Federal investments to support job seekers and 
employers. The Act provides for States to prepare a single Unified 
State Plan that identifies a 4-year strategy for achieving the 
strategic vision and goals of the State for preparing an educated and 
skilled workforce and for meeting the skilled workforce needs of 
employers. States govern the core programs as one system assessing 
strategic needs and aligning them with service strategies to ensure the 
workforce system meets employment and skill needs of all workers and 
employers.
     Streamlines the governing bodies that establish State, 
regional and local workforce investment priorities. WIOA makes State 
and Local Workforce

[[Page 20694]]

Development Boards more agile and well positioned to meet local and 
regional employers' workforce needs by reducing the size of the boards 
and assigning them additional responsibilities to assist in the 
achievement of the State and local strategic workforce vision and 
goals. The State Workforce Development Boards (State Boards) continue 
to have a majority of business representation and a business chair that 
work for all workers and jobseekers, including low-skilled adults, 
youth, and individuals with disabilities, while they foster innovation, 
and ensure streamlined operations and service delivery excellence.
     Creates a common performance accountability system and 
information for job seekers and the public. WIOA ensures that Federal 
investments in employment, education, and training programs are 
evidence-based and data-driven, and accountable to participants and the 
public. It establishes a performance accountability system that applies 
across the core programs, by generally applying six primary indicators 
of performance: entry into unsubsidized employment at two points in 
time, median earnings, attainment of post-secondary credentials, 
measurable skill gains, and effectiveness in serving employers.
     Fosters regional collaboration to meet the needs of 
regional economies. WIOA promotes alignment of workforce development 
programs with regional economic development strategies to meet the 
needs of local and regional employers.
     Enhances access to high quality services through the 
network of one-stop system. WIOA helps jobseekers and employers acquire 
the services they need in centers and online, clarifies the roles and 
responsibilities of the one-stop partner programs, adds the TANF 
program as a required one-stop partner unless the Governor objects, 
requires competitive selection of one-stop operators, and requires the 
use by the one-stop system of a common one-stop delivery identifier or 
brand that is to be developed by the Secretary of Labor.
     Improves services to individuals with disabilities. WIOA 
stresses physical and programmatic accessibility, including the use of 
accessible technology to increase individuals with disabilities' access 
to high quality workforce services.
     Makes key investments for disconnected youth. WIOA 
emphasizes services to disconnected youth to prepare them for 
successful employment by requiring that a minimum of 75 percent of 
youth formula program funds be used to help OSY, in contrast to the 30 
percent required under WIA. WIOA increases OSYs' access to WIOA 
services, including pre-apprenticeship opportunities that result in 
registered apprenticeship. It adds a requirement that at least 20 
percent of formula funds at the local level be used on work-based 
training activities such as summer jobs, on-the-job training (OJT), and 
apprenticeship.
     Helps Employers Find Workers with the Necessary Skills. 
WIOA contributes to economic growth and business expansion by ensuring 
the workforce system is job-driven--matching employers with skilled 
individuals. WIOA requires Local Boards to promote the use of industry 
and sector partnerships that include key stakeholders in an industry 
cluster or sector that work with public entities to identify and 
address the workforce needs of multiple employers.
    Additionally, successful implementation of many of the approaches 
called for within WIOA, such as career pathways and sector strategies, 
require robust relationships across programs and with businesses, 
economic development, education and training institutions, including 
community colleges and career and technical education, local entities, 
and supportive services agencies.

C. Rule Format

    The NPRM format reflects the Department's commitment to writing 
regulations that are reader-friendly. The Department has attempted to 
make this NPRM clear and easy to understand. To this end, the 
regulatory text is presented in a ``question and answer'' format and 
organized consistent with the Act. While the Department has provided 
cross-references to the statute(s), the Department also has included 
the Act's provisions in the answers for completeness.
    While the Department has anticipated many issues that may arise and 
provided appropriate directions, there are many other areas where the 
Department continues to weigh options. Thus, the Department raises 
questions throughout the preamble where the Department seeks additional 
information or where the Department is weighing options and seek 
comments.

D. Legal Basis

    On July 22, 2014, the President signed the Workforce Innovation 
Opportunity Act (WIOA) (Pub. L. 113-128) into law. WIOA repeals WIA (29 
U.S.C. 2801 et seq.). As a result, the WIA regulations no longer 
reflect current law. Section 503(f) of WIOA requires that the 
Department issue an NPRM and then a final rule that implements the 
changes WIOA makes to the public workforce system in regulations. 
Therefore, DOL seeks to develop and issue a NPRM that proposes to 
implement WIOA. The Department of Labor will issue regulations 
regarding the Section 188 Nondiscrimination provisions through separate 
rulemaking.

IV. Section-by-Section Discussion of Proposal

A. Part 603--Federal-State Unemployment Compensation Program Disclosure 
of Confidential Unemployment Compensation Information Under WIOA Sec. 
116

Relationship Between 20 CFR Part 603 and WIOA
    The Department is amending its regulations at 20 CFR part 603 to 
help States comply with the WIOA. WIOA requires that States use 
``quarterly wage records'' in assessing the performance of certain 
Federally-funded employment and training programs.
    States must make available performance reports for local areas and 
for eligible training providers (ETPs) under title I of the WIOA. WIOA 
also requires that States cooperate in evaluations, by the Departments 
of Labor and Education, of State programs overseen by those Federal 
agencies.
    To help States comply with these requirements, the Department has 
determined that it would be useful to more clearly and specifically, 
describe in unemployment compensation (UC) confidentiality regulations, 
the standards for disclosure between the State UC, workforce, and 
education systems. This proposal amends current regulations to clarify, 
in a limited fashion, those State government officials with whom the 
State may share certain confidential information in order to carry out 
requirements under the law. The regulations enumerate certain 
additional public officials who may access confidential State wage 
records that are the basis for the State's performance reporting. 
Ensuring such access to these State records would allow State agencies 
to better manage the information for the purpose of making Federally-
required reports on certain program outcomes, and to cooperate more 
effectively and be more informative with respect to Federal program 
evaluations.
    WIOA section (sec.) 116(i)(2) and proposed regulation Sec.  677.175 
(a) require State workforce, training, and education programs to use 
quarterly wage records to measure the progress of

[[Page 20695]]

the State on State and local performance accountability measures. Under 
WIA, the Department interpreted the reference to ``quarterly wage 
records'' in sec. 136(f)(2) to require States to use the confidential 
UC information in the employer-provided wage reports collected under 
sec. 1137 of the Social Security Act (SSA), 42 U.S.C. 1320b-7. (See 20 
CFR 677.175.) These are the reports that the State UC agency obtains 
from employers for determining UC tax liability, monetary eligibility, 
or for cross-matching against State UC agencies' files to determine if 
improper payments have been made. The Department adheres to this 
interpretation in implementing WIOA sec. 116(i)(2).
    The ``wage information'' defined in Sec.  603.2(k)--which the 
regulations allow State agencies to disclose under limited 
circumstances--includes the three data categories or elements (wages, 
SSN(s), employer information) that States must use as their data source 
for State and local performance reporting under WIOA. The proposed WIOA 
implementing regulation at 20 CFR 677.175 (b) defines ``quarterly wage 
record information'' to include three data elements or categories of 
data elements: (1) A program participant's SSN(s); (2) information 
about the wages program participants earn after exiting from the 
program; and (3) the name, address, State and (when known) the Federal 
Employer Identification Number (FEIN) of the employer paying those 
wages. The disclosure of such wage record data is governed by UC part 
603 regulations, which establish requirements for maintaining the 
confidentiality of UC information along with standards for mandatory 
and permissive disclosure of such information.
    Part 603 permits State agencies to disclose confidential UC 
information--including ``wage information''--to ``public officials'' 
(defined at Sec.  603.2(d)) under limited circumstances (defined under 
Sec.  603.5), and authorizes such ``public officials,'' in turn, to use 
the information to develop Federally-required performance reports.
    As explained in greater detail below, the Department proposes 
changes to Sec.  603.2 (definition of ``public official'') and Sec.  
603.5 (governing disclosures to public officials), to help States 
comply with WIOA's performance requirements, including the performance 
reports of the States, local areas, and ETPs. In addition, the 
Department proposes to amend Sec.  603.6 to add a provision requiring 
disclosure to implement the new statutory requirement on State 
cooperation with certain DOL and ED evaluations. These changes would 
facilitate States' obligations to report on performance through the use 
of quarterly wage records, and to cooperate in DOL and ED evaluations.
    The amendments the Department is proposing to part 603 relate only 
to State agency disclosures necessary to comply with certain provisions 
of WIOA. The Department is not proposing to redefine or expand the 
confidential State information--the confidential wage records or wage 
information--that is currently the basis for State performance 
reporting, and is not proposing to reduce in any way the significant 
privacy protections and confidentiality requirements that currently 
govern that information. The Department is not proposing to change any 
requirements relating to the permissible or mandatory disclosure of 
confidential UC information for any other purpose, or addressing any 
general UC issues. We note, in particular, that nothing in these 
proposed regulations exempts disclosures made under these regulations 
from the safeguards and security requirements in Sec.  603.9, the 
requirements in Sec.  603.10 governing agreements, or the requirements 
for payment of costs under Sec.  603.8(a).
    The Department invites comments on our proposed additions to part 
603, but will not consider or address comments on part 603 or other UC 
matters that are outside the scope of this NPRM.
Section 603.2(d)(2)-(5)
    Proposed Sec. Sec.  603.2(d)(2)-(5) expand the definition of who 
and what entities are considered ``public officials'' for purposes of 
complying with WIOA's requirements. Currently, Sec.  603.2(d) defines 
``public official'' as ``an official, agency, or public entity'' in the 
executive branch of government with ``responsibility for administering 
or enforcing a law,'' or ``an elected official in the Federal, State or 
local government.'' Proposed Sec.  603.5(e) allows disclosure to public 
officials who need the information to carry out their official duties. 
This exception allows State agencies that collect ``wage information'' 
(including the data required for performance reporting under WIOA sec. 
677.175) to provide that information to the State agencies responsible 
for administering and reporting on the WIOA core programs and mandatory 
one-stop partner programs. For example, State UC agencies, which are 
governed by part 603, may disclose confidential UC information to the 
State adult basic education agency for purposes of performing their 
official duties, as used in Sec.  603.5(e).
    The proposed amendments to Sec.  603.2(d) would clearly enumerate 
that ``public official'' includes officials from public post-secondary 
educational organizations, State performance accountability and 
customer information agencies, the chief elected officials (CEOs) of 
local Workforce Development Areas (as that term is used in WIOA sec. 
106), and a public State educational authority, agency, or institution. 
Proposed Sec.  603.2(d)(2) would permit disclosure to public post-
secondary educational institutions, regardless of how those 
institutions are structured or organized under State law. The 
regulation, as proposed, specifically mentions three categories of 
institutions. Proposed Sec.  603.2(d)(2)(i) would permit disclosure to 
public post-secondary educational institutions that are part of a 
State's executive branch, i.e., derive their authority either directly 
from the Governor or from an entity (State Board, commission, etc.) 
somewhere in that line of authority. Proposed Sec.  603.2(d)(2)(ii) 
would permit disclosure to public post-secondary educational 
institutions that are independent of the State's executive branch, 
which means those institutions whose directors derive their authority 
either directly from an elected official in the State other than the 
Governor or from an entity (again, a State Board, commission, or other 
entity) in that line of authority. Proposed Sec.  603.2(d)(2)(ii) 
covers any public post-secondary educational institution established 
and governed under State law, for example, a State Board of Regents. 
Proposed Sec.  603.2(d)(2)(iii) would allow disclosure specifically to 
State technical colleges and community colleges. (Those institutions 
may also be covered under (i) or (ii))
    Proposed Sec.  603.2(d)(5) permits disclosure to a public State 
educational authority, agency or institution'' as the terms are used in 
the Family Educational Rights and Privacy Act (FERPA) to clarify that 
the Department considers the heads of public institutions that derive 
their authority from a State educational authority or agency to be 
``public officials'' for purposes of part 603.
    The Department proposes these changes to help States comply with 
WIOA's requirement to use wage records to measure performance (WIOA 
sec. 116(i)(2)) and to facilitate the performance reporting required 
for ETPs under secs. 116(d) and 122 of WIOA. WIOA mandates the use of 
wage records to measure State and local performance. As long as the 
recipients of the data adhere to all of the requirements in 20 CFR part 
603, this proposed section

[[Page 20696]]

would permit States to make these disclosures to comply with WIOA 
requirements for Federal, State, or local government reporting on 
program outcomes and for other specified purposes.
    Non-public educational institutions, including non-profit or for-
profit educational institutions or other ETPs which are not subject to 
the authority of the executive branch or another State elected official 
would not be permitted to obtain confidential UC information, including 
wage information, under this authority because they are not public 
entities. Any disclosures of confidential UC information to those 
entities for purposes of complying with WIOA would have to be 
authorized under the provisions of Sec.  603.5 other than Sec.  
603.5(e). However, it is permissible and encouraged to develop 
processes or systems, such as the Wage Record Interchange System, to 
enable a State agency or State educational authority (including a State 
Education Agency) that collects wage records to match program 
participant data with wage records, and to provide aggregate 
participant outcome data to non-governmental educational entities, 
including ETPs under title I of WIOA.
Section 603.5(e)
    Proposed Sec.  603.5(e), as amended, would assist State workforce 
and State education programs in complying with WIOA, and in particular 
with WIOA's sec. 116 performance accountability responsibilities, by 
explicitly stating that confidential UC information may be disclosed to 
a ``public official'' as defined in Sec.  603.2(d)(2) for limited, 
specified WIOA purposes.
    Proposed Sec.  603.5(e), as amended, in conjunction with the 
revised definition of ``public official'' under 603.2(d)(2), would 
enable State UC agencies to disclose confidential UC information to 
State and local agencies and other public officials authorized to carry 
out their responsibilities under WIOA for performance accountability, 
including audits and evaluations of the programs and other required 
reporting of outcomes, as described in proposed Sec.  603.2(d)(2). To 
enable States to comply with WIOA, State UI agencies, or other State 
agencies responsible for collection of wage record information, must 
collaborate with the entities under WIOA that are required to use wage 
record data for performance to make the data available pursuant to part 
603.
    The Department notes that the proposed amendment to Sec.  603.5(e) 
would permit disclosure to a public official for purposes of 
performance accountability of the entities on the State's eligible 
training provider list (ETPL). In addition, disclosure of confidential 
UC information for other programs' performance accountability purposes 
(e.g., TANF or SNAP) may be accomplished under existing Sec.  603.5, as 
these entities are public officials and are performing their public 
duty, as defined in this section.
    A new clause (iii) under proposed Sec.  603.5(e) would permit 
disclosures ``as otherwise required for education or workforce training 
program performance accountability and reporting under Federal or State 
law.'' The Department intends that this provision apply only in the 
limited instance where a Federal or State law requires performance 
reporting for which data covered by part 603 is needed in a way that is 
not covered by the other WIOA-specific provisions. In those instances, 
this provision would permit a State agency to disclose confidential UC 
information to a ``public official'' seeking the information to comply 
with that statute.
Section 603.6(8)
    Proposed Sec.  603.6(8) makes the disclosure of confidential UC 
information for certain Federal evaluations mandatory when the 
disclosure would not interfere with the efficient administration of 
State UC law. The Department proposes this change to Sec.  603.6 to 
implement the requirement, under WIOA sec. 116(e)(4), that States 
cooperate, ``to the extent practicable,'' in the conduct of evaluations 
by either the Secretary of Labor or the Secretary of Education. WIOA 
sec. 116(e)(4) defines cooperation to include ``the provision of data 
(in accordance with appropriate privacy protections established by the 
Secretary of Labor)''; this includes 20 CFR part 603 and any other 
privacy protections the Secretary may establish. The proposed new 
regulation at Sec.  603.6(8) would implement these requirements for 
purposes of providing confidential UC information regulated by part 
603. The new regulation would require disclosure of confidential UC 
information to Federal officials, or their agents or contractors, 
requesting such information in the course of an evaluation covered by 
WIOA Sec.  116(e)(4) and 116(e)(1), to the extent that such disclosure 
is ``practicable.''
    In these cases, the Department interprets ``to the extent 
practicable'' to mean that the disclosure would not interfere with the 
efficient administration of State UC law. This standard is consistent 
with the standard the regulation applies to disclosures under Sec.  
603.5, in situations where the disclosure is permitted but a State must 
determine, first, that the disclosure would not interfere with the 
efficient administration of State UC law. In effect, the proposed 
provision would require that State UC agencies make disclosures to 
Federal education and labor agencies carrying out evaluations when it 
would not interfere with the efficient administration of the State UC 
law. The Department anticipates this cooperation and related 
disclosures would include responding to surveys and allowing site 
visits, as well as disclosure of confidential UC information needed for 
the evaluation.

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

    Proposed part 675 discusses the purpose of title I of the WIOA, 
explains the format of the regulations governing title I, and provides 
additional definitions which are not found and defined in the Act.
    Proposed Sec.  675.100 describes the purposes of title I of WIOA.
    Proposed Sec.  675.200 outlines the structure of the proposed WIOA 
regulations.
    Proposed Sec.  675.300 provides a list of proposed definitions that 
are applicable across the WIOA regulations.
    In addition to the definitions in the WIOA regulations and at secs. 
3, 142, 166(b), 167(i), 170(a), 171(b), 203, 302, and 404 of WIOA, 
proposed Sec.  675.300 provides additional definitions that apply to 
the programs and activities authorized and funded under title I of 
WIOA.
    Included in this list of definitions, the Department proposes to 
adopt the following relevant definitions from the Office of Management 
and Budget's (OMB) ``Uniform Administrative Requirements, Cost 
Principles and Audit Requirements for Federal Awards'' found at 2 CFR 
part 200: Contract, Contractor, Cooperative Agreement, Federal Award, 
Federal Financial Assistance, Grant Agreement, Non-Federal Entity, 
Obligations, Pass-Through Entity, Recipient, Subaward, Subrecipient, 
Unliquidated Obligations, and Unobligated Balance. All other 
definitions at 2 CFR part 200 apply to these regulations where 
relevant, but have not been included in this section.
    Contract: The proposed definition for ``contract'' incorporates the 
definition established by OMB at 2 CFR 200.22. Specifically, the 
proposed term ``contract'' refers to the legal document that a non-
Federal entity uses to purchase property or services used to carry out 
its duties under a grant authorized under WIOA. If the

[[Page 20697]]

Department determines that a particular transaction entered into by the 
entity is a Federal award or subaward it will not be considered a 
contract.
    Contractor: The proposed definition of ``contractor'' incorporates 
the definition contained in OMB's Uniform Guidance at 2 CFR 200.23. The 
Uniform Guidance has replaced the term ``vendor'' with the term 
``contractor.'' As used in these regulations, the term ``contractor'' 
includes entities that the Act refers to as ``vendors.'' Additionally, 
it is important to note that contractors are not subrecipients. 
Additional guidance on distinguishing between a contractor and a 
subrecipient can be found at 2 CFR 200.330.
    Cooperative Agreement: The proposed definition of ``cooperative 
agreement'' incorporates the definition contained in the Uniform 
Guidance at 2 CFR 200.24.
    Department or DOL: This proposed term refers to the United States 
DOL, its agencies, and organizational units.
    Employment and Training Activity: As used in these regulations, the 
proposed term ``employment and training activity'' refers to any 
workforce investment activities carried out for an adult or dislocated 
worker under sec. 134 of WIOA and 20 CFR part 678.
    Equal Opportunity (EO) Data: This proposed term refers to the data 
required by the Department's regulations at 29 CFR part 37 implementing 
sec. 188 of WIOA.
    ETA: This proposed term refers to the ETA, an agency of DOL, or its 
successor organization.
    Federal Award: This proposed definition incorporates the definition 
in the Uniform Guidance at 2 CFR 200.38.
    Federal Financial Assistance: The proposed definition of ``Federal 
financial assistance'' incorporates the definition contained in the 
Uniform Guidance at 2 CFR 200.40.
    Grant or Grant Agreement: The proposed definition of ``grant 
agreement'' incorporates the definition contained in the Uniform 
Guidance at 2 CFR 200.51. Because both WIOA and these regulations use 
``grant'' and ``grant agreement'' interchangabily, the inclusion of 
both terms here clarifies that the terms are synonymous.
    Grantee: The proposed definition of ``grantee'' refers to a 
recipient of funds under a grant or grant agreement. Grantees are also 
referred to as recipients in these regulations.
    Individual with a Disability: This proposed definition adopts the 
definition from sec. 3 of the Americans with Disabilities Act, as 
amended, and is further defined at 29 CFR 37.4.
    Labor Federation: This proposed definition remains unchanged from 
the definition used in the regulations under WIA at 20 CFR 660.300.
    Literacy: The proposed definition for ``literacy'' as used in these 
regulations is a measure of an individual's ability to participate and 
successfully function both in the workplace and in society.
    Local Board: This proposed definition clarifies that the term 
``Local Board'' as used in these regulations refers to the Local 
Workforce Development Boards established under sec. 107 of WIOA.
    Non-Federal Entity: The proposed definition of ``non-Federal 
entity'' incorporates the definition contained in the Department's 
Exceptions to the Uniform Guidance at 2 CFR 2900.2.
    Obligations: The definition of ``obligations'' incorporates the 
definition contained in the Uniform Guidance at 2 CFR 200.71.
    Outlying Area: The proposed term ``outlying area'' refers to those 
Territories of the United States which are not within the definition of 
``State,'' including the U.S. Virgin Islands, Guam, American Samoa, the 
Commonwealth of the Northern Mariana Islands, and, in certain 
circumstances, the Republic of Palau.
    Pass-through entity: The proposed definition of pass-through entity 
incorporates the definition in the Uniform Guidance at 2 CFR 200.74.
    Recipient: The proposed definition of ``recipient,'' which is 
different than the current definition of recipient under WIA at 20 CFR 
660.300, incorporates the definition in the Uniform Guidance at 2 CFR 
200.86.
    Register: The proposed definition of ``register'' means the point 
at which an individual seeks more than minimal assistance from staff in 
taking the next step towards self-sufficient employment. This is also 
when information that is used in performance information begins to be 
collected. At a minimum, individuals must provide identifying 
information to be registered.
    Secretary: This proposed term refers to the Secretary of the U.S. 
DOL, or their officially delegated designees.
    Secretaries: This proposed term refers to the Secretaries of the 
U.S. DOL and the U.S. ED, or their officially designated designees.
    Self-Certification: The proposed term ``self-certification'' refers 
to the certification made by an individual that they are eligible to 
receive services under title I of WIOA.
    State: The proposed term ``State'' refers to each of the several 
States of the United States, the District of Columbia, and the 
Commonwealth of Puerto Rico.
    State Board: This proposed definition clarifies that the term 
``State Board'' as used in these regulations refers to the State Boards 
established under sec. 101 of WIOA
    Subgrant or Subaward: This proposed term incorporates the 
definition of ``subaward'' in the Uniform Guidance at 2 CFR 200.92. 
This term replaces the term ``subgrant'' found in WIA at 20 CFR 
660.300. Because both WIOA and these regulations use ``subgrant'' and 
``subaward'' interchangeably, the inclusion of both terms here 
clarifies that the terms are synonymous.
    Subrecipient: The proposed definition of ``subrecipient'' 
incorporates the definition in the Uniform Guidance at 2 CFR 200.93. 
This term is synonymous with the term ``subgrantee.''
    Unliquidated Obligations: The proposed definition of ``unliquidated 
obligations'' incorporates the definition contained in the Uniform 
Guidance at 2 CFR 200.97.
    Unobligated Balance: The proposed definition of ``unobligated 
balance'' incorporates the definition in the Uniform Guidance at 2 CFR 
200.98.
    Wagner-Peyser Act: As used in these regulations, the proposed term 
``Wagner-Peyser Act'' refers to the Wagner-Peyser Act passed on June 6, 
1933, and codified at 29 U.S.C. 49, et seq.
    WIA Regulations: The proposed term ``WIA Regulations'' as used in 
this regulation or subsequently by the Department refers to the 
regulations 20 CFR parts 660-672. This definition is necessary because, 
as described in the introduction to these regulations, the Department 
has chosen to retain the WIA regulations at parts 660-672 of title 20 
of the CFR.
    WIOA Regulations: This proposed term, as used in this regulation or 
generally by the Department means those regulations in 20 CFR parts 675 
through 687, the Wagner-Peyser Act regulations in 20 CFR part 652, 
subpart C, and the regulations implementing WIOA sec. 188 in 29 CFR 
part 37.
    Workforce Investment Activities: The proposed term ``workforce 
investment activities'' is a general term that describes the broad 
array of activities and services provided to eligible adults, 
dislocated workers, and youth under secs. 129 and 134 of title I of 
WIOA.
    Youth Workforce Investment Activity: The proposed term ``youth 
workforce investment activity'' refers to those activities carried out 
for eligible youth that fall within the broad definition of ``workforce 
investment activity.''

[[Page 20698]]

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

1. Subpart A--State Workforce Development Board
    This subpart A sets forth the conditions under which the Governor 
must establish the State Board.
    Proposed Sec. Sec.  679.100(a)-(e) explain the purpose of the State 
Board. The State Board represents a wide variety of individuals, 
businesses, and organizations throughout the State. WIOA is designed to 
help job seekers and workers access employment, education, training, 
and support services needed to succeed in the labor market, and match 
employers with the skilled workers needed to compete in the global 
economy. Further, the Department envisions a State Board that takes 
leadership to ensure that the one-stop system in each State is customer 
driven. The State Board can help lead this effort by aligning Federal 
investments in job training, integrating service delivery across 
programs, and ensuring that the workforce system is job-driven and 
matches employers with skilled individuals.
    The Department envisions that the State Board will serve as a 
convener of State, regional, and local workforce system partners to 
enhance the capacity and performance of the workforce development 
system; align and improve employment, training, and education programs, 
and through these efforts, promote economic growth.
    The State Board must be a strategic convener that promotes 
partnerships and engages key stakeholders. This role can only be 
accomplished if each State Board member is an active participant in the 
business of the board. State Board members must establish a platform in 
which all members actively participate and collaborate closely with the 
required partners of the workforce development system, including public 
and private organizations. This engagement is crucial in the State 
Board's role to help integrate and align a more effective job-driven 
workforce investment system that invests in the connection between 
education and career preparation.
Section 679.100 What is the vision and purpose of the State Board?
    A key goal of Federally-funded training programs is to get more 
Americans ready to work with marketable skills and support businesses 
to find workers with the skills that are needed. The role of the State 
Board in achieving this goal includes engaging employers, education 
providers, economic development, and other stakeholders to help the 
workforce development system achieve the purpose of WIOA and the 
State's strategic and operational vision and goals outlined in the 
State Plan. The Department encourages the State Board to develop a 
comprehensive and high-quality workforce development system by working 
with its workforce, education, business, and other partners to improve 
and align employment, training, and education programs under WIOA.
    The Department encourages the State to take a broad and strategic 
view when considering representatives of the State Board, and also in 
establishing processes which it will use to include necessary 
perspectives in carrying out State Board functions. For example, 
alignment of required one-stop partner investments is essential to 
achieving strategic and programmatic alignment at the State, regional, 
and local level. Further, States are encouraged to examine factors like 
the natural bounds of regional economies, commuting patterns, and how 
economic sectors impact the State, which may benefit from inputs either 
from formal members of the board, or through other engagement. Further, 
a broad geographic representation as well as a reflection of diversity 
of populations within the State is critical.
Section 679.110 What is the State Workforce Development Board?
    Proposed Sec.  679.110 describes the membership requirements of the 
State Board. WIOA sec. 101(b) uses the terms ``representative'' and 
``representatives'' in several places. In this section the Department 
interprets ``representatives'' to mean two or more individuals and 
``representative'' as one individual.
    Proposed Sec.  679.110(a) explains that States must establish State 
Boards in accordance to the requirements of WIOA sec. 101 and these 
regulations. This proposed section retains the same requirements found 
at 20 CFR 661.200(a).
    Proposed Sec.  679.110(b) generally requires, in accordance with 
sec. 101(b)(2) of WIOA, that the State Board membership represent the 
diverse geographic areas of the State. Employers' and workers' 
challenges and needs differ among the urban, rural, and suburban areas 
of the States due to demographics, labor market information and 
conditions, and business and worker needs and access to the workforce 
development system. Accordingly, the Department strongly encourages 
that each category of membership on the Board--the members of the State 
legislature, business representative, workforce and labor 
representatives, and State and local officials--represent the diverse 
geographic areas of the State to ensure that the workforce development 
system meets the education, employment, and skill needs of workers, 
jobseekers, and businesses, no matter their location in the State.
    Proposed Sec.  679.110(b)(1) and (2) implement secs. 101(1)(A) and 
(B) of WIOA by requiring that the board include the Governor of the 
State and one member of each chamber of the State legislature.
    Proposed Sec.  679.110(b)(3)(i)(A) through (C), implementing sec. 
101(b)(1)(C)(i) of WIOA, require the majority of State Board 
representatives to be from businesses or organizations in the State. 
These representatives must either be the owner or chief executive of 
the business or be an executive with optimum policy-making or hiring 
authority as defined in proposed Sec.  679.120. These representatives 
must also come from businesses or organizations that represent 
businesses which provide employment and training opportunities that 
include high-quality, work-relevant training, and development 
opportunities in in-demand industry sectors or occupations. Work-
relevant and development opportunities may include customized training, 
registered apprenticeship, or OJT. Finally, the Governor must appoint 
these members based on nominations from business organizations and 
trade associations in the State. The Department envisions that these 
members will be individuals that will be able to drive the board to 
align the workforce investment, education, and economic development 
systems in support of a comprehensive, accessible, and high-quality 
workforce development system.
    Proposed Sec.  679.110(b)(3)(i)(D) requires, at a minimum, that one 
member of the State Board represent small business as defined by the 
U.S. Small Business Administration. Small businesses are a critical 
component of and major contributor to the strength of local economies 
and present new employment opportunities. The Department proposes to 
require a small business representative because the presence of at 
least one small business representative on the State Board will allow 
the board as a whole to more readily receive the unique perspectives, 
experiences, and needs of small businesses.
    Proposed Sec.  679.110(b)(3)(ii)(A) through (D) require that not 
less than 20

[[Page 20699]]

percent of the members of the State Board be representatives of the 
workforce. Such representatives must include representatives from labor 
organizations and registered apprenticeship programs within the State, 
in accordance with sec. 101(b)(1)(ii). This provision maintains WIA's 
emphasis and requirement that State Board representatives include 
members of the workforce and labor organizations. The Department 
anticipates that the inclusion of workforce and labor representatives 
will foster cooperation between labor and management, strengthening the 
operation and effectiveness of the State workforce development system. 
This proposed section also encourages representation from CBOs that 
have demonstrated experience and expertise, as defined in proposed 
Sec.  679.120, in addressing the employment, training, or education 
needs of individuals with barriers to employment across the State 
including organizations that serve veterans or that provide or support 
competitive, integrated employment for individuals with disabilities, 
and organizations that have demonstrated experience and expertise in 
addressing the employment, training, or education needs of eligible 
youth, including organizations that serve OSY.
    Proposed Sec.  679.110(b)(3)(iii)(A)(1) and (2), implementing WIOA 
sec. 101(b)(1)(iii)(I), require the Governor to appoint to the State 
Board representatives of government that include the lead State 
officials with primary responsibility for each of the core programs and 
two or more CEOs that represent both cities and counties, where 
appropriate. The inclusion of State officials with primary 
responsibility for each of the core programs and CEOs on the State 
Board is important so that they can support and improve the service 
delivery of each core program through their experience in workforce 
investment activities and positions as public leaders. This provision 
also requires that where the State official with primary responsibility 
for a core program represents more than one core program, that official 
must ensure adequate representation on the State Board of the needs of 
all the core programs under their jurisdiction. Additionally, the CEOs 
must be able to represent their geographic area such as their 
surrounding cities and counties in the area.
    Proposed Sec.  679.110(b)(3)(iii)(B), in accordance with WIOA sec. 
101(b)(1)(C)(iii)(II), allows the Governor to designate other 
representatives and officials to the Board, including but not limited 
to, representatives and officials such as State agency officials from 
agencies that are responsible for one-stop partners, State agency 
officials responsible for economic development or juvenile justice 
programs, individuals who represent an Indian tribe or tribal 
organizations, and State agency officials responsible for education 
programs.
    Proposed Sec.  679.110(c), implementing sec. 101(c) of WIOA, 
requires the Governor to select a chairperson for the State Board from 
the business representatives on the board. This proposed section 
retains the same requirements found at 20 CFR 661.200(g).
    Proposed Sec.  679.110(d) requires the Governor to establish by-
laws that help improve operations of the State Board. Proposed Sec.  
679.110(d)(1) through (7) require that at a minimum the by-laws address 
the nomination process used by the Governor to select the State Board 
chair and members, term limitations and how the term appointments will 
be staggered to ensure only a portion of memberships expire in a given 
year, the process to notify the Governor of a board member vacancy to 
ensure a prompt nominee, the proxy and alternative designee process 
that will be used when a board member is unable to attend a meeting and 
assigns a designee, brokers relationships with stakeholders, and any 
other conditions governing appointment or membership on the State Board 
as deemed appropriate by the Governor. In addition to these required 
elements, the Governor must include any additional requirements in the 
board's by-laws that he or she believes is necessary to ensure the 
orderly administration and functioning of the board. An effective State 
Board establishes clear roles, responsibilities, procedures, and 
expectations through its by-laws, and that these requirements will help 
State Boards to be more agile and proactive in reacting to board 
turnover, increase board participation when board members are not able 
to physically attend board meetings, improve board functionality, and 
help ensure that the public is informed about the operation of the 
board.
    Proposed Sec.  679.110(e) requires, as a general condition of State 
Board membership, that members who represent the non-business 
organizations, agencies, or other entities described in proposed Sec.  
679.110(b)(3)(ii) and (iii) have optimum policy-making authority. 
Because WIOA sec. 101(d) adds State Board functions, such as 
identifying and disseminating information on best practices and 
developing and reviewing statewide policies affecting the coordinated 
provision of services through the State's one-stop delivery system, all 
members, not just those representing the business community, should 
have optimum policy-making authority to accomplish the purposes of WIOA 
and conduct the State Board required functions.
    Proposed Sec.  679.110(f) implements the multiple-entity 
representation limitations for State Board members at WIOA sec. 
101(b)(3). Robust representation in each of the categories is essential 
to ensure that the State Board benefits from the diversity and 
experience of board members.
    Proposed Sec.  679.110(f)(1) explains that a State Board member may 
not represent more than one of the three membership categories: 
Business representatives, workforce representatives, or government 
representatives. For example, one member could not serve as a business 
representative and a joint labor-management apprenticeship program even 
if the member would otherwise satisfy the criteria for both categories.
    Proposed Sec.  679.110(f)(2) explains that a State Board member may 
not serve as a representative of more than one subcategory under 
(b)(3)(ii). Under this provision, a single board member could not serve 
as a representative of an organized labor organization and an 
apprenticeship program (or the optional subcategories) even if the 
member would otherwise satisfy the criteria for either category.
    Proposed Sec.  679.110(f)(3) prohibits a government representative 
from serving as a representative of more than one subcategory under 
(b)(3)(iii). However, where a single government agency is responsible 
for multiple required programs, the head of the agency may represent 
each of the required programs. In some instances, it would be 
appropriate and beneficial for one representative to represent multiple 
programs on the State Board. For example, the head of a State Workforce 
Agency might represent both the WIOA title I and Wagner-Peyser 
programs. This arrangement could serve to improve integration of these 
two programs and/or help the State Board better achieve the colocation 
requirements at WIOA sec. 123(c)(3). In other instances, such an 
arrangement would be less beneficial. For example, where vocational 
rehabilitation services fall under the State Workforce Agency, 
appointing a single representative to satisfy the membership 
requirements of WIOA title I, Wagner-Peyser, and vocational 
rehabilitation services may limit the voice and influence of a core 
program partner. The Department encourages Governors to use discretion

[[Page 20700]]

when appointing board members to represent multiple subcategories under 
(b)(3)(iii).
    Proposed Sec.  679.110(g) requires that all required board members 
have voting privileges and allows the option for the Governor to convey 
voting privileges to non-required members. All required board members 
must have a voice in the State Board's decisions to ensure that the 
interests of all members of the community represented by the required 
members are taken into account by the board. Requiring voting rights 
allows the required board members to have an effect on the State 
Board's key decisions and initiatives and enables the required board 
members to effectively represent the individuals and organizations of 
their communities. This proposed section also permits the Governor to 
grant voting privileges to the non-required members of the board, and 
the Department encourages the Governor to do so if doing so, in their 
opinion, would further the mission and goals of the board.
Section 679.120 What is meant by the terms ``optimum-policy-making 
authority'' and ``demonstrated experience and expertise''?
    Proposed Sec.  679.120(a) defines the term ``optimum policy-making 
authority'' as an individual who can reasonably be expected to speak 
affirmatively on behalf of the entity he or she represents and to 
commit that entity to a chosen course of action. This proposed section 
retains the same requirements found at 20 CFR 661.203(a).
    Proposed Sec.  679.120(b) defines the term ``demonstrated 
experience and expertise'' as an individual who has documented 
leadership in developing or implementing workforce development, human 
resources, training and development, or a core program function. WIOA 
sec. 101(d) adds new State Board functions, such as the development of 
strategies for aligning technology and data systems across one-stop 
partner programs to enhance service delivery and improve efficiencies 
in reporting on performance accountability measures. This provision 
will ensure that the State Board will include members that will assist 
the board in fulfilling these functions. The Department seeks public 
comment on how to further define ``demonstrated experience and 
expertise'' and examples of the types of qualifications that would meet 
such a definition.
Section 679.130 What are the functions of the State Board?
    Proposed Sec.  679.130 implements sec. 101(d) of WIOA and describes 
the role and functions of the State Board. Proposed Sec.  679.130(a), 
(d) through (e), and (g) through (k) reiterate the relevant statutory 
requirements at secs. 101(d)(1), (4)-(5), and (7)-(11). These functions 
are the primary functions of the State Board.
    Proposed Sec.  679.130 is consistent with WIOA's statutory 
requirement that the State Board must assist the Governor in the 
development, implementation, and modification of the 4-year State Plan.
    Proposed Sec.  679.130(b) is consistent with WIOA sec. 101(d)(2) 
and reiterates the statutory requirements. The proposed regulation 
states the review of statewide policies, programs, and recommendations 
on actions that must be taken by the State to align workforce 
development programs to support a comprehensive and streamlined 
workforce development system. Such review of policies, programs, and 
recommendations must include a review and provision of comments on the 
State plans, if any, for programs and activities of one-stop partners 
that are not core programs.
    Proposed Sec.  679.130(c)(1) through (7) are consistent with WIOA 
secs. 101(d)(3)(A) through (G) and reiterate WIOA's requirements that 
the State Board assist the Governor in development and continuous 
improvement of the State's workforce development system, including 
removing barriers to aligning programs and activities, developing 
career pathways to support individuals to retain and enter employment, 
developing customer outreach strategies, identifying regions and 
designating local workforce areas, developing and continuously 
improving the one-stop system, and developing strategies to train and 
inform staff.
    Proposed Sec.  679.130(d) and (e) reiterate statutory language 
requiring State Boards to assist in the development of State 
performance and accountability measures and to identify and disseminate 
best practices.
    Proposed Sec.  679.130(f)(1) through (3) are consistent with WIOA 
secs. 101(d)(6)(A) through (C) to assist in the development and review 
of statewide policies on coordinated service provisions, which includes 
criteria for Local Boards to assess one-stop centers, allocation of 
one-stop center infrastructure funds, and the roles and contributions 
of one-stop partners within the one-stop delivery system. In addition, 
it is important for the State Board to consult with CEOs and Local 
Boards when establishing objective criteria and procedures for Local 
Boards to use when certifying one-stop centers. Where Local Boards 
serve as the one-stop operator, the State Board must use such criteria 
to assess and certify the one-stop center to avoid inherent conflicts 
of interest in a Local Board assessing itself.
    Proposed Sec.  679.130(g) through (k) reiterate statutory language 
requiring State Boards to assist in the development of strategies for 
technological improvements to improve access and quality of service, 
align technology and data systems across one-stop partner programs to 
improve service delivery and effectiveness in reporting on performance 
accountability, develop allocation formulas for distribution of adult 
and youth programs, and in accordance with WIOA and these regulations, 
prepare the annual report and develope the statewide WLMIS.
    Proposed Sec.  679.130(l) is consistent with WIOA sec. 101(d)(12). 
This proposed regulation requires the State Board to assist the 
Governor in the development of other policies that promote statewide 
objectives and enhance the performance of the workforce development 
system in the State.
Section 679.140 How does the State Board meet its requirement to 
conduct business in an open manner under ``sunshine provision'' of the 
Workforce Innovation and Opportunity Act sec. 101(g)?
    Proposed Sec.  679.140 implements sec. 101(g) of WIOA, requires 
that the State Board conduct its business in an open and transparent 
manner, and describes several pieces of information that the board is 
required to provide to ensure transparency.
    Proposed Sec.  679.140(b)(1) through (4) requires the State Board 
to make certain information available on a regular basis to ensure that 
it is conducting its business in an open manner. Transparency promotes 
accountability and provides valuable information to citizens on the 
Federal, State, and local government's activities. Therefore, the State 
Board must make available to the public on a regular basis, through 
electronic means and open meetings, information about State Board 
activities such as the State Plan, modifications to the State Plan, 
board membership, the board's by-laws, the minutes of meetings. This 
information must be easily accessed by interested parties. Ensuring 
that this information is widely available promotes transparency and

[[Page 20701]]

provides access to the public on how the State Board works to align, 
integrate, and continuously improve the workforce development system.
Section 679.150 Under what circumstances may the Governor select an 
alternative entity in place of the State Workforce Development Board?
    Proposed Sec.  679.150(a) and (b) implement the requirements of 
WIOA sec. 101(e)(1) and describe the circumstances by which the 
Governor may select an alternate entity in place of a State Board. 
Paragraph (b) lists the conditions that must be met if a State uses an 
alternative entity in place of the State Board and requires that the 
entity meets the requirements of Sec.  679.110.
    Proposed Sec.  679.150 (c)(1) through (3) stipulate that if the 
alternative entity does not provide representatives for each of the 
categories required under WIOA sec. 101(b), the State Plan must explain 
the manner in which the State will ensure an ongoing role for any 
unrepresented membership group in the workforce development system. The 
proposed section further requires that the State Board ensure that the 
alternative entity maintain a meaningful, ongoing role for 
unrepresented membership groups, including entities carrying out the 
core programs, and to inform the Board's actions.
    Proposed Sec.  679.150(d) stipulates if the membership structure of 
the alternative entity had a significant change after August 7, 1998, 
the entity will no longer be eligible to perform the functions of the 
State Board. In such a case, the Governor must establish a new State 
Board which meets all of the criteria of WIOA sec. 101(b).
    Proposed Sec.  679.150 (e)(1) and (2) define a significant change 
in the membership structure which includes a change in the organization 
of the alternative entity or in the categories of entities represented 
on the alternative entity which requires a change to the alternative 
entity's charter or a similar document that defines the formal 
organization of the alternative entity, regardless of whether the 
required change to the document has or has not been made. This proposed 
section retains the same requirements found at 20 CFR 661.210(e).
    Proposed Sec.  679.150(f) stipulates all State Board references in 
20 CFR parts 675 through 687 also apply to an alternative entity used 
by a State. This proposed section implements sec. 101(e)(2) of WIOA.
Section 679.160 Under what circumstances may the State Board hire 
staff?
    Proposed Sec.  679.160 implements sec. 101(h) and describes the 
board's authority to hire staff. Per proposed Sec.  679.160(c), the pay 
provided to the director and staff hired by the board is subject to the 
limitations on the payment of salary and bonuses described in WIOA sec. 
194(15).
2. Subpart B--Workforce Innovation and Opportunity Act Local Governance 
(Workforce Development Areas)
    The WIOA envisions a workforce development system that is customer-
focused on both the job seeker and business, and is able to anticipate 
and respond to the needs of regional economies. It requires Workforce 
Development Boards and CEOs to design and govern the system regionally, 
aligning workforce policies and services with regional economies and 
supporting service delivery strategies tailored to these needs. To 
support this regional approach, WIOA requires States to identify 
intrastate and interstate regions which may be comprised of more than 
one local area, and requires local areas to plan regionally. WIOA 
envisions a regional system where not only do local areas plan 
regionally, but workforce system leaders partner and provide leadership 
as part of comprehensive, regional workforce and economic strategies. 
This subpart provides the requirements for designation of regions and 
local areas under WIOA.
Section 679.200 What is the purpose of a region?
    Proposed Sec.  679.200 describes the purpose of requiring States to 
identify regions: to align workforce development resources to regional 
economies to ensure coordinated and efficient services to both job 
seekers and employers. WIOA requires States to establish regions in 
order to ensure that training and ES support economic growth and 
related employment opportunities and are meeting the skill competency 
requirements of the regions. The development of comprehensive regional 
partnerships facilitates alignment of workforce development activities 
with regional economic development activities, and better supports the 
execution and implementation of sector strategies and career pathways. 
Regional cooperation may also lower costs and increase the 
effectiveness of service delivery to businesses that span more than one 
local workforce development area within a region and to job seekers 
through coordination of shared services, processes, and operations. The 
Department encourages States to use these processes to identify any 
performance, fiscal, or planning challenges and to ensure that local 
and regional planning areas are aligned to support improved service 
delivery, improved training and employment outcomes, better meet 
employer needs, and greater effectiveness and efficiency in achieving 
these outcomes.
Section 679.210 What are the requirements for identifying a region?
    Proposed Sec.  679.210 outlines the requirements for identifying a 
region.
    Proposed Sec.  679.210(a) requires that the Governor assign local 
areas to a region prior to the submission of the State Unified or 
Combined Plan.
    Proposed Sec.  679.210(b) explains that the Governor must develop a 
policy for designation of a region prior to submission of the State 
Unified or Combined Plan, in order to receive WIOA title I-B adult, 
dislocated worker, and youth allotments. The regional assignment is 
important because regional economic development areas do not 
necessarily correspond to State, county, or local workforce development 
areas, or municipal boundaries.
    Proposed Sec.  679.210(b) clarifies the required factors that a 
Governor must consider when identifying a region and the parties the 
Governor must consult, implementing WIOA sec. 106(a)(1). The 
considerations for identifying a planning region are consistent with 
those for local area designation outlined in proposed Sec.  679.240(a).
    Proposed Sec.  679.210(c) provides additional criteria the Governor 
may consider when identifying regions. These additional criteria, which 
provide a more comprehensive picture of regional economies and labor 
markets, provide additional data points to inform the Governor's 
decision to assign local areas to regions. However, the Department 
seeks comment on the appropriateness of these factors and requests 
suggestions of additional data points for defining a regional economy 
and labor market.
    The Department has included ``population centers'' in proposed 
Sec.  679.210(c)(1) because they and their contiguous areas of growth 
are a basic factor distinguishing economic development areas and 
planning regions.
    Proposed Sec.  679.210(c)(2) allows the consideration of 
``commuting patterns'' because commuting pattern data can show the 
movement of workers from their residence to their workplace. A

[[Page 20702]]

strong flow of commuters from one local area, municipality, or county 
into another is an indication of the economic interdependence of the 
two areas.
    ``Land ownership'' is included in proposed Sec.  679.210(c)(3) 
because land ownership can significantly affect the economic 
development potential of an area.
    ``Industrial composition'' has been proposed as a factor in Sec.  
679.210(c)(4) because it is primarily based upon industry employment 
patterns. The factors used in determining regions could be jobs by 
industry and share of total employment by industry.
    Proposed Sec.  679.210(c)(5) permits the Governor to consider 
``location quotients,'' which are ratios that could be computed by 
dividing a local area's percentage of employment in a particular 
industry by the State's percentage of employment in a particular 
industry. The economic base of a local area includes those industries 
in which the local area has a higher proportion of employment than the 
State as a whole, or a higher location quotient. Adjacent local areas 
with similar economic bases are strong candidates for placement in the 
same region.
    ``Labor force conditions'' is proposed as a factor in Sec.  
679.210(c)(6). Local area labor force employment and unemployment data 
could provide a measure of labor availability throughout the State. 
Adjacent local areas with similar labor force characteristics, such as 
unemployment rates, might have similar workforce/economic development 
needs, thus joining those areas into a region may be beneficial.
    Proposed Sec.  679.210(c)(7) suggests that the Governor consider 
``geographic boundaries'' when setting regions because they may serve 
to facilitate or hinder the movement of people and commerce between 
areas, thereby naturally delineating regional boundaries.
    Finally, proposed Sec.  679.210(c)(8) indicates that the Secretary 
may suggest additional factors in future guidance.
    Proposed Sec.  679.210(d), implementing sec. 106(a)(2) of WIOA, 
outlines the types of regions and how local areas may be assigned to 
regions. A region may consist of a single local area, two or more 
contiguous local areas with a State, or two or more contiguous local 
areas in two or more States. When the Governor(s) assigns two or more 
local areas to a region, the region, per WIOA sec. 3(48), is considered 
a planning region, which is required to coordinate regional service 
strategies, regional sector initiatives, the collection and analysis of 
regional labor market data, administrative costs, transportation, 
partnership with economic develop agencies, and the negotiation of 
local performance consistent with the regional planning requirements at 
Sec.  679.510. A single local area may not be split across two planning 
regions. Local areas must be contiguous in order to be a planning 
region and effectively align economic and workforce development 
activities and resources. The Department anticipates providing 
additional guidance regarding the creation and management of interstate 
planning regions.
Section 679.220 What is the purpose of the local workforce development 
area?
    Distinct from the regional designation, WIOA also provides for 
local workforce development areas. As described above, these local 
areas may be identified individually or in combination, as regions. 
Proposed Sec.  679.220 describes the purpose of the local workforce 
development area (local area). The Governor must designate local areas 
in order to receive WIOA title I adult, dislocated worker, and youth 
allotments, as required by WIOA sec. 106. Local areas serve as a 
jurisdiction for the administration of workforce development activities 
and execution of adult, dislocated worker, and youth funds allocated by 
the State. States allocate workforce investment funds based on various 
population characteristics of the local area. Local areas may 
correspond to regions identified in WIOA sec. 106(a)(1) or may be 
smaller geographic areas within a planning region, each with its own 
Local Workforce Development Board.
Section 679.230 What are the general procedural requirements for 
designation of local workforce development areas?
    Proposed Sec.  679.230 describes the procedural requirements that 
the Governor must use for the designation or redesignation of a local 
workforce development area. Proposed Sec.  679.220 (a) through (c), 
implementing WIOA sec. 106(b)(1)(A), requires the Governor to consult 
with the State Board and CEO, and consider public comments from a wide 
range of stakeholders consistent with provisions at WIOA sec. 
102(b)(2)(e)(iii)(II) as part of the process of identifying the local 
area. The Governor has the discretion to establish the process and 
procedures to solicit comments that it determines appropriate; however 
a wide-reaching, inclusive process allows sufficient time for 
stakeholders to provide substantive comments that will enable the 
Governor to receive meaningful feedback from all interested 
stakeholders, ensuring that the Governor is able to consider all 
relevant information, data, and opinions before making a decision to 
designate or redesignate a local area.
Section 679.240 What are the substantive requirements for designation 
of local workforce development areas that were not designated as local 
areas under the Workforce Investment Act of 1998?
    Proposed Sec.  679.240 provides the substantive requirements that 
Governor must use for the designation or redesignation of local 
workforce development areas.
    Proposed Sec.  679.240(a) explains that the Governor must develop a 
policy for designation or redesignation of local workforce development 
areas, including the factors that the Governor must consider. The 
statute requires that the Governor designate local areas that ``are 
consistent'' with labor market and regional economic development areas: 
The Department interprets this to mean that within a local area, there 
must be common labor markets and economic development areas. Better 
integration between the workforce and economic development systems 
serves to best connect the employment needs of workers with the skilled 
workforce needs of employers. This section implements sec. 106(b)(1)(B) 
of WIOA.
    Proposed Sec.  679.240(b) permits the Governor to approve a local 
area designation request from any unit of local government, including a 
combination of multiple units. This provision implements sec. 106(b)(4) 
of WIOA and retains the same requirements found at 20 CFR 661.250(c). 
Proposed paragraph (c) permits the Governor to redesignate a local area 
that has been designated or redesignated under Sec.  679.240(a) or has 
been designated under Sec.  679.250(a) or (c) if the local area 
requests, and the Governor approves, the redesignation.
Section 679.250 What are the requirements for initial and subsequent 
designation of workforce development areas that had been designated as 
local areas under the Workforce Investment Act of 1998?
    Proposed Sec.  679.250 describes the requirements for initial and 
subsequent designation of local areas that had been designated as local 
areas under WIA.
    Proposed Sec.  679.250(a) implements sec. 106(b)(2) of WIOA that 
requires, during the first 2 full PYs following the enactment of WIOA, 
a Governor is to approve a request for initial designation from any 
local area designated as a local area under WIA as long as the entity

[[Page 20703]]

was designated a local area under WIA, performed successfully, and 
maintained sustained fiscal integrity for 2 years prior to the 
enactment of WIOA. This provision requires the Governor to continue the 
designation of local areas that performed well and maintained sound 
fiscal practices under WIA. If a local area that was designated under 
WIA requests initial designation under WIOA but does not meet all of 
the requirements of Sec.  679.250(a), the Governor has the discretion 
to approve the initial designation under WIOA or to redesignate the 
local area pursuant to the procedures described in Sec.  679.240.
    Proposed Sec.  679.250(b) clarifies that initial designation 
applies to PYs 2015 and 2016, as per WIOA sec. 106.
    Proposed Sec.  679.250(c), in accordance with sec. 106(b)(3) of 
WIOA, describes the requirements for the subsequent designation of 
local workforce development areas that were initially designated under 
Sec.  679.250(a). Specifically, the Governor must approve requests for 
subsequent designation as long as the local area performed 
successfully, sustained fiscal integrity, and in the case of a local 
area in a planning region, met the planning region requirements during 
the 2-year period of initial designation. Local areas that are able to 
demonstrate successful performance and fiscal integrity must be 
permitted to continue to operate and may not be redesignated without 
the consent of the Local Board and CEO in the local area.
    Proposed Sec.  679.250(d) describes the role of the Governor in 
reviewing a local area's subsequent designation. Paragraph (d)(1) 
permits the Governor to evaluate a local area at any time to ensure the 
local area continues to meet the requirements for subsequent 
eligibility at paragraph (c). Paragraph (d)(2) requires the Governor to 
review local areas to ensure they continue to satisfy the requirements 
at paragraph (2) as part of each 4-year State planning cycle. Sections 
116(g)(2)(A) and 184(b)(1) of WIOA describe the required actions that 
the Governor must take in the event that a local workforce area fails 
to meet its negotiated levels of performance or does not comply with 
administrative requirements, respectively. Under these provisions the 
Governor retains the authority to take corrective action in light of 
failure of performance or fiscal management short of redesignation, and 
is not required to redesignate a local area that has failed to maintain 
the requirements of paragraph (c). Furthermore, the Governor may 
redesignate local areas at any time with the cooperation of the CEO and 
Local Board in a given local area.
    Proposed Sec.  679.250(e) presumes that local areas will be 
considered to have requested continued designation unless the CEO and 
the Local Board directly notify the Governor that they no longer wish 
operate as a local area. This newly proposed paragraph reduces the 
administrative burden of maintaining local area status, while still 
holding local areas accountable to the requirements of paragraph (c).
    Proposed Sec.  679.250(f) specifies that the requirements for 
subsequent designation do not apply to local areas that are designated 
or redesignated under Sec.  679.240 or are single-area States 
designated under Sec.  679.270.
    Proposed Sec.  679.250(g) clarifies that rural concentrated 
employment programs are not eligible to apply for initial designation 
as a local area. WIOA allows any unit of local government (or 
combination of units of local government) to request designation as a 
local area; however, unlike under WIA, this provision does not extend 
to rural concentrated employment programs.
Section 679.260 What do the terms ``performed successfully'' and 
``sustained fiscal integrity'' mean for purposes of designating local 
areas?
    Proposed Sec.  679.260 defines the terms ``performed successfully'' 
and ``sustained fiscal integrity'' used in Sec.  679.250. This section 
implements sec. 106(e) of WIOA.
    Proposed Sec.  679.260(a) defines the term ``performed 
successfully'' for the purpose of initial designation to mean that the 
local area met or exceeded all performance levels the Governor 
negotiated with Local Board and CEO under WIA sec. 136(c) for the last 
2 full PYs before the enactment of WIOA. It also requires that the 
local area not fail any individual measure for the last 2 consecutive 
PYs before the enactment of WIOA. Proposed Sec.  679.260(a)(1) requires 
the Governor, in order to determine if a local area has performed 
successfully, to have defined the terms ``met or exceeded'' and 
``failure'' at the time the performance levels were negotiated. 
Proposed Sec.  679.260(a)(2) clarifies that the Governor may not 
retroactively apply any higher WIOA threshold to performance negotiated 
and achieved under WIA for the purposes of local area designation.
    Proposed Sec.  679.260(b) defines the term ``performed 
successfully'' for the purpose of subsequent designation to mean that 
the local area met or exceeded the levels of performance the Governor 
negotiated with Local Board and CEO for core indicators of performance 
described at WIOA sec. 116(b)(2)(A). It also requires the Governor to 
have defined the terms ``met or exceeded'' and ``failure'' in the State 
Plan.
    Proposed Sec.  679.260(a) and (b) expand on the definition at WIOA 
sec. 106(e)(1) to ensure that the initial and subsequent designation of 
local areas is conducted in a fair and transparent manner by ensuring 
that the local area's performance is judged on the contemporaneous 
standards agreed to between the State and local area at the time rather 
than under subsequently imposed performance standards.
    Proposed Sec.  679.260(c) defines the term ``sustained fiscal 
integrity'' for the purpose of determining initial and subsequent local 
area designation to mean that the Secretary has not made a formal 
determination that either the grant recipient or any other entity 
charged with expending local area funds misexpended such funds due to 
willful disregard of the requirements of the provision involved, gross 
negligence, or failure to comply with accepted standards of 
administration for the 2-year period preceding the determination.
    Proposed Sec. Sec.  679.250 and 679.260 allow for an orderly 
transition from WIA to WIOA and protects the designation status of 
local areas that meet or exceed performance targets negotiated in good 
faith under the relevant authorizing legislation while allowing the 
Governor both to oversee properly the performance of the local areas 
and take action necessary to improve the area's performance in a timely 
fashion.
Section 679.270 What are the special designation provisions for single-
area States?
    Proposed Sec.  679.270 outlines the special designation provisions 
for single-area States. Under WIOA sec. 106(d), the Governor of any 
single-area State under WIA may choose to continue to designate the 
State as a single-State area. However, proposed Sec.  679.270(b) 
clarifies that the Governor must identify the single-area status of the 
State in its Unified or Combined State Plan and proposed Sec.  
679.270(c) further clarifies that the State Board in a single-area 
State must continue to carry out the functions of the State and Local 
Boards. This section is intended to clarify single-area States' 
responsibilities and functions: Key local functions, such as 
monitoring; entering into a memorandum of understanding (MOU) with one-
stop partners; selecting one-stop operators; selecting eligible 
providers of youth activities, career services and training services; 
and

[[Page 20704]]

certifying one-stop centers, are essential to the proper functioning of 
the public workforce system and remain so within single-area States.
Section 679.280 How does the State fulfill the requirement to provide 
assistance to local areas within a planning region that wish to 
redesignate into a single local area?
    Proposed Sec.  679.280 describes how the State fulfills the 
requirement to provide assistance to local areas within a planning 
region that wish to redesignate into a single local area.
    Proposed Sec.  679.280(a) asserts that the State must authorize 
statewide funds for transition activities when all local areas in a 
planning region petition the Governor for redesignation as a single 
local area as required by WIOA sec. 106(b)(6). WIOA introduces 
redesignation assistance as a required statewide activity. This 
provision will help local areas consolidate where appropriate for the 
purposes of cost savings and streamlined service delivery.
    Proposed Sec.  679.280(b) clarifies that when statewide funds are 
exhausted in a given PY, the State may fulfill the requirement to 
provide redesignation assistance in the following PY. This section 
provides States with the flexibility to balance priorities while 
ensuring local areas receive redesignation assistance.
    Proposed Sec.  679.280(c) provides examples of the activities that 
local areas may elect to pursue with the redesignation assistance 
received from the State. However, the State may establish policy on 
what other activities local areas may use funds received for the 
purposes of redesignation or leave such determination to the local 
areas.
Section 679.290 What right does an entity have to appeal the Governor's 
decision rejecting a request for designation as a workforce development 
area?
    Proposed Sec.  679.290 outlines the appeals process for an entity 
that submits a request for initial or subsequent designation as a local 
workforce development area that is rejected by the Governor. This 
section implements sec. 106(b)(5) of WIOA.
    Proposed Sec.  679.290(a) establishes that entities that are not 
approved as local areas may follow the process established at 20 CFR 
683.640. This section is essentially unchanged from WIA. However, while 
provisions at WIOA sec. 106(b) permit any unit of local government or 
combination of units to apply for designation as a local area, the law 
does not specify that rural concentrated employment programs may apply 
for designation as a local area. The intent of this section was to 
prohibit such an arrangement under WIOA and that this prohibition 
logically applies to the appeals process.
    Proposed Sec.  679.290(b) establishes that an entity making an 
unsuccessful appeal to the State Board may request a review of the 
appeal by the Secretary of Labor if the State does not respond to the 
appeal in a timely manner or if the appeal for designation is denied by 
the State. The Department defines a `timely manner' to be 60 days after 
the submission of the appeal. This provides adequate time for the State 
to review and make a ruling on the appeal while not being so long as to 
delay unreasonably the appeal and designation processes.
    Proposed Sec.  679.290(c) summarizes the circumstances under which 
the Secretary of Labor may require an entity to be designated as a 
local area. Specifically, the Secretary may require designation upon a 
finding of either a denial of procedural rights or a finding that the 
area meets the requirements for designation. This section was updated 
from WIA to reflect that neither the `automatic' nor `temporary and 
subsequent' designation statuses exist under WIOA.
3. Subpart C--Local Boards
Section 679.300 What is the vision and purpose of the Local Workforce 
Development Board?
    Proposed Sec.  679.300 explains the purpose of the Local Board. The 
Local Board represents a wide variety of individuals, businesses, and 
organizations throughout the local area. The Local Board serves as a 
strategic convener to promote and broker effective relationships 
between the CEOs and economic, education, and workforce partners.
    The Local Board must develop a strategy to continuously improve and 
strengthen the workforce development system through innovation in, and 
alignment and improvement of, employment, training, and education 
programs to promote economic growth. Local Board members must establish 
a platform in which all members actively participate and collaborate 
closely with the required and other partners of the workforce 
development system, including public and private organizations. This is 
crucial to the Local Board's role to integrate and align a more 
effective, job-driven workforce investment system.
    Proposed Sec.  679.300(b)(1) and (2) outlines the purposes of the 
Local Board. A key goal of Federally-funded training programs is to 
prepare job seekers ready to work with marketable skills. This includes 
providing strategic and operational oversight in collaboration with 
required and other partners to help the workforce development system 
achieve the purposes outlined in WIOA sec. 2, and assist in the 
achievement of the State's strategic and operational vision and goals 
outlined in the State Plan. The Local Board must work to develop a 
comprehensive and high-quality workforce development system by 
collaborating with its workforce and education partners to improve and 
align employment, training, and education programs under WIOA.
Section 679.310 What is the Local Workforce Development Board?
    Proposed Sec.  679.310 defines the Local Workforce Development 
Board. Proposed Sec.  679.310(a) explains that the CEO in each local 
area appoints the Local Board in accordance with WIOA sec. 107(b) and 
that the Governor must certify the Local Board on a biannual basis. 
This proposed section retains the same requirements found at 20 CFR 
661.300(a).
    Proposed Sec.  679.310(b) describes that the Local Board sets 
policy within the local area in partnership with the CEO, consistent 
with State policy. This proposed section retains the same requirements 
found at 20 CFR 661.300(b).
    Proposed Sec.  679.310(c), asserts that the CEO may enter into an 
agreement with the Local Board that describes the respective roles and 
responsibilities of the parties. However, the CEO remains liable for 
funds received under title I of WIOA unless they reach an agreement for 
the Governor to act as the local grant recipient and bear such 
liability. This proposed section retains the same requirements found at 
20 CFR 661.300(c).
    Proposed Sec.  679.310(d) describes that the Local Board, in 
partnership with the CEO, are responsible for the development of the 
local plan. This proposed section retains the same requirements found 
at 20 CFR 661.120(d).
    Proposed Sec.  679.310(e) affirms that in local areas with more 
than one unit of general local government, the CEOs of the respective 
units may execute an agreement to describe their responsibilities for 
carrying out their roles and responsibilities. If the various parties 
cannot come to an agreement, the Governor may appoint the Local Board. 
This proposed section retains the

[[Page 20705]]

same requirements found at 20 CFR 661.300(3).
    Proposed Sec.  679.310(f) indicates that in single-State areas, the 
State Board must fulfill the functions of the Local Board, which the 
Department also required under the WIA regulation at 20 CFR 661.300(f). 
As required by WIOA sec. 107(c)(4)(B)(iii), the proposed section 
clarifies that the State is not required to establish or report on 
local performance measures. This clarification presents a logical 
approach to local performance because the local area performance will 
be reflected in the State performance reports.
    Proposed paragraph (g) requires the CEO to establish by-laws, 
consistent with State policy, that help improve operations of the Local 
Board. Proposed Sec.  679.310(g)(1) through (7) require that at a 
minimum the by-laws address the nomination process used by the CEO to 
elect the Local Board chair and members, term limitations and how the 
term appointments will be staggered to ensure only a portion of 
memberships expire in a given year, the process to notify the CEO of a 
board member vacancy to ensure a prompt nominee, the proxy and 
alternative designee process that will be used when a board member is 
unable to attend a meeting and assigns a designee, the use of 
technology to improve board functions, brokers relationships with 
stakeholders, and any other conditions governing appointment or 
membership on the Local Board as deemed appropriate by the CEO. In 
addition to these required elements, the CEO must include any 
additional requirements in the board's by-laws that it believes is 
necessary to ensure the orderly administration and functioning of the 
board. An effective Local Board establishes clear roles, 
responsibilities, procedures, and expectations through its by-laws, and 
that these requirements will help Local Boards to be more agile and 
proactive in reacting to board turnover, increase board participation 
when board members are not able to physically attend board meetings, 
improve board functionality, and help ensure that the public is 
informed about the operation of the board.
Section 679.320 Who are the required members of the Local Workforce 
Development Board?
    Proposed Sec.  679.320 explains that the CEO in a local area must 
appoint a Local Workforce Development Board and provides guidelines on 
requirements and options for the CEO to follow in appointing members to 
the Local Board.
    Proposed Sec.  679.320(b) requires that a majority of the Local 
Board members must represent businesses as per WIOA sec. 107(b)(2)(A). 
Business representatives include owners, chief executive or operating 
officers, and other business executives, including small businesses, 
and business organizations. As reflected in proposed paragraph (b)(2), 
WIOA requires that business representatives on the Local Board must 
represent business that provide employment opportunities in in-demand 
industry sectors or occupations as defined in WIOA sec. 3(25). 
Employers with employment opportunities in high-growth sectors are 
uniquely suited to communicate the emerging workforce needs of 
employers in these high-growth, in-demand sectors to the Local Board.
    Proposed Sec.  679.320(c) explains the required and optional member 
categories that must make up at least 20 percent of the Local Board 
membership representing labor organizations, or where they do not 
exist, employee representatives. Proposed paragraphs (c)(1) and (2) 
require that the Local Board must include two or more representatives 
of labor organizations (or other employee representatives if there are 
no labor organizations operating in the local area) and one or more 
representatives of a joint-labor management registered apprenticeship 
program (or other registered apprenticeship program if there is no 
joint labor-management program in the local area). The use of the word 
`representatives' with respect to labor organization membership 
indicates a requirement for two or more members. In areas with joint 
apprenticeship programs, the apprenticeship representative must be a 
member of a labor organization or a training director.
    In addition to these required members, proposed paragraphs (c)(3) 
and (4) explain that the CEO may appoint one or more representatives of 
CBOs with experience in addressing the employment needs of individual 
barriers to employment including organizations that serve veterans or 
that provide or support competitive integrated employment for 
individuals with disabilities, and one or more representative of 
organizations with experience addressing the employment needs of WIOA-
eligible youth, including serving OSY. While not mandatory, the two 
representative categories in proposed paragraphs (c)(3) and (4) count 
towards reaching the 20 percent threshold. Proposed Sec.  679.320(c) 
underscores both the importance of registered apprenticeship, a proven 
training strategy that effectively meets the needs of both employers 
and workers,\1\ and the role of organized labor in workforce 
development, particularly in developing registered apprenticeship 
programs.
---------------------------------------------------------------------------

    \1\ Ibid; and Kleinman, Liu, Mastri, Reed, Reed, Sattar, & 
Ziegler (2012). An Effectiveness Assessment and Cost-Benefit 
Analysis of Registered Apprenticeship in 10 States. Mathematica 
Policy Research. Prepared for the U.S. Department of Labor, 
Employment and Training Administration.
---------------------------------------------------------------------------

    Proposed Sec.  679.320(d)(1) and (2) describe the entities required 
to be on the board to provide an adult education perspective and 
representation. These sections require that Local Boards include a 
minimum of one member with experience providing adult education and 
literacy activities under title II of WIOA and at least one member from 
a higher education institution, which may include community colleges, 
that provides workforce training.
    Proposed paragraph (d)(3) sets forth the statutory requirement that 
a minimum of one Local Board member must be included from each of the 
following organizations: Economic or community development 
organizations, the State ES Office under Wagner-Peyser serving the 
local area, and programs carried out under title I of the 
Rehabilitation Act of 1973 (29 U.S.C. 720, et seq.) other than sec. 112 
or part C of that title.
    Proposed Sec.  679.320(e) provides examples of other appropriate 
optional members of the board. In addition to the entities described in 
(e)(1) through (3), proposed paragraph (e)(4) explains that the CEO may 
appoint other individuals to the board at his or her discretion. This 
provides the CEO the flexibility to assemble a Local Board that 
connects all key resources and stakeholders.
    Proposed Sec.  679.320(f) requires that Local Board members possess 
optimum policy-making authority in the organizations they represent. 
This proposed section retains the same requirements found at 20 CFR 
661.315(c).
    Proposed Sec.  679.320(g) explains the nomination criteria for 
business and labor representatives, as well as representatives of adult 
education and literacy activities under title II when there are 
multiple institutions providing these services in a local area. These 
nomination requirements are unchanged from the requirements at 20 CFR 
661.315(e), however, a formal policy ensures that business and labor 
organizations are provided the opportunity to provide input on board 
member selection. When there is more than one local area provider of 
adult education and literacy activities under title II, or multiple 
institutions of higher education providing workforce

[[Page 20706]]

investment activities as described in WIOA 107(b)(2)(C)(i) or (ii), the 
CEO must solicit nominations from those particular entities. This 
requirement provides for a representative selection process for these 
membership categories.
    Proposed Sec.  679.320(h) explains that an individual may be 
appointed as a representative of more than one entity if the individual 
meets all the criteria for representation, including the criteria 
described in paragraphs (c) through (g) of this section, for each 
entity. While such ``multiple entity'' representation may not be 
appropriate in all cases, the Department proposes to allow an 
individual to represent more than one entity, because there may be 
instances when such representation may be an effective tool for 
reducing board size while still ensuring that all entities entitled to 
representation receive effective representation.
    Proposed Sec.  679.320(i) explains that all required board members 
must have voting privileges and that the CEO may give voting privileges 
to non-required members. Voting rights allow the required board members 
to have an effect on the Local Board's key decisions and initiatives. 
This will enable the required board members to effectively represent 
the individuals and organizations of their communities.
Section 679.330 Who must chair a Local Board?
    Proposed Sec.  679.330 affirms that the Local Board must elect a 
chairperson from the business representatives on the Local Board. This 
proposed section retains the same requirements found at 20 CFR 661.320.
Section 679.340 What is meant by the terms ``optimum policy-making 
authority'' and ``demonstrated experience and expertise''?
    Proposed Sec.  679.120 explains what is meant by ``optimum policy-
making authority'' and ``demonstrated experience and expertise'' for 
members of the Local Board under sec. 107(b)(5) of WIOA. Proposed 
paragraph (a) defines an individual with ``optimum policy-making 
authority'' as someone who can reasonably be expected to speak 
affirmatively on behalf of the entity he or she represents and to 
commit that entity to a chosen course of action. In order for the 
decisions of the board to have the greatest possible impact, all board 
members must be able to speak authoritatively when committing their 
organization to a decided course of action.
    Proposed paragraphs (b)(1) through (3) define the qualifications 
that satisfy the ``experience and expertise'' requirement for Local 
Board members. The CEO has a duty to appoint only those board members 
that have the skills and practical knowledge to contribute fully to the 
strategic vision of the local area's workforce system.
Section 679.350 What criteria will be used to establish the membership 
of the Local Board?
    Proposed Sec.  679.350 affirms that the CEO appoints the Local 
Board in accordance with the criteria in WIOA sec. 107(b) and 
applicable State criteria. This proposed section retains the same 
requirements found at 20 CFR 661.325.
Section 679.360 What is a standing committee, and what is its 
relationship to the Local Board?
    Proposed Sec.  679.360 establishes the roles and responsibilities 
of standing committees within the Local Board structure. Such 
committees were not legislated in the past, are optional under WIOA, 
and may be used to assist the Local Board in carrying out its 
responsibilities as outlined in WIOA sec. 107. The Department 
encourages the use of standing committees to expand opportunities for 
stakeholders to participate in board decision-making, particularly for 
representatives of organizations that may no longer sit on the Local 
Board but continue to have a stake in the success of board decisions. 
Such committees also expand the capacity of the board in meeting 
required functions.
    Proposed paragraph (a) expressly authorizes Local Boards to 
establish standing committees that include individuals who are not 
formal members of the board, but who have expertise to advise on issues 
that support the board's ability to attain the goals of the State, 
local and regional plans, and the objective of providing customer-
focused services to individuals and businesses. The subpart provides 
examples of areas where standing committees may be particularly 
beneficial, including serving targeted groups of customers such as 
individuals with disabilities and youth, and addressing one-stop system 
issues.
    Proposed paragraph (b) provides for Local Board discretion in terms 
of what kinds of standing committees, in any, the Local Board creates.
    Proposed paragraph (c) allows Local Boards to designate an entity 
in existence on the date that WIOA was enacted, such as an effective 
youth council, to fulfill the requirements of a standing committee as 
long as the entity meets the requirements outlined in paragraph (a).
Section 679.370 What are the functions of the Local Board?
    Proposed Sec.  679.370 provides the functions of the Local Boards 
as enumerated in statute. Under WIOA, the Local Board, in partnership 
with the CEO, must perform a variety of functions to support the local 
workforce system. Many of these functions have been expanded and 
enhanced under WIOA. Proposed Sec.  661.305(a), (c), (d), (g), (h), 
(j), (o), and (p) reiterate the relevant statutory requirements at WIOA 
secs. 107(d)(1) through (3), (6), (7), (9), (12), and (13); no further 
discussion of these provisions is provided below.
    Proposed paragraph (b) discusses a new role for Local Boards that 
are part of a planning region that includes multiple local areas. This 
regulation repeats the new statutory requirement that Local Boards that 
are part of a planning region must develop and submit a regional plan 
in collaboration with the other Local Boards in the region. Under WIOA, 
the local plan is incorporated into the regional plan, where required, 
in accordance with Sec.  679.540.
    Proposed paragraph (e) explains the role of the Local Boards in 
engaging employers, promoting business representation on the board, and 
developing and implementing proven or promising strategies for meeting 
the needs of employers and workers (like industry or sector 
partnerships) and providing linkages and coordination among employers 
and the workforce system. It enhances the Local Board's role in 
engaging employers beyond what was required by WIA by requiring the 
board to develop and implement promising strategies for meeting the 
employment skill needs of workers and employers. Engaging employers 
presents an opportunity to meet the local area's labor market and 
workforce development needs and connect customers seeking jobs or 
career advancement to greater employment prospects.
    Proposed paragraph (f) requires the Local Board to connect with 
representatives of secondary and post-secondary education programs in 
the local area in order to develop and implement career pathways. This 
regulation supports the statute's focus on career pathways.
    Proposed paragraph (i) enhances the oversight role of the Local 
Board beyond what was required in WIA. It requires the Local Board to 
conduct oversight, in partnership with the CEO, of the use and 
management of funds, including

[[Page 20707]]

ensuring the appropriate management and investment of funds to maximize 
performance outcomes under WIOA sec. 116.
    Proposed paragraph (k) requires that the Local Board must negotiate 
with CLEO and required partners on the methods for funding the 
infrastructure costs of one-stop centers in the local area in 
accordance with Sec.  678.715. This provision ensures each partner in 
the one-stop system is provided resources equitably.
    Proposed paragraph (l) also expands and enhances the Local Board's 
role in the selection of eligible service providers in the local area 
which must be conducted consistent with 2 CFR part 200. The regulation 
maintains the board's role in the identification of eligible providers 
of youth workforce investment activities, but now requires, consistent 
with WIOA sec. 107(d)(10)(B), that this identification be accomplished 
through the award of grants or contracts on a competitive basis. It 
also adds that the recommendations of the youth standing committee, if 
one is established, must be taken into account. It also indicates that 
the Local Board must identify eligible providers of career services 
through the award of contracts, if the one-stop operator does not 
provide such services. This provision does not impact those services 
provided by State merit staff. The final proposed expansion in this 
subpart is the requirement that Local Boards select one-stop operators 
through the competitive process described in Sec. Sec.  678.600 through 
678.635.
    Proposed paragraph (m) describes the requirement that the Local 
Board work with the State to ensure that there are sufficient numbers 
and types of providers of career and training services in the local 
area so that consumer choice and opportunities for employment for 
individuals with disabilities are maximized.
    Proposed paragraph (n) reflects a number of new functions for the 
Local Board related to coordination with adult education and literacy 
providers in the local area. The regulation requires the Local Board to 
review applications to provide adult education and literacy activities 
under title II to determine whether such applications are consistent 
with the local plan. It also requires the board to make recommendations 
to the eligible agency to promote alignment with the local plan. 
Further information regarding Local Board coordination with adult 
education and literacy providers is provided at 34 CFR 463 which 
requires the eligible agency to establish in its competition, a 
processes by which applicants must submit an application to the Local 
Board for review prior to its submission to the eligible agency. This 
subpart also includes a role for the board in replicating and 
implementing cooperative agreements in accordance with subparagraph (B) 
of sec. 101(a)(11) of the Rehabilitation Act of 1973 (29 U.S.C. 
721(a)(11)), and implementing cooperative agreements in accordance with 
that section with the local agencies administering plans under title I 
of that Act (29 U.S.C. 720 et seq.) (other than sec. 112 or part C of 
that title (29 U.S.C. 732, 741) to enhance the provision of services to 
individuals with disabilities and other individuals.
    Proposed paragraph (q) requires the Local Board to certify one-stop 
centers in accordance with Sec.  662.600.
Section 679.380 How does the Local Board satisfy the consumer choice 
requirements for career services and training services?
    Proposed Sec.  679.380 describes how the Local Board satisfies the 
consumer choice requirements for career services and training services. 
While WIA required the Local Board to maximize consumer choice for 
training services, consumer choice for career services is a new 
requirement under WIOA. Clarification of the board's role will minimize 
confusion for one-stop managers and frontline staff.
    Proposed paragraphs (a)(1) through (3) describe the process of how 
the Local Board assists the State Board in identifying providers, 
ensures a sufficient number of providers, and provides performance and 
cost information through the one-stop system.
    Proposed paragraphs (b)(2)(i) and (ii) describe how the Local Board 
satisfies the requirement to provide consumer choice for career 
services. In general, the Local Board must decide which services are 
best provided by the one-stop operator and which services may require a 
contracted provider. Furthermore, these paragraphs require the board to 
identify a wide range of services based on the needs in the local area 
with special attention to services for individuals with disabilities 
and literacy services. Requiring the board to identify a wide array of 
potential career service providers, while still allowing the board to 
ultimately determine the career service providers, balances board 
flexibility and customer choice. There is no requirement to provide 
customers with a choice of providers for a given career service.
Section 679.390 How does the Local Board meet its requirement to 
conduct business in an open manner under the ``sunshine provision'' of 
the Workforce Innovation and Opportunity Act?
    Proposed Sec.  679.390 maintains the Local Board's requirement to 
conduct business in an open manner, but expands on the scope of what 
the public must be made aware of and requires that information be 
shared by electronic means as well as through open meetings as provided 
for in WIOA sec. 107(e). These new requirements facilitate the 
transparent functioning of the board and contribute to smoother board 
operations. This can only be accomplished by each Local Board member 
actively participating during Local Board meetings, and by developing 
effective by-laws that outline the nomination process, which includes 
steps for a prompt nominee during a vacancy, term limitations, and 
encourage the use of technology and active participation.
Section 679.400 Who are the staff to the Local Board and what is their 
role?
    Proposed Sec.  679.400 describes the Local Board's authority to 
hire staff and the appropriate roles for board staff. This proposal 
clarifies and differentiates the staff's role and requires the Local 
Board to hire only qualified staff.
    Proposed paragraph (a) authorizes the board to hire a director and 
other staff. The volunteer board may not have the capacity to fulfill 
the required board functions at WIOA sec. 107(d). Board support ensures 
these functions are achieved.
    Proposed paragraph (b) requires the board to apply objective 
qualifications to the board director. It is in the best interest of the 
public workforce system to ensure the director of the board is 
competent and experienced with workforce programs and service delivery.
    Proposed paragraph (c) limits the board staff's role to assisting 
the board fulfill the functions at WIOA sec. 107(d) unless the entity 
selected to staff the board enters into a written agreement with the 
board and CEO as noted in paragraph (e) and described more fully in 
Sec.  679.430 of this part. The reasons that the Department proposes to 
require a written agreement if the staff provide functions outside of 
those in WIOA sec. 107(d) are discussed in the preamble to Sec.  
679.430 of this part.
    Proposed paragraph (d) requires Local Boards that elect to hire a 
director to establish objective qualifications to ensure that the 
selected candidate possesses the knowledge and skills to

[[Page 20708]]

assist the board in carrying out its functions.
    Proposed paragraph (e) limits the payment of the Local Board 
director and board staff to the basic pay rate for level II of the 
Executive Schedule under sec. 5313 of title 5, U.S.C. This requirement 
ensures that board staff are compensated at a reasonable level.
Section 679.410 Under what conditions may a Local Board directly be a 
provider of career services, or training services, or act as a one-stop 
operator?
    Proposed Sec.  679.410 explains the situations in which the Local 
Board may directly act as a one-stop operator, a provider of career 
services or training services. Proposed Sec.  679.410(a)(1)(i) and (ii) 
establishes that a Local Board may act as a one-stop operator where a 
Local Board successfully participates in a competition or if the board 
meets the criteria for sole source procurement. Under both 
circumstances, as required by proposed Sec.  679.410(a)(2), 
implementing WIOA sec. 107(g)(2), the Governor and CEO must agree to 
such selection. This clarifies the interaction between sec. 
122(d)(2)(A) of WIOA, which requires that Local Boards select a one-
stop operator through a competitive process, and WIOA sec. 107(g)(2), 
which states that a Local Board can be designated as a one-stop 
operator only with the agreement of the Governor and CEO in the local 
area. One interpretation of sec. 107(g)(2) is that Local Boards, with 
approval of the Governor and CEO, could be selected as one-stop 
operators without undergoing a competitive process. However, such a 
non-competitive selection is only appropriate after a competitive 
process has been conducted as required by WIOA sec. 122(d)(2)(A). The 
Department welcomes comments regarding this interpretation.
    Proposed Sec.  679.410(a)(3) also requires that where a Local Board 
acts as a one-stop operator, the State must ensure certification of 
one-stop centers. Local Boards are required to certify one-stop 
centers; however, States must fulfill that role when a Local Board acts 
as a one-stop operator to avoid conflicts of interest with a Local 
Board certifying its own performance.
    Proposed Sec.  679.410(b) provides that a Local Board may act as a 
provider of career services only with the agreement of the CEO in the 
local area and the Governor. The Department interprets WIOA sec. 
107(g)(2) to operate as a general exception from the requirement that 
the Local Board award contracts to providers of career services 
consistent with 2 CFR part 200. A Local Board acting as a direct 
provider of services is not optimal, as the Local Board is designed to 
oversee the one-stop system and its services, not provide them. 
However, unlike the selection of one-stop operators, which are 
statutorily required to be competitively selected, there is no 
similarly clear statutory requirement for providers of career services. 
Therefore, the Department does not propose to require that a 
competition fail before the Local Board may provide career services.
    Proposed 679.410(c) specifies that a Local Board is prohibited from 
providing training services unless the Governor grants a waiver in 
accordance with WIOA sec. 107(g)(1). Proposed Sec.  679.410(c)(1) 
requires the State to develop a procedure to review waiver requests 
received from Local Boards and the limitations of the waiver that 
incorporates the criteria listed at WIOA sec. 107(g)(1)(B)(i). While 
WIA contained provisions for a similar waiver, it did not include any 
such criteria. The intent of this waiver is to provide the option for 
Local Boards to provide training services in extenuating circumstances 
only, such as rural areas with limited training providers. A formal 
procedure facilitates transparency and clarity regarding the criteria 
for the training waiver and ensures that any Local Board that applies 
is subject to the same criteria. Furthermore, the new criteria 
underscore that the waiver is not appropriate for local areas that have 
a robust network of training providers.
    Proposed Sec.  679.410(c) indicates that the local area must make 
the request to be designated as a training provider available through 
public comment for a period of 30 days or more and include those 
comments in the local area's final request to the State. The proposed 
section also outlines the timeline for approval and Governor's 
authority to revoke a waiver if the Governor determines it is no longer 
needed or the Local Board demonstrates a pattern of inappropriate 
referrals. This proposed section helps ensure that the local area is 
acting in good faith when asserting that there are insufficient 
providers in the local area and protects against a conflict of 
interest.
    Proposed Sec.  679.410(d) affirms that the general prohibitions 
that apply to Local Boards directly providing career services or 
training services also apply to board staff.
Section 679.420 What are the functions of the local fiscal agent?
    Proposed Sec.  679.420 describes the role of the local fiscal agent 
when the CEO in a local area elects to designate a fiscal agent. While 
the term `fiscal agent' was widely used under WIA, the term was never 
defined, which led to inconsistent understanding of their role and 
function throughout the workforce system. This section clarifies the 
role of a fiscal agent to create a common understanding of that role.
    Proposed paragraph (a) describes that the CEO or the Governor, 
where the Governor serves as the local grant recipient for a local 
area, may designate an entity to serve as a local fiscal agent.
    Proposed paragraph (b) provides a list of the key functions of a 
fiscal agent. The appropriate role of fiscal agent is limited to 
accounting and funds management functions rather than policy or service 
delivery. Proposed fiscal agent functions include those listed in 
paragraphs (b)(1) through (6) and (c) provide additional potential 
functions for single State areas. The Department requests comment from 
State and local stakeholders regarding appropriate functions for a 
fiscal agent.
Section 679.430 How do entities performing multiple functions in a 
local area demonstrate internal controls and prevent conflict of 
interest?
    Proposed Sec.  679.430 clarifies how entities performing multiple 
functions in a local area demonstrate internal controls and prevent 
conflict of interest. This proposed provision requires a written 
agreement with the Local Board and CEO when a single entity operates in 
more than one of the following roles: Local fiscal agent, Local Board 
staff, one-stop operator, or direct provider of career services or 
training services. The proposed paragraph clarifies how the 
organization will carry out its responsibilities while demonstrating 
compliance with WIOA and corresponding regulations, relevant OMB 
circulars, and the State's conflict of interest policy. While it may be 
appropriate in some instances for a single organization to fulfill 
multiple roles, a written agreement between the Local Board, CEO, and 
the organization fulfilling multiple roles is the best method to limit 
conflict of interest or the appearance of conflict of interest, 
minimize fiscal risk, and develop appropriate firewalls within a single 
entity performing multiple functions.
4. Subpart D--Regional and Local Plan
    WIOA provides designated regions and local workforce areas the 
responsibility and opportunity to develop employment and training 
systems tailored specifically to regional economies. These systems must 
meet the needs of the full range of learners and workers, including 
those with

[[Page 20709]]

barriers to employment. The system must also address the specific needs 
of regional employers and the skills they require. WIOA requires the 
Local Board, in partnership with the CEO, to submit a local plan to the 
Governor. If the local area is part of a planning region, the Local 
Board will submit its local plan as part of the regional plan and will 
not submit a separate local plan. The local or regional plan provides 
the framework for local areas to define how their workforce development 
systems will achieve the purposes of WIOA. The regional or local plans 
serve as 4-year action plans to develop, align, and integrate the 
region and local area's job-driven workforce development systems, and 
provides the platform to achieve the local area's visions and strategic 
and operational goals. Since the local plan is only as effective as the 
partnerships that operationalize it, it must represent a collaborative 
process among local elected officials, boards, and required and other 
partners (including economic development, education, and private sector 
partners) to create a shared understanding of the local area's 
workforce investment needs, a shared vision of how the workforce 
investment system can be designed to meet those needs, and agreement on 
the key strategies to realize this vision.
Section 679.500 What is the purpose of the regional and local plan?
    Proposed Sec.  679.500 describes the purpose of the regional and 
local plans. Proposed Sec.  679.500(a)(1) through (4) explain that the 
local plan is the primary vehicle for communicating the Local Board's 
vision for the local workforce system and aligning and integrating 
local service delivery across Federal programs in a region to foster 
better alignment of Federal investments in job training, integrate 
service delivery across programs, and ensure that the workforce system 
is job-driven and matches employers with skilled individuals. Proposed 
Sec.  679.500(b) clarifies that when a State-designated region 
encompasses two or more local areas, the regional plan must meet the 
purposes of the local plan and coordinate resources across the region 
and across local areas. This approach is intended to align resources 
between multiple Local Boards.
Section 679.510 What are the requirements for regional planning?
    Proposed Sec. Sec.  679.510, 679.520, and 679.530 describe the 
required contents of the regional plan, the approval process, and when 
the regional plan must be modified. While sec. 106(c) of WIOA clearly 
describes the required contents of the regional plan, it provides less 
detail about the approval and modification process, saying only that 
officials in the planning region must ``prepare, submit, and obtain 
approval'' of the plan. Because the local plan is a component of the 
regional plan, the Department has decided to apply the approval and 
modification requirements, including the requirement to seek public 
comment and sunshine provision, to the regional plan.
    Proposed Sec.  679.510 implements sec. 106(c) of WIOA and describes 
the State and local requirements for regional planning. Proposed Sec.  
679.510(a)(1) requires Local Boards and CEOs to participate in a 
regional planning process. In some instances, where a single local 
workforce development area comprises a region, the local area will 
carry out its planning in this context.
    Proposed Sec.  679.510(a)(2) describes the regional plan contents 
and submission process. The Local Boards and CEOs must submit a 
regional plan to the Governor for approval that includes the activities 
listed at proposed Sec.  679.510(a)(1) and incorporates the local plans 
developed for each local area. Local areas are not required to submit 
an additional local plan outside of the regional planning process. The 
coordination required for regional planning is an effective method for 
local areas to identify areas of efficiency, coordinate effective 
practices, and streamline service delivery. While the regional plan 
requires coordination of local performance negotiations with the State, 
each CEO, as required by Sec.  677.210(b) and (c) will negotiate 
performance goals with the State and will remain ultimately responsible 
for ensuring that the local area meets or exceeds those goals.
    Proposed Sec.  679.510(b) requires Local Boards to make the 
regional plan available for comment before submitting the plan to the 
Governor and describes the steps necessary to ensure adequate public 
comment. This requirement provides all affected entities and the public 
an opportunity to provide input to inform plan development.
    Proposed Sec.  679.510(b)(5) specifically requires the public 
comment process to be consistent with the `sunshine provisions' at WIOA 
sec. 107(e), which requires that the Local Boards must make the plan 
available through electronic means and open meetings. This requirement 
ensures greater transparency in the planning process, and encourage 
regions to consider efforts to maximize the transparency and 
inclusiveness of the process.
    Proposed Sec.  679.510(c) requires the State to provide technical 
assistance and labor market data to facilitate regional planning. 
Because States possess a broader understanding of labor market 
information across jurisdictions and tools for analysis that individual 
local areas may not possess, States have a responsibility to provide 
and instruct local areas on the effective use of regional labor market 
information.
Section 679.520 What are the requirements for approval of a regional 
plan?
    Proposed Sec.  679.520 describes the approval of the comprehensive 
4-year regional plan. This section requires that the Governor review 
completed plans and stipulates that unless the Governor determines that 
any of the conditions described in proposed paragraphs (a) through (c) 
are met the plan will be considered approved 90 days after submission 
of the plan to the Governor.
Section 679.530 When must the regional plan be modified?
    Proposed Sec.  679.530 describes when a regional plan must be 
modified. Proposed Sec.  679.530(a) requires the Governor to establish 
procedures governing regional plan modification, which will help ensure 
that the biannual modification of regional plans is conducted 
consistently throughout the State.
    Proposed Sec.  679.530(b) explains that the Local Boards and 
appropriate CEOs in the planning region must review the regional plan 
every 2 years and submit a modification based on significant changes in 
labor market and economic conditions and other factors including 
changes to local economic conditions, and any changes in the financing 
available to support WIOA title I and partner-provided WIOA services. 
This proposed requirement helps ensure that planning regions use their 
plans to drive economic development, sector, career pathway, and 
customer-focused service delivery strategies.
Section 679.540 How are local planning requirements reflected in a 
regional plan?
    Proposed Sec.  679.540 outlines how local planning requirements are 
reflected in a regional plan. WIOA is silent on the coordination of the 
regional and local plan, noting only that the regional plan must 
``incorporate local plans for each of the local areas in the planning 
region.'' The Department has determined that the most appropriate and 
least burdensome approach to implementing this provision is to 
incorporate the local plans within the regional plan. In this 
arrangement, the regional plan is completed in

[[Page 20710]]

cooperation with the Local Boards and CEOs in a planning region, per 
Sec.  679.510(a). Each individual Local Board and CEO will respond to 
the local planning requirements at Sec.  679.560(b) through (e) 
individually. The Local Boards and CEOs in a planning region must 
cooperate to develop a common response to the local planning 
requirements that discuss regional labor market information, as 
required by Sec.  679.540(a), and any other appropriate requirements 
permitted by the Governor per Sec.  679.540(b). When these activities 
are completed, the planning region submits one regional plan to the 
Governor that includes the common discussion of regional labor market 
information and other requirements as required by the Governor, as well 
as each local plan in a single document.
    Proposed Sec.  679.540(a) requires regional plans to include the 
items identified in Sec. Sec.  679.510 and 679.560, which implement 
secs. 106(c)(1) and 108(b) of WIOA.
    Proposed Sec.  679.540(b) specifies the Governor may issue regional 
planning guidance that allows local areas to provide a common response 
to any local requirements it deems as a shared regional responsibility, 
which may include regional economic analysis. The Department recognizes 
there are many planning requirements and encourages Governors to 
minimize the individual local area burden by reducing duplication and 
encouraging a coordinated service delivery strategy.
Section 679.550 What are the requirements for the development of the 
local plan?
    Proposed Sec.  679.550 explains the requirements for the 
development of the local plan. This section emphasizes the importance 
of collaboration and transparency in the development and submission of 
the local plan and subsequent modifications.
    Proposed Sec.  679.550(a) implements sec. 108(a) of WIOA and 
describes the general requirements for the preparation and content of 
the local plan.
    Proposed Sec.  679.550(b) requires Local Boards to make the local 
plan available for comment before submitting the plan to the Governor 
and describes the steps necessary to ensure adequate public comment. 
This requirement provides all affected entities and the public an 
opportunity to provide input to inform plan development. This section 
implements sec. 108(d) of WIOA.
    Proposed Sec.  679.550(b)(5) requires the public comment process to 
be consistent with the `sunshine provisions' at WIOA sec. 107(e) and 
proposed Sec.  679.390 and that the Local Board must make the plan 
available through electronic means and in open meetings. This 
requirement ensures transparency to the public. This provision 
implements sec. 107(e) of WIOA.
Section 679.560 What are the contents of the local plan?
    Proposed Sec.  679.560, consistent with sec. 108(b) of WIOA, 
explains what information must be included in the local plan. These 
requirements set the foundation for WIOA principles, by fostering 
strategic alignment, improving service integration, and ensuring that 
the workforce system is industry-relevant, responding to the economic 
needs of the local workforce development area and matching employers 
with skilled workers. In addressing these planning requirements, boards 
engage strategic partners to develop and implement regionally aligned 
workforce development priorities and streamlined service delivery. 
Local and regional planning also is expected to lead to greater 
efficiencies by reducing duplication and maximizing financial and human 
resources. WIOA significantly expands the content requirements for the 
local plan.
    Proposed Sec.  679.560(a)(1) specifies that the local plan must 
meet the requirements of WIOA sec. 108(b)(1). Of relevance to this 
section, the use of economic and labor market information ensures that 
the local strategies are based on a thorough understanding of the 
economic opportunities and workforce needs of the region, and inform 
the alignment of strategies to the best interests of job seekers and 
employers with the economic future of the State. Similarly, the 
contents of the plan must include an analysis of the workforce 
development activities in the region, including an analysis of the 
strengths and weaknesses of such services to address the identified 
education and skill needs of the workforce and employment needs in the 
region. A thorough assessment of the best available information or 
evidence of effectiveness and performance information for specific 
service models in the region, as well as a plan to improve the 
effectiveness of such programs by adopting proven or promising 
practices, is an important part of this assessment and strategic 
vision. In addition, the regional analyses described in this proposed 
section may be conducted in cooperation with the other local areas in a 
local planning region as part of the regional planning requirements 
described at Sec.  661.290 and must not be conducted by each local 
area.
    Proposed Sec.  679.560(a)(1)(iii), consistent with sec. 108(c) of 
WIOA permits local areas to use an existing analysis to meet the 
requirements in Sec.  679.560(a).
    Proposed Sec.  679.560(b) outlines the required contents of the 
local plan that are required by secs. 108(b)(2)-(21) of WIOA to ensure 
that a local plan presents a comprehensive, customer-focused, and 
actionable service delivery strategy. This section emphasizes alignment 
and coordination to a greater extent than that required by WIA. Except 
where noted, the requirements outlined in Sec.  679.560(b)(2) through 
(21) simply reiterate the statutory requirements without additional 
explanation.
    Proposed Sec.  679.560(b)(2) requires elaboration on the strategies 
for alignment by requiring that the Local Board describe how such 
alignment will improve access to services and to activities that lead 
to a recognized post-secondary credential. Proposed Sec.  
679.560(b)(2)(ii) explains that the Local Board must describe how they 
will work with entities carrying out core programs to facilitate the 
development of career pathways and co-enrollment, as appropriate, in 
core programs. Co-enrollment allows partners to leverage resources, 
while providing a more comprehensive service delivery strategy that 
meets the needs of customers with several barriers to employment. 
Additionally, coordination of services in a customer-focused manner 
minimizes the possibility of subsequent reentry into the public 
workforce system in cases where needed services were not provided or 
possible barriers not addressed.
    Proposed Sec.  679.560(b)(4) explains that the Local Board must 
describe how they will coordinate local workforce investment activities 
with regional economic development activities that are carried out in 
the local area and how the Local Board will promote entrepreneurial 
skills training and microenterprise services. Alignment between the 
public workforce system and local economic development activities is 
critical in order to identify and fulfill industry talent needs by 
training customers for emerging and in-demand job skills. Furthermore, 
microenterprise services refers to training for the purposes of self-
employment. This training strategy may be appropriate for individuals 
or participants with multiple barriers to employment, including persons 
with disabilities.
    Proposed Sec.  679.560(b)(5) focuses on the delivery of services 
through the one-stop delivery system in the local area

[[Page 20711]]

and requires descriptions regarding how the Local Board will ensure the 
continuous improvement of eligible providers of services, including 
through the promotion of proven and promising approaches and 
evaluation; how the Local Board will facilitate access to services, 
including in remote areas, through the use of technology and other 
means; how entities within the one-stop delivery system, including one-
stop operators and the one-stop partners, will comply with WIOA sec. 
188, if applicable, and applicable provisions of the Americans with 
Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) regarding physical 
and programmatic accessibility; and the roles and resource 
contributions of the one-stop partners. WIOA, and the corresponding 
regulations at Sec.  678.420, establishes the roles of one-stop 
partners. These include providing access to the partner's programs 
through the one-stop system; making program funds available to maintain 
the one-stop delivery system, including infrastructure costs; providing 
applicable career services; entering into a MOU with the Local Board 
regarding one-stop operation; ongoing participation in the one-stop 
system; and providing representation on State and Local Workforce 
development boards as required and Board committees as needed. 
Additionally, one-stop partners are responsible for sharing 
infrastructure and career services costs. Documenting how one-stop 
partners will manage their shared roles and contribute to the funding 
of the one-stop in the local plan increases accountability and 
transparency.
    Proposed Sec.  679.560(b)(6) through (11) focus on coordination 
activities for improving services and avoiding duplication. Proposed 
Sec.  679.560(b)(11) reflects a new statutory requirement not contained 
in WIA that the local plan include plans, assurances and strategies for 
maximizing coordination with Wagner-Peyser Act services and other 
services provided through the one-stop system.
    Proposed Sec.  679.560(b)(12) and (13) are also new requirements 
under WIOA. Proposed Sec.  679.560(b)(12) speaks to coordination with 
adult education and literacy activities under title II of WIOA and 
requires a description of how the Local Board will carry out the review 
of local applications submitted under title II. Proposed Sec.  
679.560(b)(13) is intended to enhance the provision of services to 
individuals with disabilities through cooperative agreements, as 
defined in WIOA sec. 107(d)(11), and other collaborative efforts 
between the Local Board and the local VR entity. All such collaborative 
efforts must be described in the local plan.
    Proposed Sec.  679.560(b)(16) requires the Local Board to include 
local levels of performance that the board has negotiated with the 
Governor in the local plan. Additionally, this section proposes that 
the local plan must include the standards, process, or performance 
measures that the Local Board will use to evaluate the performance of 
the local fiscal agent where the CEO has designated such an entity. 
These proposed requirements increase transparency and public 
accountability, while helping ensure the Local Board has the 
information it needs to ensure sustained fiscal integrity of public 
funds.
    Proposed Sec.  679.560(b)(19) maintains the requirement that the 
local plan include a description of the process used by the Local Board 
to provide for public input into the development of the plan and for 
public comment on the completed plan prior to its submission. Unlike 
WIA, this regulation identifies the 30-day timeframe for public comment 
prior to submission of the plan.
    Proposed Sec.  679.560(b)(20), new to WIOA, requires a description 
of how the one-stop centers are implementing and transitioning to an 
integrated, technology-enabled intake and case management information 
system for programs carried out under WIOA and by one-stop partners.
    Proposed Sec.  679.560(b)(21) requires that the plan include the 
process by which priority of service must be applied by the one-stop 
operator, but also clarifies that such priority is for adult career and 
training services and must be given to recipients of public assistance, 
other low-income individuals, and individuals who are basic skills 
deficient. The Department is proposing to include this requirement 
under the authority to require additional reporting, recordkeeping, and 
investigations. Including the priority service policy in the local plan 
will help ensure a more uniform application of the policy throughout 
the local area.
    As permitted by sec. 108(b)(22) of WIOA, proposed Sec.  679.560(c) 
requires that the plan include any additional information required by 
the Governor.
    Proposed Sec.  679.560(d) recommends that the local plan identify 
the portions of the local plan that the Governor has designated as 
appropriate for common response among all local areas in a planning 
region, as per the regulations at 20 CFR 679.540.
    Proposed Sec.  679.560(e) reflects the requirement in WIOA sec. 
108(e) that any comments submitted during the public comment period 
that represent disagreement with the plan must be submitted with the 
local plan.
Section 679.580 When must the local plan be modified?
    Proposed Sec.  679.580(a) requires the Governor to establish 
procedures governing local plan review and modification to ensure that 
the biannual review and modification of local plans is conducted 
consistently throughout the State.
    Proposed Sec.  679.580(b) explains that the Local Board and 
appropriate CEOs must review the local plan every 2 years and submit a 
modification as needed, based on significant changes in labor market 
and economic conditions and other factors including changes to local 
economic conditions, changes in the financing available to support WIOA 
title I and partner-provided WIOA services, changes to the Local Board 
structure, or a need to revise strategies to meet performance goals. 
This requirement is consistent with WIOA sec. 108(a). This proposed 
requirement helps ensure that local areas use their plans to drive 
service delivery strategies and the activities the local area is 
performing remains consistent with the plan.
Section 679.570 What are the requirements for approval of a local plan?
    Proposed Sec.  679.570 describes the approval of the comprehensive 
4-year local plan. Proposed Sec.  679.570(a) requires that the Governor 
review completed plans and stipulates that unless the Governor 
determines that the conditions described in paragraphs (a)(1) through 
(3) are met the plan will be considered approved 90 days after 
submission of the plan to the Governor. This section implements sec. 
108(e) of WIOA.
    Proposed Sec.  679.570(b) outlines the processes, roles, and 
responsibilities for situations in which the State is a single local 
area. Proposed Sec.  679.570(b)(1) clarifies the State must incorporate 
the local plan in the State's Unified or Combined State Plan submitted 
to DOL. Proposed Sec.  679.570(b)(2) states that the Secretary of Labor 
will perform the roles assigned to the Governor as they relate to local 
planning activities. Proposed Sec.  679.570(b)(3) indicates the 
Secretary of Labor will issue planning guidance for single area States. 
This section implements sec. 106(d) of WIOA.
    The Department recognizes that the development of the local plan is 
dependent on several other essential State and local WIOA 
implementation activities and that local areas may not be

[[Page 20712]]

able to respond fully to each of the required elements of the local 
plan in the timeframe provided. The Department seeks comment on the 
scope of the challenges local areas may face regarding regional and 
local planning, and potential actions that the Department can take to 
help local areas address these challenges.
5. Subpart E--Waivers/WorkFlex (Workforce Flexibility Plan)
    This subpart describes the statutory and regulatory waiver 
authority provided by WIOA sec. 189(i), and the requirements for 
submitting a Workforce Flexibility Plan under WIOA sec. 190. WIOA 
provides States the flexibility to request a waiver of program 
requirements in order to implement new strategic goals for the 
improvement of the statewide workforce development system and to 
provide better customer service in exchange for accountability for 
expected programmatic outcomes. A Workforce Flexibility plan provides 
additional flexibility to the State. In general, a State with an 
approved Workforce Flexibility plan is given the authority to identify 
local level provisions to waive without further approval from the 
Secretary of Labor to achieve outcomes specified in the plan.
    A description of what provisions of WIOA and Wagner-Peyser may and 
may not be waived is included, along with an explanation of the 
procedures for requesting a waiver. The subpart also describes what may 
and may not be waived under a Workforce Flexibility Plan, and the 
procedures for obtaining approval of a plan. The WIOA requirements for 
obtaining approval for a waiver or Workforce Flexibility Plan are 
similar to those in WIA secs. 189(i) and 192, respectively; therefore, 
many of the proposed regulations are the same as the regulations 
implementing WIA.
Section 679.600 What is the purpose of the General Statutory and 
Regulatory Waiver Authority in the Workforce Innovation and Opportunity 
Act?
    Proposed Sec.  679.600(a) explains that the purpose of the general 
statutory and regulatory waiver authority, provided under WIOA sec. 
189(i)(3), is to provide flexibility to States and local areas to 
enhance their ability to improve the statewide workforce investment 
system to carry out WIOA's goals and purposes.
    Proposed Sec.  679.600(b) explains that a waiver may be requested 
to address impediments to a strategic plan that is consistent with the 
purposes of title I of WIOA, which are identified at Sec.  675.100(a) 
through (h).
Section 679.610 What provisions of the Workforce Innovation and 
Opportunity Act and the Wagner-Peyser Act may be waived, and what 
provisions may not be waived?
    Proposed Sec.  679.610(a) implements WIOA sec. 189(i)(3)(A)(i), and 
explains that the Secretary may waive for a State or local area any of 
the statutory or regulatory requirements of WIOA title I, subtitles A, 
B, and E, except for the requirements listed in paragraphs (a)(1) 
through (12). As noted in this section, the purposes of title I of WIOA 
are described at 20 CFR 675.100(a) through (h). The Department will 
provide examples of requirements that it will not waive in subsequently 
issued guidance.
    Proposed Sec.  679.610(b) follows WIOA sec. 189(i)(3)(A)(ii), and 
explains that the Secretary may waive the statutory or regulatory 
requirements of Wagner-Peyser secs. 8 through 10, except for the 
requirements listed in paragraphs (b)(1) and (2).
Section 679.620 Under what conditions may a Governor request, and the 
Secretary approve, a general waiver of statutory or regulatory 
requirements under the Workforce Innovation and Opportunity Act?
    Proposed Sec.  679.620(a) through (f) implements WIOA sec. 
189(i)(3) and describes the conditions under which a Governor may 
request, and the Secretary may approve a waiver of statutory or 
regulatory requirements.
    Proposed Sec.  679.620(a) explains that the Secretary will issue 
guidelines on waiving WIOA and Wagner-Peyser requirements. States will 
be required to follow the Secretary's guidelines, which supplement the 
requirements listed in 20 CFR 679.600 through 679.620. The guidelines 
will be issued contemporaneously with State planning guidance. This 
proposed section retains the same requirements found at 20 CFR 
661.420(f).
    Proposed Sec.  679.620(b) explains that the Governor may request a 
general waiver in consultation with the appropriate CEOs by submitting 
a waiver plan which accompanies the State's WIOA 4-year Unified or 
Combined State Plan, 2-year modification, or by directly submitting a 
waiver plan at any time after a State's WIOA Plan is approved. This 
approach is consistent with WIOA secs. 102 and 103, which require the 
State to submit either a 4-year Unified or Combined State Plan.
    Proposed Sec.  679.620(c) explains that a Governor's waiver request 
may seek waivers for the entire State or for one or more local areas 
within the State. This proposed section retains the same requirements 
found at 20 CFR 661.420(b).
    Proposed Sec.  679.620(d) lists the required components of a waiver 
plan for the improvement of the statewide workforce development system 
and includes the requirements of WIOA sec. 189(i)(3)(B). Specifically, 
the plan must identify the statutory or regulatory requirements that 
are requested to be waived, and the goals that the State or local area 
intend to achieve as a result of the waiver. The plan must also 
describe the actions that the State or local area has taken to remove 
State or local statutory or regulatory barriers; the goals of the 
waiver and the expected programmatic outcomes if the waiver is granted; 
the individuals affected by the waiver; and the processes used to 
monitor the progress in implementing the waiver, provide notice to any 
Local Board affected by the waiver, and provide any Local Board 
affected by the waiver an opportunity to comment on the request.
    Proposed Sec.  679.620(d)(1) requires that the waiver plan explain 
how the goals of the waiver relate to the Unified or Combined State 
Plan. Waivers must support State strategies as enumerated in the State 
Plan. Waivers are not separate or detached from the Unified or Combined 
State Plan: An approved waiver constitutes a modification of the State 
Plan.
    Additionally, as required by Sec.  679.620(d)(4), the waiver plan 
must describe how the waiver will align with the Department's 
priorities, such as supporting employer engagement, connecting 
education and training strategies, supporting work-based learning, and 
improving job and career results. The Department's priorities may 
change and evolve to reflect major changes in the economy, changes in 
the needs of the workforce, and new developments in service strategy 
approaches. This new requirement ensures that the Department is issuing 
waivers that align with and help achieve the priorities of the 
Department. As noted in Sec.  679.620(d)(4)(v), a more complete list of 
current priorities will be articulated in future guidance.
    Proposed Sec.  679.620(d)(5) requires the waiver plan to generally 
describe the individuals affected by the proposed waiver. This section 
specifically requires that the plan describe how the waiver will impact 
services for disadvantaged populations and individuals with multiple 
barriers to employment. One of the primary purposes of WIOA is to 
increase and enhance education, employment, and

[[Page 20713]]

training opportunities for individuals with barriers to employment, 
including low-income individuals, individuals with disabilities, the 
Native American population, and the other groups identified in sec. 
3(24) of the Act. The Department has added this specific requirement to 
ensure that the State, as part of its waiver request, considers the 
employment and training needs of these groups and how the proposed 
waiver would affect these populations.
    An additional requirement at proposed Sec.  679.620(d)(6)(iv) is 
that the plan must describe the processes used to ensure meaningful 
public comment, including comment by business and organized labor. This 
requirement was included to ensure as transparent a process as 
possible, to make sure that the public is given an opportunity to voice 
their concerns or support of potential changes in the public workforce 
system, while the Governor is afforded an opportunity to reflect on the 
opinions of the public before proceeding with a waiver request. This 
proposed section retains the same requirements found at 20 CFR 
661.420(c)(5)(iv).
    The Governor must also describe, per Sec.  679.620(d)(6)(v), the 
process used to collect and report information about the goals and 
outcomes achieved under the waiver plan in the State's WIOA Annual 
Report. The Department approves waivers in order to assist States and 
local areas in achieving goals and outcomes that will improve the 
statewide workforce development system. This collection and reporting 
requirement holds States accountable for the goals and outcomes to be 
achieved with the approved waivers and provides a regular and public 
assessment of the effectiveness of States and local areas in doing so.
    Finally, proposed Sec.  679.620(d)(7) explains that if a waiver is 
up for renewal, the Secretary may require that States provide the most 
recent data available about the outcomes achieved under the existing 
waiver. This requirement will ensure that the Department has the most 
recent, relevant information before deciding whether to renew a waiver. 
As part of its decision the Department may take other factors into 
account when deciding to renew or deny a waiver.
    Proposed Sec.  679.620(e) specifies that the Secretary will issue a 
decision on a waiver request within 90 days of the receipt of the 
waiver, consistent with WIOA sec. 189(i)(3)(C).
    Proposed Sec.  679.620(f) implements the requirements of WIOA secs. 
189(i)(C)(i) and (ii), and explains that the Secretary will approve a 
waiver request only to the extent that the Secretary determines that 
the requirements for which a waiver is requested impede the ability of 
either the State or local area to implement the State's plan to improve 
the statewide workforce investment system, and the State has executed a 
MOU with the Secretary requiring the State to meet, or ensure that the 
local area meets, agreed-upon outcomes and to implement other 
appropriate measures to ensure accountability. This section also makes 
approval of the waiver contingent on the Secretary's determining that 
the waiver plan meets all of the requirements of WIOA sec. 189(i)(3) 
and Sec. Sec.  679.600 through 679.620. This proposed section retains 
the same requirements found at 20 CFR 661.420(e), except that the 
statutory reference has changed from sec. 189(i)(4) to sec. 189(i)(3).
    Consistent with current practice, proposed Sec.  679.620(g) 
authorizes the Secretary to approve a waiver for as long as the 
Secretary determines is appropriate; however, the duration of the 
waiver may not exceed the duration of a State's current Unified or 
Combined State Plan. For example, a waiver granted during the third 
year of the Plan would have to be reconsidered as part of the 
subsequent plan submission and approval cycle, at the latest. By 
limiting the duration of the waiver, the Department will be able to 
ensure that the waiver is consistent with the goals of the State's plan 
and remains consistent with the priorities of the Department.
    Proposed Sec.  679.620(h) gives the Secretary the authority to 
revoke a State's waiver under certain circumstances. The Secretary has 
an obligation to oversee the implementation and performance of States 
under their State plan, including any waivers granted by the 
Department. As part of this responsibility, the Department proposes to 
allow the Secretary to revoke a waiver granted under this section if 
the State fails to meet the agreed upon outcomes and measures, the 
State fails to comply with the terms and conditions of the MOU or other 
document that includes the terms and conditions of the waiver, and if 
the Secretary determines that the waiver no longer meets any of the 
requirements of Sec. Sec.  679.600 through 679.620. Limiting the 
Secretary's authority to revoke to these circumstances balances the 
State's need for flexibility with the Secretary's duty to oversee the 
implementation of the waiver.
Section 679.630 Under what conditions may the Governor submit a 
Workforce Flexibility Plan?
    Proposed Sec.  679.630 describes the conditions under which the 
Governor may submit a workforce flexibility (work-flex) plan.
    Proposed Sec.  679.630(a) includes the requirements of WIOA sec. 
190(a), and explains that a State may submit a workforce flexibility 
plan for approval by the Secretary, under which three categories of 
statutory or regulatory requirements can be waived.
    Proposed Sec.  679.630(a)(1), implementing WIOA sec. 190(a)(1), 
permits a State to waive any of the statutory or regulatory 
requirements that are applicable to local areas under WIOA title I (if 
the local area requests the waiver), except for the requirements listed 
in proposed paragraphs (a)(1)(i) through (iv). In addition to the 
statutory exceptions, this proposed section adds the requirement that 
any of the statutory provisions essential to WIOA's title I purposes 
cannot be waived.
    The second category, described in proposed Sec.  679.630(a)(2), and 
implementing WIOA sec. 190(a)(2), explains that any of the statutory or 
regulatory requirements applicable to the State under Wagner-Peyser Act 
secs. 8 through 10 may be waived, except for requirements listed at 
Sec.  679.630(a)(2)(i) and (ii). This proposed section retains the same 
requirements found at 20 CFR 661.430(a)(2).
    Proposed Sec.  679.630(a)(3), implementing WIOA sec. 190(a)(3), 
permits waiver of the statutory or regulatory requirements applicable 
under the Older Americans Act of 1965 to State agencies on aging with 
respect to activities carried out using funds allotted under sec. 
506(b) of the Older Americans Act, except the for requirements 
identified at Sec.  679.630(a)(3)(i) through (iv).
    Proposed Sec.  679.630(b) explains what States are required to 
include in their workforce flexibility plan.
    Proposed Sec.  679.630(b)(1) and (3) implement the requirements at 
WIOA sec. 190(b)(1), and specify that a State workforce flexibility 
plan must include a description of the process by which local areas in 
the State may submit and obtain State approval of applications for 
waivers, and the requirements of title I of WIOA that are likely to be 
waived by the State under the plan.
    Proposed Sec.  679.630(b)(2) adds the requirement that the plan 
include a description of the criteria that the State will use to 
approve local area waiver requests and how such requests support 
implementation of the goals identified

[[Page 20714]]

in the State plan. These criteria must be addressed in the waiver 
review process discussed at Sec.  679.630(b)(1). This requirement 
ensures that all local waiver requests are evaluated consistently by 
the State.
    Proposed Sec.  679.630(b)(4) implements the requirements of WIOA 
sec. 190(b)(2) and requires a description of the Wagner-Peyser Act 
secs. 8 through 10 that are proposed for waiver, if any. This proposed 
section retains the same requirements found at 20 CFR 661.430(c)(3).
    Proposed Sec.  679.630(b)(5) implements the requirements of WIOA 
sec. 190(b)(3) and requires a description of the requirements of the 
Older Americans Act that are proposed for waiver, if any. This proposed 
section retains the same requirements found at 20 CFR 661.430(c)(4).
    Proposed Sec.  679.630(b)(6) implements the requirements of sec. 
190(b)(4) of WIOA by requiring that the plan describe the outcomes to 
be achieved by the waivers. The section explains that ``outcomes'' 
include, when appropriate, revisions to adjusted levels of performance 
included in the State or local plan under WIOA title I, and a 
description of the data or other information the State will use to 
track and assess outcomes. This provision allows the Department to 
measure more effectively the impact of waivers. For some waivers, it 
may be difficult to make a direct connection between the waiver and a 
direct impact on performance; in those instances the State must discuss 
the impact of a waiver on performance to the extent that the State has 
available data.
    Proposed Sec.  679.630(b)(7) implements WIOA sec. 190(b)(5) and 
requires that the plan include the measures to be taken to ensure 
appropriate accountability for Federal funds in connection with the 
waivers. This proposed section retains the same requirements found at 
20 CFR 661.430(b)(6).
    Proposed Sec.  679.630(c) explains that a State's workforce 
flexibility plan may accompany the State's Unified or Combined State 
Plan, the required 2-year modification of the State's Unified or 
Combined State Plan, or may be submitted separately as a plan 
modification. This requirement emphasizes that the State may submit a 
workforce-flexibility plan at any time.
    Proposed Sec.  679.630(d) explains that the Secretary may approve a 
workforce flexibility plan consistent with a period of approval of the 
State's Unified or Combined State Plan, and not more than 5 years. For 
example, if a workflex plan is approved in the third year of a 4-year 
Unified Plan, the approval would be for the remainder of the period 
covered by the plan and then would need to be reconsidered as part of 
the subsequent Unified Plan or Combined Plan. Approving a workforce 
flexibility plan for the life of a currently approved Unified or 
Combined State Plan ensures that the waivers granted under the plan are 
consistent with the strategies outlined in the State Plan. The period 
of up to 5 years is consistent with sec. 190(c) of WIOA.
    Proposed Sec.  679.630(e) implements WIOA sec. 190(d) and requires 
the State to provide notice and opportunity for comment on the proposed 
waiver request to all interested parties and the general public before 
submitting the workforce flexibility plan to the Secretary. This 
proposed section retains the same requirements found at 20 CFR 
661.430(e).
    Proposed Sec.  679.630(f) explains that the Secretary will issue 
guidelines under which States may request designation as a workflex 
State. This proposed section retains the same requirements found at 20 
CFR 661.430(f) and notes that the Secretary's guidelines may include 
requirements for a State to implement an evaluation of the impact of 
work-flex in that State.
Section 679.640 What limitations apply to the State's Workforce 
Flexibility Plan authority under the Workforce Innovation and 
Opportunity Act?
    Proposed Sec.  679.640 explains the limitations that apply to the 
State's Workforce Flexibility Plan authority under WIOA.
    Proposed Sec.  679.640(a)(1) specifies that under work-flex waiver 
authority, a State must not waive WIOA, Wagner-Peyser Act, or Older 
Americans Act requirements which are excepted from the work-flex waiver 
authority and described in Sec.  679.630(a). This proposed section 
retains the same requirements found at 20 CFR 661.440(a)(1).
    Proposed Sec.  679.640(a)(2) explains that requests to waive title 
I of WIOA requirements that are applicable at the State level may not 
be granted under work-flex waiver authority granted to a State. These 
requests may only be granted by the Secretary under the general waiver 
authority which is described at Sec. Sec.  679.610 through 679.620. The 
Department included this provision to emphasize that work-flex waivers 
are issued under separate authority than general waivers, and that 
States may not use work-flex waiver authority as a substitute for the 
general State-level waivers available under sec. 189(i)(3). This 
proposed section retains the same requirements found at 20 CFR 
661.440(a)(2).
    Proposed Sec.  679.640(b) expands on Sec.  679.630(b)(6) by 
explaining that once approved the Secretary may terminate a work-flex 
designation if the State fails to meet agreed-upon outcomes or the 
terms and conditions contained in its workforce flexibility plan. The 
Department included this provision to emphasize that the Department 
reserves the authority to terminate a workflex plan if a State is not 
meeting the terms and conditions agreed to between the Department and 
the State, including the relevant performance outcomes.

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

1. Introduction
    In this part of the proposed rule, the Department describes 
requirements relating to the services that are available for adults and 
dislocated workers under WIOA. Adult services are provided to job 
seekers who are at least 18 years old; the statute and the proposed 
rule, in providing for such services, establish a priority for serving 
low-income individuals, participants on public assistance, and 
individuals lacking basic work skills. Dislocated worker services are 
targeted for workers who are unemployed and have lost a job, through no 
fault of their own, sometimes through mass layoffs that happen during 
the business cycle. The goal of these services is to provide for the 
return of these individuals to quality employment. Dislocated workers 
generally include an individual who:
     Has been terminated or laid off, or has received a notice 
of termination or layoff from employment;
     Is eligible for or has exhausted entitlement to UC or has 
been employed for a duration sufficient to demonstrate attachment to 
the workforce but is not eligible for UC due to insufficient earnings 
or works for an employer not covered under State UC law; and
     Is unlikely to return to a previous industry or 
occupation.
    Under WIOA, adults and dislocated workers may access career 
services and training services. WIOA provides for a workforce system 
that is universally accessible, customer centered, and training that is 
job-driven. WIOA will provide for career and training services at the 
nation's nearly 2,500 one-stop centers. Training is supported through a 
robust ETPL, comprised of entities with a proven capability of securing 
participants with quality employment. WIOA also provides enhanced 
access

[[Page 20715]]

and flexibility for work-based training options, such as OJT, 
customized training, and incumbent worker training. In this part, the 
Department also discusses supportive services and needs-related 
payments that can be provided, based on customer needs, to enable them 
to participate in WIOA career and training services.
2. Subpart A--Delivery of Adult and Dislocated Worker Activities Under 
Title I of the Workforce Innovation and Opportunity Act
Introduction
    This subpart discusses the role of WIOA adult and dislocated worker 
services through the one-stop delivery system. The one-stop delivery 
system is the foundation of the workforce system. The system provides 
universal access to career services to meet the diverse needs of adults 
and dislocated workers. The grant recipient(s) for the adult and 
dislocated worker program is a required partner in the one-stop 
delivery system and is subject to the required partner responsibilities 
set forth in Sec.  678.415.
    Career and training services, tailored to the individual needs of 
jobseekers, form the backbone of the one-stop delivery system. While 
some jobseekers may only need self-service or other basic career 
services like job listings, labor market information, labor exchange 
services or information about other services, some jobseekers will need 
services that are more comprehensive and tailored to their individual 
career needs. These services may include comprehensive skills 
assessments, career planning, and development of an individual 
employment plan that outlines the needs and goal of successful 
employment. Under WIA, career services were identified as core and 
intensive services and generally participants would go through each 
level of service in order to eventually receive training. WIOA 
clarifies that individuals receiving services in the one-stop centers 
must receive the service that is needed to assist the individual to 
meet his or her job search goals, and does not need to follow a fixed 
sequence of services that may not be necessary to effectively serve the 
individual.
    Under WIOA, the Department proposes to classify career services 
into two categories: Basic and individualized career services. This 
grouping is not designed to create barriers to training, but rather 
identifies the importance that these two types of career services can 
have in helping individuals obtain employment. Basic career services 
must be made available to all job seekers and include services such as 
labor exchange services, labor market information, job listings, and 
information on partner programs. Individualized career services 
identified in WIOA and described in these proposed regulations are to 
be provided by local areas as appropriate to help individuals to obtain 
or retain employment.
    Under WIA, participants often were required to undergo a sequence 
of core and intensive services in order to receive training. WIOA 
clarifies that there is no sequence of service requirement in order to 
receive training. Training is made available to individuals after an 
interview, assessment or evaluation determines that the individual 
requires training to obtain employment or remain employed. Supportive 
services, including needs-related payments, can be essential to enable 
individuals to participate in career and training services.
Section 680.100 What is the role of the adult and dislocated worker 
programs in the one-stop delivery system?
    Proposed Sec.  680.100 directs that the one-stop system is the 
foundational system through which adult and dislocated worker program 
services are provided to eligible individuals. WIOA merges the 
categories of core services and intensive services under WIA into the 
category of career services.
Section 680.110 When must adults and dislocated workers be registered 
and considered a participant?
    Proposed Sec.  680.110 addresses the important distinction between 
registration and participation--two separate actions in the process by 
which adults and dislocated workers seek direct, one-on-one staff 
assistance from the one-stop system. The distinction is important for 
recordkeeping and program evaluation purposes. Individuals who are 
primarily seeking information are not treated as participants and their 
self-service or informational search requires no registration. When an 
individual seeks more than minimal assistance from staff in taking the 
next step towards self-sufficient employment, the person must be 
registered and eligibility must be determined. To register, as defined 
in Sec.  675.300, is the point at which information that is used in 
performance information begins to be collected. Participation is the 
point at which the individual has been determined eligible for program 
services and has received or is receiving a WIOA service, such as 
career services, other than self-service or informational service and 
is the point at which an individual is to be included in performance 
calculations for the primary indicators in 20 CFR part 681.
    Proposed Sec.  680.110(a) describes the registration process for 
collecting information to support a determination of eligibility for 
the WIOA adult and dislocated worker programs. This section explains 
that registration can be done electronically, through interviews, or 
through an application. This section proposes to distinguish the term 
``participation'' from registration by providing that participation 
occurs after IC and eligibility determination, when an individual 
receives a WIOA service, other than self-service or informational 
activities.
    Proposed Sec.  680.110(b) requires that adults and dislocated 
workers who receive services other than self-service and informational 
activities must be registered and considered a participant for WIOA 
title I services.
    Proposed Sec.  680.110(c) maintains the requirement in WIA 
regulation Sec.  663.105(c) that EO data be collected on every 
individual who is interested in being considered for WIOA title I 
financially assisted aid, benefits, services, or training, and who has 
signified that interest by submitting personal information in response 
to a request from the service provider.
Section 680.120 What are the eligibility criteria for career services 
for adults in the adult and dislocated worker programs?
    An individual must be 18 years of age or older to receive career 
services in the adult program. Priority for individualized career 
services and training services funded with title I adult funds must be 
given to low-income adults and public assistance recipients and 
individuals who are basic skills deficient, in accordance with WIOA 
sec. 134(c)(3)(E) and proposed Sec.  680.600.
Section 680.130 What are the eligibility criteria for career services 
for dislocated workers in the adult and dislocated worker programs?
    Proposed Sec.  680.130(a) states that an individual must meet the 
definition of ``dislocated worker'' in WIOA sec. 3(15) to receive 
career services in the dislocated worker program.
    Proposed Sec.  680.130(b) provides that Governors and Local Boards 
may develop policies and procedures for one-stop operators to use in 
determining a dislocated worker's eligibility for career services 
consistent with the definitions provided in the statute,

[[Page 20716]]

regulations and any guidance issued by the Secretary.
    Proposed Sec.  680.130(b)(1) and (2) allows for Governors and Local 
Boards to develop policies and procedures for what constitutes a 
``general announcement'' of a plant closing. These policies and 
procedures could include policies and procedures for what constitutes a 
``general announcement'' of a plant closing or for what constitutes 
``unemployed as a result of general economic conditions in the 
community in which the individual resides or because of natural 
disasters'' for individuals who are self-employed, including family 
members and ranch hands.
Section 680.140 What Workforce Innovation and Opportunity Act title I 
adult and dislocated worker services are Local Boards required and 
permitted to provide?
    Proposed Sec.  680.140 describes generally the availability of 
funds for use in providing services for adult and dislocated workers 
under title I of WIOA. Local areas have significant flexibility when 
providing services with adult and dislocated worker funds. In addition 
to the required career and training services, local areas may use these 
funds to provide additional job seeker services, business services, as 
well as facilitate enhanced coordination between other partner programs 
and entities at the State and local level. Local areas can use these 
funds to develop new types of technical assistance, develop new intake 
procedures, test new procurement methods which may lead to better 
outcomes for jobseekers, and ensure robust services to businesses 
throughout the workforce system.
    Paragraph (a) provides that WIOA title I adult and dislocated 
worker funds to local areas must be used to provide career and training 
services through the one-stop delivery system. Local areas have 
discretion in the appropriate mix of services, but both career and 
training services must be made available through the one-stop system 
for provision to eligible individuals served through the system.
    Paragraph (b) describes the services that may be provided with WIOA 
title I adult and dislocated worker funds in local areas.
    Subparagraph (b)(1) identifies ``Job Seeker Services.'' These 
services include customer support activities to help individuals with 
barriers to employment, training programs for displaced homemakers and 
individuals training for nontraditional occupations, work support 
activities for low-wage workers, supportive services and needs-related 
payments, and providing transitional jobs to individuals with barriers 
to employment who are chronically unemployed or have an inconsistent 
work history.
    Paragraph (b)(2) identifies ``Employer Services.'' These services 
include customized screening and referral of qualified participants in 
training to employers, customized employment-related services to 
employers, and business services.
    Paragraph (b)(3) identifies ``Coordination Activities.'' 
Coordination is required among training and employment activities under 
WIOA, child support agencies and services, Department of Agriculture 
extension programs, facilitating remote access by using technology and 
the one-stop delivery system, economic development agencies, linkages 
between the public workforce system and employers and those between the 
one-stop delivery system and unemployment insurance programs, and 
organizations that provide services to individuals with disabilities.
    Paragraph (b)(4) authorizes local areas to enter into pay-for-
performance contracts as part of a training strategy. Local areas may 
use up to 10 percent of their total adult and dislocated worker funds 
under this procurement method.
    Paragraph (b)(5) provides for technical assistance for one-stop 
operators, partners, and ETPs regarding the provision of services to 
individuals with disabilities.
    Paragraph (b)(6) provides for local areas to adjust the economic 
self-sufficiency standards for local areas. Levels of self-sufficiency 
may vary by local area and the local economy; this flexibility allows 
local areas to tailor their services in a way that works in their local 
economy.
    Paragraph (b)(7) provides for the implementation of promising 
services to workers and employers. Local areas can build upon promising 
practices to improve service delivery to both job seekers and 
employers.
    Paragraph (b)(8) provides for the use of funds for incumbent worker 
training. Local areas can use up to 20 percent of their combined adult 
and dislocated worker funds to do incumbent worker training consistent 
with subpart F of this part.
Section 680.150 What career services must be provided to adults and 
dislocated workers?
    At a minimum, all of the basic career services described in WIOA 
sec. 134(c)(2)(A)(i)-(xi) and Sec.  678.430(a) must be provided in each 
local area through the one-stop delivery system. These services include 
referrals to partner programs, initial assessments, and labor exchange 
services.
    In addition, services described in WIOA sec. 134(c)(2)(A)(xii) and 
Sec.  678.430(b), such as career counseling and the development of an 
individual employment plan, must be made available if appropriate for 
an individual to obtain or retain employment. These services are 
categorized as ``Individualized Career Services'' in Sec.  678.430(b). 
An individual employment plan is discussed in connection with proposed 
Sec.  680.180.
    Appropriate follow-up services must be made available to a 
participant placed in unsubsidized employment for a minimum of 12 
months following the participant's first date of employment. Follow-up 
services can be useful for participants in order to maintain 
employment. One-stop staff can provide workplace information and tips 
for success in a workplace environment. Additionally, follow-up 
services provide a continuing link between the participant and 
workforce system; these services allow the one-stop to assist with 
other services the participant may need once he or she obtains 
employment. Examples may include assistance with employer benefits, 
health insurance, and financial literacy and budgeting assistance.
Section 680.160 How are career services delivered?
    Proposed Sec.  680.160 explains that career services must be 
provided through the one-stop delivery system. Career services may be 
provided by the one-stop operator or through contracts with service 
providers approved by the Local Board. A Local Board may not be the 
provider of career services unless it receives a waiver from the 
Governor and meets other statutory and regulatory conditions.
Section 680.170 What is an internship or work experience for adults and 
dislocated workers?
    Proposed Sec.  683.170 defines an internship or work experience as 
a planned, structured, time-limited learning experience that takes 
places in a workplace. An internship or work experience may be paid or 
unpaid, as appropriate. An internship or work experience may be 
provided in the private for-profit, non-profit, or public sectors. 
Labor standards apply to any internship or work experience in which an 
employee/employer relationship exists under applicable law. The 
Department recognizes the role work experiences and internships play in

[[Page 20717]]

helping individuals obtain the skills they need to succeed in the 
workplace. An internship or work experience for a participant in WIOA 
is classified as an Individualized Career Service as described in Sec.  
678.430(b). Internships and work experiences provide a helpful means 
for an individual to gain experience that leads to unsubsidized 
employment.
Section 680.180 What is the individual employment plan?
    Proposed Sec.  680.180 explains that an individual employment plan 
is an individualized career service, as described in Sec.  678.430(b), 
jointly developed by the participant and career planner, that may be 
appropriate for an individual. The plan includes an ongoing strategy to 
identify employment goals, achievement objectives, and an appropriate 
combination of services for the participant to obtain these goals and 
objectives. Individual employment plans are one of the most effective 
ways to serve individuals with barriers to employment, and to 
coordinate the various services including training services they may 
need to overcome these barriers.
3. Subpart B--Training Services
Introduction
    Training services are discussed at proposed Sec. Sec.  680.200 
through 680.230. WIOA is designed to increase participant access to 
training services. Training services are provided to equip individuals 
to enter the workforce and retain employment. Training services may 
include, for example, occupational skills training, OJT, registered 
apprenticeship which incorporates both OJT and classroom training, 
incumbent worker training, pre-apprenticeship training, workplace 
training with related instruction, training programs operated by the 
private sector, skill upgrading and retraining, entrepreneurial 
training, and transitional jobs. Training services are available for 
individuals who, after interview, evaluation or assessment, and case 
management are determined to be unlikely or unable to obtain or retain 
employment that leads to self-sufficiency or higher wages from previous 
employment through career services alone. The participant must be 
determined to be in need of training services and to possess the skills 
and qualifications to successfully participate in the selected program. 
The Department explains that some participants may need additional 
services to assist their vocational training, such as job readiness 
training, literacy activities including English language training, and 
customized training.
Section 680.200 What are training services for adults and dislocated 
workers?
    Proposed Sec.  680.200 directs the reader to WIOA sec. 134(c)(3)(D) 
for a description of available training services. The proposal provides 
a series of examples that is not all-inclusive.
Section 680.210 Who may receive training services?
    Proposed Sec.  680.210(a) discusses the process used to determine 
when and what training services must be made available to an 
individual. Under WIOA, an individual may receive training services 
after an interview, evaluation, or assessment, and career planning if 
the one-stop operator or partner determines the individual is unlikely 
or unable, by only receiving career services, to retain employment that 
leads to economic self-sufficiency or wages comparable to or higher 
than wages from previous employment. Additionally, the one-stop 
operator or partner must also determine that the training the 
individual receives would result in employment leading to economic 
self-sufficiency or wages comparable to or higher than wages from 
previous employment. The one-stop operator or partner must also 
determine that the individual has the skills and qualifications to 
successfully participate in and complete the training. Upon a 
determination that career services are unlikely to obtain these 
employment outcomes, the individual may be enrolled in training 
services. The individual should have the skills and qualifications 
needed to successfully participate in and complete the training 
services.
    Proposed Sec.  680.210(b) requires that individuals, for whom 
training has been deemed appropriate, select a training program linked 
to employment opportunities in the local area or in an area to which 
the individual is willing to commute or relocate. The selection of this 
training program should be fully informed by the performance of 
relevant training providers, and individuals must be provided with the 
performance reports for all training providers who provide a relevant 
program.
    Proposed Sec.  680.210(c) explains that WIOA training services must 
be provided when other sources of grant assistance are unavailable to 
the individual.
    Proposed Sec.  680.210(d) requires that training services provided 
under the WIOA adult funding stream must be provided in accordance with 
the State or Local Board's priority system.
Section 680.220 Are there particular career services an individual must 
receive before receiving training services under Workforce Innovation 
and Opportunity Act?
    WIOA removed the requirement under WIA that an individual had to 
receive an intensive service before receiving training services. The 
proposal explains that, other than an interview, evaluation, or 
assessment and career planning there is no requirement that additional 
career services must be provided before an individual enrolls in 
training. Where an assessment is provided, a previous assessment may be 
adequate for this purpose. There is no requirement for a sequencing of 
services under WIOA. If individuals are determined to be in need of 
training consistent with WIOA sec. 134(c)(3) then they may be placed in 
training services. The Department encourages the use of individualized 
career services under Sec.  678.420(b) when appropriate for an 
individual; an individual employment plan or career counseling informed 
by local labor market information and training provider performance 
reports often will be appropriate before an individual receives 
training services.
    Proposed Sec.  680.220(b) requires that the case files for 
individuals must document the participant eligibility for training 
services and explain how this determination was made--by interview, 
evaluation or assessment, career planning, or other career service, 
such as an individual employment plan. It is important that the one-
stop gather enough information, by whatever means, be they through an 
interview or through career services, to justify the need for training 
services.
Section 680.230 What are the requirements for coordination of Workforce 
Innovation and Opportunity Act training funds and other grant 
assistance?
    Proposed Sec.  680.230 restates the requirements for coordination 
with other forms of assistance that apply under WIA. The Department has 
also added a sentence to Sec.  680.230(a)(2) to reflect the new 
provision in WIOA sec. 134(c)(3)(B)(iii) that one-stop operators and 
one-stop partners may take into account the full cost of the training, 
including the cost of supportive services. The Department encourages 
program operators to do so.
    Proposed Sec.  680.230(a) states that when coordinating other grant 
assistance the one-stop operator or

[[Page 20718]]

partner may take into account the full cost of participating in 
training services, including the cost of dependent care and 
transportation and other appropriate costs. Additionally, the one-stop 
operator or partner must coordinate training funds available and make 
funding arrangements with one-stop partners and other entities.
    Proposed Sec.  680.230(b) states that WIOA participants may enroll 
in WIOA-funded training while the participant has a Pell Grant 
application pending as long as the one-stop operator has made 
arrangements with the training provider and the WIOA participant 
regarding the award of the Pell Grant. The training provider must 
reimburse the one-stop operator or partner the amount of the WIOA funds 
used to pay for the training costs covered by the Pell Grant in the 
event that one is approved after WIOA-funded training has begun. 
Reimbursement from the participant for education-related expenses is 
not required.
4. Subpart C--Individual Training Accounts
Introduction
    Individual Training Accounts (ITAs) are key tools used in the 
delivery of many training services. The Department seeks to provide 
maximum flexibility to State and local program operators in managing 
ITAs. These proposed regulations do not establish the procedures for 
making payments, restrictions on the duration or amounts of the ITA, or 
policies regarding exceptions to the limits. The authority to make 
those decisions resides with the State or Local Boards. The authority 
that States or Local Boards may use to restrict the duration of ITAs or 
restrict funding amounts must not be used to establish limits that 
arbitrarily exclude eligible providers.
    Through the one-stop center, individuals will be provided with 
quality and performance information on providers of training and, with 
effective career services, case management, and career planning with 
the ITA as the payment mechanism. ITAs allow participants the 
opportunity to choose the training provider that best meets their 
needs. Under WIOA, ITAs can more easily support placing participants 
into registered apprenticeship programs than under WIA.
Section 680.300 How are training services provided?
    Proposed Sec.  680.300 explains that in most circumstances an 
individual will receive training services through an ITA. An ITA is 
established on behalf of the participant, where services are purchased 
from eligible providers selected in consultation with a career planner. 
Payments may be made through electronic transfers of funds, vouchers, 
or other appropriate methods. Payments may be made at the beginning of 
the training program or on an incremental basis; the payment processes 
must be decided at the local level. As explained in proposed Sec.  
680.300, an ITA is used by an individual to access training services 
from an entity on the State's ETPL. In some circumstances involving 
work-based training, such as OJT, customized training, registered 
apprenticeship, incumbent worker training and transitional jobs, the 
Local Board may contract out the training services. The section allows 
for a Local Board itself to provide the training services if it 
receives a waiver from the Governor. Local Boards must coordinate 
funding for ITAs with funding from other Federal, State, local, or 
private job training programs or sources to assist individuals in 
obtaining training services.
Section 680.310 Can the duration and amount of Individual Training 
Accounts be limited?
    Proposed Sec.  680.310 maintains the State and local flexibility to 
impose limits on ITAs that exists under WIA.
Section 680.320 Under what circumstances may mechanisms other than 
Individual Training Accounts be used to provide training services?
    Proposed Sec.  680.320(a) discusses the exceptions to the otherwise 
required use of an ITA for training. In situations covered by these 
exceptions, a contract for services may be used to provide for 
training. The exceptions include:
    1. OJT, which could include placing participants in a registered 
apprenticeship, customized training, incumbent worker training, or 
transitional jobs.
    2. Where a Local Board determines there are an insufficient number 
of eligible providers in the local area to accomplish the purpose of an 
ITA. The local plan must describe how this determination was made and 
the process used for contracting for services. This exception maintains 
the same language as WIA.
    3. If the Local Board determines a CBO or other private 
organization provides effective training services to individuals with 
barriers to employment. The Local Board must develop criteria to show 
that the program is effective.
    4. Training for multiple individuals in in-demand industry sectors 
or occupations, as long as the contract does not limit the individual's 
consumer choice.
    5. Circumstances in which a pay-for-performance contract is 
appropriate, consistent with Sec.  683.510.
    Proposed Sec.  680.320(b) includes the term ``individuals with 
barriers to employment'' in place of the term ``special participant,'' 
as used under WIA. ``Individuals with barriers to employment'' is 
broader than ``special participants.'' ``Individuals with barriers to 
employment'' includes: Displaced homemakers (see Sec.  680.630); low-
income individuals; Indians, Alaska Natives, and Native Hawaiians; 
individuals with disabilities; older individuals; ex-offenders; 
homeless individuals; youth who are in or have aged out of the foster 
care system; individuals who are English learners, have low literacy 
levels, or face substantial cultural barriers; eligible MSFWs; 
individuals within 2 years of exhausting lifetime eligibility under 
TANF; single parents (including pregnant women); long-term unemployed 
individuals; and members of other groups identified by the Governor.
Section 680.330 How can Individual Training Accounts, supportive 
services, and needs-related payments be used to support placing 
participating adults and dislocated workers into a registered 
apprenticeship program and support participants once they are in a 
registered apprenticeship program?
    This regulation is designed to ensure States and local areas have 
the flexibility to serve individuals in both being placed into a 
registered apprenticeship as well as to assist currently registered 
apprentices. WIOA provides a new opportunity for registered 
apprenticeship programs to automatically qualify to be placed on the 
State's ETPL, allowing ITAs to support participants in registered 
apprenticeship programs, and more directly connecting apprenticeship 
programs to job seekers in one-stop centers. Some apprenticeship 
programs are with a single employer, whereas others may operate through 
a joint labor-management organization where participants are selected 
for the apprenticeship but not immediately hired by a specific 
employer. The Department is seeking comment on how registered 
apprenticeship programs and individuals enrolled or seeking to be 
enrolled in such programs may be best served within the one-stop 
delivery system.

[[Page 20719]]

    Proposed Sec.  680.330(a) states that participants may use an ITA 
to receive training at a pre-apprenticeship program that is on the 
State's ETPL. Pre-apprenticeship programs provide training to increase 
math, literacy, and other vocational skills needed to gain entry to a 
registered apprenticeship program. A pre-apprenticeship program funded 
with an ITA must have at least one registered apprenticeship partner; 
such pre-apprenticeship programs must possess or develop a strong 
record of enrolling their pre-apprenticeship graduates into a 
registered apprenticeship program. The Department is also open to 
comment on how pre-apprenticeship programs and individuals enrolled or 
seeking to be enrolled in such programs may be best served within the 
one-stop delivery system.
    Proposed Sec.  680.330(b) explains that the cost of tuition may be 
paid through an ITA to the training provider involved in a registered 
apprenticeship program. In such instances, the training provider may be 
an employer, a joint labor-management entity, a labor organization, or 
an outside training provider.
    Proposed Sec.  680.330(c) states that supportive services may be 
provided to support the placement of a participant into a registered 
apprenticeship program, consistent with the rules governing supportive 
services in subpart H.
    Proposed Sec.  680.330(d) explains that needs-related payments may 
be provided to support the placement of a participant into a registered 
apprenticeship program, consistent with the rules governing needs-
related payments in subpart H.
    Proposed Sec.  680.330(e) provides a citation to the regulations on 
using OJT funds with registered apprenticeships.
Section 680.340 What are the requirements for consumer choice?
    Proposed Sec.  680.340 largely restates the consumer choice 
requirements established under WIA. The term ``career planner,'' used 
in WIOA, replaces the term ``case manager,'' used in WIA. Proposed 
Sec.  680.340(e) provides that one-stop operators may coordinate 
funding for ITAs with other funding sources in order to assist the 
individual in obtaining training services. Proposed Sec.  680.340(f) 
requires that priority consideration be given to programs that are 
aligned with in-demand industry sectors or occupations in the local 
area.
5. Subpart D--Eligible Training Providers
    This part describes the methods by which organizations qualify as 
eligible providers of training services under WIOA. It also describes 
the roles and responsibilities of the State and Local Boards in 
managing this process and disseminating ETPLs. The State ETPL and the 
related eligibility procedures ensure the accountability, quality, and 
labor-market relevance of programs of training services that receive 
funds through WIOA title I-B. The regulations emphasize that the list 
and accompanying information must be easily understood and disseminated 
widely, in order to maximize informed consumer choice and serve all 
significant population groups.
    The State plays a leadership role in ensuring the success of the 
eligible provider system in partnership with Local Boards, the one-stop 
system, and its partners. The Governor must establish eligibility 
criteria and procedures for initial determination and renewals of 
eligibility for training providers and training programs to receive 
funds under WIOA title I-B. In doing so, the Governor may establish 
minimum performance levels for eligibility and the Department 
encourages Governors to do so. In establishing minimum performance 
levels for eligibility, the Govenor should take into consideration the 
need to serve targeted populations. The Local Board may establish 
additional performance levels for program eligibility within a local 
area.
    The proposed regulations implement WIOA sec. 122 and refer to WIOA 
secs. 107, 116, and 134 where those sections affect provider 
eligibility, the ETPL, the use of ITAs, and the inclusion of registered 
apprenticeship programs on the ETPL. In Sec.  680.410, the regulations 
clarify that all training providers, including those operating under 
the ITA exceptions, must qualify as eligible providers, except for 
those engaged in OJT and customized training (for which the Governor 
must establish qualifying procedures as discussed in Sec.  680.530). 
The proposed regulations also explain how registered apprenticeship 
programs, which WIOA treats differently than other providers in some 
respects, are to be included in the list. Finally, the regulations 
describe how the State ETPL must be disseminated with accompanying 
performance and cost information. The performance information must be 
presented in a way that is easily understood, in order to maximize 
informed consumer choice and serve all significant population groups. 
Separately, ETP performance reports, which require providers to supply 
performance information for all individuals enrolled in a program are 
addressed in Sec.  677.230.
    In response to concerns expressed by stakeholders that some 
providers of training would face difficulties in participating in this 
WIOA-revised system, the Department has clarified the interrelated 
eligibility requirements and explained that while WIOA places an 
emphasis on quality training as measured by performance criteria, State 
and Local Boards and training providers must work together in attaining 
this goal. The proposed regulations emphasize the Governor's discretion 
in offering financial or technical support to training providers where 
the information requirements of this section result in undue cost or 
burden. Making a wide variety of high-quality training programs 
available to participants will increase customer choice and that 
training providers may find performance information useful to improve 
their programs of study, which in turn will provide a direct benefit to 
participants. The Department also encourages the Governor to work with 
ETPs to return aggregate performance information to the provider in 
ways that will help the training providers improve their program 
performance. Given that training providers may have many programs of 
study within their institution, the department is seeking comment on 
ways that States can help streamline performance reporting for training 
providers and minimize the burden associated with reporting on multiple 
programs of study. The State and Local Boards must work together to 
ensure sufficient numbers and types of training providers and programs 
in order to maximize customer choice while maintaining the quality and 
integrity of training services. In addition, the proposed regulations 
explain that CBOs have the opportunity to deliver training funded under 
WIOA through contracts for services rather than ITAs, provided the 
local area determines this is necessary to meet local customer needs 
and also that the provider meets training performance requirements. 
Because of WIOA's emphasis on ensuring the provision of quality 
training, and the importance of using performance criteria to obtain 
such quality, the Department does not intend to waive any of the 
requirements of this section. The Department is seeking comment on 
possible adaptations of ETP eligibility and reporting requirements to 
ensure small CBOs, especially those serving hard to

[[Page 20720]]

serve participant populations, have the capacity to qualify as ETPs.
Section 680.400 What is the purpose of this subpart?
    The workforce development system established under WIOA emphasizes 
informed consumer choice, job-driven training, provider performance, 
and continuous improvement. The quality and selection of providers and 
programs of training services is vital to achieving these core 
principles. As required by WIOA sec. 122, proposed Sec.  680.400 
explains that States, in partnership with Local Boards, must identify 
providers of training services that are qualified to receive WIOA funds 
to train adults and dislocated workers. Therefore, WIOA requires that 
each State must maintain a list of ETPs. The list must be accompanied 
by relevant performance and cost information and must be made widely 
available, including in electronic formats, and presented in a way that 
is easily understood, in order to maximize informed consumer choice and 
serve all significant population groups.
Section 680.410 What entities are eligible providers of training 
services?
    Proposed Sec.  680.410 defines the types of entities that may be 
considered eligible to provide training services and the specific funds 
to be used for this purpose. This proposed section explains that 
training providers, including those operating under the ITA exceptions, 
must qualify as eligible providers, except for those engaged in OJT and 
customized training (for which the Governor must establish qualifying 
procedures as discussed in Sec.  680.530). The proposed regulations 
identify registered apprenticeship programs as included in the list as 
long as the program remains registered. This is further explained in 
proposed Sec.  680.470.
    Proposed paragraph (a) explains that only providers that the State 
determines to be eligible, as required in WIOA sec. 122, may receive 
training funds under WIOA title I-B. This refers to funds used to 
provide training for adult and dislocated worker participants who 
enroll in a program of training services. Proposed paragraph (a) states 
that the Governor will establish the criteria and procedures for 
determining eligibility. These criteria must take into account, at a 
minimum the items in WIOA sec. 122(b)(1)(A). Under the requirements of 
WIOA sec. 122, the procedures for determining eligibility of providers 
are established at the State level and include application and renewal 
procedures, eligibility criteria, and information requirements.
    Proposed paragraphs (a)(1) through (4) list the categories of 
potentially eligible training entities. This list is largely unchanged 
from WIA. Potentially eligible entities include post-secondary 
education institutions, registered apprenticeship programs, other 
public or private providers of training, Local Boards that meet certain 
conditions, and CBOs or private organizations providing training under 
contract with the Local Board.
    Proposed paragraphs (b)(1) and (2) specify that these eligibility 
requirements apply to adult and dislocated worker funds. The 
requirements apply to both participants who seek training using ITAs 
and those who seek training through the exceptions described in 
proposed Sec. Sec.  680.320 and 680.530. Under WIOA sec. 134(c)(3)(G), 
limited exceptions allow local areas to provide training through a 
contract for services rather than ITAs in order to maintain consumer 
choice. These exceptions include: OJT training, customized training, 
incumbent worker training, or transitional employment; instances where 
the Local Board determines there are insufficient numbers of eligible 
providers of training services in the local area; where the Local Board 
determines an exception is necessary to meet the needs of individuals 
with barriers to employment (including assisting individuals with 
disabilities or adults in need of adult education and literacy 
services); where the Local Board determines that it would be most 
appropriate to award a contract to an institution of higher education 
or other eligible provider to facilitate the training of multiple 
individuals in in-demand industry sectors or occupations (where the 
contract does not limit customer choice); and, for pay-for-performance 
contracts.
    Proposed paragraph (b)(2) explains that the requirements to become 
an eligible provider of training services apply to all organizations 
providing training to adults and dislocated workers, with the specific 
exception for registered apprenticeship programs. WIOA makes a change 
from WIA in that registered apprenticeship programs must be included 
and maintained on the list for as long as the program remains 
registered. Registered apprenticeship programs are not subject to the 
same application and performance information requirements as other 
ETPs. However, because it is possible that particular registered 
apprenticeship programs may prefer not to be included on the list, the 
proposed regulation requires registered apprenticeship programs to 
indicate their interest in being on the State list, according to a 
mechanism established by the Governor. The pertinent requirements for 
registered apprenticeship programs are explained in proposed Sec.  
680.470.
Section 680.420 What is a ``program of training services''?
    Proposed Sec.  680.420 defines the term ``program of training 
services,'' which is used throughout this part. The Department explains 
that a program of training services includes a structured regimen that 
leads to specific outcomes. Our definition reinforces a key principle 
of WIOA to improve accountability and performance. Proposed paragraphs 
(a) through (c) align the outcomes for a program of training services 
with the performance requirements described in WIOA sec. 116(b)(2)(A). 
These potential outcomes include post-secondary credentials, industry-
recognized credentials, employment, and measurable skill gains toward 
credentials or employment.
Section 680.430 Who is responsible for managing the eligible provider 
process?
    Proposed Sec.  680.430 explains the roles of the Governor and Local 
Boards in administering the eligible provider process. Throughout this 
subpart, the Department emphasizes the Governor's discretion, in 
consultation with stakeholders, to establish eligibility procedures. 
The eligible provider process under WIOA sec. 122 requires the Governor 
to establish eligibility procedures and to clarify State and Local 
Board roles and responsibilities. In various sections, WIOA assigns 
responsibilities to Local Boards concerning ETPs and identifies 
additional optional activities that may be undertaken by Local Boards. 
For the convenience of stakeholders and the public, the Department has 
listed in proposed Sec.  680.430 these required and potential 
activities.
    Proposed paragraph (a) explains the Governor's responsibilities for 
managing the process for determining eligibility, developing and 
maintaining the State's list of ETPs, and disseminating the list to 
Local Boards, as required by WIOA sec. 122. In keeping with WIOA secs. 
122(a)(1) and (c)(1), proposed paragraph (a) further requires that 
Governors consult with the State Board when establishing these 
procedures. Proposed paragraph (b) authorizes the Governor to designate 
a State agency to carry out the requirements of this section. While 
WIOA sec. 122 does not address this point, the Department anticipates 
that most States will work through a designated State agency (or 
appropriate State entity) to administer the

[[Page 20721]]

requirements of this section. The Department proposes paragraph (b) to 
make this option explicit.
    Proposed paragraphs (b)(1) through (5) describe the State's 
responsibilities for developing and maintaining the State list of 
providers. The State may establish minimum performance levels. The 
State is responsible for determining if such performance targets are 
met. It is also the State's responsibility to determine whether 
accurate information has been submitted, take enforcement actions as 
needed, and disseminate the list to the Local Boards, the one-stop 
system, its partner programs, and the public. This includes 
dissemination through Web sites and searchable databases and any other 
means the State uses to disseminate information to consumers. Under 
WIA, similar responsibilities were primarily assigned to the Local 
Workforce Boards. In establishing greater accountability and 
flexibility at the State level, WIOA sec. 122 specifically requires the 
State to manage the ETP process. Proposed paragraph (b) describes these 
responsibilities and notes the Governor's primary role in exercising 
these responsibilities, including the assignment of duties to be 
undertaken by Local Boards.
    Paragraph (c) identifies the required responsibilities of Local 
Boards, which are found in WIOA secs. 107 and 134. These include 
responsibilities assigned to Local Boards statutorily as well as 
responsibilities that may be assigned by the Governor. Proposed 
paragraph (c)(1) makes clear that the Local Board must carry out 
procedures assigned to it by the State, as provided for under WIOA 
sec.122(c)(1). The Department provides examples of the responsibilities 
that the Governor may choose to assign to Local Boards, including 
duties similar to those undertaken by Local Boards under WIA.
    Proposed paragraph (c)(2) explains the Local Boards' responsibility 
to work with the State to ensure that there are sufficient number and 
variety of programs to provide participants, as consumers, adequate 
choice among providers, as described in WIOA sec. 107. Local Boards are 
charged with working with the State to ensure that there are sufficient 
numbers and types of providers to meet the skill development needs of 
adults and dislocated workers, including those who are disabled and/or 
require adult literacy assistance. This proposed paragraph emphasizes 
that Local Boards and the State must work together to ensure adequate 
consumer choice.
    Proposed paragraph (c)(3) explains, as required by WIOA sec. 
134(a)(2)(B), that Local Boards must also ensure that the State' 
eligible training provider list is disseminated publicly through the 
local one-stop system, and its partner programs. The list is a tool to 
assist one-stop customers in evaluating training programs and provider 
options. The dissemination of the list is also discussed under proposed 
Sec.  680.500.
    Proposed paragraph (d) explains the roles that a Local Board may 
choose to exercise in the eligible provider process. The Governor's 
procedure may not prevent Local Boards from exercising these options.
    Proposed paragraph (d)(1) emphasizes the potential for Local Board 
input into the Governor's development of the eligible provider 
procedure. WIOA sec. 122(e) requires the Governor to provide an 
opportunity for interested members of the public to make 
recommendations and submit comments regarding the eligibility 
procedure. Although not explicitly addressed in the WIOA sec. 122, the 
Department interprets its language to encompass Local Boards and thus 
have included this requirement in the proposed paragraph.
    Proposed paragraphs (d)(2) and (3) include the provisions at WIOA 
sec. 122(b)(3), which allow Local Boards to set additional eligibility 
criteria, information requirements, and minimum performance levels for 
local providers beyond what is required by the Governor's procedure. 
Stakeholders and the public must note that any additional requirements 
imposed by a Local Board will only affect a program's eligibility and 
performance requirements within the local area.
Section 680.440 What are the transition procedures for Workforce 
Investment Act-eligible providers to become eligible under the 
Workforce Innovation and Opportunity Act?
    Proposed Sec.  680.440 explains the procedure established by WIOA 
sec. 122(c) for training providers that were eligible as of the date 
WIOA was enacted, July 21, 2014, to continue their eligibility under 
WIOA. The Department anticipates the majority of providers previously 
eligible under WIA will be affected by this transition.
    Proposed paragraph (a) explains that the Governor may establish a 
transition period and states that providers that were eligible on July 
21, 2014 will remain eligible under WIOA until December 31, 2015, or 
such earlier date as the Governor may set. Proposed paragraph (b) 
explains that in order to retain eligibility after the transition 
period, these providers will be subject to the application procedure 
established by the Governor for providers that have previously been 
found eligible, as further explained in proposed Sec.  680.460. 
Proposed paragraph (c) explains that providers that have previously 
been found eligible are not subject to the initial eligibility 
procedures, as described in proposed Sec.  680.450. As discussed in 
Sec.  680.450, the initial eligibility procedures apply only to 
providers that were not previously eligible under WIA or WIOA.
Section 680.450 What is the initial eligibility procedure for new 
providers?
    Proposed Sec.  680.450 describes the process for adding ``new''' 
providers to the ETPL (i.e., those that have not previously been found 
eligible under sec. 122 of either WIA or WIOA). Such providers must 
first apply for initial eligibility according to procedures set by the 
Governor. In accordance with WIOA sec. 122(b)(4), this proposed section 
describes the factors the Governor must take into consideration in 
developing this procedure and take into account in setting criteria for 
initial eligibility. Eligibility is determined on a program-by-program 
basis for each provider. Proposed Sec.  680.450 distinguishes between 
registered apprenticeship programs seeking inclusion on the list and 
other providers. Registered apprenticeship programs, consistent with 
WIOA sec. 122(a)(3), are not subject to the initial eligibility 
application procedure. However, registered apprenticeship programs are 
required to indicate their interest to be included in the ETPL, 
according to a mechanism established by the Governor, as discussed in 
Sec.  680.470.
    Proposed paragraph (a) explains that the Governor's procedure must 
require that providers of training seeking initial eligibility submit 
required information in order to receive initial eligibility.
    Proposed paragraph (b) explains the exception for providers who are 
carrying out registered apprenticeship programs under the National 
Apprenticeship Act. Such programs are included and maintained on the 
list of eligible providers of training for as long as the program 
remains registered. Therefore, registered apprenticeship programs are 
not subject to a period of initial eligibility or to initial-
eligibility procedures. Rather, the Department proposes paragraph (b) 
to require the Governor to establish a procedure whereby registered 
apprenticeship programs may indicate their interest to be included and 
maintained on the list. This requirement is further discussed in Sec.  
680.470.
    Proposed paragraph (c) explains the requirement that the Governor 
must consult with Local Boards and solicit

[[Page 20722]]

public comment in determining the initial eligibility procedure. While 
the Governor is responsible for developing the initial eligibility 
procedure, input by the Local Board and public comment remain important 
for shaping a public workforce system that is responsive to local 
needs. The Local Board is responsible for working with the State to 
ensure that there are sufficient numbers and types of providers of 
career and training services, as required by WIOA sec. 107(d)(10)(E) 
and described in proposed Sec.  679.370(m). Therefore, the Department 
is requiring that the Governor consult with Local Boards about the 
initial eligibility procedure in order to maximize consumer choice at 
the local level. This is also in keeping with WIOA sec. 122(e) on the 
requirements for public comment. In addition, although WIOA does not 
address this point, the Department proposes requiring the Governor to 
describe the procedure, eligibility criteria, and information 
requirements for initial eligibility in the State Plan. Although States 
will need a separate mechanism for public comment during the first year 
of implementation, in subsequent years the State Plan process will 
afford the opportunity to solicit comments and recommendations from key 
stakeholders. In addition, the State Plan submission and review process 
allows the Department to ensure compliance with statutory and 
regulatory requirements and identify promising practices and technical 
assistance needs.
    Proposed paragraph (d) explains that the Governor must establish 
criteria and State requirements for non-exempt providers seeking 
initial eligibility. These initial requirements apply to providers that 
were not previously eligible under this section (or sec. 122 of WIA, as 
in effect on the day before the enactment of WIOA).
    Proposed paragraph (e) describes the factors that the Governor must 
take into account in establishing the criteria for determining initial 
eligibility. For those institutions that are not exempt from complying 
with the ETP application process, the State must establish consistent 
and uniform criteria for providers seeking initial eligibility. The 
information that must be submitted to the State for review will be 
defined by the Governor, but must, at a minimum, address factors 
related to program elements included in both WIOA secs. 122(b)(4)(D) 
and 116(b)(2)(A)(i)(I)-(IV). The Department has listed these required 
elements in proposed paragraphs (e)(2) through (5). The elements taken 
from WIOA sec. 122 include information addressing factors related to 
program performance indicators, any partnership a program has with a 
business, attributes indicating high quality training services and 
credentialing, and the alignment of the program's services with in-
demand industry sectors. WIOA requires that providers provide 
``verifiable program-specific performance information.'' The Department 
is interested in comments about the types of verifiable program 
specific-information this would include. The Department is particularly 
interested in the methods of providing verifiable information that are 
the least costly to the training provider and the easiest to verify to 
reduce the cost to the State or local area. The Department has added a 
requirement that the applicant provide a description of the program. 
The Department thinks this information is not burdensome and is 
essential to enable customers to understand whether the program meets 
their training needs.
    Proposed paragraph (f) describes the Governor's discretion to 
establish minimum performance standards. As with the application 
procedures described in Sec.  680.460, the Governor may establish 
minimum performance levels in the initial eligibility procedures, and 
the Department encourages them to do so.
    Proposed Sec.  680.450(g) emphasizes the time limit for initial 
eligibility, which is 1 fiscal year for a particular program, per WIOA 
sec. 122(b)(4)(B).
    Proposed paragraph (h) clarifies that after the period of initial 
eligibility, these training providers are subject to the Governor's 
application procedure, described at proposed Sec.  680.460 in order to 
remain eligible.
Section 680.460 What is the application procedure for continued 
eligibility?
    Proposed Sec.  680.460 explains the detailed application process 
for previously WIA-eligible providers to remain eligible under WIOA. 
Eligibility is determined on a program-by-program basis for each 
provider.
    Proposed paragraphs (a)(1) and (2) list the two groups of providers 
that are subject to the requirements of proposed Sec.  680.460. These 
include new training providers that were previously eligible under WIA 
(following the Governor's transition period, which ends December 31, 
2015 or such earlier date established by the Governor) as well as new 
training providers whose initial eligibility expires after 1 fiscal 
year.
    Proposed paragraphs (b)(1) and (2) explain that the Governor is 
required to gather and consider input from Local Boards, providers, and 
the public, including representatives of business and labor 
organizations. The Local Board is responsible for working with the 
State to ensure that there are sufficient numbers and types of 
providers of career and training services, as required by WIOA sec. 
107(d)(10)(E) and described in proposed Sec.  679.370(m). Therefore, 
the Department is requiring that the Governor consult with Local Boards 
regarding training provider eligibility procedures in order to maximize 
consumer choice among quality training providers at the local level. 
This is also in keeping with WIOA sec. 122(e) regarding the 
requirements for public comment. While WIOA does not specify a 
timeframe within which the consultation and determination must be 
completed, proposed paragraph (b)(3) requires the Governor to establish 
a timeframe for that purpose while leaving the amount of time to the 
Governor's discretion. The same requirements for Local Board 
consultation and a public comment period are described above in 
connection with proposed Sec.  680.450(c) for the Governor's 
development of initial eligibility procedures.
    Proposed paragraph (c) clarifies that registered apprenticeship 
programs are exempted from these application procedures. Under WIOA 
sec. 122(a)(3), registered apprenticeship programs must be included and 
maintained on the State list for as long as the program remains 
registered. While registered apprenticeships are considered eligible, 
not all registered apprenticeship sponsors may wish to be included. As 
described in Sec.  680.470, the Department proposes that the Governor's 
procedure must include a means for registered apprenticeship program to 
indicate interest in being included on the list.
    Proposed paragraph (d) explains that the Governor's procedure must 
describe the roles of the State and local areas in the application and 
eligibility process. WIOA gives the Governor discretion to assign some 
of the responsibility for receiving, reviewing, and making eligibility 
determinations to local areas. WIOA emphasizes the Governor's 
discretion in establishing eligibility procedures.
    Proposed paragraph (e) requires the Governor's procedure to be 
described in the State Plan. Although WIOA does not address this point, 
the Department proposes requiring the Governor to describe the 
procedure, eligibility criteria, and information requirements for 
initial eligibility in the State Plan. Although States will need a 
separate mechanism for public comment during the first year of 
implementation, in subsequent years the State Plan process will afford 
the opportunity to solicit

[[Page 20723]]

comments and recommendations from key stakeholders. In addition, the 
State Plan submission and review process allows the Department to 
ensure compliance with statutory and regulatory requirements and 
identify promising practices and technical assistance needs.
    Proposed paragraph (f) explains the factors that the Governor must 
take into account in developing the eligibility criteria. These include 
nine required factors and any additional factors that Governor 
considers appropriate. The proposed language closely tracks the 
language from WIOA sec. 122(b), providing a comprehensive description 
of the requirements for the application process. WIOA sec. 122(b) 
includes multiple cross-references to WIOA sec. 116 which identifies 
required performance accountability measures. Proposed paragraph (f)(1) 
generally describes the kinds of performance information which training 
providers must submit as part of their application, which pertain to 
participants receiving training under WIOA title I-B. The Department 
recommends the Governor's procedure emphasize these performance 
indicators as a way of establishing minimum standards and a means for 
comparison among training providers offering similar training in 
similar areas. The Department recommends States use these measures to 
ensure performance accountability, continuous improvement, training 
provider quality, and informed consumer choice. The Department 
anticipates that complete performance data as required under (f)(1) may 
not be available until PY 2018, given the lag time inherent in the 
performance indicators. Proposed pargraph (f)(1) allows the Govenor to 
take into account alternate factors for any performance information 
that is not yet available until such performance data are available. 
The Department seeks comment on alternate factors related to 
performance that may be used to establish eligibility during this time.
    Proposed paragraphs (f)(2) through (10) list the other factors that 
the Governor's criteria must take into account. These include the need 
to ensure access to training services in rural areas, information 
regarding Federal and State training programs other than within WIOA 
title I-B, alignment with in-demand industry sectors, State licensure 
requirements, encouraging industry-recognized credentials, provision of 
post-secondary credentials, the quality of program and training 
services, and meeting the needs of individuals with barriers to 
employment.
    Proposed paragraph (f)(10) requires the Governor's criteria to take 
into account whether the providers timely and accurately submitted 
eligible training provider performance reports, as required under WIOA 
sec. 116(d)(4). This requirement is consistent with the requirement 
under WIOA sec. 122(b)(1)(A)(ii) that the criteria to be taken into 
account include the outcomes of the training programs for students in 
general with respect to employment and earnings under the indicators of 
performance described in WIOA sec. 116(d)(2). The ETP reports provide 
information on these employment and earnings outcomes for all 
individuals in a program of study, and the failure to submit such 
reports on a timely and accurate basis would undermine the ability of 
the Governor to take such outcomes into account. The Department seeks 
comment on how best to apply the timely and accurate submission of 
these ETP performance reports as a factor for eligibility.
    Proposed paragraph (f)(11) explains the Governor's discretion to 
take into account other factors. This paragraph echoes the key 
principles of the ETPL and WIOA to ensure performance accountability, 
to meet the needs of local employers and participants, and to ensure 
informed customer choice.
    Proposed paragraph (g) lists the information that training 
providers are required to provide as part of their application. As 
discussed in paragraph (k), the Governor has broad discretion to 
prescribe additional types of information.
    Proposed paragraph (h) establishes two additional requirements 
concerning performance, cost, and information collection. Proposed 
paragraph (h)(1) states that eligible providers must submit performance 
and cost information required by paragraph (g) and the Governor's 
procedure to the State (WIOA secs. 122(b)(1) and (2)). In accordance 
with the State accountability and flexibility intended by WIOA, the 
timeframe and manner for submitting this information is to be 
determined by the State but at least every 2 years. Proposed paragraph 
(h)(2) states that the collection of information required to 
demonstrate compliance with the criteria cannot be unduly burdensome or 
costly to providers, citing to WIOA sec. 122(b)(1)(J)(iv).
    Proposed paragraph (i) explains that the Governor's eligibility 
procedure must provide for the State to biennially review training 
provider eligibility information and assess the renewal of training 
provider eligibility, per WIOA sec. 122(c)(2). In keeping with WIOA's 
emphasis on providing discretion to the Governor, the Department has 
not prescribed in paragraph (i) the timeline and manner in which this 
biennial review takes place. These particulars are to be established by 
State procedure. The Governor or State agency is not required to 
establish minimum levels of performance, although the Department 
encourages them to do so. If minimum levels are established, the 
Governor's procedure must state these requirements and the State may 
require eligible providers to meet them in order to remain eligible.
    Proposed paragraph (j) requires the Governor's procedure to verify 
the status of registered apprenticeship programs as a part of the 
biennial review of the State list. Although registered apprenticeship 
programs are not subject to the same review procedures as other 
providers, the State must verify the status of the registered 
apprenticeship programs in order to remove from the list any 
apprenticeship programs that are no longer registered.
    Proposed paragraph (k) establishes that, as was the case under WIA, 
Local Boards may set additional criteria for eligibility to provide 
services in a local area. WIOA includes this provision at sec. 
122(b)(3).
    Proposed paragraph (l) explains that the Governor may establish 
procedures for providing technical assistance in order to assist 
eligible providers in meeting these requirements. This is in addition 
to financial assistance the Governor may provide, as described in 
proposed Sec.  680.490.
Section 680.470 What is the procedure for registered apprenticeship 
programs that seek to be included on the State's eligible training 
provider list?
    WIOA encourages registered apprenticeship programs to be active 
partners in the public workforce system. These programs are proven job-
driven strategies that provide workers with career pathways and 
opportunities to earn while they learn. Under WIOA sec. 122(a)(3), a 
registered apprenticeship program is included on the list of ETPs so 
long as the program remains registered. This allows a participant 
enrolled in a registered apprenticeship who is eligible to use WIOA 
title I-B funds to use those funds toward apprentice training, 
consistent with their availability and limitations as prescribed by 
proposed Sec.  680.300. The use of ITAs and other WIOA title I-B funds 
toward apprenticeship training is further described in proposed Sec.  
680.330. Registered apprenticeship programs differ from other training 
providers in some respects, notably that a participant's enrollment 
occurs only

[[Page 20724]]

through an agreement among the participant, the registered 
apprenticeship program sponsor, and an employer.
    Proposed Sec.  680.470 explains how registered apprenticeship 
programs are included and maintained on the ETPL. Registered 
apprenticeship programs are not subject to the application procedures 
and information requirements of other training providers to be included 
on the ETPL, in light of the detailed application and vetting 
procedures under which apprenticeship programs become registered.
    Proposed paragraph (a) requires registered apprenticeship programs 
to indicate interest in being on the State list of ETPs. While 
registered apprenticeship programs are automatically eligible, not all 
registered apprenticeship sponsors may wish to be included on the list. 
The Department proposes that the Governor's procedure include a 
mechanism for registered apprenticeship programs to indicate their 
interest.
    Proposed paragraph (b) explains that a registered apprenticeship 
program will remain on the list until it loses its registration or 
notifies the State that it no longer wishes to be included on the list.
    Proposed paragraph (c) explains that when a registered 
apprenticeship program is included on the State ETPL, this allows an 
individual who eligible to use WIOA title I-B funds to use those funds 
toward apprentice training, consistent with their availability and 
limitations as prescribed by proposed Sec.  680.300.
    Proposed paragraph (d) addresses performance reporting requirements 
for apprenticeship programs. Registered apprenticeship programs are not 
subject to the same information reporting requirements as other 
training programs. However, in light of WIOA's emphasis on performance 
accountability and informed customer choice, the Department encourages 
Governors to consult with the State and Local Boards, the Department's 
Office of Apprenticeship, recognized State apprenticeship agencies 
(where they exist in the Governor's State), or other State agencies, to 
establish voluntary reporting of performance information.
Section 680.480 May an eligible training provider lose its eligibility?
    Proposed Sec.  680.480 describes enforcement provisions that are 
largely unchanged from WIA. The Governor has the ability to remove 
training providers or programs of training services from the State list 
according to the Governor's eligibility and review procedures. Under 
WIOA sec. 122(f), States must remove from the eligibility list any 
providers that willfully supply false performance information or that 
substantially violate requirements of WIOA. Under WIOA, a provider may 
also be removed from the list following the Governor's biennial review 
of the provider's program. These provisions support key principles of 
WIOA by reinforcing performance accountability and ensuring the high 
quality of training programs made available.
    Proposed paragraph (a) affirms that a provider must deliver 
positive results and provide accurate information in order to maintain 
eligibility.
    Proposed paragraph (b) explains that if a provider intentionally 
provides inaccurate information or substantially violates any provision 
of WIOA or its regulations the provider must be removed from the State 
list for a period of not less than 2 years and is liable to repay all 
adult and dislocated worker funds it received during the period of non-
compliance. The Governor must specify in the procedures which 
individual or entity is responsible for making these determinations and 
the process by which the determination will be made, which must include 
an opportunity for a hearing.
    Proposed paragraph (c) allows the Governor to remove a program or 
programs from the list for failing to meet State-established criteria 
or performance levels. The Department seeks comment on how to 
strengthen enforcement with non-compliant providers over time.
    Proposed paragraph (d) explains that the Governor must establish an 
appeal procedure for providers to appeal a denial of eligibility under 
this section. An appeals process is required by WIOA sec. 122 (c)(1). 
Proposed Sec.  683.630(b) explains the appeal process for the denial or 
termination of a training provider's eligibility.
    Proposed paragraph (e) provides that a local area may remove a 
program or programs from the list for failing to meet higher local 
standards. The local area must also provide the program with an appeal 
process.
Section 680.490 What kind of performance and cost information must 
eligible training providers provide for each program of training?
    Proposed Sec.  680.490 describes the performance information that 
providers are required to submit to the State in order to establish or 
renew eligibility, as described in WIOA sec. 122(b)(2).
    Proposed paragraph (a) requires ETPs to submit performance 
information at least every 2 years, according to procedures established 
by the Governor. While the Governor may require reporting at more 
frequent intervals, the Department interprets WIOA sec. 122 to require 
that provider performance information for eligibility purposes must be 
submitted to the State at least biennially.
    Proposed paragraphs (b)(1) through (4) list the program-specific 
performance information, described in WIOA sec. 122, that must be 
submitted by training providers. Proposed paragraph (b)(1) includes a 
cross-reference to the performance elements described at WIOA secs. 
116(b)(2)(A)(i)(I)-(IV). These elements are further discussed in 
proposed Sec.  680.460(g)(i) through (iv). Proposed paragraphs (b)(2) 
through (4) list additional information that must be supplied by 
providers; this includes information on post-secondary credentials 
offered, program costs, and the completion rate for WIOA participants 
in the program.
    Proposed paragraph (c) explains that the Governor may require any 
additional performance information that he or she considers appropriate 
for determining or renewing eligibility. Separate reporting 
requirements for the State's ETP performance reports under WIOA sec. 
116(d)(4) are addressed in Sec.  677.230.
    Proposed paragraph (d) emphasizes the collaborative relationship 
between a State and its training providers and explains that the 
Governor must assist providers in supplying the information required of 
them under WIOA and the proposed regulations. Proposed paragraph (d)(1) 
states the statutory requirement, at WIOA sec. 122(b)(1)(J)(iv), that 
the Governor must provide access to cost-effective methods for the 
collection of information. Proposed paragraphs (d)(2) and (3) explain 
that the Governor may provide technical and other assistance to 
providers in helping them to meet the performance requirements and that 
funds reserved for statewide activities under WIOA sec. 134 (a)(2)(B) 
may be used for this purpose. While WIOA emphasizes performance 
accountability, it is also important to assist ETPs in maintaining 
their eligibility, especially as training providers adjust to the more 
demanding reporting requirements of WIOA.
Section 680.500 How is the State list of eligible training providers 
disseminated?
    The public's ability to access and easily understand the State ETPL 
and its accompanying information are cornerstones of informed customer 
choice and transparency. In keeping

[[Page 20725]]

with WIOA's intent for program alignment and service integration, the 
Department proposes strengthening the distribution of the list to 
emphasize dissemination to the public through one- stop partner 
programs in addition to the one-stop system. The ETP performance 
reports at WIOA sec. 116(d)(4) are addressed separately in Sec.  
677.230, which requires the coordinated dissemination of the 
performance reports with the ETPL and the information required to 
accompany the list.
    Proposed Sec.  680.500 explains the requirements for distributing 
the list and accompanying information about the programs and providers 
on the list. These requirements recognize the central importance of the 
list as the means to provide participants, as consumers of employment 
and training activities, effective choices among programs and providers 
of these services. As discussed previously, informed consumer choice is 
a key principle under WIOA.
    Proposed paragraph (a) requires the State to disseminate the list 
with accompanying performance and cost information to Local Boards in 
the State and to members of the public online including Web sites and 
searchable databases, through whatever means the State uses to 
disseminate information to consumers, including the one-stop delivery 
system and its program partners. Local Boards must disseminate the list 
through the one-stop system as well, as described in proposed Sec.  
680.430(c)(3). Proposed paragraph (b) requires the list to be updated 
regularly, while provider eligibility is reviewed biennially. The 
Department is making a distinction between the eligibility of 
individual providers and updates to the actual list because the 
Department anticipates the list may be updated on an on-going basis, 
even though the review of a particular provider's eligibility status 
may occur biennially.
    Proposed paragraph (c) requires the State list and accompanying 
information to be easily available to all one-stop customers through 
the one-stop system and its partner programs. The State list is a key 
piece of the State one-stop system. As such, it must be made available 
to individuals seeking information on training programs as well as 
participants receiving career services funded under WIOA and other 
programs. Proposed paragraph (c) further explains that the list must be 
available to individuals who are eligible for training under WIOA as 
well as to individuals whose training is supported by other one-stop 
partners.
    Proposed paragraph (d) describes the information that must 
accompany the list to help participants in making informed choices 
regarding training programs and providers. Proposed paragraphs (d)(1) 
through (4) describe the information that must accompany the list, 
including recognized post-secondary credentials offered, other 
information as may be required by the Governor's eligibility criteria, 
and performance and cost information. The information available for 
programs in the initial eligibility stage will be different from, and 
less extensive than, the information available from programs in the 
continuing eligibility stage.
    Proposed paragraph (d)(3) includes the requirement that the State 
must disseminate the provider list with ``other appropriate 
information.'' The Department interprets this language to include the 
performance and cost information described at Sec.  680.490.
    Proposed paragraph (d)(4) states that the Governor may include any 
additional information to accompany the list as he or she considers 
appropriate. The Department encourages States to include any 
information that, consistent with WIOA's goal of promoting consumer 
choice, will assist participants in choosing training activities and 
providers.
    Proposed paragraph (e) requires, as described in WIOA sec. 
122(d)(3), that the accompanying information must not reveal personally 
identifiable information about an individual participant. In addition, 
disclosure of personally identifiable information from an education 
record must be carried out in accordance with the FERPA, including the 
circumstances relating to prior written consent.
    The Department is interested in comments on specific ways to 
structure the accompanying information so that it provides a complete 
and easily understandable picture of provider performance but is not so 
detailed or complex that it discourages users from consulting it or 
limits its utility to the lay person. Should, for example, there be a 
summary sheet that is easy and quick to read and, if so, what 
information must be on the summary sheet?
Section 680.510 In what ways can a Local Board supplement the 
information available from the State list?
    Proposed Sec.  680.510 explains that Local Boards may choose to 
supplement the criteria and information requirements established by the 
Governor's procedure in order to facilitate informed consumer choice in 
a local area.
    Proposed paragraph (a) states that a Local Board may require that 
providers of training services furnish additional criteria and 
information as allowed under WIOA sec. 122(b)(3). These requirements 
impact the provision of services in the local area involved.
    Proposed paragraphs (b)(1) through (4) explain the type of 
additional information that the Local Board may require providers to 
supply in their application to become eligible. These provisions are 
largely unchanged from the WIA regulations. The Local Board may request 
that the provider of training services explain how the training program 
specifically links to occupations that are in demand within the local 
area. The Local Board may also request specific program performance and 
cost information particular to a local area where programs are offered 
at multiple sites. The Department further explains that Local Boards 
may request information from training providers that indicates how 
programs are responsive to these local requirements, as provided for in 
WIOA sec. 122(b)(3).
Section 680.520 May individuals choose training providers located 
outside of the local area?
    Proposed Sec.  680.520 explains that an individual may choose a 
training provider located outside the local area, and, in some 
instances, in other States. States may enter into reciprocity 
agreements with other States under which providers of training services 
are allowed to accept ITAs provided by another State. Providers of 
training services that are located outside the local area may not be 
subject to State eligibility procedures if the provider has been 
determined eligible by another State with such an agreement. The option 
to enter into reciprocity agreements diminishes the burden on States 
and providers of training services to be subject to duplicative 
procedures and is allowable under WIOA sec. 122(g). This provision also 
expands the array of training options available for individuals seeking 
training.
Section 680.530 What requirements apply to providers of on-the-job 
training, customized training, incumbent worker training, and other 
training exceptions?
    In proposed Sec.  680.530, the Department explains that providers 
of OJT, customized training, incumbent worker training, internships, 
paid or unpaid work experience, or transitional employment are not 
subject to the eligibility requirements under WIOA

[[Page 20726]]

secs. 122(a)-(f), but are required to provide performance information 
established by the Governor. The Department further explains that the 
local one-stop operator is required to collect and disseminate 
information that identifies these providers as meeting the Governor's 
performance criteria. Although these providers are not included on the 
State ETPL they are considered to be eligible providers of training 
services.
6. Subpart E--Priority and Special Populations
Introduction
    The services provided with adult funds can be a pathway to the 
middle class for low-income adults, public assistance recipients, and 
individuals who are basic skills deficient. The proposed regulations 
implement the statutorily-required priority for the use of adult funds. 
This subpart contains proposed regulations about how participants from 
certain populations are able to access adult and dislocated worker 
services and establish priority access to these services. WIOA sec. 
134(c)(3)(E) provides that priority must be given to recipients of 
public assistance, other low-income individuals, and individuals who 
are basic skills deficient. Under WIA, this priority applies only when 
adult funds are limited. Under WIOA, however, priority access to 
services by members of this group applies automatically. Nonetheless, 
WIOA allows one-stop operators to provide individualized career 
services to individuals who are not members of these groups, if 
determined appropriate by the one-stop operator.
    The Department strongly encourages close cooperation between WIOA-
funded programs and other Federal and State sources of assistance for 
job seekers. Coordination between WIOA-funded programs and the TANF 
program is a crucial element in serving individuals who are on public 
assistance. TANF is a required partner in the one-stop delivery system. 
Through close cooperation, each program's participants will have access 
to a much broader range of services to promote employment retention and 
self-sufficiency than if they relied only on the services available 
under a single program.
    In this subpart, the Department explains how displaced homemakers 
may be served with both adult and dislocated worker funds. Under WIOA, 
a displaced homemaker qualifies as an ``individual with a barrier to 
employment'' (see proposed Sec.  680.320(b) and its discussion above). 
WIOA provides a focus on serving ``individuals with a barrier to 
employment'' to ensure they have opportunities to enter meaningful 
employment; this term is defined in WIOA sec. 3(24). Additionally, 
displaced homemakers meet the definition of a ``dislocated worker,'' as 
defined in WIOA sec. 3(15)(D). The proposed regulations implement 
WIOA's requirements and effectuate its purpose to aid displaced 
homemakers, whose work, albeit without a formal connection to the 
workforce, is recognized for its value, but who may need WIOA services 
to develop further work skills. WIOA also expands the definition of 
displaced homemakers to include dependent spouses of the Armed Forces 
on active duty to ensure they have access to WIOA title I services.
    This subpart ensures that veterans and certain service members have 
access to adult and dislocated worker programs. Under WIOA, as was the 
case under WIA, veterans receive priority of service in all Department-
funded employment and training programs. The proposed regulations 
describe what is meant by ``priority of service.'' The Department has 
proposed a regulation consistent with guidance it issued in Training 
and Employment Guidance Letter (TEGL) 22-04 that separating service 
members meet the eligibility requirements for dislocated worker 
activities. This proposed regulation will ensure that service members 
will have access to the full array of services available through the 
one-stop delivery system.
Section 680.600 What priority must be given to low-income adults and 
public assistance recipients and individuals who are basic skills 
deficient served with adult funds under title I?
    Proposed Sec.  680.600 provides priority access to career services 
and training services funded under WIOA sec. 134(c)(2)(A)(xii) and 
adult title I. In Sec.  678.430(b), the Department proposes to 
categorize these services as individualized career services. WIOA 
builds on the priority given under WIA to providing training services 
to low-income individuals and individuals receiving public assistance. 
Under WIOA, the priority also extends to individuals who are basic 
skills deficient.
    Proposed Sec.  680.600(a) explains that individualized career 
services and training services must be given on a priority basis to 
low-income adults, public assistance recipients, and individuals who 
are basic skills deficient in the local area under the WIOA adult 
program. For adults, the term ``basic skills deficient'' is defined in 
WIOA sec. 3(5)(B) and applies when an individual is unable to compute 
or solve problems, or read, write, or speak English, at a level 
necessary to function on the job, in the individual's family, or in 
society. Priority must be given regardless of funding levels.
    Proposed Sec.  680.600(b) requires States and local areas to 
establish criteria for providing priority to individualized career 
services and training services with WIOA adult funds under title I. The 
criteria may include other resources and funds for providing career and 
training-related services in the local area, as well as the needs of 
specific groups in the local area, as well as other factors the local 
areas determines appropriate.
    Proposed Sec.  680.600(c) clarifies that while priority must be 
given under WIOA adult funds to low-income individuals, public 
assistance recipients, or individuals who are basic skills deficient 
for individualized career services and training services, the Local 
Board and Governor may establish a process that also gives priority to 
other individuals.
Section 680.610 Does the statutory priority for use of adult funds also 
apply to dislocated worker funds?
    Proposed Sec.  680.610 clarifies that the statutory priority for 
low-income individuals, public assistance recipients, and individuals 
who are basic skills deficient only applies to the WIOA adult program 
and not the WIOA dislocated worker program.
Section 680.620 How does the Temporary Assistance for Needy Families 
program relate to the one-stop delivery system?
    Proposed Sec.  680.620 explains how the TANF program relates to the 
one-stop delivery system. Cooperation among required partner programs 
is vital to build pathways to the middle class for individuals on 
public assistance and low-income individuals. Partners, working 
together, can ensure the best mix of services for each individual 
seeking to enhance their lives and employment.
    Under WIOA, TANF is a required partner in the one-stop system, 
unless the Governor opts out. TANF provides assistance to needy 
families and by coordinating closely with WIOA local areas can ensure 
programs and services include the needs of individuals on public 
assistance. This section encourages cooperation among the WIOA and TANF 
programs to maximize

[[Page 20727]]

services available to participants eligible under both programs.
Section 680.630 How does a displaced homemaker qualify for services 
under title I?
    Proposed Sec.  680.630 explains displaced homemakers' eligibility 
for dislocated worker activities. A displaced homemaker can qualify for 
either adult or dislocated worker funds. First, if an individual meets 
the definition of a displaced homemaker under WIOA sec. 3(16), the 
individual is eligible for dislocated worker career and training 
services. Second, the displaced homemaker may be served with title I 
adult funds if the individual meets the eligibility requirements for 
this program; generally priority in the adult program is given to low-
income individuals, individuals on public assistance, or if they lack 
basic work skills. A State may also use reserve funds that target 
displaced homemakers in which they would be eligible.
    Under WIOA, the definition of a displaced homemaker is expanded to 
explicitly include dependent spouses of a member of the Armed Forces on 
active duty (as defined in sec. 101(d)(1) of title 10, United States 
Code) and whose family income is significantly reduced because of a 
deployment, a call or order to active duty, a permanent change in 
station, or the service-connected death or disability of the service 
member.
Section 680.640 May an individual with a disability whose family does 
not meet income eligibility criteria under the Act be eligible for 
priority as a low-income adult?
    Proposed Sec.  680.640 explains that under WIOA an individual with 
a disability whose family does not meet income eligibility criteria 
will still qualify for priority as a low-income adult if the individual 
meets the low-income criteria in WIOA sec. 3(36). Additionally, the 
Department proposes that if an individual with a disability meets the 
income eligibility criteria for payments under any Federal, State, or 
local public assistance program that individual will also be eligible 
for priority as a low-income adult consistent with WIOA sec. 
3(36)(A)(i). This includes recipients of SNAP, TANF, and recipients of 
the Supplemental Security Income program.
Section 680.650 Do veterans receive priority of service under the 
Workforce Innovation and Opportunity Act?
    Proposed Sec.  680.650 builds on the Department's efforts to ensure 
veterans are entitled to priority of service in all Department-funded 
training programs under 38 U.S.C. 4215 and 20 CFR 1010. The proposal 
states that veterans must receive priority of service in programs for 
which they are eligible. In programs that require income-based 
eligibility to receive services, amounts paid while on active duty or 
paid by the Department of Veterans Affairs (VA) for VR, disability, or 
other related VA programs are not considered as income when determining 
low-income status. Generally, this means many separating service 
members may qualify for the WIOA adult program because it provides 
priority for low-income individuals and military earnings are not to be 
considered income for this purpose.
Section 680.660 Are separating service members eligible for dislocated 
worker activities under the Workforce Innovation and Opportunity Act?
    Proposed Sec.  680.660 explains, consistent with the Department's 
long-standing policy, that service members exiting the military qualify 
as dislocated workers. Dislocated worker funds under title I can help 
separating service members enter or reenter the civilian labor force.
    Proposed Sec.  680.660(a) clarifies that a notice of separation, a 
DD-214 from the Department of Defense, or other appropriate 
documentation that shows a separation or imminent separation from the 
Armed Forces qualifies as a notice of termination or layoff required 
for the dislocated worker definition.
    Proposed Sec.  680.660(b) clarifies that a separating service 
member meets the dislocated worker requirements concerning UC.
    Proposed Sec.  680.660(c) clarifies that a separating service 
member meets the dislocated worker requirement that an individual is 
unlikely to return to his or her previous industry or occupation.
7. Subpart F--Work-Based Training
Introduction
    Proposed Sec. Sec.  680.700 through 680.850 are proposed 
regulations for work-based training under WIOA. The proposed 
regulations apply to (OJT) training, customized training, incumbent 
worker training, and transitional jobs. The proposed regulations 
include specific information about general, contract, and employer 
payment requirements. Work-based training is employer-driven with the 
goal of unsubsidized employment after participation. Generally, work-
based training involves a commitment by an employer or employers to 
fully employ successful participants after they have completed the 
program. Registered apprenticeship training is a type of work-based 
training that can be funded in the adult and dislocated worker 
programs; additionally pre-apprenticeships may be used to provide work 
experiences that can help participants obtain the skills needed to be 
placed into a registered apprenticeship.
    Work-based training can be an effective training strategy that can 
provide additional opportunities for participants and employers in both 
finding high quality work and in developing a high quality workforce. 
Each of these work-based models can be effectively used to target 
different job seeker and employer needs. OJT is primarily designed to 
provide a participant with the knowledge and skills necessary for the 
full performance of the job. Incumbent worker training is designed to 
ensure that employees of a company are able to gain the skills 
necessary to retain employment and advance within the company or to 
provide the skills necessary to avert a layoff. Customized training is 
designed to provide local areas with flexibility to ensure that 
training meets the unique needs of the job seekers and employers or 
groups of employers.
    Both training providers and OJT providers must be providing the 
highest quality training to participants. OJT contracts must be 
continually monitored so that WIOA funds provided through OJT contracts 
are providing participants with successful employment. It is important 
that OJTs have a strong ability to provide participants with in-demand 
skills with opportunities for career advancement and employers with a 
skilled workforce.
    Under WIA, States could apply for a waiver to increase 
reimbursement amounts of the OJT wage rate. Under WIOA, the statute 
enables a Governor or Local Board to increase this rate to 75 percent 
without a waiver. This change is designed to give States and Local 
Boards additional flexibility in developing OJT opportunities that work 
best with the participating employers and in the local economy.
    WIOA also explicitly allows for incumbent worker training at the 
local level. WIOA introduces incumbent worker training as an allowable 
type of training for a local area to provide. Under WIA, States could 
use their statewide activities funds to conduct incumbent worker 
training, and local areas could conduct incumbent worker training with 
an approved waiver. Incumbent worker training is designed to either 
assist workers in obtaining the skills necessary to retain employment 
or to avert layoffs and must increase both a participant's and a 
company's

[[Page 20728]]

competitiveness. Local areas may use up to 20 percent of their local 
adult and dislocated worker funds for incumbent worker training. In 
this proposed regulation, the Department seeks to ensure that incumbent 
worker training is targeted to improving the skills and competitiveness 
of the participant and increasing the competitiveness of the employer. 
The training should, wherever possible, allow the participant to gain 
industry-recognized training experience, and ultimately should lead to 
an increase in wages. To receive incumbent worker funding under WIOA, 
an incumbent worker must have an employer-employee relationship, and an 
established employment history, with the employer. Incumbent workers 
are employed at the time of their participation, and the contract funds 
are paid to the employer for training provided to the incumbent worker 
either to avert a lay-off or otherwise retain employment. An ideal 
incumbent worker training would be one where a participant acquires new 
skills allowing him or her to move into a higher skilled and higher 
paid job within the company, thus allowing the company to hire a job 
seeker to backfill the incumbent worker's position. The Departments are 
seeking comment on the best way to structure these arrangements to 
maximize the likelihood that this ideal outcome occurs.
    WIOA also discusses transitional jobs as a way for adults and 
dislocated workers with barriers to employment who are experiencing 
chronic unemployment or have an inconsistent work history to develop a 
work history and basic work skills essential to keeping a job. 
Transitional jobs are time-limited, subsidized employment in the 
private, non-profit, or public sectors.
Section 680.700 What are the requirements for on-the-job training?
    OJT is a type of training that is provided by an employer to a 
participant. During the training, the participant is engaged in 
productive work in a job for which he or she is paid, and the training 
provides the knowledge or skills essential to the full and adequate 
performance of the job. Studies over the past 3 decades have found that 
in the United States formal OJT programs have positive employment and 
earnings outcomes.\2\ OJT is a critical tool that can help jobseekers 
enter into successful employment.
---------------------------------------------------------------------------

    \2\ Kleinman, Liu, Mastri, Reed, Reed, Sattar, Ziegler, An 
Effectiveness Assessment and Cost-Benefit Analysis of Registered 
Apprenticeship in 10 States, Mathematica Policy Research, July 2012, 
Prepared for the U.S. Department of Labor, Employment and Training 
Administration.
---------------------------------------------------------------------------

    Proposed Sec.  680.700(a) explains that OJT may be provided under 
contract with an employer in the public, private non-profit, or private 
sectors. Under WIOA, the reimbursement level may be raised up to 75 
percent of the wage rate, in contrast to 50 percent of the wage rate 
under WIA. Typically, the OJT contract provides reimbursement to the 
employer for a portion of the wage rate of the participant for the 
extraordinary costs of providing training and supervision related to 
the training.
    Proposed Sec.  680.700(b) states that contracts must not be entered 
into with an employer that received payments under previous contracts 
under WIOA or WIA if the employer has exhibited a pattern of failing to 
provide OJT participants with continued long-term employment as regular 
employees with wages, employment benefits, or working conditions at the 
same level as other employees performing the same type of work for the 
same length of time.
    Proposed Sec.  680.700(c) continues the requirement under WIA that 
OJT contracts must be limited in duration to the time necessary for a 
participant to become proficient in the occupation for which they are 
receiving the OJT training. When determining the length of the 
contract, the Governor or Local Boards must take into account the skill 
requirements of the occupation, the academic and occupational skill 
level of the participant, prior work experience, and the participant's 
individual employment plan.
Section 680.710 What are the requirements for on-the-job training 
contracts for employed workers?
    Proposed Sec.  680.710 is unchanged from the WIA regulations. The 
proposal identifies the requirements for OJT contracts used to train 
employed workers.
Section 680.720 What conditions govern on-the-job training payments to 
employers?
    Proposed Sec.  680.720 identifies the conditions that govern OJT 
payment to employers. OJT payments are to be compensation to the 
employer for the extraordinary costs associated with training 
participants. The Department does not seek to define through this 
regulation what ``extraordinary costs'' are, and is seeking public 
comment on this issue. The Department generally believes extraordinary 
costs are those costs the employer has in training participants who may 
not yet have the knowledge or skills to obtain the job through an 
employer's normal recruitment process.
Section 680.730 Under what conditions may a Governor or Local Board 
raise the on-the-job training reimbursement rate up to 75 percent of 
the wage rate?
    Proposed Sec.  680.730(a) identifies the factors that a Governor or 
Local Board must consider and document in determining whether to raise 
the reimbursement rate for OJT contracts up to 75 percent of the wage 
rate.
    Proposed Sec.  680.730(1) allows for the wage rate to be up to 75 
percent after taking into consideration, among other factors, the 
characteristics of the participants (WIOA sec. 134(c)(3)(H)(ii)(I)), 
including whether the OJT contract is leading to employment for 
individuals with barriers to employment. Proposed Sec.  680.730(2) 
states that the size of the employer is a factor that must be 
considered; proposed Sec.  680.730(3) states that the quality of 
employer-provided training and advancement opportunities is a factor 
that must be considered. Proposed Sec.  680.730(4) states that the 
Governor or Local Board may consider other factors in determining 
whether it is appropriate to raise the reimbursement rate. Such other 
factors may include the number of employees participating, wage and 
benefit levels of employees both before and after OJT completion, and 
relation of training to the competitiveness of the participant. 
Proposed Sec.  680.730(b) requires that the Governor or Local Board 
must document the factors that they considered when deciding to 
increase the wage reimbursement levels above 50 percent up to 75 
percent. The Department is seeking comments from the public on how the 
relation of training to the competitiveness of the participant must be 
analyzed when implementing this provision.
Section 680.740 How can on-the-job training funds be used to support 
placing participants into a registered apprenticeship program?
    Proposed Sec.  680.740(a) clarifies that an OJT contract may be 
made with a registered apprenticeship program for training 
participants. OJT contracts are made with the employer, and registered 
apprenticeships generally involve both classroom and on-the-job 
instruction. The OJT contract may be made to support the OJT portion of 
the registered apprenticeship program. The Department also notes that 
registered apprenticeship programs vary in length, so the OJT may 
support the entire duration of training while other means

[[Page 20729]]

may support the beginning of the registered apprenticeship training. 
The Department is seeking comments on what an appropriate maximum 
amount of time would be for OJT funds to be used to support 
participants in registered apprenticeships.
    Proposed paragraph (b) clarifies that in some instances a 
registered apprenticeship is operated by the employer and in others it 
is operated by a training provider with a direct connection to an 
employer or group of employers. If a participant is in a registered 
apprenticeship and employed as part of that arrangement, then the OJT 
must be treated as other OJTs provided for employed workers as 
described in Sec.  680.710. If a participant is in a registered 
apprenticeship but is unemployed, the OJT funds may be provided in same 
manner as other OJTs as described in Sec.  680.700.
Section 680.750 Can Individual Training Account and on-the-job training 
funds be combined to support placing participants into a registered 
apprenticeship program?
    Local areas may use an ITA to support classroom portions of a 
registered apprenticeship program and OJT funds may be used to support 
the on-the-job portions of the registered apprenticeship program. This 
is to ensure local areas have maximum flexibility in serving 
participants and supporting their placement into registered 
apprenticeship programs.
Section 680.760 What is customized training?
    Proposed Sec.  680.760 explains that customized training is to be 
used to meet the special requirements of an employer or group of 
employers, conducted with a commitment by the employer to employ all 
individuals upon successful completion of training. The employer must 
pay for a significant share of the cost of the training.
    Proposed Sec.  680.760(a) and (b) are unchanged from WIA. In 
paragraph (c) under WIA employers were required to pay for not less 
than 50 percent of the cost of the training, WIOA removes the precise 
figure and says that the employer must pay for a ``significant cost of 
the training.''
Section 680.770 What are the requirements for customized training for 
employed workers?
    Proposed Sec.  680.770 identifies the eligibility requirements for 
employed workers to receive customized training. There may be instances 
where a worker is employed but then receives customized training under 
contract between the local area and the employer. In order for the 
employed worker to qualify, the employee must not be earning a self-
sufficient wage as determined by Local Board policy, the requirements 
of customized training in proposed Sec.  680.760 must be met, and the 
training must incorporate new technologies, processes, or procedures; 
skills upgrades; workplace literacy; or other appropriate purposes, as 
identified by the Local Board. Proposed Sec.  680.770 is unchanged from 
WIA. The Department is interested in comments that discuss how to 
distinguish customized training from OJT. Should they focus on 
different service populations, different training strategies, or 
different types of jobs?
Section 680.780 Who is an ``incumbent worker'' for purposes of 
statewide and local employment and training activities?
    Proposed Sec.  680.780 is designed to update the definition of an 
incumbent worker from WIA. An incumbent worker is employed with the 
company when the incumbent worker training starts. The Department is 
seeking comment on the appropriate amount of time an employee must have 
worked for the employer before being eligible for incumbent worker 
training. The Department is proposing a minimum of 6 months, but is 
seeking substantive comments on this proposal. The Department is also 
seeking comments on how incumbent worker training should increase the 
competitiveness of the employee or employer for the purposes of 
identifying high-quality incumbent worker opportunities.
Section 680.790 What is incumbent worker training?
    Proposed Sec.  680.790 discusses the purposes served by and the 
conditions relating to incumbent worker training as prescribed by WIOA 
sec. 134(d)(4)(B).
    Incumbent worker training is designed to meet the special 
requirements of an employer (including a group of employers) to retain 
a skilled workforce or avert the need to lay off employees by assisting 
the workers in obtaining the skills necessary to retain employment. The 
employer or group of employers must pay for a portion of the cost of 
providing the training to incumbent workers.
Section 680.800 What funds may be used for incumbent worker training?
    Proposed Sec.  680.800 provides that under WIOA, local areas may 
use up to 20 percent of their combined total of adult and dislocated 
worker allotments for incumbent worker training. States may use their 
statewide activities funds and Rapid Response funds for statewide 
incumbent worker training activities.
Section 680.810 What criteria must be taken into account for an 
employer to be eligible to receive local incumbent worker funds?
    Proposed Sec.  680.810 provides the criteria a Local Board must use 
when deciding on using funds for incumbent worker training with an 
employer. Paragraphs (a) through (c) address participant 
characteristics, the relationship of the training to the 
competitiveness of the participant and employer, and other factors that 
the Local Board determines appropriate. These factors may include the 
number of employees in training, wages and benefits (including post-
training increases), and the existence of other training opportunities 
provided by the employer.
Section 680.820 Are there cost sharing requirements for local area 
incumbent worker training?
    Proposed Sec.  680.820 clarifies that there are cost sharing 
requirements for employers participating in incumbent worker training 
to pay for the non-Federal share of the cost of providing training to 
incumbent workers of the employers.
Section 680.830 What is a transitional job?
    Proposed Sec.  680.830 explains that transitional jobs are time-
limited work experiences that are subsidized for individuals with 
barriers to employment who are chronically unemployed or have an 
inconsistent work history. These jobs may be in the public, private, or 
non-profit sectors. Transitional jobs can be effective solutions for 
individuals to gain necessary work experience that they would otherwise 
not be able to get through training or an OJT contract. The goal is to 
establish a work history for the individual, demonstrate work success, 
and develop skills that lead to entry into unsubsidized employment. The 
difference between a transitional job and an OJT contract is that in a 
transitional job there is no expectation that the individual will 
continue his or her hire with the employer after the work experience is 
complete.
Section 680.840 What funds may be used for transitional jobs?
    Proposed Sec.  680.840 states that local areas may reserve up to 10 
percent of their combined total of adult and dislocated worker 
allotments for transitional jobs and must be provided

[[Page 20730]]

along with comprehensive career services and supportive services.
Section 680.850 May funds provided to employers for work-based training 
be used to assist, promote, or deter union organizing?
    Proposed Sec.  680.850 clarifies that there is an explicit 
prohibition on the use of work-based training funds which includes OJT, 
customized training, incumbent worker training, transitional jobs or 
registered apprenticeship for assisting, promoting, or deterring union 
organizing activities.
8. Subpart G--Supportive Services
Introduction
    This section defines the scope and purpose of supportive services 
and the requirements governing their disbursement. A key principle in 
WIOA is to provide local areas with the authority to make policy and 
administrative decisions and the flexibility to tailor the workforce 
system to the needs of the local community. To ensure maximum 
flexibility, the regulations provide local areas the discretion to 
provide the supportive services they deem appropriate subject to the 
limited conditions prescribed by WIOA. Local Boards must develop 
policies and procedures to ensure coordination with other entities to 
ensure non-duplication of resources and services and to establish 
limits on the amount and duration of such services. Local Boards are 
encouraged to develop policies and procedures that ensure that 
supportive services are WIOA-funded only when these services are not 
available through other agencies and that the services are necessary 
for the individual to participate in title I activities. Supportive 
services may be made available to anyone participating in title I 
activities.
    Needs-related payments are designed to provide a participant with 
resources for the purpose of enabling them to participate in training 
services. The Department recognizes that many individuals in need of 
training services may not have the resources available to participate 
in the training. Needs-related payments can help individuals meet their 
non-training expenses and help them to complete training successfully. 
A participant must be enrolled in a training program in order to 
receive needs-related payments.
Section 680.900 What are supportive services for adults and dislocated 
workers?
    Proposed Sec.  680.900 explains that supportive services are 
services, such as transportation, child care, dependent care, housing, 
and needs-related payments, that are necessary to enable an individual 
to participate in career and training services. Referrals to supportive 
services are one of the career services that must be made available to 
adults and dislocated workers through the one-stop delivery system. The 
proposed section also provides that Local Boards, in consultation with 
the one-stop partners and other community service providers, must 
develop a policy on supportive services that ensures resource and 
service coordination in the local area. The policy must address 
procedures for referral to such services, including how such services 
will be funded when they are not otherwise available from other 
sources. When developing this policy, the Department encourages Local 
Boards to consider incorporating local legal aid services. Legal aid is 
able to reduce barriers to employment and establish employment 
eligibility such as by helping secure a driver's license, expunging 
criminal records, and addressing debts or credit reporting issues.
    In the context of a coordinated one-stop delivery system envisioned 
by WIOA, the one-stop needs to take into consideration all of the 
available supportive service resources so that participants may receive 
the best supportive services available and to ensure that funds are 
spent to maximize participants' opportunity to participate in career 
and training services.
Section 680.910 When may supportive services be provided to 
participants?
    Proposed Sec.  680.910 states that supportive services may only be 
provided to participants who are in career or training services, unable 
to obtain supportive services through other programs providing 
supportive services, and that they must be provided in a manner 
necessary to enable individuals to participate in career or training 
services. The proposed rule removes references to ``core'' and 
``intensive'' services, terms now characterized as ``career services'' 
under WIOA.
Section 680.920 Are there limits on the amounts or duration of funds 
for supportive services?
    Proposed Sec.  680.920 provides that Local Boards may establish 
limits on providing supportive services or allow the one-stop operator 
to establish limits, including caps on the amount of funding and length 
of time for supportive services to be made available. The rule text 
makes no changes from WIA.
Section 680.930 What are needs-related payments?
    Proposed Sec.  680.930 defines needs-related payments as financial 
assistance to a participant for the purpose of enabling the individual 
to participate in training. Needs-related payments are a type of 
supportive service that provides direct financial payments to a 
participant, and unlike other supportive services, the participant must 
be enrolled in training to receive needs-related payments. The rule 
text makes no substantive changes from WIA; it provides updated 
citations to WIOA.
Section 680.940 What are the eligibility requirements for adults to 
receive needs-related payments?
    Proposed Sec.  680.940 clarifies that for an adult to receive a 
needs-related payment he or she must be unemployed, not qualify for or 
have ceased to qualify for UC, and be enrolled in a training program.
Section 680.950 What are the eligibility requirements for dislocated 
workers to receive needs-related payments?
    Proposed Sec.  680.950 provides that dislocated workers may receive 
needs-related payments if they are unemployed, ceased to qualify for UC 
or trade readjustment allowance under Trade Adjustment Assistance 
(TAA), and be enrolled in training by certain deadlines. It makes one 
clarification from WIA in that it provides that the dislocated worker 
must be enrolled in training.
Section 680.960 May needs-related payments be paid while a participant 
is waiting to start training classes?
    Proposed Sec.  680.960 states that payments may be provided if the 
participant has been accepted into a program that will begin within 30 
calendar days.
Section 680.970 How is the level of needs-related payments determined?
    Proposed Sec.  680.970(a) explains that the needs-related payment 
level for adults must be established by the Local Board. The Department 
recognizes the costs of different labor markets and believes that 
payment levels are best set locally to ensure the needs-related 
payments meet their purpose of enabling participants to receive 
training services.
    Proposed Sec.  680.970(b) explains how needs-related payments for 
dislocated workers are calculated. If the participant is a dislocated 
worker and has established eligibility for UC, the needs-related 
payment must not exceed the

[[Page 20731]]

higher of the weekly level of UC the participant receives or an amount 
equal to the poverty level for an equivalent time period. If the 
participant qualifies for dislocated worker services, but not for UC as 
a result of the qualifying layoff, the needs-related payment must not 
exceed the higher of the weekly level of UC the participant would 
receive if she or he had qualified, if the weekly benefit amount that 
the participant would have received can be determined, or an amount 
equal to the poverty level for an equivalent time period. Local Boards 
must adopt policies to adjust the weekly payment level if there are 
changes in total family income.

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

1. Introduction
    Under WIOA, Federal, State, and local partnerships that put the 
youths' interests first will help the nation's disconnected youth to 
succeed. The common performance measures across WIOA core programs, 
adult and youth programs under WIOA title I, and Adult Education and 
Vocational Rehabilitation programs under WIOA titles II and IV provide 
a mechanism to support youth service alignment. WIOA envisions the 
Department's youth programs, including Job Corps, YouthBuild, and the 
youth formula-funded program, coordinating to support systems alignment 
and service delivery for youth. Local and State plans will articulate 
this vision of youth workforce investment activities and help ensure a 
long-term supply of skilled workers and leaders in local communities.
    WIOA affirms the Department's commitment to providing high quality 
services for youth and young adults beginning with career exploration 
and guidance, continued support for educational attainment, 
opportunities for skills training in in-demand industries and 
occupations, and culminating with a good job along a career pathway or 
enrollment in post-secondary education. All of the Department's youth-
serving programs continue to promote evidence-based strategies that 
also meet the highest levels of performance, accountability, and 
quality in preparing young people for the workforce. The Department's 
focus on performance and accountability is emphasized through the 
implementation of the new primary indicators of performance for 
eligible youth across programs and through their use of the primary 
indicators for program management and decision-making.
    WIOA maintains WIA's focus on OSY in Job Corps and YouthBuild, 
while greatly increasing the focus on OSY in the WIOA youth formula-
funded program. The shift in policy to focus on those youth most in 
need is based on the current state of youth employment. With an 
estimated 6 million 16-24 year olds in our country not employed or in 
school, WIOA youth programs provide a continuum of services to help 
these young people navigate between the educational and workforce 
systems. The Department, working with its Education and Health and 
Human Services partners, plans to provide intensive technical 
assistance around meeting the needs of this population.
    WIOA calls for customer-focused services based on the needs of the 
individual participant. This includes the creation of career pathways 
for youth in all title I youth programs, including a connection to 
career pathways as part of a youth's individual service strategy in the 
youth formula-funded program. In addition, many services under title I 
youth programs are based on the individual needs of participants. WIOA 
also calls for this population to be intimately involved in the design 
and implementation of services so the youth voice is represented and 
their needs are being met.
    This integrated vision also applies to the workforce system's other 
shared customer-employers. By repositioning youth as an asset to 
employers with a need for skilled workers, the value of employers 
engaging the youth workforce system and programs is enhanced. Employers 
are critical partners that provide meaningful growth opportunities for 
young people through work experiences that give them the opportunity to 
learn and apply skills in real-world setting and ultimately jobs that 
young people are ready to fill given the opportunity.
    The Department recognizes that much of this alignment and 
integration is already happening in local areas and regions across the 
country. WIOA aims to build upon these existing efforts through an 
emphasis on system alignment, an increased focus on serving OSY and 
those most in need, an emphasis on the needs of individual 
participants, and the prioritization of connections with employers, 
especially through work experience opportunities. The Department 
recognizes that WIOA also includes major shifts in approach and is 
committed to working with the youth workforce investment system to 
partner in the implementation of these changes through guidance and 
technical assistance.
    WIOA supersedes the youth formula-funded program under title I, 
subtitle B, chapter 2 Youth Workforce Investment Activities. It further 
aligns the WIOA youth program with the other ETA youth training 
programs, including YouthBuild and Job Corps, as well as with titles II 
and IV of WIOA by requiring common performance measures across all core 
programs.
    WIOA includes a number of significant changes for the youth 
formula-funded program. The biggest change under WIOA is the shift to 
focus resources primarily on OSY. WIOA increases the minimum percentage 
of funds required to be spent on OSY from 30 percent to 75 percent. 
This intentional shift refocuses the program to serve OSY during a time 
when large numbers of youth and young adults are out of school and not 
connected to the labor force. While the Department recognizes this 
transition to serve more OSY will take time to implement, it is 
critical that States and local areas begin to incorporate strategies 
for recruiting and serving more OSY.
    These strategies must incorporate strong framework services which 
must include intake, objective assessments, and the development of 
individual service strategy, case management, supportive services, and 
follow-up services. They must also consider how to ensure that American 
Job Center staff have the requisite knowledge and sensitivity to the 
needs of OSY to effectively serve them. The Department plans to release 
subsequent guidance on these matters but also welcomes comments at this 
time on preferred approaches.
    In addition, WIOA includes a major focus on providing youth with 
work experience opportunities. WIOA prioritizes work experiences with 
the requirement that local areas must spend a minimum of 20 percent of 
local area funds on work experience. Under WIOA, work experience 
becomes the most important of the program elements. WIOA also 
introduces five new program elements: Financial literacy; 
entrepreneurial skills training; services that provide labor market and 
employment information about in-demand industry sectors or occupations 
available in the local areas; activities that help youth prepare for 
and transition to post-secondary education and training; and education 
offered concurrently with and in the same context as workforce 
preparation activities and training for a specific occupation or 
occupational cluster.

[[Page 20732]]

    WIOA enhances the youth program design through an increased 
emphasis on individual participant needs by adding new components to 
the objective assessment and individual service strategy. WIOA 
incorporates career pathways as part of both the objective assessment 
and development of the individual service strategy. In addition, the 
individual service strategy must directly link to one or more of the 
performance indicators. The program design under WIOA also includes 
effective connections to employers, including small employers, in in-
demand industry sectors and occupations.
2. Subpart A--Standing Youth Committees
Section 681.100 What is a standing youth committee?
    This proposed section describes a standing youth committee. WIOA 
eliminates the requirement for Local Boards to establish a youth 
council; however, the Local Board may choose to establish, ``a standing 
committee to provide information and to assist with planning, 
operational, and other issues relating to the provision of services to 
youth, which must include CBOs with a demonstrated record of success in 
serving eligible youth'' (WIOA sec. 107(b)(4)(A)(ii)). The Department 
recognizes the difficulty under WIA in some local areas in maintaining 
the required youth council partnerships. The Department encourages 
Local Boards to consider establishing standing youth committees, taking 
advantage of the flexibility under WIOA to design standing youth 
committee membership to meet the local area's needs. Additionally, the 
law further clarifies that an existing youth council may be designated 
as the youth standing committee if they are fulfilling the requirements 
of a standing committee which means that they have members of the Local 
Board who have the appropriate experience and expertise in youth 
educational and workforce development (WIOA sec. 107(b)(4)(C)). The 
Department encourages Local Boards to designate high performing youth 
councils as standing youth committees if appropriate. Local Boards are 
responsible for the oversight of youth programs. Under WIA, youth 
councils were mandated to fulfill this function for the Board. Local 
Boards now may choose to fulfill the oversight responsibility, or have 
the discretion to delegate this function to a standing youth committee. 
If Local Boards choose not to delegate this function to a standing 
youth committee, they are responsible for conducting oversight of youth 
workforce investment activities under WIOA sec. 129(c).
Section 681.110 Who is included on a standing youth committee?
    This proposed section describes the members of a standing youth 
committee if the Local Board chooses to establish such a committee 
based on WIOA secs. 107(b)(4)(A)(ii) and 129(c)(3)(C). The members must 
include a member of the Local Board, who must chair the committee, 
members of CBOs with a demonstrated record of success in serving 
eligible youth and other individuals with appropriate expertise and 
experience who are not members of the Local Board. The committee may 
also include parents, participants, and youth. A Local Board may 
designate an existing entity such as an effective youth council as the 
standing youth committee if its membership meets the WIOA membership 
requirements.
Section 681.120 What does a standing youth committee do?
    This proposed section describes the duties of a standing youth 
committee if the Local Board chooses to establish such a committee 
based on WIOA secs.107(b)(4)(A)(ii) and 129(c)(3)(C). The standing 
committee's main function is to inform and assist the Local Board in 
developing and overseeing a comprehensive youth program. The details of 
its responsibilities are assigned by the Local Board.
3. Subpart B--Eligibility for Youth Services
Section 681.200 Who is eligible for youth services?
    This proposed section based on WIOA sec. 3(18) describes 
eligibility for the WIOA title I youth formula-funded program which 
includes two groups: In-school youth (ISY) and OSY and establishes 
specific criteria for each group. The eligible WIOA title I youth 
population represents youth who face challenges and barriers to success 
in the labor market.
Section 681.210 Who is an ``out-of-school youth''?
    This proposed section describes how one meets the eligibility for 
an OSY for purposes of the title I WIOA youth program. OSY youth must 
not attend any school, be between the ages of 16 and 24 at time of 
enrollment, and meet one or more of a list of eight criteria. With one 
exception, the WIOA criteria are generally the same as those under WIA. 
The section clarifies that age is based on time of enrollment and as 
long as the individual meets the age eligibility at time of enrollment 
they can continue to receive WIOA youth services beyond the age of 24. 
Unlike under WIA or under the definition of an ISY, low income is not a 
requirement to meet eligibility for most categories of OSY under WIOA. 
However, low income is now a part of the criteria for youth who need 
additional assistance to enter or complete an educational program or to 
secure or hold employment. Also, WIOA has made youth with a disability 
a separate eligibility criterion.
    In addition, WIOA includes a new criterion: A youth who is within 
the age of compulsory school attendance, but has not attended school 
for at least the most recent school year calendar quarter. Because 
school districts differ in what they use for school year quarters, the 
time period of a school year quarter is based on how a local school 
district defines its school year quarters. WIOA lists this criterion as 
the second on the list of eight that satisfy the third of the three 
primary requirements.
Section 681.220 Who is an ``in-school youth''?
    This proposed section describes how one meets the eligibility for 
an ISY for purposes of the WIOA title I youth program. ISY youth must 
be attending school, including secondary or post-secondary school, be 
between the ages of 14 and 21 at time of enrollment, be low-income, and 
meet one or more of a list of seven criteria. These are essentially the 
same criteria as under WIA but the disability criterion has been 
separated from the ``needs additional assistance'' criterion. The 
section clarifies that age is based on time of enrollment and as long 
as the individual meets the age eligibility at time of enrollment they 
can continue to receive WIOA youth services beyond the age of 21. WIOA 
includes a youth as low-income if he or she receives or is eligible to 
receive a free or reduced price lunch under the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1751 et seq.).
Section 681.230 What does ``school'' refer to in the ``not attending or 
attending any school'' in the out-of-school and in-school definitions?
    The term school refers to both secondary and post-secondary school 
as defined by the applicable State law for secondary and post-secondary 
institutions. This proposed section provides that for purposes of title 
I of WIOA, the Department does not consider providers of adult 
education under title II of WIOA, YouthBuild

[[Page 20733]]

programs, or Job Corps programs as schools. Therefore, if the only 
``school'' the youth attends is adult education provided under title II 
of WIOA, YouthBuild, or Job Corps, the Department will consider the 
individual an OSY youth for purposes of title I of WIOA youth program 
eligibility.
    WIOA emphasizes the importance of coordination among Federally-
funded employment and training programs, including those authorized 
under titles I and II. Many disconnected youth age 16 to 24 meet 
eligibility requirements for both WIOA title I youth activities and 
WIOA title II adult education. Co-enrollment between these two programs 
can be very beneficial to disconnected youth as they can receive work 
experience and occupational skills through title I funding and literacy 
skills through title II funding. Because the eligibility for title II 
is similar to that for an OSY under title I, an individual who is not 
enrolled or required to be enrolled in secondary school under State 
law, it is consistent to consider such youth already enrolled in title 
II as an OSY for purposes of title I WIOA youth eligibility.
Section 681.240 When do local youth programs verify dropout status, 
particularly for youth attending alternative schools?
    This proposed section provides that dropout status is determined at 
the time of enrollment for eligibility as an OSY and that once a youth 
is enrolled as an OSY, that status continues, for purposes of the 75 
percent OSY enrollment requirement, for the duration of the youth's 
enrollment, even if the youth later returns to a school. Because WIOA 
does not define the term alternative school, States must develop a 
definition. The Department advises States to define alternative school 
consistent with their State education agency alternative school 
definition. As of September 2014, 43 States and the District of 
Columbia have formal definitions of alternative education. The intent 
of WIOA is to serve more OSY who are disconnected from school and work, 
while continuing to develop strategies and provide services to ISY in 
collaboration with community partners.
Section 681.250 Who does the low-income eligibility requirement apply 
to?
    This proposed section discusses the low-income eligibility criteria 
for OSY and ISY. For OSY, only those youth who are the recipient of a 
secondary school diploma or its recognized equivalent and are either 
basic skills deficient or an English language learner and youth who 
require additional assistance to enter or complete an educational 
program or to secure or hold employment must be low-income. For OSY who 
are subject to the justice system, homeless, pregnant or parenting, or 
have a disability, income eligibility documentation is not required by 
statute. All ISY must be low-income. Under WIOA, there are 
circumstances when local areas will find documenting low income for 
youth formula program eligibility less burdensome than it was under the 
WIA youth program. For example, for ISY a local program can use 
eligibility for free or reduced price lunch as low-income 
documentation. For all youth, those living in a high-poverty area are 
considered low-income. The section also sets out the exception to the 
low-income requirement that up to 5 percent of youth who meet all the 
other eligibility requirements need not be low-income. The 5 percent is 
calculated based on all youth served in the WIOA local youth program in 
a given PY.
Section 681.260 How does the Department define ``high poverty area'' 
for the purposes of the special rule for low-income youth in Workforce 
Innovation and Opportunity Act?
    WIOA contains a new provision that allows for youth living in a 
high-poverty area to automatically meet the low-income criterion that 
is one of the eligibility criteria for ISY and for some OSY. In order 
to maintain consistency across the country, the Department proposes 
that a high-poverty area be defined as a Census tract; a set of 
contiguous Census tracts; Indian Reservation, tribal land, or Native 
Alaskan Village; or a county that has a poverty rate of at least 30 
percent as set every 5 years using American Community Survey 5-Year 
data. While there is no standard definition for the term ``high-poverty 
area'' in Federal programs, the Census Bureau uses two similar 
concepts. One is ``poverty area,'' that is an area with a poverty rate 
of at least 20 percent and the other is ``area with concentrated 
poverty,'' that is an area with a poverty rate of at least 40 percent. 
The term high-poverty area implies an area that has more poverty than a 
``poverty area'' but not as much poverty as an ``area with concentrated 
poverty.'' In addition, current Department competitive grant programs 
for ex-offenders define high poverty areas as communities with poverty 
rates of at least 30 percent. The Department is seeking comments on 
whether the poverty thresholds the Department is proposing are the most 
appropriate levels for youth living in a high poverty area.
Section 681.270 May a local program use eligibility for free or reduced 
price lunches under the National School Lunch Program as a substitute 
for the income eligibility criteria under title I of the Workforce 
Innovation and Opportunity Act?
    This proposed section describes a change from WIA in which a local 
program can use eligibility for free or reduced price lunch under the 
Richard B. Russell National School Lunch Act as one of the factors to 
determine whether a participant meets the low-income criteria for 
eligibility for the WIOA youth program.
Section 681.280 Is a youth with a disability eligible for youth 
services under the Act if their family income exceeds the income 
eligibility criteria?
    This proposed section reiterates the WIOA provision that, for an 
individual with a disability, income level for eligibility purposes is 
based on his/her own income rather than his/her family's income.
Section 681.290 How does the Department define the ``basic skills 
deficient'' criterion in this part?
    This proposed section reiterates the basic skills deficient 
criterion that is part of the eligibility criteria for both OSY and 
ISY, for purposes of title I of WIOA. For the second part of the 
definition, which reads ``a youth who is unable to compute or solve 
problems, or read, write, or speak English at a level necessary to 
function on the job, in the individual's family, or in society,'' the 
State and/or Local Board must further define how the State or Local 
Board will determine if a youth is unable to demonstrate these skills 
well enough to function on the job, in their family, or in society as 
part of its respective State or local plan. The section also provides 
that local programs must use valid and reliable assessment instruments 
and provide reasonable accommodations to youth with disabilities in the 
assessment process in making this determination.
Section 681.300 How does the Department define the ``requires 
additional assistance to complete an educational program, or to secure 
and hold employment'' criterion in this part?
    This proposed section allows States and/or local areas to define 
the ``requires additional assistance . . .'' criterion that is part of 
the OSY and ISY eligibility. It clarifies that if this criterion is not 
defined at the State level and a local area uses this criterion in 
their OSY or ISY eligibility, the local

[[Page 20734]]

area must define this criterion in their local plan.
Section 681.310 Must youth participants enroll to participate in the 
youth program?
    This proposed section clarifies that there is no self-service 
concept for the WIOA youth program and every individual receiving 
services under WIOA youth must meet ISY or OSY eligibility criteria and 
formally enroll in the program. It defines enrollment as the collection 
of information to support an eligibility determination and 
participation in any one of the 14 program elements. Under WIA the 
Department received many questions about the point in time that a youth 
became enrolled in the program. The Department hopes the proposed 
addition of connecting enrollment to receipt of a program element 
clarifies the moment at which enrollment occurs. The reference to EO 
data in the corresponding section under WIA was dropped because all 
rules related to data collection are covered in Sec.  677 on 
performance management.
4. Subpart C--Youth Program Design, Elements, and Parameters
Section 681.400 What is the process used to select eligible youth 
providers?
    WIA regulations did not address the process for identifying and 
selecting eligible youth providers required in WIA sec. 123. The 
Department has received numerous inquiries asking for clarification on 
the competitive selection of youth providers and which services must be 
provided by entities identified in accordance with WIA sec. 123. This 
proposed regulation clarifies which youth activities may be conducted 
by the local grant recipient and which services must be provided by 
entities identified in accordance with WIOA sec. 123. Consistent with 
Sec.  664.405(a)(4), the competitive selection requirement in WIOA sec. 
123 does not apply to framework services if the grant recipient/fiscal 
agent provides these services. The Department allows this because in 
some cases the grant recipient/fiscal agent may be best positioned to 
provide such services. For example, the grant recipient/fiscal agent 
that provides framework services can ensure continuity of WIOA youth 
programming as youth service providers change.
Section 681.410 Does the requirement that a State and local area expend 
at least 75 percent of youth funds to provide services to out-of-school 
youth apply to all youth funds?
    This proposed section describes the new minimum expenditure 
requirement under WIOA that States and local areas must expend a 
minimum of 75 percent of youth funds on OSY. Under WIA, local areas 
were required to spend at least 30 percent of funds to assist eligible 
OSY. This represents a significant shift in the focus of the WIOA youth 
program and the Department recognizes such a shift will require 
additional technical assistance and guidance, including assistance to 
other youth-serving programs. This section also describes that the 
minimum 75 percent OSY expenditure applies to both local area funds and 
statewide youth activities funds reserved by the Governor. However, 
only those statewide funds spent on direct services to youth are 
subject to the OSY expenditure requirement. Funds spent on statewide 
youth activities that do not provide direct services to youth, such as 
most of the required statewide youth activities listed in WIOA sec. 
129(b)(1), are not subject to the OSY expenditure requirement. In 
addition, local area administrative costs are not subject to the 75 
percent OSY minimum expenditure. The OSY expenditure rate is calculated 
for statewide funds after subtracting out funds that are not spent on 
direct services to youth. The OSY expenditure rate is calculated for 
local area funds after subtracting the funds spent on administrative 
costs. For example, if a local area receives $1 million and spends 
$100,000 on administrative costs, the remaining $900,000 is subject to 
the OSY expenditure rate. In this example, the local area would be 
required to spend at least $675,000 (75 percent) of the $900,000 on 
OSY.
    This section also clarifies the guidelines by which a State that 
receives a minimum allotment under WIOA sec. 127(b)(1) or under WIOA 
sec. 132(b)(1) may request an exception to decrease the expenditure 
percentage to not less than 50 percent. The OSY exception language at 
WIOA sec. 129(a)(4)(B) references sec. 127(b)(1)(C)(iv) and sec. 
132(b)(1)(B)(iv), which includes States that receive 90 percent of the 
allotment percentage for the preceding year under the youth or adult 
formula programs (WIOA secs. 127(b)(1)(C)(iv)(I) and 
132(b)(1)(B)(iv)(I)) and States that receive the small State minimum 
allotment under either program (WIOA secs. 127(b)(1)(C)(iv)(II) and 
132(b)(1)(B)(iv)(II)). Under WIA this exception was only available to 
States receiving the small State minimum allotment, and no State 
submitted a request for the exception. The Department proposes to limit 
the approval of requests described in WIOA sec. 129(a)(4)(B) to only 
those States that receive the small State minimum allotment under WIOA 
secs. 127(b)(1)(C)(iv)(II) and 132(b)(1)(B)(iv)(II). Thus, requests to 
decrease the percentage of funds to be used to provide activities to 
OSY will not be granted to States based on their having received 90 
percent of the allotment percentage for the preceding year. When the 
Secretary receives such a request from a State based on having received 
90 percent of the allotment percentage for the preceding year, the 
request will be denied without the Secretary exercising further 
discretion.
    While the list of States receiving the small State minimum 
allotment is generally consistent, there is an almost complete yearly 
turnover of the States receiving the 90 percent minimum allotment. 
Given this continuous turnover, approving a request from these States 
for an exception to the 75 percent expenditure requirement would cause 
significant disruption in the operation of local youth programs. In 
particular, States and local areas would be unable to develop and 
implement long-term service delivery strategies and plans and would be 
unable to establish the appropriate infrastructure necessary to meet 
the 75 percent expenditure requirement. These disruptions would 
adversely affect the quality of services that could be delivered to 
youth program participants, particularly OSY, thereby undermining one 
of the most significant changes in priorities from WIA to WIOA. Given 
the disruption and harm that would result from approving requests from 
States receiving the 90 percent minimum allotment for an exception to 
the 75 percent expenditure requirement, the Department proposes to 
limit the approval of this exception to States receiving the small 
State minimum allotment.
    Even in those States receiving a small State minimum allotment, it 
will be very difficult for a State to make an affirmative determination 
that, after analysis of the local area's youth population, the local 
area ``will not be able'' to use 75 percent of its funds for OSY, which 
is a required element of any request.

[[Page 20735]]

Section 681.420 How must Local Boards design Workforce Innovation and 
Opportunity Act youth programs?
    This proposed section describes the framework for the WIOA youth 
program design. The framework includes an objective assessment; an 
individual service strategy, which programs must update as needed to 
ensure progression through the program; and general case management; 
and follow-up services that lead toward successful outcomes for WIOA 
youth program participants. WIOA makes two significant changes to WIA's 
requirements for service strategies. One is that the service strategy 
must be linked to one or more of the indicators of performance in WIOA 
sec. 116(b)(2)(A)(ii). The other is that the service strategy must 
identify career pathways that include appropriate education and 
employment goals. For both objective assessment and individual service 
strategy, programs may use recently completed assessments or service 
strategies conducted by another education or training program rather 
than create new assessments or service strategies if they determine it 
is appropriate to do so.
    This proposed section also describes the requirement that Local 
Boards must link to youth-serving agencies and adds local human 
services agencies to the list that WIA required. It provides that Local 
Boards must provide eligible youth with information about the full 
array of applicable or appropriate services available through the Local 
Board or other eligible providers, or one-stop partners. It also 
provides that Local Boards must refer eligible youth to appropriate 
services that have the capacity to serve them on a concurrent or 
sequential basis. The proposed section also provides that eligible 
providers must refer youth who either do not meet the enrollment 
requirements for that program or cannot be served by that program for 
further assessment, if necessary, or to appropriate programs to meet 
the skills and training needs of the participant. Local Boards must 
also involve specific members of the community, including parents and 
youth participants, in designing and implementing the WIOA youth 
program.
    A new provision in WIOA allows the Local Board to use up to 10 
percent of their funds to implement pay-for-performance contracts for 
the program elements described in Sec.  681.460. Pay-for-performance 
contracts are further described in Sec.  683.500.
Section 681.430 May youth participate in both the Workforce Innovation 
and Opportunity Act youth and adult programs concurrently, and how do 
local program operators track concurrent enrollment in the Workforce 
Innovation and Opportunity Act youth and adult programs?
    This proposed section provides that youth may participate in both 
the WIOA youth program and the adult program at the same time if they 
are eligible for both and it is appropriate. If such concurrent 
enrollment occurs, local programs must track expenditures separately by 
program. This section eliminated the reference, included in the WIA 
regulations, to concurrent enrollment in the dislocated worker program 
because any youth meeting eligibility for the dislocated worker program 
would have already successfully attained a job and would most likely be 
more appropriately served under the dislocated worker program. The 
section also provides that youth who are eligible under both programs 
may enroll concurrently in WIOA title I and II programs.
Section 681.440 How does a local youth program determine if an 18 to 24 
year old is enrolled in the Workforce Innovation and Opportunity Act 
youth program or Workforce Innovation and Opportunity Act adult 
program?
    Individuals aged 18 to 24 are eligible for the WIOA adult and youth 
programs and local areas must determine whether to serve such 
individuals in the youth program, adult program, or both. This proposed 
section provides that a local youth program must determine whether to 
enroll an 18 to 24 year old in the youth program or adult program based 
on the individual's career readiness as determined through an objective 
assessment.
Section 681.450 For how long must a local Workforce Innovation and 
Opportunity Act youth program serve a participant?
    The Department proposes this new section because the Department's 
monitoring of local areas commonly found WIA youth were exited before 
successfully completing the program due to artificial time constraints 
or the ending of youth service provider contracts. In order to ensure 
that youth are not prematurely exited from the WIOA youth program, the 
Department proposes that youth programs serve participants for the 
amount of time necessary to ensure they are successfully prepared to 
enter post-secondary education and/or unsubsidized employment. While 
there is no minimum or maximum time a youth can participate in the WIOA 
youth program, programs must link program participation to a 
participant's individual service strategy and not the timing of youth 
service provider contracts or PYs.
Section 681.460 What services must local programs offer to youth 
participants?
    This proposed section lists the 14 program elements, including 5 
new youth program elements in WIOA sec. 129(c)(2) that were not 
included under WIA. These new elements are (1) education offered 
concurrently with and in the same context as workforce preparation 
activities and training for a specific occupation or occupational 
cluster; (2) financial literacy education; (3) entrepreneurial skills 
training; (4) services that provide labor market and employment 
information about in-demand industry sectors or occupations available 
in the local area, such as career awareness, career counseling, and 
career exploration services; and (5) activities that help youth prepare 
for and transition to post-secondary education and training. In 
addition, WIOA has revised some of the WIA program elements. For 
example, the element on tutoring, study skills training, instruction 
leading to the completion of secondary school, including dropout 
prevention strategies, has been revised to provide that the dropout 
prevention (and recovery) strategies must be evidence-based and to make 
clear that the completion of secondary school can be accomplished by 
attainment of a secondary school diploma or its recognized equivalent, 
including a certificate of attendance or similar document for 
individuals with disabilities. This change is consistent with WIOA's 
emphasis on evidence-based programs. WIOA also combines the two WIA 
elements of summer youth employment programs and work experiences so 
that summer youth employment programs become one item in a list of work 
experiences and adds pre-apprenticeship programs to the list of work 
experiences. Finally, WIOA expands the description of the occupational 
skill training element to provide for priority consideration for 
training programs that lead to recognized post-secondary credentials 
that are aligned with in-demand industry sectors or occupations if the 
programs meet WIOA's quality criteria. This change is consistent with 
WIOA's increased emphasis on credential attainment. The section 
clarifies that while local WIOA youth programs must

[[Page 20736]]

make all 14 program elements available to WIOA youth participants, 
local programs have the discretion to determine which elements to 
provide to a participant based on the participant's assessment and 
individual service strategy.
Section 681.470 Does the Department require local programs to use 
Workforce Innovation and Opportunity Act funds for each of the 14 
program elements?
    This proposed section clarifies that local WIOA youth programs must 
make all 14 program elements available to youth participants, but not 
all services must be funded with WIOA youth funds. Local programs may 
leverage partner resources to provide program elements that are 
available in the local area. If a local program does not fund an 
activity with WIOA title I youth funds, the local area must have an 
agreement in place with the partner to offer the program element and 
ensure that the activity is closely connected and coordinated with the 
WIOA youth program if enrolled youth participate in the program 
element. By closely connected and coordinated, the Department means 
that case managers must contact and monitor the provider of the non-
WIOA-funded activity to ensure the activity is of high quality and 
beneficial to the youth participant.
Section 681.480 What is a pre-apprenticeship program?
    This proposed section defines a pre-apprenticeship program, which 
is one of the types of work experiences listed under WIOA sec. 
129(c)(2)(C). The reference to pre-apprenticeship programs is new in 
WIOA. The definition is based on TEN No. 13-12 that defined a quality 
pre-apprenticeship program. Local youth programs must coordinate pre-
apprenticeship programs to the maximum extent feasible with registered 
apprenticeship programs, which are defined in WIOA sec. 171(b)(10), and 
require at least one documented partnership with a registered 
apprenticeship program. Quality pre-apprenticeship programs play a 
valuable role in preparing entrants for registered apprenticeship and 
contribute to the development of a diverse and skilled workforce. Pre-
apprenticeship programs can be adapted to meet the needs of 
participants, the various employers and sponsors they serve, and the 
specific employment opportunities available in a local labor market. 
Pre-apprenticeship training programs have successfully demonstrated 
that obstacles such as low math skills, poor work habits, lack of 
access to transportation, and lack of knowledge of sector opportunities 
can be overcome when coordinated training and support is provided to 
workers.
Section 681.490 What is adult mentoring?
    This proposed section describes the adult mentoring program 
element. It provides that mentoring must last at least 12 months and 
defines the mentoring relationship. It clarifies that mentoring must be 
provided by an adult other than the WIOA youth participant's assigned 
case manager since mentoring is above and beyond typical case 
management services. Mentoring may take many forms, but at a minimum 
must include a youth participant matched with an individual adult 
mentor other than the participant's case manager. Mentoring services 
may include group mentoring, mentoring via electronic means, and other 
forms as long as it also includes individual mentoring from an assigned 
mentor. Local programs should use evidence-based models of mentoring to 
design their programs. The Department recommends that programs provide 
rigorous screening, training, and match support for mentors, and 
frequent contact with youth and parents as the match progresses.
Section 681.500 What is financial literacy education?
    This proposed section describes the financial literacy program 
element, new under WIOA. Financial literacy is described in the 
allowable statewide youth activities in WIOA sec. 129(b)(2)(D) and the 
proposed section reiterates what was stated in the allowable statewide 
activities section of supporting financial literacy. The Department has 
added an element on informing participants about identity theft to the 
list in WIOA sec. 129(b)(2)(D). The Department recognizes the 
importance of equipping workers with the knowledge and skills they need 
to achieve long-term financial stability and solicits comments on how 
best to achieve this goal.
Section 681.510 What is comprehensive guidance and counseling?
    This proposed section describes the types of guidance and 
counseling services that fall under the program element comprehensive 
guidance and counseling, which includes referral to services provided 
by partner programs, as appropriate. When referring participants to 
necessary counseling that cannot be provided by the local youth program 
or its service providers, the local youth program must coordinate with 
the organization it refers to in order to ensure continuity of service.
Section 681.520 What are leadership development opportunities?
    This proposed section includes all of the examples of leadership 
development opportunities included in WIA regulations and adds two new 
examples of appropriate leadership development opportunities that a 
local area may consider when providing leadership development 
opportunities. One new example is civic engagement activities; the 
other is activities which put the youth in a leadership role.
Section 681.530 What are positive social and civic behaviors?
    While WIA included positive social behaviors as part of the 
description of leadership development opportunities, WIOA adds ``civic 
behaviors'' to the description of the leadership development program 
element. This proposed section expands the examples of positive social 
behaviors to include keeping informed of community affairs and current 
events.
Section 681.540 What is occupational skills training?
    This proposed section provides a definition for the occupational 
skills training program element. It was not previously defined under 
WIA. WIOA sec. 129(c)(2)(D) further sharpens the focus on occupational 
skills training by requiring local areas to give priority consideration 
for training programs that lead to recognized post-secondary 
credentials that align with in-demand industries or occupations in the 
local area. The Department interprets this requirement to mean that 
when seeking occupational skills training for a participant, local 
areas must first seek training programs that lead to recognized post-
secondary credentials in in-demand industries or occupations and only 
if none are available should they refer a participant to a training 
program that does not lead to a recognized post-secondary credential. 
The Department has further defined this priority by requiring that such 
training be outcome oriented and focused on an occupational goal in a 
participant's individual service strategy and that it be of sufficient 
duration to impart the skills needed to meet that occupational goal. In 
all cases, local areas must ensure that the training program meets the 
quality standards in WIOA sec. 123.

[[Page 20737]]

Section 681.550 Are Individual Training Accounts permitted for youth 
participants?
    Prior WIA regulations provide that ITAs are not an authorized use 
of youth funds. However, more than 30 States received waivers under WIA 
to use ITAs for older and OSY to: (1) Expand training options; (2) 
increase program flexibility; (3) enhance customer choice; and (4) 
reduce tracking, reporting and paperwork that comes with dual 
enrollment. ITAs have therefore become a critical component in WIA to 
provide training services to older and OSY. WIOA is silent on the use 
of ITAs for youth participants.
    This proposed section allows ITAs for older OSY aged 18 to 24. This 
change will enhance individual participant choice in their education 
and training plans and provide flexibility to service providers. ITAs 
also reduce the burden for local areas by eliminating duplicative 
paperwork needed for enrolling older youth in both youth and adult 
formula programs. ITAs will benefit disconnected youth and reinforce 
WIOA's emphasis on increasing access to and opportunities for workforce 
investment services for this population. To the extent possible, local 
programs must ensure that youth participants are involved in the 
selection of their educational and training activities. The Department 
welcomes comments on the proposed allowance of ITAs for older OSY.
Section 681.560 What is entrepreneurial skills training and how is it 
taught?
    This proposed section defines entrepreneurial skills training, a 
new program element under WIOA. While entrepreneurial skills training 
was previously listed as an example of a work experience in WIA, under 
WIOA it is a separate program element. The Department has also provided 
a list of possible methods of teaching youth entrepreneurial skills 
training. The Department is specifically seeking comments from 
stakeholders around developmentally appropriate types and methods of 
teaching entrepreneurial skills.
Section 681.570 What are supportive services for youth?
    This proposed section lists examples of supportive services for 
youth and includes two additional examples which were not listed in WIA 
youth regulations. Needs-related payments were listed as an example of 
an adult supportive service under WIA and also can be critical to youth 
living on their own who participate in a youth program. WIOA lists 
needs-related payments as a supportive service at sec. 3(59). In 
addition, the Department lists assistance with educational testing and 
accommodations as examples because they are prime example of services 
that can be necessary to enable an individual to participate in 
activities authorized by WIOA. For example, assistance with educational 
testing can provide OSY with the opportunity to take high school 
equivalency tests, as well as other exams for occupational 
certifications and credentials, while accommodations may be necessary 
for youth with disabilities to participate in certain assessments and 
to have equal access and opportunity to participate in a variety of 
work-based learning activities.
Section 681.580 What are follow-up services for youth?
    This proposed section discusses the importance of follow-up 
services and lists examples of follow-up services for youth, which WIOA 
requires be provided for a minimum of 12 months. It clarifies that 
follow-up services may be different for each individual based on his or 
her individual needs. It also clarifies that follow-up services are 
more than a contact attempted or made to gather information for 
reporting purposes because follow-up services provide the necessary 
support to ensure the success of youth post-program. Therefore, to meet 
follow-up requirements, programs must do more than just make an attempt 
to contact to gather reporting information. The Department seeks 
comments on whether this section includes reasonable requirements for 
follow-up services.
Section 681.590 What is the work experience priority?
    The proposed section discusses the 20 percent minimum expenditure 
requirement on the work experience program element in WIOA sec. 
129(c)(4). Work experience is a critical WIOA youth program element, 
arguably the most important program element as signaled by the minimum 
expenditure requirement. Work experience helps youth understand proper 
workplace behavior and what is necessary in order to attain and retain 
employment. Work experience can serve as a stepping stone to 
unsubsidized employment and is an important step in the process of 
developing a career pathway for youth. Research shows work experience 
is correlated with higher high school graduation rates and success in 
the labor market. This is particularly important for youth with 
disabilities.
Section 681.600 What are work experiences?
    The proposed section defines the work experience program element 
using language similar to the corresponding WIA regulation and includes 
the four work experience categories listed in WIOA sec. 129(c)(2)(C). 
In addition, the section eliminates the language under the 
corresponding WIA rule that OJT is not an appropriate work experience 
activity for youth. WIOA sec. 129(c)(2)(C)(4) explicitly enumerates OJT 
opportunities as one type of work experience.
    Work experiences are designed to enable youth to gain exposure to 
the working world and its requirements. Work experiences should help 
youth acquire the personal attributes, knowledge, and skills needed to 
obtain a job and advance in employment.
Section 681.610 How will local Workforce Innovation and Opportunity Act 
youth programs track the work experience priority?
    This proposed section discusses the new requirement under WIOA that 
a local youth program must use not less than 20 percent of the funds 
allocated to the local area to provide youth participants, both ISY and 
OSY, with paid and unpaid work experiences. In order to ensure that 
local WIOA youth programs meet this requirement, the Department 
proposes that local WIOA youth programs track program funds spent on 
paid and unpaid work experiences and report such expenditures as part 
of the local WIOA youth financial reporting. Program expenditures on 
the work experience program element include wages as well as staffing 
costs for the development and management of work experiences. Like the 
75 percent OSY expenditure requirement, local area administrative costs 
are not subject to the 20 percent minimum work experience expenditure 
requirement. The work experience expenditure rate is calculated for 
local area funds after subtracting out funds spent on administrative 
costs and is calculated based on remaining total local area youth funds 
rather than calculated separately for in-school and OSY.
Section 681.620 Does the Workforce Innovation and Opportunity Act 
require Local Boards to offer summer employment opportunities in the 
local youth program?
    Under WIOA sec. 129(c)(2)(C), summer employment opportunities are 
one of four suggested components of the paid and unpaid work 
experiences

[[Page 20738]]

program element. While local WIOA youth programs must provide paid and 
unpaid work experiences, they may take the form of a number of 
activities including: summer employment opportunities and employment 
opportunities available throughout the year, pre-apprenticeship 
programs, internships and job shadowing, and OJT. While summer 
employment opportunities are an allowable activity and a type of work 
experience that counts toward the work experience priority (which 
requires a minimum of 20 percent of funds allocated to a local area are 
spent on work experience) they are not a required program element as 
they previously were under WIA.
Section 681.630 How are summer employment opportunities administered?
    Local areas must adhere to the provisions outlined in WIOA sec. 123 
for selecting service providers when administering summer employment 
opportunities. This proposed section discusses that WIOA requires local 
areas to identify youth providers of youth workforce investment 
activities, including work experiences such as summer employment 
opportunities, by awarding grants or contracts on a competitive basis. 
As provided in WIOA sec. 123, if there is an insufficient number of 
eligible providers of youth workforce investment activities, Local 
Boards may award grants or contracts on a sole source basis. This 
section also clarifies that the summer employment administrator does 
not need to select the employers who are providing the employment 
opportunities through a competitive process.
Section 681.640 What does education offered concurrently with and in 
the same context as workforce preparation activities and training for a 
specific occupation or occupational cluster mean?
    This proposed section describes the new program element at WIOA 
sec. 129(c)(2)(E): ``education offered concurrently and in the same 
context as workforce preparation activities and training for a specific 
occupation or occupational cluster.'' The new program element requires 
integrated education and training to occur concurrently and 
contextually with workforce preparation activities and workforce 
training for a specific occupation or occupational cluster for the 
purpose of educational and career advancement. Youth participants will 
not be required to master basic academic skills before moving on to 
learning career-specific technical skills. This approach aligns with 
recent research which found students using an integrated education and 
training model had better rates of program completion and persistence 
than a comparison group (Jenkins 2009).
Section 681.650 Does the Department allow incentive payments for youth 
participants?
    This proposed section clarifies that incentives under the WIOA 
youth program are permitted. The Department has included the reference 
to 2 CFR 200 to emphasize that while incentive payments are allowable 
under WIOA, the incentives must be in compliance with the requirements 
in 2 CFR part 200. This is not a change; under WIA, incentives must 
have followed the Uniform Administrative Requirements at 29 CFR parts 
95 and 97 and the cost principles at 2 CFR parts 220, 225, and 230. The 
Uniform Administrative Requirements were recently consolidated into 2 
CFR part 200. For example, under 2 CFR part 200, Federal funds may not 
be spent on entertainment costs. Therefore, incentives may not include 
entertainment, such as movie or sporting event tickets or gift cards to 
movie theaters or other venues whose sole purpose is entertainment. 
Additionally, under 2 CFR part 200, there are requirements related to 
internal controls to safeguard cash which also apply to safeguarding of 
gift cards, which are essentially cash.
Section 681.660 How can parents, youth, and other members of the 
community get involved in the design and implementation of local youth 
programs?
    This proposed section discusses the requirement in WIOA sec. 
129(c)(3)(C) for the involvement of parents, participants, and 
community members in the design and implementation of the WIOA youth 
program and provides examples of the type of involvement that would be 
beneficial. The Department has also included in this proposed section 
the requirement in WIOA sec. 129(c)(8) that Local Boards must also make 
opportunities available to successful participants to volunteer to help 
participants as mentors, tutors, or in other activities.
5. Subpart D--One-Stop Services to Youth
Section 681.700 What is the connection between the youth program and 
the one-stop service delivery system?
    This proposed section reiterates the connections between the youth 
program and the one-stop system that were provided in the WIA 
regulations and includes additional examples of such connections 
including collocating WIOA youth program staff at one-stop centers and/
or equipping one-stop centers and staff with the information necessary 
to advise youth on programming to best fit their needs. The intent 
behind this section is to encourage staff working with youth under 
titles I, II, and IV of WIOA to coordinate better services for youth. 
This could include youth-focused one-stop centers in locations where 
youth tend to gather and making one-stops more accessible to youth.
Section 681.710 Do Local Boards have the flexibility to offer services 
to area youth who are not eligible under the youth program through the 
one-stop centers?
    Consistent with WIA, this proposed section clarifies that Local 
Boards may provide services to youth through one-stop career centers 
even if the youth are not eligible for the WIOA youth program.
F. Part 682--Statewide Activities Under Title I of the Workforce 
Innovation and Opportunity Act
1. Introduction
    WIOA provides a reservation of funds for employment and training 
activities to be undertaken on a statewide basis. These activities are 
undertaken by the States, rather than by Local Boards. WIOA requires 
States to undertake certain statewide activities, but authorizes States 
to undertake a much wider range of activities. These required and 
allowable activities are addressed by this part of the proposed 
regulations. WIOA designates the percentage of funds that may be 
devoted to these activities from annual allotments to the States--up to 
15 percent must be reserved from youth, adult, and dislocated worker 
funding streams, and up to an additional 25 percent of dislocated 
worker funds must be reserved for statewide rapid response activities.
    The up to 15 percent funds from the three funding streams may be 
expended on employment and training activities without regard to the 
source of the funding. For example, funds reserved from the adult 
funding stream may be used to carry out statewide youth activities and 
vice versa. These funds must be used for certain specified activities, 
such as for State evaluations and for provision of data for Federal 
evaluations and research. If funds permit, States have authority to 
provide a variety of other activities. State set-

[[Page 20739]]

aside funds allow States to continually improve their comprehensive 
workforce programs, ensure a national system that meets the needs of 
job seekers, workers and employers, and contribute to building a body 
of evidence to improve the effectiveness of services under WIOA.
2. Subpart A--General Description
    This subpart describes what is encompassed by the term ``statewide 
employment and training activities.'' It explains that States have both 
required and allowable activities to be undertaken on a statewide basis 
for adults, dislocated workers and youth. States have significant 
flexibility in the development of policies and strategies for the use 
of their statewide funds.
Section 682.100 What are the statewide employment and training 
activities under title I of the Workforce Innovation and Opportunity 
Act?
    Proposed Sec.  682.100 provides that there are both required and 
allowable statewide employment and training activities. States may use 
up to 15 percent of adult, youth and dislocated worker funds for 
statewide activities relating to youth, adult, dislocated workers. The 
States are encouraged to develop policies and strategies for utilizing 
these funds, and must include descriptions of these activities in their 
State Plan.
Section 682.110 How are statewide employment and training activities 
funded?
    Proposed Sec.  682.110 does not change how statewide employment and 
training activities from how such activities were funded under WIA. The 
Governor has authority to use up to 15 percent of the adult, dislocated 
worker, and youth funds allocated to the State for statewide 
activities. The regulation provides that the adult, dislocated worker 
and youth 15 percent funds may be combined for use on required or 
allowed statewide activities regardless of the funding source.
3. Subpart B--Required and Allowable Statewide Employment and Training 
Activities
    This subpart first discusses required statewide activities. WIOA 
continues the activities that were required under WIA, but adds several 
additional required activities, such as assistance to State entities 
and agencies described in the State Plan, alignment of data systems, 
regional planning, implementation of industry or sector partnerships, 
and cooperation in providing data for Federal evaluation and research 
projects. Required statewide activities under WIA and continued under 
WIOA include: Outreach to businesses, dissemination of information on 
the performance and cost of attendance for programs offered by ETPs, 
and conducting evaluations.
    This subpart also discusses allowable statewide activities. The 
Department provides States with a significant amount of flexibility in 
how these funds may be used for statewide activities. States can test 
and develop promising strategies. This regulation is not designed to be 
an exhaustive list, but more illustrative of the types of allowable 
statewide activities that may be provided with these funds.
Section 682.200 What are required statewide employment and training 
activities?
    Proposed Sec.  682.200(a) explains that rapid response activities 
are a required statewide employment and training activity, as described 
in Sec.  682.310.
    Proposed Sec.  682.200(b) explains the different types of 
information States are required to disseminate to the workforce system, 
including ETPLs, providers of work-based training providers, business 
partnership and outreach information, promising service delivery 
strategies, performance information about training providers, eligible 
providers of youth activities, and information about physical and 
programmatic accessibility for individuals with disabilities.
    Proposed Sec.  682.200(c) states that the information listed in 
Sec.  682.200(b) be made widely available. It explains that this may be 
achieved by various means, including posting information on State Web 
sites, physical and electronic handouts for dissemination to one-stop 
centers, and other appropriate means of sharing information.
    Proposed Sec.  682.200(d) explains that under WIOA sec. 
134(a)(2)(B)(vi), States are required to use the 15 percent set aside 
to conduct evaluations in accordance with WIOA sec. 116(e) whose 
requirements are implemented in Sec.  682.220.
    Proposed Sec.  682.200(e) requires States to provide technical 
assistance to local areas in carrying out activities described in the 
State Plan.
    Proposed Sec.  682.200(f) requires States to assist local areas, 
one-stop operators, and eligibile providers in providing opportunities 
for individuals with barriers to employment to enter in-demend industry 
sectors, and developing exemplary program activities.
    Proposed Sec.  682.200(g) and (h) require States to assit local 
areas carry out the regional planning and service delivery efforts, and 
provide local areas information on and support for the effective 
development, convening, and implementation of industry and sector 
partnerships.
    Proposed Sec.  682.200(i) requires the States to provide technical 
assistance to local areas that fail to meet their performance goals.
    Proposed Sec.  682.200(j) requires the State to carry out 
monitoring and oversight activities of the programs providing services 
to youth, adults and dislocated workers in WIOA. Under this authority, 
States may conduct reviews that compare services provided to male and 
female youth.
    Proposed Sec.  682.200(k) clarifies that States may provide 
additional assistance to local areas that have high concentrations of 
eligible youth to ensure a transition to education or unsubsidized 
employment.
    Proposed Sec.  682.200(l) requires States to operate a fiscal and 
management accountability system. This system is vital to ensure high 
levels in integrity of managing Federal funds and conveying important 
information on the services being provided to job seekers and 
employers. As required by WIOA, the Department will consult with a wide 
range of stakeholders to establish guidelines for this system (see WIOA 
sec. 116(i)(1)).
Section 682.210 What are allowable statewide employment and training 
activities?
    In addition to the required statewide activities, States are 
provided with significant flexibility to innovate within the workforce 
system with various allowable statewide employment and training 
activities. These allowable activities are vital to ensuring a high 
quality workforce system, and can be used to ensure continuous 
improvement throughout the system. This regulation is not designed to 
be an exhaustive list, but more illustrative of the types of allowable 
statewide activities that may be provided with these funds.
    Proposed Sec.  682.210(a) provides that State administration of the 
adult, dislocated worker, and youth employment and training activities 
is an allowable statewide employment and training activity. This 
proposed section maintains the same 5 percent administrative cost limit 
that existed under WIA and clarifies that the 5 percent is calculated 
based on the total allotment received by the State and counts towards 
the amount reserved for statewide activities.
    Proposed Sec.  682.210(b) permits States to use WIOA funds to 
develop and implement innovative programs and

[[Page 20740]]

strategies designed to meet employer needs, including small business 
needs. The workforce system provides services to dual customers--the 
job seeker and the employer. The Department values ways in which States 
can engage businesses with all levels of the workforce system. Under 
this section, States have authority to carry out a variety of programs 
identified in WIOA sec. 134(a)(3)(A)(i), such as sectoral and industry 
cluster strategies, microenterprise and entrepreneurial training, and 
utilization of business intermediaries.
    Proposed Sec.  682.210(c) permits States to develop and implement 
strategies for serving individuals with barriers to employment and 
encourages States to partner with other agencies to coordinate services 
among all the one-stop partners.
    Proposed Sec.  682.210(d) and (e) allow the development and 
identification of education and training programs that respond to real-
time labor market analysis, that allow for use of direct or prior 
assessments, and that provide credit for prior learning, or which have 
other characteristics identified in WIOA sec. 134(a)(3)(A)(iii). States 
can also use these funds to increase training for individuals placed in 
non-traditional employment.
    Proposed Sec.  682.210(f) permits States to undertake research and 
demonstrations related to meeting the education and employment needs of 
youth, adults and dislocated workers, as stated in WIOA secs. 
129(b)(2)(A)(i) and (ii) and sec. 134(a)(3)(A)(ix).
    Proposed Sec.  682.210(g) provides that States may utilize 
statewide funds to support the development of alternative, evidence-
based programs, and other activities which increase the choices 
available to eligible youth and encourage them to reenter and complete 
secondary education, enroll in post-secondary education and advanced 
training, progress through a career pathway, and/or enter unsubsidized 
employment that leads to economic self-sufficiency.
    Proposed Sec.  682.210(h) provides that States may utilize 
statewide funds to support the provision of career services throughout 
the one-stop delivery system in the State.
    Proposed Sec.  682.210(i) provides that States may incorporate a 
variety of financial literacy identified in WIOA sec. 129(b)(23)(D) 
activities into the service delivery strategy within the one-stop 
delivery system. Financial literacy activities are important services 
for job seekers to receive as part of their career services. The 
Department encourages States to develop and implement strategies for 
local areas to utilize to coordinate financial literacy services to 
participants under this authority and to provide financial literacy 
activities to youth under Sec.  682.210(i).
    Proposed Sec.  682.210(j) allows for States to provide incentive 
grants to local areas for reaching performance goals. Incentive grants 
can be an effective way to develop and maintain a culture of continuous 
improvement throughout the workforce system.
    Proposed Sec.  682.210(k) allows for States to provide technical 
assistance to local areas, CEOs, one-stop operators, one-stop partners, 
and eligible providers in local areas for the development of exemplary 
program activities and the provision of technology to facilitate remote 
access to services provided through the one-stop delivery system in the 
State (WIOA sec. 129(b)(2)(E));
    Proposed Sec.  682.210(l) allows States to provide technical 
assistance to local areas using pay-for-performance contract 
strategies. Under WIOA, pay-for-performance is an allowable use of 
funds that could potentially be an effective mechanism to improve 
participant outcomes. Technical assistance will be of vital importance 
to ensure these strategies are being implemented effectively. Under 
this authority, such technical assistance may include providing 
assistance with data collections, meeting data entry requirements, 
identifying levels of performance, and conducting evaluations of pay-
for-performance strategies.
    Proposed Sec.  682.210(m) allows for States to utilize technology 
to allow for remote access to training services provided through the 
one-stop delivery system. The Department recognizes that there are many 
different means by which individuals may get training and that the use 
of technology may be particularly helpful to participants in rural 
areas. The Department encourages States to develop and build upon 
strategies that enable job seekers to connect with the workforce system 
remotely.
    Proposed Sec.  682.210(n) allows States to conduct activities that 
increase coordination between workforce investment activities and 
economic development approaches. This proposed regulation also allows 
States to undertake activities that provide coordination with services 
provided by other agencies, such as child support services and 
assistance (provided by State and local agencies carrying out part D of 
title IV of the SSA (42 U.S.C. 651 et seq.)), cooperative extension 
programs (carried out by the Department of Agriculture), programs in 
the local areas for individuals with disabilities (including the 
programs identified in WIOA sec. 134(a)(3)(A)(viii)(II)(cc)), adult 
education and literacy activities including those carried out by public 
libraries, and activities in the corrections system to connect ex-
offenders reentering the workforce. The Department strongly encourages 
States to engage in these coordination activities. States are also 
encouraged to use funds to develop and disseminate workforce and labor 
market information (WLMI).
    Proposed Sec.  682.210(o) allows States to implement promising 
practices for workers and businesses as described in WIOA sec. 
134(a)(3)(A).
    Proposed Sec.  682.210(p) allows States to develop economic self-
sufficiency standards that specify the income needs of families, 
including the number and ages of children. The Department recognizes 
that different regions in a State may have different levels of self-
sufficiency; therefore the proposed regulation allows for States to 
take geographical considerations into account in developing self-
sufficiency standards.
    Proposed Sec.  682.210(q) allows States to develop and disseminate 
common intake procedures across core and partner programs, including 
common registration procedures. The Department strongly encourages 
States to utilize this approach in a customer-focused way. By 
developing common procedures one-stop staff can reduce duplication and 
enhance the job seeker experience in the workforce system.
    Proposed Sec.  682.210(r) encourages coordinating activities with 
the child welfare system to facilitate provision of services to 
children and youth who are eligible for assistance.
Section 682.220 What are States' responsibilities in regard to 
evaluations and research?
    The Department proposes to add rules on new State responsibilities 
and opportunities in regard to evaluation and research under WIOA sec. 
116(e). State and Federal evaluations and research are intended to 
improve the quality and effectiveness of programs under WIOA, and 
contribute to an expanding body of knowledge on customers, their needs, 
existing services, and innovative approaches. Examples of the 
strategies that might be explored in evaluation and research include, 
but are not limited to, interventions envisioned in WIOA itself, such 
as integrated systems, coordinated services, career pathways, and 
multiple forms of engagement with businesses.

[[Page 20741]]

    WIOA continues the long-standing support of evaluation and research 
found in prior law, but strengthens it in several ways, including 
permitting States to evaluate activities under all of the title I-IV 
core programs, including adult education and vocational education, and 
permitting the use of funds from any of these programs for evaluations. 
WIOA expands coordination and the consultative process regarding 
evaluations and research beyond the workforce system to State agencies 
for the other core programs. Further, WIOA now also requires States to 
coordinate their own studies with evaluations and research projects 
undertaken by the Departments of Labor and Education, as well as to 
cooperate in provision of data and information for such Federal 
evaluations.
    Provisions on the Department's role in evaluation and research, now 
found under WIOA sec. 169 (corresponding to secs. 171 and 172 in WIA), 
authorize a wide array of studies. Evaluation and research projects, 
permissible under WIOA sec. 169 include process and outcome studies, 
pilot and demonstration projects, analyses of programmatic and economic 
data, impact and benefit-cost analyses, and use of rigorous designs to 
test the efficacy of various interventions, such as random assignment. 
WIOA also implies that State evaluations are synonymous with multiple 
forms of research to test various interventions and to examine program 
services and outcomes in greater depth and over a longer time frame 
than is typically done for performance accountability purposes for 
State and local programs.
    Section 169 also includes numerous examples of studies to be 
conducted in collaboration with other Federal Departments. WIOA sec. 
169 also requires several research projects (evaluations of title I 
programs, a study of career pathways in health and child care, and 
research on equivalent pay), suggests seven research projects (relating 
to disconnected youth, business needs, nontraditional occupations, 
performance indicators, public housing assistance recipients, older 
workers, and credentials for prior learning), and permits studies of 
Federally-funded employment-related programs and activities under 
``other provisions of law.'' An evaluation of Job Corp is also required 
under WIOA sec. 161.
    WIOA recognizes in sec. 116(e) the vital role of States in 
providing various forms of quantitative and qualitative data and 
information for Federal evaluations and research. Data, survey 
responses, and site visit information, from both the State and local 
levels are essential in Federal research designed to understand and 
evaluate various existing systems and services as well as new 
interventions. All of these forms of data and information are needed to 
understand key participant characteristics, labor market outcomes, the 
role of decision-makers, how faithfully interventions are implemented, 
and the quality of the customer experience. Further, there are multiple 
potential data sources which could include, for example, UI 
administrative data and wage records, data from other workforce 
programs, various documents, and individual or focus group interviews 
with State officials, local program staff and customers.
    To assure that data are consistently available from all States, the 
rules emphasize the need for States to cooperate, to the extent 
practicable, in data collection activities for evaluations conducted by 
the Departments of Labor and Education, as related to services under 
WIOA and to other employment-related programs and activities. The rules 
also clarify the need for States to provide data from sub-State level 
and from State and local workforce boards and, further, to encourage 
provision of data by other partner programs. A method for informing the 
Department about possible problems in providing the various forms of 
data and for resolving such problems is also proposed below.
    Specifically, the rules include the following:
    Proposed Sec.  682.220(a)(1) explains that under WIOA secs. 116(e), 
129(b)(1)(A) and 134(a)(2)(B)(vi), States are required to use funds 
reserved by the Governor for statewide activities (the State set-aside) 
to conduct evaluations of activities of the core programs. Paragraph 
(b)(1) requires States to coordinate such evaluations with Federal 
evaluation and research activities under WIOA secs. 169 and 
242(c)(2)(D) (regarding adult education), under the Rehabilitation Act 
of 1973 and under the Wagner-Peyser Act [29 U.S.C. 49i(b)]. Paragraph 
(a) delineates the role of evaluations and research in promoting 
continuous improvement and high performance in existing programs and 
identifies an additional purpose of evaluation activities: Testing 
innovative services and strategies.
    Proposed Sec.  682.220(a)(2) clarifies that the States may use set-
aside funds to conduct other research and demonstration projects that 
relate to the education and employment needs for youth, adults and 
dislocated workers. Proposed Sec.  682.220(a)(3) clarifies that States 
may use funds from other WIOA title II-IV core programs but only as 
determined through the consultative processes required with State and 
Local Boards and agencies responsible for the core programs as 
referenced in paragraph (b)(1). Paragraph 682.220(e) highlights the 
opportunity for States to use and combine funds from other sources 
(consistent with Federal and State law, regulation, and guidance). The 
sources might include other Federal and State grants and contracts, as 
well as private philanthropic or other sources.
    Proposed Sec.  682.220(b) promotes State efforts to conduct 
evaluations and research, assure they relate to State goals and 
strategies, and are coordinated and designed in conjunction with State 
and Local Boards and other agencies responsible for the core programs. 
The proposed rule also lists some key features that States can include 
their evaluations and research projects when appropriate and feasible, 
not as a ``one-size-fits-all'' checklist of requirements for every 
evaluation and research project. As such, paragraphs (b)(2) through (4) 
implement WIOA sec. 116(e), but qualifies the requirements for States 
to include an analysis of customer feedback and of outcome and process 
measures when appropriate, to coordinate with Federal evaluations to 
the extent feasible, and to use the most rigorous analytical and 
statistical methods that are reasonably feasible.
    Proposed Sec.  682.220(c) implements sec. 116(e)(3) of WIOA, which 
requires States to share their evaluations with the public, including 
through electronic means, such as posting the results of all types of 
research and evaluations that States conduct on the relevant State Web 
site.
    Proposed Sec.  682.220(d)(1) implements sec. 116(e)(4) of WIOA, 
which requires States to cooperate, to the extent practicable, in 
providing data, responding to surveys, and allowing site visits in a 
timely manner for Federal evaluation, research, and investigation 
activities conducted by the Secretaries of Labor and Education or their 
agents under WIOA secs. 169 and 242, the Rehabilitation Act of 1973, 
and the Wagner-Peyser Act, as listed in Sec.  682.200(d) and above. 
(The provision of UI data for Federal evaluations and research is 
subject to regulations found in 20 CFR part 603.) The Department of 
Labor intends to work with States and the United States Census Bureau 
(Census) to explore the potential to meet the requirement that States 
provide UI wage record data for Federal evaluations and research using 
the wage record data

[[Page 20742]]

States currently provide to Census for the Longitudinal Employer-
Household Dynamics (LEHD) program. This approach to provision of UI 
data may reduce burden on State UI infrastructure, while also making 
the LEHD data set more useful to a broad array of researchers. Since 
data and survey responses from local subgrantees and State and local 
workforce boards are often critical in Federal evaluation and research 
projects, the rule also requires that States provide timely data and 
survey responses from these entities and that States assure that 
subgrantees and boards allow timely site visits for Federal 
evaluations. States are proposed to assume these responsibilities 
because of their relationship with and support of the boards as well as 
their role in overseeing the operation of subgrantees. Since States do 
not set the requirements for other one-stop partners, proposed Sec.  
682.220(d)(2) requires States to encourage these partners to cooperate 
in data provision for the relevant Federal evaluations and research.
    Proposed Sec.  682.220(d)(3) requires a Governor to inform the 
Secretary in writing if a State finds that it is not practicable to 
participate in timely provision of data, survey responses and site 
visits for Department of Labor or Department of Education evaluations 
and research, and, further, to explain why it is not practicable for 
the State to provide the requested information. This explanation will 
help the Department to work more effectively with the State to 
accommodate its concerns and mitigate or overcome any problems 
preventing the State from providing the information needed for Federal 
evaluations or research conducted under the various authorities cited 
in Sec.  682.200(d).
    Proposed Sec.  665.220(e) provides that States may use or combine 
funds, consistent with Federal and State law, regulation, and guidance, 
from other public or private sources, to conduct evaluations, research, 
and demonstration projects relating to activities under the WIOA title 
I-IV core programs. The Department will provide information, technical 
assistance, and guidance to support States in conducting their own 
evaluations and research, at the highest levels of quality and 
integrity, consistent with State goals and priorities, and using 
methodologies appropriate to the research objectives and the funds 
available. The technical assistance and guidance will also address how 
States can coordinate with studies conducted by the Departments of 
Labor and Education under WIOA and cooperate in providing data and 
other information for such Federal research.
4. Subpart C--Rapid Response Activities
Introduction
    This subpart discusses the important role that rapid response plays 
in providing customer-focused services both to dislocated workers and 
employers, thereby ensuring immediate access to affected workers to 
help them quickly reenter the workforce. The proposed regulations 
reflect the Department's experience in managing the PYs and lessons 
learned from the innovations and best practices of various rapid 
response programs around the country in planning for and meeting the 
challenges posed by events precipitating substantial increases in the 
number of unemployed individuals in States, regions and local areas. 
The proposed regulations provide a comprehensive framework for 
operating successful rapid response programs in a way that promotes 
innovation and maintains flexibility to enable States to successfully 
manage economic transitions.
    Section 134(a)(2) of WIOA authorizes the use of reserved funds for 
statewide activities to plan for and respond to events that precipitate 
substantial increases in the number of unemployed individuals. Except 
for a new provision, at sec. 134(a)(2)(A)(ii), that addresses the use 
of unobligated funds for rapid response activities, WIOA largely 
replicates the language in sec. 134 of WIA. The proposed regulations 
provide additional, detailed direction regarding required and optional 
rapid response activities. The WIA regulations concerning the rapid 
response program provided substantial flexibility in program design and 
implementation. This flexibility allowed for customized planning and 
responses based upon specific factors in a given situation--an 
important component to delivering effective services. However, some 
States and local operators did not understand the full range of 
activities allowable under the program. In crafting the proposed 
regulations, the Department has worked to maintain the same flexibility 
that the current regulation allows, while providing more detailed 
information about appropriate activities, such as layoff aversion, 
engaging business, and illustrating how these funds can be used.
    Our proposed approach is based on the premise that successful rapid 
response programs are flexible, agile, and focused on promptly 
delivering comprehensive solutions to businesses and workers in 
transition. Rapid response, when operated successfully, delivers on the 
promises that the workforce system makes to businesses, workers, and 
communities--to provide economically valuable solutions to businesses 
and critically important services to workers at the time when they are 
most needed. These proposed regulations are designed to ensure that 
rapid response programs in all States are capable of meeting those 
promises, that service levels are consistent in quality yet customized 
to specific events, and activities are driven always by the goal of 
preventing or minimizing unemployment. The proposed regulations also 
focus specifically on anticipating needs and planning for them, rather 
than only responding to layoff events.
Section 682.300 What is rapid response, and what is its purpose?
    Proposed Sec.  682.300 describes the purpose of rapid response--to 
promote economic development and vitality--and identifies the 
activities and responsibilities to meet this purpose. Proposed Sec.  
682.300(a) identifies as key components of rapid response the 
strategies and activities necessary to plan for and respond to layoffs 
or other dislocation events, including natural or other disasters. 
While many States will provide rapid response services for layoffs of 
all sizes, some States have restricted rapid response services to 
layoffs of 50 or more workers, or for which they received a Worker 
Adjustment and Retraining Notification (WARN) Act notice. While rapid 
response is required for closures and mass layoffs, the Department's 
intention is that effective services are provided to as many workers 
and companies as possible. Most employers have fewer than 50 workers, 
and thus, a substantial percentage of layoffs do not qualify for WARN 
coverage; therefore, using either of these criteria as the only 
triggers for the provision of rapid response assistance means that most 
companies and workers affected by dislocations will not be provided 
rapid response services. Establishing a strict threshold is counter to 
the purpose of rapid response, and prevents many workers and companies 
from receiving valuable services at a time when they are needed.
    Therefore, the proposed regulations do not define any threshold for 
the size of a layoff for which rapid response services are provided. 
The regulation does not specifically address plant closures because the 
Department considers the layoffs associated with closures to be covered 
under the general principles applicable to layoffs. Based on the fact 
that most companies employ fewer than 50 workers and the rapid response 
services provide significant

[[Page 20743]]

value to both affected workers and businesses, the Department expects 
that States and local areas will provide rapid response services to 
layoffs and closures of all sizes, as practicable. However, for any 
plant closure or layoff of 50 or more, rapid response services must be 
provided per the statutory reference to mass layoffs. Additionally, 
rapid response must be provided for any layoff which receives a WARN 
notice. State and local area rapid response providers must establish 
policies and procedures that allow them to serve the most companies and 
affected workers or to determine the specific scenarios which meet this 
criterion and for which they will provide rapid response services.
    Proposed Sec.  682.300(a) identifies the need to expeditiously 
deliver services in order to enable dislocated workers to transition 
quickly to new employment. The two critical phrases in this section--
``plan for and respond'' and ``as quickly as possible''--demonstrate 
that rapid response must include strategic planning and other 
activities that will ensure that dislocated workers can be reemployed 
as soon as possible.
    Proposed Sec.  682.300(b) explains that the purpose of rapid 
response is a proactive, strategic set of actions, not simply a 
response to layoffs. The proposal establishes rapid response as a 
critical tool in managing economic transition and supporting economic 
growth in communities. As stated in the proposal, rapid response 
includes a wide array of strategies and activities of which layoff 
aversion is a key component. Proposed paragraph (b)(1) describes the 
direct and informational services rapid response must provide to 
workers affected by layoffs.
    Proposed paragraph (b)(2) describes the services that rapid 
response must provide to businesses. Building and maintaining 
relationships with the business community, throughout the growth and 
decline that characterizes the business cycle, is a critical aspect of 
rapid response; establishing and maintaining these relationships allows 
for early knowledge of potential layoffs. This information not only 
provides time for undertaking actions that may prevent the layoffs from 
occurring but may also allow affected workers to connect, in a timely 
manner, with businesses that can use their skills, thereby avoiding 
unemployment or minimizing its duration.
    Engaging with businesses and delivering effective solutions to 
their needs is critical--to allow rapid response teams to meet and work 
with individuals affected by layoff, preferably before layoff and on 
company time, but also to identify companies that are growing and may 
hire dislocated workers or to deliver services that may prevent workers 
at those companies from being laid off in the future.
    Proposed paragraph (b)(3) describes the role that rapid response 
must play in developing strong, comprehensive networks of partners and 
service providers to ensure that all needed services are provided to 
businesses, workers, and communities.
    Proposed paragraph (b)(4) covers the need for rapid response to 
undertake strategic planning and data gathering to ensure readiness to 
act appropriately whenever the need arises.
Section 682.310 Who is responsible for carrying out rapid response 
activities?
    Proposed Sec.  682.310 is a new section that was split from Sec.  
665.300 under the current regulations. Its text follows the current 
regulation, Sec.  665.300(b), without substantive change, but it 
changes the verb used to describe the delivery of rapid response from 
``provide'' to ``carry out'' to track the language used in WIOA sec. 
134(a)(2).
Section 682.320 What is layoff aversion, and what are appropriate 
layoff aversion strategies and activities?
    Proposed Sec.  682.315 significantly enhances the required 
activities from those set forth in the current regulation. Rapid 
response experience under WIA has shown the importance of layoff 
aversion as a critical component of a successful rapid response 
program, to be used by States and Local Boards to prevent or minimize 
layoffs. This section describes strategies and activities which are 
designed to prevent or minimize the duration of unemployment.
    Layoff aversion is a comprehensive approach requiring the 
integration of data, relationships, partnerships, and policies and 
procedures to allow an assessment of the economic situation that exists 
within a given area. This approach enables the development of a plan 
that may be applied, at any time, to intervene and manage transition 
that occurs within that area. Layoff aversion strategies and activities 
are customized to specific needs, quickly deployable, informed by 
economic data, and designed and coordinated with partners as necessary. 
This proposed section describes examples of these strategies and 
activities.
    Proposed Sec.  682.315 provides a definition for layoff aversion, 
which has been adapted from TEGL 30-09, and describes a number of 
potential layoff aversion strategies and activities that rapid response 
programs must include, many of which were first described in (TEN) 9-
12.
Section 682.330 What rapid response activities are required?
    Proposed Sec.  682.330 describes rapid response activities that are 
required to be carried out with rapid response funds. The elements 
include activities that have been previously discussed in guidance and 
through technical assistance; elements that are required by the current 
regulation; and elements that were previously allowable, but which are 
now required. In particular, the regulation now specifically identifies 
layoff aversion activities and the provision of additional assistance 
to local areas experiencing increased dislocation events as required 
rapid response activity (paragraphs (a) and (i)) and adds new 
responsibilities in paragraphs (g) through (k). The Department's 
experience under WIA has shown that such activities are critical for a 
successful rapid response program. To meet the needs of affected 
workers and businesses, a rapid response program must be proactive, 
data-driven, engaged with businesses, and focused on preventing layoffs 
or minimizing their negative impacts. Substantially increasing the 
level of required activities under rapid response is designed to drive 
those outcomes. By undertaking these activities, the State and local 
areas will be able to effectively manage, review and evaluate rapid 
response and layoff aversion efforts.
    Proposed Sec.  682.330(a) describes layoff aversion as a required 
rapid response activity. Layoff aversion strategies and activities are 
described in proposed Sec.  682.315. The proposal requires that States 
and local areas have the capability to conduct layoff aversion; 
however, it is left to the discretion of the operators of rapid 
response programs to determine which strategies and activities are 
applicable in a given situation, based upon specific needs, policies, 
and procedures within the State and operating areas. The current 
regulation requires rapid response operators to assess the potential 
for averting layoffs; this proposal expands on this requirement by 
listing a number of specific strategies and activities that are 
critical to maintaining readiness and ensuring the ability to 
capitalize on opportunities that will prevent, or minimize the duration 
of, unemployment.
    Proposed Sec.  682.330(b) through (e) are consistent with the 
current regulations; these activities are retained as required under 
the proposed WIOA regulations.
    This proposed regulation does not define the term ``emergency 
services'' as

[[Page 20744]]

used in proposed Sec.  682.330(f); however, in the past States and 
local areas have used rapid response teams and resources for a wide 
array of activities in response to disaster situations. Such activities 
have included outreach, support, and assistance for impacted 
individuals with accessing UI or disaster unemployment assistance; 
acquisition of and support for mobile one-stop units; demographic 
information gathering for potential emergency grant applications; and 
coordination with Federal Emergency Management Agency (FEMA) or other 
disaster-response organizations. State and local area rapid response 
providers must work closely with other State and local agencies and 
other critical partners through strategic planning processes to ensure 
effective and immediate responses can be undertaken when the need 
arises.
    Proposed Sec.  682.330(g) discusses the requirement that State or 
local rapid response programs collect and utilize data as a core 
component of their work. Proposed Sec.  682.330(g)(1) requires States 
and/or local areas to identify sources of information that will provide 
early warning of potential layoffs, and to gather this data in a manner 
that best suits their needs. Proposed Sec.  682.330(g)(2) requires the 
processing and analysis of a range of economic data and information to 
ensure the best possible services are delivered to businesses and 
workers at the appropriate time. Proposed Sec.  682.330(g)(3) requires 
that States and/or local areas track data and other information related 
to the activities and outcomes of the rapid response program, so as to 
provide an adequate basis for effective program management, review, and 
evaluation of rapid response and layoff aversion efforts.
    Proposed Sec.  682.330(h) highlights the need for strategic and 
operational partnerships. Rapid response operators must develop and 
maintain partnerships with a wide range of partners to ensure the 
capability to deliver needed services and resources to businesses, 
workers, and communities whenever the need arises. The proposal 
provides some examples of organizations with which to partner, but 
States and local areas should establish partnerships with those 
organizations that are necessary to ensure the successful functioning 
of their rapid response program. Proposed Sec.  682.330(h)(1) discusses 
the use of these partnerships to conduct strategic planning and to 
ensure that assistance provided to companies, workers, and communities 
is comprehensive. Proposed Sec.  682.330(h)(2) requires that the 
partnerships developed to support rapid response programs actively 
share information on resources available on a regular basis to ensure 
that the needs of businesses, workers, and communities will be met at 
the time they are needed.
    Proposed Sec.  682.330(i) requires rapid response services to be 
provided to workers upon the filing of a petition for TAA. If the 
Department no longer processes TAA petitions due to an expiration or 
termination of the program, there will be no explicit requirement 
pertaining to TAA participants. However, such individuals, as 
dislocated workers, will continue to receive rapid response services 
upon notification of layoff consistent with State or local area 
procedure.
    Proposed Sec.  682.330(j) requires States to provide additional 
assistance to local areas that experience an event that causes 
significant layoffs that exceed the capacity of the local area to 
respond to with existing formula resources. This requirement is found 
in the current regulation at Sec.  665.300(b); the Department has made 
slight wording changes and moved it to this part. The additional 
assistance is required by WIOA sec. 134(a)(2)(A)(II). Proposed Sec.  
682.330(j) establishes the requirement that such assistance be 
provided; proposed Sec.  682.350 defines and describes what additional 
assistance entails.
    Proposed Sec.  682.330(k) describes the role of rapid response in 
organizing or supporting labor management committees. This proposed 
paragraph uses the language from the current regulation that addresses 
this point, 20 CFR 655.310(c)(1) and (2). This support is required by 
WIOA sec. 3(51), as it was under WIA sec. 101(38), where labor and 
management voluntarily agree that the establishment of such a committee 
is appropriate. It has been the Department's experience that in some 
circumstances such committees have proven ineffective; therefore, their 
establishment is not a required rapid response activity. However, where 
labor and management desire to establish such a committee, guidance and 
financial support must be provided by rapid response.
    The proposal does not include the requirement, now in 20 CFR 
655.310(c)(3), that a neutral chairperson be appointed for such a 
committee. Based on feedback received regarding the difficulties 
involved in obtaining a neutral chairperson who is familiar with the 
immediate problem, the leadership of such a committee is better left to 
the discretion of the parties involved.
    The proposal does not include the language in the current 
regulation referring to ``workforce transition committees''--the 
Department now refers to these as groups as ``community transition 
teams.'' Their role is explained in proposed Sec.  682.340.
Section 682.340 May other activities be undertaken as part of rapid 
response?
    Proposed Sec.  682.340 identifies additional activities that may be 
undertaken as part of the rapid response program. Proposed Sec.  
682.340(a) is designed to allow for innovative approaches and to ensure 
additional flexibility to prepare for and respond to layoffs, and to 
react to unusual or unforeseeable situations. Although the proposal 
leaves considerable discretion, any allowable activities must be 
designed to prevent or minimize the duration of unemployment, or to 
develop strategies or activities that will lead to better programmatic 
outcomes.
    Proposed Sec.  682.340(b) provides for the creation and operation 
of community transition teams. Community transition teams are designed 
to expand the ability of the public workforce system to enlist 
partners, community organizations, and others to provide services and 
resources in communities or areas in response to major layoffs or other 
events that have caused significant impact that are beyond the capacity 
of the public workforce system to address. Rapid response funds may be 
used to organize or sustain community transition teams that are 
organized to provide relief to impacted communities.
Section 682.350 What is meant by ``provision of additional assistance'' 
in Workforce Innovation and Opportunity Act?
    Section 665.330 of the current regulations is not maintained in the 
proposed regulations. The North American Free Trade Agreement (NAFTA) 
program to which it refers has ended. Proposed Sec.  682.350, which 
describes the provision of ``additional assistance'' to local areas, 
has been largely maintained from the existing WIA regulations. The 
Department has made a slight change to the language in the existing 
regulations for clarity, but the concept has not changed. While the 
provision of additional assistance is required, as described in 
proposed Sec.  682.330(i), the mechanisms by which such assistance may 
be provided are left to the discretion of the States.

[[Page 20745]]

Section 682.360 What rapid response, layoff aversion, or other 
information will States be required to report to the Employment and 
Training Administration?
    Proposed Sec.  682.360 does not appear in the current regulations; 
it requires that States report information about the receipt of rapid 
response services by individuals enrolled as dislocated workers. This 
information is currently required under WIA reporting guidelines. The 
Department also reserves authority to issue further guidance on the 
reporting of rapid response activities. Should such reporting become 
required, the Department will work with States and local areas to 
ensure that reporting burdens are minimized while still meeting program 
reporting goals.
Section 682.370 What are ``allowable statewide activities'' for which 
rapid response funds remaining unspent at the end of the year of 
obligation may be recaptured by the State?
    Proposed Sec.  682.370 addresses the WIOA provision at sec. 
134(a)(2)(B) that allows a State to ``recapture'' any funds reserved 
for rapid response that remain unspent at the end of the PY of 
obligation and utilize them for State set-aside activities. The 
Department has provided further definition around required and 
allowable activities under the rapid response provisions of the WIOA, 
which may support States to more fully utilize rapid response funds 
while better serving businesses and workers.

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

1. Introduction
    This proposed part establishes the administrative provisions that 
apply to formula and discretionary grants and cooperative agreements 
authorized under title I of WIOA. Some administrative provisions are 
also applicable to grants provided under the Wagner-Peyser Act, as 
indicated in specific sections of this part. The remaining Wagner-
Peyser Act administrative rules are still located in 20 CFR part 658. 
Wagner-Peyser grants are included in this part to ensure consistent 
application of the common administrative provisions that apply to all 
grants awarded under title I of WIOA and the Wagner-Peyser Act. For 
instance, the audit requirements for discretionary and formula grantees 
for title I and Wagner-Peyser Act funds can be found in one section. 
The internal control requirements for both programs can be found in 
this part as well. However, contracts, rather than grants or 
cooperative agreements, are used to award most funds authorized for Job 
Corps. As such, the administrative provisions for Job Corps (subtitle C 
of title I of WIOA) will be addressed separately in 20 CFR part 686.
    Many of the proposed requirements in this part 683 are impacted by 
the Department's new rule ``Uniform Administrative Requirements, Cost 
Principles, and Audit Requirements for Federal Awards Final Rule,'' at 
2 CFR part 2900 published on December 19, 2014, and OMB's Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements 
for Federal Awards Final Rule, dated December 26, 2013 found at 2 CFR 
part 200 (``Uniform Guidance'' or ``2 CFR part 200''). The Uniform 
Guidance, which can be found at http://www.gpo.gov/fdsys/pkg/FR-2013-12-26/pdf/2013-30465.pdf, streamlines and consolidates OMB Circulars A-
21 (2 CFR part 220), A-50, A-87 (2 CFR part 225), A-89, A-102 (29 CFR 
part 97), A-110 (29 CFR part 95), A-122 (2 CFR part 230), and A-133 (29 
CFR part 96) into a single document. The Uniform Guidance standardizes 
the administrative, cost, and audit provisions for nearly all grants 
across the Federal government including those awarded by the 
Department's WIOA Federal partners, including ED, HHS, and the 
Department of Agriculture. Federal agencies were allowed to submit 
exceptions, as defined at 2 CFR 200.102, that deviate from the Uniform 
Guidance. The list of the Department's exceptions to the Uniform 
Guidance is available at 2 CFR part 2900. Requirements of this Uniform 
Guidance, including the Department's exceptions, apply to all grants 
and cooperative agreements provided under this part.
    In this proposed part, the Department hopes to strengthen its 
administration of grants and enhance program results by providing 
consistent and uniform guidance that increases accountability and 
transparency, promotes fiscal integrity, and reduces duplication.
2. Subpart A--Funding and Closeout
    This subpart addresses the grant life cycle from fund availability 
to closeout for formula grants awarded to States under WIOA title I, 
subtitle B, and the Wagner-Peyser Act, and the grant life cycle for 
discretionary or competitive WIOA grants, awarded under subtitle D of 
title I. This subpart identifies the three financial assistance 
instruments that will be used to award funds under title I of WIOA and 
Wagner-Peyser: Contracts, grant agreements, and cooperative agreements. 
One shift from WIA to WIOA is that the Secretary will no longer use the 
Governor/Secretary agreements used under WIA. In compliance with the 
Uniform Guidance, the Department will use Notices of Award as the 
funding instrument for all grants, both formula and discretionary. 
Another shift to promote full expenditure of funds is to require that 
recipients expend the funds with the shortest period of performance 
before expending other funds. This proposed subpart also implements the 
WIOA statute's flexibility in allowing a Local Board to transfer up to 
100 percent of a PY allocation between the adult and dislocated workers 
funding streams subject to the Governor's approval. Additionally, the 
subpart proposes processes on the handling of unobligated rapid 
response funds and ETA's role in the annual reallotment process that 
takes place between the States and the Department after each PY. The 
proposed responsibility review provisions are also different from those 
under WIA to reflect the new requirements in the Uniform Guidance. 
Lastly, this subpart outlines the closeout procedures for title I of 
WIOA and Wagner-Peyser awards.
Section 683.100 When do Workforce Innovation and Opportunity Act grant 
funds become available for obligation?
    This proposed section describes the statutory requirements for the 
Department's release of formula funds under title I of WIOA and the 
Wagner-Peyser Act. WIOA youth funds may be released earlier than other 
formula funds, as early as April, to assist States and locals in 
planning youth activities. Adult and dislocated worker funds will be 
awarded on a PY basis in two payments: In July after the beginning of 
the PY and a second release of funds in October of each PY. Wagner-
Peyser funds will also be released on a PY basis, in July of each 
fiscal year. The availability of funds awarded on a competitive or 
discretionary basis will be dependent on the annual appropriation and 
on the grant or cooperative agreement.
Section 683.105 What award document authorizes the expenditure of funds 
under title I of the Workforce Innovation and Opportunity Act and the 
Wagner-Peyser Act?
    This section recognizes the use of the three funding instruments 
that conform with the Uniform Guidance: Grant agreements, cooperative 
agreements, and contracts. The Department will no longer use the 
Governor/Secretary agreement, used under WIA, as a

[[Page 20746]]

funding instrument because it is not consistent with the Uniform 
Guidance. Proposed paragraphs (b) through (e) of this section specify 
the type of funding instruments that will be used for different WIOA 
programs. Proposed paragraph (e)(3) implements WIOA sec. 169(b)(6)(B), 
which states that the Department may not award a contract or grant for 
research, studies, or multi-State projects ``to the same organization 
for more than 3 consecutive years unless such grant or contract is 
competitively reevaluated within such period.'' The Department 
interprets the central purpose of this provision to promote 
competition--it prohibits the Department from awarding lengthy 
contracts or grants on a non-competitive basis to the same 
organization. However, as long as the contract or grant is awarded on a 
competitive basis, the project (and therefore the award) may span over 
a period of more than 3 years. This is consistent with the Department's 
need to conduct lengthy research and other projects and with the new 
flexibility to incrementally fund evaluations, research, and other 
projects, provided in sec. 189(g)(2)(B)(ii) of WIOA. Finally, proposed 
paragraph (f) of Sec.  683.105 makes clear that all three funding 
instruments are subject to the closeout procedures in the Uniform 
Guidance.
Section 683.110 What is the period of performance of Workforce 
Innovation and Opportunity Act title I and Wagner-Peyser Act funds?
    This proposed section describes the period of performance for 
different types of WIOA title I and Wagner-Peyser Act grant awards. 
Proposed paragraph (a) provides a general explanation about expenditure 
periods. Specifically, the period of performance for grants is the 
statutory period of availability for expenditure, unless otherwise 
provided in the grant agreement. Funds must be spent in a timely 
manner; if they are not expended by the end of the performance period, 
they risk losing their availability. Grantees must expend funds with 
the shortest period of availability first, unless otherwise authorized 
in the agreement or in a subsequent modification. The proposed 
paragraph includes a sentence encouraging grantees to follow this rule, 
so that they use funds expeditiously and effectively. This approach 
should help reduce unexpended funds at the end of a grant's period of 
performance
    Proposed Sec.  683.110(b) through (h) restate the applicable 
periods of performance for WIOA and the Wagner-Peyser Act grants. WIOA 
did not change these periods for formula funds--adult/dislocated worker 
and youth formula funds allotted during any PY are available for 
expenditure by the State only during that PY and the 2 succeeding PYs; 
funds allocated by the State to a local area for any PY are available 
for expenditure only during that PY and the succeeding PY (WIOA sec. 
189(g)(2)). Proposed paragraph (c)(2) also requires that funds 
unexpended by a local area in the 2 year period be returned to the 
State and be used for specific purposes. This is unchanged from the WIA 
regulation at 20 CFR 667.107. However, proposed paragraph (c)(1)(ii) 
notes an exception to the 2-year performance period for local areas in 
the case of WIOA Pay-for-Performance contracting strategies, a new 
option added by secs. 129(c)(1)(D) and 134(d)(1)(iii) of WIOA and more 
fully discussed in proposed subpart E. Under this paragraph, and in 
accordance with sec. 189(g)(2)(D) of WIOA, funds used by local areas to 
carry out WIOA Pay-for-Performance contract strategies remain available 
until expended. Additional information on this provision is explained 
below in the discussion of proposed Sec.  683.530. Proposed paragraph 
(h) also implements sec. 5(c) of the Wagner-Peyser Act, and explains 
that funds allotted to States for grants under secs. 3 and 15 of the 
Wagner-Peyser Act for any PY are available for expenditure by the State 
receiving the funds only during that PY and the 2 succeeding PYs.
    Proposed paragraphs (d) and (e) provide the expenditure period for 
the Native American programs and MSFW programs under secs. 166(c) and 
167(a) of WIOA, respectively. In both programs, WIOA requires the 
Secretary to enter into grants or contracts with eligible entities 
every 4 years. Accordingly, the proposed paragraphs explain that funds 
awarded by the Department under these programs are available for 
expenditure during the period identified in the award document, which 
will not exceed 4 years.
    For grants awarded for research or evaluations under WIOA sec. 169, 
funds remain available until expended, in accordance with sec. 
189(g)(2)(B)(i) of WIOA, or for the period of performance specified in 
the terms and conditions of the award. The Secretary has the authority 
to limit the period of expenditure of these funds in the terms and 
conditions of the grant award.
    Finally, proposed paragraph (f) explains that funds allotted for 
other programs under title I of WIOA, including secs. 170 (National 
Dislocated Worker Grants (NDWGs) and 171 (Youthbuild program), are 
available for expenditure for the period of performance identified in 
the grant or contract.
Section 683.115 What planning information must a State submit in order 
to receive a formula grant?
    This proposed section implements the statutory requirement that an 
approved Unified State Plan or Combined State Plan be submitted before 
formula funds under title I, subtitle B, of WIOA and Wagner-Peyser can 
be issued. As discussed in the preamble discussion of part 676, WIOA is 
apparently inconsistent as to whether outlying areas must submit a 
Unified or Combined State Plan to receive funding under title I. The 
preamble discussion of part 676 details the apparent inconsistency and 
identifies potential options to resolve the inconsistency.
Section 683.120 How are Workforce Innovation and Opportunity Act title 
I formula funds allocated to local areas?
    This proposed section describes the timeframe and formula factors a 
Governor must employ when allocating funds to local areas under secs. 
128 and 133. It also specifies the steps a Governor must take when 
issuing allocations, including consulting with Local Boards and elected 
officials prior to issuing the allocation. The Governors must issue the 
funds to the local areas in a timely manner to allow for an adequate 
planning process.
    This section also adopts the provision in sec. 134(2)(A)(ii) of 
WIOA that allows States to use unobligated rapid response funds, after 
the completion of the PY, for statewide activities.
Section 683.125 What minimum funding provisions apply to Workforce 
Innovation and Opportunity Act adult, dislocated worker, and youth 
allocations?
    This proposed section addresses the minimum funding thresholds for 
States funded under subtitle B of title I of WIOA. Minimum funding 
thresholds are established to offset the impact of fluctuations in the 
formula factors that result from shifts in the economy that may be 
compounded by additional downturns in a particular industry or market 
in a particular State. Sections 128(b)(2)(A) and 133(b)(2)(A) of WIOA 
contain these minimum funding requirements to avoid significant swings 
in the amount of funding a State receives from 1 year to the next and 
to avoid any disruption of services or planning.

[[Page 20747]]

Section 683.130 Does a Local Board have the authority to transfer funds 
between the adult employment and training activities allocation and the 
dislocated worker employment and training activities allocation?
    This proposed section provides flexibility to local areas to 
provide services in the areas of greatest need by allowing fund 
transfers of up to 100 percent of a PY allocation between the local 
adult and local dislocated worker allocations. Proposed Sec.  
683.130(b) requires a Local Board to obtain written approval of the 
Governor before making such a transfer. This flexibility to transfer 
funds is contained in sec. 133(b)(4) of WIOA.
Section 683.135 What reallotment procedures does the Secretary use?
    This proposed section implements secs. 127(c) and 132(c) of WIOA, 
and explains the Department's process for recapture and reallotment of 
formula funds awarded to the States under title I. The proposed rule 
requires the Secretary to make the determination about whether the 
State has obligated 80 percent of the funds during the second quarter 
of each PY, rather than the first quarter. The procedures are the same 
as those in the WIA regulation at 20 CFR 667.150, with a few 
exceptions. The Department proposes to make the determination during 
the second quarter because State financial reports for the end of the 
PY period are not locked for modification until the next quarter's 
reports are submitted, which is during the second quarter of the PY. 
The Department also uses the term ``each'' to make it clear that the 
Department performs the reallotment procedures every PY with respect to 
the prior PY. Further, the section clarifies that the amount subject to 
recapture is based on the unobligated balance of the prior ``program'' 
year, in accordance with secs. 127(c)(2) and 132(c)(2) of the statute. 
Finally, the proposed section clarifies the language that the recapture 
amount, if any, is determined separately for each funding stream.
    Proposed Sec.  683.135(c) defines the term ``obligation'' in 
accordance with the new OMB Administrative Requirements at 2 CFR 200.71 
(``[w]hen used in connection with a non-Federal entity's utilization of 
funds under a Federal award, obligations means orders placed for 
property and services, contracts, and subawards made, and similar 
transactions during a given period that require payment by the non-
Federal entity during the same or a future period.''). The Department 
is using this definition to be consistent in our application of 2 CFR 
part 200, which is applicable to all funds awarded as grants or 
cooperative agreements. The proposed rule includes the same additions 
to the definition of ``obligation'' that are in the WIA regulation at 
20 CFR 667.150(d)(1) and (2). The Department will continue to recognize 
the monies allocated to the local areas through the formula process 
under subtitle B of title I as obligated by the States for the purposes 
of this section, and the Department has clarified this by adding the 
words ``to the local area'' in proposed paragraph (c)(1). Because of 
this, local transfers between the adult and dislocated worker funding 
streams do not impact the Department's recapture calculation for 
reallotment among the States. Similarly, the fact that up to 10 percent 
of local funds may be reserved for administrative costs does not affect 
the calculation. Recapture and reallotment of funds among States will 
occur during PY 2015 based on obligations in PY 2014, because the 
procedures for realloting funds did not change from WIA to WIOA.
    New in WIOA, sec. 134(a)(2)(A)(ii) permits the Governor to use 
rapid response funds that remain unobligated after the first PY for 
which they were allotted to carry out statewide employment and training 
activities. The rapid response funds will be included in the 
calculation of unobligated funding to determine if a State is subject 
to reallotment. Sections 127(c) and 132(c) of WIOA do not except rapid 
response funds from recapture--a tool which provides a strong incentive 
for States to expeditiously expend funds.
    Excepting rapid response funds from the reallotment calculation 
would effectively remove the reallotment provision out of the statute. 
The Department generally is able to recapture and reallot only 
dislocated worker funds, because States immediately obligate 85 percent 
of their adult and youth program funds by allocating them to the local 
areas through the formula process. Because sec. 133(a)(2) of WIOA 
allows the Governor to reserve up to 25 percent of dislocated worker 
funds for rapid response activities, there may never be a situation 
where 80 percent of the remaining dislocated worker funds have not been 
obligated. Therefore, the Department includes rapid response funds in 
the calculation of a State's unobligated funding to determine if the 
State is subject to recapture and reallotment.
    However, even if a State is subject to reallotment, the Governor 
may use the unobligated rapid response funds described in WIOA sec. 
134(a)(2)(A)(ii) that remain available after reallotment to carry out 
statewide employment and training activities (in addition to rapid 
response activities). This preserves the additional flexibility 
provided to the Governors in WIOA sec. 134, by permitting Governors to 
use rapid response funds for statewide employment and training 
activities if not expended in the first year of availability. The 
Department welcomes comments on the proposed reallotment approach and 
potential impact on States, including the transfer flexibility.
Sec.  683.140 What reallocation procedures must the Governors use?
    This proposed section describes the procedures for reallocating 
youth, adult, and dislocated worker funds among local areas in the 
State, in accordance with secs. 128(c) and 133(c) of WIOA, and is 
unchanged from the WIA regulation at 20 CFR 667.160 except that 
proposed paragraph (a) requires the Governor to consult with the State 
Board before reallocating, as required by secs. 128(c)(1) and 133(c)(1) 
of WIOA. Proposed paragraph (b) clarifies that the amount to be 
recaptured, if any, must be separately determined for each funding 
stream, and the calculations of unobligated balances in each stream 
must be adjusted to account for any funds that are transferred between 
funding streams under proposed Sec.  683.130. The Department also notes 
that States and local areas are required to adhere to the definition of 
``obligations'' in 2 CFR 200.71.
Section 683.145 What merit review and risk assessment does the 
Department conduct for Federal financial assistance awards made under 
Workforce Innovation and Opportunity Act title I, subtitle D?
    This proposed section includes new requirements mandated by the 
Uniform Guidance. First, there is a requirement for the use of merit 
review as a means to ensure that discretionary or competitive grants 
and cooperative agreements are awarded through a competitive, merit-
based process. Second, this section incorporates the Uniform Guidance 
requirement, found at 2 CFR 200.205, that an agency must have ``a 
framework for evaluating the risks posed by applicants before they 
receive Federal Awards.'' The factors the Grant Officer will consider 
are listed in this section and drawn from 2 CFR 200.205. Additional 
guidance will be issued to further specify how the Grant Officer will 
evaluate these factors in determining whether the applicant

[[Page 20748]]

should be precluded from receipt of Federal financial assistance.
Section 683.150 What closeout requirements apply to grants funded with 
Workforce Innovation and Opportunity Act title I and Wagner-Peyser Act 
funds?
    This proposed section is new; there is not one like it in the WIA 
regulations. It addresses closeout, which is an important component to 
complete the grant life cycle. This section paraphrases the Uniform 
Administrative requirement sections on closeout and post-closeout 
adjustments (2 CFR 200.343-344). Specifically, when the period of 
performance ends, the Department will close out the Federal award after 
determining that all administrative actions and required work have been 
completed by the grant recipient. The grant recipient must submit all 
required reports and liquidate all obligations and/or accrued 
expenditures within 90 days of the end of the performance period. The 
Department will promptly reimburse the grant recipient for allowable 
reimbursable costs under the Federal award being closed out. The non-
Federal entity must promptly refund any balanced of unobligated cash 
that is owed to the Department. The Department will settle for any 
upward or downward adjustments to the Federal share of costs after 
closeout reports are received. The grant recipient must account for any 
real and personal property acquired with Federal funds or received from 
the Federal government. The Department must complete all closeout 
actions no later than 1 year after receiving and accepting all required 
final reports; however, closeout does not affect the Department's right 
to disallow costs and recover funds, or obligations of the grantee, 
including audit, property management, and records retention 
requirements. After award closeout, a relationship created under the 
award may be modified or ended. Grant recipients that award funds to 
subrecipients must institute a timely closeout process after the end of 
performance to ensure a timely closeout in accordance with this 
section.
3. Subpart B--Administrative Rules, Costs and Limitations
    Financial and Administrative Rules. These proposed regulations 
provide the rules applicable to WIOA grants in the areas of fiscal and 
administrative requirements, audit requirements, and allowable cost/
cost principles, and includes changes as the result of the Uniform 
Guidance at 2 CFR part 200 and any exceptions to 2 CFR part 200 that 
have been released by the Department under 2 CFR part 2900. To support 
the fiscal integrity of the grant process, proposed Sec.  683.220 
requires recipients and subprecipients of WIOA or Wagner-Peyser Act 
funds to have an internal control structure in place that provides 
safeguards to protect personally identifiable information and other 
sensitive information. This section is new to WIOA; there is no 
corresponding section in the WIA regulations. Another new section 
provides rules for using real property with Federal equity. Under this 
provision, Federal equity acquired in real property through grants to 
States awarded under title III of the SSA or the Wagner-Peyser Act is 
transferred to the States that used the grant to acquire the equity; 
the portion of the equity transferred must be used to carryout 
activities authorized under these programs and/or WIOA. The new section 
also provides instructions on using properties funded with Reed Act 
equity or the Job Training Partnership Act (JTPA).
    Costs and Limitations. This proposed regulation in Sec.  683.205 
delineates activities and functions associated with the cost of 
administration as well as cost limitations (discussed in proposed Sec.  
683.205). The intent continues to be that the function and intended 
purpose of an activity should be used to determine whether the costs 
are administrative or programmatic. There is a new section on salary 
and bonus limitations, which prescribes limits on salaries and bonuses 
in both WIOA and Wagner-Peyser programs. The proposed subpart also 
describes activities that are prohibited under WIOA, such as employment 
generating activities and activities that encourage business 
relocation.
    Responsibilities toward participants and employees. These proposed 
regulations provide rules on employee displacement, wage and labor 
standards, health and safety standards, and non-discrimination.
    Other rules. There is a new section addressing the allowability of 
earning under WIOA grants.
Section 683.200 What general fiscal and administrative rules apply to 
the use of Workforce Innovation and Opportunity Act title I and Wagner-
Peyser funds?
    This proposed section describes the application of the Uniform 
Guidance and the corresponding exceptions authorized by the Department 
at 2 CFR part 2900 for all grant recipients and subrecipients, 
including for-profit organizations and foreign entities. It references 
the cost principles, discusses when prior approval for certain 
expenditures is required, and highlights a number of specific 
requirements in the Uniform Guidance and the WIOA statute. For example, 
this section addresses the requirement that interest income be disposed 
of using the addition method and requires an entity to provide 
additional program services with those funds. This section also 
addresses times when income is earned and how it is recognized, 
reported, and applied to the program. It outlines the code of conduct 
and conflict of interest requirements that must be implemented under 2 
CFR part 200, as well as certain restrictions imposed on grant 
recipients and subrecipients when using WIOA and Wagner-Peyser funds, 
including the Buy-American provision in sec. 502 of WIOA. Likewise, 
this section requires adherence to the mandatory disclosure 
requirements found in 2 CFR part 200 on all violations of Federal 
criminal law involving fraud, bribery, or gratuity violations 
potentially affecting the Federal award. Additional disclosures on 
lobbying, drug-free workplace, debarment, and suspension continue to be 
required as well. Such disclosures must be timely and in writing. 
Failure to make the required disclosures can result in any of the 
remedies described in Sec.  200.338, remedies for noncompliance, 
including suspension or debarment.
Section 683.205 What administrative cost limitations apply to Workforce 
Innovation and Opportunity Act title I grants?
    This proposed section specifies the statutory administrative cost 
limitations on title I grant funds. States receiving formula WIOA funds 
are limited to spending no more than 5 percent of their annual 
allotment on administrative costs. Local areas are limited to spending 
no more than 10 percent of their annual allocation on administrative 
costs. Flexibility is provided to States and local areas in the statute 
by allowing administrative funds from the three formula funding streams 
awarded under subtitle B to be pooled and used together for 
administrative costs for any of the three programs, at the State and 
locals' discretion. For other WIOA title I and Wagner-Peyser funding, 
the administrative cost limits can be found in the grant agreement and 
are subject to the Uniform Guidance.

[[Page 20749]]

Section 683.210 What audit requirements apply to the use of Workforce 
Innovation and Opportunity Act title I and title III funds?
    This proposed section specifies the audit requirements for all 
grant recipients and subrecipients of WIOA funds that expend more than 
$750,000 in Federal funds during the fiscal year, including for-profit 
entities that are grant recipients or subrecipients of WIOA title I or 
Wagner-Peyser funds. As this proposed section notes, the audit 
requirements do not normally pass through to contractors, but will in 
some situations, such as where the payments are found to constitute a 
Federal award rather than a payment for goods and services. This 
section seeks to implement the requirements of the Uniform Guidance.
Section 683.215 What Workforce Innovation and Opportunity Act title I 
functions and activities constitute the costs of administration subject 
to the administrative cost limitation?
    The proposed section defines the functions and activities that 
constitute administration in accordance with sec. 3(1) of WIOA, and 
therefore are subject to the administrative cost limitations discussed 
in proposed Sec.  683.205. The Department notes that this proposed 
section applies to activities performed under all grants awarded under 
title I of WIOA. It does not apply to activities funded through 
contracts, such as operation of Job Corps centers. The proposed rule is 
the same as the WIA regulation at 20 CFR 667.220 with a few exceptions. 
For clarification, fiscal agent responsibilities are now included in 
the list of enumerated administrative costs. Regions are also included 
in the list of entities that can incur administrative costs, consistent 
with sec. 106 of WIOA. The Department made these enhancements because 
services can be integrated and streamlined through regions that may 
cross geographical boundaries or local economic areas. Additionally, 
the section refers to ``contractors'' instead of ``vendors'' to be 
consistent with the Uniform Guidance, which replaces vendor with 
contractor and defines ``contractor'' at 2 CFR 200.23.
    Proposed Sec.  683.215(c) describes some activities that can be 
administrative, programmatic, or both, depending on whether the 
underlying functions which they support are classified as programmatic 
or administrative. These include costs of activities such as 
information systems development and operation, travel, and continuous 
improvement. For example, the costs of developing an information 
system, which serves both administrative functions, and the tracking 
and monitoring of participants, would be allocated between program 
costs and administrative costs in proportion to the use of the system 
for each intended purpose.
    On the other hand, preparing program-level budgets and program 
plans are classified as program costs. The negotiation of MOUs and one-
stop infrastructure agreements, and certifications of one-stop centers 
are also program costs, because they build or support the one-stop 
delivery system and services to participants.
    The Department welcomes comments regarding whether it is more 
advantageous to issue the proposed list of administrative costs in 
Sec.  683.215(b) as a regulation, or to provide a general description 
of administrative costs similar to the definition in sec. 3(1) of WIOA 
and provide a rationale for why such an approach is advantageous. The 
Department also seeks comment on whether this list will need to be 
flexible, and subject to review and change periodically, or whether it 
is anticipated to be stable. Additionally, the Department seeks comment 
as to whether indirect costs should be included as programmatic or 
administrative.
    Finally, proposed Sec.  683.215(d) requires entities to make 
efforts to streamline administrative services and reduce administrative 
costs by minimizing duplication and effectively using information 
technology to improve services. The Department expects that 
streamlining the administration of the program will minimize 
duplication of multiple systems at different levels of grant 
administration so that more funds will be available for program 
activities.
Section 683.220 What are the internal control requirements for 
recipients and subrecipients of Workforce Innovation and Opportunity 
Act title I and Wagner-Peyser Act funds?
    This proposed new section describes the internal controls that 
recipients and subrecipients must install and have in place when 
expending WIOA and Wagner-Peyser Act funds, and is based on 2 CFR 
200.303. The controls include having a structure and policies in place 
to protect personally identifiable and sensitive information, including 
information that the Department considers to be sensitive, and 
providing reasonable assurances that the recipient or subrecipient is 
managing the award in compliance with Federal law and the terms of the 
award, complying with Federal law and the conditions of the award, 
evaluating and monitoring the recipient's or subrecipient's compliance 
with Federal law and award terms, and taking prompt action when 
noncompliance is identified. The internal controls must meet the 
Committee of Sponsoring Organizations of the Treadway Commission (COSO) 
framework. The framework established has been used in the private 
sector for numerous years and provides standards to achieve reasonable 
assurance in the achievement of the following: Effectiveness and 
efficiency of operations; reliability of financial reporting; 
compliance with applicable laws and regulations; and safeguarding of 
assets. Complying with the internal control requirements will increase 
accountability and transparency in the use of WIOA and Wagner-Peyser 
Act funds. Through past monitoring and oversight, the Department 
discovered that some grantees did not have the tools or access to 
resources to build a strong internal control structure. The Department 
will work with States and discretionary grantees to provide tools and 
assistance to achieve better results through its internal control 
structure. Direct grant recipients must assist their subrecipients in 
achieving an internal control structure framework consistent with 2 CFR 
part 200 and COSO.
Section 683.225 What requirements relate to the enforcement of the 
Military Selective Service Act?
    This proposed section specifies the requirements of the Military 
Selective Service Act for programs and activities authorized under 
title I of WIOA and found in sec. 189(h) of WIOA. This proposed section 
is substantively the same as the WIA regulation at 20 CFR 667.250.
Section 683.230 Are there special rules that apply to veterans when 
income is a factor in eligibility determinations?
    This proposed section addresses the laws governing the 
determination of eligibility for veterans and their spouses for WIOA 
funded services with income qualification requirements. The parameters 
for the exclusion of certain income from the eligibility determination 
process are outlined in this section. This section also states that the 
same method of excluding certain income of veterans must also be used 
when a local area imposes a priority of service threshold when funding 
for program services is limited.

[[Page 20750]]

Section 683.235 May Workforce Innovation and Opportunity Act title I 
funds be spent for construction?
    This proposed section is different from the WIA regulations at 20 
CFR 667.260. It is based on the requirements in the Uniform Guidance at 
2 CFR 200.439(b)(3). The proposed text states that WIOA title I funds 
must not be spent on construction, purchase of facilities or buildings, 
or other capital expenditures for improvements to land or buildings 
except with prior approval of the Secretary. Under the statute, WIOA 
title I funds can be used for construction only in limited situations, 
including meeting obligations to provide physical and programmatic 
accessibility and reasonable accommodations, certain repairs, 
renovations, alterations, and capital improvements of property, and for 
disaster relief projects under WIOA sec. 170(d), YouthBuild programs 
under WIOA sec. 171(c)(2)(A)(i), and for other projects that the 
Secretary determines necessary to carry out WIOA, as described by under 
sec. 189(c) of WIOA. The proposed regulatory text is meant to include 
all these situations, but not offer an exclusive list to ensure that 
the Secretary is able to use the funds for construction in any 
situation where it might be necessary.
Section 683.240 What are the instructions for using real property with 
Federal Equity?
    The proposed section provides rules on State Employee Security Act 
(SESA) properties, Reed Act-funded properties, and JTPA-funded 
properties. The proposed section provides guidance on these different 
properties because the use of these properties can play an integral 
part in WIOA's intent to align Federal investments to support jobs 
seekers and employers. Such efforts are not only achieved through 
strategic coordination among one-stop partners, but through physical 
presence at offices in the one-stop delivery system. Many buildings 
that have existing Federal equity currently house Wagner-Peyser 
programs, and it seems logical to use these facilities as American Job 
Centers if they are accessible and available and can support the 
requirements for colocation outlined in proposed Sec. Sec.  678.310 
through 678.320. Properties with Reed Act equity may also play a role 
in the American Job Center System. Lastly, the Department is aware that 
many local workforce development areas that were previously known as 
service delivery areas (SDAs) continue to be used as facilities for WIA 
programs, and they should continue to be used for the one-stop delivery 
service system under WIOA. The Department welcomes feedback on these 
provisions. Making use of these properties for the one-stop delivery 
system in accordance with statutory requirements will maximize the 
investments already made in these buildings and help to achieve the 
goals of WIOA.
    With respect to Federal equity in SESA properties, the proposed 
section restates the requirements of sec. 192 of WIOA, and explains 
that Federal equity acquired in real property through grants to States 
awarded under title III of the SSA or the Wagner-Peyser Act is 
transferred to the States that used the grant to acquire the equity. 
The portion of the real property attributable to the Federal equity 
transferred must be used to carry out activities authorized under WIOA, 
title III of the SSA, or the Wagner-Peyser Act. When the property is no 
longer needed to carry out those activities, the States are directed to 
request disposition instructions from the Grant Officer. Proceeds from 
the disposition must be used to carry out activities authorized under 
WIOA, title III of the SSA, or the Wagner-Peyser Act.
    The statutory limitation in sec. 192(b) of WIOA is provided as 
well. States are not permitted to use funds awarded under WIOA, title 
III of the Social Security, or the Wagner-Peyser Act to amortize the 
costs of the real property that is purchased by any State after 
February 15, 2007.
    The Department has also included the new requirement from sec. 
121(e)(3) of WIOA and sec. 3(d) of the Wagner-Peyser Act that 
properties occupied by Wagner-Peyser ESs be collocated with one-stop 
centers.
    With respect to Reed Act-funded properties, the proposed rule 
states that properties with Reed Act equity may be used for the one-
stop delivery system to the extent that the proportionate share of Reed 
Act equity is less than or equal to the proportionate share of 
occupancy by the Wagner-Peyser and UC programs. However, subject to 
conditions specified in sec. 903(c)(2) of the SSA and any 
appropriations limitations, a State is permitted, at its discretion, to 
use Reed Act funds for ``the administration of its UC law and public 
employment offices.'' When the property is no longer needed for these 
activities, the State must request disposition instructions from the 
Grant Officer prior to sale. Because Reed Act funded properties are 
different than other Federal equity properties, disposition 
instructions will include a requirement to return the funds 
attributable to the Reed Act equity to the State's account in the 
Unemployment Trust fund. See discussion in TEGL 3-07 ``Transfer of 
Federal Equity in State Real Property to the States.'' It is expected 
that additional guidance will be issued to update the guidance 
contained in TEGL 3-07, which will include instructions on the handling 
of such properties when considering colocation of Wagner-Peyser, as 
required in sec. 121(e)(3) of WIOA and sec. 3(d) of the Wagner-Peyser 
Act (as added by the amendments in title III of WIOA).
    For JTPA funded properties, the proposed rule states that real 
property that was purchased with JTPA funds and transferred to WIA, is 
now transferred to the WIOA title I programs and may be used for WIOA 
purposes. It is the Department's position that the Federal equity 
remains with the property while in use. Many properties that were 
purchased with JTPA funds continue to be locations that house and serve 
individuals and staff persons under WIA, and as such, those same 
buildings must continue to be used for the purposes of WIOA. If JTPA 
properties that were being used for WIA activities will not be used for 
WIOA programs, disposal of the property must occur. When the real 
property is no longer needed for the WIOA activities, the recipient 
must seek instructions from the Grant Officer prior to disposition or 
sale. A subrecipient would seek instructions from the State. Such 
instructions must be consistent with 2 CFR part 200. The Department 
welcomes any feedback from the workforce development system that 
promotes the use of these properties and streamlines the disposition 
process.
Section 683.245 Are employment generating activities, or similar 
activities, allowable under title I of the Workforce Innovation and 
Opportunity Act?
    This proposed section implements sec. 181(e) of WIOA, which 
restricts the use of WIOA funds for employment generating activities 
except where the activities are directly related to training for 
eligible individuals. The proposed section states that employer 
outreach and job development activities are considered to be directly 
related to training for eligible individuals, and it lists a number of 
examples of acceptable activities. The section also describes the 
conditions in which WIOA funds can be used for employer outreach.
Section 683.250 What other activities are prohibited under title I of 
the Workforce Innovation and Opportunity Act?
    This proposed section describes other activities that are expressly 
prohibited

[[Page 20751]]

in title I of WIOA, including foreign travel paid for by WIOA formula 
funds (sec. 181(e) of WIOA) payment of wages of incumbent workers 
participating in economic development activities (sec. 181(b) of WIOA), 
contracts with persons falsely labeling products as made in America 
(sec. 502(c) of WIOA), and others.
Section 683.255 What are the limitations related to religious 
activities in title I of the Workforce Innovation and Opportunity Act?
    This proposed section describes the limitations related to using 
WIOA funds to support religious activities, including the preclusion on 
employment of participants for the construction, operation, or 
maintenance of facilities used for sectarian purposes or worship, which 
is contained in sec. 188(a)(3) of WIOA. This section also references 29 
CFR part 2, subpart D, which describes other limitations in detail, 
along with certain exceptions. This proposed section contains similar 
requirements as the WIA regulations at 20 CFR 667.266.
Section 683.260 What prohibitions apply to the use of Workforce 
Innovation and Opportunity Act title I funds to encourage business 
relocation?
    This proposed section describes the prohibitions on the use of WIOA 
title I funds to encourage business relocation, including specific 
timeframes when entities can begin working with such businesses. This 
section also describes the States' obligation to develop procedures to 
implement these rules. These provisions implement the requirements of 
sec 181(d) of WIOA. This proposed section contains the same 
requirements as the WIA regulations at 20 CFR 667.268.
Section 683.265 What procedures and sanctions apply to violations of 
this part?
    This proposed section lists the provisions that provide for 
sanctions resulting from the violation of Sec. Sec.  683.235-260.
Section 683.270 What safeguards are there to ensure that participants 
in Workforce Innovation and Opportunity Act employment and training 
activities do not displace other employees?
    This proposed section outlines conditions and safeguards to ensure 
that any WIOA title I participant does not displace an existing 
employee by participating in a WIOA title I program or activity. It 
also states that an employee can file a complaint alleging 
displacement. Section 181(b)(2) of WIOA did not change the WIA 
displacement requirements at sec. 181(b)(2) of WIA. Accordingly, this 
regulation is unchanged from the WIA regulation at 20 CFR 667. 270.
Section 683.275 What wage and labor standards apply to participants in 
activities under title I of the Workforce Innovation and Opportunity 
Act?
    This proposed section describes the wage and labor standards that 
apply to WIOA title I participants, including the requirements under 
the Federal Fair Labor Standards Act (FLSA) and State and local minimum 
wage laws. The regulation is unchanged from the WIA regulations at 20 
CFR 667.272, except that it includes two additional provisions from 
sec. 181 of WIOA. The first is that the reference to the FLSA minimum 
wage requirement does not apply to territorial jurisdictions in which 
the minimum wage requirement does not apply (WIOA sec. 181(a)(1)(B)), 
and the second is that WIOA title I funds must not be used to pay the 
wages of incumbent employees during their participation in economic 
development activities provided through a statewide workforce delivery 
system (WIOA sec. 181(b)(1)). This requirement is also found in 
proposed Sec.  683.250(a)(1), but it is included here as well to give a 
complete list of the wage standards that apply to WIOA participants.
Section 683.280 What health and safety standards apply to the working 
conditions of participants in activities under title I of the Workforce 
Innovation and Opportunity Act?
    The proposed section explains what health and safety standards and 
workers compensation laws apply to WIOA title I participants. The 
standards in WIOA are the same as those in WIA, so the regulation is 
unchanged from the WIA regulation at 20 CFR 667.274.
Section 683.285 What are a recipient's obligations to ensure 
nondiscrimination and equal opportunity, and what are a recipient's 
obligations with respect to religious activities?
    This proposed section describes the nondiscrimination, equal 
opportunity, and religious activities requirements that recipients, as 
defined in WIOA sec. 188 and at 29 CFR part 37, must adhere to when 
using WIOA title I funds. WIOA did not change these requirements, so 
the proposed section contains the same requirements as the WIA 
regulation at 20 CFR 667.275, with a few exceptions. Accordingly, 
paragraph (a)(1) of the proposed rule refers to ``Job Corps 
contractors,'' instead of ``vendors,'' to conform with 29 CFR part 37. 
Additionally, proposed Sec.  683.285(a)(4) implements sec. 188(a)(4) of 
WIOA, which prohibits discriminating against an individual because of 
that person's status as a WIOA title I participant. Proposed Sec.  
683.285(a)(5) also implements the requirement at sec. 188(a)(5) of WIOA 
that participation in WIOA title I programs and activities be available 
to citizens and nationals of the United States, lawfully admitted 
permanent resident aliens, refugees, asylees, and parolees, and other 
immigrants authorized by the Attorney General to work in the United 
States. Finally, the proposed section includes the Wagner- Peyser 
program as an example of a Department program that is covered by 29 CFR 
part 2, subpart D.
Section 683.290 Are there salary and bonus restrictions in place for 
the use of Workforce Innovation and Opportunity Act title I and Wagner-
Peyser Act funds?
    This proposed section implements the requirements of sec. 194(15) 
of WIOA related to salary and bonus restrictions that apply to 
recipients or subrecipients. Although the statute applies the 
restrictions to WIOA title I funding, the Department expanded 
application to Wagner-Peyser Act recipients and subrecipients. The 
appropriations acts for the last 9 years (Pub. L. 109-234 June 15, 
2006) have applied the limitation to all ETA-funded programs; thus, 
interpreting the provision as applying to Wagner-Peyser funded 
activities is appropriate. Additionally, it is the Department's policy 
to ensure that funding is directed to substantive workforce employment 
and training activities to the greatest extent possible, rather than to 
administrative costs.
    The proposed section restates the WIOA statutory provisions. 
Specifically, it prohibits recipients and subrecipients from paying the 
salary and bonuses of an individual, either as direct or indirect 
costs, at a rate in excess of the annual rate of basic pay prescribed 
for level II of the Executive Schedule under 5 U.S.C. 5313. 
Additionally, the limitation does not apply to contractors providing 
goods and services as defined in OMB's Uniform Administrative 
requirements (which supersedes OMB Circular A-133 cited in the 
statute). The Department has used the term ``contractors'' instead of 
the statutory term ``vendor'' to be consistent with the term used in 
the Uniform Guidance. The proposed rule also explains the provision at 
WIOA sec. 194(15)(B) that a State may establish a lower limit for 
salaries and bonuses.
    Finally, the Department has provided direction for scenarios in 
which an employee may be funded by various

[[Page 20752]]

programs or work for multiple offices. If funds awarded under title I 
of WIOA or the Wagner-Peyser Act pay only a portion of the employee's 
salary or bonus, the WIOA title I or Wagner-Peyer Act funds may only be 
charged for the share of the employee's salary or bonus attributable to 
the work performed on the WIOA title I or Wagner-Peyser Act grant. That 
portion cannot exceed the proportional Executive level II rate. This 
restriction applies to the sum of salary and bonus payments made to an 
individual whether they are charged as direct costs or indirect costs 
under title I of WIOA and Wagner-Peyer. When an individual is working 
for the same recipient or subrecipient in multiple offices that are 
funded by title I of WIOA or the Wagner-Peyser Act, the recipient or 
subrecipient must ensure that the sum of the individual's salary and 
bonus payments does not exceed the prescribed limitation. These 
clarifications will help to ensure that WIOA and Wagner-Peyser Act 
funds are not overcharged for salary and bonus payments and that there 
are no ``loopholes'' in applying the limitation.
Section 683.295 Is earning of profit allowed under the Workforce 
Innovation and Opportunity Act?
    This proposed section addresses earning profit under WIOA. As the 
network of training services and one-stop operators has changed over 
the years, the Department is including the proposed section to address 
working with for-profit entities and the earning of profit by these 
entities. Proposed Sec.  683.295(a)(2) includes a requirement for 
grants and other Federal financial assistance awarded under secs. 
121(d) and 134(b) of WIOA, which states that where a Federal financial 
assistance award authorizes one-stop operators, service providers, or 
ETPs to earn profit, the pass through entity must follow 2 CFR 200.323 
to ensure that the entities' charges are reasonable and fair. The 
requirement in 2 CFR 200.323 that profit be negotiated as a separate 
element of the price will provide greater transparency as to the amount 
of profit earned by for-profit entities whether they are subrecipients 
or subcontractors. This paragraph (a)(2) describes an exception to the 
general rule that for-profit entities acting under a contract are 
allowed to earn profit. When the for-profit entity is a recipient of a 
grant or other Federal financial assistance, the entities will now be 
covered by the Uniform Guidance rather than the Federal Acquisition 
Regulations. The general rule, for when for-profit entities are working 
as contractors, is included in proposed Sec.  683.295(a)(3). The 
paragraph notes that the profit is allowable provided that the 
contractor abides by the requirements of 2 CFR 200.323. Proposed Sec.  
683.295(b) states that for programs authorized by other sections of 
WIOA, profit will be prohibited unless authorized by the terms and 
conditions of the Federal award.
4. Subpart C--Reporting Requirements
    This subpart provides guidance for reporting that will promote 
transparency and accountability at the grant recipient level. With 
today's demand for data in an open and transparent environment, the 
Federal government meets the challenges with initiatives such as the 
Digital Accountability and Transparency Act, requiring the Department 
to open access to data and use common data metrics. Performance and 
financial data, when made available, can lead to innovation. Not only 
does the Secretary seek to employ fresh and innovative approaches in 
serving job seekers and employers, the Department wants to utilize our 
resources and reporting portals to provide to the public visualizations 
rich in data and metrics to assist in better understanding of the 
employment environment. It is the Department's intent to use data 
collected from the financial, performance, and annual reports to 
empower our workforce system while providing transparency and 
accountability to our stakeholders. This subpart seeks to promote the 
government's initiative to manage information as an asset to increase 
operational efficiencies, reduce costs, improve services, support 
mission needs, safeguard personal information, and increase public 
access. One way to promote this initiative is through the collection 
and transmission of data, using machine readable formats whenever 
possible. To safeguard personally identifiable information, recipients 
and subrecipients must limit the collection and transmission of such 
data and use encrypted transmission software. To increase operational 
efficiencies and reduce costs, the Department and its grantees work 
together to find solutions that allow for the streamlining of reporting 
and the reduction of duplication of systems and efforts. The 
Department's existing financial expenditure form (ETA-9130) will be 
modified to reflect new reporting requirements. The Secretary will 
issue additional guidance on this topic.
683.300 What are the reporting requirements for programs funded under 
the Workforce Innovation and Opportunity Act?
    To continue with efforts for accountability and transparency as 
well as to provide data to our stakeholders, the Department requires 
its recipients to submit financial and performance reports, as well as 
an annual performance report. The data contained in these reports must 
be generated and processed in formats that are compatible with other 
commonly used data systems and be in machine readable formats. This 
proposed section specifies the reporting requirements for grant 
recipients and the deadlines for such reports. This section also sets 
forth recipients' responsibility to collect data from subrecipients. 
Pargraphs (b), (d), and (e) separately describe the performance 
reporting requirements for the core programs under sec. 116 of WIOA and 
part 677 and other grant programs authorized under title I of WIOA.
5. Subpart D--Oversight and Resolution of Findings
    This proposed subpart addressees the oversight and resolution 
responsibilities of the Department and grant recipients of WIOA funds. 
Oversight and monitoring is a valuable tool in effectively managing 
grants and this subpart emphasizes the need for careful application of 
these requirements by the Department and by recipients.
    Oversight. These regulations which provide for oversight and 
resolution responsibilities of the Department and its grant recipients 
are an important part of the Department's overall strategy to improve 
grant administration and to promote the vision of WIOA. As in WIA, 
States will review their subrecipients and validate their compliance 
with the Uniform Guidance on an annual basis and certify compliance to 
the Secretary every 2 years. The States and grant recipients must also 
install a monitoring system that meets the requirements of the Uniform 
Guidance and includes the examination of such items as performance, 
program goals, non-discrimination, conflict of interest, and mandatory 
disclosures.
    Resolution. The resolution of findings that arise from audits, 
investigations, monitoring reviews, and the Grant Officer resolution 
process is specified in this proposed subpart. It also provides 
clarification on the effect of the Uniform Guidance on the resolution 
process at the subrecipient level. When action to resolve findings is 
inadequate, the Department will take additional action

[[Page 20753]]

against the State or other direct grant recipient to reach resolution. 
Such action will include the Grant Officer resolution process, 
including the initial and final determination process, as described in 
proposed Sec.  683.440.
Sec.  683.400 What are the Federal and State monitoring and oversight 
responsibilities?
    This proposed section identifies the requirements of the Department 
in performing oversight and monitoring of its grant recipients and of 
the Department's grant recipients' responsibility for subrecipients. 
Proposed Sec.  683.400(c) describes the requirements WIOA has placed on 
the States to create a monitoring system for their subrecipients. 
Proposed paragraph (d) also requires the retention of evidence related 
to monitoring functions and resolution actions. This section also 
covers the new requirements under the Uniform Guidance which requires 
an examination of recipient and subrecipient non-discrimination and 
conflict of interest policies, mandatory disclosures of all violations 
of Federal criminal law involving fraud, bribery, or gratuity 
violations potentially affecting the Federal award.
Section 683.410 What are the oversight roles and responsibilities of 
recipients and subrecipients of Federal financial assistance awarded 
under title I of the Workforce Innovation and Opportunity Act and 
Wagner-Peyser?
    This proposed section defines the roles and areas in which 
oversight must be conducted by the recipients and subrecipients, 
including ensuring compliance with relevant rules and developing a 
monitoring system. Proposed paragraph (b) of the section also discusses 
a number of requirements for the States' monitoring systems and the 
Governor's biannual certification. The Department has always placed 
significant emphasis on monitoring as a tool in providing effective 
grants managements and this emphasis is further supported by the 
inclusion of monitoring in the Uniform Guidance. Monitoring and 
oversight also helps in identifying technical assistance needs, areas 
for improvement, and best practices.
Section 683.420 What procedures apply to the resolution of findings 
arising from audits, investigations, monitoring, and oversight reviews?
    Proposed Sec.  683.420(a) describes the steps and procedures that 
must be taken by grant recipients to resolve findings at the 
subrecipient level. For formula funds, sec. 184(a) of WIOA requires 
States to use the procedures they have in place for other Federal grant 
programs or, in the absence of such procedures, write standards for 
this program. Paragraph (a)(2) states that non-formula grant recipients 
must have written monitoring and resolutions procedures that adhere to 
the Uniform Guidance governing monitoring of subrecipients. All 
recipients must ensure that the rules governing the use of WIOA funds 
are being followed, including adherence to cost categories and cost 
limitations. Proposed Sec.  683.420(b) also describes the processes the 
Department will use to resolve findings of its direct grant recipients, 
and proposed paragraph (c) describes the processes to resolve findings 
regarding the non-discrimination provisions in sec. 188 of WIOA.
Section 683.430 How does the Secretary resolve investigative and 
monitoring findings?
    This proposed section describes the actions the Secretary will take 
to resolve findings. This section also describes the process when the 
Grant Officer agrees that the recipient's actions are sufficient to 
resolve a finding and when they are not satisfactory. This proposed 
section implements the requirements of sec. 184(a)(7) of WIOA. Proposed 
Sec.  683.430(b) states that audits from 2 CFR part 200 will be 
resolved through the Grant Officer resolution process described in 
proposed Sec.  683.440.
Section 683.440 What is the Grant Officer resolution process?
    This proposed section describes the Grant Officer's resolution 
process when dissatisfied with the actions taken by the grant recipient 
to resolve findings. This process involves the issuance of an Initial 
Determination followed by a period for informal resolution which allows 
the recipient to work with the Department to provide the necessary 
documentation or take certain action to reach a resolution. At the end 
of that period, the Grant Officer issues a Final Determination with 
findings listing any unresolved issues, establishing any debts, and 
listing required corrective actions, as well as offering the 
opportunity for a hearing. This process is unchanged from the process 
under WIA.
6. Subpart E--Pay-for-Performance Contract Strategies
Introduction
    WIOA's Pay-for-Performance provisions were designed to provide 
flexibility at the local level in an effort to infuse the system with 
more innovation, improve results for participants, and reward providers 
who deliver outstanding results. This regulatory proposal builds on the 
Department's experience with innovations and evidence-based work funded 
under the Workforce Innovation Fund and other Federally authorized 
activities. Moreover, the statute authorizes States to use non-Federal 
funds to establish incentives for Local Boards to implement WIOA Pay-
for-Performance contract strategies. We encourage States to adopt 
evidence-based approaches and innovate in the way they deliver services 
to participants in order to improve outcomes, and recognize that WIOA 
Pay-for-Performance contracting strategies, while still experimental, 
are one promising method to do so.
    A performance-based contract is a contracting strategy that 
establishes specific benchmarks that must be achieved in order for the 
contractor to receive payment. The WIOA Pay-for-Performance contracts 
are a specific form of contracting that, as authorized by WIOA, have 
six distinct characteristics: (1) They must provide adult training 
services described in sec. 134(c)(3) of WIOA or youth activities 
described in sec. 129(c)(2) of WIOA; (2) they must specify a fixed 
amount that will be paid to the service provider based on the 
achievement of specified levels of performance on the performance 
outcomes in sec. 116(b)(2)(A) of WIOA within a defined timetable; (3) 
the performance outcomes achieved must be independently validated using 
high-quality, reliable, and verified data; (4) outcomes must be 
reported in accordance with sec. 116(d)(2)(K) of WIOA; (5) pursuant to 
sec. 3(47)(A) of WIOA, bonuses may be built into WIOA Pay-for-
Performance contracts so long as such bonuses are used to expand the 
contractor's capacity to provide effective training; and (6) there may 
be an extended period of availability to expend funds under Pay-for-
Performance contract strategies. Additionally, the funds obligated for 
WIOA Pay-for-Performance contract strategies are limited to 10 percent 
of the total of the local adult and dislocated worker allotments 
provided under sec. 133(b) of WIOA, and 10 percent of the local youth 
allotment provided under sec. 128(b) of WIOA.
    The WIOA Pay-for-Performance contract strategy is one of several 
innovative strategies WIOA adopts to place a higher emphasis on 
performance outcomes and provider accountability, drive better results, 
and incorporate rigorous evaluation and evidence-based practice into 
the delivery of workforce

[[Page 20754]]

services. The Department intends to support this contracting approach 
by incorporating WIOA Pay-for-Performance into its WIOA performance 
reporting requirements for States in which local areas are adopting 
such a contracting approach.
    The WIOA Pay-for-Performance contract strategy can benefit local 
areas, job seekers, and business customers when used to support 
interventions that have a high probability of success based on prior 
evidence; have measurable outcomes supported with authoritative data 
and strong evaluation methodologies; and are overseen by experienced 
managers that have flexibility to adjust their approach.
    Given the heavy emphasis that WIOA Pay-For-Performance authorities 
place on outcome-based payment and independent validation, the quality 
of local area data and data systems should be of high enough quality to 
be able to (1) reliably and validly establish appropriate performance 
benchmarks for the target population, and (2) support independent 
validation of actual performance outcomes.
    In particular, in order for these contracting mechanisms to work 
effectively and efficiently, they must incorporate measures to prevent 
or account for potential ``creaming'' by service providers, and strong 
data systems are essential to this function. The use of outcome data 
from comparison groups--substantially similar populations who are not 
receiving services through the provider--is one potential method to 
minimize creaming. Another potential method adopted by WIOA to address 
creaming is the use of a statistical adjustment model for (1) the 
establishment of performance targets, and (2) the adjustment of actual 
performance based on economic conditions and the characteristics of the 
participants. In either case, the use of valid and reliable baseline 
data will help to inform appropriate performance targets and that 
strong data systems are necessary to support this approach.
    Additionally, it is important to engage in a feasibility analysis 
before engaging in a WIOA Pay-for-Performance contract, and that these 
analysis should be built into a WIOA Pay-for-Performance contract 
strategy. Such a feasibility analysis could include items like 
assessing the availability and quality of necessary data, including the 
source and cost of such data; determining the target population to be 
served; determining the availability of competent providers; whether 
any other additional professional services are required to support the 
execution of the contract; and reviewing other operational factors that 
would affect the feasibility of the contract.
    The Department is soliciting comments on the appropriate strategies 
to implement different varieties of Pay for Performance contracts, 
including issues involving what components should be included in a Pay-
for-Performance contracting strategy; what factors should be considered 
in a feasibility analysis; which entities should be eligible to enter 
into these contracts; how different varieties of contracts should be 
structured; how to best establish baseline performance information for 
target populations served; how best to prevent or account for creaming; 
the best methods to account for the relative and absolute risk to 
government, the contractor, and other stakeholders when setting payment 
terms; how best to balance the total cost to government against bonus 
and incentive payments included in the contract and potential outcome 
improvements for participants; how comprehensive services can be 
provided in a Pay-for-Performance contract context; and how to 
facilitate the participation of small service providers.
    Because of the requirements contained in statute, the Department is 
considering how best to incorporate reporting into performance and 
fiscal information collection requests, which will be included in the 
performance and fiscal PRA packages, or whether a separate information 
collection is needed. We welcome comments regarding the burden of 
additional reporting requirements, such as specifics about local areas 
utilizing pay-for-performance contract strategies; the service 
providers, the amount of contracts, duration, and monitoring and 
evaluation findings. The Department expects to put performance and 
implementation requirements in place in the future.
Section 683.500 What is a Workforce Innovation and Opportunity Act Pay-
for-Performance contract strategy?
    This proposed section describes the components of a WIOA Pay-for-
Performance contract strategy and describes WIOA Pay-for-Performance 
contract as a specific type of performance-based contract. It draws a 
distinction between the WIOA Pay-for-Performance contract itself and 
the broader goals and strategies surrounding it, which are the 
contracting strategy.
    Local area WIOA Pay-for-Performance contract strategies must 
include: (1) Identification of the problem space and target populations 
for which a local area will pursue a WIOA Pay-for-Performance contract; 
(2) the outcomes the local area would hope to achieve through a Pay-
for-Performance contract relative to baseline performance; (3) the 
acceptable cost associated with implementing such a strategy; (4) a 
feasibility study to determine whether the service delivery strategy to 
be funded is suitable for a WIOA Pay-for-Performance contracting 
strategy; (5) independent validation of the performance outcomes 
achieved under each contract within the strategy prior to payment 
occurring; and (6) a description of how the local area will reallocate 
funds to other activities under the contract strategy in the event a 
service provider does not achieve performance benchmarks under a WIOA 
Pay-for-Performance contract.
    The Department will issue additional guidance to both State and 
local areas on the development of the broader Pay-for-Performance 
contract strategy, including the scope and minimum requirements of the 
required feasibility study.
Section 683.510 What is a Workforce Innovation and Opportunity Act Pay-
for-Performance contract?
    This proposed section defines the requirements associated with a 
WIOA Pay-for-Performance contract, which would be awarded under a WIOA 
Pay-for-Performance contract strategy.
    Paragraph (a) identifies a WIOA Pay-for-Performance contract 
strategy as a type of performance-based contract. A performance-based 
contract is a contracting mechanism that establishes specific 
benchmarks that must be achieved in order for the contractor to receive 
payment. Performance-based contracting in general is defined and 
discussed in subpart 37.6 of the Federal Acquisition Regulation.
    Paragraph (b) articulates that WIOA Pay-for-Performance contracts 
can only be used when they are part of a broader WIOA Pay-for-
Performance Contract Strategy described in Sec.  683.500.
    To be consistent with past practice and with the Uniform Guidance 
at 2 CFR part 200, proposed paragraph (c) prohibits the use of cost-
plus percentage contracts in WIOA Pay-for-Performance contracts.
    The specifications in proposed paragraphs (d) through (f) regarding 
eligible service providers, structure of payments, target populations, 
and program elements are derived directly from the statute, at WIOA 
secs. 3(47), 129(c)(1)(D), 129(c)(2), 134(c)(3), and 134(d)(1)(iii). 
Proposed paragraph (e) specifically requires that the performance 
elements that must be included in any WIOA Pay-for-

[[Page 20755]]

Performance contract are the primary indicators of performance 
described in sec. 116(b)(2)(A) of WIOA and further defined in proposed 
Sec.  677.155. These include:
    i. The percentage of program participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    ii. the percentage of program participants who are in unsubsidized 
employment during the fourth quarter after exit from the program;
    iii. the median earnings of program participants who are in 
unsubsidized employment during the second quarter after exit from the 
program;
    iv. the percentage of program participants who obtain a recognized 
post-secondary credential, or a secondary school diploma or its 
recognized equivalent (subject to sec. 116(b)(iii) of WIOA), during 
participation in or within 1 year after exit from the program;
    v. the percentage of program participants who, during a program 
year, are in an education or training program that leads to a 
recognized post-secondary credential or employment and who are 
achieving measurable skill gains toward such a credential or 
employment; and
    vi. the indicators of effectiveness in serving employers 
established pursuant to sec. 116(b)(iv) of WIOA.
    Proposed paragraph (h) states that under WIOA Pay-for-Performance 
contracts, bonus payments and/or incentive payments are authorized to 
be paid to the service providers who enter into the WIOA Pay-for-
Performance contracts. Such bonus payments must be used to expand the 
contractor's capacity to provide effective training. These payments are 
authorized by sec. 3(47)(A) of WIOA. Incentive payments must be 
consistent with incentive payments for performance-based contracting as 
described in the Federal Acquisition Regulation. WIOA Pay-For-
Performance contracts may also utilize positive and negative incentives 
to other forms of performance-based contracts. To be consistent with 
performance-based contracting and in alignment with WIOA Pay-for-
Performance contract characteristics, such as recognizing high 
performers and providing boards with flexibility to make adjustments, 
incentive payments should be based on the total and relative amount of 
risk incurred by the service provider or contractor versus that 
incurred by the local area or other stakeholders.
    Because the Department is responsible for reporting on local 
outcomes annually to Congress, as well as providing recommendations for 
improvements in and adjustments to WIOA Pay-for-Performance contract 
strategies, proposed paragraph (i) requires specific reporting by the 
local areas to the State regarding the performance outcomes achieved by 
the service providers that enter into WIOA Pay-for-Performance 
contracts. Additionally, proposed paragraph (j) requires independent 
validation of a contractor's achievement of performance benchmarks 
under a WIOA Pay-for-Performance contract, as required by sec. 3(47)(B) 
of WIOA, and requires that this validation be based on high-quality, 
reliable, and verified data. The Secretary will issue guidance related 
to standards for independent evaluation as part of its Pay-for-
Performance guidance to States and local areas.
    Paragraph (k) indicates that the Secretary may issue additional 
guidance related to use of WIOA Pay-for-Performance contracts.
    Under WIA, many Workforce Development Boards utilized elements of 
performance-based contracts with training providers. These contracts 
incorporated performance outcomes that contractors were required to 
meet to obtain payment. However, these contracts did not contain 
required elements of a WIOA Pay-for-Performance contract articulated in 
this section. The Department encourages local areas to refocus these 
traditional performance-based contracts to place an emphasis on the 
contractor achieving outcomes like participants obtaining and retaining 
good jobs, rather than outputs like the number of people served. Also, 
the provision for the inclusion of bonus payments is limited to WIOA 
Pay-For-Performance contracts. Contracts that are not executed under 
the WIOA Pay-For-Performance contracting authority may continue to 
include performance incentives, either positive or negative or both, in 
compliance with the Federal Acquisition Regulation. Workforce 
Development Boards may continue to use performance-based contracts that 
are not WIOA Pay-for-Performance contracts. The 10 percent limitation 
provisions in secs. 129(c)(1)(D) and 134(d)(1)(A)(iii) of WIOA only 
apply to WIOA Pay-for-Performance contract strategies, including WIOA 
Pay-for-Performance contracts.
Section 683.520 What funds can be used for Workforce Innovation and 
Opportunity Act Pay-for-Performance contract strategies?
    This proposed section restates the WIOA requirements that funds 
allocated under secs. 133(b)(2) and (3) of WIOA can be used for WIOA 
Pay-for-Performance contract strategies providing adults and dislocated 
worker training, and funds allocated under sec. 128(b) of WIOA can be 
used for WIOA Pay-for-Performance contract strategies providing youth 
activities. No more than 10 percent of the total local adult and 
dislocated worker allotments can be expended on the implementation of 
WIOA Pay-for-Performance contract strategies for adult training 
services described in sec. 134(c)(3) of WIOA. No more than 10 percent 
of the local youth allotment can be expended on the implementation of 
WIOA Pay-for-Performance contract strategies for youth training 
services and other activities described in secs. 129(c)(1) and (c)(2) 
of WIOA. There is no limit on the use of funds for typical performance-
based contracts, as defined in the Federal Acquisition Regulation. The 
10 percent limits apply only to those performance-based contracts that 
are WIOA Pay-for-Performance contract strategies as defined above.
Section 683.530 How long are funds used for Workforce Innovation and 
Opportunity Act Pay-for-Performance contract strategies available?
    Section 189(g)(2)(D) of WIOA specifies that funds used for WIOA 
Pay-for-Performance contract strategies are available until expended. 
This allows local areas to structure contracts that include time-
intensive service delivery strategies and/or that structure payments 
based on outcomes that may take longer to achieve, measure, and 
validate than the typical 2-year funding availability of local area 
funds. Funds that are obligated but not expended due to contractor not 
achieving the levels of performance specified in a WIOA Pay-for-
Performance contract may be reallocated for further activities related 
to WIOA Pay-for-Performance contract strategies only. This also allows 
the local area to realize one of the benefits of performance-based 
contracting strategies--the local area does not pay a financial penalty 
for contracted services that do not achieve the stated outcomes. This 
provision gives the local area the discretion to choose whether to use 
the funds for these strategies, and if the local area so chooses, the 
funds will remain available until expended. This will require new grant 
management practices for local areas that choose to carry out WIOA Pay-
for-Performance strategies. The Department will issue guidance to 
explain these new practices and we welcome comments with suggestions on 
how to maximize the use of these contract strategies and the expanded 
availability of the funds.

[[Page 20756]]

Section 683.540 What is the State's role in assisting local areas in 
using Workforce Innovation and Opportunity Act Pay-for-Performance 
contract strategies?
    This proposed section describes both allowable and required State 
activities related to WIOA Pay-for-Performance contract strategies. The 
section indicates that States may provide technical assistance to local 
areas, including assistance with structuring WIOA Pay-for-Performance 
contracting strategies, performance data collection, meeting 
performance data entry requirements, and identifying levels of 
performance. This technical assistance can help local areas move 
forward in using this contracting strategy. Additionally, the State may 
either conduct evaluations of such strategies and/or provide technical 
assistance to locals regarding the importance of evaluation of Pay-for-
Performance contract strategies. The State and local areas may conduct 
their own evaluations of the WIOA Pay-for-Performance contracts, or 
procure an independent evaluator. The Department welcomes comments 
regarding use of independent evaluators and whether the cost of such 
evaluations is feasible within the amount of funds available to local 
areas for pay-for-performance contracts. The Department also seeks 
comments on how the Department might facilitate local areas' ability to 
conduct evaluations. Further, sec. 116(h) of WIOA authorizes States to 
use non-Federal funds to incentivize use of WIOA Pay-for-Performance 
contract strategies for the delivery of training services or youth 
activities by Local Boards.
    This section also identifies required activities States must 
undertake if a local area implements at WIOA Pay-for-Performance 
contract strategy. Because of the unique reporting requirements in sec. 
116(d)(2)(K) for WIOA Pay-for-Performance contracts, the performance 
section of this proposed rule, as well as the forthcoming Information 
Collection Request package, will clearly articulate the State's 
responsibility to track and report data on the primary indicators of 
performance as well as the State and local evaluations of the design of 
the programs and performance of WIOA Pay-for-Performance contract 
strategies and, where possible, the level of satisfaction with the 
strategies among employers and participants benefitting from the 
strategies.
    The State must also monitor local areas' use of WIOA Pay-for-
Performance contracts to ensure compliance with the following: The 
required elements listed in Sec.  683.500, the contract specifications 
in Sec.  683.510, State procurement policies, the 10 percent 
limitations, and achievement of performance benchmarks.
7. Subpart F--Grievance Procedures, Complaints, and State Appeals 
Processes
    This subpart provides regulations governing the grievance, 
complaint, and appeals procedures that apply at the State and local 
level and to discretionary grantees under WIOA, as well as appeals to 
the Secretary. Providing clear rules for resolving complaints and 
filing appeals promotes transparency and fairness, which are 
fundamental requirements of the workforce investment system grant 
process. Included are rules governing the appeals of local area non-
designation, denial or termination of training provider eligibility, 
and appeals of formula program participants who are tested or 
sanctioned for the use of controlled substances. Appeals of the 
Governor's imposition of sanctions for substantial violations of fiscal 
or other substantive requirements or performance failures under WIOA 
title I are also addressed. Finally, this subpart explains the process 
of reporting information and complaints involving criminal fraud, 
waste, abuse, or other criminal activity under WIOA.
Section 683.600 What local area, State and direct recipient grievance 
procedures must be established?
    This proposed section requires local areas, States, outlying areas, 
and direct grant recipients of WIOA title I funds to establish and 
maintain a procedure for grievances and complaints, including appeals 
as appropriate, and describes what the procedure much include, as 
required by WIOA sec. 181(c)(1). While this section of WIOA does not 
require outlying areas or direct grant recipients to establish such 
procedures, the Department has included them in this section to ensure 
that all participants receiving services under title I of WIOA have the 
same opportunity to report and receive relief from the negative actions 
of the WIOA funded grantees.
    This proposed section also clarifies that allegations of violations 
of the non-discrimination provisions of WIOA are subject to the 
policies and procedures described in 29 CFR part 37, which is 
administered by the Department's Civil Rights Center, and that 
complaint and grievance procedures related to Job Corps are in part 686 
of this title. This section retains the same requirements found at 20 
CFR 667.600.
Section 683.610 What processes does the Secretary use to review 
grievances and complaints of title I recipients?
    This proposed section describes the situations in which the 
Department will review allegations, and the procedures that the 
Secretary will use, that arise through local, State, and other direct 
recipient grievance procedures in accordance with WIOA sec. 184(c)(2). 
This section retains the same requirements found at 20 CFR 667.610.
Section 683.620 How are complaints and reports of criminal fraud and 
abuse addressed under the Workforce Innovation and Opportunity Act?
    This proposed section provides the requirements for reporting 
information and complaints involving non-criminal complaints and 
criminal fraud, waste, abuse or other criminal activity through the 
Department's Incident Reporting System to the Department's Office of 
the Inspector General. This section retains the same requirements found 
at 20 CFR 667.630.
Section 683.630 What additional appeal processes or systems must a 
State have for the Workforce Innovation and Opportunity Act program?
    This proposed section describes the processes and systems that a 
State must establish to hear appeals of: Entities that are denied 
initial or subsequent designation as a local area; training service 
providers that are denied eligibility as providers of training 
services; and WIOA title I subtitle B participants who are subject to 
testing or sanctions for the use of controlled substances. The section 
restates the WIOA appeal requirements in secs. 106(b)(5) (local area 
non-designation), 122 (training provider eligibility denial or 
termination); 181(f) (participant testing and sanctioning for use of 
controlled substances).
Section 683.640 What procedures apply to the appeals of non-designation 
of local areas?
    This proposed section describes the procedures that apply when a 
State Board denies an appeal for initial or subsequent designation of a 
local area made by a unit of local government or grant recipient under 
Sec.  683.630(a). This section restates and implements the appeal 
requirements required by WIOA sec. 106(b)(5).

[[Page 20757]]

Section 683.650 What procedures apply to the appeals of the Governor's 
imposition of sanctions for substantial violations or performance 
failures by a local area?
    This proposed section describes the procedures that apply to 
appeals of the Governor's imposition of sanctions for substantial 
violations of fiscal or other substantive requirements of title I of 
WIOA or of performance failures by local areas.
8. Subpart G--Sanctions, Corrective Actions, and Waiver of Liability
    While technical assistance, oversight, and monitoring are tools to 
ensure compliance with program and funding requirements, sanctions and 
corrective action plans are necessary where those tools fail. This 
subpart addresses sanctions and corrective actions, waiver of 
liability, advance approval of contemplated corrective actions, as well 
as the offset and State deduction provision. Of particular note in this 
subpart are the procedures for allowing a waiver of liability or an 
offset from other funds owed to the recipient. The statutory provisions 
are largely unchanged from those under WIA, though the Uniform Guidance 
has resulted in some changes to this subpart.
Section 683.700 When can the Secretary impose sanctions and corrective 
actions on recipients and subrecipients of title I Workforce Innovation 
and Opportunity Act funds?
    This proposed section describes the procedures and circumstances 
under which the Department will impose sanctions or take corrective 
actions, as described in sec. 184(b) and (e), against States, local 
areas, and grant recipients and subrecipients. For actions other than 
those under WIOA sec. 188(a), the process outlined in Sec.  683.440 
will be used before corrective actions or sanctions are taken against 
direct recipients. This section also gives the Grant Officer the 
authority to take direct action against local areas or other 
subrecipients, which will also be done using the process in Sec.  
683.440. This section also clarifies that the procedures described at 
20 CFR part 677 will be used to impose a sanction or corrective action 
for a violation of sec. 116 of WIOA. This section generally implements 
sec. 184 of WIOA and retains the same requirements found at 20 CFR 
667.700. The Department seeks comments on appropriate sanctions and 
corrective actions in a variety of circumstances.
Section 683.710 Who is responsible for funds provided under title I and 
Wagner-Peyser?
    This proposed section identifies the recipient as the responsible 
party for title I and Wagner-Peyser funds. For local areas receiving 
funds, this section explains how to identify the responsible party. 
Where a planning region includes two separate units of local 
government, the CEO of each unit of local government would be the 
responsible party. The general rule of recipient responsibility arises 
from the Uniform Guidance, while the rules pertaining to local areas 
come from WIOA sec. 184.
Section 683.720 What actions are required to address the failure of a 
local area to comply with the applicable uniform administrative 
provisions?
    This proposed section requires the Governor to take corrective 
action and impose sanctions on a local area if it fails to comply with 
the requirements described in the section. This section also describes 
the local area's appeal rights and actions the Secretary may take if 
the Governor fails to monitor and certify local areas' compliance or 
promptly take corrective action to bring the local area into 
compliance. The requirements in this section are taken from WIOA sec. 
184.
Section 683.730 When can the Secretary waive the imposition of 
sanctions?
    This proposed section permits a recipient to request a waiver of 
liability, and describes the factors the Grant Officer will consider 
when determining whether to grant the request. This provision 
implements sec. 184(d) of WIOA and retains the same requirements found 
at 20 CFR 667.720.
Section 683.740 What is the procedure to handle a recipient of title I 
Workforce Innovation and Opportunity Act funds' request for advance 
approval of contemplated corrective actions?
    This proposed section describes the procedures which a recipient 
must use to request advance approval of corrective action from the 
Department. It describes the factors the Grant Officer will consider 
and when advance approval may be appropriate. This provision implements 
sec. 184(d) of WIOA and retains the same requirements found at 20 CFR 
667.730.
Section 683.750 What procedure must be used for administering the 
offset/deduction provisions of the Workforce Innovation and Opportunity 
Act?
    This proposed section outlines the steps that must be taken in 
order for the Department to consider and allow an offset or deduction 
of a debt, including the offset rules for direct recipients and the 
rule for a State making a deduction from a subrecipient's PY 
allocation. This section implements the requirements of WIOA sec. 
184(c)(2).
9. Subpart H--Administrative Adjudication and Judicial Review
    This subpart specifies those actions which may be appealed to the 
Department's Office of Administrative Law Judges (OALJ), and the rules 
of procedure and timing of decisions for OALJ hearings as well as the 
process for judicial review by a United States Circuit Court of 
Appeals. This subpart is similar to that currently in effect under WIA 
because the WIOA statute itself had only minor changes to the 
requirements in this subpart.
Section 683.800 What actions of the Department may be appealed to the 
Office of Administrative Law Judges?
    This proposed section outlines the actions that can be appealed 
through an Administrative Law Judge (ALJ) under WIOA sec. 186(a), 
including a determination to not award financial assistance or a 
corrective action or sanction against a recipient or subrecipient. This 
section describes the appeal deadlines and the contents that an 
applicant is required to include in its appeal request. Paragraph (e) 
states that these procedures also apply when parties fail to reach 
resolution through the process described in Sec.  683.840.
Sec.  683.810 What rules of procedure apply to hearings conducted under 
this subpart?
    This proposed section adopts the rules of procedure for hearings 
conducted before the OALJ found at 29 CFR part 18, with some 
clarifications. This section also describes the Secretary's subpoena 
authority under WIOA. Finally, this section sets forth the burdens of 
production and persuasion in hearings conducted under this subpart. Per 
paragraph (c), the grant officer has the initial burden of production, 
which is satisfied by the submission of an administrative file. After 
the grant officer submits the administrative file, the party seeking to 
overturn the Grant Officer's determination has the burden of 
persuasion. This section retains the same requirements found at 20 CFR 
667.810.

[[Page 20758]]

Section 683.820 What authority does the Administrative Law Judge have 
in ordering relief as an outcome of an administrative hearing?
    This section, which applies to all discretionary grants issued 
under subpart D of title I of WIOA, specifies the remedies that an ALJ 
may award. Paragraph (a) applies to cases other than grant selection 
cases and is unchanged from the WIA regulation.
    Paragraph (b) specifies the remedies for grant selection cases, and 
is largely drawn from the Senior Community Service Employment Program 
remedies provision found at 20 CFR 641.470. This section gives the 
Grant Officer discretion to ensure that project beneficiaries (i.e., an 
entity awarded financial assistance) will not be unduly negatively 
impacted by the implementation of remedies resulting from a grant 
selection appeal.
    Proposed paragraphs (b)(1) and (2) state that upon receipt of an 
ALJ finding the application review process must be corrected or that an 
appealing entity should have been awarded funding, the Grant Officer 
will be required to take certain steps to determine whether the funding 
must be awarded to that entity. In determining whether the funds will 
be awarded to the appealing entity, the Grant Officer must take into 
account whether such a move would be in the interest of project 
beneficiaries and whether it would cause undue disruption to the 
participants and the program. In the event the Grant Officer determines 
that the appealing entity will not receive the funds, entities without 
an approved Negotiated Indirect Cost Rate Agreement (NICRA) will 
receive reasonable application preparation costs (under 2 CFR 200.460, 
for entities with an approved NICRA, application preparation costs may 
be included in their indirect cost pool and therefore are recouped from 
their indirect costs to other Federal grant awards). In the event that 
the Grant Officer determines that the appealing entity will receive the 
funds, that entity will only receive funds that have not yet been 
obligated by the current grantee.
    Finally, the Grant Officer will provide notification to the current 
grantee within 10 days of its decision, and that the current grantee 
may appeal the Grant Officer's determination using the appeal 
procedures described in 20 CFR 683.800.
Section 683.830 When will the Administrative Law Judge issue a 
decision?
    This section describes the timeframe in which an ALJ must make a 
decision to avoid any unnecessary delays. It also describes the 
parties' appeal rights, as stated in WIOA sec. 186(b).
Section 683.840 Is there an alternative dispute resolution process that 
may be used in place of an Office of Administrative Law Judges hearing?
    This section describes the available alternative an entity may use 
to seek resolution other than a hearing process. The outcome of this 
process is considered the equivalent of the final decision of an ALJ. 
The purpose of this provision is to offer entities a less formal, less 
burdensome, and more interactive appeal process.
Section 683.850 Is there judicial review of a final order of the 
Secretary issued under the Workforce Innovation and Opportunity Act?
    This section outlines the steps a party to a final order must take 
to obtain judicial review in a United States Circuit Court of Appeals 
of any decision made by the Secretary under WIOA sec. 184 or 186, as 
well as the deadlines for seeking review. This provision summarizes the 
requirements of WIOA sec. 187.

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

1. Introduction
    Because sec. 166 of WIOA retains many of the requirements of sec. 
166 of WIA, the Department has drawn on the WIA regulations, found at 
20 CFR part 668, in drafting the regulations for sec. 166 of WIOA. 
Consequently, many of the sections in this part retain the requirements 
found in their parallel sections of the WIA regulations. This preamble 
details the Department's reasons for changing any of the previous 
requirements under the WIA regulations on a paragraph by paragraph 
basis. However, some changes to the requirements under the WIA 
regulations affect so many paragraphs that they are noted in the 
introduction to the preamble instead of noting them every time that 
they occur.
    First, proposed part 684 seeks to streamline the competitive 
process for awarding the Indian and Native American (INA) program 
grants. Section 166 of WIOA is unusual in that it requires both that 
grants be awarded through a competitive process and that grantees 
submit a 4-year plan (WIOA secs. 166(c) and 166(e)). Under the WIA 
regulations, the competition was separate from the plan. These WIOA 
regulations propose to streamline the grant award process to ease the 
administrative redundancy inherent in the WIA regulations. The 
Department will no longer designate grantees or require a notice of 
intent. Moreover, the proposed WIOA regulations have incorporated the 
4-year plan into the competitive grant award process. The Department 
anticipates that these changes will help streamline the process for 
awarding grants. These proposed changes should result in less of an 
administrative burden on both applicants and the Department.
    Additionally, although WIA had a 2-year grant cycle for grantees 
under sec. 166, WIOA has established a 4-year grant cycle (WIOA secs. 
166(c) and 166(e)). Consequently, all references to the grant cycle or 
plan in the proposed WIOA regulations refer to a 4-year cycle or 4-year 
plan.
    Finally, to ensure that the terms used to discuss the populations 
and entities that will be served, as described in sec. 166(d) of WIOA, 
are consistent throughout the proposed regulation, the Department 
proposes to define the term ``INA'' to mean American Indian, Native 
American, Alaska Native, and Native Hawaiian in proposed Sec.  684.130. 
This term provides an efficient way to ensure inclusivity and 
consistency in this part.
2. Subpart A--Purposes and Policies
Section 684.100 What is the purpose of the programs established to 
serve Indians and Native Americans under the Workforce Innovation and 
Opportunity Act?
    Proposed Sec.  684.100 describes the purpose of WIOA for the INA 
programs authorized by WIOA sec. 166.
    Proposed Sec.  684.100(a) retains the same requirements found in 
the WIA regulations at 20 CFR 684.100(a) except that Sec.  
684.100(a)(2) includes entrepreneurial skills as part of the purpose of 
the program in order to implement and carry out the entrepreneurial 
skills requirement in sec. 166(a)(1)(B) of WIOA.
    Proposed Sec.  684.100(b) describes the principle means of 
accomplishing the purpose described in Sec.  684.100. Because the 
Department has determined that no substantial changes were necessary to 
implement WIOA, the proposed regulation retains the same requirements 
found in the WIA regulations at 20 CFR 668.100(b) with the exception 
that it references the principles of the Indian Self-Determination and 
Education Assistance Act (ISDEAA). This reference to the principles of 
the ISDEAA directly aligns with sec. 166(a)(2) of WIOA.

[[Page 20759]]

Section 684.110 How must Indian and Native American programs be 
administered?
    Proposed Sec.  684.110(a) describes how the Department will 
administer the INA program. Because no changes were necessary to this 
section to implement WIOA, this proposed section retains the same 
requirements as the WIA regulations at 20 CFR 668.120.
    Proposed Sec.  684.110(b) states that the Department will follow 
the Congressional declaration of policy set forth in the Indian Self-
Determination and Education Assistance Act (ISDEAA), at 25 U.S.C. 450a, 
as well as the Department of Labor's American Indian and Alaska Native 
policies in administering these programs. These policies include DOL's 
``American Indian and Alaska Native Policy,'' dated July 29, 1998 and 
the ``Tribal Consultation Policy'' published in the Federal Register on 
December 4, 2012 (77 FR 71833). This is consistent with WIOA because 
WIOA sec. 166(a)(2) incorporates the principles of the ISDEAA and the 
other two policies are important works of guidance on consultation and 
coordination with INA parties.
    Proposed Sec.  684.110(c) and (d) describe the trust 
responsibilities of the Federal government and the designation of the 
Division of Indian and Native American Programs (DINAP) within ETA. 
Because the Department has determined that no changes were necessary to 
these regulations to implement WIOA, these proposed regulations retain 
the same requirements at 20 CFR 668.120(c) and (d).
    Proposed Sec.  668.120(e) describes the establishment of 
administrative procedures of the INA programs. 20 CFR 668.120(e) 
required that the Department utilize staff with a particular competence 
in this field for administration of the program. Although the 
Department is still committed to the utilization of competent staff, 
the proposed regulation does not retain this requirement as this 
language was not included in WIOA. The rest of the proposed regulation 
retains the same requirements at 20 CFR 668.120(e) because the 
Department has determined that no changes were necessary to implement 
WIOA.
Section 684.120 What obligation does the Department have to consult 
with the Indian and Native American grantee community in developing 
rules, regulations, and standards of accountability for Indian and 
Native American programs?
    Proposed Sec.  684.120 describes the obligation the Department has 
in consulting with the INA grantee community in developing rules, 
regulations, and standards of accountability for INA programs. This 
proposed section retains the same requirements found in the WIA 
regulations at 20 CFR 668.130, except that it adds new language 
referencing the Department's tribal consultation policy, which was 
published in the Federal Register on December 4, 2012, and Executive 
Order (E.O.) 13175 of November 6, 2000, which requires Federal agencies 
to engage in regular and meaningful consultation and collaboration with 
tribal officials in the development of Federal policies that have 
tribal implications and are responsible for strengthening the 
government-to-government relationship between the United States and 
Indian tribes. Section 166(i)(2) of WIOA states that the Secretary must 
consult with Indian tribes, tribal organizations, Alaska Native 
entities, Indian-controlled organizations serving Indians, and Native 
Hawaiian organizations in establishing regulations to carry out WIOA 
sec. 166 and develop a funding distribution plan for the INA program. 
In addition, sec. 166(i)(4)(A) of WIOA states that the Secretary must 
establish a Native American Employment and Training Council to 
facilitate consultation and provide advice on the operation and 
administration of the WIOA INA programs, including the selection of the 
individual appointed as the head of DINAP. While it is not specified in 
WIOA, by referencing the tribal consultation policy in this proposed 
section, the Department proposes that the consultation requirements 
referenced in WIOA must be coordinated with the Department's tribal 
consultation policy published in the Federal Register on December 4, 
2012 and E.O. 13175 of November 6, 2000. However, the Department notes 
that although these consultation policies must be coordinated, they are 
also separate. The Native American Employment and Training Council 
represents all of the INA grantee community but it does not necessarily 
serve as the primary vehicle through which the Federal government 
fulfills its obligation to consult with tribes.
Section 684.130 What definitions apply to terms used in the regulations 
in this part?
    Proposed Sec.  684.130 provides definitions to terms used in 
proposed part 684 that have not been defined in secs. 3 or 166 of WIOA 
or Sec.  675.300 of these proposed regulations. Because the Department 
has determined that no changes were necessary to the definitions used 
in 20 CFR 668.150, we have retained those definitions as included in 
the WIA regulations without change. These include the definitions for 
the terms ``DINAP,'' ``Governing body,'' ``Grant Officer,'' and 
``Underemployed.'' The Department has not retained the term ``NEW'' 
because it is not used in this proposed subpart. However, to provide 
additional clarity in these proposed regulations, the Department has 
included definitions for nine additional terms.
    Alaska Native-Controlled Organization--This definition clarifies 
that an entity applying for WIOA sec. 166 funds as an Alaska Native-
Controlled Organization must have a governing board in which 51 percent 
of the members are Alaska Natives, to ensure that entities that receive 
WIOA sec. 166 funds as an Alaska Native-Controlled Organization are 
comprised of representatives from the communities they serve.
    Carry-In--The Department is providing a definition of carry-in to 
clarify our process at Sec.  684.254(d) for reallocating funds unspent 
at the end of a PY. This definition is consistent with current practice 
and the process for reallocating funds is explained in more detail in 
the preamble for Sec.  684.270(d).
    High-Poverty Area--A definition of ``high-poverty area'' has been 
included to reflect the inclusion of the phrase in WIOA. Section 
129(a)(2) of WIOA provides a special rule for the youth program that 
includes the term ``high-poverty area'' but does not define that term. 
This proposed part references sec. 129 of WIOA in implementing the 
youth INA program. Therefore the Department proposes to provide a 
definition for high-poverty area in these regulations. The Department 
has chosen to employ the American Community Survey 5-Year Data because 
it is the only source data that uniformly collects the income level of 
individuals across all geographic service areas in the United States.
    Incumbent Grantee--This term is used in several places in the 
regulations including the regulations that define which entities are 
eligible to apply for a WIOA sec. 166 grant. Therefore the Department 
is providing a definition to

[[Page 20760]]

make clear which entities are considered incumbent grantees as referred 
to in the regulations.
    INA--Throughout proposed part 684, the Department refers to 
American Indians, Native Americans, Alaska Natives, and Native 
Hawaiians. To ensure consistency and inclusiveness the Department 
decided to use a single term, INA, when referencing all four groups.
    Indian-Controlled Organization--This definition clarifies the 
qualifications for an organization to be an Indian-Controlled 
Organization and is intended to ensure that entities that receive WIOA 
sec. 166 funds as Indian-controlled entities are comprised of 
representatives from the communities they serve.
    Native Hawaiian-Controlled Organization--This definition clarifies 
that an entity applying for WIOA sec. 166 funds as a Native Hawaiian-
controlled organization must have a governing board in which 51 percent 
of the members are Native Hawaiians. The purpose is to ensure that 
entities that receive WIOA sec. 166 funds as a Native Hawaiian entity 
are comprised of representatives from the communities they serve.
    Total Funds Available--This term is used in the definition of 
carry-in. The Department is providing a definition to clarify what is 
meant by total funds available as it affects the amount of carry-in a 
grantee may have and whether such carry-in is considered excessive. 
Available funds do not include carry-in funds. This definition is 
consistent with current practice and the process for reallocating funds 
is explained in more detail in the preamble for Sec.  684.270(d).
3. Subpart B--Service Delivery Systems Applicable to Section 166 
Programs
Section 684.200 What are the requirements to apply for a Workforce 
Innovation and Opportunity Act grant?
    Proposed Sec.  684.200(a)(1) establishes the eligibility 
requirements to apply for a WIOA sec. 166 grant. Because the Department 
has determined that no changes were necessary to this section to 
implement WIOA, this proposed section retains the same requirements 
found at the WIA regulations at 20 CFR 668.200(a)(1), except that we 
have required that all members of a consortium must be one of the 
listed entities to insure the input, authority, and autonomy of the INA 
entities listed in sec. 166(c) of WIOA. To be eligible, entities must 
also meet the requirements of Sec.  684.200(c); Sec.  684.200(a) just 
provides further detail about the legal shape eligible entities might 
take. For example, the application for a tribe might be submitted by 
the tribal government. Additionally, a non-profit might be an Indian-
controlled organization.
    Proposed Sec.  684.200(a)(2) describes a $100,000 minimum funding 
award amount that is required in order to receive a WIOA sec. 166 
grant. There is an exception for INA grantees participating in the 
demonstration program under Public Law 102-477; under this exception, 
if all resources to be consolidated under Public Law 102-477 total 
$100,000, only $20,000 must be derived from sec. 166 funds. Under 
proposed Sec.  684.200(a)(2), there is no exception to the requirement 
that at least $20,000 of all resources to be consolidated under Public 
Law 102-477 must be derived from WIOA sec. 166 funds. Awards for less 
than $20,000 do not provide sufficient funds to effectively operate an 
employment and training grant. Therefore, under WIOA, all sec. 166 
funding awards must be equal to or greater than $20,000 in order to 
apply for a grant under Public Law 102-477 except for incumbent Public 
Law 102-477 grantees that are receiving WIA funding as of the date of 
implementation of WIOA. These grantees will be grandfathered into the 
program because the advantage of requiring these grantees to meet the 
$20,000 minimum does not outweigh the advantages of allowing these 
grantees to continue with programs that have already been approved.
    Proposed Sec.  668.200(b) describes the types of entities that may 
make up a consortium. The proposed section requires that each member of 
a consortium meets the requirements. To ensure that all INA grantees 
sufficiently represent the interests of the INA community, the 
Department has decided to require that every member of a consortium 
must meet the requirements at proposed Sec.  668.200(a).
    Proposed Sec.  684.200(b)(1) through (3) describe the requirements 
for entities to apply for WIOA sec. 166 funds as a consortium. Because 
the Department has determined that no changes were necessary to this 
section to implement WIOA, this proposed section retains the same 
requirements found at 20 CFR 668.200(b)(1) through (3).
    Proposed Sec.  684.200(c) describes the entities that are 
potentially eligible to receive WIOA sec. 166 funds. Because the 
Department has determined that no changes were necessary to this 
section to implement WIOA, this proposed section retains the same 
requirements found at 20 CFR 668.200(c).
    Proposed Sec.  684.200(d) explains that State-recognized tribal 
organizations will be considered to be ``Indian-controlled'' 
organizations for WIOA sec. 166 purposes, assuming they meet the 
definition of an Indian-controlled organization as defined at Sec.  
684.130. The proposed section also states that State-recognized tribes 
that do not meet this definition but are grantees under WIA will be 
grandfathered into WIOA as Indian-controlled organizations. State-
recognized tribal organizations that meet the definition of an Indian-
controlled organization can apply for a WIOA sec. 166 grant because 
they otherwise meet the eligibility requirements for an Indian-
controlled organization, which ensures that they are comprised of 
representatives of the community they serve. State-recognized tribes 
that are grantees under WIA may be grandfathered in because allowing 
grantees that have successfully provided services to continue providing 
those services is consistent with the objectives of WIOA sec. 166.
Section 684.210 What priority for awarding grants is given to eligible 
organizations?
    Proposed Sec.  684.210(a) states that Federally-recognized Indian 
tribes, Alaska Native entities, or a consortium of such entities will 
have the highest priority to receive grants for those geographic 
service areas in which the Indian Tribe, Alaska Native entity, or a 
consortium of such entities has legal jurisdiction, such as an Indian 
reservation, Oklahoma Tribal Service Area (OTSA) or Alaska Native 
Village Service Area (ANVSA). The Department recognizes that Federally-
recognized tribes are sovereign governments that often have reservation 
areas over which they have legal jurisdiction. Accordingly, consistent 
with current practice, it is the Department's position that when a 
tribe has legal jurisdiction over a geographic service area such as an 
Indian reservation or OTSA, the Department will award sec. 166 grants 
to serve such areas to that tribe if it meets the requirements for 
receiving a grant.
    Proposed Sec.  684.210(b) states that if the Department decides not 
to make an award to an Indian tribe or Alaska Native entity that has 
legal jurisdiction over a service area--for example if a Federally-
recognized tribe is not eligible to apply for a WIOA grant or does not 
have the ability to administer Federal funds--the Department will 
consult with that tribe or Alaska Native entity before selecting an 
entity to serve the tribe's legal jurisdictional area. As described in 
the preamble to Sec.  684.120,

[[Page 20761]]

consultation with tribes and Alaska Native entities about the service 
areas over which they have legal jurisdiction is integral to the 
principles of Indian self-determination. However, to ensure that the 
INA individuals residing in this service area receive services, Sec.  
684.210(b) does not require prior approval of the entity with legal 
jurisdiction.
    Proposed Sec.  684.210(c) clarifies that the priority described in 
paragraphs (a) and (b) does not apply to service areas outside the 
legal jurisdiction of an Indian tribe or Alaska Native entity. The 
Department does not believe that the same priority is warranted outside 
the legal jurisdiction of Indian tribes and Alaska Native entities.
Section 684.220 What is the process for applying for a Workforce 
Innovation and Opportunity Act grant?
    Proposed Sec.  684.220(a) describes when the competitive grant 
application process takes place. The process described aligns this 
proposed section with the requirements at secs. 166(c) and (e) of WIOA 
and with the streamlining of the application process, which is 
discussed in further detail in the introduction to this proposed part.
    Proposed Sec.  684.220(b) provides clarification on which 
applicants are required to submit a 4-year plan, as described at 
proposed Sec.  684.710. The Department has decided to exclude entities 
that have been granted approval to transfer their WIOA funds pursuant 
to Public Law 102-477 from this requirement because the intent of 
Public Law 102-477 is to allow Federally-recognized tribes and Alaska 
Native entities to combine formula-funded Federal grant funds, which 
are employment and training-related, into a single plan with a single 
budget and a single reporting system.
Section 684.230 What appeal rights are available to entities that are 
denied a grant award?
    Proposed Sec.  684.230 describes the appeal rights for entities 
that are denied a grant award in whole or in part. There is no appeal 
process specifically for sec. 166 grants; however, the Department 
proposes to follow the appeal process described at proposed Sec. Sec.  
683.800 and 683.840, which allow entities that are denied a grant award 
an opportunity to appeal the denial to the Office of the Administrative 
Law Judges. Because the Department has determined that no changes were 
necessary to this section to implement WIOA, this proposed section 
retains the same requirements found at 20 CFR 668.270.
Section 684.240 Are there any other ways in which an entity may be 
awarded a Workforce Innovation and Opportunity Act grant?
    Proposed Sec.  684.240 describes other ways in which an entity may 
be granted an award under this proposed subpart if areas would 
otherwise go unserved.
Section 684.250 Can an Indian and Native American grantee's grant award 
be terminated?
    Proposed Sec.  684.250(a) states that a grant award can be 
terminated for cause, or due to emergency circumstances under the 
Secretary's authority at sec. 184(e) of WIOA. This proposed section 
retains substantively the same requirements found in the WIA 
regulations at 20 CFR 668.290(a). The Department notes that if a grant 
is terminated under sec. 184(e) of WIOA, the grantee must be given 
prompt notice and opportunity for a hearing within 30 days after the 
termination.
    Proposed Sec.  684.250(b) describes the circumstances under which 
an award may be terminated for cause. Because the Department has 
determined that no changes were necessary to this section to implement 
WIOA, this proposed section retains the same requirements found at 20 
CFR 668.290(b).
Section 684.260 Does the Department have to award a grant for every 
part of the country?
    Proposed Sec.  684.260 states that the Department is not required 
to provide grant funds to every part of the country. This proposed 
section retains similar requirements in the WIA regulations at 20 CFR 
668.294, with the exception that the Department clarified that funds 
not allocated to a service area will be distributed to existing INA 
grantees consistent with current practice.
Section 684.270 How are Workforce Innovation and Opportunity Act funds 
allocated to Indian and Native American program grantees?
    Proposed Sec.  684. 270(a) through (c) describe how funds will be 
allocated to INA grantees. Because the Department has determined that 
no substantial changes were necessary to this section to implement 
WIOA, this proposed section retains the same requirements found at 20 
CFR 668.296.
    Proposed Sec.  684. 270(d) states that the Department may 
reallocate funds under certain circumstances. This language clarifies 
that excess carry-in will result in the funding formula being adjusted 
in future years to reflect the excess. Additionally, there is no 
exception for carry-in amounts in excess of 20 percent because these 
funds must be fully expended.
    Proposed Sec.  684.270(e) describes the funding resources the 
Department may draw on for TAT purposes. The proposed paragraph 
clarifies that the 1 percent of funding reserved under this section is 
not the only source funding for providing TAT for the INA program 
grantees. This language is consistent with current practice and is 
intended to make clear that INA program grantees may also access 
resources available to other Department programs as needed.
4. Subpart C--Services to Customers
Section 684.300 Who is eligible to receive services under the Indian 
and Native American program?
    Proposed Sec.  684.300(a) describes who is eligible to receive 
services under an INA program. Because the Department has determined 
that no changes were necessary to this section to implement WIOA, this 
proposed section retains the same requirements found at 20 CFR 
668.300(a), with the exception that the language in Sec.  684.300(a)(2) 
references the definition of Alaska Native in sec. 166(b)(1) of WIOA.
    Proposed paragraph (a)(1) leaves the definition of ``Indian'' to 
the tribes and local American Indian organizations that receive grant 
funds to determine, since WIOA does not define who is eligible to 
receive services under sec. 166, and there are different opinions on 
who is considered an Indian when determining eligibility for employment 
and training services. For instance some grantees consider members of 
State-recognized tribes as eligible individuals while other grantees do 
not. Therefore, the Department has left the decision of defining who is 
an Indian to tribes and organizations at the local level. However, the 
Department requires that a grantee's definition must at least include 
anyone who is a member of a Federally-recognized tribe.
    Proposed Sec.  684.300(b) and (c) describe additional eligibility 
requirements for participants to receive services from the INA program. 
Because the Department has determined that no changes were necessary to 
these sections to implement WIOA, these proposed sections retain the 
same requirements in the WIA regulations found at 20 CFR 668.300(b).
Section 684.310 What are Indian and Native American program grantee 
allowable activities?
    Proposed Sec.  684.310(a) describes what types of opportunities INA 
program grantees must attempt to develop and provide. This section 
incorporates the

[[Page 20762]]

broad objectives referenced in sec. 194(1) of WIOA.
    Proposed Sec.  684.310(b) further defines the employment and 
training services that are allowable under sec. 166 of WIOA. Because 
the Department has determined that no changes were necessary to this 
section to implement WIOA, this proposed section retains the same 
requirements found at 20 CFR 668.340(a).
    Proposed Sec.  684.310(c) references a non-exhaustive list of 
career services listed in WIOA. This language reflects WIOA's unified 
approach to the provision of services.
    Proposed Sec.  684.310(d) defines follow-up services. The 
Department chose to define follow-up services as including counseling 
and supportive services for up to 12 months after the date of exit for 
consistency with current practice. Unlike the follow-up services 
available under sec. 134 of WIOA, the follow-up services available 
under Sec.  684.310 are available for up to 12 months because of the 
limited employment opportunities available to participants in the sec. 
166 program.
    Proposed Sec.  684.310(e) references the non-exhaustive list of 
training services available at WIOA sec. 134(c)(3). The Department has 
referenced sec. 134(c)(3) because this section includes good examples 
of services that are allowable activities for INA program grantees.
    Proposed Sec.  684.310(f) lists examples of allowable activities 
specifically designed for youth. The Department references the program 
requirements for the WIOA youth program because these activities serve 
as good examples of allowable activities for INA programs targeting INA 
youth.
    Proposed Sec.  684.310(g) provides examples of allowable activities 
for job development and employment outreach. Because the Department has 
determined that no changes were necessary to this section to implement 
WIOA, this proposed section retains the same requirements found in the 
WIA regulations at 20 CFR 668.340(f).
    Proposed Sec.  684.310(h) describes whether services can be 
overlapping and/or sequential. Because the Department has determined 
that no changes were necessary to this section to implement WIOA, this 
proposed section retains the same requirements found at 20 CFR 
668.340(g).
    Proposed Sec.  684.310(i) states that services may be provided to a 
participant in any sequence based on the particular needs of the 
participant. This clarification is consistent with the description of 
career services in proposed Sec.  678.425(b), which states that 
services are provided to individuals based on individual needs, 
including the seamless delivery of multiple services to individual 
customers. There is no required sequence of services. Section 
134(c)(3)(A)(iii) of WIOA similarly clarifies that an individual is not 
required to receive career services prior to receiving training 
services.
Section 684.320 Are there any restrictions on allowable activities?
    Proposed Sec.  684.320(a) and (b) describe geographical 
restrictions on training activities and restrictions on OJT services. 
Because the Department has determined that no changes were necessary to 
these sections to implement WIOA, these proposed sections retain the 
same requirements found at 20 CFR 668.350(a) and (b).
    Proposed Sec.  684.320(c) prohibits OJT where an employer has 
exhibited a pattern of certain conduct. Because the Department has 
determined that no substantial changes were necessary to these section 
to implement WIOA, this proposed section retains the same requirements 
found at 20 CFR 668.350(c). However, to align Sec.  684.320(c) with the 
language found at sec. 194(4) of WIOA, the phrase ``including health 
benefits'' has been included in Sec.  684.320(c)(1), and Sec.  
684.320(c)(2) targets patterns of violation instead of single 
violations.
    Proposed Sec.  684.320(d) through (g) describe restrictions on the 
use of INA grant funds. Because the Department has determined that no 
changes were necessary to these sections to implement WIOA, these 
proposed sections retain the same requirements found at 20 CFR 
668.350(d) through (g), with citations and references updated to be 
consistent with WIOA.
Section 684.330 What is the role of Indian and Native American grantees 
in the one-stop system?
    Proposed Sec.  684.330(a) describes the required collaboration 
between INA grantees and the one-stop system. The Department recognizes 
that there are areas in the U.S. where the Native American population 
is so sparse that it is not practical for WIOA grantees to be actively 
involved in the local one-stop system. Accordingly, WIOA only requires 
grantees to be involved in those local workforce investment areas where 
an INA grantee conducts field operations or provides substantial 
services. In these areas, the INA grantee must execute an MOU with the 
Local Board or, at a minimum, be able to demonstrate that it has made a 
good faith effort to enter into such agreement. Regardless of how 
sparse the Native American community is in an area, and regardless of 
an executed MOU, it is expected that, at a minimum, both the INA 
grantee and the local one-stop operator are familiar with each other's 
services and that information is available at each other's location, 
and referrals, coordination, and co-enrollment are encouraged. INA 
grantees will be required to provide details of their relationship with 
the local one-stop operators as part of the 4-year plan.
    Proposed Sec.  684.330(b) describes the minimum provisions 
necessary in an MOU between the INA grantee and a local one-stop 
delivery system. Proposed paragraph (b) lists information required 
under WIOA sec. 121(c) and includes additional requirements that 
implement current policy.
    Proposed Sec.  684.330(c) describes when an INA grantee is required 
to describe its efforts to negotiate a MOU. This information is 
necessary for determining why the INA grantee has not been able to 
negotiate an MOU and for alerting the Department about what steps might 
be taken to facilitate the negotiation of an MOU.
    Proposed Sec.  684.330(d) describes the application of the one-stop 
infrastructure in the context of INA programs. Proposed paragraph (d) 
implements the statutory requirements found at WIOA sec. 
121(h)(2)(D)(iv).
Section 684.340 What policies govern payments to participants, 
including wages, training allowances or stipends, or direct payments 
for supportive services?
    Proposed Sec.  684.340(a) through (e) describe the policies that 
govern payments to participants. Because the Department has determined 
that no changes are necessary to these sections to implement WIOA, 
these proposed sections retain the same requirements found at 20 CFR 
668.370.
Section 684.350 What will the Department do to strengthen the capacity 
of Indnian and Native American grantees to deliver effective services?
    Proposed Sec.  684.350 describes what the Department will do to 
strengthen the capacity of INA program grantees to deliver effective 
services. This proposed section retains the same commitment to provide 
necessary technical assistance and training to INA program grantees as 
found in the WIA regulations at 20 CFR 668.380.

[[Page 20763]]

5. Subpart D--Supplemental Youth Services
Section 684.400 What is the purpose of the supplemental youth services 
program?
    Proposed Sec.  684.400 describes the purpose of the supplemental 
youth services program.
    Because the Department has determined that no substantial changes 
were necessary to this section to implement WIOA, this proposed section 
retains the same requirements found at 20 CFR 668.400.
Section 684.410 What entities are eligible to receive supplemental 
youth services funding?
    Proposed Sec.  684.410 describes the entities that are eligible to 
receive supplemental youth services funding. The amount of funding 
reserved for the supplemental program makes it impractical to fund all 
service areas in the United States. Therefore the Department proposes 
to limit funding awards to eligible entities that serve low-income 
youth residing on or near their respective reservations, OTSAs or 
ANVSAs or other legal jurisdictional areas, or to eligible 
organizations that are providing services on behalf of entities with 
legal jurisdiction.
Section 684.420 What are the planning requirements for receiving 
supplemental youth services funding?
    Proposed Sec.  684.420 describes the planning requirements for 
receiving supplemental youth services funding. Because youth funding is 
considered a supplement to the adult funding, the Department envisions 
that the strategy for youth will not be extensive. This proposed 
section also aligns the planning requirements for the youth 
supplemental services with the streamlined application process, which 
is described in more detail in the introduction to this part.
    Finally, the Department also recognizes that awareness of one's 
culture and history is important to having a healthy self-identity and 
self-esteem. Therefore, the Department supports youth activities that 
teach INA to incorporate culture and traditional values since it is not 
fully explored in the public school system and because it plays a role 
in transitioning INA youth to become successful adults.
Section 684.430 What individuals are eligible to receive supplemental 
youth services?
    Proposed Sec.  684.430(a)(1) through (3) provide the eligibility 
requirements for individuals to receive supplemental youth services. 
Individuals must be low-income, except that 5 percent of individuals 
enrolled in a grantee's youth program during a PY need not meet the 
definition of low-income. Individuals included under this 5 percent 
exception do not need to meet any requirements other than those listed 
under proposed Sec.  684.430(a)(1) and (2) because the Department 
recognizes that the funding amounts for the majority of INA program 
grantees are so small (and therefore the number of youth served are 
also so small) that the number of youth served under the 5 percent 
exception is numerically insignificant and that the effort and cost of 
collecting information on the additional barriers is not justified. 
Furthermore, the poverty level on or near Indian reservations (which 
are the areas to be served with youth funds) is so high that the vast 
majority of youth served under WIA met the low-income requirement and 
those that do not are only slightly over the poverty level.
    Additionally, the INA youth program differs significantly from the 
State youth formula program in that it does not distinguish between 
``in-school'' youth and ``out-of-school'' youth and there are no 
percentage requirements for ISY and OSY as required by the State youth 
formula program. The Department recognizes that given the small funding 
amount for the INA youth program, most INA grantees are primarily 
limited to operating summer employment programs for ISY. However, the 
Department encourages the few grantees that receive significant amounts 
of youth funding to provide year-round youth programs and incorporate 
educational and training components in their youth program.
    Proposed Sec.  684.430(b) provides additional information about the 
definition of ``low-income.'' This proposed section helps implement and 
carry out the definition of low-income provided in WIOA sec. 129(a)(2).
Section 684.440 How is funding for supplemental youth services 
determined?
    Proposed Sec.  684.440(a) specifies how funding will be allocated. 
Because the Department has determined that WIOA did not require any 
substantive changes to 20 CFR 668.440(a), we have retained the same 
essential requirements. Although this proposed section specifies that 
the Department will allocate youth funding based on the number of youth 
in poverty, the inclusion of the term ``in poverty'' merely implements 
current practices and does not change our requirements.
    Proposed Sec.  684.440(b) through (e) describe what data the 
Department will use in calculating the youth funding allocation, how 
the hold harmless factor described in Sec.  684.270(c) will apply, how 
the reallocation provisions apply, and how supplemental youth services 
funds not allotted may be used. Because the Department has determined 
that no substantial changes were necessary to these sections to 
implement WIOA, these proposed sections retains the same requirements 
found at 20 CFR 668.350(b) through (e).
Section 684.450 How will supplemental youth services be provided?
    Proposed Sec.  684.450(a) through (c) describe how supplemental 
youth services will be provided. Because the Department has determined 
that no substantial changes were necessary to these sections to 
implement WIOA, these proposed sections retain the same requirements 
found at 20 CFR 668.450(a) through (c).
Section 684.460 What performance measures are applicable to the 
supplemental youth services program?
    Proposed Sec.  684.460(a) describes the performance measures and 
standards applicable to the supplemental youth services program. These 
measures and standards of performance are the same as the primary 
indicators discussed in proposed Sec.  677.155. Though the indicators 
of performance are identified in various places throughout the WIOA 
proposed regulations, the indicators are the same and do not vary 
across the regulations. Section 166(e)(5) of WIOA specifies that 
performance indicators for the Native American program ``shall'' 
include the primary indicators of performance described in WIOA sec. 
116(b)(2)(A). Consequently, the Department has listed the youth 
performance indicators at WIOA sec. 116(b)(2)(A)(ii) to implement and 
carry out statutory requirements.
    The Department acknowledges that some of the performance indicators 
for youth programs are targeted to capture data related to participants 
who are either in their senior year of high school or are no longer a 
high school student (Sec.  684.460(a)(1) and (2)). Because of limited 
funding, many of the INA youth programs are summer employment programs 
serving younger high school students, these performance indicators 
might not accurately capture the success of such programs.
    Proposed Sec.  684.460(b) describes the Secretary's role in the 
creation of additional performance measures to the ones listed in Sec.  
684.460(a). Section

[[Page 20764]]

684.460 implements the statutory language in WIOA sec. 166(h)(2).
6. Subpart E--Services to Communities
Section 684.500 What services may Indian and Native American program 
grantees provide to or for employers?
    Proposed Sec.  684.500(a) and (b) describe other services that INA 
program grantees may provide to or for employers under sec. 166. 
Because the Department has determined that no changes were necessary to 
these sections to implement WIOA, these proposed sections retain the 
same requirements as 20 CFR 668.500.
Section 684.510 What services may Indian and Native American program 
grantees provide to the community at large?
    Proposed Sec.  684.510(a) and (b) describe services that INA 
program grantees may provide to INA communities. Because the Department 
has determined that no changes were necessary to these sections to 
implement WIOA, these proposed sections retain the same requirements at 
20 CFR 668.510(a) and (b).
Section 684.520 Must Indian and Native American program grantees give 
preference to Indian and Native American entities in the selection of 
contractors or service providers?
    Proposed Sec.  684.520 discusses the requirement to give preference 
to Indian/Native American entities in the selection of contractors or 
service providers. Because the Department has determined that no 
changes were necessary to this section to implement WIOA, this proposed 
section retains the same requirements at 20 CFR 668.520.
Section 684.530 What rules govern the issuance of contracts and/or 
subgrants?
    Proposed Sec.  684.530 describes the rules that govern the issuance 
of contracts and/or subgrants. In general, INA program grantees must 
follow the uniform administrative requirements, cost principles, and 
audit requirements for Federal awards at 2 CFR part 200 subpart E 
published in the Federal Register on December 26, 2013, except that 
these rules do not apply to OJT contract awards. This section 
essentially retains the same language as provided under WIA at 20 CFR 
668.530, except that the references to OMB Circulars A-102, A-110 have 
been replaced with references to 2 CFR part 200 subpart E.
7. Subpart F--Accountability for Services and Expenditures
Section 684.600 To whom is the Indian and Native American program 
grantee accountable for the provision of services and the expenditure 
of INA funds?
    Proposed Sec.  684.600(a) and (b) describe who INA program grantees 
are accountable to for the provision of services and the expenditure of 
INA funds. Because the Department has determined that no changes were 
necessary to these sections to implement WIOA, these proposed sections 
retain the same requirements as 20 CFR 668.600.
Section 684.610 How is this accountability documented and fulfilled?
    Proposed Sec.  684.610(a) and (b) require INA program grantees to 
establish internal policies and procedures to ensure accountability to 
its governing body and describe how accountability to the Department is 
accomplished. Because the Department has determined that no changes 
were necessary to these sections to implement WIOA, these proposed 
sections retain the same requirements at 20 CFR 668.610(a) and (b).
    Proposed Sec.  684.610(c) describes how accountability to the 
Department is documented and fulfilled. The Department proposes to 
require compliance with the reporting items listed in Sec.  684.610(c) 
because these are the best ways to ensure accountability and they 
comply with our current practices.
Section 684.620 What performance measures are in place for the Indian 
and Native American program?
    Proposed Sec.  684.620(a) describes the performance measures that 
are required under WIOA for the INA program. These measures of 
performance are the same as the primary indicators discussed in 
proposed Sec.  677.155. Though the indicators of performance are 
identified in various places throughout the WIOA proposed regulations, 
the indicators are the same and do not vary across the regulations. 
Section 166(e)(5) of WIOA specifies that performance indicators for the 
Native American program ``shall'' include the primary indicators of 
performance described in WIOA sec. 116(b)(2)(A). Proposed Sec.  
684.620(a) lists the applicable performance indicators described in 
WIOA sec. 116(b)(2)(A), thus implementing and carrying out the 
statutory requirements of sec. 166(e)(5) of WIOA.
    Proposed Sec.  684.620(b) describes the Secretary's role in the 
creation of additional performance measures to the ones listed in Sec.  
684.620(a). Section 684.620 implements the statutory language in WIOA 
sec. 166(h)(2).
Section 684.630 What are the requirements for preventing fraud and 
abuse?
    Proposed Sec.  684.630(a) requires INA program grantees to 
establish fiscal control and fund accounting procedures. This section 
implements the language in WIOA sec. 184 to the INA program.
    Proposed Sec.  684.630(b) and (c) include requirements related to 
conflicts of interest gifts. Because the Department has determined that 
no changes were necessary to these sections to implement WIOA, these 
proposed sections retain the same requirements at 20 CFR 668.630(b) and 
(c).
    Proposed Sec.  684.630(d) describes certain restrictions on 
selecting family members as participants. Because the Department has 
determined that no substantial changes were necessary to this section 
to implement WIOA, this proposed section retains the same requirements 
at 20 CFR 668.610(d), except that it clarifies our current practice of 
counting all INA individuals in a community to determine if the 
exception is met.
    Proposed Sec.  684.630(e) through (h) describe kickback, political 
activities, lobbying, and embezzlement restrictions that apply to this 
section. Because the Department has determined that no substantial 
changes were necessary to these sections to implement WIOA, these 
proposed sections retain the same requirements at 20 CFR 668.630(e) 
through (h) with changes to update citations.
    Proposed Sec.  684.630(i) prohibits discriminatory practices by 
recipients of WIOA funds. This section clarifies for the benefit of 
potential applicants the effect of WIOA sec. 188 on the INA programs. 
The language in this section also addresses a long-standing 
misconception among INA grantees that individuals outside of a 
grantee's geographic service area cannot be served without the consent 
of the grantee whose service area the individual resides. The 
Department recognizes that INA program grantees receive funding based 
on specified geographic boundaries such as a county, reservation, 
Alaska Native village etc., and therefore we agree that grantees are 
not required to serve individuals outside their geographic areas since 
another grantee is receiving funding to serve such individuals. 
However, this

[[Page 20765]]

does not mean that grantees cannot serve individuals outside their 
specified boundaries if they choose to do so.
Section 684.640 What grievance systems must an Indian and Native 
American program grantee provide?
    Proposed Sec.  684.640 requires INA program grantees establish 
grievance procedure. Because the Department has determined that no 
changes were necessary to this section to implement WIOA, this proposed 
section retains the same requirements at 20 CFR 668.640.
Section 684.650 Can Indian and Native American program grantees exclude 
segments of the eligible population?
    Proposed Sec.  684.650(a) and (b) inform INA program grantees 
whether they can exclude segments of the eligible population. Because 
the Department has determined that no changes were necessary to these 
sections to implement WIOA, this proposed sections retain the same 
requirements at 20 CFR 668.650.
8. Subpart G--Section 166 Planning/Funding Process
Section 684.700 What is the process for submitting a 4-year plan?
    Proposed Sec.  684.700 describes the process for submitting a 4-
year plan, as required by sec. 166(e) of WIOA. Specific requirements 
for the submission of a 4-year plan will be provided in a Funding 
Opportunity Announcement (FOA). This section facilitates the 
streamlining of the application process as is described in detail in 
the introduction of this part.
Section 684.710 What information must be included in the 4-year plans 
as part of the competitive application?
    Proposed Sec.  684.710 describes the information that must be 
included in the 4-year plan. The Department intends to seek economic 
and workforce responsive 4-year plans under WIOA. Under WIOA, the 
Department proposes that a plan contains only the four information 
requirements set out in WIOA sec. 166(e), which will leave the 
Department flexibility to ask for different kinds of information in a 
request for additional information during the FOA process. The 
Department recognizes that the workforce system must be able to change 
and adapt to the changes required by employers who are, in turn, 
changing and adapting to forces in the economy and advancements in 
technology which require different skill sets for American workers. 
This new approach to planning will provide the flexibility necessary to 
address the current workforce needs at the time plans are written.
    Proposed Sec.  684.710(a) describes the information that must be 
included in the 4-year plan, required by WIOA secs. 166(e)(2) through 
(5).
    Proposed Sec.  684.710(b) states that the 4-year plan must include 
a projection of participants to be served and expenditures during a PY 
and any additional information requested in a FOA. Again, this section 
has been added under WIOA to convey that additional information will be 
required in the 4-year plan, as determined by current labor market 
trends and skills requirements, and what information must be in plans 
will be requested in a FOA as part of the competitive process.
    Proposed Sec.  684.710(c) requires INA program grantees receiving 
supplemental youth funds to provide additional information in the 4-
year plan that describes a strategy for serving low-income, INA youth. 
The Department supports youth activities that preserve Native American 
culture and values. Because the Department has determined that no 
changes were necessary to this section to implement WIOA, this proposed 
section retains the same requirements at 20 CFR 668.720(b), with the 
exception that it is framed to reflect the streamlined application 
process described in more detail in the introduction to this part.
Section 684.720 When must the 4-year plan be submitted?
    Proposed Sec.  684.720 describes when the 4-year plan must be 
submitted. The due date for the submission of the 4-year plan will be 
specified in the FOA. This approach implements and carries out the 
requirements of WIOA secs. 166(c) and 166(e) in the context of the 
streamlined application process that is described in more detail in the 
introduction to this part. The Department envisions that the first 4-
year plan will be for PY 2016-2020 which will cover the period from 
July 1, 2016 through June 30, 2020.
Section 684.730 How will the Department review and approve such plans?
    Proposed Sec.  684.730 describes how the Department will review and 
approve 4-year plans. The Department will make every effort to approve 
plans that are fully complete prior to the beginning of the first PY of 
the 4-year plan and funds will be obligated to grantees for that year 
through a grant award. After the first year of a 4 -year plan, funds 
will automatically be added each year for the following 3 years through 
a grant modification, assuming the grantee continues to be in good 
standing with the Department.
    Incomplete plans that do not fully meet the requirements provided 
in the FOA will not be approved. It is possible for entities to be 
selected through the competitive process and also have an incomplete 
plan. Therefore, after competitive grant selections have been made, the 
DINAP office may assist INA program grantees with incomplete plans on 
tasks such as submitting required documents and other unresolved issues 
that render the 4-year plan incomplete. However, the Department may 
delay funding to grantees until all issues with the 4-year plan have 
been resolved.
    While it is unlikely that a grantee will fail to submit an 
acceptable 4-year plan, the Department will reallocate funds from an 
INA program grantee that fails to submit a 4-year plan to other 
incumbent INA program grantees that have an approved 4-year plan. The 
Grant Officer may also delay executing a grant agreement and obligating 
funds to an entity selected through the competitive process until all 
the required documents--including the 4-year plan--are in place.
    Proposed Sec.  684.730(a) states that it is the Department's intent 
to approve a grantee's 4-year strategic plan before the date on which 
funds for the program become available. Because the Department has 
determined that no changes were necessary under WIOA, this section 
retains the same language as provided under WIA at 20 CFR 668.740(a), 
save for the addition of language specifically addressing the 
streamlined, 4-year grant application process as described in more 
detail in the introduction to this part.
    Proposed Sec.  684.730(b) describes the extent to which the DINAP 
office will assist INA program grantees in resolving any outstanding 
issues that may exist with the 4-year plan. Again, while the Department 
expects that it is unlikely that a grantee will fail to submit an 
acceptable 4-year plan, we need a mechanism to reallocate funds when 
such an event occurs in order to ensure that funds are spent providing 
services to eligible program participants.
    Proposed Sec.  684.730(c) notes that the Department may approve 
portions of a plan while disapproving others. Because the Department 
has determined that no changes were necessary to implement WIOA, the 
proposed regulation retains the same requirements found in the WIA 
regulations at 20 CFR 668.740(b).
    Proposed Sec.  684.730(d) references appeal rights in nonselection 
cases or in the case of a decision by the Department to deny or 
reallocate funds based on unresolved issues with the applicant's

[[Page 20766]]

application or 4-year plan. There are no appeal rights in addition to 
the ones listed in the cited regulations because the Department has 
determined that consistency of appeal rights amongst WIOA programs is 
desirable.
Section 684.740 Under what circumstances can the Department or the 
Indian and Native American program grantee modify the terms of the 
grantee's plan(s)?
    Proposed Sec.  684.740(a) describes when the Department may 
unilaterally modify an INA program grantee's plan to add or reduce 
funds to the grant. Because the Department has determined that no 
changes were necessary to implement WIOA, the proposed regulation 
retains the same requirements found in the WIA regulations at 20 CFR 
668.750(a).
    Proposed Sec.  684.740(b) describes when an INA program grantee may 
request approval to modify their plan to add, expand, delete, or 
diminish any service allowable under the regulations in this part. 
Because the Department has determined that no changes were necessary to 
implement WIOA, the proposed regulation retains the same requirements 
found in the WIA regulations at 20 CFR 668.750(b). Generally, it is the 
Department's intent to pursue grant modifications only when there are 
significant increases or decreases in the grantee's funding that 
results in significant changes in the employment and training services 
stated in the 4-year plan or when the grantee wishes to make a 
significant change in its service strategy. As a general rule, a 
significant change is when the number of participants to be served in 
the original plan changes by 25 percent or by 25 actual participants, 
whichever is larger.
9. Subpart H--Administrative Requirements
Section 684.800 What systems must an Indian and Native American program 
grantee have in place to administer an Indian and Native American 
program?
    Proposed Sec.  684.800(a) and (b) describe the systems that must be 
in place in order for INA grantees to administer a WIOA sec. 166 grant 
INA program. Because the Department has determined that no changes were 
necessary to these sections to implement WIOA, these proposed sections 
retain the same requirements at 20 CFR 668.800.
Section 684.810 What types of costs are allowable expenditures under 
the Indian and Native American program?
    Proposed Sec.  684.810 describes where the rules relating to 
allowable costs under WIOA are located. Because the Department has 
determined that no changes were necessary to this section to implement 
WIOA, this proposed section retains the same requirements at 20 CFR 
668.810.
Section 684.820 What rules apply to administrative costs under the 
Indian and Native American program?
    Proposed Sec.  684.820 describes where the definition and treatment 
of administrative costs can be found. Because the Department has 
determined that no changes were necessary to this section to implement 
WIOA, this proposed section retains the same requirements at 20 CFR 
668.820.
Section 684.830 Does the Workforce Innovation and Opportunity Act 
administrative cost limit for States and local areas apply to grants?
    Proposed Sec.  684.830 informs INA program grantees about whether 
the WIOA administrative cost limit for States and local areas applies 
to INA grants. Because the Department has determined that no changes 
were necessary to this section to implement WIOA, this proposed section 
retains the same requirements at 20 CFR 668.825.
Section 684.840 How should Indian and Native American program grantees 
classify costs?
    Proposed Sec.  684.840 describes how INA program grantees must 
classify costs. Because the Department has determined that no changes 
were necessary to this section to implement WIOA, this proposed section 
retains the same requirements at 20 CFR 668.830.
Section 684.850 What cost principles apply to Indian and Native 
American funds?
    Proposed Sec.  684.850 requires INA program grantee to follow the 
cost principles at 2 CFR part 200 subpart E of the Uniform 
Administrative Requirements published in the Federal Register on 
December 26, 2013. This section retains the same language as provided 
under WIA at 20 CFR 668.840, except that the references to OMB 
Circulars A-87, A-122, A-21 have been updated with references to 2 CFR 
part 200 subpart E, Cost Principles, & Audit Requirements for Federal 
Awards.
Section 684.860 What audit requirements apply to Indian and Native 
American grants?
    Proposed Sec.  684.860 requires INA program grantee to follow the 
audit requirements at 2 CFR 200 subpart F of the Uniform Administrative 
Requirements, Cost Principles, & Audit Requirements for Federal Awards 
published in the Federal Register on December 26, 2013. This section 
retains the same language as provided under WIA at 20 CFR 668.850, 
except that the references to OMB Circular A-133 and 29 CFR part 99 
have been updated with references to 2 CFR part 200 subpart E, Cost 
Principles, & Audit Requirements for Federal Awards.
    Additionally, Sec.  684.860(b) implements the language at WIOA sec. 
166(j) relating to single audit requirements.
Section 684.870 What is ``program income'' and how is it regulated in 
the Indian and Native American program?
    Proposed Sec.  684.870(a) through (c) provide descriptions of what 
qualifies as program income for work experience participants and OJT 
participants. Because the Department has determined that no changes 
were necessary to these sections to implement WIOA, these proposed 
sections retain the same requirements at 20 CFR 668.870(a) through (c).
10. Subpart I--Miscellaneous Program Provisions
Section 684.900 Does the Workforce Innovation and Opportunity Act 
provide regulatory and/or statutory waiver authority?
    Proposed Sec.  684.900 describes the regulatory and/or statutory 
waiver authority for the INA program. Because the Department has 
determined that no changes were necessary to this section to implement 
WIOA, this proposed section retains the same requirements at 20 CFR 
668.900, except that we have clarified, in accordance with WIOA sec. 
166(i)(3), that only requirements related to title I of WIOA may be 
waived.
Section 684.910 What information is required in a waiver request?
    Proposed Sec.  684.910(a) describes what information an INA program 
grantee must include when it requests a waiver. This section implements 
the requirements in WIOA sec. 166(i)(3)(B) and saves INA grantees from 
having to reference additional departmental guidance on how to request 
a waiver.
    Proposed Sec.  684.910(b) states that a waiver may be requested at 
the beginning of a 4-year grant award cycle or anytime during a 4-year 
award cycle. However, all waivers expire at the end of the 4-year award 
cycle. The Department envisions that waivers will be requested for 
unique situations that were not expected in the normal course of 
operating an INA grant. Therefore, Department proposes that waivers 
cannot be provided indefinitely and

[[Page 20767]]

must be renewed at the beginning of a new 4-year grant cycle.
Section 684.920 What provisions of law or regulations may not be 
waived?
    Proposed Sec.  684.920 describes the laws and regulations that may 
not be waived. Because the Department has determined that no changes 
were necessary to this section to implement WIOA, this proposed section 
retains the same requirements at 20 CFR 668.920.
Section 684.930 May Indian and Native American grantees combine or 
consolidate their employment and training funds?
    Proposed Sec.  684.930 provides a description of when INA program 
grantees can consolidate their funds under Public Law 102-477 (477). In 
addition to generally allowing the consolidation of funds as required 
under Public Law 102-477, Sec.  684.930 describes the extent to which 
the Department will review 477 plans. The Department will not review 
the renewal of 477 plans after the initial plan has been approved by 
DOL, accepted by the Department of the Interior, and all other 
applicable Departmental programmatic and financial obligations have 
been met prior to transfer. This policy aligns with the requirements of 
Public Law 102-477 which allows Federally-recognized tribes and Alaska 
Native entities to combine formula-funded Federal grant funds, which 
are employment and training-related, into a single plan with a single 
budget and a single reporting system. The Department recognizes that 
when Federal funds from various agencies are combined under one unified 
plan, there must be one lead agency that administers and manages the 
unified plan. According to Public Law 102-477 the lead agency is the 
DOI.
Section 684.940 What is the role of the Native American Employment and 
Training Council?
    Proposed Sec.  684.940 describes the role of the Native American 
Employment and Training Council. The language in proposed Sec.  684.940 
repeats the requirements at WIOA sec. 166(i)(4)(C) and explains that 
WIOA sec. 166(4) has not made any major changes to the council.
Section 684.950 Does the Workforce Innovation and Opportunity Act 
provide any additional assistance to unique populations in Alaska and 
Hawaii?
    Proposed Sec.  684.950 address the additional assistance that WIOA 
provides for unique populations in Alaska and Hawaii. This proposed 
section implements and carries out the requirements in WIOA sec. 
166(k).

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

1. Introduction
    The purpose of part 685 is to implement WIOA sec. 167, which 
authorizes MSFW programs. In drafting these regulations, the Department 
consulted with States and MSFW groups during stakeholder consultation 
sessions conducted in August and September 2014, as required by WIOA 
sec. 167(f). MSFW programs include career services and training, 
housing assistance, youth services, and related assistance. In drafting 
the proposed regulations for this part the Department seeks to 
encourage strategic alignment across other workforce development 
programs such as Wagner-Peyser and WIOA title I adult, dislocated 
worker, and youth programs; encourage the delivery of training for in-
demand occupations; provide comprehensive youth workforce activities; 
and provide a detailed description of housing services available to 
eligible MSFWs. As required by WIOA sec. 167(e), when making grants and 
entering into contracts under this section, the Department will consult 
with the Governors and Local Boards of the States in which grantees 
will carry out the activities described in WIOA sec. 167(d) during the 
FOA process described in Sec.  685.210.
    The regulations in this section support strategic alignment across 
workforce development programs by: Aligning the definition of 
``farmwork'' found in this section with that used in the Wagner-Peyser 
program; adjusting the upper and lower age ranges of eligible MSFW 
youth to conform to those established in WIOA sec. 129 for OSY and ISY; 
and requiring that grantees coordinate services, particularly outreach 
to MSFWs, with the State Workforce Agency (SWA) in their service area 
and the State's monitor advocate. These changes are intended to support 
coordination between MSFW programs and other workforce programs such as 
the Wagner-Peyser program, and facilitate MSFW youth co-enrollments 
with other WIOA title I programs.
    The Department proposes language in Sec.  685.350 regarding 
training services that reinforces that training must be directly linked 
to an in-demand industry or occupation that leads to economic self-
sufficiency and encourages the attainment of recognized post-secondary 
credentials when appropriate.
    Proposed Sec. Sec.  685.330 and 685.510 establish that grantees 
funded under WIOA sec. 167 can serve eligible MSFW youth participants. 
The Department also has proposed that a percentage of the total funds 
appropriated each year for WIOA sec. 167 activities will be used for 
housing grants, and described specific housing assistance activities in 
Sec.  685.360, to better articulate the types of services that can be 
delivered to eligible MSFWs.
2. Subpart A--Purpose and Definitions
    This subpart describes the general purpose and definitions relevant 
to MSFW programs authorized under WIOA sec. 167, the role of the 
Department in providing technical assistance and training to grantees, 
and the regulations applicable to grantees.
Section 685.100 What is the purpose of the National Farmworker Jobs 
Program and the other services and activities established under 
Workforce Innovation and Opportunity Act?
    Proposed Sec.  685.100 identifies achieving economic self-
sufficiency as the goal of the services and activities that are 
authorized in WIOA sec. 167 for eligible MSFWs which includes their 
dependents. This section emphasizes the importance of obtaining, 
retaining, and stabilizing the unsubsidized employment of MSFWs, 
including obtaining upgraded agricultural employment, in achieving the 
goal of the program.
Section 685.110 What definitions apply to this program?
    Proposed Sec.  685.110 provides definitions of terms relevant to 
the implementation and operation of workforce investment activities 
authorized for MSFWs and their dependents under WIOA sec. 167.
    A definition of allowances has been provided that means direct 
payments made to participants to support participation specific career 
services and training.
    Dependents of eligible MSFWs may receive services under WIOA secs. 
167(i)(2)(B) and 167(i)(3)(B), and the Department has provided a 
definition of the family member relationships of an eligible MSFW who 
qualify for MSFW program services.
    Eligibility determination period is defined as ``any consecutive 
12-month period within the 24-month period immediately preceding the 
date of application for the MSFW program by the applicant MSFW.'' The 
definition was adopted from the first clause of

[[Page 20768]]

WIOA sec. 167(i)(3)(A)(i), which defines ``eligible seasonal 
farmworker.''
    The definition of eligible migrant farmworker is taken from WIOA 
sec. 167(i)(2).
    The definition of eligible seasonal farmworker is taken from WIOA 
sec. 167(i)(3).
    A definition of eligible migrant and seasonal farmworker has been 
provided, meaning an eligible migrant farmworker or an eligible 
seasonal farmworker as defined in WIOA sec. 167(i).
    A definition of eligible MSFW youth has been provided, and it is 
defined as eligible MSFWs aged 14-24 who are individually eligible or 
are dependents of eligible MSFWs. The upper age range (age 24) and 
lower age range (age 14) for eligible MSFW youth have been put in 
alignment with the upper and lower age ranges provided in WIOA secs. 
129 ((a)(1)(B) and (a)(1)(C). Eligible MSFW youth is a subset of 
eligible MSFWs as defined in this section. This alignment will 
facilitate co-enrollment with other WIOA youth programs that serve 14-
24 year old youth participants, where appropriate.
    A definition of emergency assistance had been provided that 
establishes that emergency assistance is a form of related assistance, 
and means assistance that addresses immediate needs of eligible MSFWs 
and their dependents, provided by grantees. To facilitate the delivery 
of emergency services in a timely manner the applicant's self-
certification is accepted as sufficient documentation of eligibility 
for emergency assistance.
    A definition of family, is provided that means an eligible MSFW and 
all the individuals identified under the definition of dependent in 
this section who are living together in one physical residence. The 
definition has been proposed for the purpose of reporting housing 
assistance grantee indicators of performance as described in Sec.  
685.400.
    A definition of farmwork is provided that means work while employed 
in the occupations described in 20 CFR 651.10. The specific occupations 
and industries within agricultural production and agricultural services 
will be provided through Departmental guidance, and will be updated 
when government-wide standard industry and occupation codes undergo 
periodic review and revision. Providing a definition of farmwork that 
is aligned with the Wagner-Peyser ES system will facilitate the 
provision of services to MSFWs under both programs.
    A definition of grantee has been provided, meaning an entity to 
which the Department directly awards a WIOA grant to carry out programs 
to serve eligible MSFWs in a service area, with funds made available 
under WIOA sec. 167 or 127(a)(1).
    A definition of housing assistance is provided and means housing-
related services provided to eligible MSFWs. Examples of specific 
authorized housing activities are provided in proposed Sec.  685.360.
    The definition of lower living standard income level from WIOA sec. 
3(36)(B) has been referenced without change.
    The definition of low-income individual from WIOA sec. 3(36)(A) has 
been referenced without change.
    A definition of MOU has been provided, meaning ``Memorandum of 
Understanding.''
    A definition of National Farmworker Jobs Program (NFJP) has been 
provided and is the Department-administered workforce investment 
program for MSFWs established by WIOA sec. 167 as a required partner of 
the one-stop system and includes career services, training grants, and 
housing grants. The term NFJP was initially developed in 1999 by the 
Secretary's MSFW Advisory Committee to distinguish the NFJP from the 
other workforce investment grants and activities funded under WIA sec. 
167, such as the farmworker housing assistance grants; however, since 
that time the NFJP has come to be the accepted term for both employment 
and training grants and housing grants, and this definition reflects 
that understanding.
    The definition of recognized post-secondary credential from WIOA 
sec. 3(52) has been referenced without change.
    A definition of related assistance, which is authorized under WIOA 
sec. 167(d), has been provided meaning short-term forms of direct 
assistance designed to assist eligible MSFWs retain or stabilize their 
agricultural employment.
    A definition of self-certification has been provided meaning an 
eligible MSFW's signed attestation that the information he/she submits 
to demonstrate eligibility for the NFJP is true and accurate.
    A definition of service area has been provided meaning the 
geographical jurisdiction, which may be comprised of one or more 
designated States or sub-State areas, in which a WIOA sec. 167 grantee 
is designated to operate.
    A definition of technical assistance has been provided meaning the 
guidance provided to grantees and grantee staff by the Department to 
improve the quality of the program and the delivery of program services 
to eligible MSFWs. This definition was adapted from and replaces the 20 
CFR part 685 definition of capacity enhancement under WIA to reflect 
the term more commonly used by the Department.
Section 685.120 How does the Department administer the National 
Farmworker Jobs Program?
    Proposed Sec.  685.120 clarifies that the Department's ETA 
administers NFJP activities authorized under WIOA sec. 167 for eligible 
MSFWs, and as described in Sec.  685.210, the Department designates 
grantees in a manner consistent with standard Federal government 
competitive procedures.
Section 685.130 How does the Department assist grantees to serve 
eligible migrant and seasonal farmworkers?
    Proposed Sec.  685.130 establishes that the Department will provide 
guidance, administrative support, technical assistance, and training to 
support MSFW programs and promote employment outcomes for eligible 
MSFWs.
Section 685.140 What regulations apply to the programs authorized under 
Workforce Innovation and Opportunity Act?
    Proposed Sec.  685.140 specifies the regulations that are 
applicable to MSFW programs authorized under WIOA sec. 167, including 
proposed part 685. Applicable regulations include the general 
administrative requirements found in 20 CFR part 683, including the 
regulations regarding the Complaints, Investigations and Hearings found 
at 20 CFR part 683, subpart D through subpart H; Uniform Guidance at 2 
CFR part 200 and the Department's exceptions at 2 CFR part 2900 
pursuant to the effective dates in 2 CFR part 200 and 2 CFR part 2900; 
the regulations on partnership responsibilities contained in 20 CFR 
parts 679 (Statewide and Local Governance) and 678 (the one-stop 
system); the Department's regulations at 29 CFR part 37, which 
implement the nondiscrimination provisions of WIOA sec. 188.
3. Subpart B--The Service Delivery System for the National Farmworker 
Program
    This subpart describes the service delivery system for the MSFW 
programs authorized by WIOA sec. 167 including who is eligible to 
receive grants and the role of the NFJP in the one-stop delivery 
system. Termination of grantee designation is explained. This subpart 
also discusses the appropriation of WIOA sec. 167 funds and establishes

[[Page 20769]]

that a percentage of the total funds appropriated each year for WIOA 
sec. 167 activities will be used for housing assistance grants.
Section 685.200 Who is eligible to receive a National Farmworker Jobs 
Program grant?
    Proposed Sec.  685.200 describes the entities that are eligible to 
receive NFJP grants. The entity must have an understanding of the 
problems of eligible MSFWs, a familiarity with the agricultural 
industries and the labor market needs of the proposed service area, and 
the ability to demonstrate a capacity to administer and deliver 
effectively a diversified program of workforce investment activities, 
including youth workforce investment activities, and related assistance 
for eligible MSFWs.
Section 685.210 How does an eligible entity become a grantee?
    Proposed Sec.  685.210 establishes that grantees will be selected 
through a FOA using standard Federal government competitive procedures. 
The entity's proposal must describe a 4-year strategy for meeting the 
needs of eligible MSFWs in the proposed service area and a description 
of the entity's experience working with the broader workforce delivery 
system. This is in alignment with the requirement in WIOA sec. 167(a) 
that the Department make grants or enter into contracts on a 
competitive basis every 4 years. Unless specified otherwise in the FOA, 
grantees may serve eligible MSFWs, including eligible MSFW youth, under 
the grant. An applicant whose application for funding as a grantee 
under part 685 is denied in whole or in part may request an 
administrative review under 20 CFR 683.800.
Section 685.220 What is the role of the grantee in the one-stop 
delivery system?
    Proposed Sec.  685.220 describes that in those local workforce 
development areas where the grantee operates its NFJP, as described in 
its grant agreement, the grantee is a required one-stop partner, and is 
subject to the provisions relating to such partners described in 20 CFR 
part 678. Consistent with those provisions, the grantee and Local 
Workforce Development Board must develop and enter into an MOU which 
meets the requirements of 20 CFR 678.500 and sets forth their 
respective responsibilities for providing access to the full range of 
NFJP services through the one-stop system to eligible MSFWs.
Section 685.230 Can a grantee's designation be terminated?
    Proposed Sec.  685.230 explains the circumstance in which a grantee 
may be terminated by the Department for cause, including emergency 
circumstances when such action is necessary to protect the integrity of 
Federal funds or ensure the proper operation of the program, or by the 
Department's Grant Officer, if the recipient materially fails to comply 
with the terms and conditions of the award. The Department has changed 
the standard for Grant Officer termination from ``substantial or 
persistent violation'' as used in the WIA regulations in order to be 
consistent with the standards used for all other Department WIOA grants 
under the common administrative requirements for grants.
Section 685.240 How does the Department use funds appropriated under 
Workforce Innovation and Opportunity Act for the National Farmworker 
Jobs Program?
    Proposed Sec.  685.240 establishes that in accordance with WIOA 
sec. 167(h), at least 99 percent of the funds appropriated each year 
for WIOA sec. 167 activities must be allocated to service areas, based 
on the distribution of the eligible MSFW population determined under a 
formula which has been published in the Federal Register. The grants 
will be awarded under Sec.  685.210. The Department has added language 
that clarifies that of this amount, a percentage of funds will be set 
aside for housing grants and will be specified in an FOA issued by the 
Department. The balance, up to 1 percent of the appropriated funds, 
will be used for discretionary purposes, such as providing technical 
assistance to eligible entities, and other activities prescribed by the 
Secretary to eligible entities. This differs from the up to 4 percent 
reserved in the prior regulations so as to comply with the funding 
requirements of WIOA sec. 167(h).
4. Subpart C--The National Farmworker Jobs Program Customers and 
Available Program Services
    This subpart describes the responsibilities of grantees, and 
workforce investment activities available to eligible MSFWs, including 
career services and training, housing assistance, youth services, and 
related assistance.
Section 685.300 What are the general responsibilities of grantees?
    Proposed Sec.  685.300 establishes the general responsibilities of 
grantees, including that: eligible entities receive grants through the 
FOA process described in Sec.  685.210; career services and training 
grantees are responsible for providing appropriate career services, 
training, and related assistance to eligible MSFWs and eligible MSFW 
youth; and housing grantees are responsible for providing housing 
assistance to eligible MSFWs. Grantees will provide these services in 
accordance with the service delivery strategy described in the approved 
program plan described in Sec.  685.420. These services must reflect 
the needs of the MSFW population in the service area and include the 
services that are necessary to achieve each participant's employment 
goals or housing needs. Grantees also are responsible for coordinating 
services, particularly outreach to MSFWs, with the SWA, as defined in 
20 CFR part 651, and the State's monitor advocate and fulfilling the 
responsibilities of one-stop partners described in proposed Sec.  
678.420.
Section 685.310 What are the basic components of an National Farmworker 
Jobs Program service delivery strategy?
    Proposed Sec.  685.310 describes the basic components of the NFJP 
delivery strategy that must include: A customer-focused case management 
approach; the provision of workforce investment activities, which 
include career services and training, as described in WIOA secs. 167(d) 
and 134 and 20 CFR part 680, and youth workforce investment activities 
described in WIOA sec. 129 and 20 CFR part 681; the arrangements under 
the MOU's with the applicable Local Workforce Development Boards for 
the delivery of the services available through the one-stop system to 
MSFWs; and related assistance services.
Section 685.320 Who is eligible to receive services under the National 
Farmworker Jobs Program?
    Proposed Sec.  685.320 establishes that MSFWs as defined in Sec.  
685.110 are eligible for services funded by the NFJP. As provided in 
WIOA sec. 167(d)(1), NFJP grants are used to provide adult and youth 
services, thus the NFJP may use funds available to serve youth even 
when the service area is not being served with supplemental youth funds 
authorized in WIOA sec. 127(a)(1). In addition, NFJP services can be 
provided to eligible MSFW youth who demonstrate a need for and ability 
to benefit from career services. For example, some older youth may 
benefit more from the array of career services available under NFJP 
than from the youth services offered under subpart E.

[[Page 20770]]

Section 685.330 How are services delivered to eligible migrant and 
seasonal farmworkers?
    Proposed Sec.  685.330 emphasizes that services to eligible MSFWs 
will be focused on the customer's needs and provided through a case-
management approach emphasizing customer choice, and may include 
appropriate career services and training, and related assistance, which 
includes emergency assistance; and supportive services, which includes 
allowance payments. The basic services and delivery of case-management 
activities are further described in Sec. Sec.  685.340 through 685.390.
Section 685.340 What career services must grantees provide to eligible 
migrant and seasonal farmworkers?
    Proposed Sec.  685.340 establishes that eligible MSFWs must be 
provided the career services described in WIOA secs. 167(d) and 
134(c)(2), and 20 CFR part 680. Other career services may be provided 
as identified in the grantee's approved program plan. The Department 
also has included language to clarify that while career services must 
be made available through the one-stop delivery system, grantees also 
may provide these types of services through other sources outside the 
one-stop system. Examples include non-profit organizations or 
educational institutions. The delivery of career services to eligible 
MSFWs by the grantee and through the one-stop system must be discussed 
in the required MOU between the Local Workforce Development Board and 
the grantee.
Section 685.350 What training services must grantees provide to 
eligible migrant and seasonal farmworkers?
    Proposed Sec.  685.350 establishes that the training activities in 
WIOA secs. 167(d) and 134(c)(3)(D), and 20 CFR part 680, must be 
provided to eligible MSFWs. These activities include, but are not 
limited to, occupational-skills training and OJT. The Department also 
emphasizes that eligible MSFWs are not required to receive career 
services prior to receiving training services, as described in WIOA 
sec. 134(c)(3)(iii). This section also reinforces the intent of WIOA 
that training services be directly linked to an in-demand industry 
sector or occupation in the service area, or in another area to which 
an eligible MSFW receiving such services is willing to relocate, 
consistent with WIOA sec. 134(c)(3)(G)(iii). The Department also 
establishes that training activities must encourage the attainment of 
recognized post-secondary credentials as defined in Sec.  685.110 
(which refers to WIOA sec. 3(52)), when appropriate for an eligible 
MSFW. This requirement is in alignment with WIOA secs. 
116(b)(2)(A)(i)(IV) and 116(b)(2)(A)(ii)(III), which include ``the 
percentage of program participants who obtain a recognized post-
secondary credential, or a secondary school diploma,'' as a primary 
indicator of performance for both the adult and youth programs.
Section 685.360 What housing services must grantees provide to eligible 
migrant and seasonal farmworkers?
    Proposed Sec.  685.360 requires that housing grantees must provide 
housing services to eligible MSFWs and that career services and 
training grantees may provide housing services to eligible MSFWs as 
described in their program plan. The proposed section establishes the 
definitions of permanent housing and temporary housing services that 
are available to eligible MSFWs. The Department establishes that 
permanent housing is owner-occupied, or occupied on a permanent, year-
round basis (notwithstanding ownership) as the MSFW's primary residence 
to which he/she typically returns at the end of the work or training 
day and temporary housing is non-owner-occupied housing used by MSFWs 
whose employment requires occasional travel outside their normal 
commuting area. Permanent housing may include rental units, single 
family, duplexes, and other multi-family structures, dormitory, group 
homes, and other housing types that provide short-term, seasonal, or 
year-round housing opportunities in permanent structures. Modular 
structures, manufactured housing, or mobile units placed on permanent 
foundations and supplied with appropriate utilities and other 
infrastructure are also considered permanent housing. Temporary housing 
may include: Units intended for temporary occupancy located in 
permanent structures, such as rental units in an apartment complex or 
in mobile structures, tents, and yurts that provide short-term, 
seasonal housing opportunities; temporary structures that may be moved 
from site to site, dismantled and re-erected when needed for farmworker 
occupancy; and off-farm housing operated independently of employer 
interest in, or control of, the housing, or on-farm housing operated by 
a nonprofit, including faith-based or community non-profit 
organizations, but located on property owned by an agricultural 
employer. Specific examples of permanent housing services and 
activities associated with the provision of permanent housing services, 
and specific examples of temporary housing activities associated with 
the provision of temporary housing services, including emergency 
assistance such as emergency housing payments, vouchers, and cash 
payments for rent/lease and utilities are provided. The Department 
establishes that housing services are intended to meet the needs of 
eligible MSFWs to occupy a unit of housing for reasons related to 
seeking employment, retaining employment, or engaging in training. The 
definitions of permanent housing and temporary housing assistance and 
the specific examples of permanent and temporary housing services 
described in the proposed Sec.  685.360 are adapted from the 2011 
Department Notice of Availability of Funds and Solicitation for Grant 
Applications for the National Farmworker Jobs Program (NFJP) Housing 
Assistance Program (Funding Opportunity Number: SGA-DFA-PY-10-08) which 
provided specific requirements and guidelines for housing grant 
applicants.
Section 685.370 What services may grantees provide to eligible migrant 
and seasonal farmworker youth participants aged 14-24?
    Proposed Sec.  685.370 describes the services that grantees may 
provide to eligible MSFW youth participants aged 14-24 based on an 
evaluation and assessment of their needs. These services include the 
career and training services described in Sec. Sec.  685.340 through 
685.350; youth workforce investment activities described in WIOA sec. 
129; life skills activities that encourage development of self and 
interpersonal skills development; community service projects; and other 
activities that conform to the use of funds for youth activities 
described in 20 CFR part 681. Grantees may provide these services to 
any eligible MSFW youth, regardless of the participant's eligibility 
for WIOA title I youth activities as described in WIOA sec. 129(a).
Section 685.380 What related assistance services may be provided to 
eligible migrant and seasonal farmworkers?
    Proposed Sec.  685.380 describes the types of services that may be 
provided to eligible MSFWs as ``related assistance,'' and establishes 
that these services are short-term, direct services. Examples include 
emergency assistance, as defined in Sec.  685.110, and those activities 
identified in WIOA sec. 167(d), such as English language and literacy 
instruction, pesticide and worker safety training, housing (including 
permanent housing), as

[[Page 20771]]

described in Sec.  685.360, and school dropout prevention and recovery 
activities. Related assistance is distinct from ``supportive services'' 
as defined in WIOA sec. 3, which ``means services such as 
transportation, child care, dependent care, housing, and needs-related 
payments, that are necessary to enable an individual to participate in 
activities authorized under this Act,'' because related assistance may 
be provided to eligible MSFWs who are not otherwise participating in 
activities authorized under this Act such as career services, youth 
services, or training services.
Section 685.390 When may eligible migrant and seasonal farmworkers 
receive related assistance?
    Proposed Sec.  685.390 establishes that eligible MSFWs may receive 
related assistance services when the need for the related assistance is 
identified and documented by the grantee. A statement by the eligible 
MSFW may be included as documentation.
5. Subpart D--Performance Accountability, Planning, and Waiver 
Provisions
    This subpart describes indicators of performance for grantees, 
required planning documents, and the information required in program 
plans required under WIOA sec. 167. The subpart also explains waiver 
provisions and clarifies how grant costs are classified under WIOA sec. 
167.
Section 685.400 What are the indicators of performance that apply to 
the National Farmworker Jobs Program?
    Proposed Sec.  685.400 describes the indicators of performance that 
apply to grantees. Grantees providing career services and training will 
use the indicators of performance common to the adult and youth 
programs, described in WIOA sec. 116(b)(2)(A), as required by WIOA sec. 
167(c)(2)(C). These measures of performance are the same as the primary 
indicators discussed in proposed Sec.  677.155. Though the indicators 
of performance are identified in various places throughout the WIOA 
proposed regulations, the indicators are the same and do not vary 
across the regulations.
    For grantees providing career services and training, the Department 
will reach agreement on the levels of performance for each of the 
primary indicators of performance described in WIOA sec. 116(b)(2)(A), 
taking into account economic conditions, characteristics of the 
individuals served, and other appropriate factors, and using, to the 
extent practicable, the statistical adjustment model under WIOA sec. 
116(b)(3)(A)(viii). The levels agreed to will be the adjusted levels of 
performance and will be incorporated in the program plan, as required 
in WIOA sec. 167(c)(3). For grantees providing housing services only, 
grantees will use the total number of eligible MSFWs served and the 
total number of eligible MSFW families served as indicators of 
performance. Performance indicators for NFJP housing grantees are not 
specified in WIA or WIOA statute, and the measures proposed here are 
adapted from the Department's TEGL, Number 15-13, Program Year 2014 
Planning Guidance for National Farmworker Jobs Program Housing 
Grantees, released March 25, 2014. As described in proposed Sec.  
685.400(d), the Department may develop additional performance 
indicators with appropriate levels of performance for evaluating 
programs that serve eligible MSFWs and which reflect the State service 
area economy, local demographics of eligible MSFWs, and other 
appropriate factors. In accordance with Sec.  685.400(d), the 
Department may develop additional indicators of performance for housing 
grantees in addition to the indicators specified in proposed Sec.  
685.400(c). If additional performance indicators are developed, the 
levels of performance for these additional indicators must be 
negotiated with the grantee and included in the approved program plan. 
Grantees also may develop additional performance indicators and include 
them in the program plan or in periodic performance reports.
Section 685.410 What planning documents must a grantee submit?
    Proposed Sec.  685.410 describes the planning documents that a 
grantee must submit, including a comprehensive program plan, further 
described in proposed Sec.  685.420, and a projection of participant 
services and expenditures covering the 4-year grant cycle.
Section 685.420 What information is required in the grantee program 
plan?
    Proposed Sec.  685.420 describes the information required for 
inclusion in program plans. Paragraph (a) asks for a description of the 
service area that the applicant proposes to serve, in accordance with 
WIOA sec. 167(c). Paragraphs (b) through (g) incorporate the elements 
described in WIOA sec. 167(c)(2). Paragraphs (h) and (i) specify 
additional information required in program plans which include: The 
methods the grantee will use to target its services on specific 
segments of the eligible population, as appropriate, and the response 
to any other requirements set forth in the FOA issued under Sec.  
685.210.
Section 685.430 Under what circumstances are the terms of the grantee's 
program plan modified by the grantee or the Department?
    Proposed Sec.  685.430 describes the circumstances when the terms 
of the grantee's program plan can be modified by the grantee or the 
Department. Program plans must be modified to reflect the funding level 
for each year of the grant, and the Department will provide 
instructions annually on when to submit modifications for each year of 
funding, which will generally be no later than June 1, prior to the 
start of the subsequent year of the grant cycle. Grantees must submit a 
request to the Department for any proposed modifications to the plan to 
add, delete, expand, or reduce any part of the program plan or 
allowable activities, and the Department will consider the cost 
principles, uniform administrative requirements, and terms and 
conditions of award when reviewing modifications to program plans. The 
purpose of this requirement is to ensure that the Department has 
reviewed and approved any proposed programmatic changes as part of a 
grant award to ensure the changes are allowable, programmatically and 
fiscally sound, and do not negatively affect performance outcomes. If 
the grantee is approved for a regulatory waiver under proposed Sec.  
685.560 and Sec.  685.570, it must submit a modification of the grant 
plan to reflect the effect of the waiver.
Section 685.440 How are costs classified under the National Farmworker 
Jobs Program?
    Proposed Sec.  685.440 describes how costs are classified under the 
NFJP. Costs are classified as administrative costs, as defined in 20 
CFR 683.215, and program costs are all other costs not defined as 
administrative. The Department further specifies that program costs 
must be classified and reported in the categories of related assistance 
(including emergency assistance), supportive services, and all other 
program services.
Section 685.450 What is the Workforce Innovation and Opportunity Act 
administrative cost limit for National Farmworker Jobs Program grants?
    Proposed Sec.  685.450 describes the administrative cost limit for 
NFJP grants which, under 20 CFR 683.205(b), will be identified in the 
grant or contract award document, and will not exceed 15 percent of 
total grantee funding. The administrative cost limit established in

[[Page 20772]]

this section is consistent with the administrative cost limit under 
which the program is currently operating.
Section 685.460 Are there regulatory and/or statutory waiver provisions 
that apply to the Workforce Innovation and Opportunity Act?
    Proposed Sec.  685.460 describes the regulatory and/or statutory 
waiver provisions that apply to WIOA sec. 167. The statutory waiver 
provision at WIOA sec. 189(i) and discussed in 20 CFR 679.600 does not 
apply to WIOA sec. 167. Paragraph (b) establishes that grantees may 
request a waiver of any regulatory provisions only when such regulatory 
provisions are (1) not required by WIOA; (2) not related to wage and 
labor standards, non-displacement protection, worker rights, 
participation and protection of workers and participants, and 
eligibility of participants, grievance procedures, judicial review, 
nondiscrimination, allocation of funds, procedures for review and 
approval of plans; and (3) not related to the basic purposes of WIOA, 
described in 20 CFR 675.100.
Section 685.470 How can grantees request a waiver?
    Proposed Sec.  685.570 describes the information that grantees must 
submit to the Department in a waiver plan to document a requested 
waiver. The waiver request must include: A description of the goals of 
the waiver; the expected programmatic outcomes and how the waiver will 
improve the provision of program activities; how the waiver is 
consistent with guidelines the Department establishes; the data that 
will be collected to track the impact of the waiver; and the modified 
program plan reflecting the effect of the requested waiver.

6. Subpart E--Supplemental Youth Workforce Investment Activity Funding 
Under Workforce Innovation and Opportunity Act Sec. 127(a)(1)

    This subpart describes the purpose of supplemental youth workforce 
investment activity funding that may become available under WIOA sec. 
127(a)(1). Included is a description of how the funds may become 
available, and what requirements apply to grants funded by WIOA sec. 
127(a)(1). Significantly, these funds may be used only for workforce 
investment activities for eligible MSFW youth, as defined in Sec.  
685.110. The Department will issue a separate FOA for grants funded by 
WIOA sec. 127(a)(1), and the selection will be made in accordance with 
the procedures described in Sec.  685.210, giving priority to 
applicants that are WIOA sec. 167 grantees. Planning documents required 
for grants funded by WIOA sec. 127(a)(1) will be described in the FOA; 
and allocation of WIOA sec. 127(a)(1) funds will be based on the 
comparative merits of the applications in accordance with criteria set 
forth in the FOA.
Section 685.500 What is supplemental youth workforce investment 
activity funding?
    Proposed Sec.  685.500 describes that if Congress appropriates more 
than $925 million for WIOA youth workforce investment activities in a 
fiscal year, 4 percent of the excess amount must be used to provide 
workforce investment activities for eligible MSFW youth under WIOA sec. 
167.
Section 685.510 What requirements apply to grants funded by the 
Workforce Innovation and Opportunity Act?
    Proposed Sec.  685.510 specifies that the requirements in subparts 
A through D of Sec.  685 apply to grants funded by WIOA sec. 127(a)(1), 
except that grants described in this subpart must be used only for 
workforce investment activities for eligible MSFW youth, as described 
in Sec.  685.370 and WIOA sec. 167(d) (including related assistance and 
supportive services).
Section 685.520 What is the application process for obtaining a grant 
funded by the Workforce Innovation and Opportunity Act?
    Proposed Sec.  685.520 specifies that the Department will issue a 
separate FOA for grants funded by WIOA sec. 127(a)(1). The selection 
will be made in accordance with the procedures described in Sec.  
685.210, except that the Department reserves the right to provide 
priority to applicants that are WIOA sec. 167 grantees.
Section 685.530 What planning documents are required for grants funded 
by the Workforce Innovation and Opportunity Act?
    Proposed Sec.  685.530 specifies that planning documents required 
for grants funded by WIOA sec. 127(a)(1) will be described in the FOA.
Section 685.540 How are funds allocated to grants funded by the 
Workforce Innovation and Opportunity Act?
    Proposed Sec.  685.540 describes that the allocation of WIOA sec. 
127(a)(1) funds will be based on the comparative merits of the 
applications, in accordance with criteria set forth in the FOA.
Section 685.550 Who is eligible to receive services through grants 
funded by the Workforce Innovation and Opportunity Act?
    Proposed Sec.  685.550 describes that eligible MSFW youth as 
defined in Sec.  685.110 may receive services through grants funded by 
WIOA sec. 127(a)(1).
J. Part 686--The Job Corps Under Title I of the Workforce Innovation 
and Opportunity Act
1. Introduction
    This part provides proposed regulations for the Job Corps program, 
authorized in title I, subtitle C of WIOA. The regulations address the 
scope and purpose of the Job Corps program and provide requirements 
relating to site selection, protection, and maintenance of Job Corps 
facilities; funding and selection of center operators and service 
providers; recruitment, eligibility, screening, selection and 
assignment, and enrollment of Job Corps students; Job Corps program 
activities and center operations; student support; career transition 
services and graduate services; community connections; and 
administrative and management requirements. The Department's intent in 
the regulations is to incorporate the requirements of title I, subtitle 
C of the Act and to describe how the Job Corps program is operated in 
order to deliver relevant academic and career technical training (CTT) 
that leads to meaningful employment or post-secondary education. The 
regulations also serve to explain clearly the requirements necessitated 
by the unique residential environment of a Job Corps center. The major 
changes from the existing regulations reflect WIOA's effort to enhance 
the Job Corps program, provide access to high quality training and 
education, create incentives for strong contractor performance, and 
promote accountability and transparency.
2. Subpart A--Scope and Purpose
    This proposed subpart contains regulatory provisions that describe 
the Job Corps program, its purpose, the role of its Director, and 
applicable definitions. In describing the role of the Job Corps 
Director, this subpart provides that the Secretary has delegated the 
authority to carry out his or her responsibilities under this part to 
the National Director of Job Corps; therefore, all references to the 
Secretary issuing guidelines, procedures or standards means that they 
will be issued by the National Job Corps Director. This subpart also 
describes the Policy and Requirements Handbook (PRH), which provides 
the operating policies and

[[Page 20773]]

procedures governing day-to-day activities of the Job Corps program. 
The subpart describes the scope and purpose of the program, along with 
the responsibilities of its National Director. It promotes 
accountability and transparency by making readers aware of exactly what 
the Job Corps program plans to achieve and the procedures for doing so, 
as well as the role its leadership plays in its operation.
Section 686.100 What is the scope of this part?
    Proposed Sec.  686.100 contains the regulatory provisions governing 
the Job Corps program. It explains that procedures guiding day-to-day 
operations are proposed to be provided in the PRH and clarifies that 
throughout this part, phrases that refer to instructions or procedures 
issued by the Secretary refer to the PRH and other Job Corps 
Directives. Because this section of WIOA is so similar to the 
corresponding section in WIA, this proposed section retains the same 
requirements found at 20 CFR 686.100.
Section 686.110 What is the Job Corps program?
    Proposed Sec.  686.110 describes the Job Corps program. Job Corps 
is a national program that operates in partnership with States, 
communities, local Workforce Development Boards, youth councils, one-
stop centers and partners, and other youth programs to provide social, 
academic, career and technical education, and service-learning 
opportunities, primarily in a residential setting, for low-income young 
people. Proposed Sec.  686.110 reflects the increased focus in sec. 141 
of WIOA on connecting young people to the labor force by providing them 
with intensive social, academic, career and technical education in 
order to obtain secondary school diplomas or recognized credentials 
leading to successful careers in in-demand industries or occupations, 
the Armed Forces, or enrollment in post-secondary education. The 
program's goals for students are economic self-sufficiency, 
opportunities for advancement, and responsible citizenship.
Section 686.120 What definitions apply to this part?
    The definitions that are listed in this section are specific to 
this proposed part, which governs the Job Corps program. Other 
definitions that apply to the Job Corps program are defined under secs. 
3 and 142 of WIOA. Proposed Sec.  686.120 describes definitions in four 
categories.
    The first category is made up of proposed definitions that are the 
same as those included in the regulations at 20 CFR 686.120 that 
governed the Job Corps program under WIA. These are ``Absent Without 
Official Leave (AWOL),'' ``Capital improvement,'' ``Contract center,'' 
``Enrollee,'' ``Enrollment,'' ``Individual with a disability,'' 
``Interagency agreement,'' ``Job Corps Director,'' ``National Office,'' 
``Placement,'' ``Regional appeal board,'' ``Regional Director,'' 
``Regional Office,'' ``Regional Solicitor,'' ``Separation,'' 
``Student,'' and ``Unauthorized goods.'' Because these definitions are 
the same as those in the WIA regulations, the Department has not 
included further explanation of them below.
    The second category is made up of proposed definitions that are 
similar to definitions included in the WIA regulations at 20 CFR 
670.120, but they have been modified slightly due to differences in the 
definitions contained in WIOA. These are ``Applicable Local Board,'' 
``Civilian Conservation Center (CCC), ``Contracting Officer,'' 
``Graduate,'' ``Job Corps,'' ``Job Corps center,'' ``Low-income 
individual,'' ``National training contractor,'' ``Operational support 
services,'' ``Operator,'' and ``Outreach and admissions provider.''
    The third category is made up of proposed definitions that were not 
included in the WIA regulations, but they are defined in sec. 142 of 
WIOA. These are ``Applicable one-stop center,'' ``Former Enrollee,'' 
and ``Service Provider.''
    The fourth category is made up of proposed definitions that apply 
to the Job Corps program and are commonly used in these regulations, 
but do not appear in the WIA regulations or in WIOA. These are ``Career 
Technical Training,'' ``Career Transition Service Provider,'' and 
``Participant.''
    Aside from the terms in the first category, the definitions are 
explained as the terms appear in this proposed section in alphabetical 
order, as follows:
    Applicable Local Board--The proposed definition of this term 
implements the definition of ``applicable Local Board'' contained in 
sec. 142 of WIOA. It is similar to the definition of ``Workforce 
Investment Board'' in the WIA regulations.
    Applicable one-stop center--The proposed definition of this term 
implements the definition contained in sec. 142 of WIOA.
    Career Technical Training--The proposed definition of this term 
means career and technical education and training, which is the term 
most often used by WIOA rather than ``vocational training,'' as used in 
WIA.
    Career Transition Service Provider--The proposed definition of this 
term means an organization acting under a contract or other agreement 
with Job Corps to provide career transition services for graduates and, 
to the extent possible, for former students. WIOA uses both the term 
``Career Transition Service Provider'' and ``Placement Provider'' 
interchangeably. Career transition services are further explained in 
subpart G of the proposed rule.
    Contracting officer--The proposed definition of this term is 
similar to the definition of ``contracting officer'' in the WIA 
regulations, but it does not include ``Regional Director,'' because 
contracting officers are most often not Regional Directors.
    Former Enrollee--The proposed definition of this term implements 
the definition contained in sec. 142 of WIOA.
    Graduate--The proposed definition of this term implements the 
definition contained in sec. 142 of WIOA.
    Job Corps--The proposed definition of this term is similar to the 
definition of ``Job Corps'' in the WIA regulations, but it clarifies 
that the Job Corps is established within the Department and cites the 
applicable section of WIOA.
    Job Corps center--The proposed definition of this term is the same 
as the definition in the WIA regulations, except that this definition 
cites the applicable section of WIOA.
    Low-income individual--The proposed definition of this term is the 
same as the definition in the WIA regulations, except that this 
definition cites the applicable section of WIOA.
    National training contractor--The proposed definition of this term 
is slightly different from the definition in the WIA regulations, 
because the term ``career and technical training'' is used rather than 
``vocational training.'' However, the meaning remains unchanged.
    Operational support services--The proposed definition of this term 
is slightly different from the definition in the WIA regulations, 
because the term ``career and technical training'' is used instead of 
``vocational training.'' However, the meaning remains unchanged.
    Operator--The proposed definition of this term implements the 
definition of ``operator'' contained in sec. 142 of WIOA. It is similar 
to the definition of ``center operator'' in the WIA regulations.
    Outreach and admissions provider - The proposed definition of this 
term is similar to the definition of ``outreach

[[Page 20774]]

and admissions agency'' in the WIA regulations, but it clarifies that 
the entity performs recruitment in addition to outreach and enrollment 
activities, consistent with the definition in sec. 142 of WIOA.
    Participant--The proposed definition of this term clarifies which 
individuals are considered participants for performance reporting 
purposes under proposed Sec.  686.1010. The definition of participant 
includes graduates and those enrollees and former enrollees who have 
completed the career preparation period. It also includes enrollees and 
former enrollees who have remained in the program for 60 days or more, 
regardless of whether they have completed their career preparation 
period. During the career preparation period, the student learns, 
demonstrates, and practices personal responsibility and skills required 
in the workplace; learns, demonstrates, and practices job search 
skills; visits and learns about one-stop centers; and creates a 
personal career development plan with the help of staff. In most cases, 
the career preparation period culminates with the commitment to the 
Personal Career Development Plan. The Department proposes this 
limitation because students are not assigned to trades and are not 
generally receiving the services described subpart E of this part until 
the career preparation period is completed. The career preparation 
period is described in Job Corps' Policy and Requirements Handbook.
    Service Provider--The proposed definition of this term implements 
the definition contained in sec. 142 of WIOA.
Section 686.130 What is the role of the Job Corps Director?
    Proposed Sec.  686.130 describes the role of the Job Corps 
Director, noting that he/she has been delegated authority to carry out 
the responsibility of the Secretary under title I, subtitle C of WIOA 
related to the operation of the Job Corps program. Proposed Sec.  
686.130 also clarifies that references in this part referring to 
``guidelines'' or ``procedures issued by the Secretary'' mean that the 
Job Corps Director issues such guidelines. This proposed section 
retains the same requirements as those found at 20 CFR 686.130.
3. Subpart B--Site Selection and Protection and Maintenance of 
Facilities
    This proposed subpart describes how sites for Job Corps centers are 
selected, the handling of capital improvements and new construction on 
Job Corps centers, and responsibilities for facility protection and 
maintenance. The requirements in this subpart are not significantly 
different from the corresponding requirements in the WIA Job Corps 
regulations at 20 CFR part 686 subpart B. The Secretary, through 
delegation of authority to the National Director of Job Corps, must 
approve the location and size of all Job Corps centers, and establish 
procedures for requesting, approving, and initiating capital 
improvement and new construction on Job Corps centers, which serves to 
strengthen and enhance the program as a whole.
Section 686.200 How are Job Corps center locations and sizes 
determined?
    Proposed Sec.  686.200 explains that the Secretary must approve the 
location and size of all Job Corps centers, including both contract 
centers and CCCs. The Secretary also establishes procedures for making 
decisions concerning the establishment, relocation, expansion, or 
closing of contract centers.
Section 686.210 How are center facilities improvements and new 
construction handled?
    Proposed Sec.  686.210 states that the Secretary establishes 
procedures for requesting, approving, and initiating capital 
improvements and new construction on Job Corps centers.
Section 686.220 Who is responsible for the protection and maintenance 
of center facilities?
    Proposed Sec.  686.220 states that the Secretary establishes 
procedures for the protection and maintenance of contract center 
facilities owned or leased by the Department. The proposed section also 
states that when the Department of Agriculture operates CCCs on public 
land, it will be responsible for the protection and maintenance of CCC 
facilities. The Secretary issues procedures for conducting periodic 
facility surveys of centers to determine their condition and to 
identify additional physical needs. This proposed section retains the 
same requirements found at 20 CFR 670.220.
4. Subpart C--Funding and Selection of Center Operators and Service 
Providers
    In this proposed subpart the Department implements new requirements 
of WIOA with regard to the operators of high-performing centers, the 
length of contractual agreements to operate Job Corps centers, and how 
entities are selected to receive funding to operate Job Corps centers 
and to provide outreach, admissions, and career transition support 
services. In addition to adding to the list of considerations currently 
used in selecting Job Corps center operators and service providers, 
WIOA emphasizes competition to increase the performance and quality of 
the Job Corps program. WIOA also provides that an entity, in its role 
as incumbent operator of a center deemed to be high performing, may 
compete in any competitive selection process carried out for an award 
to operate that center, even in cases where the selection of the 
operator is set aside for small businesses as required by the Federal 
Acquisition Regulation. This serves to ensure continued access to high 
quality training and education for Job Corps students, since a high 
performing incumbent operator has an established and proven record of 
providing it. WIOA also provides that a center operations contracts 
cannot exceed 2 years, with three 1-year options to renew. This 
codifies current Job Corps practice. Furthermore, WIOA precludes the 
Secretary from exercising an option to renew a center operations 
contract for an additional 1-year period if certain criteria are not 
met, with limited exceptions. All of these new and expanded provisions 
follow WIOA's theme of enhancing the Job Corps program and providing 
access to high quality training and education by ensuring Job Corps 
centers are staffed with high quality service providers.
Section 686.300 What entities are eligible to receive funds to operate 
centers and provide training and operational support services?
    Proposed Sec.  686.300 implements secs. 147(a)(1), 147(e), and 
145(a)(3) of WIOA, establishing the entities eligible to receive funds 
to operate Job Corps centers, and to provide outreach and admissions, 
career transition, and other operational support services.
    Proposed paragraphs (a)(1), (a)(2), and (a)(4) reflect the entities 
eligible to operate Job Corps centers listed in WIOA sec. 147(a)(1)(A). 
Proposed paragraph (a)(3) includes ``Indian tribes and organizations'' 
as eligible center operators, consistent with sec. 147(e) of WIOA. For 
purposes of this section, the Department interprets ``Indian tribes and 
organizations'' consistent with sec. 147(e)(2) of WIOA, which provides 
that the terms ``Indian'' and ``Indian tribe'' have the meanings given 
them in sec. 4 of the ISDEAA (codified at 25 U.S.C. 450b(d) and (e)), 
which says that ``Indian tribe'' means any Indian tribe, band, nation, 
or other organized group or community, including any Alaska Native 
village or regional or village corporation as defined in or established 
pursuant to the Alaska Native Claims Settlement Act (codified at 43 
U.S.C. 1601 et seq.), which is recognized as

[[Page 20775]]

eligible for the special programs and services provided by the United 
States to Indians because of their status as Indians.
    Proposed paragraph (b) lists the entities eligible to receive funds 
to provide necessary services to Job Corps centers, including outreach 
and admissions, career transition, and other operational support 
services. Generally, as provided in WIOA sec. 147(a)(1)(B), local or 
other entities with the necessary capacity to provide activities 
described in this part are considered eligible entities. Paragraphs 
(b)(1), (b)(2), and (b)(3) reflect the entities listed in sec. 
145(a)(3) of WIOA. Currently Job Corps also allows private for-profit 
and non-profit corporations to act as eligible service providers; 
paragraph (b)(2) clarifies that private for-profit and non-profit 
corporations continue to be included as business organizations eligible 
to receive funds as service providers.
Section 686.310 How are entities selected to receive funding to operate 
centers?
    Proposed Sec.  686.310 implements secs. 147(a)(2) and (a)(3) of 
WIOA, which contain new provisions to strengthen the Job Corps 
contracting process by requiring specific criteria that emphasize 
quality, performance, and accountability to be addressed as part of the 
selection process for center operators. The proposed section adopts 
these criteria to improve the effectiveness of the program in helping 
young people become responsible citizens by providing them with the 
skills they need for successful careers in in-demand industry sectors, 
occupations, or the Armed Forces, or for enrollment in post-secondary 
education. The Department welcomes comments on how best to embed a 
focus on quality, performance, and accountability into the procurement 
process.
    Proposed Sec.  686.310(a) implements sec. 147(a)(2)(A) of WIOA, 
stating that the Secretary selects eligible entities to operate 
contract centers on a competitive basis in accordance with applicable 
statutes and regulations. This paragraph also explains that in 
selecting an entity, ETA issues requests for proposals (RFPs) for the 
operation of all contact centers according to the Federal Acquisition 
Regulation (48 chapter 1) and the Department's Acquisition Regulation 
(48 chapter 29). ETA develops RFPs for center operators in consultation 
with the Governor, the center workforce council (if established), and 
the Local Board for the workforce development area in which the center 
is located.
    Proposed paragraph (b) requires that the RFPs for each contract 
center describe uniform specifications and standards, as well as 
specifications and requirements that are unique to the operation of the 
specific center.
    Proposed paragraph (c) implements the factors for selection of an 
entity to operate a Job Corps center established in sec. 
147(a)(2)(B)(i) of WIOA, by specifying that the selection criteria will 
be established by the Secretary and set forth in the RFP. Proposed 
paragraphs (c)(1) through (5) set forth the specific criteria that must 
be included in the RFP, as listed in sec. 147(a)(2)(B)(i) of WIOA. 
Paragraph (c)(1) retains the language found in the WIA regulations at 
20 CFR 670.310(c)(1), requiring that the offeror demonstrate its 
ability to coordinate the activities carried out through the Job Corps 
center with activities carried out under the appropriate State and 
local workforce investment plans. This supports the overall goal of 
better connecting and aligning Job Corps with the workforce system.
    Proposed paragraphs (c)(2) through (4) implement the criteria at 
WIOA secs. 147(a)(2)(B)(i)(II) through 147(a)(2)(B)(i)(IV). These 
provisions support the goal of better alignment with the workforce 
system and the increased focus on past performance and student outcomes 
against the primary indicators of performance for eligible youth and 
the Job Corps program.
    Proposed paragraph (c)(5) is a new element in the selection process 
established in sec. 147(a)(2)(B)(i)(V) of WIOA, requiring that the 
criteria include the offeror's ability to demonstrate a record of 
successfully assisting at-risk youth to connect to the workforce, 
including providing them with intensive academics and career and 
technical training. This aligns with the increased focus on student 
outcomes and emphasizes the purpose of the program, which is to provide 
students with the skills they need for successful careers in in-demand 
industries, occupations, or the Armed Forces, or to continue on to 
post-secondary education. The Department welcomes comments on how to 
assess potential offerors' past records in assisting at-risk youth to 
connect to the workforce.
    Proposed paragraph (d) implements the additional factors for 
selection of an entity to operate a Job Corps center that are specified 
in sec. 147(a)(3) of WIOA. These provisions support the goals of better 
alignment with the workforce system and increased focus on past 
performance and student outcomes against the primary indicators of 
performance for eligible youth and the Job Corps program. In addition, 
paragraph (d) specifies that the information described in paragraphs 
(d)(1) through (11) must be submitted at such time in the procurement 
process, and in such form, as the Secretary determines is appropriate.
Section 686.320 What if a current center operator is deemed to be an 
operator of a high-performing center?
    Proposed Sec.  686.320(a) implements sec. 147(b)(1) of WIOA, 
allowing an entity that, in its role as the incumbent operator of a 
center, meets the requirements of this section to be considered an 
operator of a high-performing center. If the entity is considered an 
operator of a high-performing center, the entity must be allowed to 
compete in any competitive selection process carried out for an award 
to operate that center. This means that in cases where the selection of 
the operator of a particular center is set aside for small businesses 
as required by the Federal Acquisition Regulation, the incumbent 
operator may participate in the subsequent competition for the center 
operations contract even if the operator would be otherwise ineligible 
to compete as a result of the set-aside.
    Proposed paragraph (b) implements sec. 147(b)(2) of WIOA, which 
provides the criteria an operator must meet to be considered an 
operator of a high-performing center for the purposes of paragraph (a). 
First, under paragraph (b)(1), the center must be ranked among the top 
20 percent of Job Corps centers for the most recent preceding PY 
according to the ranking described in proposed Sec.  686.1070. Second, 
under paragraph (b)(2), the center must meet the expected levels of 
performance established with respect to each of the primary indicators 
of performance for eligible youth found in proposed Sec.  686.1000. A 
center will be determined to have met the expected measures of 
performance if, per proposed Sec.  686.320(b)(2)(i) and (ii), it 
achieved an average of at least 100 percent of the expected level of 
performance for the indicator over the most recent preceding 3 PYs, 
and, for the most recent preceding PY for which information is 
available at the time the determination is made, the center achieved at 
least 100 percent of the expected level of performance established for 
the indicator. This provision emphasizes the importance of meeting the 
expected levels of performance related to the primary indicators, by 
providing an opportunity for the most successful incumbent contractors 
to compete to operate a high-performing center even if

[[Page 20776]]

the competition for that center is a small business set-aside and the 
incumbent would not normally meet the criteria to compete in a small 
business set-aside competition. The Department anticipates going 
through the market research phase of the competition before determining 
whether the competition will be set aside for small businesses; a 
determination as to whether the incumbent contractor meets the criteria 
in proposed paragraph (b) will likely be made after the market research 
phase is completed and before the issuance of the solicitation.
    Proposed paragraph (c) implements the transition procedures in sec. 
147(b)(3) of WIOA, and describes the criteria that must be met for an 
operator to be considered to be an operator of a high-performing center 
if any of the PYs described in paragraph (b) precede the implementation 
of the establishment of the expected levels of performance and the 
application of the primary indicators of performance for eligible 
youth.
Section 686.330 What is the length of an agreement entered into by the 
Secretary for operation of a Job Corps center and what are the 
conditions for renewal of such an agreement?
    Proposed Sec.  686.330 implements secs. 147(f)-(g) of WIOA, which 
contain new provisions to strengthen the Job Corps contracting process 
by enacting new requirements for the length of center operations 
contracts and the conditions under which they may be renewed. These 
provisions emphasize quality and integrity in center operators and 
direct the Secretary not to exercise option years for contracts where 
minimum standards of performance related to the primary indicators of 
performance for eligible youth are not met. These provisions further 
support the overall vision of improved performance and accountability 
for the Job Corps program.
    Proposed Sec.  686.330(a) implements sec. 147(f) of WIOA, which 
provides that contracts to operate a Job Corps center cannot exceed 2 
years, but that the Secretary can exercise any contractual option to 
renew the agreement in 1-year increments for not more than 3 additional 
years. This proposed paragraph reflects current Job Corps contracting 
practice.
    Proposed paragraph (b) explains that the Secretary will establish 
procedures for evaluating the option to renew an agreement that include 
an assessment of the factors described in proposed paragraph (c), a 
review of contract performance and financial reporting compliance, a 
review of the program management and performance data described in 
proposed Sec. Sec.  686.975 and 686.980, and an evaluation of the 
factors described in proposed paragraph (d).
    Proposed paragraph (c) implements sec. 147(g)(4) of WIOA, which 
establishes conditions that must be met for the Secretary to exercise a 
contractual option to renew an agreement for an entity to operate a Job 
Corps center.
    Proposed paragraph (d) implements sec. 147(g)(1) of WIOA, which 
prohibits the Secretary from renewing an agreement for an entity to 
operate a Job Corps center for any 1-year additional period if, for 
both of the 2 most recent preceding PYs for which information is 
available at the time the determination to exercise an option is made, 
the center both has been ranked in the lowest 10 percent of Job Corps 
centers according to the ranking described in proposed Sec.  686.1070 
and has failed to achieve an average of 50 percent or higher of the 
expected level of performance with respect to each of the primary 
indicators of performance for eligible youth (as described in proposed 
Sec.  686.1000). If a second year of program data is unavailable at the 
time the determination regarding the contractual option is made, 
proposed paragraph (d) requires the use of data from the preceding year 
from which performance information is available. This provision 
emphasizes the center operator's accountability for meeting the 
expected levels of performance related to the primary indicators by 
establishing minimum performance standards that must be met for the 
Secretary to exercise an option year.
    Proposed paragraph (e) addresses the availability of information 
and data necessary to make the determination required by proposed 
paragraph (d). The availability of sufficient information to make this 
determination is a particular concern in situations where there is a 
change of operators at the beginning of an agreement, and there is a 
period of time during which student outcome data, and thus the primary 
indicators of performance, reflect the performance of the previous 
operator rather than the operator upon whose contract the determination 
is being made.
    In order to prevent an entity from being penalized for the poor 
performance of the previous operator, proposed paragraph (e)(1) states 
that information will only be considered to be available for a PY for 
purposes of paragraph (d) if for each of the primary indicators of 
performance, all of the students included in the cohort being measured 
either began their participation under the current center operator or, 
if they began their participation under the previous center operator, 
were on center for at least 6 months under the current operator. Six 
months represents a sufficient length of time for the efforts of the 
current operator to influence the outcomes achieved by a student. 
Proposed paragraph (e)(2) further provides that if complete information 
for any of the indicators of performance described in paragraph (d)(2) 
is not available for either of the 2 PYs described in paragraph (d), 
the Secretary will review partial PY data from the most recent PY for 
those indicators, if at least 2 quarters of data are available, when 
making the determination required under paragraph (d)(2). The 
Department recognizes that data for some of the primary indicators of 
performance do not become mature for an extended period of time. For 
example, employment in the fourth quarter after exit and credential 
attainment are measured more than a year after the student exits the 
program and then are reported in a subsequent quarter. Because the 
Secretary's decision on whether to exercise the first option year is 
normally made about 18 months after the contract begins, in many cases 
complete information on employment in the fourth quarter after exit and 
credential attainment will not be available at the time the first 
option year decision is made. The Department invites comments on the 
issue of information availability, including the threshold for the 
point at which the performance of the center reflects the performance 
of the current operator.
    Proposed paragraph (f) provides a transition provision for 
establishing the criteria that must be met for an operator to meet the 
requirements of proposed paragraph (d). The transition provisions apply 
if any of the PYs described in paragraph (d) precede the implementation 
of the primary indicators of performance for eligible youth and 
establishment of the expected levels of performance. While the WIOA 
statute does not include a transition provision, it is necessary to add 
such a provision because although the WIOA contracting provisions, 
including this section, go into effect on July 1, 2015, the WIOA 
performance reporting requirements do not go into effect until July 1, 
2016. In addition, there will be a gap in time during which initial 
data on the primary indicators of performance is being collected and 
baselines are being established when the expected levels of performance 
will not have been established and therefore, the data described in 
paragraph (d)(2) will not yet be available. ETA has modeled the 
transition language in proposed

[[Page 20777]]

paragraph (f) on the transition provision in WIOA sec. 147(b)(3), which 
is used to determine whether a center is a high performing center, and 
based on criteria similar to the criteria in proposed paragraph (d). 
The transition bases the determination on similar data points using the 
performance of the Job Corps center regarding the national goals or 
targets established by the Office of the Job Corps under the previous 
performance accountability system, which is the available data that 
most closely aligns with the requirement in paragraph (d). Therefore, 
the Department chose this as the best proxy data available. The 
Department invites comments on the approach to transitioning from the 
WIA to WIOA performance management systems.
    Proposed paragraph (g), implements sec. 147(g)(2) of WIOA, which 
provides an exception to the prohibition against exercising an option 
year for an operator of a low-performing center as determined under 
proposed paragraph (d).
    As required in sec. 147(g)(3) of WIOA, if the Secretary exercises a 
contractual option by applying the exception described in proposed 
paragraph (g), proposed paragraph (h) requires the Secretary to provide 
a detailed explanation of the rationale for exercising the option to 
the Committee on Education and the Workforce of the House of 
Representatives and the Committee on Health, Education, Labor, and 
Pensions of the Senate.
Section 686.340 How are entities selected to receive funding to provide 
outreach and admission, career transition and other operational support 
services?
    Proposed Sec.  686.340(a) implements sec. 147(a)(2)(A) of WIOA, 
generally describing the process by which eligible entities are 
selected to provide outreach and admissions, career transition, and 
other operational support services to the Job Corps program.
    Proposed paragraph (b) requires that the RFP for each support 
service contract describes uniform specifications and standards, as 
well as specifications and requirements that are unique to the 
operation of the specific center.
    Proposed paragraph (c) implements the factors for selection of an 
entity to provide operational support services, as established in sec. 
147(a)(2)(B)(i) of WIOA, by specifying that the selection criteria will 
be established by the Secretary and set forth in the RFP. The criteria 
listed in proposed paragraphs (c)(1) through (5) are the same as those 
in proposed Sec.  686.310(c)(1) through (5). Proposed paragraph (c)(6) 
provides that the Secretary may require additional information or 
selection factors in the RFP.
Section 686.350 What conditions apply to the operation of a Civilian 
Conservation Center?
    Proposed Sec.  686.350 is a new section that implements sec. 147(d) 
of WIOA. Proposed paragraph (a) implements sec. 147(d)(1) of WIOA, 
establishing that the Secretary of Labor may enter into an agreement 
with the Secretary of Agriculture to operate Job Corps centers called 
CCCs. Paragraph (a) also contains the description of the 
characteristics of CCCs.
    Proposed paragraph (b) retains the language in the WIA regulations 
at 20 CFR 670.310(e) that when the Secretary of Labor enters into an 
agreement with the Secretary of Agriculture for the funding, 
establishment, and operation of CCCs, provisions are included to ensure 
that the Department of Agriculture complies with the regulations under 
this part.
    Proposed paragraph (c), implementing sec. 147(d)(2) of WIOA, 
permits enrollees in CCCs to provide assistance in addressing national, 
State, and local disasters, consistent with relevant child labor laws. 
This proposed paragraph further requires that the Secretary of 
Agriculture ensure that enrollees are properly trained, equipped, 
supervised, and dispatched consistent with the standards for the 
conservation and rehabilitation of wildlife established under the Fish 
and Wildlife Coordination Act (16 U.S.C. 661 et seq.).
    Proposed paragraph (d) requires the Secretary of Agriculture to 
designate a Job Corps National Liaison to support the agreement between 
the Departments of Labor and Agriculture to operate CCCs, as required 
by sec. 147(d)(3) of WIOA.
    Proposed paragraph (e) permits the Secretary, in consultation with 
the Secretary of Agriculture, to select a private entity to operate a 
CCC using the process and requirements described at Sec.  686.310.
    Proposed paragraph (f) permits the Secretary to close a CCC as part 
of the Department's administration of the Job Corps program if it 
determines that such action would be appropriate.
Section 686.360 What are the requirements for award of contracts and 
payments to Federal agencies?
    Proposed Sec.  686.360 states the requirements and authorities that 
apply to the award of contracts and payments to Federal agencies. This 
section retains the same requirements as those in the WIA regulations 
at 20 CFR 670.320.
5. Subpart D--Recruitment, Eligibility, Screening, Selection and 
Assignment, Enrollment
    This proposed subpart describes who is eligible for Job Corps under 
WIOA and provides additional factors that are considered in selecting 
eligible applicants for enrollment. Also described is how applicants 
who meet eligibility and selection requirements are assigned to 
centers, which implements WIOA's new requirements that the assignment 
plan consider the size and enrollment level of a center, including the 
education, training, and supportive services provided, and the 
performance of the Job Corps center related to the newly established 
expected levels of performance. WIOA also amends the assignment plan to 
provide for assignments at the center closest to home that offers the 
type of career and technical training selected by the individual rather 
than just the center closest to home, which improves access to high 
quality training for Job Corps students. These proposed regulations 
serve to enhance the Job Corps program overall by ensuring that the 
individual training and education needs of applicants and enrollees are 
met in accordance with the requirements of WIOA. They also ensure that 
applicants and enrollees are provided accurate information about the 
standards and expectations of the Job Corps program and are fully 
prepared to be successful.
Section 686.400 Who is eligible to participate in the Job Corps 
program?
    Proposed paragraph (a) implements the eligibility requirements in 
sec. 144(a) of WIOA. According to WIOA, to be eligible to participate 
in the Job Corps, an individual must be at least 16 and not more than 
24 years old at the time of enrollment, except that: Under proposed 
paragraph (a)(1)(i), the Job Corps Director may waive the maximum age 
limitation described in paragraph (a)(1) and the requirement in 
paragraph (a)(1)(ii) for an individual with a disability who is 
otherwise eligible according to the requirements listed in Sec. Sec.  
686.400 and 686.410. Proposed paragraph (a)(1)(ii) states that not more 
than 20 percent of individuals enrolled nationwide can be aged 22 to 24 
at the time of enrollment. The regulatory language in paragraph 
(a)(1)(i) differs from the language in the WIA regulations at 20 CFR 
670.400(a)(1). The proposed language is intended to enable the Job 
Corps Director to admit individuals with disabilities even if they 
exceed the age limitations in paragraph

[[Page 20778]]

(a) as long as the Director determines that the individual meets all 
the other eligibility requirements listed in proposed Sec.  686.410.
    In addition to satisfying the age requirements above, proposed 
Sec.  686.410 lists the additional requirements for a person to be 
eligible to participate in Job Corps. An individual must also be a low-
income individual and be facing one or more of the following barriers 
to education and employment: Be basic skills deficient, as defined in 
WIOA sec. 144(a)(3)(A); be a high school dropout; be homeless, as 
defined in sec. 41043(6) of the Violence Against Women Act of 1994 (42 
U.S.C. 14043e-2(6)); be a homeless child or youth, as defined in sec. 
725(2) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 
1143a(2)); a runaway, an individual in foster care, or an individual 
who was in foster care and has aged out of the system; be a parent; or 
require additional education, career, and technical training, or 
workforce preparation skills in order to obtain and retain employment 
that leads to economic self-sufficiency.
    Proposed paragraph (b) implements the special eligibility rule for 
veterans in sec. 144(b) of WIOA. That rule states that an otherwise 
eligible veteran may still enroll in Job Corps if they do not meet the 
income requirement at Sec.  686.400(a)(2) as a result of military 
income earned within the 6-month period prior to the individual's 
application for Job Corps, per 38 U.S.C. 4213.
Section 686.410 Are there additional factors which are considered in 
selecting an eligible applicant for enrollment?
    In addition to the basic eligibility requirements identified above, 
proposed Sec.  686.410 lists several additional criteria that must be 
met before an otherwise eligible applicant may be enrolled in Job 
Corps.
    Proposed paragraph (a) provides, pursuant to sec. 145(a)(2)(C) of 
WIOA, that an otherwise eligible applicant can be selected for 
enrollment in Job Corps only if a determination is made, based on 
information relating to the background, needs and interests of the 
applicant, that the applicant's education and career and technical 
needs can best be met through the Job Corps program.
    An additional determination, as described in proposed paragraph 
(b), implementing sec. 145(b)(1)(A) of WIOA, must also be made that 
there is a reasonable expectation that the applicant can participate 
successfully in group situations and activities, and is not likely to: 
Engage in actions that would potentially prevent other students from 
receiving the benefit of the program; be incompatible with the 
maintenance of sound discipline; or impede satisfactory relationships 
between the center to which the student is assigned and the surrounding 
local communities. These requirements support the vision of Job Corps 
centers as safe environments with a culture that is conducive to 
student learning and achievement of the academic, technical, and social 
skills needed to obtain employment or enter post-secondary education.
    Proposed paragraph (c) requires that an applicant must also be made 
aware of and understand the center's rules, the consequences for 
failing to observe the rules, and agree to comply with the rules.
    Proposed paragraph (d) provides that no one will be denied 
enrollment in Job Corps solely on the basis of contact with the 
criminal justice system, except if the individual has been convicted of 
a felony consisting of murder, child abuse, or a crime involving rape 
or sexual assault, in accordance with secs. 145(b)(2) and (3) of WIOA. 
All applicants must also submit to a background check conducted 
according to procedures established by the Secretary and with 
applicable State and local laws. If the background check finds that the 
applicant is on probation, parole, under a suspended sentence, or under 
the supervision of any agency as a result of court action or 
institutionalization, the court or appropriate supervising agency may 
certify in writing that it will approve of the applicant's 
participation in Job Corps, and provide full release from its 
supervision, and that the applicant's participation and release does 
not violate applicable laws and regulations. However, the Department 
notes that although these individuals are eligible, the final admission 
decision remains with the Job Corps.
    Finally, proposed paragraph (e) requires that suitable arrangements 
be made for the care of any dependent children for the proposed period 
of enrollment.
Section 686.420 Are there any special requirements for enrollment 
related to the Military Selective Service Act?
    As required by WIOA sec. 146(a), this proposed section requires 
each male applicant 18 years of age or older, or a male student who 
turns 18 years of age, to present evidence that he has complied with 
sec. 3 of the Military Selective Service Act (50 U.S.C. App. 451 et 
seq.). These requirements are the same as those found at 20 CFR 
670.420.
Section 686.430 What entities conduct outreach and admissions 
activities for the Job Corps program?
    Proposed Sec.  686.430 states that the Secretary makes arrangements 
with outreach and admission agencies to perform Job Corps recruitment, 
screening and admissions functions according to standards and 
procedures issued by the Secretary. Entities eligible to receive funds 
to provide outreach and admissions service are identified in Sec.  
686.300(b).
Section 686.440 What are the responsibilities of outreach and 
admissions providers?
    Proposed paragraphs (a) and (b) of this section require outreach 
and admission providers to perform a number of tasks to recruit and 
enroll students, including completing all Job Corps application forms 
and determining whether the applicants meet the eligibility and 
selection criteria outlined for participation in the program as 
provided in proposed Sec. Sec.  686.400 and 686.410.
    Proposed paragraph (c) clarifies that the Secretary may require 
that the National Director or his or her designee make determinations 
with regard to one or more of the eligibility criteria.
    This proposed section retains the same requirements as those found 
at 20 CFR 670.450.
Section 686.450 How are applicants who meet eligibility and selection 
criteria assigned to centers?
    In accordance with WIOA secs. 145(c) and (d), proposed Sec.  
686.450 describes the process for assigning applicants to Job Corps 
centers.
    Applicants who meet the eligibility and selection requirements of 
proposed Sec. Sec.  686.400 and 686.410 are assigned to a center based 
on an assignment plan developed by the Secretary based on an analysis 
of the factors described in proposed paragraph (a). These factors are 
specified in secs. 145(c) and (d) of WIOA. They are similar to the 
factors for the assignment plan required to be developed under WIA, 
except that sec. 145(c)(2)(D) of WIOA also requires the Secretary to 
consider the performance of the center, as described in proposed Sec.  
686.450(a).
    Proposed paragraph (b) describes the general rules for assignment 
of individual enrollees, consistent with sec. 145(d) of WIOA.
    In accordance with sec. 145(d)(2) of WIOA, and similar to the same 
requirement in WIA, proposed paragraph (c) mandates that if a parent or 
guardian objects to the assignment of

[[Page 20779]]

a student under the age of 18 to a center other than the center closest 
to home that offers the desired career and technical training, the 
Secretary must not make such an assignment.
Section 686.460 What restrictions are there on the assignment of 
eligible applicants for nonresidential enrollment in Job Corps?
    In accordance with WIOA sec. 147(c), this proposed section requires 
that no more than 20 percent of students enrolled in Job Corps 
nationwide may be nonresidential students.
Section 686.470 May an individual who is determined to be ineligible or 
an individual who is denied enrollment appeal that decision?
    Proposed Sec.  686.470(a) describes the process for an applicant to 
appeal a denial of their application.
    Proposed paragraph (b) states that if an applicant believes that he 
or she has been determined ineligible or not selected for enrollment in 
violation of the nondiscrimination and equal opportunity provisions 
contained in sec. 188 of WIOA and at 29 CFR part 37, the individual may 
file a complaint as described by the nondiscrimination regulations at 
29 CFR part 37. Finally, proposed paragraph (c) requires that an 
applicant denied enrollment be referred to the appropriate one-stop 
center or other service provider as appropriate.
    This proposed section retains the same requirements as those found 
at 20 CFR 670.470.
Section 686.480 At what point is an applicant considered to be enrolled 
in Job Corps?
    Proposed Sec.  686.480 delineates when an applicant is considered 
to be enrolled in Job Corps and requires that, based on procedures 
issued by the Secretary, center operators must document the enrollment 
of new students.
    This proposed section retains the same requirements as those found 
at 20 CFR 670.480.
Section 686.490 How long may a student be enrolled in Job Corps?
    This proposed section implements the requirements in sec. 146(b) of 
WIOA. Proposed paragraph (a) states the general rule that a student may 
remain enrolled in Job Corps for no more than 2 years.
    However, proposed paragraph (b) implements four exceptions to this 
rule, consistent with sec. 146(b) of WIOA, which permit the 2 years to 
be extended in specific cases. Paragraph (b)(1) permits the Secretary 
to extend the 2 year enrollment period in special cases, according to 
procedures issued by the Secretary. Paragraph (b)(2) permits up to a 1 
year extension of a student's enrollment in an advanced career training 
program in order to complete the program. Paragraph (b)(3) permits an 
extension for a student with a disability who would reasonably be 
expected to meet the standards for a Job Corps graduate if allowed to 
participate in the Job Corps for up to an additional year. Finally, 
proposed paragraph (b)(4) permits a student who participates in 
national service authorized by a CCC to have his or her enrollment 
extended for the amount of time equal to the period of national 
service. This paragraph (b)(4) implements sec. 146(a)(3) of WIOA. WIOA 
also states that students enrolled in CCCs may provide assistance in 
addressing national, State, and local disasters (sec. 147(d)(2) of 
WIOA; see proposed Sec.  686.610(a)). Both of these provisions are new 
in WIOA. Taken together, these provisions show WIOA's added attention 
to ensuring that Job Corps students in CCCs have the flexibility to 
provide assistance, such as fire-fighting, for example, when needed in 
a disaster. The Department notes that similar to the provision in 
proposed Sec.  686.490(b)(4) that addresses national service, the 
Secretary is authorized to extend the enrollment period for students 
who perform service to address State and local disasters or other needs 
under proposed Sec.  686.490(b)(1).
6. Subpart E--Program Activities and Center Operations
    This proposed subpart describes the services and training that a 
Job Corps center must provide. Job Corps distinguishes itself from 
other training programs by providing students with residential services 
in combination with hands-on training and experience aligned with 
industry standards. While education, training, and job placement are 
core components of what the program offers, this section of the 
regulations describes how Job Corps provides a comprehensive service 
model that also includes life skills, emotional development, personal 
management, and responsibility. New regulations addressing advanced 
career training programs are included; such programs provide broader 
opportunities for higher wages and career advancement.
    This proposed subpart also establishes the requirements for a 
student accountability system and behavior management system. Job 
Corps' policy for violence, drugs, and unauthorized goods is described. 
Requirements to ensure students are provided due process in 
disciplinary actions, to include center fact-finding and review board 
and appeal procedures are outlined. These systems and requirements 
serve to enhance the Job Corps program by ensuring that Job Corps 
centers are safe and secure environments that promote the education and 
training of students. Approved experimental, research and demonstration 
projects related to the Job Corps program are authorized in this 
proposed subpart, which also serves to enhance the program.
Section 686.500 What services must Job Corps centers provide?
    Proposed paragraph (a) specifies that Job Corps centers must 
provide an intensive, well-organized and fully supervised program, 
including training activities, work-based learning and experience, 
residential support services, and other services as required by the 
Secretary.
    Proposed paragraph (a)(1) describes training activities to include 
career and technical training, academic education, and employability 
and independent learning and living skills development. Job Corps is 
first and foremost a career training program, and an essential part of 
preparing enrollees for success upon exit necessitates providing 
employability, social, and independent-living skills.
    Proposed paragraph (b) provides that students must be provided with 
access to career services as described in WIOA secs. 134(c)(2)(A)(i) 
through (xi).
Section 686.505 What types of training must Job Corps centers provide?
    In order to provide enrollees with the intensive program of 
activities required by WIOA, several types of training must be provided 
by Job Corps centers.
    Proposed paragraph (a) requires that centers provide students with 
a CTT program that is aligned with industry-recognized standards and 
credentials. Ensuring that training programs are aligned with industry 
standards and credentials better prepares students to attain in-demand, 
long-term employment; further career enhancement along a career 
pathway; or advanced education, including apprenticeships.
    Proposed paragraph (b) requires that centers provide an education 
program, including English language acquisition programs, as required 
by sec. 148(a)(1) of WIOA, as well as high school diploma (HSD) or high 
school equivalency certification programs, and academic skills 
training. These skills are necessary for students to master

[[Page 20780]]

technical skills in their chosen CTT programs.
    Proposed paragraph (c) states that centers must provide programs 
for students to learn and practice employability and independent 
learning and living skills. These skills include: Job search and career 
development, interpersonal relations, driver's education (as required 
by sec. 148(a)(1) of WIOA), study and critical thinking skills, 
financial literacy and other skills specified in program guidance 
issued by the Secretary. Learning these skills will enable long-term 
labor market attachment and are critical to the continuing success of 
enrollees after leaving the Job Corps program.
    Proposed paragraph (d) requires all Job Corps training programs to 
be based on industry and academic skills standards leading to 
recognized industry and academic credentials, applying evidence-based 
instructional approaches, with the goal of placing students in 
unsubsidized employment in in-demand jobs with career advancement 
opportunities; enrollment in advanced education and training programs 
or apprenticeships; or enlistment in the Armed Forces. Responsiveness 
to employers' and industries' needs for employees who are prepared with 
the academic, technical, and employability skills necessary for career 
success is required in order to effectively place students and to 
sustain Job Corps' relationships with employers.
    Proposed paragraph (e) requires that specific career and technical 
training programs offered by individual centers must be approved by the 
Regional Director. Approval is necessary to ensure that the training 
provided by Job Corps meets industry workforce needs.
    Proposed paragraph (f) states the responsibilities of the center 
workforce council in shaping a center's career and technical training 
program, as described in Sec.  686.800.
    Proposed paragraph (g) retains the same requirements as those in 
the WIA regulations at 20 CFR 670.505(c), requiring that each center 
must implement a system to evaluate and track the progress and 
achievement of each student at regular intervals.
    Proposed paragraph (h) states that each center must develop a 
training plan that must be available for review and approval by the 
appropriate Regional Director. It retains the same requirements as 
those in 20 CFR 670.505(d).
Section 686.510 Are entities other than Job Corps center operators 
permitted to provide academic and career and technical training?
    Proposed paragraph (a) implements sec. 148(b) of WIOA, which lists 
the entities that the Secretary may use to provide career technical and 
academic education of Job Corps students, as long as the entity can 
provide education and training substantially equivalent in cost and 
quality to that which the Secretary could provide through other means.
    Proposed paragraph (b) states that these entities will be selected 
in accordance with the requirements of Sec.  686.310.
Section 686.515 What are advanced career training programs?
    Advanced career training provides students an opportunity to 
receive advanced education or training while still receiving the 
benefits and services provided by Job Corps. In order to be eligible, 
students must have a HSD or its equivalent and have completed a Job 
Corps CTT program. Proposed paragraphs (a) and (b) restate the 
requirements for advanced career training programs in secs. 148(c)(1)-
(2) of WIOA.
    Advanced career training programs are authorized by the Secretary 
based on the relationship between on board strength and training slot 
availability. Proposed paragraph (c), which restates the requirements 
found in WIOA sec. 148(c)(3), permits a center operator to enroll more 
students than otherwise authorized by the Secretary in an advanced 
career training program if, in accordance with standards developed by 
the Secretary, the operator demonstrates that participants in the 
program have achieved a satisfactory rate of training and placement in 
training-related jobs, and for the most recently preceding 2 PYs, the 
operator has, on average, met or exceeded the primary indicators for 
eligible youth described in Sec.  686.980.
Section 686.520 What responsibilities do the center operators have in 
managing work-based learning?
    This section retains the same requirements as those in the WIA 
regulations at 20 CFR 670.515. Proposed Sec.  686.520(a) requires that 
center operators emphasize and implement work-based learning programs 
for students through center program activities, including career and 
technical skills training, and through arrangements with employers. 
This paragraph further requires that work-based learning must be under 
actual working conditions and be designed to enhance the employability, 
responsibility, and confidence of the students. Work-based learning 
usually occurs in tandem with students' career and technical training, 
and is intended to develop a further understanding of career 
opportunities, employer expectations, and the impact of post-secondary 
education in the workplace. Work-based learning can include structured, 
hands-on experiences, as well as workplace tours, employer 
presentations, and job shadowing to help students refine their career 
objectives.
    Proposed paragraph (b), in accordance with sec. 159(g)(2) of WIOA, 
states that the center operator must ensure that the students are 
assigned only to workplaces that meet the safety standards described in 
Sec.  686.920.
Section 686.525 Are students permitted to hold jobs other than work-
based learning opportunities?
    Proposed Sec.  686.525 states that a center operator may authorize 
a student to participate in gainful leisure time employment, as long as 
the employment does not interfere with required scheduled academic and 
CTT activities. This section retains the same requirements as those in 
the WIA regulations at 20 CFR 670.520.
Section 686.530 What residential support services must Job Corps center 
operators provide?
    Proposed Sec.  686.530 states that Job Corps center operators must 
provide residential support services according to procedures issued by 
the Secretary. Residential support services are critical for the 
success of the Job Corps programs because they are central to creating 
and maintaining environments that allow enrollees to learn, practice 
independent and community living skills, promote personal 
responsibility, and reinforce social and employability skills, such as 
a positive attitude, dependability, and teamwork. This proposed section 
retains largely the same requirements as those contained in the WIA 
regulations at 20 CFR 670.525.
    The Department notes that one of the requirements is that a student 
leadership program and an elected student government is supported by 
the center operator. The goals of student leadership programs are to 
provide opportunities for interested students to develop leadership 
skills through participation in student governance, representing Job 
Corps in the community at large, planning and leading Job Corps events, 
and providing input and feedback for center

[[Page 20781]]

management decisions that impact student services and/or residential 
living.
Section 686.535 Are Job Corps centers required to maintain a student 
accountability system?
    Job Corps centers are required to maintain a student accountability 
system, as described at proposed Sec.  686.535. This proposed section 
retains the same requirements as those contained in the WIA regulations 
at 20 CFR 670.530. An accountability system is important to ensure the 
safety and security of Job Corps students and to track participation in 
various activities in order to evaluate program delivery.
Section 686.540 Are Job Corps centers required to establish behavior 
management systems?
    Proposed Sec.  686.540 states that each Job Corps center must 
establish and maintain a behavior management system, based on a 
behavior management plan, consistent with the standards of conduct and 
procedures established by the Secretary. The behavior management plan 
must be approved by the Job Corps regional office and reviewed 
annually. The system must include Job Corps' zero tolerance policy for 
violence and drugs as described in Sec.  686.545.
Section 686.545 What is Job Corps' zero tolerance policy?
    Proposed Sec.  686.545(a) requires all center operators to comply 
with Job Corps' zero tolerance policy as established by the Secretary. 
Infractions addressed in the zero tolerance policy must include, but 
are not limited to: Actions of violence, as defined by the Secretary; 
use, sale, or possession of a controlled substance, as defined at 21 
U.S.C. 802; abuse of alcohol; possession of unauthorized goods; or 
other illegal or disruptive activity.
    Proposed paragraph (b) implements secs. 145(a)(2)(A) and 152(b)(2) 
of WIOA, providing that all students must be tested for drugs as a 
condition of enrollment.
    Proposed paragraph (c) provides that the zero tolerance policy 
established by the Secretary specifies the offenses that will result in 
the separation of students from the Job Corps. This paragraph further 
provides that the center director is expressly responsible for 
determining when such an offense has occurred.
Section 686.550 How does Job Corps ensure that students receive due 
process in disciplinary actions?
    Proposed Sec.  686.550 provides that a center operator must ensure 
that all students receive due process in disciplinary proceedings 
according to procedures developed by the Secretary. This proposed 
section retains the same requirements as those contained in the WIA 
regulations at 20 CFR 670.545.
Section 686.555 What responsibilities do Job Corps centers have in 
assisting students with child care needs?
    Proposed Sec.  686.555 implements the requirement in sec. 148(e) of 
WIOA that the Secretary provide for child care to the extent 
practicable. Proposed paragraph (a) encourages Job Corps centers to 
coordinate with outreach and admissions agencies to assist applicants, 
whenever feasible, with making arrangements for child care. This 
paragraph also requires that, prior to enrollment, a program applicant 
with dependent children who provides primary or custodial care must 
certify that suitable arrangements for child care have been established 
for the proposed period of enrollment. This is necessary to ensure full 
program participation once a student is enrolled.
    Proposed paragraph (b) states that a child development program may 
be located at a Job Corps center with the approval of the Secretary.
Section 686.560 What are the center's responsibilities in ensuring that 
students' religious rights are respected?
    Proposed Sec.  686.560 retains the same requirements found in the 
WIA regulations at 20 CFR 670.555.
Section 686.565 Is Job Corps authorized to conduct pilot and 
demonstration projects?
    Proposed Sec.  686.565(a) establishes that the Secretary may 
undertake experimental, research and demonstration projects related to 
the Job Corps program as long as the projects are developed, approved, 
and conducted in accordance with the policies and procedures developed 
by the Secretary, in accordance with sec. 156(a) of WIOA.
7. Subpart F--Student Support
    Proposed subpart F discusses the support services provided to Job 
Corps enrollees, including transportation to and from Job Corps 
centers, authorized student leave, allowances and performance bonuses, 
and student clothing. In addition to being eligible to receive 
transportation to and from Job Corps centers, students are eligible for 
other benefits, including basic living allowances to cover personal 
expenses, in accordance with guidance issued by the Secretary. Students 
are also provided with a modest clothing allowance to enable them to 
purchase clothes that are appropriate for the classroom and the 
workplace. These proposed regulations again work to strengthen the Job 
Corps program and provide access to high quality training by ensuring 
that Job Corps students are placed in the best possible position to 
prepare them for learning, and that they are rewarded for their success 
in the program.
Section 686.600 Are students provided with government-paid 
transportation to and from Job Corps centers?
    Proposed Sec.  686.600 states that Job Corps provides students with 
transportation to and from Job Corps centers, according to policies and 
procedures established by the Secretary. This section retains the same 
requirements as those in the WIA regulations at 20 CFR 670.600.
Section 686.610 When are students authorized to take leaves of absence 
from their Job Corps centers?
    Proposed Sec.  686.610 provides that Job Corps students are 
eligible for annual leave, emergency leave, and other types of leaves 
of absence from their assigned centers. Procedures for requesting, 
approving, and recording student leave will be based on criteria and 
requirements issued by the Secretary. This section retains the same 
requirements found in the WIA regulations at 20 CFR 670.610. 
Additionally, proposed Sec.  686.600(a) states that in accordance with 
sec. 147(d)(2) of WIOA, enrollees in CCCs may take leave to provide 
assistance in addressing national, State, and local disasters.
Section 686.620 Are Job Corps students eligible to receive cash 
allowances and performance bonuses?
    Proposed Sec.  686.620(a) allows, based on criteria and rates 
established by the Secretary, Job Corps students to receive cash living 
allowances, performance bonuses, and allotments for care of dependents. 
Also, graduates receive post-separation transition allowances according 
to proposed Sec.  686.750. This paragraph largely retains the same 
requirements in the WIA regulations at 20 CFR 670.620(a), but revises 
the description of the payments to align with sec. 150(b) of WIOA.
    Under proposed paragraph (b), in the case of a student's death, any 
amount due is to be paid according to 5 U.S.C. 5582, governing issues 
including designation of a beneficiary, order of precedent, and related 
matters. This paragraph retains the same requirements as those found at 
20 CFR 670.620(b).

[[Page 20782]]

Section 686.630 Are student allowances subject to Federal payroll 
taxes?
    As required by sec. 157(a)(2) of WIOA, proposed Sec.  686.630 
requires that Job Corps student allowances be subject to Federal 
payroll tax withholding and Social Security taxes. For purposes of the 
Internal Revenue Code of 1986 and title II of the SSA (42 U.S.C. 401 et 
seq.), enrollees are deemed to be employees of the United States.
Section 686.640 Are students provided with clothing?
    Proposed Sec.  686.640 provides that, according to rates, criteria, 
and procedures issued by the Secretary, center operators and other 
service providers must provide Job Corps students with a clothing 
allowance and/or articles of clothing as needed to facilitate their 
participation in Job Corps and successful entry into the workforce. 
This proposed section retains the same requirements as those in the WIA 
regulations at 20 CFR 670.640.
8. Subpart G--Career Transition and Graduate Services
    This proposed subpart discusses career transition and graduate 
services for Job Corps enrollees. Job Corps focuses on placing program 
graduates in full time jobs, post-secondary education, advanced 
training programs, including apprenticeship programs, or the Armed 
Forces. In an effort to further integrate the Job Corps program with 
the greater workforce system and align it with the core programs, 
proposed Sec.  686.820 specifically focuses on how Job Corps will 
coordinate with other agencies, where emphasis is placed on utilizing 
the one-stop delivery system to the maximum extent practicable. This 
proposed subpart also outlines a center's responsibilities in preparing 
students for career transition services; the career transition services 
that are provided for enrollees; who m6ay provide career transition and 
graduate services, in addition to one-stop centers; and services 
provided for graduates and former enrollees.
Section 686.700 What are a Job Corps center's responsibilities in 
preparing students for career transition services?
    Proposed Sec.  686.700 implements sec. 149(a) of WIOA, providing 
that Job Corps centers assess and counsel enrollees to determine their 
competencies and capabilities and readiness for career transition 
services prior to their scheduled graduation. The purpose of counseling 
and assessment is to determine students' capabilities to allow them to 
either be placed into employment leading to self-sufficiency based on 
their training, or to assist the student in participating in further 
activities leading to the capabilities necessary for placement.
Section 686.710 What career transition services are provided for Job 
Corps enrollees?
    Proposed Sec.  686.710 implements sec. 149(b) of WIOA, requiring 
that career transition services focus on placing program graduates in 
full time jobs that are related to their career and technical training 
and that lead to economic self-sufficiency; higher education; advanced 
training programs, including apprenticeship programs; or the Armed 
Forces.
Section 686.720 Who provides career transition services?
    As required by sec. 149(b) of WIOA, proposed Sec.  686.720 states 
that the one-stop delivery system must be used to the maximum extent 
practicable in placing graduates and former enrollees in jobs. Multiple 
other resources can also provide post-program services, including, but 
not limited to, Job Corps career transition service providers and State 
VR agencies for individuals with disabilities.
Section 686.730 What are the responsibilities of career transition 
service providers?
    Proposed Sec.  686.730 contains the responsibilities of career 
transition service providers. The section largely retains the same 
requirements found in the WIA regulations at 20 CFR 670.730.
Section 686.740 What services are provided for program graduates?
    As required by sec. 148(d) of WIOA, proposed Sec.  686.740 states 
that career transition and support services must be provided to program 
graduates for up to 12 months after graduation, according to procedures 
issued by the Secretary.
Section 686.750 Are graduates provided with transition allowances?
    Proposed Sec.  686.750 states that Job Corps graduates receive 
post-separation transition allowances. As required by sec. 150(b) of 
WIOA, the transition allowance must be incentive-based to reflect a 
graduate's completion of academic, career, and technical education or 
training, and attainment of recognized post-secondary credentials.
Section 686.760 What services are provided to former enrollees?
    Proposed Sec.  686.760(a) implements sec. 150(c) of WIOA, allowing 
for the provision of 3 months of ESs to former enrollees.
    Proposed paragraph (b) states that Job Corps centers may provide 
other assessment, counseling, or career transition services to help 
former enrollees find and retain employment, if determined appropriate, 
according to procedures issued by the Secretary.
9. Subpart H--Community Connections
    This proposed subpart highlights WIOA's focus on community 
relationships and further integration with the workforce system. In 
both the new contracting provisions in proposed subpart C and in this 
subpart, there is more emphasis on connections with one-stops, Local 
Boards, and State and local plans. While WIA's requirement for a 
Business and Community Liaison has been eliminated, the responsibility 
for establishing beneficial business and community relationships and 
networks now lies with the director of each Job Corps center. Moreover, 
WIOA contains a new requirement that in a single-State local area, a 
representative of the State Board must be included on the workforce 
council. Proposed Sec.  686.810 also states, consistent with sec. 
154(b)(2) of WIOA, that the workforce council may include employers 
from outside the local area that are likely to hire center graduates. 
The new requirements for the workforce council seek to provide greater 
access to high quality training for Job Corps students, in part by 
ensuring that Job Corps is providing training in in-demand industry 
sectors and occupations.
Section 686.800 How do Job Corps centers and service providers become 
involved in their local communities?
    While WIA's requirement for a Business and Community Liaison 
designated by the director of each center has been eliminated, the 
director of each Job Corps center must still ensure that mutually 
beneficial business and community relationships and networks are 
established and developed. As required by sec. 153 of WIOA, proposed 
Sec.  686.800(a) states that each Job Corps center director must 
establish relationships with local and distant employers; applicable 
one-stop centers and Local Boards; entities carrying out relevant 
apprenticeship programs and youth programs; labor-management 
organizations and local labor organizations; employers and contractors 
that support national training programs and initiatives; and CBOs, non-
profit organizations, and intermediaries providing workforce 
development and support services. Through these relationships, Job 
Corps

[[Page 20783]]

hopes to improve the quality of the training programs that it offers 
and create meaningful associations with other entities with which it 
interacts and shares similar goals.
    Under proposed paragraph (b), each Job Corps center must also 
establish and develop relationships with members of the community in 
which it is located. This paragraph further proposes that members of 
the community be informed of projects of the center and changes in the 
rules, procedures, or activities of the center that may affect the 
community. Through these efforts, Job Corps aims to garner the support 
and endorsement of the local community.
Section 686.810 What is the makeup of a workforce council and what are 
its responsibilities?
    Section 154 of WIOA requires each center to establish a workforce 
council according to procedures established by the Secretary. Proposed 
Sec.  686.810 implements this provision. It specifies that the council 
must include: non-governmental and private sector employers; 
representatives of labor organizations and employees; Job Corps 
enrollees and graduates; and, in the case of a single State local area, 
a representative of the State Board.
    Proposed paragraph (b) describes the composition of the workforce 
council, consistent with the requirements of sec. 154(b) of WIOA.
    Proposed paragraph (c) states that the workforce council may also 
include, or otherwise provide for consultation with, employers from 
outside the local area who are likely to hire a significant number of 
enrollees from the Job Corps center.
    Proposed paragraph (d)(1) implements sec. 154(c)(1) of WIOA by 
identifying that the first responsibility of the workforce council is 
to work with all applicable Local Boards and review labor market 
information to determine and provide recommendations to the Secretary 
regarding the center's career and technical training offerings, 
including identifying the emerging occupations suitable for training. 
In doing so, Job Corps hopes to remain current in its CTT offerings, 
adjusting and supplementing its training offerings based on the needs 
of industry in the surrounding communities.
    Proposed Sec.  686.810(d)(2) and (3) state the remaining duties of 
the workforce council, in accordance with secs. 154(c)(2)-(3) of WIOA.
Section 686.820 How will Job Corps coordinate with other agencies?
    Proposed Sec.  686.820 describes how Job Corps coordinates with 
other agencies. This section retains the same requirements found in the 
WIA regulations at 20 CFR 670.760 and 20 CFR 670.800(g). Paragraph (b) 
of this section describes the linkages required between Job Corps and 
the one-stop service system and paragraph (c) indicates that Job Corps 
is identified as a required one-stop partner. The Department notes that 
in addition to these linkages, similar to the requirement in WIA, 
proposed Sec.  678.400 identifies Job Corps as a required one-stop 
partner, as required by sec. 121(b)(1)(B)(i) of WIOA. Additionally, 
similar to the WIA regulations at 20 CFR 670.800(g), proposed Sec.  
678.415 specifies that the Job Corps center is the Job Corps ``entity'' 
that is required to serve as the one-stop partner in any local area 
where a center exists. Job Corps centers are encouraged to review the 
requirements of one-stop partners described in subpart B of part 678 of 
these proposed regulations.
10. Subpart I--Administrative and Management Provisions
    The proposed subpart provides requirements relating to tort claims, 
Federal Employees Compensation Act (FECA) benefits for students, safety 
and health, and law enforcement jurisdiction on Job Corps center 
property. It also addresses whether Job Corp operators and service 
providers are authorized to pay State or local taxes on gross receipts, 
and details the financial management responsibilities of center 
operators and other service providers. The management of student 
records, as well as procedures applicable to the disclosure of 
information about Job Corps students and program activities are 
outlined. Finally, procedures available to resolve complaints and 
disputes, and how Job Corps ensures that complaints or disputes are 
resolved in a timely fashion, are addressed. The entirety of this 
proposed subpart addressing administrative and management principles 
that apply to the operation of the Job Corps program serves to promote 
its accountability and transparency.
Section 686.900 Are damages caused by the acts or omissions of students 
eligible for payment under the Federal Tort Claims Act?
    In accordance with sec. 157(a)(4) of WIOA, proposed Sec.  686.900 
states that students are considered Federal employees for purposes of 
the FTCA (28 U.S.C. 2671 et seq.) and that claims for such damage must 
be filed pursuant to the procedures found in 29 CFR part 15, subpart D. 
This proposed section retains the same requirements as those found in 
the WIA regulations at 20 CFR 670.900.
Section 686.905 Are loss and damages that occur to persons or personal 
property of students at Job Corps centers eligible for reimbursement?
    Proposed Sec.  686.905 states that the Job Corps program may pay 
students for valid claims under the procedures found in 29 CFR part 15, 
subpart D. This proposed section retains the same requirements found at 
20 CFR 670.905.
Section 686.910 If a student is injured in the performance of duty as a 
Job Corps student, what benefits may the student receive?
    Proposed Sec.  686.910 implements sec. 157(a)(3) of WIOA. Paragraph 
(a) states that Job Corps students are considered Federal employees for 
purposes of the FECA, as specified in sec. 157(a)(3) of WIOA (29 U.S.C. 
2897). Proposed paragraphs (b) through (d) outline the requirements for 
Job Corps students' eligibility for FECA benefits and the procedures by 
which the benefits are paid. These paragraphs contain the same 
requirements as those in Sec.  670.910 of the WIA regulations.
Section 686.915 When is a Job Corps student considered to be in the 
performance of duty?
    Proposed Sec.  686.915 outlines when a Job Corps student is 
considered to be in the performance of duty. This proposed section 
retains the same requirements as those found at 20 CFR 670.915.
Section 686.920 How are students protected from unsafe or unhealthy 
situations?
    Proposed Sec.  686.920(a) states that the Secretary will establish 
procedures to ensure that students are not required or permitted to 
work, be trained, reside in, or receive services in buildings or 
surroundings or under conditions that are unsanitary or hazardous. This 
section further states, consistent with sec. 159(g)(2) of WIOA, that 
whenever students are employed or in training for jobs, they must be 
assigned only to jobs or training which observe applicable Federal, 
State, and local health and safety standards. This proposed paragraph 
retains the same requirements found at 20 CFR 670.935.
    Proposed paragraph (b) states that the Secretary will develop 
procedures to ensure compliance with applicable DOL Occupational Safety 
and Health Administration (OSHA) regulations and Wage and Hour Division 
(WHD) regulations.

[[Page 20784]]

Section 686.925 What are the requirements for criminal law enforcement 
jurisdiction on center property?
    Proposed Sec.  686.925 provides information about criminal law 
enforcement jurisdiction on Job Corps center property. This proposed 
section retains the same requirements found in the WIA regulations at 
20 CFR 670.940.
Section 686.930 Are Job Corps operators and service providers 
authorized to pay State or local taxes on gross receipts?
    Consistent with sec. 158(d) of WIOA, proposed Sec.  686.930 
explains some of the tax liabilities that apply to Job Corps center 
operators.
    This proposed section retains the same requirements as those found 
at 20 CFR 670.945.
Section 686.935 What are the financial management responsibilities of 
Job Corps center operators and other service providers?
    As required by WIOA sec. 159(a), proposed Sec.  686.935 states the 
financial management responsibilities that apply to Job Corps center 
operators and other service providers.
    This proposed section retains the same requirements as those found 
at 20 CFR 670.950.
Section 686.940 Are center operators and service providers subject to 
Federal audits?
    As required by WIOA sec. 159(b), proposed Sec.  686.940 explains 
how Job Corps center operators and other service providers are subject 
to Federal audits.
    This proposed section retains the same requirements found in the 
WIA regulations at 20 CFR 670.955.
Section 686.945 What are the procedures for management of student 
records?
    Proposed Sec.  686.945 states that the Secretary will issue 
guidelines for a system for maintaining records for each student during 
enrollment and for disposition of records after separation. This 
proposed section retains the same requirements as those found at 20 CFR 
670.960.
Section 686.950 What procedures apply to disclosure of information 
about Job Corps students and program activities?
    Proposed Sec.  686.950 discusses the procedures that apply to 
disclosure of information about Job Corps students and program 
activities.
    This proposed section retains the same requirements as those found 
at 20 CFR 670.965.
Section 686.955 What are the reporting requirements for center 
operators and operational support service providers?
    Proposed Sec.  686.955 states that the Secretary will establish 
procedures to ensure the timely and complete reporting of necessary 
financial and program information to maintain accountability. Under 
this section, center operators and operational support service 
providers are responsible for the accuracy and integrity of all reports 
and data they provide. This proposed section retains the same 
requirements as those found at 20 CFR 670.970.
Section 686.960 What procedures are available to resolve complaints and 
disputes?
    In support of the Department's commitment to ensuring that students 
are entitled to a fair process, proposed Sec.  686.960 outlines the 
procedures that are available to resolve student complaints and 
disputes. This section retains the same requirements found in the WIA 
regulations at 20 CFR 670.991.
Section 686.965 How does Job Corps ensure that complaints or disputes 
are resolved in a timely fashion?
    Proposed Sec.  686.965 outlines the procedures that are available 
to ensure timely resolution of a complaint or dispute. This section 
retains the same requirements as those found at 20 CFR 670.991.
Section 686.970 How does Job Corps ensure that centers or other service 
providers comply with the Act and the Workforce Innovation and 
Opportunity Act regulations?
    Proposed Sec.  686.970 explains the procedures Job Corps will use 
to ensure Job Corps center operators and other service providers comply 
with WIOA and this part. This proposed section retains the same 
requirements found in the WIA regulations at 20 CFR 670.992.
Section 686.975 How does Job Corps ensure that contract disputes will 
be resolved?
    Proposed Sec.  686.975 states that a dispute between the Department 
and a Job Corps contractor will be handled according to the Contract 
Disputes Act and applicable regulations. This proposed section retains 
the same requirements as those found at 20 CFR 670.993.
Section 686.980 How does Job Corps resolve disputes between the U.S. 
Department of Labor and the U.S. Department of Agriculture regarding 
the operation of Civilian Conservation Centers?
    Proposed Sec.  686.980 states that disputes between the Department 
and the U.S. Department of Agriculture regarding operating a center 
will be handled according to the interagency agreement between the two 
agencies. This proposed section retains the same requirements as those 
found at 20 CFR 670.994.
Section 686.985 What Department of Labor equal opportunity and 
nondiscrimination regulations apply to Job Corps?
    Proposed Sec.  686.985 states that nondiscrimination requirements, 
procedures, complaint processing, and compliance reviews would be 
governed by provisions of the Department's regulations, as applicable. 
This proposed section retains the same requirements found in the WIA 
regulations at 20 CFR 670.995.
11. Subpart J--Performance
    Proposed subpart J incorporates WIOA-specific requirements related 
to performance assessment and accountability, as well as requirements 
for performance improvement plans for Job Corps center operators who 
fail to meet expected levels of performance. The Job Corps program is 
now required to report on the performance indicators common to all WIOA 
programs that provide key employment information on how many students 
entered and retained employment, their median wages, whether they 
attained credentials, their measurable skills gains, and effectiveness 
of services to employers. The entirety of this proposed subpart serves 
to promote the accountability, performance, and transparency of the Job 
Corps program.
Section 686.1000 How is the performance of the Job Corps program 
assessed?
    Proposed Sec.  686.1000 describes the performance management system 
the Secretary will establish to meet the requirements for management 
information in sec. 159 of WIOA.
    Proposed paragraph (a) indicates that the performance of the Job 
Corps program as a whole, and the performance of individual centers, 
outreach and admission providers, and career transition service 
providers, will be assessed in accordance with required procedures and 
standards issued by the Secretary, through a national

[[Page 20785]]

performance management system described in proposed paragraph (b) that 
includes the Outcome Measurement System (OMS). The Department proposes 
to continue its use of a national performance management system that 
includes the OMS because such a system is needed to track and report 
all of the management information required in sec. 159 of WIOA. The 
management information requirements include establishing expected 
levels of performance and collecting and reporting data on each 
center's performance relating to the primary indicators of performance 
for eligible youth, the performance indicators for outreach and 
admission providers, and the performance indicators for career 
transition service providers required under WIOA sec. 159(c); 
collecting and reporting data on each center's performance relating to 
the additional information required to be submitted in the annual 
report to Congress under sec. 159(d) of WIOA; collecting and reporting 
information regarding the state of Job Corps buildings and facilities 
under sec. 159(h) of WIOA; and collecting and reporting information 
regarding national and community service activities of enrollees under 
sec. 159(i) of WIOA.
    Consistent with current practice, proposed paragraph (b) states 
that the performance management system will include measures that 
reflect not only the primary indicators of performance described in 
proposed Sec.  686.1010, but also the information needed to complete 
the Annual Report described in proposed Sec.  686.1040, as well as any 
other information the Secretary determines is necessary to manage and 
evaluate the effectiveness of the Job Corps program.
    Job Corps' performance management system, which includes the OMS, 
is a well-established measurement system within the Job Corps community 
that has been used to track performance of centers and service 
providers for many years. It will be updated to reflect the new 
requirements of WIOA, including the new primary indicators of 
performance. The performance management system is designed to provide 
the Secretary with the information necessary to manage and evaluate the 
effectiveness of the Job Corps program. It currently includes data on 
the WIA common measures, each center's success in filling student slots 
or on-board strength (OBS), information on the results of Regional 
Office Center Assessments, and the OMS.
    The OMS currently includes the following 15 measures: HSD or 
General Educational Development (GED) Attainment Rate, CTT Completion 
Rate, Combination HSD or GED, and CTT Attainment Rate, Average Literacy 
Gain, Average Numeracy Gain, CTT Industry-Recognized Credential 
Attainment Rate, CTT Completer Job-Training Match/Post-secondary Credit 
Placement Rate, Former Enrollee Initial Placement Rate, Graduate 
Initial Placement Rate, Graduate Average Hourly Wage at Placement, 
Graduate Full-Time Job Placement Rate, Graduate 6-Month Follow-up 
Placement Rate, Graduate 6-Month Average Weekly Earnings, Graduate 12-
Month Follow-up Placement Rate, and Graduate 12-Month Follow-up Weekly 
Earnings. These measures are based on the current performance 
requirements under WIA, and in some cases break down an overarching 
measure to provide a more detailed look at elements that make up the 
overarching measures. For example, one of the WIA common measures is 
the percent of students who achieve literacy or numeracy gains. In the 
OMS, literacy gains and numeracy gains are broken into two separate 
measures that provide program managers with an additional level of 
detail. A center may be achieving a high level of literacy gains but 
lagging in numeracy gains. In the combined measure that distinction 
would be hidden, but with the broken out measure, program managers can 
more specifically identify where to target interventions to support 
achievement of the overall common measure. Similarly, the OMS will be 
updated to reflect the primary indicators, but may also include 
breakouts of data that will help program managers target interventions 
in order to achieve the primary indicators.
    Four of the new primary indicators of performance under WIOA are 
long-term measures, meaning that the point of measurement is as much as 
a year after a student exits the Job Corps program. These measures are 
valuable in assessing the performance of the program, but additional 
shorter-term measures are needed to supplement the primary indicators 
and provide program managers with information on a quicker cycle that 
can be used to make adjustments in the program on a faster timeframe. 
This includes measures such as the CTT completion rate, which provides 
useful information about the quality of the training programs at a 
center without waiting for the student outcome data to become fully 
available. When updating the OMS, the Department will begin to 
incorporate the primary indicators and other measures that will drive 
the system towards attainment of the WIOA primary indicators, while 
still maintaining other shorter-term measures that will provide 
additional information that the Secretary believes is necessary to 
manage and evaluate the effectiveness of the Job Corps program. The 
Department welcomes comments on this approach, and specifically on 
which short-term measures should be maintained in the new OMS system.
    Over the years as program reporting requirements have changed from 
the Government Performance and Results Act (GPRA), the Program 
Assessment and Rating Tool (PART), and Common Measures, the OMS has 
proven to be flexible and through its mix of measures, goals, and 
weights, and successful in driving the system towards meeting changing 
priorities. For example, when additional emphasis was placed on longer 
term attachment to the workforce, Job Corps added 12-month placement 
and 12-month earnings to the existing line-up of measures included on 
the OMS as a clear indication to program operators of the new priority. 
Similarly, beginning in PY 2016, the OMS will be updated to reflect the 
new primary indicators of performance under WIOA.
    Proposed paragraph (b) also indicates that the Secretary will issue 
annual guidance describing the performance management system and OMS. 
This guidance will describe any changes or updates to the overall 
performance management system or the OMS and also communicate the 
expected levels of performance for each indicator for each center, 
outreach and admission provider, and career transition service provider 
described in Sec.  686.1030 to the system.
    Proposed Sec.  686.1000(c), implementing sec. 159(f)(1) of WIOA, 
indicates that annual performance assessments based on the measures 
referenced in proposed paragraph (b) will be done for each center 
operator and other service providers, including outreach and admission 
providers and career transition providers. These annual assessments 
will include a review of the data in the OMS, a calculation of the 
annual performance ranking as described in proposed Sec.  686.1070, and 
an analysis of the operator or service provider's success at meeting 
the expected levels of performance, including consideration of any 
factors influencing the performance outcomes such as disruption in the 
operations of the center, economic conditions, or other factors.

[[Page 20786]]

Section 686.1010 What are the primary indicators of performance for Job 
Corps centers and the Job Corps program?
    Proposed Sec.  686.1010 implements WIOA sec. 159(c)(1), which 
requires the use of the primary indicators of performance for eligible 
youth as described in sec. 116(b)(2)(A)(ii) of WIOA for the Job Corps 
program and each center. Proposed paragraphs (a) through (f) are the 
primary indicators of performance for eligible youth as described in 
sec. 116(b)(2)(A)(ii) of WIOA. These measures of performance are the 
same as the primary indicators discussed in proposed Sec.  677.155. 
Though the indicators of performance are identified in various places 
throughout the WIOA proposed regulations, the indicators are the same 
and do not vary across the regulations.
Section 686.1020 What are the indicators of performance for Job Corps 
outreach and admissions providers?
    Proposed Sec.  686.1020 implements sec. 159(c)(2) of WIOA, which 
requires that the Secretary establish performance indicators and 
expected levels of performance on those indicators for recruitment 
service providers serving the Job Corps program. The performance 
management system and OMS will be updated to reflect the new 
performance measures for Job Corps outreach and admissions providers. 
Proposed paragraphs (a) through (d) are the indicators of performance 
as provided in sec. 159(c)(2) of WIOA.
Section 686.1030 What are the indicators of performance for Job Corps 
career transition service providers?
    Proposed Sec.  686.1030 implements sec. 159(c)(3) of WIOA, which 
requires that the Secretary establish performance indicators and 
expected levels of performance on those indicators for career 
transition service providers serving the Job Corps program. The 
performance management system and OMS will be updated to reflect the 
new performance measures for Job Corps Career Transition Service 
providers. Proposed paragraphs (a) through (g) are the indicators of 
performance as provided in sec. 159(c)(3) of WIOA.
Section 686.1040 What information will be collected for use in the 
Annual Report?
    Proposed Sec.  686.1040 implements sec. 159(c)(4) of WIOA, which 
requires the Secretary to collect information and submit an Annual 
Report on the performance of each Job Corps center and the Job Corps 
program. The Department is including this proposed section so that the 
Job Corps community is made aware of the information that will be 
collected. Proposed paragraphs (a) through (p) specify the information 
required to be included by secs. 159(c)(4)(A)-(B) and 159(d)(1)(A)-(N) 
of WIOA. Proposed paragraph (q) reflects the information required to be 
included by sec. 159(h) of WIOA, and proposed paragraph (r) reflects 
the information required by sec. 159(i) of WIOA.
    Proposed paragraph (s) states that the Secretary may collect and 
include additional information in the Annual Report that the Secretary 
determines is necessary. Any such information would be collected as 
part of the performance management system and identified in the annual 
guidance described in Sec.  686.1000.
Section 686.1050 How are the expected levels of performance for Job 
Corps centers, outreach and admission providers and career transition 
service providers established?
    Proposed Sec.  686.1050(a) implements secs. 159(c)(1)-(3) of WIOA, 
which require that the Secretary establish expected levels of 
performance for Job Corps centers, outreach and admission providers, 
and career transition service providers, and the Job Corps program 
relating to each of the primary indicators of performance described in 
Sec. Sec.  686.1010, 686.1020 and 686.1030. In order to develop 
expected levels of performance for the primary indicators, the 
Department will first examine past performance specific to the new 
measures. Since several of the employment-related indicators are 
intended to utilize State wage records, this will involve a process of 
developing quarterly earnings specifications as well as developing an 
infrastructure to align WRIS data with Job Corps survey data at the 
center level. Expected levels of performance can more readily be 
developed for the credential attainment and skill gains indicators 
using past performance aligned to the timeframes required by WIOA. Job 
Corps will also continue to use a regression model to statistically 
adjust for local economic conditions and participant characteristics at 
the center level similar to regression models used for other programs 
under WIOA. The Department anticipates that after implementation of the 
new primary indicators, there will be a period of at least 1 PY where 
baseline data are collected on each of the primary indicators and there 
is no expected level of performance in place. Once baseline data has 
been collected, the Department will begin to establish expected levels 
of performance.
    Proposed paragraph (b) states that as provided in Sec.  686.1000, 
the Secretary will issue annual guidance describing the national 
performance management system. This guidance will also communicate the 
expected levels of performance for each center and each indicator of 
performance for each outreach and admissions provider and each career 
transition service provider. This guidance will also describe how the 
expected levels of performance were calculated.
Section 686.1070 How are center rankings established?
    Proposed Sec.  686.1070(a) states that the Secretary will calculate 
the annual rankings of center performance based on the performance 
management system described in proposed Sec.  686.1000. As described 
above in the explanation of proposed Sec.  686.1000, Job Corps' OMS is 
a well-established measurement system within the Job Corps community 
that has been used to track performance of centers and service 
providers for many years, and it will be updated to reflect the new 
requirements of WIOA, including the new primary indicators of 
performance. It is designed to drive the system to meet programmatic 
goals, which under WIOA will be established through the primary 
indicators of performance. As described above, the OMS will be updated 
to reflect the primary indicators of performance and may also include 
other measures that will drive the system towards attainment of the 
primary indicators or that provide more detailed information about 
elements that make up the primary indictors that the Secretary believes 
are necessary to manage and evaluate the effectiveness of the Job Corps 
program.
    Proposed Sec.  686.1070(b) states that the Secretary will issue 
annual guidance that communicates the methodology for calculating the 
performance rankings for the year. This guidance will include any 
changes in the weighting of individual measures in the calculation. The 
Department expects to weigh measures reflecting the attainment of the 
primary indicators most heavily. However, the Department anticipates 
that there could be changes in weighting from year to year to address 
areas of concentration in the program. For example, if the Department's 
analysis of past years' data regarding the system's results on the 
primary indicator related to measurable skills gains indicates that 
students are achieving high levels of literacy gains but lagging on 
numeracy gains, the Department may increase the weighting of the OMS 
measure on numeracy gains to signal to operators that they need to put 
more emphasis on improving numeracy. The expected result would

[[Page 20787]]

be that the increased focus on numeracy would lead to improved numeracy 
gains and a commensurate increase in the primary indicator related to 
measurable skills gains. The center rankings will reflect these efforts 
to push the system to continuous improvement of outcomes.
Section 686.1070 How and when will the Secretary use Performance 
Improvement Plans?
    Proposed Sec.  686.1070 implements sec. 159(f)(2) of WIOA, which 
sets out requirements for the circumstances under which the Secretary 
will use Performance Improvement Plans.
    Proposed paragraph (a) provides that the Secretary will establish 
standards and procedures for developing and implementing performance 
improvement plans. Paragraph (a)(1) implements the requirement in sec. 
159(f)(2) of WIOA, that when a center fails to meet expected levels of 
performance, the Secretary must develop and implement a performance 
improvement plan designed to help the center improve its performance 
outcomes. Paragraph (a)(1)(i) establishes standards for when the 
Secretary will consider a center to have failed to meet the expected 
levels of performance on the primary indicators. The proposed paragraph 
states that a center will have failed to meet the expected levels of 
performance if the center is ranked among the lowest 10 percent of Job 
Corps centers and the center fails to achieve an average of 90 percent 
of the expected level of performance for all of the primary indicators. 
This is consistent with the methodology used to determine whether 
States have failed to meet the expected levels of performance on other 
programs under WIOA. Proposed paragraph (a)(1)(ii) establishes 
standards for when the Secretary will consider a center to have failed 
to meet the expected levels of performance on the primary indicators 
for PYs that occur prior to the implementation of the expected levels 
of performance on the primary indicators. The paragraph states that a 
center will have failed to meet the expected levels of performance if 
it is ranked among the lowest 10 percent of Job Corps centers and the 
center's composite OMS score for the PY is 88 percent or less of the 
year's OMS national average. This proposal is consistent with the Job 
Corps Performance Improvement Plan system planned for implementation in 
early 2015.
    Proposed paragraph (a)(2) implements sec. 159(f)(3) of WIOA, which 
states that the Secretary may also develop and implement additional 
performance improvement plans that will require improvements for a Job 
Corps center that fails to meet criteria established by the Secretary 
other than the expected levels of performance. The Department expects 
to outline requirements for any such plans through subsequent guidance.
    Proposed paragraph (b) implements the requirement in sec. 159(f)(2) 
of WIOA that the performance improvement plan require that action under 
the plan must be taken within 1 year of its implementation to address 
the issues that led to the center's failure to meet its expected levels 
of performance. The paragraph states that the plan will identify 
criteria that must be met for the center to complete the performance 
improvement plan. In addition, paragraph (b)(1) provides that the 
center operator must implement the actions outlined in the performance 
improvement plan. Proposed paragraph (b)(2) provides that if the center 
fails to take the steps outlined in the performance improvement plan or 
fails to meet the criteria established to complete the performance 
improvement plan after 1 year, the center will be considered to have 
failed to improve performance under a performance improvement plan 
detailed in paragraph (a). In that case, the center will remain on a 
performance improvement plan and the Secretary will take action as 
described in proposed paragraph (c). Paragraph (b)(2)(ii) implements 
sec. 159(f)(4) of WIOA, which provides that if a CCC fails to meet 
expected levels of performance relating to the primary indicators of 
performance specified in proposed Sec.  686.1010, or fails to improve 
performance under a performance improvement plan detailed in paragraph 
(a) after 3 PYs, the Secretary, in consultation with the Secretary of 
Agriculture, must select an entity to operate the CCC on a competitive 
basis. Such competition will be held in accordance with the 
requirements at proposed Sec.  686.310.
    Proposed paragraph (c) implements secs. 159(f)(2)(A) through 
159(f)(2)(G) of WIOA, which permit the Secretary to take specific 
actions to improve the performance of a center, as necessary. These 
requirements are taken directly from the statute and this proposed 
paragraph retains the same requirements as those in the WIA regulations 
at 20 CFR 670.985. The Department notes that nothing in the statute or 
in these proposed regulations requires that the performance improvement 
actions be taken in any particular order or on a progressive basis. The 
Secretary will take any of the measures listed in sec. 159(f)(2) of 
WIOA that will lead to improving performance of a center. Among these 
measures, the Secretary also reserves the right to close low-performing 
centers, pursuant to WIOA sec. 159(f)(2)(G).

K. Part 687--National Dislocated Worker Grants

    Proposed part 687 implements provisions in sec. 170 of WIOA that 
authorize the Secretary to award discretionary funds to serve 
dislocated workers and other eligible individuals affected by major 
economic dislocations, emergencies, or disasters. The proposed 
regulations set forth the key elements and requirements for the 
statute's NDWGs. Additional guidance on NDWGs and the application 
requirements for these grants will be published separately.
    The proposed regulations establish a framework that will enable 
eligible applicants to apply quickly for grants to relieve the impact 
of layoffs, emergencies, and disasters on employment in the impacted 
area and to meet the training and reemployment needs of affected 
workers and to enable them to obtain new jobs as quickly as possible. 
The proposed regulations call for early assessment of the needs and 
interests of the affected workers, through either rapid response 
activities, or other means, as well as an indication of the other 
resources available to meet these needs, to aid in the creation of a 
customer-centered service proposal. The early collection of information 
about affected workers will allow applicants to have an understanding 
of the needs and interests of the impacted workers to enable a prompt 
application for the appropriate level of NDWG funds. Early collection 
of information also will facilitate the receipt of NDWG funds when the 
Secretary determines that there are insufficient State and local 
formula funds available. Early intervention to assist workers being 
dislocated is critical to enable them to access work-based learning 
opportunities and other types of training that lead to industry-
recognized credentials, as appropriate, to help them find new 
employment in in-demand industries and occupations as soon as possible 
after their dislocation occurs.
Section 687.100 What are the types and purposes of national disclosed 
worker grants the Workforce Innovation and Opportunity Act?
    Proposed Sec.  687.100 describes the purpose of NDWGs, expanding 
upon the description provided in the WIA regulations at 20 CFR 671.100. 
Regular NDWGs provide career services for dislocated workers and other 
eligible

[[Page 20788]]

populations where demand is unable to be met with formula funds or 
other sources. Disaster NDWGs, which were originally authorized under 
WIA to conduct clean-up and humanitarian assistance, are still 
authorized under WIOA; however, WIOA expands their availability by 
adding new qualifying events for Disaster NDWGs, such as serving 
workers who have relocated from an area in which a disaster has been 
declared, as discussed in Sec. Sec.  687.110(b) and 687.180(b).
Section 687.110 What are major economic dislocations or other events 
which may qualify for a national dislocated worker grant?
    Proposed Sec.  687.110 describes the events that qualify for NDWG 
funding. Proposed Sec.  687.110(a)(1) through (3) include substantially 
similar provisions to those that were contained in the WIA regulations; 
however, the terms ``single site of employment'' and ``in a single 
local community,'' which had been used to qualify the types of eligible 
layoff events, are not included in the proposed section. Experience 
under WIA has shown that a company's total number of layoffs affects 
the local and regional economy in the same way without regard to 
whether the layoffs occur at a single facility or at multiple 
locations. Proposed Sec.  687.110(a)(4) describes a qualifying event 
added by sec. 170(b)(1)(D)(i) of WIOA, permitting the award of a NDWG 
when a higher than average demand for employment and training 
activities for dislocated members of the Armed Forces, dislocated 
spouses of members of the Armed Forces on active duty (as defined in 10 
U.S.C. 101(d)(1)), or members of the Armed Forces described in proposed 
Sec.  687.170(a)(1)(iii), exceeds State and local resources. Section 
170(b)(1)(D)(i) of WIOA specifically limits the military spouses 
included in this analysis to ``spouses described in sec. 3(15)(E) [of 
WIOA].'' Under sec. 3(15)(E) of WIOA, these are spouses of members of 
the Armed Forces on active duty who are dislocated specifically because 
they have experienced a loss of employment as a direct result of 
relocation to accommodate a permanent change in duty station of the 
member of the military, or are unemployed or underemployed and 
experiencing difficulty in obtaining or upgrading employment. 
Implementing this exactly as stated in the statute would require 
applicants for these NDWGs to determine whether a specific subset of 
dislocated military spouses is driving the higher than average demand 
for services in an area. This would cause an unnecessary burden on the 
NDWG applicants, and instead proposed Sec.  687.110(a)(4) would only 
require applicants for these NDWGs to assess whether military spouses 
who are dislocated under any of the factors in sec. 3(15) of WIOA are 
contributing to the higher than average demand for services. The 
proposed provision also specifies that these spouses must be spouses of 
members of the Armed Forces on active duty, which implements the intent 
of this provision of WIOA while avoiding the unnecessary administrative 
hardship. The Department intends to provide additional guidance about 
how higher than average demand will be defined for purposes of this 
section. The Department is exploring definitions that may include 
veterans' unemployment in excess of the State's unemployment rate, 
Unemployment Compensation for Ex-service members (UCX) data, and other 
similar administrative data sources. The Department invites comments 
about the usefulness of relying on these and other data sources in 
determining how higher than average demand should be defined. Proposed 
Sec.  687.110(a)(5) maintains the prerogative of the Secretary of Labor 
to provide NDWG funding for other events.
    Proposed Sec.  687.110(b) describes qualifying events for Disaster 
NDWGs. Proposed Sec.  687.110(b)(1) provides, similar to the WIA 
regulation at 20 CFR 671.110(e), that disasters declared eligible for 
public assistance under the Stafford Act are qualifying events for 
Disaster NDWGs. The proposed paragraph also makes clear that outlying 
areas and tribal areas that receive a public assistance declaration 
also are eligible to apply for a Disaster NDWG. This is consistent with 
the intent and purpose of sec. 170 of WIOA, because these entities are 
both eligible for dislocated worker grants under WIOA and are eligible 
for public assistance under the Stafford Act. Therefore, it is logical 
that they would be eligible for Disaster NDWGs.
    Proposed Sec.  687.110(b)(2) and (3) describe the new events that 
WIOA establishes are qualifying events for Disaster NDWGs. As stated in 
sec. 170(a)(1)(B) of WIOA, eligible events for Disaster NDWGs now 
include an emergency or disaster situation of national significance 
that could result in a potentially large loss of employment, as 
recognized by the chief official of a Federal agency that has authority 
or jurisdiction over the Federal response for the emergency or disaster 
situation. Although such an event might not meet the requirements to 
receive a public assistance declaration from the FEMA, it still may be 
an event where NDWG funding may be needed. NDWGs may be provided in 
this instance for activities that are determined to be appropriate by 
the Secretary. Proposed paragraph (b)(3) addresses situations where a 
substantial number of workers from a State, tribal area, or outlying 
area in which an emergency or disaster has occurred relocate to another 
State, tribal area, or outlying area. This would also be a qualifying 
event for a Disaster NDWG, according to secs. 170(b)(1)(B)(ii) and 
(d)(4) of WIOA. The addition of this type of event was informed by the 
mass evacuations that took place as a result of Hurricane Katrina, 
which caused massive flooding and damage along the Gulf Coast in 2005, 
resulting in evacuees settling in high concentrations in some other 
communities.
Section 687.120 Who is eligible to apply for national dislocated worker 
grants?
    Proposed Sec.  687.120 identifies which entities are eligible to 
apply for NDWGs. Proposed Sec.  687.120(a) and (b) retain essentially 
the same requirements as in Sec.  671.120 of the WIA regulations, but 
these proposed regulations clearly identify which entities may apply 
for Regular NDWGs and which may apply for Disaster NDWGs. Unlike Sec.  
671.120(b), proposed Sec.  687.120 does not include a statement 
concerning the ability of private entities to apply for NDWGs for 
interstate projects, because sec. 170(c)(1)(B) of WIOA and proposed 
Sec.  687.120(a)(5) provide for such applications. The proposed 
language, in contrast to its WIA counterpart, does not distinguish 
between interstate and intrastate projects, because from the 
Department's perspective the grantee/grantor relationship is between 
the Department and a single entity. In proposed Sec.  687.120(a), the 
Department has specified that outlying areas, in addition to States, 
may apply for Regular NDWGs. In proposed Sec.  687.120(b), the 
Department has specified that outlying areas and Indian tribal 
governments as defined by the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, in addition to States, may apply for Disaster 
NDWGs.
Section 687.130 When should applications for national dislocated worker 
grants be submitted to the Department?
    Proposed Sec.  687.130 describes when applications for NDWGs may be 
submitted and retains many of the requirements found in the WIA 
regulations at 20 CFR 671.130. However, there are some key differences 
in the proposed regulations. Proposed Sec.  687.130(a) identifies the 
conditions

[[Page 20789]]

applicable to Regular NDWGs and underscores the importance that 
applications for Regular NDWGs must be submitted as soon as possible 
after the eligibility criteria are met and the necessary information to 
apply is available to the applicant. Timely submissions that comply 
with the requirements will help ensure that the needed resources are 
provided expediently.
    Proposed Sec.  687.130(b) identifies the conditions applicable to 
Disaster NDWGs and underscores the importance that applications for 
Disaster NDWGs must be submitted as soon as possible. Proposed Sec.  
687.130(b)(1) through (3) identify the events that trigger applications 
for Disaster NDWGs, and also emphasize the importance of submitting 
applications as soon as possible after the appropriate declarations or 
determinations have been made.
Section 687.140 What activities are applicants expected to conduct 
before a national dislocated worker grant application is submitted?
    Proposed Sec.  687.140 describes the activities to be conducted 
before an application for a NDWG is submitted. Proposed Sec.  
687.140(a) expands on the requirements found in the WIA regulations at 
20 CFR 671.160. The proposed language, based in part on the 
Department's experience under WIA, requires applicants to identify the 
needs of the affected workers, and their interest in receiving 
services, either through Rapid Response activities or other means. 
Under WIA, the Department learned that some individuals who could have 
benefited from receiving ESs under a National Emergency Grant (NEG) 
ended up not being interested in receiving them. For example, some 
individuals chose to opt out of receiving services because they 
believed their previous employer was going to call them back to work, 
while others chose to forgo receiving employment and training services 
in order to find new employment on their own. The Department has found 
that the lack of information on needs and interest of affected workers 
have significantly impacted participant enrollment rates in the past, 
and in some cases, resulted in the return of funds outside the 
timeframe allowed for the funds to be obligated for other grants. 
Further, the proposed language expands the allowable data gathering 
methods that may be used, so that applicants are no longer limited to 
using only data obtained via Rapid Response interventions. This change 
allows for greater flexibility in obtaining this critical data.
    Proposed Sec.  687.140(b)(1) makes it clear that applicants for 
Disaster NDWGs must conduct a preliminary assessment of the clean-up 
and humanitarian needs in the affected areas. Proposed Sec.  
687.140(b)(2) requires applicants to have a mechanism in place to 
ascertain reasonably that there is a sufficient population of eligible 
individuals in the area and, if needed, eligible individuals outside 
the area to conduct the planned clean-up and humanitarian work. Under 
WIA, there were a few instances where after NEGs were issued, a State 
was unable to conduct the work it had planned because it was unable to 
find eligible individuals to do the work. The Department recognizes 
that in the immediate aftermath of a disaster it is difficult to 
conduct a thorough assessment of the number of individuals that could 
be eligible to conduct the planned work. While the Department's 
proposed approach allows flexibility, it also ensures there is a 
process in place so that reasonable estimates of potential participant 
availability are made prior to submitting the application, so that the 
proper amount of funding may be provided.
Section 687.150 What are the requirements for submitting applications 
for national dislocated worker grants?
    Proposed Sec.  687.150 explains that the Department will publish 
additional guidance on the requirements for submitting NDWG 
applications. A similar approach was taken in the WIA regulations. 
Unlike the WIA regulations, however, the proposed section requires that 
a project implementation plan, which is currently required for all 
NEGs, be submitted post NDWG award. Under WIA, this requirement is 
included only in guidance. The project implementation plan includes 
more detailed information about project operations than is required for 
the initial application. This information allows the Department to 
provide grantees with targeted technical assistance, and to exercise 
appropriate oversight and monitoring over the NDWG award. Additional 
information on what must be included in the project implementation 
plan, and the process for submitting it, will be included in future 
guidance.
Section 687.160 What is the timeframe for the Department to issue 
decisions on national dislocated worker grant applications?
    Proposed Sec.  687.160 implements sec. 170(b)(2) of WIOA, which 
establishes a 45-day timeframe for issuing determinations on NDWG 
applications. The proposed paragraph makes it clear that final 
decisions on NDWG applications will be issued within 45 calendar days 
of receiving an application that meets the requirements. Applicants are 
encouraged to engage the appropriate Regional Office so that timely 
technical assistance can be provided when developing NDWG applications 
to help ensure that the information provided in the application is 
sufficient.


Sec.  687.170  Who is eligible to be served under national dislocated 
worker grants?

    Proposed Sec.  687.170 provides information on participant 
eligibility for NDWGs, distinguishing between individuals who may be 
served under Regular NDWGs and those who may be served under Disaster 
NDWGs. In the WIA regulations at Sec.  671.140, participant eligibility 
and allowable activities were included in the same section; these two 
topics are being addressed separately in proposed Sec. Sec.  687.170 
and 687.180 for clarity. Proposed Sec.  687.170(a) lists the specific 
populations that are eligible to be served under Regular NDWGs. This 
paragraph retains the provision from the WIA regulations at 20 CFR 
671.140(a) that dislocated workers may be served. However, as discussed 
below, the definition of a dislocated worker was expanded under WIOA, 
thereby expanding the population that can be served with NDWGs.
    Section 3(15)(E)(i)-(ii) of WIOA includes certain spouses of 
members of the Armed Forces on active duty in the definition of 
``dislocated worker.'' These spouses are considered dislocated workers, 
and therefore eligible for services under NDWGs, if they: (1) Have 
experienced a loss of employment as a direct result of relocation to 
accommodate a permanent change in duty station of the member of the 
Armed Forces; or, (2) are unemployed or underemployed and experiencing 
difficulty obtaining or upgrading employment.
    WIOA also expanded upon the definition of a ``displaced 
homemaker,'' recognized under both WIA and WIOA as a type of dislocated 
worker. Under sec. 3(16)(A)(ii) of WIOA, the definition of a displaced 
homemaker now explicitly includes a person who is a dependent spouse of 
a member of the

[[Page 20790]]

Armed Forces on active duty whose family income is significantly 
reduced because of a deployment, a call or order to active duty, a 
permanent change of station, or the service-connected death or 
disability of the member, and who is unemployed or underemployed and is 
experiencing difficulty in obtaining or upgrading employment. In 
addition to the expanded dislocated worker definition covering 
additional military spouses, dislocated members of the Armed Forces and 
other dislocated military spouses continue to be included in the 
definition of ``dislocated workers'' and therefore continue to be 
eligible for services under NDWGs, just as they were under WIA NEGs. 
Finally, sec. 170(c)(2)(A)(iv) of WIOA retains the eligibility 
provision found at sec. 173(c)(2)(iv) of WIA that members of the Armed 
Forces who were on active duty or full-time National Guard duty who 
meet other specific requirements are an eligible population. These 
members of the Armed Forces and the requirements are specifically 
described in proposed Sec.  687.170(a)(1)(iii).
    As discussed earlier in this preamble, WIOA states that dislocated 
members of the Armed Forces, members of the Armed Forces described in 
proposed Sec.  687.170(a)(1)(iii), and dislocated spouses of members of 
the Armed Forces on active duty may be served with NDWGs when there is 
a higher than average demand for employment and training activities 
from this population that exceeds State and local resources to provide 
them.
    Proposed Sec.  687.170(b)(1) retains many of the participant 
eligibility requirements for Disaster NEGs found in the WIA regulations 
at Sec.  671.140(d), and also includes a new population authorized 
under sec. 170(d)(2)(D) of WIOA--individuals who were self-employed, 
but become unemployed or significantly underemployed as a result of the 
emergency or disaster. Proposed Sec.  687.170(b)(2) implements sec. 
170(b)(1)(B)(ii) of WIOA, discussed in proposed Sec.  687.110(b)(3), 
which authorizes NDWG assistance for individuals who have relocated to 
another State, tribal area, or outlying area as a result of the 
disaster. This paragraph lists the relocated individuals who are 
eligible for assistance under these type of NDWGs, and also notes that 
in rare instances, humanitarian-related temporary employment will be 
available in the relocation areas. This is further discussed in 
proposed Sec.  687.180(b)(2) and the corresponding preamble language. 
In those cases, the relocated individuals listed in proposed Sec.  
687.170(b)(2) would be eligible for that work.
Section 687.180 What are the allowable activities under national 
dislocated worker grants?
    Proposed Sec.  687.180 provides information on allowable 
activities; first, those allowable under Regular NDWGs; second, those 
allowable under Disaster NDWGs. Proposed Sec.  687.180(a) lists the 
allowable activities for Regular NDWGs. These activities are 
essentially the same as those reflected in the WIA regulations at 20 
CFR 671.140; however, consistent with WIOA, references to core, 
intensive, and training services have been changed to refer to career 
services. Additionally, the reference to trade-impacted workers under 
the NAFTA-TAA program contained in 20 CFR 671.140(c)(2) is not included 
in the proposed paragraph, since the NAFTA-TAA program no longer 
exists.
    Proposed Sec.  687.180(b) lists the allowable activities for 
Disaster NDWGs. Proposed Sec.  687.180(b)(1) uses the same language as 
in the WIA regulations at 20 CFR 671.140(e), which authorizes temporary 
employment for humanitarian assistance and clean-up and repair of 
facilities and lands within the disaster area for which a Disaster NDWG 
is issued. This proposed paragraph also implements sec. 170(d)(1)(A) of 
WIOA, which requires coordination with FEMA and permits these 
activities to be performed in offshore areas related to the emergency 
or disaster. The addition of the language on offshore areas was 
informed by the Deepwater Horizon Oil Spill; the proposed paragraph 
allows clean-up and humanitarian assistance activities to take place 
beyond the land surface of the disaster area.
    Proposed Sec.  687.180(b)(1) implements sec. 170(d)(3) of WIOA; 
this paragraph allows employment of up to 12 months in the temporary 
jobs created under Disaster NDWGs, with the potential for an additional 
12 months with Secretarial approval. Under sec. 173(d)(3) of WIA, only 
6 months of disaster relief employment was allowed. Proposed Sec.  
687.180(b)(1) identifies employment and training activities as 
allowable under Disaster NDWGs. While the WIA regulations contained a 
comparable provision, individuals were only allowed to participate in 
employment and training services after they had completed the disaster 
relief employment component of the project. The proposed paragraph 
allows individuals enrolled in disaster relief employment under 
Disaster NDWGs to receive concurrent career and training services, as 
well as upon completion. Feedback received from grantees over the years 
demonstrates that individuals involved in clean-up and humanitarian 
assistance benefit from the opportunity to receive employment and 
training services. These services will help to improve the skills of 
these individuals and enhance their chances of obtaining employment 
once the temporary disaster relief employment is completed. However, 
because the primary purpose of Disaster NDWGs is to perform clean-up 
and humanitarian assistance, the Department will issue further guidance 
about the specific requirements regarding concurrent participation in 
career services.
    Proposed Sec.  687.180(b)(2) implements sec. 170(b)(1)(B)(ii) of 
WIOA, discussed in proposed Sec.  687.110(b)(3), which makes 
individuals who have relocated to another State, tribal area, or 
outlying area as a result of a disaster eligible to receive services. 
Proposed Sec.  687.180(b)(2) recognizes that although these individuals 
are eligible for temporary disaster relief employment, their 
employment, by virtue of their relocation, will most likely be limited 
to humanitarian work (if those services are warranted). If individuals 
relocate outside of the disaster area, they will most likely not be in 
the impacted geographic area to conduct clean-up work. It is the 
Department's expectation that, except in rare circumstances, the 
services provided to relocated individuals will be limited to career 
services.
    Proposed Sec.  687.180(b)(3), consistent with secs. 170(a)(1)(A)-
(B) of WIOA, authorizes career services and/or disaster relief 
employment both where recognized by FEMA, or by another Federal agency. 
Under sec. 173(a)(2) of WIA and the WIA regulations at 20 CFR 
671.110(e) and 671.130(c), NEGs were only available where FEMA declared 
an area eligible for disaster-related public assistance.
    Proposed Sec.  687.180(b)(4) implements sec. 170(d)(1)(B) of WIOA, 
which states that disaster NDWG funds may be expended through public 
and private agencies and organizations that are engaged in disaster 
relief and humanitarian assistance projects.
Section 687.190 How do statutory and regulatory waivers apply to 
national dislocated worker grants?
    Proposed Sec.  687.190 describes how statutory and regulatory 
waivers apply to NDWGs. To improve a grantee's ability to serve 
participants, or increase the effectiveness of NDWG projects, the 
Department may grant waivers to many statutory and regulatory 
requirements. See WIOA sec. 189(i)(3)(A), which identifies some 
limitations on the Secretary's waiver authority. Proposed

[[Page 20791]]

Sec.  687.190(a) and (b) retain essentially the same requirements found 
in the WIA regulations at 20 CFR 671.150. A grantee requesting a waiver 
of the statutory or regulatory requirements in connection with an NDWG 
must submit its request either in the initial application for an NDWG, 
or in a subsequent modification request. A waiver issued under other 
WIOA provisions does not supplant this requirement.
Section 687.200 What are the program and administrative requirements 
that apply to national dislocated worker grants?
    Proposed Sec.  687.200 describes program and administrative 
requirements for NDWGs. It retains essentially the same language 
included in the WIA regulations at 20 CFR 671.170. Proposed Sec.  
687.200(b) authorizes the use of funds for temporary job creation in 
areas declared eligible for public assistance by FEMA or in areas 
impacted by a situation of national significance as designated by a 
Federal agency other than FEMA, subject to the limitations of sec. 
170(d) of WIOA, and any additional guidance issued by the Department. 
Proposed Sec.  687.200(b)(2) authorizes any remaining Disaster NDWG 
funds awarded under this part to be used by a grantee in the same PY 
the funds were awarded, in limited instances as determined by the 
Secretary or the Secretary's designee, for additional disasters or 
situations of national significance subject to the limitations of sec. 
170(d) of WIOA. This flexibility will allow States, tribal areas, and 
outlying areas that experience a quick succession of disasters (such as 
those experienced by several Gulf States in 2005 that were devastated 
by the effects of Hurricane Katrina, and approximately 1 month later, 
were devastated by Hurricane Rita) to be able to modify their existing 
grant and quickly access existing funding.

L. Part 688--Provisions Governing the YouthBuild Program

1. Introduction
    The Department wants to emphasize the connections across all of our 
youth-serving programs under WIOA including the WIOA youth formula 
program including boards and youth committees, connections to pre-
apprenticeship and registered apprenticeship programs, and Job Corps 
centers across the country. WIOA is an opportunity to align and 
coordinate service strategies for these ETA youth training programs as 
well as align with our Federal partners that serve these same 
customers. WIOA also ensures that these programs are using common 
performance measures and standard definitions, which includes aligning 
the definitions for homeless youth, basic skills deficient, 
occupational skills training and supportive services. Additionally, the 
YouthBuild regulation aligns six new performance measures with the WIOA 
youth formula program.
    WIOA affirms the Department's commitment to providing high quality 
education, training, and ESs for youth and young adults through 
YouthBuild grants by expanding the occupational skills training offered 
at local YouthBuild programs. YouthBuild programs can offer 
occupational skills training in in-demand occupations, such as health 
care, advanced manufacturing, and IT, as approved by the Secretary and 
based on local labor market information.
    In addition to the changes to the program required by WIOA, the 
Department proposes several additional changes to the program, 
including proposed revisions to the duration of the restrictive 
covenant clause (as detailed in the preamble at Sec.  688.730), 
clarifying eligibility criteria for participation, and describing 
qualifying work sites and minimum criteria for successful exit from the 
YouthBuild program. Beyond these regulations, the Department will 
develop guidance and technical assistance to help grantees and the 
workforce development community operate highly effective YouthBuild 
programs.
2. Subpart A--Purpose and Definitions
Section 688.100 What is YouthBuild?
    This proposed section describes the YouthBuild program. YouthBuild 
is a workforce development program that provides employment, education, 
leadership development, and training opportunities to disadvantaged 
youth. The program also benefits the larger community by providing new 
and rehabilitated affordable housing, thereby decreasing the incidence 
of homelessness in those communities. The program recruits youth 
between the ages of 16 and 24 who are school dropouts and are either: A 
member of a low-income family, a youth in foster care, a youth who is 
homeless, a youth offender, a youth who is an individual with a 
disability, a child of an incarcerated parent, or a migrant youth.
Section 688.110 What are the purposes of the YouthBuild program?
    This proposed section describes the purposes of the YouthBuild 
program. The overarching goal of the YouthBuild program is to offer 
disadvantaged youth the opportunity to obtain education and useful 
employment skills to enter the labor market successfully. Construction 
training provides skills training and hands-on application of those 
skills. Youth also receive educational services that lead to a HSD or 
its State-recognized equivalent.
    In addition to describing the Department's vision for the 
YouthBuild program, this proposed section describes the purposes of the 
YouthBuild program as found at WIOA sec. 171(a).
Section 688.120 What definitions apply to this part?
    This proposed section provides definitions that are specific to the 
YouthBuild program in sec. 171(b) of WIOA. Other definitions that apply 
to the YouthBuild program are defined under sec. 3 of WIOA and Sec.  
675.300. Where appropriate and applicable the Department has aligned 
our definitions with the definitions within the regulations of WIOA 
youth, Job Corps, and WIOA adult and dislocated workers programs.
    These proposed definitions fall into several categories, which are 
described below: (1) Definitions that remain unchanged from the WIA 
regulation at 20 CFR 672.110; (2) terms that were included in the WIA 
regulation but which have been amended; and (3) new definitions added 
to implement WIOA.
    Definitions included in 20 CFR 672.110 which have been carried over 
to this part unchanged are: ``Community or Other Public Facility,'' 
``Core Construction,'' ``Eligible Entity,'' ``Housing Development 
Agency,'' ``Income,'' ``Indian; Indian Tribe,'' ``Low-Income Family,'' 
``Migrant Youth,'' and ``Youth in Foster Care.''
    Definitions published in the WIA regulations at Sec.  672.110 that 
the Department proposes changing include existing definitions for: 
``Homeless Individual'' to include individuals considered homeless as 
defined in sec. 41403(6) of the Violence Against Women Act of 1994 and 
the inclusion of ``Homeless Child or Youth'' as defined under the 
McKinney-Vento Homeless Assistance Act; ``Needs-Based Stipends'' to 
``Needs-Based Payments'' in order to be consistent with the term as 
used in Sec.  688.320 below and to differentiate the term from the 
allowable program stipends described in Sec.  688.320; ``Occupational 
Skills Traning'' to align with in-demand industries and an emphasis on 
post-secondary credentials; ``Registered Apprenticeship'' to align with 
the WIOA definition; and ``Transitional

[[Page 20792]]

Housing'' to reflect the amended definition under the McKinney-Vento 
Homeless Assistance Act as amended by S. 896 The Homeless Emergency 
Assistance and Rapid Transition to Housing (HEARTH) Act of 2009.
    Proposed changes to this section also include the addition of new 
definitions that were not in WIA but are included in either sec. 3 or 
sec. 171(b) of WIOA. These are ``Adjusted Income,'' ``Applicant,'' 
``Basic Skills Deficient,'' ``In-Demand Industry Sector or 
Occupation,'' ``Individual with a Disability,'' ``Offender,'' 
``Qualified National Nonprofit Agency,'' ``Recognized Post-secondary 
Credential,'' ``School Dropout,'' ``Secondary School,'' ``Supportive 
Services,'' and ``YouthBuild Program.''
    Finally, the Department proposes to include several new definitions 
not defined under WIA YouthBuild regulations Sec.  673.110: 
``Construction Plus,'' ``Exit,'' ``Follow-Up Services,'' 
``Participant,'' and ``Pre-apprenticeship.''
    In addition, the Department has removed several definitions that 
were included in the WIA regulations: ``Alternative School,'' 
``Individuals of Limited English Proficiency (LEP),'' ``Partnership,'' 
``Public Housing Agency,'' and ``Youth who is an Individual with a 
Disability.''
    The Department proposes to include the following definitions at 
Sec.  688.120:
    Adjusted Income: The Department proposes that the term ``adjusted 
income'' means that with respect to a family, the amount of the income 
of the members of the family residing in a dwelling unit or the persons 
on a lease, after any allowable income exclusions. Per WIOA sec. 
171(b)(1), this definition comes from sec. 3(b) of the United States 
Housing Act of 1937 (42 U.S.C. 1437a(b).
    Applicant: The Department proposes defining this as an entity 
applying for YouthBuild funding as described at WIOA sec. 171(b)(2).
    Basic Skills Deficient: This proposed definition comes from WIOA 
sec. 3(5) and the Department is adding it for ease of use. In assessing 
basic skills, YouthBuild programs must use assessment instruments that 
are valid and appropriate for the target population, and must provide 
reasonable accommodation in the assessment process, if necessary, for 
participants with disabilities.
    Construction Plus: The Department proposes defining this as the 
inclusion of occupational skills training for YouthBuild participants 
in in-demand occupations other than construction. This definition is 
from TEGL 7-14 Guidance for Implementing the ``Construction Plus'' 
Component of the YouthBuild Program. The Department is adding this 
definition to the regulations to stress the importance of correctly 
implementing a high quality Construction Plus program and to refer 
grantees to TEGL 7-14.
    Community Or Other Public Facility: The Department proposes 
defining this as those facilities which are either privately owned by 
non-profit organizations or publicly owned and publicly used for the 
benefit of the community. For publically owned buildings, examples 
include public use buildings such as recreation centers, libraries, 
public park shelters, or public schools.
    Core Construction: The Department proposes defining this term to 
mean those activities that are directly related to the construction or 
rehabilitation of residential, community, or other public facilities. 
These activities include, but are not limited to, job skills that can 
be found under the Standard Occupational Classification System (SOC) 
major group 47, and Construction and Extraction Occupations, in codes 
47-1011 through 47-4099. A full list of the SOC's can be found at the 
Bureau of Labor Statistics (BLS) Web site, http://www.bls.gov/soc.
    Eligible Entity: This proposed term describes the entities eligible 
to apply for funding under this part. This definition comes from WIOA 
sec. 171(b)(3).
    English Language Learner: The Department proposes defining this 
term as a participant who has limited ability in reading, writing, 
speaking, or comprehending the English language, and whose native 
language is one other than English; or who lives in a family or 
community environment where a language other than English is the 
dominant language. This definition comes from WIOA sec. 3(21), which 
adopts the definition found at WIOA sec. 203(7).
    Exit: For purposes of measuring performance under the performance 
measures described in Sec.  688.400, the Department proposes to adopt 
the general definition of exit that is used in Sec.  677.150 in order 
to align with the core programs generally and the youth formula program 
specifically. For purposes of this definition, an exit from a 
YouthBuild program is either a successful exit under Sec.  688.370 or 
an unsuccessful exit, which occurs when a participant leaves the 
program before completing the program. However, a participant is not 
considered to have unsuccessfully exited if they leave the program 
because of a documented death, health or medical reason, family care, 
being called to active duty in the military, or any other circumstance 
described by the Secretary.
    Follow-Up Services: This proposed term describes the services 
provided to youth participants after program exit to ensure success in 
established outcomes, such as placement into post-secondary education 
and training or employment. The definition is based on the Department's 
experience in administering the YouthBuild program, and aligns with the 
WIOA youth formula program definition. By adding this definition, the 
Department intends to strengthen the emphasis on career pathways for 
YouthBuild participants. Follow-up services are critical services 
provided following a youth's exit from the program that help ensure the 
youth is successful in employment and/or post-secondary education and 
training as they progress along their career pathway. The Department 
will issue guidance and provide technical assistance regarding the 
services necessary to ensure the success of youth participants.
    Homeless Individual: This proposed term comes from WIOA sec. 
171(b)(4), which adopted the definition from sec. 41403(6) of the 
Violence Against Women Act of 1994 (42 U.S.C. 14043e-2(6)).
    Homeless Child or Youth: This proposed term comes from WIOA sec. 
171(b)(4) of WIOA and comes from sec. 725(2) of the McKinney-Vento 
Homeless Assistance Act (42 U.S.C. 1134a(2)).
    Housing Development Agency: The Department proposes adopting the 
statutory definition of this term at WIOA sec. 171(b)(5).
    Income: This proposed definition has been adopted from WIOA sec. 
171(b)(6), which adopted the definition from the United States Housing 
Act of 1937 (42 U.S.C. 1437a(b)(2)).
    In-Demand Industry Sector or Occupation: The Department proposes to 
define this term as described at WIOA sec. 3(23).
    Indian; Indian Tribe: These proposed terms are found in WIOA sec. 
171(b)(7), which incorporated the definitions from sec. 4 of the 
ISDEAA.
    Individual With a Disability: This proposed definition was taken 
from sec. 3(25) of WIOA, which adopted the definition from sec. 3 of 
the Americans with Disabilities Act of 1990 (42 U.S.C. 12102).
    Low-Income Family: This proposed definition implements the 
definition at WIOA sec. 171(b)(8), which adopted the definition of 
``low-income family'' from sec. 3(b)(2) of the Housing Act of 1937. 
This definition applies not only to the eligibility of participants but 
also to the

[[Page 20793]]

requirement that any residential units constructed or rehabilitated 
using YouthBuild funds must house homeless individuals and families or 
low-income families.
    Migrant Youth: The Department proposes using the definition we used 
under the WIA YouthBuild regulation. The definition was adapted from 
Farmworker Bulletin 00-02, which relates to eligibility in the Migrant 
Seasonal Farmworker Youth program, and expands on the definition of 
``migrant seasonal farmworker'' found in WIA.
    Needs-Based Payments: This proposed term describes additional 
payments to participants beyond stipends which are necessary for an 
eligible youth to participate in the program.
    Occupational Skills Training: The Department proposes to define 
this term as a course of study that provides specific vocational 
skills.
    Offender: The Department proposes to define this term based on the 
definition found at WIOA sec. 3(38) and it includes both youth and 
adults who have been subject to any stage of the criminal justice 
process. The Department is proposing this definition in order to align 
YouthBuild's definition of offender with WIOA's formula for adult and 
youth programs.
    Participant: The Department is proposing to define this term as an 
individual who, after an affirmative eligibility determination has been 
made, enrolls and actively participates in the program. Participants 
must be reported in the performance outcome measures. The term 
``participant'' is necessary to define because Sec.  688.400 requires 
grantees to report on the performance of participants in the program. 
This definition is designed to be consistent with the definition of 
participant in Sec.  677.150, and it captures the same type of 
individuals that are considered participants in the core programs.
    Pre-Apprenticeship: This proposed term describes a program or set 
of strategies designed to prepare individuals to enter and succeed in a 
registered apprenticeship program. This definition is adopted from TEN 
13-12 (http://wdr.doleta.gov/directives/attach/TEN/TEN_13-12_Acc.pdf), 
and is being used to ensure consistency with the definition used by the 
Department's Office of Apprenticeship. Per TEN 13-12, YouthBuild 
programs that receive funding from DOL are considered pre-
apprenticeship programs.
    Recognized Post-secondary Credential: This proposed definition 
explains that a recognized post-secondary credential includes an 
industry-recognized certificate or completion of an apprenticeship 
program, a license recognized by the State involved or Federal 
government, or an associate or baccalaureate degree. This definition 
has been adopted from WIOA sec. 3(52). the Department is using this to 
term to align with WIOA's formula adult and youth programs.
    Registered Apprenticeship Program: The Department proposes to adopt 
the definition found at WIOA sec. 171(b)(10).
    School Dropout: This proposed definition, adopted from WIOA sec. 
3(54), describes a school dropout as an individual who is no longer 
attending any school and who has not received a secondary school 
diploma or its recognized equivalent.
    Secondary School: The Department proposes to define this term as a 
nonprofit institutional day or residential school, including a public 
secondary charter school, that provides secondary education, as 
determined under State law, except that the term does not include any 
education beyond grade 12. This proposed definition adopts the 
definition at WIOA sec. 3(55), which cites to sec. 9101 of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801).
    Section 3: The Department proposes to define this term as Section 3 
of the Housing and Urban Development Act of 1968, as amended by the 
Housing and Community Development Act of 1992. The Department proposes 
adding this definition because YouthBuild is specifically identified in 
the U.S. Department of Housing and Urban Development (HUD's) Section 3 
regulations. In Section 3, contractors are encouraged to work with 
YouthBuild programs and participants when working on Federally-funded 
HUD projects. Contractors and registered apprenticeship sponsors that 
hire YouthBuild graduates will increase the competitiveness of their 
proposals when bidding on HUD-funding construction projects.
    Supportive Services: This proposed definition adopts the definition 
from WIOA sec. 3(59). In this definition, linkages to community 
services include but are not limited to services such as linkages to 
free legal aid to help with the expungement of criminal records, 
securing government identification, and linkages to organizations that 
provide youth the opportunity to develop their leadership skills 
through service to their respective community. This proposed definition 
identifies additional services that are necessary for youth to 
participant in this program. Guidance regarding the provision of 
supportive services will be issued by the Department.
    Transitional Housing: The Department proposes to define this term 
as housing provided to ease the movement of individuals and families 
experiencing homelessness to permanent housing within 24 months. This 
definition, per WIOA sec. 171(b)(11), is adopted from sec. 401(29) of 
the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11360(29)).
    Youth in Foster Care: This term means ``youth currently in foster 
care or youth who have ever been in foster care.'' The Department is 
including it here as it was in WIA YouthBuild regulations.
    Youthbuild Program: The Department proposes to define this term as 
any program that receives assistance under this section and provides 
disadvantaged youth with opportunities for employment, education, 
leadership development, and training through the rehabilitation (which 
for purposes of this section, must include energy efficiency 
enhancements) or construction of housing for homeless individuals and 
low-income families, and public facilities. This proposed term adopts 
the definition from WIOA sec. 171(b)(12).
3. Subpart B--Funding and Grant Applications
Section 688.200 How are YouthBuild grants funded and administered?
    This proposed section describes how the Secretary uses funds 
authorized for appropriation under WIOA sec. 171(i) to administer 
YouthBuild as a national program under title I, subtitle D of WIOA. 
This section also notes that grants to operate YouthBuild programs are 
awarded to eligible entities through a competitive selection process, 
as required by WIOA sec. 171(c)(3). This proposed section retains the 
same requirements found at 20 CFR 672.200.
Section 688.210 How does an eligible entity apply for grant funds to 
operate a YouthBuild program?
    This proposed section, implementing WIOA sec. 171(c)(1), generally 
describes the application process for the YouthBuild program.
Section 688.220 How are eligible entities selected to receive grant 
funds?
    This proposed section, which implements WIOA sec. 171(c)(4), 
describes the selection criteria that will be considered by the 
Secretary when reviewing an application for funding. In addition to the 
criteria described in the law, the Department has added additional 
criteria in paragraphs (d), (e),

[[Page 20794]]

and (g) and added a new criteria in paragraph (i).
    In paragraph (d), the Department has added ``counseling and case 
management'' to the criteria described in sec. 171(c)(4)(D) because 
these are essential to the success of YouthBuild participants.
    In paragraph (e), in addition to the criteria at WIOA sec. 
171(c)(4)(E), the Department has clarified that applicants should train 
participants in sectors or occupations that are in demand locally to 
help them achieve a positive employment outcome after their exit from 
the program. Paragraph (g) adds to the criteria at WIOA sec. 
171(c)(4)(I) by clarifying that the Department will also consider the 
extent to which the proposal provides for previously homeless families 
as well as individuals.
    The Department has added a new criterion at paragraph (i) which 
looks at the applicant's ability to enter into partnerships with a 
variety of organizations and providers. Inclusion of this criterion is 
beneficial to the grantee and the participant. No single grantee is 
able to provide all of the services that a participant will need to 
succeed along her or his chosen career pathway. However, programs that 
enter into various types of partnerships are able to provide 
participants with needed supportive services, increasing the likelihood 
that they will succeed both during and after their participation in the 
program.
    Finally, paragraph (l) clarifies that the Department will apply 
varying weights to these factors as described in the FOA.
Section 688.230 What are the minimum requirements and elements to apply 
for YouthBuild funds?
    This proposed section implements WIOA section 171(c)(3)(B) and 
describes the minimum requirements and elements that must be included 
in an application for YouthBuild funds.
    In addition to the requirement at sec. 171(c)(3)(B)(iii), proposed 
Sec.  688.230(c) requires applicants to describe their experience 
operating a program under Section 3 of the Housing and Urban 
Development Act of 1968. This requirement was added because the 
Department wants grantees to be aware that YouthBuild is specifically 
identified in HUD's Section 3 regulations. In Section 3, contractors 
are encouraged to work with YouthBuild programs and participants when 
working on Federally-funded HUD projects. The criteria described in 
this proposed section will be included in the FOA.
    The criteria described in this section emphasize strong connections 
to registered apprenticeship programs as a key component of the 
YouthBuild model, as well as connections to the one-stop system as a 
support for employer engagement, connecting with the Local Workforce 
Development Board youth services, and connecting to the network of 
standing youth committees at the local level. These connections will 
not only strengthen YouthBuild programs, but better enable them to 
provide a comprehensive spectrum of employment and training services to 
their participants.
    Additionally, Sec.  688.230(l) proposes, consistent with current 
practice, that the Department will consider an applicant's past 
performance under an award made by the Secretary of Labor to operate a 
YouthBuild program. This consideration will be based on the applicant's 
past Quarterly Performance Reports (ETA-9136) and Quarterly Financial 
Reports (ETA-9130). Our past experience in administering the YouthBuild 
program has demonstrated that evaluating past performance allows the 
Department to conduct comprehensive analysis of the program's ability 
to meet the complicated requirements of YouthBuild. Additional details 
about this requirement will be included in the FOA.
    Finally, proposed paragraph (v) authorizes the Secretary to include 
additional requirements in the FOA. This provision has been included to 
ensure that the requirements upon which the Secretary is making its 
determination are based on adequately and accurately judging the 
ability of the applicant in order to ensure the effective, efficient 
use of Federal funds and maximum benefit to program participants and 
the communities in which the proposed program will operate.
Section 688.240 How are eligible entities notified of approval for 
grant funds?
    Consistent with sec. 171(c)(5) of WIOA, this proposed section 
describes how eligible entities are notified of the status of their 
respective grant application submitted for funding and the time frame 
for notification. This proposed section retains the same requirements 
found at 20 CFR 672.215.
4. Subpart C--Program Requirements
Section 688.300 Who is an eligible participant?
    This proposed section sets out the participant eligibility 
requirements for enrollment in the YouthBuild program. It covers the 
required ages, education, income level, and other factors as well as 
exceptions. This proposed section implements the statutory eligibility 
requirement at WIOA sec. 171(e)(1).
    While the language ``its recognized State equivalent'' in Sec.  
688.300(b)(1) is commonly understood to mean a GED, States can choose 
from several different equivalency tests that result in the attainment 
of a credential similar to the GED. Accordingly, the phrase 
``recognized State equivalent'' as used in this section refers to the 
credential attained by passing any of the recognized equivalency tests.
    While WIOA sec. 171(e)(1)(A)(ii) includes ``a youth offender'' as 
an eligible participant, proposed Sec.  688.300(a)(3)(iii) permits both 
adult and youth offenders to participate in the YouthBuild program. The 
reason for the inclusion of adult offenders is twofold. First, some 
States categorize anyone who was convicted of a crime over the age of 
16 an adult. Because individuals between the ages of 16 and 24 are 
eligible to participate in YouthBuild programs, not including adult 
offenders as eligible participants would exclude those 16 and 17 year 
olds who have been convicted of a crime from participating in the 
program. Including adult offenders in this list of eligible 
participants ensures that these youth with a substantial barrier to 
employment will be able to participate in and benefit from the 
YouthBuild program.
Section 688.310 Are there special rules that apply to veterans?
    This section identifies the relevant rules for determining income 
for veterans and priority of service for qualified veterans. These 
rules can be found in 20 CFR 683.230 and 20 CFR part 1010, 
respectively. This proposed section retains the same requirements found 
at 20 CFR 672.305.
Section 688.320 What eligible activities may be funded under the 
YouthBuild program?
    This proposed section, which implements WIOA sec. 171(c)(2), 
outlines the activities that YouthBuild programs funded under this 
section may provide to program participants, including the allowable 
education and workforce training activities. Of note, sec. 
171(c)(2)(a)(i) of WIOA codified the Department's decision to allow 
training in in-demand industries with the approval of the Secretary.
    In addition to the activities allowed by the statute, the 
Department, in Sec.  688.320, proposes to allow grantees to provide 
referrals to mental health

[[Page 20795]]

services and victim services, such as referrals to domestic violence 
services or services to victims of gang violence. The Department has 
decided to add this because it is not uncommon for our participants to 
enroll in our programs while at the same time dealing with the adverse 
effects of violence.
    Finally, Sec.  688.320(a)(7)(ii) specifies that in order to provide 
needs-based payments, a grantee must have a written policy which 
includes the information described to sure that such payments are 
proper and fairly distributed.
Section 688.330 What level of training qualifies a construction project 
as a qualifying work site under the YouthBuild program?
    This proposed section provides requirements for YouthBuild grant 
programs on what is considered a qualifying work site for purposes of 
allowable construction activities under the YouthBuild program.
    While the YouthBuild program model requires hands-on construction 
training that supports the outcome of increasing the supply of 
affordable housing within the communities that YouthBuild serves, some 
grant programs struggle to secure work sites that will offer the youth 
the hands-on construction skills training obtained from either building 
housing from scratch or through extensive rehabilitation of existing 
housing stock.
    Determining whether a work site meets the criteria for providing 
substantial hands-on experience is complex. As referenced in TEGL 35-
12, ``Definition and Guidance on Allowable Construction Credentials for 
YouthBuild Programs,'' participants must study and pass testing in a 
number of modules, or skill areas, before one of the industry-
recognized construction certification programs will accredit them. 
These modules include, for example, brick masonry, carpentry, painting, 
plumbing, and weatherization.
    Per paragraphs (a) through (e) of this section, several criteria 
must be met in order for a work site to qualify as appropriate for 
construction skills training for YouthBuild participants. The first is 
whether the worksite will provide the opportunity for hands-on training 
in at least two modules in a construction skills training program 
offering an industry-recognized credential. The second is whether the 
completed work site will be used by a family or individual that meets 
the low-income threshold, as defined by the United States Housing Act 
of 1937 (42 U.S.C. 1437a(b)(2)). The third is whether the site provides 
substantial hands-on experience for youth. This means that the work 
site must include from-the-ground-up building experience (e.g., 
foundation, framing, roofing, dry wall installation, finishing, etc.) 
or a substantial level of rehabilitation (i.e., ``a gut job''). Fourth, 
per Sec.  688.730, all YouthBuild work sites must be built or renovated 
for low-income individuals or families and are required to have a 
restrictive covenant in place that only allows for rental or resale to 
low-income participants for a particular period of time. Last, all work 
sites must adhere to the allowable construction and other capital asset 
costs, as defined in TEGL 05-10, ``Match and Allowable Construction and 
Other Capital Asset Costs for the YouthBuild Program,'' or subsequent 
or similar guidance issued by the Department related to allowable 
costs.
    All grantees must use the required Work Site Description form (ETA-
9143) in submitting proposed work sites for review and approval to and 
by the Department at the time of applying for grant funds. If after 
approval the grantee can no longer work at the approved construction 
site, the grantee must submit another ETA-9143 for the proposed new 
work site. The Work Site Description form requests specific information 
on the property for building or rehabilitation, the participants' 
construction activities, the funding source for the construction, and 
demonstration of ownership or access to the site.
    By tying approved work sites with hands on training, the Department 
can ensure youth have the necessary hands-on training and experience in 
two or more of these modules or skill areas in order to qualify for 
industry-recognized credentials. The Department will issue guidance on 
the types of work sites that are acceptable for construction training 
for YouthBuild participants, and describe the minimum construction 
activities that define work site training.
Section 688.340 What timeframes apply to participation?
    This proposed section, implementing WIOA sec. 171(e)(2), provides 
that the period of participation for YouthBuild participants while 
enrolled in the program is not less than 6 months and not more than 24 
months. This proposed section retains the same requirements found at 20 
CFR 672.315.
Section 688.350 What timeframes must be devoted to education and 
workforce investment or other activities?
    Implementing WIOA sec. 171(e)(3), this proposed section outlines 
the requirements for the minimum amount of time that participants must 
engage in workforce and educational training activities. This section 
also permits program participants to spend up to 10 percent of their 
time engaged in leadership development and community service 
activities, such as youth serving as crew leaders, participating on 
policy councils, organizing community clean-up projects, leading youth 
voter registration drives and organizing and hosting community anti-
violence conferences.
Section 688.360 What timeframes apply to follow-up services?
    This proposed section requires YouthBuild grantees to provide 
follow-up services for a period of 12 months after exit. These services 
are provided to program participants that have successfully exited the 
program to help them transition successfully into a post-secondary 
education program or employment.
    The Department proposes to require 12 months of follow-up services 
to align the length of services with the youth formula program and the 
new performance measure requiring grantees to measure outcomes up to 
four quarters after exit. The types of services provided and the 
duration of services must be determined based on the needs of the 
individual and therefore, the type and intensity of follow-up services 
may differ for each participant.
    Consistent with the youth formula program, a participant that is 
receiving follow-up services is considered to have exited the program, 
and therefore would be counted as having exited the program for the 
purpose of the performance measures described in Sec.  688.400.
Section 688.370 What are the requirements for exit from the YouthBuild 
program?
    This proposed section outlines the minimum criteria for successful 
exit from the YouthBuild program. One purpose of the YouthBuild program 
is for participants to receive practical skills and training that will 
allow them to successfully transition to employment or further 
education. As used in this section, a successful exit occurs when a 
participant has completed his/her training and is ready to transition 
out of the program.
    Proposed paragraph (a) requires hands-on training because, based on 
our experience, participants that do not receive this training are less 
likely to transition out of the program successfully, thereby 
undermining one of the primary purposes of the program.
    Proposed paragraph (b) requires each YouthBuild program to create 
exit

[[Page 20796]]

policies that establish any additional minimum requirements that youth 
must meet in order to be considered to have successfully completed the 
program.
    In the past, grantees have deemed participants to have exited the 
program, simultaneously upon graduation, before all program services 
have been completed or delivered. This can result in lower performance 
outcome measures for the grantee and a lower post program success rate 
for participants. Participants do not have to exit at the moment of 
graduation. Exits can and should be based on the individual ongoing 
needs of the participant. Transition services can be provided until the 
participant is ready for exit and may include college experience, 
subsidized summer jobs, internships, or other activities that will help 
the youth focus on post-program goals (for further details, please see 
Sec.  688.320). It may also be best to have the youth already connected 
to a post-program placement before exit to ensure successful outcomes 
for the youth and successful performance outcome measures for the 
program. In addition, because follow-up services are only available to 
participants that have successfully completed the program, adding this 
section clarifies which participants are eligible to receive follow-up 
services
Section 688.380 What is the role of the YouthBuild grantee in the one-
stop system?
    WIOA sec. 121(b)(1)(B)(i) includes all of the programs authorized 
under title I of WIOA as a required partner in the local one-stop 
system. This proposed section implements that provision by requiring 
YouthBuild grantees to take all actions required of required partners 
described in sec. 121 of WIOA and 20 CFR part 678. The Department 
encourages its YouthBuild grantees to actively participate as a partner 
with the one-stop system. Because of the positive role that a local 
one-stop center can have on the operation of a local YouthBuild program 
and on the outcomes for YouthBuild participants, the local YouthBuild 
grantee should serve as the required partner of the one-stop system as 
required by sec. 121 of WIOA.
5. Subpart D--Performance Indicators
Section 688.400 What are the performance indicators for YouthBuild 
grants?
    This proposed section describes performance indicators for the 
YouthBuild program, as required by WIOA sec. 171(f). Proposed Sec.  
688.400(a) through (f) are the six primary indicators as required by 
sec. 116 (b)(2)(A)(ii) of WIOA. These measures of performance are the 
same as the primary indicators discussed in proposed Sec.  677.155. 
Though the indicators of performance are identified in various places 
throughout the WIOA proposed regulations, the indicators are the same 
and do not vary across the regulations. In addition to the six primary 
indicators, the Secretary may require YouthBuild programs to collect 
additional information on performance. If additional performance 
information becomes a requirement for YouthBuild grantees, they will be 
informed through a formal memorandum from the Department.
    In calculating a program's performance, grantees must consider all 
of the participants that have exited the program, as that term is 
defined in Sec.  688.120, not just those that have successfully exited 
the program under the policy described in Sec.  688.370.
Section 688.410 What are the required levels of performance for the 
performance indicators?
    This proposed section, implementing sec. 171(f) of the statute, 
provides a description of how levels of performance are developed for 
YouthBuild programs.
Section 688.420 What are the reporting requirements for YouthBuild 
grantees?
    This section outlines the performance, narrative, and financial 
reporting requirements for YouthBuild grantees and explains that any 
additional information on the reporting requirements will be included 
in guidance issued by the Secretary. This proposed section retains the 
same requirements found at 20 CFR 672.410.
Section 688.430 What are the due dates for quarterly reporting?
    This section provides due dates for quarterly performance reporting 
under the YouthBuild program. This proposed section retains the same 
requirements found at 20 CFR 672.415.
6. Subpart E--Administrative Rules, Costs, and Limitations
Section 688.500 What administrative regulations apply to the YouthBuild 
program?
    This proposed section applies the relevant administrative 
requirements and regulations applicable to all WIOA ETA programs to the 
YouthBuild program. This section requires each YouthBuild grantee to 
comply with the general administrative requirements found in 20 CFR 
part 683, except those that apply only to the WIOA title I-B program, 
the Uniform Administrative Requirements at 2 CFR parts 200 and 2900, 29 
CFR parts 93, 94, and 98, and the nondiscrimination regulations at 29 
CFR part 37.
    The nondiscrimination regulations incorporated by this section at 
Sec.  688.500(c)(2), 29 CFR part 37, broadly prohibit all forms of 
discrimination for WIOA title I programs, which include YouthBuild. In 
particular, 29 CFR 37.5 states that ``[n]o individual in the United 
States may, on the ground of race, color, religion, sex, national 
origin, age, disability, political affiliation or belief, and for 
beneficiaries only, citizenship or participation in any WIOA title I-
financially assisted program or activity, be excluded from 
participation in, denied the benefits of, subjected to discrimination 
under, or denied employment in the administration of or in connection 
with any WIOA title I-funded program or activity.''
    The regulations also require that grantees provide reasonable 
accommodations to youth who are individuals with disabilities, as found 
in 29 CFR 37.8. For grantees unsure of how to best accommodate youth 
who are individuals with disabilities in their program, the Department 
recommends that the grantees consult with the Job Accommodation Network 
[https://askjan.org/] or call (800) 526-7234 (Voice) (877) 781-9403 
(TTY], a free service of the Department's Office of Disability 
Employment Policy that provides employers with technical assistance on 
accommodating different disabilities.
    In addition to prohibiting discrimination, YouthBuild grantees have 
positive requirements to ensure equal opportunity and prevent 
discrimination in their programs. YouthBuild grantees are required by 
29 CFR 37.29 through 37.32 to disseminate an equal opportunity policy. 
YouthBuild grantees also must ensure that they provide universal access 
to their programs, including advertising the program in a manner that 
targets various populations, sending notices about openings in programs 
to community service groups that serve various populations, and 
consulting with community service groups on ways to improve outreach 
and service to various populations, as required by 29 CFR 39.42.
    YouthBuild grantees also are required to comply with all generally 
applicable laws and implementing regulations that apply to the grantees 
or their participants. For example, for participants who are youth with 
disabilities and participate in secondary

[[Page 20797]]

education programs, grantees must adhere to the administrative 
provisions of the Individuals with Disabilities Improvement Act at 34 
CFR 300.320 through 300.324, which require that grantees provide youth 
who are individuals with disabilities who enter the program with an 
appropriate transition plan corresponding to their individual needs.
    Finally, proposed Sec.  688.500(d), implementing sec. 171(e)(5) of 
WIOA, requires YouthBuild grantees to comply with relevant State and 
local education standards for their programs and activities that award 
academic credit or certify educational attainment.
Section 688.510 How may grantees provide services under the YouthBuild 
program?
    This proposed section, implementing WIOA sec. 171(h), authorizes 
grantees to provide services directly or to enter into subgrants, 
contracts, or other arrangements with various public and private 
entities. This proposed section retains the same requirements found at 
20 CFR 672.505.
Section 688.520 What cost limits apply to the use of YouthBuild program 
funds?
    This proposed section implements WIOA secs. 171(c)(2)(C)(i) and 
(c)(2)(D), describing the limitations on the percentage of grant funds 
that a YouthBuild grantee can spend on administrative costs and the 
rehabilitation or construction of a community or public facility. The 
definition of administrative costs can be found in 20 CFR 683.215.
Section 688.530 What are the cost-sharing or matching requirements of 
the YouthBuild program?
    This proposed section provides that the cost-sharing or matching 
requirements applicable to a YouthBuild grant generally will be 
addressed in the grant agreement, and also describes the requirements 
for several specific costs.
    Regarding the use of Federal funds, this section explains that 
grantees must follow the requirements of 2 CFR parts 200 and 2900 in 
the accounting, valuation, and reporting of the required non-Federal 
share. Additionally, because inquiries about the allowability of using 
Federal funds as part of the cost-sharing or match amount is frequently 
asked by applicants, the regulations restate the prohibition on the use 
of such funds.
    This proposed section retains the same requirements found at 20 CFR 
672.515.
Section 688.540 What are considered to be leveraged funds?
    This proposed section addresses the use of additional money, known 
as leveraged funds, to support grant activities. It explains that 
leveraged funds include costs that could be an allowable match but are 
in excess of the match requirement or costs that do not meet the cost-
sharing and match requirements set forth in the Uniform Administrative 
Requirements. To be considered leveraged funds, they must be otherwise 
allowable costs under the cost principles which have been used by the 
grantee to support grant activity. For example, the Department would 
not allow a grantee to count toward the match requirement another 
Federal grant used by the grantee or subgrantee to support otherwise 
allowable activities under the YouthBuild program. However, the 
Department would consider such a grant a leveraged fund.
    The amount, commitment, nature and quality of the leveraged funds 
described in the grant application will be considered as factors in 
evaluating grants in the FOA. The Department also will require grantees 
to report the use of such funds through their financial report and 
quarterly narrative report.
    This proposed section retains the same requirements found at 20 CFR 
672.520.
Section 688.550 How are the costs associated with real property treated 
in the YouthBuild program?
    This proposed section specifies which costs associated with real 
property are allowable and unallowable under the YouthBuild program. It 
explains that the costs associated with the acquisition of buildings to 
be rehabilitated for training purposes are allowable under the same 
proportionate share conditions that apply under the match provision at 
Sec.  688.530, but only with prior grant officer approval. Costs 
related to construction and/or rehabilitation associated with the 
training of participants are allowed; however, costs associated with 
the acquisition of land are not.
Section 688.560 What participant costs are allowable under the 
YouthBuild program?
    This proposed section permits payments to participants for work-
related and non-work-related YouthBuild activities, supportive 
services, needs-based payments, and additional benefits as allowable 
participant costs.
Section 688.570 Does the Department allow incentive payments in the 
YouthBuild program?
    This proposed section allows incentive payments to youth 
participants for recognition and achievement directly tied to training 
activities and work experiences. Grantees must outline in writing how 
they will use incentive payments. Proposed paragraphs (a) and (b) 
require that incentive payments be provided in accordance with the 
organization's general policies governing incentives and be related to 
the goals of the specific YouthBuild program. All incentive payments 
must be provided in accordance with the requirements in 2 CFR 200.
Section 688.580 What effect do payments to YouthBuild participants have 
on eligibility for other Federal needs-based benefits?
    This proposed section explains the effect that payments to 
YouthBuild participants have on eligibility for other Federal needs 
based benefits. Under WIOA regulations at 20 CFR 683.275(c), 
allowances, earnings, and payments to individuals participating in 
programs under title I of WIOA are not considered as income for 
purposes of determining eligibility for and the amount of income 
transfer and in-kind aid furnished under any Federal or Federally-
assisted program based on need other than as provided under the SSA (42 
U.S.C. 301).
    This proposed section retains the same requirements found at 20 CFR 
672.535.
Section 688.590 What program income requirements apply to the 
YouthBuild program?
    This proposed section provides that the program income provisions 
of the Uniform Administrative Requirements at 2 CFR parts 200 and 2900 
apply to the YouthBuild program. This section specifies that the 
revenue from the sale or rental of buildings rehabilitated or 
constructed under the YouthBuild program to homeless individuals and 
families or low-income families, as specified in Sec.  688.730, is not 
considered program income. The Department encourages grantees to use 
such revenue for the long-term sustainability of the YouthBuild effort.
    This proposed section retains the same requirements found at 20 CFR 
672.540.
Section 688.600 Are YouthBuild programs subject to the Davis-Bacon Act 
labor standards?
    This proposed section requires that when a YouthBuild participant 
works

[[Page 20798]]

on a project subject to Davis-Bacon labor standards, the Davis-Bacon 
labor standards, including prevailing wage requirements, apply to the 
hours worked on the site of the work.
    The regulations implementing the Davis-Bacon Act contain a 
provision that allows for Department-certified training programs to pay 
less than the applicable prevailing wage rate to trainees when work is 
being performed on Federally-funded projects. As stipulated by 29 CFR 
5.5(a)(4)(ii), ``trainees'' are not permitted to be paid less than the 
predetermined rate for the work performed unless they are employed 
under an individual registered in a program which has received prior 
approval, evidenced by a formal certification by DOL. However, 
YouthBuild program participants are not considered ``trainees'' and 
therefore must be paid the prevailing wage rate when they are 
performing work on Federally-funded projects.
    This proposed section retains the same requirements found at 20 CFR 
672.545.
Section 688.610 What are the recordkeeping requirements for YouthBuild 
programs?
    This section sets forth that grantees must follow the recordkeeping 
requirements specified in the Uniform Administrative Requirements at 2 
CFR parts 200 and 2900, and any additional requirements included in 
subsequently issued guidance or the grantee's grant agreement. This 
proposed section retains the same requirements found at 20 CFR 672.550.
7. Subpart F--Additional Requirements
Section 688.700 What are the safety requirements for the YouthBuild 
program?
    This proposed section requires YouthBuild grantees to comply with 
20 CFR 683.280, which applies Federal and State health and safety 
standards to the working conditions under WIOA-funded projects safety 
requirements for YouthBuild programs, and the relevant child labor laws 
at 29 CFR part 570, governing the employment of children in hazardous 
occupations under the Fair Labor Standards Act. This proposed section 
is meant to protect the health and safety of YouthBuild participants on 
YouthBuild work sites, and to ensure that YouthBuild grantees comply 
with relevant child labor laws.
Section 688.710 What are the reporting requirements for youth safety?
    This proposed section requires YouthBuild grantees to comply with 
the OSHA reporting requirements in 29 CFR part 1904 if a participant 
suffers a reportable injury while participating in the YouthBuild 
program. This proposed section retains the same requirements found at 
20 CFR 672.605.
Section 688.720 What environmental protection laws apply to the 
YouthBuild program?
    This proposed section requires grantees to comply with all 
environmental protection statutes and regulations, if applicable. This 
proposed section retains the same requirements found at 20 CFR 672.610.
Section 688.730 What requirements apply to YouthBuild housing?
    In order to effectively ensure that one of the primary purposes of 
the YouthBuild program--to increase the stock of housing for homeless 
and low-income individuals and families--is met, this proposed section 
provides additional requirements, including a series of restrictions on 
the sale and use of units of housing built or renovated by a YouthBuild 
grantee.
    This proposed section also requires a YouthBuild grantee to ensure 
that the owner of the property records a restrictive covenant on the 
property. The covenant must include the use restrictions in this 
section and must be for a term of 5 years. The Department requires the 
recordation of a restrictive covenant to ensure that YouthBuild funds 
are spent on projects that will benefit the intended beneficiaries of 
the program beyond the life of the grant.
    Under the WIA regulations, grantees were required to ensure that 
the restrictive covenant was for a 10-year term. However, grantees have 
identified the 10-year restrictive covenant as a barrier to recruiting 
and maintaining construction partners. The current requirement of a 10-
year covenant strictly binds partner organizations that may serve low-
income populations but also desire flexibility regarding to whom they 
may sell the property in the future.
    The term of the covenant was shortened in this proposed section in 
order to accommodate the difficulties faced by grantees while also 
ensuring that the purpose of the program continues to be met. Reducing 
the covenant period supports grantees in securing worksites where 
community-based housing partners and private property owners are 
reluctant to agree to a 10-year covenant requirement. At the same time, 
a 5-year term ensures that housing built or renovated using YouthBuild 
funding remains available solely for the use of low-income and/or 
homeless individuals and families for a period beyond the grantee's 3-
year period of performance. The Department specifically requests 
comments on the restrictive covenant requirement and our proposal to 
shorten the length of the covenant.

M. Part 651--General Provisions Governing the Federal-State Employment 
Service System

1. Introduction
    In this proposed rule, the Department proposes to revise the ES 
regulations that implement the Wagner-Peyser Act of 1933. These include 
the provision of ESs to all job seekers with a particular emphasis on 
MSFWs. The proposed rule will update the language and content of the 
regulations to, among other things, implement amendments made by title 
III of WIOA to the Wagner-Peyser Act. In some areas, these regulations 
establish entirely new responsibilities and procedures; in other areas, 
the regulations clarify and update requirements already established. 
The regulations make important changes to the following components of 
the ES system: definitions, data submission, and ETA standards for 
agricultural housing, among others.
2. Background
    The Wagner-Peyser Act (Wagner-Peyser) of 1933 provided the 
Department the authority to establish a national ES system. The ES 
system provides labor exchange services to its participants and has 
undergone numerous changes to align its activities with broader 
national workforce development policies and statutory requirements. 
WIOA expands upon the previous workforce reforms in the WIA and, among 
other provisions, identifies the ES system as a core program in the 
one-stop system, embeds ES State planning requirements into a combined 
planning approach, and increases requirements for the colocation of ES 
offices into the one-stop centers.
    In 1974, the case National Association for the Advancement of 
Colored People (NAACP), Western Region, et al. v. Brennan et al, No. 
2010-72, 1974 WL 229 (D.D.C. Aug. 13, 1974) resulted in a detailed 
court order mandating various Federal and State actions (referred to as 
the Judge Richey Court Order (Richey Order) in the remainder of this 
preamble). The Richey Order required the Department to implement and 
maintain a Federal and State monitoring and advocacy system and set 
forth requirements to ensure the delivery of ES services, benefits, and 
protections to MSFWs on a non-discriminatory basis, and to provide such 
services in a manner that is

[[Page 20799]]

qualitatively equivalent and quantitatively proportionate to those 
provided to non-farmworkers. In 1980, the Department published 
regulations at 20 CFR parts 651, 653, and 658 to implement the 
requirements of the Richey Order. Part 653 sets forth standards and 
procedures for providing services to MSFWs and provides regulations 
governing the Agricultural Recruitment System (ARS), a system for 
interstate and intrastate agricultural job recruitment. Part 658 sets 
forth standards and procedures for the administrative handling of 
complaints alleging violations of ES regulations and of employment-
related laws, the discontinuation of services to employers by the ES 
system, the review and assessment of State agency compliance with ES 
regulations, and the Federal application of remedial action to State 
agencies. Also in 1980, the Department separately published amended 
regulations at 20 CFR part 654 providing agricultural housing standards 
for MSFWs.
    In 1983, the Department published the regulations at 20 CFR part 
652 that set forth standards and procedures regarding the establishment 
and functioning of State ES operations. Part 652 was amended in 1999 
and 2000 to reflect provisions of WIA. The proposed rule aligns part 
652 with the WIOA amendments to the ES program, and with the WIOA 
reforms to the workforce system that affect the ES program.
3. Discussion of Proposed 20 CFR Part 651
    20 CFR part 651 sets forth definitions for 20 CFR parts 652, 653, 
654, and 658. The Department proposes to revise and update the 
definitions by eliminating outdated or obsolete definitions and by 
adding new definitions as needed. Throughout these parts it is 
generally proposed that the term ``State MSFW monitor advocate'' be 
replaced with the term ``State monitor advocate'' (SMA) because MSFW-
related responsibilities are inherent parts of the SMA position and 
``State monitor advocate'' is the commonly used term for the position. 
It also is proposed that the term ``local office'' be replaced with 
``employment service office'' or ``one-stop center'' depending on the 
context. The Department also proposes that the definitions for 
farmwork, farmworker, and agricultural worker be streamlined through 
reference to the same base line definition--farmwork. Also, the 
definition of farmwork is proposed to be revised by drawing language 
from definitions used in other Department regulations and eliminating 
references to the North American Industry Classification System 
(NAICS). Additionally, it is proposed that the definitions found at 20 
CFR 652.1 be moved to 20 CFR 651.10 because it is the intention of part 
651 to include Wagner-Peyser ES program definitions. It is proposed 
that the following definitions be added as they are provided in sec. 2 
of the Wagner-Peyser Act, as amended by sec. 302 of WIOA, and pertain 
to the scope of definitions covered by Sec.  651.10: Local Workforce 
Development Board, one-stop center, one-stop delivery system, one-stop 
partner, training services, and workforce development activity. All of 
these adhere strictly to WIOA and Wagner-Peyser definitions. The 
Department notes that the WIOA amendments to the Wagner-Peyser Act also 
add the definitions of CEO, institutions of higher education, and 
workplace learning advisor, but these definitions are not proposed to 
be added to the regulatory text of Sec.  651.10 because the terms are 
not used in parts 652, 653, 654, or 658. Finally, sec. 134 of WIOA 
merges the categories of core services and intensive services under WIA 
into career services. Since WIOA includes responsibilities for the 
Wagner-Peyser ES in the provision of career services, a definition for 
career services has been proposed to be added.
    The definition of act is proposed to be added to Sec.  651.10, 
moved from 20 CFR 652.1.
    The definition of agricultural worker is proposed to be eliminated 
because the term is synonymous with the definition of farmworker 
described in this section. The proposed regulatory text directs the 
reader to the definition of farmworker.
    The definition of applicant is proposed to be eliminated because 
the Department proposes to replace the term with participant as defined 
in this section. This change is proposed to align with the language in 
WIOA and conform to reporting requirements which include all MSFWs who 
apply for and/or receive Wagner-Peyser Act services.
    The definitions for Applicant Holding Office, Applicant Holding 
State, and Order Holding Office are proposed to be added because the 
terms are used throughout 20 CFR part 658 and adding the definitions 
clarifies the process for stakeholders. The proposed language in each 
definition derives from the purpose and scope defined in Sec.  653.500. 
The inclusion of ``U.S. workers'' in these definitions helps to clarify 
that ARS is intended for the recruitment of U.S.-based workers only.
    The definition of application card is proposed to be deleted as the 
document is generally no longer used as part of Wagner-Peyser Act 
services. ES offices have moved from a paper-based system to an online 
system and participants register for services in a variety of ways 
electronically.
    The definition of career services is proposed to be added, as 
discussed above.
    A definition of clearance order is proposed to be added to 
distinguish it from a job order.
    The definition of clearance is proposed to be revised to clearance 
system and reflect secs. 3 and 7 of the Wagner-Peyser Act, as well as 
20 CFR 652.3, which describes the basic labor exchange system as ``a 
system for clearing labor between States.'' The updated language 
clarifies that this clearance system moves job seekers through an ES 
office or more than one such office, depending on the needs of the 
individual and the available job or jobs.
    A revised definition of complaint is proposed to align with 
language in sec. 2 of the Wagner-Peyser Act, as amended by WIOA sec. 
302, to refer to ``employment service'' offices rather than ``job 
service'' (JS) offices. The revised definition specifies that 
complaints are representations or referrals of alleged violations of ES 
regulations, Federal laws enforced by the Department's WHD or OSHA, or 
State or local employment-related laws. The Department proposes to add 
language in the definition clarifying that the complaints filed are 
alleging a violation occurred, rather than confirming that a complaint 
represents an actual violation--which may be determined after the 
complaint is under investigation pursuant to 658 subpart F.
    The definition of day haul is proposed to be deleted as the term is 
no longer relevant with the proposed deletion of 20 CFR 653.105 and 
653.106.
    A revised definition of Employment and Training Administration 
(ETA) is proposed to conform to the description of ETA that is 
currently used.
    A definition of employment-related laws is proposed to be added to 
conform to the proposed complaint procedures in 20 CFR part 658.
    A definition of the term Employment Service (ES) is proposed to 
replace the definition for the term Job Service (JS) in order to 
conform to the terminology used in the Wagner-Peyser Act as amended by 
WIOA. For this reason, throughout these proposed regulations, the term 
Employment Service (ES) replaces the term JS.
    A definition of Employment Service regulations (ES regulations) is 
proposed to replace the definition of JS regulations. The purpose of 
this change

[[Page 20800]]

is to conform to language in the Wagner-Peyser Act, as amended by WIOA, 
and to include only relevant regulations. The proposed definition now 
includes Federal regulations at 20 CFR parts 651, 652, 653, 654, and 
658 and at 29 CFR part 75, and removes references to 20 CFR parts 620 
and 621 because they are reserved, the reference to 29 CFR part 8 
because Employment Service is not referenced in that part, and 29 CFR 
part 26 because it does not exist.
    The proposed definition of farmwork will eliminate references to 
NAICS codes and include language aligning it with pertinent definitions 
in other Department regulations at 29 CFR 500.20 and 20 CFR 655.103(c). 
Drawing language from those definitions clarifies what is covered by 
the term farmwork and slightly expands the term to include certain 
occupations and activities covered by the Department's Office of 
Foreign Labor Certification (OFLC) and/or WHD. It is also proposed that 
the revised definition of farmwork fold in food ``processing'' work to 
align Sec.  651.10 with OFLC regulations at 20 CFR 655.103(c)(1) which 
include food processing worker in the definition for agricultural labor 
or services. Including food processing work in the revised definition 
expands the scope of those who would be considered farmworkers. It also 
allows the Department to streamline the regulations by eliminating the 
separate definition of migrant food processing worker without reducing 
ES coverage or protections of such workers. The addition of food 
processing work to the revised definition of farmwork also expands the 
capability of Wagner-Peyser staff to provide services to more MSFWs. 
The Department will provide guidance to clarify what is considered food 
``processing.'' Fish farming is added to conform to sec. 167 of WIOA.
    The reference to ``. . . the cultivation and tillage of the soil, 
dairying, the production, cultivation, growing, and harvesting of any 
agricultural or horticultural commodities'' and ``[t]his includes the 
raising of livestock, bees, fur-bearing animals, or poultry, the 
farming of fish, and any practices (including any forestry or lumbering 
operations) performed by a farmer or on a farm as an incident to or in 
conjunction with such farming operations, including preparation for 
market, delivery to storage or to market or to carriers for 
transportation to market'' is adapted from 20 CFR 655.103(c)(2) which 
references 29 U.S.C. 203(f), as amended (sec. 3(f) of the FLSA, as 
codified). The language ``the handling, planting, drying, packing, 
packaging, processing, freezing, or grading prior to delivery for 
storage of any agricultural or horticultural commodity in its 
unmanufactured state,'' is adapted from 20 CFR 655.103 which references 
sec. 3121(g) of the Internal Revenue Code of 1954 (26 U.S.C. 3121(g)). 
The language ``agricultural commodities means all commodities produced 
on a farm including, but not limited to, crude gum (oleoresin) from a 
living tree, and the following products as processed by the original 
producer of the crude gum (oleoresin) from which derived: gum spirits 
of turpentine and gum rosin'' is taken from OFLC 20 CFR 655.103 and 
aligns with WHD 29 CFR 500.20. Under the proposed definition, the 
activities and services currently included by reference to NAICS codes 
111, 112, 115 will still be included whether explicit in the definition 
or through Department guidance, and those activities and services 
currently excluded by reference to NAICS codes 1152 and 1153 will still 
be excluded, excepting the proposed addition of fish farming. The NAICS 
reference to code 1125 will be covered through Department guidance as 
it relates to fish farming.
    The Department anticipates the following impact of expanding the 
definition of farmworker and aligning it with the WHD and OFLC 
definitions: (1) State agency employees will more easily distinguish 
MSFWs for reporting purposes; (2) the proposed definition will also 
align with that of the proposed updated definition under 20 CFR part 
685 for the NFJP; (3) more farmworkers will be served as such under 
Wagner-Peyser because fewer people would be excluded under the expanded 
definition; (4) the Department will maintain consistency with the 
intent of the Richey Order to update data gathering systems to 
accurately reflect services delivered; and (5) the Department's data 
reporting will improve because under the different regulations, the 
Department's agencies will utilize basically the same definition for 
farmworker and therefore will accurately reflect the number of MSFWs 
identified across all programs. At the end of the proposed definition, 
the Department proposes to add a sentence to include any service or 
activity covered under 20 CFR 655.103(c) (definition of agricultural 
labor or services) and/or under 29 CFR 500.20(e) (agricultural 
employment) and/or through official published Department guidance, such 
as a TEGL, to allow for other current or future types of farmwork to be 
included.
    A revised definition of farmworker is proposed to conform to the 
proposed definition of farmwork in this section.
    A definition of field checks is proposed to be added to Sec.  
651.10 because the term is referenced in 20 CFR 653.503 but was 
previously undefined. Adding the definition clarifies the meaning for 
those who conduct or receive field checks.
    A definition of field visits is proposed to be added to Sec.  
651.10 because the term is referenced in 20 CFR 653.108 but was 
previously undefined. Adding the definition clarifies the meaning for 
those who conduct or receive field visits.
    The definition of full application is proposed to be deleted 
because State Workforce Agencies (SWAs) generally do not utilize the 
full or partial application process. Instead, participants submit 
resumes or other information to register in the SWA network.
    The definition of Governor is proposed to be added to Sec.  651.10, 
moved from 20 CFR 652.1. Additionally, the Department proposes to add 
reference to the outlying areas in the definition to be clear that 
their chief executives are included when this part references a 
Governor.
    The definition of identification card is proposed to be deleted as 
the document is no longer utilized as part of Wagner-Peyser services. 
SWAs have moved from paper-based to electronic-based systems and 
participants often log in using whatever information is required for 
that particular system.
    A definition of interstate job order is proposed to be added to 
Sec.  651.10 because it is referenced in the ES regulations but was 
previously undefined. Adding the definition clarifies the difference 
between interstate and intrastate job orders.
    A revised definition of intrastate clearance order is proposed to 
conform to the ``employment service'' terminology used in the Wagner-
Peyser Act as amended by WIOA. Interstate or intrastate clearance order 
means an agricultural job order for temporary employment describing one 
or more hard-to-fill job openings, which an ES office uses to request 
recruitment assistance from other ES offices.
    The definition of job bank is proposed to be deleted because the 
system, as it was previously defined, no longer exists. Now, most job 
openings are posted on internet-based systems.
    The definition of job development is proposed to be slightly 
revised to refer to an ``employment service office'' rather than a 
``local office.''
    The definition of Job Information Service (JIS) is proposed to be 
deleted as resource centers replace JIS areas inside one-stop centers.

[[Page 20801]]

    In the definition of job opening, it is proposed that the term 
applicants be replaced with the term participants to be consistent with 
the replacement term applicant in this section.
    A definition of job order is proposed to be added to clarify the 
difference between a job order and a clearance order. The language for 
this definition is derived from 20 CFR 655.5.
    The definition of job referral is proposed to be revised to include 
``or for a potential job'' because the current definition is limited to 
the availability of a specific job and this revision opens job 
referrals to include situations that are responding to the possibility 
of employment.
    A revised definition of labor market area is proposed to be revised 
to conform to the definition in sec. 3 of WIOA.
    The definition of Local Office Manager is proposed to be revised to 
conform to the ``employment service'' terminology used in the Wagner-
Peyser Act as amended by WIOA.
    The definition of Local Workforce Development Board is proposed to 
be added to conform with sec. 2 of the Wagner-Peyser Act, as amended by 
WIOA.
    The definition of migrant farmworker is proposed to be revised to 
conform to the updated definition of farmworker.
    The definition of migrant food processing worker is proposed to be 
synonymous with the proposed definition of migrant farmworker.
    Within the definition of MSFW it is proposed that ``migrant food 
processing worker'' be deleted to conform to the above proposed 
definition of migrant food processing worker. No reduction in coverage 
is intended by this change.
    The definitions of one-stop center, one-stop delivery system, and 
one-stop partner are proposed to be added to Sec.  651.10 to conform 
with sec. 2 of the Wagner-Peyser Act, as amended by WIOA.
    The definition of O*NET-SOC is proposed to be revised to clarify 
that O*NET SOC codes are based on, but more detailed than, Standard 
Occupation Codes used across Federal statistical agencies.
    The definition of Order Holding Office is proposed to be added for 
reasons explained above.
    The definition of onsite review is proposed to be added because 
these reviews are mandated under the Richey Order and are found 
throughout the regulations at 20 CFR parts 653 and 658. The language 
for the proposed definition is taken from 20 CFR 653.108(g).
    It is proposed that the definition of outreach contact be added to 
Sec.  651.10 for clarification. The language for the definition is 
taken from Sec.  653.107.
    The definition of partial application is proposed to be deleted 
because it is generally no longer used by ES offices or SWAs. Instead, 
participants submit resumes or other information to register in the SWA 
network.
    The definition of participant is proposed to be added to replace 
the definition of applicant, as discussed above. This definition only 
applies to the Wagner-Peyser regulations at parts 651, 652, 653, and 
658. Proposed Sec.  677.150(a) includes a separate, narrower definition 
of ``participant'' for purposes of performance accountability under 
sec. 116 of WIOA and 20 CFR part 677. Therefore, an individual who is 
considered a participant for the purpose of these Wagner-Peryser 
regulations would not necessarily be considered a participant for 
performance accountability purposes.
    The definition of Program Budget Plan (PBP) is proposed to be 
deleted because the PBP is obsolete and the amendment to sec. 8 of 
Wagner-Peyser now calls for States to submit Unified or Combined State 
Plans.
    The definition of RA is proposed to be deleted because the 
definition for Regional Administrator with the appropriate acronym is 
already described in this section.
    The definition for rural area is proposed to be eliminated because 
the term is not used at 20 CFR parts 652, 653, 654, or 658 and is 
therefore not necessary to define in this section.
    The definition of seasonal farmworker is proposed to be revised to 
mean an individual who, over the past 12 months, has been employed in 
farmwork of a seasonal or other temporary nature. This proposed 
definition seeks to simplify and clarify the meaning of seasonal 
farmworker, and conform to the definitions used by the Department's WHD 
for seasonal agricultural workers under 29 CFR part 500, and the OFLC 
under 20 CFR part 655. Additionally, the Department proposes to retain 
the 12-month period originally used in the definition of seasonal 
farmworker at 20 CFR 651.10 to minimize the time period that an 
individual could assert that he/she is a seasonal farmworker. The 
Department anticipates that this updated definition will more 
accurately reflect the total number of seasonal farmworkers that 
participate in the ES system. The Department also anticipates that ES 
staff will more easily be able to identify seasonal farmworkers for 
reporting purposes.
    In the definitions of Significant MSFW Local Offices and 
Significant Bilingual MSFW Local Offices, the references to ``local 
offices'' are proposed to be replaced with ``one-stop centers'' because 
the WIOA amendment to the Wagner-Peyser Act requires colocation of 
Wagner-Peyser ESs in a one-stop center. Additionally, expanding the 
scope of the term will help States determine not only at which one-stop 
centers ESs must be sufficiently staffed to meet the needs of MSFWs, 
but also will identify one-stop centers that need to consider the needs 
of a significant number of MSFWs who do not speak English, in order to 
meet the requirements for making services accessible, as described in 
Sec.  678.800. This also helps the Department conform to the intent of 
the Richey Order to serve MSFWs on a qualitatively equivalent and 
quantitatively proportionate basis. The term bilingual is proposed to 
be replaced with multilingual in the latter title to conform to the 
current trend of MSFWs speaking additional languages other than English 
and/or Spanish. Also, the references to ``applicants'' are proposed to 
be replaced with ``participants,'' to conform to the proposed changes 
in these definitions.
    The definition of Significant MSFW States remains unchanged; 
however, the reference to the Department organizational unit ETA has 
been replaced with the Department to be consistent with other 
references throughout the section.
    The definition of State Administrator is proposed to be revised to 
change ``State Employment Security Agency'' to ``State Workforce 
Agency'' to reflect language used in WIOA title I.
    The definition of State Workforce Agency (SWA) is proposed to be 
revised to conform to sec. 2 of the Wagner-Peyser Act, as amended by 
title III of WIOA. The language ``formerly State Employment Security 
Agency or SESA'' is proposed to be deleted because the SESA terminology 
is outdated and no longer needs reference.
    The definition of State Workforce Development Board (State Board) 
is proposed to be added to Sec.  651.10, moved from 20 CFR 652.1 and 
updated from the former text, which defined State Workforce Investment 
Board.
    The definition of Supply State(s) is proposed to be added to 
clarify its meaning under the ARS.
    The definition of supportive services is proposed to be revised to 
conform to the definition for ``supportive services'' in sec. 3 of WIOA 
and to make clear that supportive services are also available to

[[Page 20802]]

individuals participating in activities funded by the Wagner-Peyser 
Act.
    The definition of tests is proposed to be deleted because the 
Department does not offer tests to ES participants.
    The definition of training services is proposed to replace the 
definition of training, and the proposed definition references the 
services provided under WIOA sec. 134(c)(3).
    The definition of transaction is proposed to be deleted because the 
term is not used in the relevant sections under this chapter.
    A definition of unemployment insurance claimant is proposed to be 
added in this section to conform to the emphasis on serving this 
population in the WIOA amendments to secs. 7(a)(1) and (3) of the 
Wagner-Peyser Act.
    The definition of vocational plan is proposed to be deleted because 
the Wagner-Peyser Act does not require the establishment of such plans 
for job seekers in the ES system.
    The definition of WIOA is proposed to be added to Sec.  651.10, 
moved from 20 CFR 652.1 and updated. Section 652.1 defines WIA.
    The definitions of Workforce and Labor Market Information (WLMI) 
and Workforce Labor Market Information System (WLMIS) are proposed to 
conform to the provisions in sec. 308 of the Wagner-Peyser Act.
    The definition for working days is proposed to be added to 20 CFR 
651 because it is originally located in 20 CFR 653.501 and fits more 
appropriately under part 651.
    A definition of work test is proposed to be added in this section 
to ensure that individuals who are eligible for UI benefits meet 
continued eligibility requirements with respect to work search. The 
Wagner-Peyser Act's requirements for administering the work test are 
further discussed in 20 CFR 652.210.

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

Section 1. Introduction
    The Wagner-Peyser Act of 1933 established the one Act ES, which is 
a nationwide system of public employment offices amended in 1998 to 
make ES part of the one-stop delivery system established under WIA. ES 
seeks to improve the functioning of the nation's labor markets by 
bringing together individuals seeking employment with employers seeking 
workers.
    The amended Wagner-Peyser Act furthers longstanding goals of closer 
collaboration with other employment and training programs by mandating 
colocation of ES offices with one-stop centers; aligning service 
delivery in the one-stop delivery system; and ensuring alignment of 
State planning and performance measures in the one-stop delivery 
system. Other new provisions are consistent with long-term Departmental 
policies, including increased emphasis on reemployment services for UI 
claimants (sec. 7(a)); promoting robust WLMI; the development of 
national electronic tools for jobseekers and businesses (sec. 3(e)); 
dissemination of information on best practices (sec. 3(c)(2)); and 
professional development for ES staff (secs. 3(c)(4) and 7(b)(3)).
2. Subpart A--Employment Service Operations
    This subpart includes an explanation of the scope and purpose of 
the ES system, the rules governing allotments and grant agreements, 
authorized services, administrative provisions, and rules governing 
labor disputes. The proposed rule makes few changes in subpart A.
Section 652.1 Introduction
    This section introduces the Wagner-Peyser Act regulations, as 
amended by WIOA. Therefore, the Department proposes to delete paragraph 
(b) of Sec.  652.1 and change the title of the section from 
``Introduction and definitions'' to ``Introduction.''
Section 652.2 Scope and Purpose of the Employment Service System
    The Department proposes no changes in this section, which briefly 
describes the public labor exchange system.
Section 652.3 Public Labor Exchange Services System
    This section explains the minimum services that must be offered by 
the public labor exchange system. The Department proposes adding 
paragraph (f) to align the title to the changes in WIOA and cite to 
sec. 134(c)(2)(A)(iv) of WIOA.
    The Department proposes to align the Wagner-Peyser definitions of 
labor exchange services with those described under WIOA. The Department 
is seeking public comments on any issues or challenges in aligning 
labor exchange services described under WIOA with the labor exchange 
services provided by the ES.
    Finally, the Department proposes to add to Sec.  652.3(a) a clause 
to implement the emphasis the Act, as amended, places on national 
electronic tools (WIOA sec. 303(c), amending sec. 3(e) of Wagner-
Peyser). The proposed clause, which would clarify that each State's 
obligation to assist jobseekers includes promoting their familiarity 
with the Department's electronic tools, is designed to improve customer 
access to labor exchange and workforce information.
    The statutory provision recognizes the Department's longstanding 
efforts in this area. Since the 1990s, the Department has greatly 
expanded its national electronic tools to enhance short-term labor 
exchanges and support longer-term career aspirations for multiple 
audiences: Jobseekers; employers; students; employment and training 
staff; educators and guidance counselors; Federal, State and local 
policy-makers and planners; CBOs; librarians; and other individuals and 
entities that assist with the job search and career needs of Americans. 
The Department offers electronic tools through such Web portals as 
CareerOneStop (www.careeronestop.org); O*NET OnLine 
(www.onetonline.org) and O*NET's My Next Move (www.mynextmove.org); and 
the WLMI provided through the BLS (www.bls.gov) and the U.S. ETA's 
Labor Market Information Community of Practice (https://winwin.workforce3one.org/page/home).
Section 652.4 Allotment of Funds and Grant Agreement
    The Department proposes no changes in this section, which ensures 
that allotment information is publicly available with sufficient notice 
to allow public comment and to resolve complaints, and that grant 
agreements with the States meet all applicable statutes and 
regulations.
Section 652.5 Services Authorized
    The Department proposes only minor changes conforming to WIOA in 
this section, State expenditures. Specifically, the proposed 
regulations substitutes ``funds'' with ``sums'' and substitutes ``basic 
labor exchange elements'' with ``minimum labor exchange elements.'' 
Both changes were made to align with the Act as amended.
Section 652.8 Administrative Provisions
    This section covers administrative matters, including financial and 
program management information systems, recordkeeping and retention of 
records, required reports, monitoring and audits, costs, disclosure of 
information, and sanctions. The Department proposes to eliminate 
paragraph (d)(6) of this section which addressed amortization payments 
to

[[Page 20803]]

States which had independent retirement plans in their State ES 
agencies prior to 1980. This paragraph is no longer applicable to any 
State and no State may revert back to a retirement system where these 
provisions apply. The Department is also proposing to change the record 
retention requirements for work applications and job orders from 1 year 
to 3 years in order to align with other Wagner-Peyser record retention 
requirements. Finally, the Department proposes to amend paragraph (f) 
to require that financial audits be conducted under the same 
requirements that apply to audits under WIOA at 20 CFR 683.210.
Section 652.9 Labor Disputes.
    This section is designed to preserve the neutrality of the ES in 
the event of a labor dispute, such as a strike. The Department proposes 
no changes in this section, as WIOA made no amendments to the Wagner-
Peyser Act relevant to this section.
3. Subpart B--Services for Veterans
    This subpart merely refers the reader to the relevant regulatory 
section governing services to veterans.
Section 652.100 Services for Veterans
    The Department proposes to amend this section to clarify that 
veterans receive priority of service for all Department-funded 
employment and training programs, as described in 20 CFR part 1010. The 
proposed amendment also clarifies that the Department's Veterans' 
Employment and Training Service (VETS) administers the Jobs for 
Veterans State Grants (JVSG) program and other activities and training 
programs which provide services to specific populations of eligible 
veterans.
4. Subpart C--Wagner-Peyser Act Services in a One-Stop Delivery System 
Environment
    This subpart discusses State agency roles and responsibilities, 
rules governing ES offices, the relationship between the ES and the 
one-stop system, required and allowable Wagner-Peyser services, 
universal service access requirements, provision of services and work 
test requirements for UI claimants, State planning, and State merit 
staffing requirements.
    WIOA ensures the ES's key role in the one-stop delivery system by 
making it one of the core workforce programs. The ES must be a part of 
the State planning process, collocated with the one-stop delivery 
system, and must align its service delivery and performance measures 
with the rest of the one-stop system. This subpart addresses how the ES 
is to fulfill its mission of providing labor exchange services to job 
seekers and businesses in the one-stop delivery system.
Section 652.200 What is the Purpose of This Subpart?
    The general purpose of this subpart is to provide guidance for 
implementing Wagner-Peyser services within the one-stop delivery 
system.
Section 652.201 What is the role of the State agency in the one-stop 
delivery system?
    This section emphasizes the leadership role played by the State in 
the one-stop system, including the delivery of Wagner-Peyser services. 
The Department proposes changing ``Workforce Investment Board'' to 
``Workforce Development Board,'' to be consistent with WIOA's 
terminology.
Section 652.202 May local Employment Service Offices exist outside of 
the one-stop service delivery system?
    The Department is proposing to delete paragraph (b) of this section 
to align with WIOA's approach to colocation of services and prohibition 
against stand-alone employment service offices. Additionally, the 
Department proposes to change the text of what was paragraph (a) to 
provide a clear statement that ES offices must be collocated in one-
stop centers, as required by WIOA. WIA strongly encouraged the 
colocation of ES and one-stop offices, but allowed some stand-alone ES 
offices under limited circumstances. Section 303(d) of WIOA modified 
sec. 3(d) of Wagner-Peyser to eliminate these exceptions and made 
colocation mandatory. Therefore, stand-alone ES offices are no longer 
permissible, as explained in Sec. Sec.  678.310-678.315.
    Colocation is intended to achieve several purposes: improved 
service delivery and coordination, less duplication of services, and 
greater access to services in underserved areas.
Section 652.203 Who is responsible for funds authorized under the Act 
in the workforce investment system?
    The Department proposes no changes in this regulation, which 
stipulates that the State agency is responsible for all Wagner-Peyser 
funds.
Section 652.204 Must funds authorized under the Act (the Governor's 
reserve) flow through the one-stop delivery system?
    This section clarifies that the Governor's reserve funds may or may 
not be delivered through the one-stop system. The Department proposes 
to identify the services in sec. 7(b) of the Act that these funds must 
be used to provide. WIOA does not change these services; however, it is 
helpful to list the services in this section. As required by sec. 7(b) 
of the Act, the services are: performance incentives, supporting 
exemplary models of service delivery, and services for groups with 
special needs.
Section 652.205 May funds authorized under the Act be used to 
supplement funding for labor exchange programs authorized under 
separate legislation?
    The Department proposes only minor nomenclature changes in this 
section, which explains under what conditions funds under secs. 7(a) or 
7(b) of Wagner-Peyser may be used to provide additional funds to other 
programs.
Section 652.206 May a State use funds authorized under the Act to 
provide applicable ``career services,'' as defined in the Workforce 
Innovation and Opportunity Act?
    The Department is proposing in this section to align Wagner-Peyser 
service delivery with the service delivery changes in WIOA. Under WIA, 
non-training services were generally identified as either ``core'' or 
``intensive'' services. WIOA has removed the terms ``core'' and 
``intensive'' and these services are now called ``career services.'' 
The primary goal of the change to ``career services'' was to eliminate 
any sequencing of service requirements and to ensure participants had a 
broad array of services available to them based on a participant's 
employment needs.
    Proposed Sec.  678.430 organizes the WIOA career services into 
three categories: (1) Career services that must be made available to 
all participants; (2) career services that must be made available if 
deemed appropriate and needed for an individual to obtain or retain 
employment; and (3) follow-up activities. The proposed regulation 
respectively designates these categories as basic career services 
(Sec.  678.430(a)), individualized career services (Sec.  678.430(b)), 
and follow-up services (Sec.  678.430(c)).
    Labor exchange services, which are the primary services provided by 
the ES, fall under the ``basic career services''

[[Page 20804]]

identified in proposed Sec.  678.430(a) and listed in sec. 134(c)(2)(A) 
of WIOA. This section is designed to provide that Wagner-Peyser staff 
must use funds authorized by sec. 7(a) of the Act to provide the basic 
career services.
    Individualized career services are identified in proposed Sec.  
678.430(b) and listed in sec. 134(c)(2)(A)(xii) of WIOA. These services 
involve more dedicated staff time to provide. These services are 
similar to intensive services and they may be provided as appropriate. 
The primary services the ES provides are labor exchange services, which 
are identified by the Department as basic career services. The 
Department proposes that the ES staff may also provide individualized 
career services, paid for from funds authorized under sec. 7(a) of the 
Act, in a manner consistent with the requirements of the Wagner-Peyser 
Act. Additionally, the Department wishes to clarify that the funds can 
be used to provide any of the individualized services defined in 
proposed Sec.  678.430(b) and sec. 134(c)(2)(A)(xii) of WIOA; there is 
no limit that the funds can only be used for particular individualized 
services. However, these Wagner-Peyser funds may not be used to provide 
training services.
    The Department is seeking comments on how services provided by the 
ES can be more aligned with other services in the one-stop delivery 
system and ensure participants can receive seamless services from the 
ES to other programs under WIOA.
Section 652.207 How does a State meet the requirement for universal 
access to services provided under the Act?
    This section provides States discretion in meeting universal access 
to service requirements, and explains the requirements, including how 
those services must be delivered. The section specifies that labor 
exchange services may be provided through self-service, facilitated 
self-help service, and staff-assisted services. The Department is 
proposing to include ``virtual services'' as a type of self-service. 
The Department recognizes the valuable virtual and online services that 
States provide through the ES, and seeks to include these services as 
self-services.
    The Department also proposes changes in this section to tie it to 
the mandatory services described in Sec.  652.206. The revised 
provision would replace the reference to core and intensive services 
with reference to career services made mandatory by an amended Sec.  
652.206.
Section 652.208 How are applicable career services related to the 
methods of service delivery described in this part?
    This section explains how career services may be delivered to meet 
the requirements for access described in proposed Sec.  652.207(b)(2). 
The Department proposes to include ``virtual services'' as a type of 
self-service provided by the ES, recognizing these important services 
provided by States. The Department is also proposing to replace the 
reference to ``core services and intensive services'' with a reference 
to ``career services'' per WIOA.
Section 652.209 What are the requirements under the Act for providing 
reemployment services and other activities to referred unemployment 
insurance claimants?
    The Wagner-Peyser Act authorizes funding for States to deliver a 
wide array of labor exchange services to jobseekers. This regulation 
clarifies the required and allowable Wagner-Peyser services to UI 
claimants, as a subset of the broader ES beneficiary population.
    WIOA added language to sec. 7(a) of the Wagner-Peyser Act 
reemphasizing the use of funds to support reemployment and related 
services to UI claimants. These changes strengthen the connectivity 
between the ES and the UI systems, and broaden opportunities for these 
systems to help UI claimants return to employment as quickly as 
possible. Coordination of labor exchange services and UI claimant 
services is essential to ensure an integrated approach to reemployment 
strategies. Wagner-Peyser funds may also be used to administer the work 
test for the State unemployment system for UI eligibility assessments. 
Additionally, the ES may provide UI claimants with referrals to, and 
application assistance for, education and training resources and 
programs as appropriate. Such resources include those provided through 
the Higher Education Act and State-specific educational assistance 
programs, veterans' educational assistance programs, WIOA education and 
training programs, and VR services.
    The Department proposes two types of changes in Sec.  652.209: one 
to clearly require services to UI claimants, and the other to implement 
new statutory provisions. The proposed text deletes the existing Sec.  
652.209(a) language that services must be provided ``to the extent 
funding is available,'' because it is implied and the Department 
encourages reemployment assistance to UI claimants.
    The proposed text includes in Sec.  652.209(b)(2) a reference to 
``conducting eligibility assessments'' to conform with sec. 7(a)(3)(F) 
of the Wagner-Peyser Act, as amended by WIOA, and includes a 
requirement that where applicable, UI claimants must be registered for 
ESs in accordance with the UC law of the State with which they file 
their claim. The States may use Wagner-Peyser funds to pay for 
eligibility assessments, which is a required activity that must be made 
available when appropriate.
    Additionally, in Sec.  652.209(b)(3) the Department proposes to 
require that States provide referrals and application assistance to UI 
claimants, consistent with the new statutory language in sec. 
7(a)(3)(G) of the Wagner-Peyser Act and includes a reference to the 
Post-9/11 GI Bill which staff may also refer participants to as well as 
other veterans educational assistance.
Section 652.210 What are the Act's requirements for administration of 
the work test, including eligibility assessments, as appropriate, and 
assistance to unemployment insurance claimants?
    This section clarifies the requirement for administration of the 
work test to UI claimants. The proposed changes provide more 
specificity about required services.
    The Department proposes to include a reference to ``conducting 
eligibility assessments'' to conform with sec. 7(a)(3)(F) of the 
Wagner-Peyser Act. The States may use Wagner-Peyser funds to pay for 
eligibility assessments, which are a required reemployment activity 
that must be made available when appropriate. Proposed new language was 
also added to Sec.  652.210(b)(3) to ensure that ES staff provide 
information about UI claimants' ability or availability for work, or 
the suitability of work offered to them, to UI staff. Sharing such 
information with UI staff will help accelerate claimants' return to 
employment.
Section 652.211 What are State planning requirements under the Act?
    The Department is proposing to remove the planning provisions of 
this part of the regulation, including the text in Sec. Sec.  652.211 
through 652.214, because the ES is a core program under WIOA and falls 
under both the unified and combined planning requirements. This section 
has been amended to simply provide a citation to the State planning 
requirements under WIOA.

[[Page 20805]]

Section 652.215 Do any provisions in the Workforce Innovation and 
Opportunity Act change the requirement that State merit staff employees 
must deliver services provided under the Act?
    This section stipulates that only State merit staff may provide 
Wagner-Peyser services. The only change proposed in this section is to 
change ``WIA'' to ``WIOA'' in the section question; the remainder of 
the text has not changed from the existing regulation. The Department 
has followed this policy since the earliest years of the ES, in order 
to ensure minimum standards for the quality of the services provided. A 
1998 U.S. District Court decision, Michigan v. Herman, 81 F. Supp. 2nd 
840 (http://law.justia.com/cases/federal/district-courts/FSupp2/81/840/2420800/) upheld this policy. State merit staff employees are directly 
accountable to State government entities, and the standards for their 
performance and their determinations on the use of public funds require 
that decisions be made in the best interest of the public and of the 
population to be served. State merit staff meet objective professional 
qualifications and provide impartial, transparent information and 
services to all customers while complying with established government 
standards.
Section 652.216 May the one-stop operator provide guidance to State 
merit staff employees in accordance with the Act?
    This section clarifies that ES staff may receive guidance from a 
one-stop operator about the provision of labor exchange services, but 
that all personnel matters remain under the authority of the State 
agency. The only change proposed in this section is to add a reference 
to proposed Sec.  678.500, which provides the requirements for the 
local MOU. The Department seeks comment on whether any other changes 
are needed to allow the one-stop operator to ensure the efficient and 
effective operation of the one-stop center.
5. Subpart D--Workforce and Labor Market Information
    Secretary of Labor's role concerning the Workforce and Labor Market 
Information System (WLMIS). The Wagner-Peyser Act, as amended by and 
integrated with WIOA, envisions a robust WLMIS that is a critical 
underpinning for a wide array of workforce functions, including: (1) 
Supporting State and regional planning of workforce strategies that 
provide a pipeline of workers with in-demand skills and drive economic 
growth and development; (2) delivery of quality labor market and career 
information that enables workforce professionals to provide quality 
career counseling; and (3) enabling the workforce system's customers to 
make informed career and service delivery choices. New provisions in 
Wagner-Peyser provide for a collaborative process, led by the Secretary 
of Labor in partnership with Federal agencies, the newly created 
Workforce Information Advisory Council (WIAC), and States, to develop 
and implement a strategic plan that continuously improves the labor 
market and workforce information available through the workforce 
system. The Act describes certain key components of the WLMIS and 
commits the Secretary of Labor to oversee and ensure the competent 
management of the system.
    Wage records are a critical data source for WLMIS. When combined 
with data from other sources, wage records produce a wide array of 
labor market information used to inform economic development, support 
career counseling, identify training needs, inform industry sector 
workforce strategies, and assist with other facets of a job-driven 
workforce system.
    For example, through agreements with States, wage records are used 
to produce the following aggregate reports and data that support the 
objectives listed above:
     The United States Census Bureau's Longitudinal Employer-
Household Dynamics Program including the:
    [cir] Quarterly Workforce Explorer, that provides worker residence 
and work place location data and critical employment and business 
related data including hiring, worker separations, and turnover rates, 
at State, county, metro and Workforce Development Board areas;
    [cir] OnTheMap, that provides geographic information system (GIS) 
capabilities to map worker origin and destination information on detail 
map overlays in customized geographic areas at a Census block level; 
and
    [cir] OnTheMap for Emergency Management tools, that provides GIS 
capabilities to map natural disasters including fire, flood, and storm 
and the impact on workers and businesses in customized geographic areas 
at the Census block level area.
     The DOL's Bureau of Labor Statistics Quarterly Census of 
Employment and Wages, which provides a complete count of employment and 
wages, classified by industry and based on quarterly reports filed by 
employers for over 9 million establishments subject to unemployment 
insurance laws.
    Continuous improvement, in part through consultation. The Act 
requires the Secretary of Labor to oversee, and the States to pursue 
actively, the ``continuous improvement'' of the WLMIS.\3\ The Act, 
throughout, describes components of the system and ways in which the 
Secretary and the States must act to discharge their duties under the 
Act, including their duties related to ``continuous improvement.'' 
Proposed Sec.  652.300(a) is a general statement implementing this 
requirement. It provides, as does the Act, that the Secretary must 
oversee the development, maintenance, and continuous improvement of the 
WLMIS. The reference to Wagner-Peyser sec. 15 simply signals the 
section where the WLMIS is defined; the provision does not mean to 
state that sec. 15 is the only section where the duty of continuous 
improvement is created.
---------------------------------------------------------------------------

    \3\ Based on internal Department of Labor data. This figure 
includes the 50 States, the District of Columbia, American Samoa, 
Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin 
Islands.
---------------------------------------------------------------------------

    Proposed Sec.  652.300(b) implements the Secretary's more specific 
duties with regard to the WLMIS, as they are described in Wagner-Peyser 
sec. 15(b)(2). The proposed regulation closely tracks the statute with 
respect to duties related to collection, analysis, and dissemination of 
workforce and labor market information. These include, for example, the 
duty to eliminate gaps and duplication in statistical undertakings. The 
Act also identifies certain activities that should be considered to 
improve data sources. For example, sec. 15(b)(2) requires the 
Secretary, to ensure that data collected is consistent with appropriate 
Bureau of Labor Statistics standards and definitions and understandable 
to users of such data; and to develop consistent procedures and 
definitions for use by States in the collection of data. Earlier, in 
sec. 15(a)(1)(E), the Act requires that the WLMIS include ``procedures 
to support standardization and aggregation of data from administrative 
reporting systems.''
    Recognizing the breadth of these and other requirements it imposes 
on the Secretary, the statute--at sec. 15(b)(2)--establishes an 
expectation that the Secretary will discuss and fulfill the 
requirements in active collaboration with the WIAC, Federal agencies, 
and States. Proposed Sec.  652.302(b) incorporates this consultation 
requirement, while reserving our authority to consult with other 
stakeholders. To the extent that the data

[[Page 20806]]

and tools used in the context of the WLMIS are owned by other Federal 
agencies, such as LEHD data which is owned by the Census Bureau subject 
to the authority of title 13 of the U.S. Code, the Secretary of Labor 
will work collaboratively with the owners of such data or data tools to 
coordinate the use of those tools with the WLMIS and to identify 
potential enhancements, but the Secretary of Labor has no direct 
authority with regard to those tools.
    Proposed Sec.  652.300 works in conjunction with certain amendments 
to 20 CFR part 651. In order to clarify the Secretary's jurisdiction 
with respect to the Employment Service and related workforce systems--
in particular, with respect to responsibilities related to ``continuous 
improvement,'' performance assessment, and collection and management of 
information--the Department proposes new regulatory definitions for 
``Workforce and Labor Market Information'' (WLMI) and ``Workforce and 
Labor Market Information System'' (WLMIS). Those proposed definitions 
appear in part 651.
    Definition of ``wage record.'' The proposed definition of WLMI that 
appears in part 651 lists numerous components, including ``wage 
records.'' The Wagner-Peyser Act does not define ``wage records.'' To 
clarify the Secretary's responsibilities with respect to that component 
of WLMI, however, the Department proposes to define ``wage records'' in 
a new section under part 652, Sec.  652.301.
    Proposed Sec.  652.301 defines ``wage records'' for purposes of the 
Wagner-Peyser Act, including amendments to Wagner-Peyser relating to 
the WLMIS. The Department proposes to define ``wage record,'' for these 
purposes, as records that contain ``wage information'' as defined in 
the Department regulations at 20 CFR part 603. Part 603, among other 
things, implements the requirements of the Social Security Act 
governing the now-established Income and Eligibility Verification 
System (IEVS). Federal law requires each State participating in the 
Federal-State unemployment compensation (UC) program to have in place 
an IEVS through which it exchanges information with certain Federal 
agencies to help determine applicants' eligibility and amount of 
benefits for UC and several Federal financial assistance programs. 
(Social Security Act (SSA) secs. 303(f), 1137; 20 CFR 603.20-603.23.)
    As part of its IEVS, every State must collect certain information--
including ``wage information'' as defined in 20 CFR 603.2(k) and 
referred to here as ``wage records''--from applicants for these 
programs, employers in the State, or relevant State or Federal 
agencies. (SSA sec. 1137.) In the context of establishing 
confidentiality requirements for State UC data, the Federal regulation 
at 20 CFR 603.2(k) defines ``wage information'' to mean information in 
the records of a State UC agency, and information reported under 
provisions of State law that meets the requirements of an IEVS, that 
may fall into any one of three categories: (1) ``wages paid to an 
individual''; (2) the individual's SSN(s); and (3) the name, address, 
State, and FEIN of the employer that paid the wages. (20 CFR 603(k)) 
Normally, a State collects this information through the quarterly 
``wage reports'' employers file with the State (referred to in 20 CFR 
603.2(j) and SSA sec. 1137(a)(3)). States may, based on their need, 
require employers to report additional data--beyond these three 
categories--in their wage reports, whether for unemployment insurance 
purposes or for other purposes. It is the combination of these data 
collections that are referred to, broadly, as ``wage records.''
    The new, proposed definition of ``wage records'' in Sec.  652.301 
helps meet the legislative intent for consistency by standardizing, the 
definition of ``wage records'' across regulations governing WIOA 
activities, Wagner-Peyser activities, and disclosure of confidential UC 
information. Part 603--which uses the term ``wage information'' is the 
basis for the definition of ``wage records'' in proposed Sec.  
652.301--in part serves to allow States to disclose specific 
confidential wage information to help meet Federal reporting 
requirements for certain programs and activities funded under WIOA and 
Wagner-Peyser. As proposed, the definition in Sec.  652.301 is also 
consistent with the definition of ``quarterly wage record information'' 
under 20 CFR 677.175,\4\ which requires States to use essentially the 
same data elements in ``wage records'' to formally assess their 
performance for purposes of performance reporting. (For additional 
explanation of the relationship between these three sections, and the 
distinction between the provisions authorizing State use of certain 
wage data and those authorizing States to disclose essentially the data 
for purposes of Federally-required performance reporting, see the 
Department's proposal to amend its regulations at 20 CFR part 603, 
accompanying this proposal to amend the Wagner-Peyser regulations.)
---------------------------------------------------------------------------

    \4\ Ibid.
---------------------------------------------------------------------------

    Secretary of Labor's role concerning wage records under WIOA. 
Proposed Sec.  652.302 explains how the Secretary's responsibilities 
concerning the WLMIS apply to the wage record component of WLMI. That 
is, the proposed regulation reflects how the Department would apply the 
broader Wagner-Peyser expectations for improvement of labor market data 
sources, including those related to consistency and standardization, to 
one specific source--wage records.
    Proposed Sec.  652.302(b) would clarify that pursuant to his/her 
responsibility to oversee the development, maintenance, and continuous 
improvement of the WLMIS, including the numerous duties set forth in 
the Act and restated throughout this preamble, the Secretary will seek 
to develop standardized definitions of the data elements in wage 
records, and improved processes and systems for the collection of and 
reporting of wage records. As proposed, this provision would authorize 
the Secretary to develop common data definitions and standardized 
reporting formats that are consistent across States.
    Proposed Sec.  652.302(a) would work in conjunction with the 
proposed definitions of WLMI and WLMIS in part 651 to clarify that wage 
records are, in fact, included in and source data for WLMI.
    Consistency of wage records. On the matter of wage records, a 
number of areas have, in recent years, required policy discussions 
between the Department and States and other stakeholders. Of these 
discussions, the one on consistency has gained momentum.
    State wage records today, while they are a critical component of 
the WLMIS, suffer from inconsistencies that impede better management of 
WLMI, and of the ES more broadly. Wage records have always been a 
critical data source for administration of the UI program as well as 
other Federal programs, providing information that supports eligibility 
determinations and identification and reduction of improper payments. 
Wage records have increased importance today because States are 
required to use them to evaluate State performance of the workforce 
system and education and training providers. Additionally, wage records 
play a key role in Federal evaluations of the workforce system's 
programs. The expanded use of wage records for such a wide range of 
purposes requires consistency and quality of the data in order to 
maximize its use.
    Regrettably, such consistency is lacking. The wage data employers 
must report on their quarterly wage reports to their State and the 
formats they must use to report it vary, State-by-State. While 
employers filing wage reports described in Federal regulations at 20

[[Page 20807]]

CFR 603.2(j) must, at a minimum, report the three data elements 
described in 20 CFR 603.2(k), State law may require them to report 
additional elements. And because States differ in how they define 
certain data elements--including the three elements listed in Sec.  
603.2(k)--different States may prescribe different reporting formats 
for the same data elements. This means that the same type of data 
(employee SSN, employee name, employee address) may look different, 
from State to State, when placed on the form. For example, some States 
only require the first several numbers of workers' SSN. Such 
differences in State reporting requirements, and the variation they 
generate in the type of data and the format of data collected, set up a 
significant barrier to data quality and data consistency. They make it 
hard for data users to effectively match wage records across the 
States. This interferes with the effective and efficient measure of 
performance, program evaluation, income verification under sec. 1137 
SSA, and detection of improper benefits payments in multiple Federal 
programs.
    Consultations with stakeholders over the years, as well as our own, 
longstanding program experience, lead the Department to believe that 
adoption of standardized definitions of data elements, and processes 
and systems for collecting and reporting wage records across all 
States, could greatly enhance the usability of the wage records and the 
ability to easily merge the data they contain with other data sets. 
Standardized definitions, collection processes, and systems also could 
reduce employer burden, given that multi-State employers and their 
third-party administrators now have to report wages to States in many 
different formats. With such enhancements, State wage records would 
contain data that have the potential to create more comprehensive and 
powerful workforce and labor market information. Such an approach would 
also help implement the statute's requirement for consistency.
    Other Federal statutes support making significant improvements in 
wage records as a data source. A number of Federal statutes now place 
emphasis on wage records and data standardization. WIOA and the Middle 
Class Tax Relief and Job Creation Act of 2014, for example, require the 
Department to make the labor market data it oversees or generates, even 
more consistent and meaningful. WIOA emphasizes the use of wage records 
for performance and evaluations of the workforce system. The Job 
Creation Act focus on data standardization.
    Section 2104 of the Job Creation Act requires the Secretary to 
promote data exchange standardization through regulation in the 
delivery of the UI program, including as it relates to supporting the 
reemployment of unemployed workers. Data exchange standards include use 
of interoperable standards; use of widely accepted, non-proprietary, 
searchable, and computer readable formats; and use of existing non-
proprietary standards, such as the eXtensible Markup Language. A key 
component of data exchange standardization is ensuring that the data 
the States are sharing is consistent. As addressed above, it is 
impossible to accurately exchange and match data that has different 
elements and different requirements for the common elements. The 
Secretary cannot achieve data exchange standardization in the UI 
program if the data elements cannot be accurately exchanged and 
matched. Therefore, the Department interprets the requirement in the 
Job Creation Act to standardize data exchange to include the 
requirement that the Secretary consult with the WIAC and develop a set 
of common data definitions.
    The Wagner-Peyser Act, especially when read in the context of these 
two other statutes and the amendments made to it by WIOA, exhibits the 
same focus and expectation. Proposed Sec. Sec.  652.300 through 652.303 
enable all of this work to proceed through a collaborative approach 
that brings in other Federal agencies, States, and the public through 
the newly constituted WIAC.
    Consultations with the WIC and WIAC to improve wage records and the 
WLMIS. Of course, consistency is not the only concern or area of 
consultation with stakeholders. There is a long history of interest and 
discussions among Federal and State agencies and data users about the 
desirability of making a variety of improvements to wage records that 
would increase their value and usability. Among these was an effort in 
the 1990s referred to as the Simplified Tax and Wage Reporting System 
(STAWRS).
    More recently, a subgroup of the Workforce Information Council \5\ 
established under WIA has been researching and developing reports on 
how to enhance the content of wage records to support improvements in 
labor market and workforce information. The working group is currently 
considering possible enhancements, such as adding data elements to the 
information States collect from employers through the wage reports 
under 20 CFR 603.2(j), and the potential impact of those enhancements, 
on State workforce agencies and businesses. This work will result in 
recommendations to the WIC in the coming year and will provide strong 
foundational information to support the Secretary's work with the WIAC 
when it is established. (See discussion on WIAC elsewhere in this 
proposed rule.)
---------------------------------------------------------------------------

    \5\ Ibid.
---------------------------------------------------------------------------

    As discussed elsewhere, sec. 15(d) of the Wagner-Peyser Act 
requires the WIAC to evaluate the WLMIS System and make recommendations 
to the Secretary on how to improve the WLMIS. Section 15(b) requires 
the Secretary to receive and evaluate the WIAC's recommendations and 
respond to these recommendations in writing. At the appropriate time, 
the WIAC will make recommendations for improving the WLMIS. These 
recommendations could range from technical improvements to the system, 
such as improving the technology States use to gather and report data, 
to more substantive changes to the system, such as standardizing data 
elements to facilitate comparisons and provide job seekers easy to 
understand information about the labor market.
    To the extent that the Secretary's consultations with the WIAC and, 
potentially, other stakeholder groups result in proposals to change, 
enhance, or expand wage record data elements, the Secretary will 
carefully consider the potential benefits and costs of these proposals 
on the workforce system, and work with the Congress, other Federal 
agencies, States, the WIAC, and other stakeholders to explore possible 
ways to implement the recommendations. If appropriate, the Department 
will engage in further rulemaking or seek legislative authority.
    Data elements associated with wage records. Potentially 
establishing new data elements to wage records that employers in all 
States must report could have benefits similar to standardization. For 
example, knowing individuals' occupations, along with the wages they 
earned, would be extremely valuable. Such additional information would 
greatly assist in performance reporting and program evaluation under 
WIOA, in the identification of skill shortages by detailed geographic 
area to inform labor market training programs, and in the analysis of 
the long-term impact of education and training programs on labor market 
outcomes. It is likely that the WIAC will explore the value and 
viability of adding this and, potentially, other data elements. As 
discussed above, the current WIC is researching this issue and 
developing reports that will provide additional

[[Page 20808]]

information that is likely to be passed on to the WIAC for 
consideration.
    On January 31, 2014, the WIC released its ``Phase One Interim 
Report on Current Practices of Unemployment Insurance Wage Record 
Collection and Use.'' This report analyzed the results of a State 
survey on the benefits of and barriers to enhancing labor market 
information by adding data elements to the quarterly wage reports 
employers submit to States as defined in 20 CFR 603.2(j). Among other 
things, the WIC's survey asked States what additional data elements, 
aside from Federally-required wage information, States require 
employers to report. The Phase One Interim Report can be found at: 
http://www.workforceinfocouncil.org/Documents/Wage%20Report%20Final.pdf. While not all States responded, Alaska, 
Iowa, Minnesota, New Jersey, Ohio, Oregon, Pennsylvania, Rhode Island, 
Vermont, the Virgin Islands, Washington, and Wyoming reported already 
collecting additional data elements in the quarterly wage reports. The 
additional elements included the Code, total hours worked in a quarter, 
total number of weeks worked in a quarter, pay type (salary or hourly), 
hourly pay rate, gender, job title, worksite address, zip code, and 
tips. Some of the responding States reported that the additional data 
elements are extremely helpful for estimating hourly earnings, 
understanding career progression from occupation to occupation, 
assessing the effectiveness of workforce training, and making 
occupational projections. One State pointed out that knowing the 
employee worksite information helped with UC claim filing.
    Asking employers to report and States to collect additional data or 
data categories through quarterly wage reports, would expand the data 
collections for many States. The Department is committed to strong 
stakeholder consultation as strategies are developed to improve and 
enhance wage records and to striking the appropriate balance between 
the burden of any new data collection and the value of any additional 
data elements. In the event the WIAC and/or other stakeholder 
consultations generate recommendations for such enhancements, the 
Department will consider additional rulemaking or seek legislative 
authority, if appropriate.
    Request for comment. The Department is interested in receiving 
comments from States that responded to the survey, and any other States 
that require additional data elements in quarterly wage reports, on the 
challenges and benefits of requiring additional data elements in the 
quarterly wage reports. The Department is also interested in receiving 
comments from employers and payroll processors who provide occupational 
data for the quarterly wage records.
    Applying 20 CFR part 603 to wage records. Finally, the regulation 
proposed for new Sec.  652.303 would clarify that wage records are 
subject to and protected by the Department's regulations at 20 CFR part 
603, which govern confidentiality and disclosure for confidential UC 
information, including the ``wage information'' that make up ``wage 
records.'' Nothing in Sec. Sec.  652.300 through 652.302 changes the 
confidentiality requirements of 20 CFR part 603. Information contained 
in ``wage records'' that is confidential under Sec. Sec.  603.2(b) and 
603.4 remains confidential in accordance with those sections of the 
confidentiality and disclosure requirements of subparts A and B of part 
603. The Department proposes this provision to further ensure the 
confidentiality of the information in the State UC system.

O. Part 653--Services of the Employment Service System

    In subparts B and F, the Department proposes to implement the WIOA 
title III amendments to the Wagner-Peyser Act and to streamline and 
update certain sections to eliminate duplicative and obsolete 
provisions. Despite these changes, part 653 will remain consistent with 
the ``Richey Order'', which allows revisions as long as they are 
consistent with the Richey Order. NAACP v. Brennan, 9174 WL 229, at *7.
Section 653.100 Purpose and Scope of Subpart
    Proposed Sec.  653.100 explains that the regulations under part 653 
seek to ensure that all services of the workforce development system be 
available to all job seekers in an equitable fashion. This section 
includes language currently at Sec.  653.101 that explains the purpose 
and scope of part 653. This approach is consistent with the 
Department's current policy and requiring equal access and treatment to 
all services available through the workforce development system is also 
consistent with the purpose and terms of the Richey Order.
Section 653.101 Provision of Services to Migrant and Seasonal 
Farmworkers
    The Department proposes to delete Sec.  653.101 because its 
provisions have been moved to Sec.  653.100 or concern itinerant or 
satellite offices that have been replaced by one-stop centers that 
provide services to both MSFWs and non-MSFWs.
Section 653.102 Job Information
    The Department proposes to make several changes to Sec.  653.102:
    (1) That State agencies make job order information conspicuous and 
available to MSFWs ``. . . by all reasonable means'' rather than ``in 
all local offices'' to reflect the obligation of State agencies to 
contact MSFWs who are not being reached by the normal intake activities 
including at their working, living or gathering areas to explain the 
services available at the local one-stop center;
    (2) That the language in Sec.  653.102 referring to ``computer 
terminal, microfiche, hard copy, or other equally effective means'' be 
replaced with ``internet labor exchange systems and through the one-
stop centers'' to conform to technological advances and current 
techniques of States' internet-based labor exchange systems;
    (3) That the reference to ``each significant MSFW local office'' be 
replaced with ``employment service offices'' to require each ES office 
to provide adequate staff assistance to MSFWs to more fully conform 
with the Richey Order, which requires the Department to ensure that 
MSFWs are serviced in a quantitatively proportionate and qualitatively 
equivalent way to non-MSFWs;
    (4) That offices designated as significant MSFW multilingual ES 
offices must provide services to MSFWs in their native language, 
whenever requested or necessary and to acknowledge that Spanish is not 
the only native language spoken by MSFWs whose first language is not 
English.
Section 653.103 Process for Migrant and Seasonal Farmworkers To 
Participate in Workforce Development Activities
    The Department proposes to revise the heading in Sec.  653.103 to 
``Process for migrant and seasonal farmworkers to participate in 
workforce development activities'' to align it with language used in 
titles I and III of WIOA, which refer to ``workforce development 
activities.''
    Proposed Sec.  653.103(b) includes new language requiring that 
persons with LEP receive, free of charge, the language assistance 
necessary to afford them meaningful access to the programs, services, 
and information offered by one-stop centers. The Department also 
proposes to remove the reference to Sec.  653.105 because we propose to 
eliminate that section.
    In proposed Sec.  653.103(c), the Department proposes to add the 
words ``or in their native language'' to further

[[Page 20809]]

acknowledge that Spanish is not the only native language spoken by 
MSFWs whose first language is not English, and to remove language 
regarding checking the accuracy and quality of applications because 
such actions are part of compliance reviews which are addressed in 
Sec.  653.108.
    The Department also proposes to remove paragraphs (d) through (h) 
from Sec.  653.103, that refer to application cards and an application 
process that are generally no longer used, having been replaced by 
online resources. Instead, it is proposed in paragraph (d) that local 
ES offices ``refer and/or register the MSFW in accordance with the 
established procedures defined in the relevant regulations(s) or 
guidance.''
    The Department proposes to remove Sec.  653.104(a) because MSFWs 
receive equitable ESs regardless of family status. The provision of 
services for all Wagner-Peyser participants is not dependent upon 
whether their family members are participating in the ES system. It is 
also proposed that paragraphs (b) and (c) regarding applications from 
an individual for employment as a farm labor contractor, and 
agricultural job orders submitted by a farm labor contractor or farm 
labor contractor employee, be relocated to Sec.  653.500 because that 
addresses the ARS.
    It is proposed that Sec. Sec.  653.105 and 653.106 be deleted as 
they are generally obsolete and because State agencies no longer make 
referrals to or operate day-haul facilities. Additionally, it is not 
anticipated that State agencies will make referrals to or operate day-
haul facilities in the foreseeable future in part because WIOA title I, 
sec. 121(e)(3) requires the colocation of Wagner-Peyser services. 
Should those activities resume in the future, however, the Department 
will ensure compliance with the requirements of the Richey Order 
concerning any day-haul referrals and day-haul locations operating 
under ES supervision. The Department also proposes to remove paragraph 
(c) of Sec.  653.106 as it is unnecessary because it references 
Sec. Sec.  653.107(j) and 653.108(p) concerning outreach visits to, and 
monitoring of day-haul facilities. Those outreach obligations remain, 
as revised, in proposed Sec.  653.107.
Section 653.107 Outreach and Agricultural Outreach Plan
    The Department proposes to restructure and reorganize Sec.  653.107 
to facilitate a better understanding of State agency responsibilities, 
outreach worker responsibilities, and ES office responsibilities 
relating to outreach and the Agricultural Outreach Plan (AOP). The 
Department anticipates that the reorganization will allow the relevant 
entities to identify their responsibilities under this section.
    Currently, the AOP is submitted annually as a modification to the 
WIA under title I and the Wagner-Peyser Integrated or Unified Workforce 
Plan. As required by sec. 8 of the Wagner-Peyser Act, and as amended by 
sec. 306 of WIOA, States must now submit their Wagner-Peyser plan as 
part of the Unified or Combined State Plan described in WIOA secs. 102 
and 103, respectively. In order to streamline the plan submission 
process for States, the Department proposes to require that States 
include their AOP with their Unified or Combined State Plan. As the 
State Plans are required every 4 years, the Department proposes to 
require that the AOP be submitted every 4 years. The Department notes, 
however, that the Richey Order requires much of the information 
submitted through the AOP to be submitted annually. Therefore, in order 
to balance the goal of streamlining the State planning process with the 
need to comply with the Richey Order, the Department proposes that the 
Annual Summary required at 20 CFR 653.108(s) include outreach data and 
an update on the State's progress toward accomplishing its goals set 
forth in the AOP. In proposed paragraph (d), the Department explains 
the basic requirements of the AOP and the Annual Summaries and explain 
that official guidance will be forthcoming. Additionally, terminology 
in proposed Sec.  653.107 is revised, when appropriate, to better align 
its terms with corresponding terms in WIOA which will be used in the 
Unified State Plan.
    The Department also proposes the following changes to Sec.  
653.107:
    (1) The heading is proposed to be replaced with ``Outreach and 
Agricultural Outreach Plan (AOP)'' to make clear that information 
regarding the AOP can be found in this section;
    (2) The term ``Outreach Program'' used in paragraph (a) is proposed 
to be replaced by ``Outreach'' to broaden the scope of the section to 
accurately reflect the various requirements regarding outreach and that 
the section is not a formulaic program;
    (3) References in paragraph (a) to the Outreach Plan have been 
relocated, in revised form, to paragraph (d) that concerns the 
``Agricultural Outreach Plan (AOP)'' or ``Annual Summaries,'' or 
reserved for use in future official Department guidance (the Department 
will include AOP guidance as part of its Unified State Plan guidance);
    (4) A requirement has been added to paragraph (a) for each State 
agency to employ outreach workers to conduct outreach in their service 
areas (full or part time staff may be hired depending on whether the 
State has a significant MSFW population). This addition is proposed to 
help each State meet its requirement under the current 20 CFR 
653.107(a) to locate and contact MSFWs who are not being reached by the 
normal intake activities conducted by the local ES offices. The Richey 
Order influenced the language for this proposed addition, as it states 
that ``each State agency shall employ an adequate number of staff who 
shall be assigned to ES offices. . . . ;''
    (5) Paragraph (a)(4) has been revised to clarify that the 
Department, through guidance, will identify the 20 States with the 
highest estimated year-round MSFW activity;
    (6) Delete paragraph (b)(2) because all outreach efforts must be 
vigorous. This change does not signal a reduction in the required 
intensity of outreach activities;
    (7) The language in paragraph (h)(3)(i) be relocated to Sec.  
653.107(a)(4) and be revised to require the ``top 20 States,'' that is 
the 20 States with the highest estimated year-round MSFW activity, to 
hire year-round full-time outreach staff to help ensure that more 
farmworkers will be reached on a year-round basis in high activity 
areas than are reached at present. The remaining States must hire part-
time outreach staff year-round and must hire full-time outreach staff 
during periods of peak MSFW activity. These provisions are proposed to 
balance the urgent need for outreach with the reality of limited staff 
resources available to the States. Additionally, it is proposed that 
the option for the Regional Administrator to grant a deviation from the 
requirements in this paragraph be deleted to ensure that States have a 
means to contact MSFWs who are not being reached by the normal intake 
activities conducted by the local ES offices and to encourage them to 
strive for ``the development of strategies for providing effective 
outreach to and improve access for individuals and employers who could 
benefit from services provided through the workforce development 
system,'' as stated at WIOA sec. 101(d)(3)(c);
    (8) The reference to local offices in Sec.  653.107(b)(4)(vi) has 
been updated to ``one-stop center.'' In this section ``one-stop 
centers'' refers to both comprehensive and affiliate one-stop centers;
    (9) The language in current Sec.  653.107(j)(1)(v) be relocated to 
proposed Sec.  653.107(b)(2) and revised by inserting the words 
``employer's property or work area'' and changing the words 
``permission of the employer'' to

[[Page 20810]]

``permission of the employer, owner or farm labor contractor'' because 
the employer may not always be the appropriate person to grant such 
permission;
    (10) The reference to unemployed and employed MSFWs in current 
paragraph (j)(2)(ii) be deleted because all MSFWs contacted through 
outreach activities must receive information on current and future 
employment opportunities;
    (11) A sentence was added to paragraph (b)(6) requiring outreach 
workers to document and refer apparent violations that are non-
employment related; and
    (12) Language was added to paragraph (b)(7) regarding training 
outreach workers on protecting farmworkers against sexual harassment in 
the fields. While such abuse is not often considered when contemplating 
the protection of, and advocacy for, MSFWs, it is increasingly 
prevalent and the addition is intended to further a concerted effort to 
deter such abuse. To that end, the Department wishes to ensure that 
outreach workers are aware of the issue and able to appropriately refer 
MSFWs.
Section 653.108 State Workforce Agency and State Monitor Advocate 
Responsibilities
    The Department proposes the following changes to Sec.  653.108:
    (1) The heading is proposed to be revised to State Workforce Agency 
and State monitor advocate (SMA) responsibilities to better describe 
the contents of this section;
    (2) The requirement in paragraph (c) for SMAs to work in the State 
central office was removed because there are instances where it may be 
more productive and logical for them to work in an office that is more 
centrally located to the State's MSFW population;
    (3) The language in paragraph (d) allowing an Office of Workforce 
Investment (OWI) Administrator to reallocate SMA positions and approve 
the use of less than full-time work be deleted because the OWI 
administrator does not have authority over these determinations. It is 
also proposed that the last sentence in this paragraph be modified to 
clarify that a State agency that deems SMA functions appropriate on a 
part-time basis must demonstrate to the Regional Administrator that 
part-time staffing will be sufficient for carrying out his/her duties;
    (4) Language has been added to paragraph (g)(1) authorizing SMAs to 
request a corrective action plan from the ES office to address any 
deficiencies found in their review and allowing the SMAs to advise the 
State agency on means to improve the delivery of services to MSFWs;
    (5) That the words ``local office MSFW formal monitoring'' be 
deleted from paragraph (g)(2) because the Department has proposed to 
include a definition for onsite reviews in 20 CFR 651.10;
    (6) In paragraph (g)(3) the words ``significant MSFW local office'' 
are proposed to be replaced with ``significant MSFW one-stop center'' 
to conform with the proposed definition in 20 CFR 651.10;
    (7) In paragraph (g)(4) it is proposed that the sentence referring 
to applications be deleted because such information can be more 
effectively provided and updated, as necessary, via Department-
published guidance materials. It is also proposed this paragraph 
include language requiring the SMA to clear the State's AOP to ensure 
that the SMA reviews, provides necessary input, and supports the final 
version of the State's AOP;
    (8) That paragraph (g)(6) be created to require SMAs to write and 
submit Annual Summaries to the State Administrator with a copy to the 
Regional Administrator because it is a duty originally located in Sec.  
653.108(t) but appropriately falls under Sec.  653.108(g) as one of the 
SMA duties;
    (9) In paragraphs (h)(2) and (h)(3) the references to ``reviews'' 
be replaced with ``onsite review(s)'' for clarity, and that the 
reference to ``ETA'' in paragraph (h)(3) be replaced with ``the 
Department;''
    (10) It is proposed that in paragraph (j) the SMAs must ensure that 
local ES office managers submit copies of the MSFW complaint logs to 
the State agency quarterly pursuant to 20 CFR 658 subpart E instead of 
the regional office, as was originally required. This change is 
proposed because the regional office does not need to review each 
complaint log, rather it reviews the information in aggregate, as is 
the current practice. This helps to avoid overburdening the regional 
offices with more detail than is necessary. Additional details 
concerning the submission of complaint logs will be provided and 
updated, as necessary, via Department official guidance;
    (11) Current paragraph (k) has been broken into separate paragraphs 
(proposed paragraphs (j), (k), and (l)), to clarify the intent of the 
respective duties under this subpart. Paragraph (j) will require SMAs 
to serve as advocates to improve services to MSFWs; paragraph (k) will 
strengthen the requirement for SMAs to liaise with WIOA sec. 167 
grantees to encourage increased collaboration between SMAs and grantees 
that provide services to MSFWs; paragraph (l) proposes that SMAs meet 
at least quarterly and establish an MOU with WIOA sec. 167 grantees and 
other organizations serving farmworkers, the Department intends to 
foster a better working relationship between the SMAs, the grantees, 
and the other organizations while harmonizing the delivery of services 
to MSFWs and minimizing the duplication of services;
    (12) Language to include committees other than DOL Regional Farm 
Labor Coordinated Enforcement Committee has been added to paragraph (l) 
to broaden the scope of appropriate regional meetings the SMA must 
attend.
    (13) Paragraph (o) has been deleted because affirmative action 
staffing plans are no longer required. In their place, each State 
agency must provide an assurance that it is complying with its 
affirmative action requirements set forth in 20 CFR 653.111 through the 
AOP. Additionally, the requirement under proposed paragraph (g)(1) for 
SMAs to conduct an ongoing review of and advise the State agency on its 
affirmative action goals will meet the need for SMAs to ensure that 
their respective States are complying with the affirmative action 
staffing requirements outlined in the Richey Order;
    (14) Paragraph (p) concerning day-haul sites has been deleted for 
the same reasons provided for deleting Sec. Sec.  653.105 and 653.106; 
and
    (15) A new paragraph (s) has been added to outline the purpose and 
scope of required Annual Summaries, and a list of what the summaries 
must include. The requirements for the Annual Summary have been 
expanded to include information that would be relevant for the 
Department's review of how the States are providing services to MSFW. 
Many of the added requirements are taken from other sections under this 
chapter. Specifically, the Annual Summary would include assurances or 
summaries of SMA duties taken from current Sec.  653.108(c), (g)(1), 
(h)(2), (j), (k), (q), and (r). This section also requires that the 
Annual Summaries include a summary of the activities conducted over the 
course of the previous year that relate to meeting the goals of the 
AOP. At the end of the AOP, this section would require that the SMA 
provide a synopsis of the State agency's achievements in meetings its 
goals set forth in the AOP. This will help keep each State agency on 
track toward achieving its AOP goals and help the Department track such 
progress.
    In addition, related to proposed Sec.  653.108(g)(4), the 
Department notes that the process by which the SMA will receive, 
review, and approve the AOP

[[Page 20811]]

will be described in the joint planning guidance issued by the 
Departments of Labor and Education.
Section 653.109 Data Collection and Performance Accountability Measures
    For Sec.  653.109, Data collection, the Department proposes to 
include the equity indicators and minimum service level indicators 
currently at Sec.  653.112 as they are data elements that appropriately 
fit under Sec.  653.109, with the exception of the contents of current 
Sec.  653.112(c)(3) that will be deleted because ETA does not publish a 
list of priorities that State agencies can use as a basis for the 
minimum service levels required of significant MSFW States. The 
Department also proposes to add ``and performance accountability 
measures'' to Sec.  653.109 so the part may appropriately include the 
additional measures.
    The Department proposes to make several other changes to Sec.  
653.109:
    (1) Paragraph (a) specifies that State agencies must collect career 
service indicator data for services described in WIOA sec. 
134(c)(2)(A)(xii) because WIOA sec. 134(c)(2)(A)(xii) includes several 
of the existing requirements under Sec.  653.109;
    (2) Paragraph (b) has been revised to specify that data collection 
will include the number of non-MSFWs and MSFWs registered for Wagner-
Peyser services and MSFW average earnings, and will remove the 
requirement to collect data on the number of MSFWs referred to 
training, receiving job development, receiving testing, receiving 
employment counseling, and referred for supportive services or other 
services, as those are already required data elements under WIOA; and
    (3) Paragraph (b) also replaces the terms ``wage rates'' and 
``duration of employment'' with the terms ``entered employment rate'' 
and ``employment retention rate,'' respectively to conform with the 
terminology by the Department's data collection mechanism (currently 
the Labor Exchange Agricultural Reporting System 9002a form).
Section 653.110 Disclosure of Data
    Proposed Sec.  653.110 contains minor changes to clarify the 
provisions and to update terminology.
Section 653.111 State Agency Staffing Requirements
    In Sec.  653.111 it is proposed that the requirement for each State 
agency with significant MSFW offices to submit an affirmative action 
plan be replaced with the requirement that each such State agency 
submit assurances, as part of its Unified State Plan and as part of its 
Annual Summaries, that it is implementing an affirmative action 
staffing program. This change is proposed because it will help each 
State agency with significant MSFW offices to streamline implementation 
of its affirmative action program while ensuring that the Department 
remains in compliance with the relevant requirements under the Richey 
Order. It is proposed that the regulation providing the formula for 
determining the racial and ethnic characteristics of the workforce be 
deleted from the regulation because this will be provided in 
subsequently issued guidance.
    It is proposed that Sec.  653.112 be deleted because PBPs are 
obsolete as each State agency is required to submit a Unified or 
Combined State Plan pursuant to WIOA title I. The text in paragraphs 
(b) and (c) concerning equity indicators and minimum level service 
requirements is proposed to be relocated, with minor revisions, to 
Sec.  653.109.
    It is proposed that Sec.  653.113 be deleted and its contents 
relocated to 20 CFR 658.419 because it relates to the ES and 
Employment-Related Law Complaint System (Complaint System).
    In subpart F, the Department proposes the following changes to 
clarify the requirements of this subpart:
    (1) The paragraphs under the ARS have been reorganized into 
subcategories based on each stakeholder's respective responsibilities 
(the subcategories are ES Office Responsibilities, State Agency 
Responsibilities, and Processing Job Orders). The proposed 
restructuring of this subpart is intended to help stakeholders better 
understand how the system works and more easily identify and comprehend 
their respective responsibilities. The reorganizing is also proposed to 
help clarify the meaning of the regulations;
    (2) The paragraphs have been revised to state requirements in the 
positive and active voice, versus the negative passive voice from which 
they were originally drafted;
    (3) References to information that needs to be provided to MSFWs in 
Spanish be changed to ``native language'' to conform to TEGL 26-02; and
    (4) The heading for subpart F has been revised and supplemented by 
adding the words ``for US Workers'' to clarify that ARS is meant for 
U.S. workers versus foreign workers. It is a common misconception that 
the ARS is for foreign workers who may be hired by U.S. employers 
through visa programs such as the H-2A or H-2B visa programs, and the 
Department intends the proposed change to help eliminate this 
misconception. For the same reason, any references to the temporary 
employment of foreign workers in the United States (that would 
otherwise fall under 20 CFR 655) have been deleted.
Section 653.501 Requirements for Processing Clearance Orders
    The Department proposes the following changes to Sec.  653.501:
    (1) In paragraph (c)(1)(iv)(I), currently paragraph (d)(2)(x), it 
is proposed that the sentence regarding the contingency of payments 
made beyond the period of employment specified in the job order be 
deleted because such terms are already specified in the job order and 
the language is duplicative;
    (2) In paragraph (c)(3)(iv), currently paragraph (d)(2)(xiii), it 
is proposed that the sentence referring to requests for foreign workers 
be deleted because this section should only cover information regarding 
ARS and the requirements for foreign workers are covered under 20 CFR 
655; and
    (3) In paragraph (j), it is proposed that the Regional 
Administrator notify the national monitor advocate instead of the OWI 
Administrator when a potential labor supply State agency rejects a 
clearance order and the Regional Administrator does not concur with the 
reasons for rejection. In this case, the national monitor advocate, in 
consultation with the OWI Administrator, is the appropriate person to 
make the final determination because it is the common practice for the 
national monitor advocate to provide the State agencies with guidance 
regarding ARS.
Section 653.502 Conditional Access to the Agricultural Recruitment 
System
    The Department proposes to delete current Sec.  653.502 concerning 
changes in crop and recruitment situations and fold its contents 
without change into proposed Sec.  653.501.
    The Department proposes to add a new Sec.  653.502 which contains 
the relocated provisions of 20 CFR 654.403. While the housing standards 
at 20 CFR 654 subpart E, including current Sec.  654.403, will expire 1 
year after the publication of the final rule, the Department proposes 
moving current Sec.  654.403 into this new section because those 
requirements remain necessary and relevant, and because that section is 
related to the terms and requirements of this subpart. Accordingly, the 
provisions of 20 CFR 654.403 have been relocated to proposed 20 CFR 
653.502.

[[Page 20812]]

Section 653.503 Field Checks
    Proposed Sec.  653.503(b) has been revised to clarify that State 
agencies must conduct field checks on at least 25 percent of 
agricultural worksites to align with common practice. The Department 
also proposes to add language requiring a State agency with fewer than 
10 ES placements to conduct field checks on all agricultural worksites 
where the placements have been made. This change is proposed to ensure 
that all worksites are checked whenever feasible. In paragraph (e), it 
is proposed that the word ``shall'' be changed to ``may'' because it is 
not a requirement, rather State agencies may choose to enter into an 
agreement with an enforcement agency if they believe it is necessary or 
helpful.

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

1. Introduction
    The Department proposes to revise the ETA regulations governing 
Housing for Agricultural Workers at 20 CFR 654, subpart E, issued under 
the authority of the 1933 Wagner-Peyser Act by updating outdated 
terminology and by establishing an expiration date for the ETA 
standards in order to transition housing currently governed by the ETA 
standards to the Occupational Safety and Health Administration (OHSA) 
regulations governing temporary labor camps for agricultural workers.
2. Subpart E--Housing for Agricultural Workers
Section 654.401 Applicability
    The Department proposes to amend Sec.  654.401 to require that 
housing covered by the regulations in this subpart be subject to the 
relevant OSHA housing standards for agricultural workers beginning 1 
year after the publication of the final rule.
    In 1951 the U.S. ES Bureau of Employment Security established the 
ETA housing standards for farmworkers. These standards were updated in 
1959 and again in 1968. However, despite the Department's intention to 
``make every effort to ensure that `housing and facilities are hygienic 
and adequate to the climatic conditions of the area of employment''' 
and that such housing ``conformed to applicable State or local housing 
codes, and in the absence of such codes, that the housing would not 
endanger the health or safety of the workers,'' farmworkers continued 
to face inadequate, unsafe, and unsanitary housing. In 1970, Congress 
passed the Occupational Health and Safety Act (OSHA) which was intended 
to assure that every person working in the United States has safe and 
healthful working conditions.'' In this light, OSHA adopted a set of 
national consensus standards for temporary labor camps which was 
published in August 1971. Therefore, since 1971 the Department has had 
in effect two sets of agricultural housing standards for farmworkers: 
Those under the ETA regulations (originally at 20 CFR part 620, later 
at 20 CFR part 654) and those under the OSHA regulations (at 29 CFR 
1910.142). The dual set of standards has long resulted in confusion 
with respect to their applicability and enforcement. In view of these 
problems, the Department held hearings in 1976 with stakeholders, 
developed several proposals to arrive at a single set of standards, 
and, on December 9, 1977, rescinded the ETA regulations and standards.
    While the rescission was effective immediately, employers whose 
housing met the ETA standards on the date of their rescission were 
given until January 1, 1979 to come into compliance with the OSHA 
housing regulations. Later, the Department received numerous complaints 
objecting to the rescission of the ETA housing regulations, including 
those from employers who had constructed housing to conform to the ETA 
standards and complained that the shift from ETA to OSHA standards 
would require costly modifications to housing which the Department had 
previously approved. In response to these comments, the Department 
proposed on September 1, 1978 to revise the December 9, 1977 rescission 
action by adding an indefinite extension of time for employers already 
following the ETA standards to bring their housing into compliance with 
the OSHA standards and a transitional provision for housing built in 
reliance on the ETA regulations.
    On March 4, 1980, the Department issued a final rule providing that 
the OSHA standards and regulations applied to all temporary housing for 
farmworkers except that ``[e]mployers whose housing was constructed in 
accordance with the ETA housing standards may continue to follow the 
full set of ETA standards set forth in this subpart only where prior to 
April 3, 1980 the housing was completed or under construction, or where 
prior to March 4, 1980 a contract for the construction of the specific 
housing was signed.'' 45 FR 14180, 14182 (Mar. 4, 1980).
    The Department proposes that the remaining housing currently 
governed under the standards and provisions at 20 CFR part 654 subpart 
E (Housing for Agricultural Workers) be subject to the OSHA standards 
and provisions beginning 1 year after the publication of the final 
rule, except that mobile range housing for sheepherders and goatherders 
must continue to meet existing Departmental guidelines and/or 
applicable regulations. The proposed expiration date will provide 
sufficient time for affected employers to transition into compliance 
with the OSHA standards.
    Pursuant to the January 19, 1981 agreement between OSHA, the WHD 
(replacing the abolished Employment Standards Administration (ESA)), 
and ETA for Inspections of Migrant Agricultural Worker Housing, the 
Department's WHD will continue to be responsible for enforcing the 
provisions under 29 CFR 1910.142. Beginning 1 year after the 
publication of the final rule, the Department will not apply or enforce 
the standards of this subpart, other than in cases relating to events 
predating that expiration date.
    Requiring all housing to meet the relevant OSHA standards and 
eliminating the ETA standards will reduce administrative and 
enforcement burdens on employers, workers, State agencies, and the 
Department because they will need to reference and rely on only one set 
of applicable standards located in one place. Enforcement agency staff 
and State agency staff that conduct housing inspections will only need 
to understand one set of standards which will ease the learning 
process. Additionally, the change will benefit MSFWs as the regulations 
under 29 CFR 1910.142 conform to more modern housing standards than 
those under 20 CFR part 654 subpart E. The Department acknowledges that 
the change will mean that some employers will need to upgrade their 
farmworker housing to meet the OSHA standards. However, the benefit to 
farmworkers and the administrative benefits to State agencies and the 
Department outweigh the adjustments employers will need to make to 
comply with the OSHA standards. In order to assist employers, the 
Department will provide technical assistance to facilitate the 
transition to the OSHA housing standards.
    Having been in place for 34 years, it is the Department's opinion 
that it is appropriate to complete the transition to the OSHA standards 
begun in 1980 and to phase out in full the ETA standards grandfathered 
for 34 years for farmworker housing completed or under construction 
prior to March 3, 1980, or under contract for construction prior to 
April 3, 1980. As in 1980, the Department continues to believe that the 
OSHA regulations provide for superior standards of safety and 
habitability for

[[Page 20813]]

MSFWs and do not overly burden employers.
    In addition to the change described above, the Department proposes 
to amend the following sections:
Section 654.400 Scope and Purpose
    The Department proposes to amend Sec.  654.400 to update 
terminology and explain that housing covered under the standards and 
provisions of subpart E will be subject to different regulations 
without grandfathering beginning 1 year after the date that this final 
regulation is published.
    In addition to the amendment described above, the Department 
proposes to revise Sec.  654.401 for clarity, to add a new paragraph 
(b), and to shorten the section heading by eliminating unnecessary 
language.
Section 654.402 Variances
    The Department proposes to amend Sec.  654.402 to update 
terminology and remove the term ``permanent'' because, as proposed, 
variances will expire on the given expiration date for the standards 
and provisions of subpart E; therefore, employers will no longer be 
entitled to a permanent variance. The deadline of June 2, 1980 is 
removed because the Department proposes to receive applications for 
temporary variances from the ETA standards until the date on which the 
standards and provisions of subpart E will expire. Additionally, 
paragraph (f) has been added to state that all variances and requests 
for variances will expire 1 year after the publication of the final 
rule requiring this change, and that no applications will be accepted 
as of that date. After this change takes effect, the Department will 
return any pending requests for variances to the appropriate applicant 
noting that all variances and variance requests expired on that date 
and are therefore stale.
Section 654.403 [Reserved]
    Finally, the Department proposes that the provisions of Sec.  
654.403 be deleted and relocated to 20 CFR 653.502 because they more 
directly relate to the governance and operation of the ARS rather than 
the condition of worker housing. Section 654.403 provides for 
conditional access to the clearance order system administered by the 
relevant State workforce agency which is needed to effectively service 
employers whose housing has fallen temporarily out of compliance with 
the applicable housing standards during a period of use in the previous 
year, and where the employer has not had an opportunity to bring the 
housing back into compliance.
    The following sections of part 654 remain unchanged: Sec. Sec.  
654.404, 654.405, 654.406, 654.407, 654.408, 654.409, 654.410, 654.411, 
654.412, 654.413, 654.414, 654.415, 654.416, and 654.417.

Q. Part 658--Administrative Provisions Governing the Employment Service 
System

    20 CFR part 658 sets forth systems and procedures for complaints, 
monitoring for compliance assessment, enforcement and sanctions for 
violations of the ES regulations and employment-related laws, including 
discontinuation of services to employers and decertification of State 
agencies.
    The Department's proposed changes update terminology and 
responsibilities and reorganize various regulations to increase the 
clarity and efficiency of the provisions involved. Additionally, 
headings have been revised, when necessary, to reflect proposed changes 
to the regulations, and language has been added to permit, where 
relevant, the use of electronic mail and electronic signatures. The 
complaint system under 20 CFR part 658 does not apply to complaints 
filed under WIOA title I.
    During the 1980 rulemaking, the Department received numerous 
comments about the proposed complaint system at 20 CFR part 658 subpart 
E (Complaint System) including comments that focused on the limited 
staff resources available to provide all labor exchange services 
including the handling of complaints. The Department took those 
comments into account and limited the complaint system to only take in 
writing those complaints that were ``Job Service (JS) related or those 
non-JS related complaints that [were] filed by MSFWs alleging 
violations of laws enforced by ESA or OSHA.'' (Since the dissolution of 
ESA on Nov. 8, 2009, the WHD has taken on the relevant enforcement 
responsibilities (45 FR 39454, 39456 (June 10, 1980.)) The Department 
now believes it is appropriate and consistent with the Richey Order to 
allow most employment-related law complaints by MSFWs to be recorded, 
referred, and tracked to resolution (except those that relate to WIOA 
title I complaints which follow a different process--see WIOA title I 
sec. 181(c)). Technological advances in the workplace since 1980, such 
as the widespread use of computer software and systems, have made 
performing such work feasible with limited staff resources. 
Additionally, recording, referring, and tracking to resolution the 
additional complaints will help, directly or indirectly, to deter the 
employment-related discrimination and abuses that MSFWs continue to 
suffer throughout the United States.
    The Department proposes to revise the heading for 20 CFR part 658 
subpart E from ``Job Service Complaint System'' to ``Employment Service 
and Employment-Related Law Complaint System (Complaint System)'' to 
accurately reflect what the Complaint System covers. The Department 
proposes to eliminate Sec.  658.401 and fold its revised provisions 
that relate to the purpose and scope of the subpart into Sec.  658.400.
    Regarding provisions concerning the complaint system at the State 
level, the Department proposes to restructure the previous Sec. Sec.  
658.410 through 658.418 by placing them in Sec.  658.411 and breaking 
them down into subsections for complaints alleging violation(s) of 
employment-related laws and subsections on complaints alleging 
violation(s) of the ES regulations. Those subsections are further 
broken down based on whether the complainant is an MSFW or not. 
Proposed new Sec. Sec.  658.410 and 658.411 provide an overview of the 
Complaint System as it pertains to all persons who submit a complaint 
and as it pertains specifically to MSFWs who submit a complaint.
Section 658.410 Establishment of Local and State Complaint Systems
    In Sec.  658.410(c)(2), it is proposed that quarterly complaint 
logs be submitted to the SMA and the State Administrator rather than to 
the Regional Administrator, unless requested. This change is proposed 
to increase the efficiency of the Regional Administrator's position 
that does not require the routine review of the multitude of highly 
detailed logs.
Section 658.411 Action on Complaints
    Section 658.411 is expanded to incorporate the majority of the 
provisions currently in Sec. Sec.  658.412 through 658.417 in the 
interest of streamlining and clarity. The Department proposes to 
eliminate Sec. Sec.  659.412 through 658.417 as separate sections. Not 
included in Sec.  658.411, however, is the reference currently in Sec.  
658.414(a) to 29 CFR part 42 because the proposed revisions to the 
complaint system call for coordination with all relevant enforcement 
agencies concerning MSFW complaints, and provisions at 29 CFR part 42 
discuss such coordination only between WHD, OSHA, and the ETA. This new 
approach ensures that State and local officials will consider 
forwarding employment-related law complaints to a broader group of 
enforcement agencies. Also excluded from proposed Sec.  658.411 is the

[[Page 20814]]

text of current Sec.  658.414(c) that has become redundant because 
proposed Sec.  658.410 also states that all complaints filed by an MSFW 
must be recorded. The Department proposes to add new Sec.  658.419 that 
will incorporate the relocated provisions of 20 CFR 653.113 (Apparent 
Violations) because those provisions set forth the procedures for State 
agency employees to follow when they become aware of an apparent 
violation of employment-related law or of the ES regulations which is 
more appropriately located in 20 CFR part 658 subpart E than in 20 CFR 
part 653 subpart B that concerns services for MSFWs.
    Proposed Sec.  658.411(d)(6) indicates that complaints alleging 
violations of the ES regulations will be handled to resolution if the 
complaint was made within 2 years from the date of occurrence, versus 
the 1 year provided currently at Sec.  658.401. A 2-year limitations 
period would be consistent with the limitations period for non-willful 
violations of the Fair Labor Standards Act, a worker protective statute 
of general application that applies to employment in agriculture and 
from which the definition of farmwork in 20 CFR 651.10 is largely 
drawn. Increasing the limitations period to 2 years will provide 
greater protections to those participating in the ES system by 
accommodating those individuals that do not feel comfortable filing or 
are not able to file complaints within a year from the alleged 
occurrence. Increasing the limitations period by 1 year will not 
increase the burden on State agencies or employers because the Uniform 
Administrative Requirements for the Wagner-Peyser grant already 
requires the retention of all financial and programmatic records, 
supporting documents, and statistical records for 3 years, and those 
records, in many cases, will contain information bearing on complaints 
filed within the 2-year limitations period. Finally, as with complaints 
filed under the FLSA, there is little risk that a complaint will become 
stale if it is filed 2 years after an alleged occurrence. The 2-year 
limitations period would not apply to employment-related law complaints 
as each enforcement agency has its own respective limitations period 
for which it can process complaints.
    It is proposed that Sec. Sec.  658.420 through 658.426 be 
restructured to conform to the restructured regulations for the 
Complaint System at the State level in which the system is broken down 
into employment law-related complaints and complaints relating to the 
ES regulations.
Section 658.422 Handling of Employment-Related Law Complaints by the 
Regional Administrator
    The Department proposes to revise Sec.  658.422 by replacing in 
Sec.  658.422(a) the reference to ``ESA or OSHA'' with ``the 
appropriate enforcement agency'' to allow for complaints to be referred 
to the appropriate agency and not confined to two agencies within the 
Department. Also proposed is the elimination of Sec.  658.422(d) 
because its requirement to log all complaints and related 
correspondence is already set forth in Sec.  658.420(d). The Department 
also proposes to eliminate Sec.  658.423 as a separate section and 
incorporate its provisions in Sec.  658.420 that addresses the handling 
and other treatment of complaints.
Section 658.424 Proceedings Before the Office of Administrative Law 
Judges
    Per Sec.  658.424(b), the Department proposes to clarify that the 
rules governing procedures before the Department's OALJ at subpart A of 
29 CFR part 18 govern proceedings under Sec.  658.424, except where the 
provisions of Sec. Sec.  658.424 and 658.425 conflict with the 
provisions of that subpart. However, the rules of evidence at subpart B 
of 29 CFR part 18 do not apply to this section. This change is proposed 
to ensure consistency with other ETA programs.
Section 658.501 Basis for Discontinuation of Services
    In 20 CFR part 658 subpart F, it is proposed that language be added 
to Sec.  658.501(c) to clarify the procedures a State agency must 
follow when an employer participating in the ES system has allegedly 
not complied with the terms of the temporary labor certification.
    In 20 CFR part 658 subpart G, it is proposed that the references to 
Sec. Sec.  658.620 and 658.621 be deleted from Sec.  658.600 because 
those sections are reserved. It is also proposed that under Sec.  
658.601(a)(1)(ii), ``Employment Security Automated Reporting System 
(ESARS) tables and Cost Accounting Reports'' be replaced with ``the 
Department's ETA 9002A report, or any successor report required by the 
Department'' to conform to what is currently utilized.
    In 20 CFR part 658 subpart H, the Department proposes to replace 
outdated or otherwise incorrect terminology. For example, ETA is 
replaced by the Department, State agency is replaced by State Workforce 
Agency (SWA), and JS is replaced with ES.
    Finally, recognizing that almost all correspondence, formal filings 
and submissions, and other exchanges of documents and information 
between the public and the Department are conducted electronically, 
these regulations clarify that any required filing or submission of 
documents, etc. via mail or hard copy may also be accomplished 
electronically.

V. Rulemaking Analyses and Notices

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

    Executive Order (E.O.) 12866 directs agencies, in deciding whether 
and how to regulate, to assess all costs and benefits of available 
regulatory alternatives, including the alternative of not regulating. 
E.O. 13563 is supplemental to and reaffirms E.O. 12866. It emphasizes 
the importance of quantifying present and future benefits and costs; 
directs that regulations be adopted with public participation; and 
where relevant and feasible, directs that regulatory approaches be 
considered that reduce burdens, harmonize rules across agencies, and 
maintain flexibility and freedom of choice for the public. Costs and 
benefits are to include both quantifiable measures and qualitative 
assessments of possible impacts that are difficult to quantify. If 
regulation is necessary, agencies should select regulatory approaches 
that maximize net benefits. OMB determines whether a regulatory action 
is significant and, therefore, subject to review.
    Section 3(f) of E.O. 12866 defines a ``significant regulatory 
action'' as any action that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising from legal mandates, 
the President's priorities, or the principles set forth in E.O. 12866.
    Summary of the analysis. The Department provides the following 
summary of the regulatory impact analysis:
    (1) The proposed rule is a ``significant regulatory action'' under 
WIOA sec. 3(f)(4) of E.O. 12866; therefore, OMB has reviewed the 
proposed rule.

[[Page 20815]]

    (2) The proposed rule would have no cost impact on small entities.
    (3) The proposed rule would not impose an unfunded mandate on 
Federal, State, local, or tribal governments as defined by the Unfunded 
Mandates Reform Act of 1995.
    In total, the Department estimates that this NPRM would have an 
average annual cost of $38,437,779 and a total 10-year cost of 
$305,556,353 (with 7-percent discounting). The largest contributor to 
the cost is the requirement related to the development and continuous 
improvement of the workforce development system, followed by the career 
pathways development and the colocation of Wagner-Peyser services.
    The Department was unable to quantify several important benefits to 
society due to data limitations or lack of existing data or evaluation 
findings on particular items. Based on a review of empirical studies 
(primarily studies published in peer-reviewed academic publications and 
studies sponsored by the Department), we identified a variety of 
societal benefits: (1) Training services increase job placement rates; 
(2) participants in occupational training experience higher 
reemployment rates; (3) training is associated with higher earnings; 
and (4) State performance accountability measures, in combination with 
the board membership provision requiring employer/business 
representation, can be expected to improve the quality of the training 
and, ultimately, the number and caliber of job placements. We 
identified several channels through which these benefits might be 
achieved: (1) Better information about training providers will enable 
workers to make better informed choices about programs to pursue; (2) 
sanctions to under-performing States will serve as an incentive for 
both States and local entities to monitor performance more effectively 
and to intervene early; and (3) enhanced services for dislocated 
workers, self-employed individuals, and workers with disabilities will 
lead to the benefits discussed above.
    The Department requests comment on the costs and benefits of this 
NPRM with the goal of ensuring a thorough consideration and discussion 
at the Final Rule stage.
1. Need for Regulation
    Public Law 113-128, the Workforce Innovation and Opportunity Act, 
enacted on July 22, 2014, statutorily requires publication of proposed 
implementation regulations not later than 180 days after the date of 
enactment. The Department has determined that implementing regulations 
are necessary in order for the WIOA program to be efficiently and 
effectively operated and that such regulations shall provide Congress 
and others with uniform information necessary to evaluate the outcomes 
of the new workforce law.
2. Alternatives in Light of the Required Publication of Proposed 
Regulations
    OMB Circular A-4, which outlines best practices in regulatory 
analysis, directs agencies to analyze alternatives outside the scope of 
their current legal authority if such alternatives best satisfy the 
philosophy and principles of E.O. 12866. While the WIOA provides little 
regulatory discretion, the Department assessed, to the extent feasible, 
alternatives to the proposed regulations.
    In this NPRM, the Department considered significant alternatives to 
accomplish the stated objectives of the WIOA while also attempting to 
minimize any significant economic impact of the proposed rule on small 
entities. This analysis considered the extent to which WIOA's 
prescriptive language presented any regulatory options which would also 
allow for achieving the Act's articulated program goals. The 
Department, in many instances, has reiterated the Act's language in the 
regulatory text and expansions are offered for clarification and 
guidance to the regulated community. The additional regulatory guidance 
should create more efficient administration of the program by reducing 
ambiguities and subsequent State and local revisions as a result of 
unclear statutory language.
    In addition, the Department considered and, where feasible, 
proposed to issue sub-regulatory guidance in lieu of additional 
regulatory requirements. This policy option has two primary benefits to 
small entities. First, guidance will be issued following publication of 
the rules, thereby allowing States, local areas, and small entities 
additional time to prepare their compliance efforts. Second, this level 
of guidance is more flexible in nature, allowing for faster 
modifications and any subsequent issuances, as necessary.
    The Department considered three possible alternatives:
    (1) To implement the changes prescribed in WIOA, as noted in this 
NPRM, thereby satisfying the statutory mandate; or
    (2) To take no action, that is, to attempt to implement the WIOA 
utilizing existing Workforce Innovation Act (WIA) regulations; or
    (3) To not publish regulation and rescind existing WIA final 
regulations and, thereby ignoring the WIOA statutory requirement to 
publish implementing regulations thus forcing the regulated community 
to follow statutory language for implementation and compliance 
purposes.
    The Department considered these three options in accordance with 
the provisions of E.O. 12866 and chose to publish the WIOA NPRM, that 
is, the first alternative. The Department considered the second 
alternative, that is, retaining existing WIA regulations as the guide 
for WIOA implementation, but believes that the requirements have 
changed substantially enough that new implementing regulations are 
necessary for the workforce system to achieve program compliance. The 
Department considered the third alternative, that is, to not publish an 
implementing regulation and rescind existing WIA final regulations, but 
rejected it because the WIOA legislative language in and of itself does 
not provide sufficient detailed guidance to effectively implement WIOA; 
thus, regulations are necessary to achieve program compliance.
    In addition to the regulatory alternatives noted above, the 
Department also considered whether certain aspects of the WIOA could be 
phased in over a prescribed period of time (different compliance 
dates), thereby allowing States and localities additional time for 
planning and successful implementation. As a policy option, this 
alternative appears appealing in a broad theoretical sense and where 
feasible (e.g., Wagner-Peyser colocation of services), the Department 
has recognized and made allowances for different schedules of 
implementation. However, upon further discussion and in order to begin 
to achieve the intended legislative benefits of the WIOA, additional 
implementation delays beyond those noted in this NPRM may create 
potentially more issues than the benefit of alternative starting dates. 
Specifically, as many critical WIOA elements follow upon the 
implementation of other provisions (e.g., technology and performance 
reporting are intrinsically related), discussions around delaying 
additional aspects became quite complicated such that the 
interrelatedness of the WIOA's requirements suggested that the 
alternative of delaying additional aspects was not operationally 
feasible.
    Furthermore, the data necessary to fully review this option does 
not yet exist, and will not until local workforce development boards 
(WDBs) conduct procurements and announce awards.

[[Page 20816]]

Similarly, performance standards will be negotiated at a future time 
and based upon a variety of factors including State and local economic 
conditions, resources, and priorities. Establishing proposed standards 
in advance of this statutorily-defined process may not be an efficient 
or effective action. The enforcement methods described in the proposed 
rule are a reflection of prescribed WIOA requirements and entity size 
should not in and of itself create alternative methods for compliance 
or different time periods for achieving compliance. Although the 
Department has not determined sufficiently valid reasons for altering 
compliance timeframes in addition to those described in the proposed 
rule for small entities, we seek comment on this issue.
    The Department's initial impact analysis has concluded that by 
virtue of WIOA's prescriptive language, particularly the requirement to 
publish implementing regulations within 180 days, there are no viable 
regulatory alternatives available other than those discussed above.
    The Department requests comment on these or other alternatives, 
including alternatives on the specific provisions contained in this 
NPRM, with the goal of ensuring a thorough consideration and discussion 
at the Final Rule stage.
 3. Analysis Considerations
    The Department derives its estimates by comparing the existing 
program baseline, i.e., the benefits and costs associated with current 
practices, which at a minimum, must comply with the 2000 WIA Final Rule 
(65 FR 49294, Aug. 11, 2000), against the additional benefits and costs 
associated with implementation of provisions contained in this WIOA-
required NPRM.
    For a proper evaluation of the additional benefits and costs of 
this NPRM, the Department explains how the required actions of States, 
WDBs, employers and training entities, government agencies, and other 
related entities are linked to the expected benefits and estimated 
costs. We also considered, where appropriate, the unintended 
consequences of the proposed regulations introduced by this NPRM. The 
Department makes every effort, when feasible, to quantify and monetize 
the benefits and costs of this NPRM. The Department was unable to 
quantify the benefits associated with the proposed rule because of data 
limitations and a lack of operational data or evaluation findings on 
the provisions of the proposed rule or WIOA in general. Therefore, we 
describe the benefits qualitatively. We followed the same approach when 
we were unable to quantify the costs.
    Throughout the benefit-cost analysis, the Department made every 
effort to identify and quantify all potential incremental costs 
associated with the implementation of WIOA as distinct from what 
already exist under WIA, WIOA's predecessor statute. Despite our best 
estimation efforts, however, the Department might be double-counting 
some activities that are already happening under WIA. Thus, the costs 
itemized below represent an upper bound of the potential cost of 
implementing the statute. The Department requests comment on its cost 
estimates, specifically in terms of whether it has accurately captured 
the additional costs associated with the implementation of WIOA.
    In addition to this NPRM, the Departments of Labor and Education 
have proposed a joint NPRM to implement specific requirements of WIOA 
that fall under both Departments' purviews. While we acknowledge that 
these proposed rules and their associated impacts may not be wholly 
independent from one another, we are unaware of any reliable method of 
quantifying the effects of this interdependence. Therefore, our 
analysis does not capture the correlated impacts of the benefits and 
costs of this proposed rule and those associated with the other NPRMs. 
We request comments from the public about the appropriateness of this 
assumption.
    In accordance with the regulatory analysis guidance contained in 
OMB Circular A-4 and consistent with the Department's practices in 
previous rulemakings, this regulatory analysis focuses on the likely 
consequences (benefits and costs that accrue to citizens and residents 
of the United States) of this WIOA-required NPRM. The analysis covers 
10 years (2015 through 2024) to ensure it captures major additional 
benefits and costs that accrue over time. The Department expresses all 
quantifiable impacts in 2013 dollars and use 3-percent and 7-percent 
discounting following OMB Circular A-4.
    Exhibit 1 presents the estimated number of entities expected to 
experience an increase in level of effort (workload) due to the 
proposed requirements contained in this NPRM. These estimates are 
provided by the Department and are used extensively throughout this 
analysis to calculate the estimated cost of each proposed provision.

             Exhibit 1--Number of Affected Entities by Type
------------------------------------------------------------------------
                                                              Number of
                        Entity type                            entities
------------------------------------------------------------------------
States impacted by DOL program requirements................       \6\ 56
States without collocated Wagner-Peyser offices and one-          \7\ 10
 stops.....................................................
States without sector strategies...........................       \2\ 21
States that need to create Unified State Plans.............       \2\ 14
States that must pay their share for proportionate use of         \2\ 54
 one-stop delivery systems.................................
Local areas without collocated Wagner-Peyser offices and         \2\ 100
 one-stops.................................................
Workforce development boards...............................      \2\ 580
Workforce development boards selecting one-stop operators..      \2\ 250
Local Boards performing regional plan modifications........      \2\ 300
------------------------------------------------------------------------

Transfer Payments
---------------------------------------------------------------------------

    \6\ Ibid.
    \7\ Department of Labor estimate.
---------------------------------------------------------------------------

    In addition, the Department provides an assessment of transfer 
payments associated with transitioning the nation's public workforce 
system from the requirements of WIA to new requirements imposed by 
WIOA. In accordance with OMB Circular A-4, we consider transfer 
payments as payments from one group to another that do not affect total 
resources available to society. For example, under WIOA, partners are 
required to pay their share for proportionate use of one-stop delivery 
systems. Partners receive sufficient Federal funding to cover these 
payments, rendering this payment a transfer rather than a new cost. 
Under-performing States will also receive sanctions under WIOA, which 
are similarly classified as transfers as they result in the de-
obligation of funds from the State's set-aside. In accordance with the 
State allotment provisions noted in WIOA sec. 127, the interstate 
funding formula methodology is not significantly different than that 
utilized for the distribution of WIA funds. Final program year grant 
allocations will reflect WIOA requirements and are under development.
    One example of transfer payments is the expectation that available 
U.S. workers trained and hired who were previously unemployed will no 
longer need to seek new or continued unemployment insurance benefits. 
Assuming other factors remain constant, the Department expects State 
unemployment insurance expenditures to decline because of the hiring of 
U.S.

[[Page 20817]]

workers following WIOA implementation. The Department, however, cannot 
quantify these transfer payments due to a lack of adequate data.
    In the subject-by-subject analysis, the Department presents the 
additional labor and other costs associated with the implementation of 
each of the proposed provisions in this NPRM. Exhibit 2 presents the 
compensation rates for the occupational categories expected to 
experience an increase in level of effort (workload) due to the 
proposed rule. We used wage rates from the Bureau of Labor Statistics' 
Mean Hourly Wage Rate for private and State employees.\8\ For 
simplicity, we applied State-level wages to local employees. We also 
used wage rates from the Office of Personnel Management's Salary Table 
for the 2013 General Schedule for Federal employees.\9\ We adjusted the 
wage rates using a loaded wage factor to reflect total compensation, 
which includes health and retirement benefits. For the State and local 
sectors, we used a loaded wage factor of 1.55, which represents the 
ratio of total compensation \10\ to wages.\11\ For Federal employees, 
we used a loaded wage factor of 1.69 based on internal data from DOL. 
We then multiplied the loaded wage factor by each occupational 
category's wage rate to calculate an hourly compensation rate.
---------------------------------------------------------------------------

    \8\ Bureau of Labor Statistics, May 2013, National Occupational 
Employment and Wage Estimates, retrieved from: http://www.bls.gov/oes/current/oes_nat.htm.
    \9\ The wage rate for Federal employees is based on Step 5 of 
the General Schedule (source: OPM, 2013, Salary Table for the 2013 
General Schedule, retrieved from: http://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2013/general-schedule/gs_h.pdf).
    \10\ BLS Employment Cost Index, 2013 Average Series ID 
CMU3010000000000D, CMU3010000000000P (source: Bureau of Labor 
Statistics, 2013 Employer Costs for Employee Compensation, retrieved 
from: http://www.bls.gov/schedule/archives/ecec_nr.htm).
    \11\ The State and local loaded wage factor was applied to all 
non-Federal employees. Discerning the number of State and local-
sector employees and private-sector employees at the local level is 
difficult; therefore, the Department used the State and local-sector 
loaded wage factor (1.55) instead of the private-sector wage factor 
(1.42) for all non-Federal employees to avoid underestimating the 
costs.
---------------------------------------------------------------------------

    The Department invites comments regarding the assumptions used to 
estimate the level of additional effort required for the various 
proposed new activities, as well as data sources for the wages and the 
loaded wage factors that reflect employee benefits used in the 
analysis.
    The Department uses the hourly compensation rates presented in 
Exhibit 2 throughout this analysis to estimate the additional labor 
costs for each proposed provision.
---------------------------------------------------------------------------

    \12\ BLS OES, May 2013, 43-0000 Office and Administrative 
Support Occupations (http://www.bls.gov/oes/current/999201.htm#43-0000).
    \13\ BLS OES, May 2013, 23-10111 Lawyers (http://www.bls.gov/oes/current/999201.htm#23-0000).
    \14\ BLS OES, May 2013, 15-1131 Computer Programmers (http://www.bls.gov/oes/current/oes151131.htm).
    \15\ BLS OES, May 2013, 11-1021 General and Operations Managers 
(http://www.bls.gov/oes/current/999201.htm#11-0000).
    \16\ BLS OES, May 2013, average for the following occupational 
categories weighted by the number of employees in State government: 
15-1131 Computer Programmers; 15-1132 Software Developers, 
Applications; 15-1133 Software Developers, Systems Software; and 15-
1134 Web Developers (http://www.bls.gov/oes/current/999201.htm#15-0000).

                               Exhibit 2--Calculation of Hourly Compensation Rates
----------------------------------------------------------------------------------------------------------------
                                                                                                      Hourly
                    Position                        Grade level   Average hourly    Loaded wage    compensation
                                                                       wage           factor           rate
                                                  ..............               a               b       c = a x b
----------------------------------------------------------------------------------------------------------------
State and Local Employees
Administrative staff \12\.......................             N/A          $17.96            1.55          $27.84
Legal counsel staff \13\........................  ..............           40.68  ..............           63.05
IT reprogramming or database development staff    ..............           38.91  ..............           60.31
 \14\...........................................
Managers \15\...................................  ..............           45.32  ..............           70.25
Technical staff \16\............................  ..............           43.38  ..............           67.24
----------------------------------------------------------------------------------------------------------------

    The section-by-section analysis presents the total incremental cost 
of the proposed rule relative to the baseline, i.e., the current 
practice. At a minimum, all affected entities are currently required to 
comply with the 2000 WIA Final Rule (65 FR 49294, Aug. 11, 2000); 
however, some affected entities may already be in compliance with some 
provisions of the proposed rule. This analysis estimates the 
incremental costs that would be incurred by affected entities which are 
not yet compliant with the proposed rule. The equation below shows the 
method by which the Department calculated the incremental total cost 
for each provision over the 10-year analysis period.
[GRAPHIC] [TIFF OMITTED] TP16AP15.002


Where,

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

    The total cost of each provision is calculated as the sum of the 
total labor cost and total non-labor cost incurred each year over the 
10-year period (see Exhibit 3 for the 10-year cost of the proposed rule 
by provision). The total labor cost is the sum of the labor costs for 
each labor type i (e.g., administrative

[[Page 20818]]

staff, legal counsel staff, and managers) multiplied by the number of 
affected entities that will incur labor costs, Al. The labor 
cost for each labor type i is calculated by multiplying the number of 
staff required to perform the proposed activity, Ni; the 
hours required per staff member to perform the proposed activity, 
Hi; the mean hourly wage of staff of labor type i, 
Wi; and the loaded wage factor of staff of labor type i, 
Li. The total non-labor cost is the sum of the non-labor 
costs for each non-labor cost type j (e.g., consulting costs) 
multiplied by the number of affected entities that will incur non-labor 
costs, Aj.
4. Subject-by-Subject Analysis
    The Department's analysis below covers the expected impacts of the 
following proposed provisions of the WIOA NPRM against the baseline of 
the current practice under WIA: (a) New State Workforce Development 
Board Membership Requirements; (b) Development and Continuous 
Improvement of the Workforce Development System; (c) Development of 
Statewide Policies Affecting the State's One-stop System; (d) 
Development of Strategies for Technological Improvements; (e) State 
Plan Modification; (f) Identification of Regions; (g) Appoint New Local 
Workforce Development Board and Appropriate Firewalls; (h) Career 
Pathways Development; (i) Development of Proven and Promising 
Practices; (j) Technology; (k) Selection of the One-stop Operator; (l) 
Coordination with Education Providers; (m) Regional Plans; (n) Local 
and Regional Plan Modification; (o) Improved Information about 
Potential Training Program Providers; (p) Sanctions on Under-performing 
States; (q) Colocation of Wagner-Peyser Services; (r) Partners Required 
to Pay their Share for Proportionate Use of One-stop Delivery System; 
(s) Establishing Training Provider Eligibility Procedures, Including 
Adding Registered Apprenticeship; (t) Determining Eligibility of New 
and Previously Eligible Providers; (u) Biennial Review of Eligibility; 
(v) Disseminating the Training Provider List with Accompanying 
Information; and (w) Migrant and Seasonal Farmworker (MSFW) Housing.
    The Department emphasizes that many of the proposed provisions in 
this WIOA-required NPRM are also existing requirements under WIA. For 
example, the requirement that States ``prepare annual reports'' is a 
current requirement under WIA that States routinely undertake. 
Accordingly, our regulatory analysis focuses on ``new'' benefits, 
costs, and transfers that can be attributed exclusively to the 
enactment of WIOA, as addressed in this NPRM. Much of WIA's 
infrastructure and operations are carried forward under WIOA and, 
therefore, are not considered ``new'' cost burdens under this NPRM.
a. New State Workforce Development Board Membership Requirements
    States must establish State WDBs in accordance with the 
requirements of WIOA sec. 101. Under WIOA sec. 101(b)(1)(C)(i), the 
majority of the State WDB representatives must be from businesses or 
organizations in the State. These representatives must be owners or 
chief executives or operating officers of the businesses or executives 
with optimum policy-making or hiring authority. WIOA sec. 
101(b)(1)(C)(iii)(I) requires the Governor to appoint to the State WDB 
representatives of government that include the lead State officials 
with primary responsibility for each core program and two or more Chief 
Elected Officials (CEOs) that represent both cities and counties, where 
appropriate. In accordance with WIOA sec. 101(b)(2), State WDB 
membership must represent the diverse geographic areas of the State.
Costs
    To estimate State WDB costs, the Department multiplied the 
estimated average number of managers per State (1) by the time required 
to adjust the State WDB membership (20 hours) and by the hourly 
compensation rate. We repeated the calculation for the following 
occupational categories: Legal counsel staff (1 staff member for 15 
hours), technical staff (2 staff for 20 hours each), and administrative 
staff (1 staff member for 20 hours). We summed the labor cost for all 
four personnel categories ($5,597) and multiplied the result by the 
number of States (56). This would result in a one-time cost of $313,435 
in the first year of the proposed rule, which amounts to an average 
annual cost of $31,343.
b. Development and Continuous Improvement of the Workforce Development 
System
    WIOA sec. 101(d)(3)(A) through (G) require that the State WDB 
assist the Governor in the development and continuous improvement of 
the State's workforce development system, including identifying 
barriers and means for removing barriers to aligning programs and 
activities; developing or expanding sector-based training and career 
pathways proven to support individuals to seeking to enter and retain 
employment; developing customer outreach strategies; identifying 
regions and designating local workforce development areas; developing 
and continuously improving the one-stop system; and developing 
strategies to train and inform staff.
Costs
    The Department estimated the State WDBs' annual labor costs for 
developing or expanding sector strategies by multiplying the estimated 
average number of managers per State (1) by the time required to review 
the workforce development system (300 hours) and the hourly 
compensation rate. We performed the same calculation for the technical 
staff (2 staff for 1,260 hours each). We summed the labor cost for both 
categories ($190,516) and multiplied the result by the number of States 
that do not have extensive and systematic sector strategies (21). Over 
the 10-year period, this calculation yields an estimated recurring 
annual cost of $4,000,838.
    Similarly, the State WDBs' annual labor cost for expanding career 
pathways strategies was estimated by multiplying the estimated average 
number of managers per State (1) by the time required to review the 
workforce development system (300 hours) and the hourly compensation 
rate. The Department repeated the calculation for the technical staff 
(2 staff for 1,260 hours each). We summed the labor cost for the two 
occupational categories ($190,516) and multiplied the result by the 
number of States that do not have policies for career pathways 
(27).\17\ Over the 10-year period, this calculation yields an estimated 
recurring annual cost of $5,143,934.
---------------------------------------------------------------------------

    \17\ The number of States that have not established career 
pathways is provided in the ``National Dialogue on Career Pathways 
Viewing Party Guide.''
---------------------------------------------------------------------------

    The Department estimated the labor cost that State WDBs would incur 
to identify regions by multiplying the estimated average number of 
managers per State (1) by the time required to review the workforce 
development system (40 hours) and the hourly compensation rate. We 
performed the same calculation for the following occupational 
categories: legal counsel staff (1 staff member for 40 hours), 
technical staff (1 staff member for 80 hours), and administrative staff 
(1 staff member for 20 hours). We summed the labor cost for all four 
personnel categories ($11,268) and multiplied the result by the number 
of States (56) to estimate this one-time cost of $631,001. Over the 10-
year period, this calculation

[[Page 20819]]

yields an average annual cost of $63,100.
    The sum of these costs yields a total one-time cost of $631,001 and 
an annual cost of $9,144,772, which results in a total average annual 
cost of $9,207,872 for individuals from the State level to review the 
workforce development system.
c. Development of Statewide Policies Affecting the State's One-Stop 
System
    Under WIOA sec. 101(d)(6), State WDBs must assist State Governors 
in developing and reviewing statewide policies affecting the 
coordinated provision of services through the State's one-stop delivery 
system, including policies concerning objective criteria for Local 
Boards to assess one-stop centers, guidance for the allocation of one-
stop center infrastructure funds, and policies relating to the roles 
and contributions of one-stop partners within the one-stop delivery 
system.
Costs
    The Department estimated the labor cost that State WDBs would incur 
by multiplying the estimated average number of managers per State (1) 
by the time required to provide objective criteria and procedures (40 
hours) and the hourly compensation rate. We performed the same 
calculation for the legal counsel staff (1 staff member for 40 hours) 
and technical staff (2 staff for 120 hours). We summed the labor cost 
for all three personnel categories ($21,469) and multiplied the result 
by the number of States (56) to estimate this one-time cost at 
$1,202,284, which results in an average annual cost of $120,228.
d. Development of Strategies for Technological Improvements
    Under WIOA sec. 101(d)(7), State WDBs must assist State Governors 
in the development of strategies for technological improvements to 
facilitate access and quality of services and activities provided 
through the one-stop delivery system. These strategies include 
improvements to enhance digital literacy skills, accelerate acquisition 
of skills and recognized post-secondary credentials by participants, 
strengthen professional development of providers and workforce 
professionals, and ensure technology is accessible to individuals with 
disabilities and individuals residing in remote areas.
Costs
    The Department estimated the labor cost that State WDBs would incur 
by multiplying the estimated average number of managers per State (1) 
by the time required to develop strategies (20 hours) and the hourly 
compensation rate. We repeated the calculation for the technical staff 
(1 staff member for 40 hours). We summed the labor cost for both 
categories ($4,094) and multiplied the result by the number of States 
(56) to estimate a recurring annual cost of $229,291.
e. State Plan Modification
    Under WIOA sec. 102(c)(3)(B), a Governor may submit a modification 
of its Unified State Plan at any time during the 4-year period of the 
Plan. Under WIOA sec. 102(c)(3)(A), at a minimum, a State is required 
to submit modifications to its Unified State Plan at the end of the 
first 2-year period of any 4-year plan and also under specific 
circumstances.
    The Department expects that the initial 4-year State Plans would be 
highly speculative. Therefore, we anticipate that some States would 
make substantial modifications to the State Plans based on the 
experiences gained by operating under WIOA for the first two years. 
Based on past experience, we do not expect any subsequent modifications 
to present a substantial burden.
Costs
    The Department estimated the labor cost the State WDBs would incur 
by multiplying the estimated average number of managers per State (1) 
by the time required to review and modify a 4-year State Plan (10 
hours) and the hourly compensation rate. We repeated the calculation 
for the following labor categories: legal counsel staff (1 staff member 
for 4 hours), technical staff (2 staff for 10 hours each), and 
administrative staff (1 staff member for 4 hours). We summed the labor 
cost for all four personnel categories ($2,411) and multiplied the 
result by the number of States (56) to estimate this one-time cost as 
$135,005, which results in an average annual cost of $13,501.
f. Identification of Regions
    Under WIOA sec. 101(d)(3)(E), State WDBs must assist State 
Governors in the identification of regions, including planning regions, 
for the purposes of WIOA sec. 106(a), and the designation of local 
areas under WIOA sec. 106, after consultation with Local Boards and 
CEOs. According to WIOA sec. 106(a)(1), identification of regions is 
part of the process for developing the State Plan, and is necessary to 
receive an allotment under other provisions of the statute.
Costs
    The Department estimated this labor cost for State WDBs by first 
multiplying the estimated average number of managers per State (2) by 
the time required to identify regions in the State (40 hours) and the 
hourly compensation rate. We performed the same calculation for the 
following occupational categories: legal counsel staff (1 staff member 
for 10 hours), technical staff (3 staff for 15 hours each), and 
administrative staff (2 staff for 10 hours each). We summed the labor 
cost for all four personnel categories ($9,833) and multiplied the 
result by the number of States (56) to estimate this cost as $550,633, 
occurring in 2016 and 2020 and resulting in an average annual cost of 
$110,127.
g. Appoint New Local Workforce Development Board and Appropriate 
Firewalls
    The Local WDB is appointed by the CEOs in each local area in 
accordance with State criteria established under WIOA sec. 107(b), and 
is certified by the Governor every two years, in accordance with WIOA 
sec. 107(c)(2). The procedures for sole-source selection of one-stop 
operators include requirements about maintaining written documentation 
and developing appropriate firewalls and conflict-of-interest policies. 
A Local Board can be selected as a one-stop operator through a sole-
source procurement only if the board establishes sufficient firewalls 
and conflict-of-interest policies and procedures that are approved by 
the Governor.
Costs
    The Department estimated the labor costs incurred by WDBs by 
multiplying the estimated average number of managers per WDB (1) by the 
time required to appoint a new Local Board (20 hours) and the hourly 
compensation rate. We performed the same calculation for the following 
occupational categories: legal counsel staff (1 staff member for 15 
hours), technical staff (2 staff for 20 hours each), and administrative 
staff (1 staff member for 20 hours). We summed the labor cost for the 
four occupational categories ($5,597) and multiplied the result by the 
number of WDBs (580) to estimate this one-time cost as $3,246,289, 
which results in an average annual cost of $324,629.
    Additionally, the Department estimated the labor cost for WDBs to 
develop written agreements by multiplying the estimated average number 
of managers per WDB (1) by the time required to develop written

[[Page 20820]]

agreements (8 hours) and the hourly compensation rate. We repeated the 
calculation for the legal counsel staff (1 staff member for 8 hours) 
and technical staff (1 staff member for 20 hours). We summed the labor 
cost for the three occupational categories ($2,411) and multiplied the 
result by the number of WDBs (580) to estimate this one-time cost as 
$1,398,484, which results in an average annual cost of $139,848.
    In total, these calculations yield a one-time cost of $4,644,773 
which results in an average annual cost of $464,477 for individuals 
from the local level to appoint new boards and set administrative 
firewalls that avoid conflicts of interest.
h. Career Pathways Development
    Under WIOA sec. 107(d)(5), Local Boards must, with representatives 
of secondary and post-secondary education programs, lead efforts to 
develop and implement career pathways within the local area by aligning 
the employment, training, education, and supportive services that are 
needed by adults and youth, particularly individuals with barriers to 
employment.
Costs
    The Department estimated the labor cost for WDBs by first 
multiplying the estimated average number of managers per WDB (1) by the 
time required to develop and implement career pathways (80 hours) and 
the hourly compensation rate. We performed the same calculation for the 
following occupational categories: legal counsel staff (1 staff member 
for 10 hours), technical staff (1 staff member for 80 hours), and 
administrative staff (1 staff member for 20 hours). We summed the labor 
cost for all four personnel categories ($12,186) and multiplied the 
result by the number of WDBs (580) to estimate this recurring annual 
cost of $7,067,938.
i. Development of Proven and Promising Practices
    Under WIOA sec. 107(d)(6), Local Boards must lead efforts in the 
local area to identify and promote proven and promising strategies and 
initiatives for meeting the needs of employers, workers, and jobseekers 
(including individuals with barriers to employment), and identify and 
disseminate information on proven and promising practices carried out 
in other local areas for meeting such needs.
Costs
    For State WDBs, the Department estimated this labor cost by first 
multiplying the estimated average number of managers per State (1) by 
the time required to identify and promote proven strategies (20 hours) 
and the hourly compensation rate. We performed the same calculation for 
the following occupational categories: legal counsel staff (1 staff 
member for 10 hours), technical staff (1 staff member for 40 hours), 
and administrative staff (1 staff member for 15 hours). We summed the 
labor cost for all four personnel categories ($5,143) and multiplied 
the result by the number of States (56) to estimate this recurring 
annual cost of $287,985.
j. Technology
    Under WIOA sec. 107(d)(7), Local Boards must develop strategies for 
using technology to maximize the accessibility and effectiveness of the 
local workforce development system for employers, workers, and 
jobseekers by facilitating access to services provided through the one-
stop delivery system, facilitating connections among the intake and 
case-management information systems of the one-stop partner programs, 
identifying strategies for better meeting the needs of individuals with 
barriers to employment, and leveraging resources and capacity within 
the local workforce development system.
Costs
    The Department estimated the cost for Local WDBs by first 
multiplying the estimated average number of managers per WDB (1) by the 
time required to develop technology strategies (20 hours) and the 
hourly compensation rate. We performed the same calculation for the 
technical staff (1 staff member for 40 hours). We summed the labor cost 
for these two categories ($4,094) and multiplied the result by the 
number of WDBs (580) to estimate this recurring annual cost of 
$2,374,798.
k. Selection of One-Stop Operators
    Under WIOA sec. 107(d)(10)(A), consistent with WIOA sec. 121(d), 
and with the agreement of the CEO for the local area, Local Boards must 
designate or certify one-stop operators and may terminate for cause the 
eligibility of such operators. WIOA sec. 121(d)(2)(A) allows for 
selection of a one-stop operator only through a competitive process.
Costs
    The Department estimated the cost for Local WDBs by first 
multiplying the estimated average number of managers per WDB (1) by the 
time required to designate one-stop operators (80 hours) and the hourly 
compensation rate. We performed the same calculation for the following 
occupational categories: legal counsel staff (1 staff member for 40 
hours), technical staff (2 staff for 120 hours each), and 
administrative staff (1 staff member for 40 hours). We summed the labor 
costs for these four personnel categories ($25,393) and multiplied the 
result by the number of WDBs (580) to estimate this quadrennial cost of 
$6,348,180. Over the 10-year period, this calculation yields an average 
annual cost of $1,904,454.
l. Coordination With Education Providers
    Under WIOA sec. 107(d)(11), Local Boards must coordinate activities 
with education and training providers in the local area, including 
providers of workforce investment activities, providers of adult 
education and literacy activities under title II of WIOA, certain 
providers of career and technical education, and local agencies 
administering certain plans under the Rehabilitation Act of 1973.
Costs
    For State WDBs, the Department estimated this labor cost by first 
multiplying the estimated average number of managers per State (1) by 
the time required to coordinate activities with local education and 
training providers (30 hours) and the hourly compensation rate. We 
performed the same calculation for the following occupational 
categories: legal counsel staff (1 staff member for 10 hours), 
technical staff (1 staff member for 40 hours), and administrative staff 
(1 staff member for 10 hours). We summed the labor cost for all four 
personnel categories ($5,706) and multiplied the result by the number 
of States (56) to estimate this recurring annual cost of $319,528.
m. Regional Plans
    WIOA sec. 106(c)(2) requires Local Boards and CEOs within a 
planning region to prepare, submit, and obtain approval of a single 
regional plan that includes a description of the activities described 
in the statute and that incorporates local plans for each of the local 
areas in the planning region.
Costs
    For Local WDBs, the Department estimated this cost by first 
multiplying the estimated average number of managers per WDB (2) by the 
time required to prepare, submit, and obtain approval of a single 
regional plan (20 hours) and the hourly compensation rate. We performed 
the same calculation for the following occupational categories: legal 
counsel staff (1 staff

[[Page 20821]]

member for 8 hours), technical staff (2 staff for 40 hours), and 
administrative staff (1 staff member for 8 hours). We summed the labor 
cost for the four occupational categories ($8,916) and multiplied the 
result by the number of WDBs (580) to estimate this cost as $5,171,336, 
which occurs in 2016 and 2020. This results in an average annual cost 
of $1,034,267.
n. Local and Regional Plan Modification
    Under WIOA sec. 108(a), each Local Board, in partnership with the 
CEO, must review the local plan every 2 years and submit a modification 
as needed, based on significant changes in labor market and economic 
conditions and other factors. These factors include changes to local 
economic conditions, changes in the financing available to support WIOA 
title I and partner-provided WIOA services, changes to the Local Board 
structure, or a need to revise strategies to meet performance goals. If 
the local area is part of a planning region, the Local Board must 
comply with WIOA sec. 106(c) in the preparation and submission of a 
regional plan.
Costs
    For Local WDBs, the Department estimated the local plan 
modification cost by first multiplying the estimated average number of 
managers per WDB (1) by the time required to review and modify the 4-
year plan (10 hours) and the hourly compensation rate. We performed the 
same calculation for the following occupational categories: Legal 
counsel staff (1 staff member for 4 hours), technical staff (2 staff 
for 10 hours), and administrative staff (1 staff member for 4 hours). 
We summed the labor cost for all four personnel categories ($2,411) and 
multiplied the result by the number of WDBs (580) to estimate this one-
time cost of $1,398,269, occurring in 2018. Over the 10-year period, 
this calculation yields an average annual cost of $139,827.
    Similarly, the Department estimated the regional plan modification 
cost for Local WDBs by first multiplying the estimated average number 
of managers per regional board (2) by the time required to review and 
modify the 4-year plan (10 hours) and the hourly compensation rate. We 
performed the same calculation for the following occupational 
categories: legal counsel staff (1 staff member for 4 hours), technical 
staff (2 staff for 20 hours each), and administrative staff (1 staff 
member for 5 hours). We summed the labor cost for all four personnel 
categories ($4,486) and multiplied the result by the number of regional 
boards (580) to estimate a cost of $1,345,766, occurring once every 
four years. Over the 10-year period, this calculation yields an average 
annual cost of $269,153.
    The sum of these costs yields a 10-year cost of $4,089,800, which 
results in an average annual cost of $408,980 for individuals from the 
Local WDBs to review and modify the 4-year plan.
o. Improved Information About Potential Training Program Providers
    WIOA sec. 116 establishes performance accountability measures and 
performance reporting requirements to assess the effectiveness of 
States and local areas in achieving positive outcomes for individuals 
served by the core programs. The performance accountability measures 
will provide workers with better information about potential training 
program providers and enable them to make more informed choices about 
programs to pursue. The information analyzed and published by the 
boards about local labor markets also will assist trainees and 
providers in targeting their efforts and developing reasonable 
expectations about outcomes.
Costs
    At the State level for DOL programs, the Department estimated this 
labor cost by first multiplying the estimated average number of 
managers per State (1) by the time required to provide additional 
information about eligible training program providers (32 hours) and 
the hourly compensation rate. We performed the same calculation for the 
technical staff (2 staff for 40 hours each) and administrative staff (1 
staff member for 80 hours). We summed the labor cost for all three 
personnel categories ($9,854) and multiplied the result by the number 
of States (56) to estimate this recurring annual cost of $551,826.
p. Sanctions on Under-Performing States
    Section 116(f)(1)(B) of WIOA requires the Department to assess a 
sanction if ``a State fails to submit a report under subsection (d) for 
any program year.'' Three reports are required under WIOA sec. 116(d): 
The State annual performance reports, the local area performance 
reports, and the ETP performance reports. Of these, only the State 
annual performance reports must be submitted by the State to the 
Secretary of Labor. Section 116(f)(1) of WIOA requires that sanctions 
for performance failure be based on the primary indicators of 
performance.
    The sanctions will alter Federal transfer payments.\18\ Transfer 
payments, as defined by OMB Circular A-4, are payments from one group 
to another that do not affect total resources available to society. The 
Department requests comment and data that would allow for estimation of 
the transfer that would result from the sanctions provision.
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    \18\ The Department transfers funds to each State through a 
formal grant process. States may set aside a portion of these funds 
for discretionary use under WIOA. If a State were sanctioned, we 
would de-obligate the funds comprising the penalty from the State's 
set-aside, thereby reducing funding without incurring additional 
costs.
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Costs
    At the State level, the Department estimated the costs resulting 
from labor requirements by first multiplying the estimated average 
number of managers per State (1), the time required to evaluate State 
performance (40 hours), and the hourly compensation rate. We performed 
the same calculation for technical staff (1 staff member for 80 hours) 
and administrative staff (1 staff member for 40 hours). We summed the 
labor cost for all three personnel categories ($9,302) and multiplied 
the result by the number of States (56) to estimate a recurring annual 
transfer of $520,939.
    The Department estimates that 56 States will be impacted by this 
annual cost because we have determined that 56 States will calculate, 
annually, the performance levels of each State's core programs. Each 
State will do this on an annual basis in order to determine if the 
State is subject to sanctions, as discussed in proposed Sec.  677.190 
of this part, by comparing those levels against the negotiated levels 
of performance that the State has provided for in the State Plan.
q. Colocation of Wagner-Peyser Services
    WIOA sec. 121(e)(3) requires colocation of Wagner-Peyser Employment 
Service offices and one-stop centers established under title I of WIOA. 
Colocation is intended to improve service delivery, avoid duplication 
of services, and enhance coordination of services, including location 
of staff to ensure access to services in underserved areas.
Costs
    At the State level for DOL programs, the Department estimated this 
labor cost by first multiplying the estimated average number of 
managers per State (10), the time required to collocate Wagner-Peyser 
Services (40 hours), and the hourly compensation rate. We

[[Page 20822]]

performed the same calculation for the following occupational 
categories: legal counsel staff (10 staff for 10 hours each), technical 
staff (20 staff at 25 hours each), and administrative staff (10 staff 
for 5 hours each). We summed the labor cost for all four personnel 
categories ($69,415) and multiplied the result by the number of States 
without collocated Wagner-Peyser Services (10) to estimate a one-time 
cost of $694,152, which results in an annual cost of $69,415.
    At the State level, the Department estimated consultant costs by 
multiplying the estimated consultant costs ($10,000) by the number of 
States without collocated Wagner-Peyser Services (10). This calculation 
yields an estimated one-time cost of $100,000, resulting in an average 
annual cost of $10,000.
    At the local level, the Department estimated labor costs by first 
multiplying the estimated average number of managers for all local 
entities within a State (100), the time required to collocate Wagner-
Peyser Services (40 hours), and the hourly compensation rate. We 
performed the same calculation for the technical staff (200 staff for 
25 hours each) and administrative staff (100 staff for 5 hours each). 
We summed the labor cost for all three personnel categories ($631,098) 
and multiplied the result by the number of local areas without 
collocated Wagner-Peyser offices and one-stops (100) to estimate a one-
time cost of $63,109,800, resulting in an annual cost of $6,310,980.
    The sum of these costs yields a one-time cost of $63,903,952, which 
results in an average annual cost of $6,390,395 for individuals from 
the State and local levels to collocate Wagner-Peyser Services.
r. Partners Required To Pay Their Share for Proportionate Use of One-
stop Delivery System
    An important goal under both the local and State funding mechanisms 
is to ensure that each one-stop partner contributes its proportional 
share to the funding of one-stop infrastructure costs, consistent with 
Federal cost principles. Under WIOA sec. 121(h), in general, State 
Governors must ensure that costs are appropriately shared by one-stop 
partners. Contributions must be based on proportional share of use and 
all funds must be spent solely for allowable purposes in a manner 
consistent with the applicable authorizing statute and all other 
applicable legal requirements, including Federal cost principles.
    This provision will alter Federal transfer payments, and the 
Department requests comment and data that would allow for estimation of 
this rule-induced transfer.\19\
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    \19\ The Department distributes funds through a combination of 
multi-step formula distributions, Title III (Wagner-Peyser) 
distribution, and national grant competitions that award funds 
directly to partners. The Department supplies funding to cover 
payments for partners proportionate to their use of one-stop 
delivery systems, although partners may instead opt to use pay-in-
kind or other leveraged funds.
---------------------------------------------------------------------------

Costs
    At the State level, the Department estimated costs related to this 
provision (e.g., the cost of developing memoranda of understanding) by 
first multiplying the estimated average number of managers per State 
(50), the time required for States to comply with payment requirements 
proportional to use of one-stop delivery systems (40 hours), and the 
hourly compensation rate. We performed the same calculation for the 
following occupational categories: Legal counsel staff (50 staff for 1 
hour each), technical staff (100 staff for 40 hours each), and 
administrative staff (50 staff for 5 hours each). We summed these 
products for all four personnel categories ($419,560) and multiplied 
the result by the number of States that need to pay their proportional 
share (54) to estimate transfer of $22,656,251 occurring once every 
three years, resulting in an average annual transfer of $6,796,875.
s. Establishing Training Provider Eligibility Procedures, Including 
Adding Registered Apprenticeship
    Under WIOA sec. 122, the Governor, after consultation with the 
State WDB, must establish criteria, information requirements, and 
procedures regarding the eligibility of providers of training services 
to receive funds under WIOA for the provision of training services in 
local areas in the State. Training providers, including those operating 
under the individual training account exceptions, must qualify as ETPs, 
except for those engaged in on-the-job and customized training (for 
which the Governor should establish qualifying procedures). Registered 
apprenticeship programs are included in the ETPL, provided the program 
remains eligible. Only providers that the State determines to be 
eligible under WIOA sec. 122 may receive training funds under WIOA 
title I-B.
Costs
    At the State level, the Department estimated this cost by first 
multiplying the estimated average number of managers per State (1), the 
time needed to establish procedures for training provider eligibility 
(40 hours), and the hourly compensation rate. We performed the same 
calculation for the legal counsel staff (1 staff member for 20 hours) 
and technical staff (1 staff member for 80 hours). We summed the labor 
cost for all three personnel categories ($9,450) and multiplied the 
result by the number of States that need to pay their proportional 
share (56) to estimate this one-time cost of $529,202, resulting in an 
annual cost of $52,920.
t. Determining Eligibility of New and Previously Eligible Providers
    Under the requirements of WIOA sec. 122, the procedures for 
determining eligibility of providers are established by the Governor, 
after consultation with the State WDB and include application and 
renewal procedures, eligibility criteria, and information requirements.
Costs
    At the State level for DOL programs, the Department estimated this 
labor cost by first multiplying the estimated average number of 
managers per State (1), the time needed to determine provider 
eligibility (40 hours), and the hourly compensation rate. We performed 
the same calculation for the technical staff (2 staff for 110 hours 
each) and administrative staff (2 staff for 50 hours each). We summed 
the labor cost for all three personnel categories ($20,386) and 
multiplied the result by the number of States (56) to estimate a one-
time cost of $1,141,628, resulting in an annual cost of $114,163.
u. Biennial Review of Eligibility
    Under WIOA sec. 122(c)(2), training provider eligibility criteria 
established under this provision must include procedures for biennial 
review and renewal of eligibility for providers of training services.
Costs
    At the State level, the Department estimated this labor cost by 
first multiplying the estimated average number of managers per State 
(1), the time needed to perform the eligibility review (30 hours), and 
the hourly compensation rate. We performed the same calculation for the 
technical staff (2 staff for 60 hours each) and administrative staff (2 
staff for 30 hours each). We summed the labor cost for all three 
personnel categories ($11,846) and multiplied the result by the number 
of States (56) to estimate cost of $663,395 that occurs four times over 
the 10-year analysis period, that is, an annual cost of $265,358.

[[Page 20823]]

v. Disseminating the Training Provider List With Accompanying 
Information
    Under WIOA sec. 122(d), the Governor must ensure preparation of an 
appropriate list of providers determined to be eligible under this 
section to offer a program in the State (and, as appropriate, in a 
local area), accompanied by information identifying the recognized 
post-secondary credential offered by the provider and other appropriate 
information. The list must be provided to the Local Boards in the 
State, and made available to such participants and to members of the 
public through the one-stop delivery system in the State.
Costs
    At the State level, the Department estimated this labor cost by 
first multiplying the estimated average number of managers per State 
(1), the time needed to disseminate the ETPL with accompanying 
information (30 hours), and the hourly compensation rate. We performed 
the same calculation for the following occupational categories: 
Technical staff (2 staff for 80 hours each), administrative staff (2 
staff for 45 hours), and IT reprogramming (database development) staff 
(2 staff for 125 hours each). We summed the labor cost for all four 
personnel categories ($30,449) and multiplied the result by the number 
of States (56) to estimate a one-time cost of $1,705,125, resulting in 
an annual cost of $170,513.
w. Migrant and Seasonal Farmworker Housing
    While bringing the Department's housing standards at 20 CFR 654 
(ETA Standards) under the Occupational Safety and Health Administration 
(OSHA) provisions set forth in 29 CFR 1910.142 will not completely 
remedy many of the inadequate housing conditions common among 
agricultural housing facilities, the Department anticipates the change 
will: (1) Update the housing standards as the OSHA provisions conform 
to slightly more modern standards; (2) streamline the compliance 
process for employers who will only need to look to one place to comply 
with housing standards; and (3) ease the administrative burden on State 
and Federal employees who conduct housing inspections as they will only 
need to learn and rely upon one set of housing standards.
    In estimating the impact of the proposed changes to 20 CFR 654, the 
Department consulted various agencies within DOL to uncover pertinent 
data. Such data includes the number of H-2A employers approved through 
the Office of Foreign Labor Certification (OFLC). The Department 
believes that reviewing H-2A employer data is useful as it represents a 
subset of population (and, therefore, a minimum) of the total number of 
employers that may be offering housing to agricultural workers and who 
may be affected by the proposed changes. The Department estimates that 
of the approximately 6,400 \20\ employers nationally who hire foreign 
workers under the H-2A program and who provide housing, the majority 
will not be affected by the proposed changes because it estimates that, 
nationally, OSHA housing standards apply more frequently than the ETA 
Standards in the context of housing investigations. Specifically, the 
Department estimates that every region, except the Northeast and 
Pacific Northwest, has agricultural housing that predominantly falls 
under the OSHA standards. However, the situation will vary from State 
to State. For example, Colorado reported that approximately 84 percent 
of the agricultural housing inspected in the State from July 1, 2014 to 
January 29, 2015 falls under the ETA standards. Wyoming reported that 
64 percent of the housing inspections over the course of a year fell 
under ETA standards.
---------------------------------------------------------------------------

    \20\ This number is derived from OFLC data on employers that 
have submitted H-2A applications. The Department extrapolated the 
number of unique employers from the full list of applications to 
avoid duplication and to identify the fewest employers that may be 
impacted by these proposed changes.
---------------------------------------------------------------------------

    However, the housing data currently available to DOL is limited. 
The Department collects agricultural housing information as it pertains 
to employers' compliance with the appropriate standards. The Department 
does not collect or track the number of agricultural housing units 
nationally that fall under the ETA versus the OSHA standards. To better 
understand the impact of the proposed regulations, the Department would 
like to know: (1) The approximate number of agricultural housing units 
in the United States provided by agricultural employers for 
farmworkers; (2) the approximate percentage of the total farmworker 
housing units that currently fall under the ETA Standards set forth in 
20 CFR 654; and (3) the estimated cost of bringing those housing units 
from the ETA Standards into compliance with the OSHA Standards. The 
Department would appreciate public feedback on the aforementioned data 
elements.
    Specifically, it would be helpful for DOL's analysis if: (1) There 
are State Workforce Agencies or States that would share any data on the 
total number of employer-provided agricultural housing units in the 
State and the percentage of those that are subject to the ETA 
Standards; and (2) agricultural employers would furnish estimated costs 
for bringing their farmworker housing units from ETA to OSHA Standards. 
The Department appreciates any such information that could assist in 
the development of the overall impact analysis.
5. Summary of Analysis
    Exhibit 3 summarizes the annual and total costs of the proposed 
rule. It summarizes the total 10-year total costs and the average 
annualized costs for each provision of the proposed rule. The exhibit 
also presents high-level benefits resulting from full WIOA 
implementation for each provision. These qualitative forecasts are 
predicated on program experience and are outcomes for which data will 
only become available after implementation. The Department estimates 
the average annual cost of the proposed rule over the 10-year period of 
analysis at $38.4 million. The largest contributor to this cost is the 
provision related to the development and improvement of the workforce 
development system, which amounts to an estimated $9.2 million per 
year. The next largest cost results from career pathways development at 
$7.1 million per year, followed by the cost of partners required to pay 
their share for proportionate use of one-stop delivery system at an 
estimated $6.8 million per year.

[[Page 20824]]



                               Exhibit 3--Costs of the Proposed Rule by Provision
----------------------------------------------------------------------------------------------------------------
                                        Total 10-year    Average annual
              Provision                     cost              cost          Percent of      Qualitative benefit
                                       (undiscounted)    (undiscounted)     total cost          highlights
----------------------------------------------------------------------------------------------------------------
(a) New State Workforce Development           $313,435           $31,343            0.08  Policy implementation
 Board Membership Requirements.                                                            efficiencies from
                                                                                           reduced size and
                                                                                           maneuverability.
(b) Development and Continuous              92,078,720         9,207,872           23.96  Mission clarification
 Improvement of the Workforce                                                              and ongoing
 Development System.                                                                       commitment should
                                                                                           foster future
                                                                                           envisioned benefits
                                                                                           continuing to accrue.
(c) Development of Statewide                 1,202,284           120,228            0.31  Mission clarification
 Policies Affecting the State's One-                                                       for State WDBs and
 stop System.                                                                              overall system
                                                                                           building capacity.
(d) Development of Strategies for            2,292,909           229,291            0.60  Recognition of the
 Technological Improvements.                                                               efficiencies
                                                                                           generated by
                                                                                           technology and
                                                                                           enhanced management
                                                                                           capabilities
                                                                                           especially utilizing
                                                                                           outcome data.
(e) State Plan Modification.........           135,005            13,501            0.04  More efficient use of
                                                                                           public resources;
                                                                                           enhanced customer
                                                                                           service; improved
                                                                                           program management
                                                                                           based on actual
                                                                                           client data.
(f) Identification of Regions.......         1,101,266           110,127            0.29  Enhanced employer and
                                                                                           employee services as
                                                                                           a result of
                                                                                           recognition of real
                                                                                           labor markets
                                                                                           (without artificial
                                                                                           jurisdictional
                                                                                           boundaries).
(g) Appoint New Local Workforce              4,644,773           464,477            1.21  Efficient use of board
 Development Board and Appropriate                                                         time; avoids
 Firewalls.                                                                                conflicts of interest
                                                                                           and negative
                                                                                           publicity;
                                                                                           administrative
                                                                                           savings.
(h) Career Pathways Development.....        70,679,380         7,067,938           18.39  Improved educational
                                                                                           and employment
                                                                                           outcomes; potential
                                                                                           employees are better
                                                                                           prepared for jobs.
(i) Development of Proven and                2,879,850           287,985            0.75  Improved job
 Promising Practices.                                                                      placements and
                                                                                           customer service.
(j) Technology......................        23,747,984         2,374,798            6.18  Improved customer
                                                                                           service; better
                                                                                           decision-making from
                                                                                           improved service
                                                                                           level data; reduced
                                                                                           paper costs, improved
                                                                                           collaboration across
                                                                                           service partners;
                                                                                           improved customer
                                                                                           service planning;
                                                                                           reduced duplication
                                                                                           of service intakes.
(k) Selection of the One-stop               19,044,540         1,904,454            4.95  Improved public
 Operator.                                                                                 confidence in the
                                                                                           process; avoided
                                                                                           conflicts of
                                                                                           interest.
(l) Coordination with Education              3,195,282           319,528            0.83  Improved preparation
 Providers.                                                                                of workers and youth
                                                                                           for future jobs;
                                                                                           enhanced placements
                                                                                           and outcomes.
(m) Regional Plans..................        10,342,671         1,034,267            2.69  Savings from expanded
                                                                                           collaboration;
                                                                                           increased services to
                                                                                           customers; reduced
                                                                                           administrative
                                                                                           overhead.
(n) Local and Regional Plan                  4,089,800           408,980            1.06  Increased coordination
 Modification.                                                                             of services leading
                                                                                           to resource
                                                                                           efficiencies;
                                                                                           transparency.
(o) Improved Information about               5,518,258           551,826            1.44  Improved customer
 Potential Training Program                                                                decision-making;
 Providers.                                                                                linkage of resources
                                                                                           to outcomes and
                                                                                           accountability for
                                                                                           training and improved
                                                                                           placement outcomes.
(p) Sanctions on Under-performing            5,209,389           520,939            1.36  Improved services;
 States.                                                                                   better use of WIOA
                                                                                           funds; enhanced
                                                                                           recognition of
                                                                                           performance
                                                                                           imperatives by States
                                                                                           and local areas; more
                                                                                           accountability.
(q) Co-location of Wagner-Peyser            63,903,952         6,390,395           16.63  Reduced administrative
 Services.                                                                                 overhead; improved
                                                                                           service delivery and
                                                                                           customer service;
                                                                                           more efficient and
                                                                                           effective public
                                                                                           administration.
(r) Partners Required to Pay their          67,968,752         6,796,875           17.68  Expanded system
 Share for Proportionate Use of One-                                                       cohesion; improved
 stop Delivery System.                                                                     service delivery;
                                                                                           avoidance of
                                                                                           fragmented or
                                                                                           duplication of
                                                                                           services.
(s) Establishing Training Provider             529,202            52,920            0.14  Increased training
 Eligibility Procedures, Including                                                         opportunities,
 Adding Registered Apprenticeship.                                                         especially for youth;
                                                                                           effective
                                                                                           administration
                                                                                           linking to
                                                                                           accountability and
                                                                                           outcomes.
(t) Determining Eligibility of New           1,141,628           114,163            0.30  Increased
 and Previously Eligible Providers.                                                        transparency; uniform
                                                                                           treatment of ETPs;
                                                                                           reduced incidents of
                                                                                           non-meritorious
                                                                                           performance.
(u) Biennial Review of Eligibility..         2,653,580           265,358            0.69  Increased competition
                                                                                           leading to more and
                                                                                           better placements.
(v) Disseminating the Training               1,705,125           170,513            0.44  More informed customer
 Provider List with Accompanying                                                           choice; clearer link
 Information.                                                                              of training resources
                                                                                           to desired outcomes;
                                                                                           more transparency.
                                     ----------------------------------------------------

[[Page 20825]]

 
(w) Migrant and Seasonal Farmworker                     Not quantified.                   More streamlined
 Housing.                                                                                  compliance process
                                                                                           for employers who
                                                                                           will only need to
                                                                                           look to one place to
                                                                                           comply with housing
                                                                                           standards. Eased
                                                                                           administrative burden
                                                                                           on State and Federal
                                                                                           employees who conduct
                                                                                           housing inspections
                                                                                           as they will only
                                                                                           need to learn and
                                                                                           rely on one set of
                                                                                           housing standards.
                                     ----------------------------------------------------
    Total...........................       384,377,787        38,437,778          100.00  ......................
----------------------------------------------------------------------------------------------------------------
Note: Totals might not sum due to rounding.

    Exhibit 4 summarizes the first-year cost of each provision of the 
proposed rule. The Department estimates the total first-year cost of 
the proposed rule at $94.6 million. The largest contributor to the 
first-year cost is the provision related to the colocation of Wagner-
Peyser services $63.9 million. The next largest first-year cost results 
from development and continuous improvement of the workforce 
development system, amounting to $9.8 million, followed by the cost of 
career pathways development at $7.1 million.

      Exhibit 4--First-Year Cost of the Proposed Rule by Provision
------------------------------------------------------------------------
                                     Total first-year   Percent of total
                                           cost         first-year cost
------------------------------------------------------------------------
(a) New State Workforce                      $313,435               0.33
 Development Board Membership
 Requirements.....................
(b) Development and Continuous              9,775,773              10.34
 Improvement of the Workforce
 Development System...............
(c) Development of Statewide                1,202,284               1.27
 Policies Affecting the State's
 One-stop System..................
(d) Development of Strategies for             229,291               0.24
 Technological Improvements.......
(e) State Plan Modification.......                  0               0.00
(f) Identification of Regions.....                  0               0.00
(g) Appoint New Local Workforce             4,644,773               4.91
 Development Board and Appropriate
 Firewalls........................
(h) Career Pathways Development...          7,067,938               7.47
(i) Development of Proven and                 287,985               0.30
 Promising Practices..............
(j) Technology....................          2,374,798               2.51
(k) Selection of the One-stop                       0               0.00
 Operator.........................
(l) Coordination with Education               319,528               0.34
 Providers........................
(m) Regional Plans................                  0               0.00
(n) Local and Regional Plan                         0               0.00
 Modification.....................
(o) Improved Information about                551,826               0.58
 Potential Training Program
 Providers........................
(p) Sanctions on Under-performing             520,939               0.55
 States...........................
(q) Co-location of Wagner-Peyser           63,903,952              67.57
 Services.........................
(r) Partners Required to Pay their                  0               0.00
 Share for Proportionate Use of
 One-stop Delivery System.........
(s) Establishing Training Provider            529,202               0.56
 Eligibility Procedures, Including
 Adding Registered Apprenticeship.
(t) Determining Eligibility of New          1,141,628               1.21
 and Previously Eligible Providers
(u) Biennial Review of Eligibility                  0               0.00
(v) Disseminating the Training              1,705,125               1.80
 Provider List with Accompanying
 Information......................
                                   -------------------------------------
(w) Migrant and Seasonal
 Farmworker (MSFW) Housing........             Not quantified.
                                   -------------------------------------
    Total.........................         94,568,477             100.00
------------------------------------------------------------------------
Note: Totals might not sum due to rounding.

    Exhibit 5 presents the per-year and total estimated costs of the 
proposed rule. The total undiscounted cost of the rule sums to $384.4 
million over the 10-year analysis period, which is an average annual 
cost of $38.4 million per year. In total, the 10-year discounted costs 
of the proposed rule range from $305.6 million to $345.9 million (with 
7- and 3-percent discounting, respectively).
    To contextualize the cost of the proposed rule, the Department of 
Labor's average annual budget for WIA over the past three fiscal years 
was $2.8 billion. Thus, the annual additional cost of implementing the 
proposed rule is between 1.1 percent and 1.2 percent of the average 
annual cost of implementing WIA over the last three fiscal years (with 
3 percent and 7 percent discounting, respectively).

           Exhibit 5--Monetized Costs of the Proposed DOL Rule
                             [2013 dollars]
------------------------------------------------------------------------
                          Year                              Total costs
------------------------------------------------------------------------
2015....................................................     $94,568,478
2016....................................................      32,567,226
2017....................................................      43,153,328
2018....................................................      24,039,512
2019....................................................      20,497,077
2020....................................................      55,886,872
2021....................................................      20,497,077
2022....................................................      22,506,238

[[Page 20826]]

 
2023....................................................      43,153,328
2024....................................................      27,508,652
Undiscounted 10-year Total..............................     384,377,787
10-year Total with 3% Discounting.......................     345,897,084
10-year Total with 7% Discounting.......................     305,556,353
10-year Average.........................................      38,437,778
Annualized with 3% Discounting..........................      40,549,690
Annualized with 7% Discounting..........................      43,504,350
------------------------------------------------------------------------
Note: Totals might not sum due to rounding.

Benefits
    The Department was unable to quantify the benefits associated with 
the proposed rule because of data limitations and a lack of operational 
(WIOA) data or evaluation findings on the provisions of the proposed 
rule. Thus, the Department is unable to provide monetary estimates of 
several important benefits to society, including the increased 
employment opportunities for unemployed or under-employed U.S. workers, 
benefits of colocation of Wagner-Peyser Services, enhanced ETP process, 
regional planning, and evaluation of State programs. In support of a 
State's strategic plan and goals, State-conducted evaluation and 
research of programs would enable each State to test various 
interventions geared toward State conditions and opportunities. Results 
from such evaluation and research, if used by States, could improve 
service quality and effectiveness and, thus, potentially lead to higher 
employment rates and earnings among participants. Implementing various 
innovations that have been tested and found effective could also lead 
to lower unit costs and increased numbers of individuals served within 
a State. Sharing the findings nationally could lead to new service or 
management practices that other States could adopt to improve 
participant results, lower unit costs, or increase the number served.
    The Department invites comments regarding possible data sources or 
methodologies for estimating these benefits. In addition, the 
Department invites comments regarding other benefits that might arise 
from the proposed rule and how these benefits could be estimated.
    The Department provides a qualitative description of the 
anticipated WIOA benefits below. These qualitative forecasts are 
predicated on program experience and are outcomes for which data will 
only become available after implementation. Although these studies are 
largely based on programs and their existing requirements under WIA, we 
believe that they capture the essence of the societal benefits that can 
be expected from this proposed rule.
    Training's impact on placement. A recent study found that flexible 
and innovative training which is closely related to a real and in-
demand occupation is associated with better labor market outcomes for 
training participants. Youth disconnected from work and school can 
benefit from comprehensive and integrated models of training that 
combine education, occupational skills, and support services.\21\ 
However, the study noted that evidence for effective employment and 
training-related programs for youth is less extensive than for adults, 
and that there are fewer positive findings from evaluations.\22\ The 
WIA youth program remains largely untested.\23\ One study found that 
WIA training services increase placement rates by 4.4 percent among 
adults and by 5.9 percent among dislocated workers,\24\ while another 
study concluded that placement rates are 3 to 5 percent higher among 
all training recipients.\25\
---------------------------------------------------------------------------

    \21\ Department of Labor et al. ``What Works In Job Training: A 
Synthesis of the Evidence.'' July 2014.
    \22\ Ibid.
    \23\ Decker, Paul T. and Jillian A. Berk. 2011. ``Ten Years of 
the Workforce Investment Act (WIA): Interpreting the Research on WIA 
and Related Programs.'' Journal of Policy Analysis and Management 30 
(4): 906-926.
    \24\ Hollenbeck, Kevin, Daniel Schroeder, Christopher T. King, 
and Wei-Jang Huang. ``Net Impact Estimates for Services Provided 
through the Workforce Investment Act.'' Washington, DC: U.S. 
Department of Labor, 2005. Available at http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_puListingDetails&pub_id 
=2367&mp=y&start=81&sort=7.
    \25\ Heinrich, Carolyn J., Peter R. Mueser, and Kenneth R. 
Troske. ``Workforce Investment Act Non-Experimental Net Impact 
Evaluation.'' Columbia, MD: IMPAQ International, LLC, 2009.
---------------------------------------------------------------------------

    Participants in occupational training had a ``5 percentage points 
higher reemployment rate than those who received no training, and 
reemployment rates were highest among recipients of on-the-job 
training, a difference of 10 to 11 percentage points.'' \26\ However, 
the study found that training did not correspond to higher employment 
retention or earnings.\27\ A Youth Opportunity Grant Initiative study 
found that Youth Opportunity was successful at improving outcomes for 
high-poverty youth. Youth Opportunity also increased the labor-force 
participation rate overall and for subgroups, including 16- to 19-year-
old adolescents, women, African Americans, and in-school youth.\28\ 
Department-sponsored research found that participants who received core 
services (often funded by Employment Services) and other services in 
American Job Centers were more likely to enter and retain 
employment.\29\
---------------------------------------------------------------------------

    \26\ Park, Jooyoun. ``Does Occupational Training by the Trade 
Adjustment Assistance Program Really Help Reemployment? Success 
Measured as Matching.'' Washington, DC: U.S. Department of Labor, 
Employment and Training Administration, 2011.
    \27\ Park, Jooyoun. ``Does Occupational Training by the Trade 
Adjustment Assistance Program Really Help Reemployment? Success 
Measured as Matching.'' Washington, DC: U.S. Department of Labor, 
Employment and Training Administration, 2011.
    \28\ Jackson, Russell H., Jamie Diamandopoulos, Carol Pistorino, 
Paul Zador, John Lopdell, Juanita Lucas-McLean, and Lee Bruno. 
``Youth Opportunity Grant Initiative (YO).'' Houston, TX: Decision 
Information Resources, Inc., 2008. Available at http://wdr.doleta.gov/research/FullText_Documents/YO%20Impact%20and%20Synthesis%20Report.pdf.
    \29\ Office of Policy Development and Research, U.S. Department 
of Labor. ``Five-Year Research and Evaluation Strategic Plan Program 
Years 2012-2017.'' May 2013. Available at http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_resultDetails&pub_id=2516&mp=y.
---------------------------------------------------------------------------

    Training's impact on wages. Before enactment of WIA, Job Training 
Partnership Act services had a modest but statistically significant 
impact on the earnings of adult participants.\30\ WIA training 
increased participants' quarterly earnings by $660; these impacts 
persisted beyond two years and were largest among women.\31\ WIA adult 
program participants who received core services (e.g. skill assessment, 
labor market information) or intensive services (e.g. specialized 
assessments, counseling) earned up to $200 more per quarter than non-
WIA participants. Participants who received training services in 
addition to core and intensive services initially earned less but 
caught up within 10 quarters with the earnings of participants who only 
received core or intensive services; marginal benefits of training 
could exceed $400 per quarter. Earnings progressions were similar for 
WIA adult program participants and users of the

[[Page 20827]]

labor exchange only.\32\ WIA training services also improved 
participants' long-term wage rates, doubling earnings after 10 quarters 
over those not receiving training services.\33\ However, WIA 
participants who did not receive training earned $550 to $700 more in 
the first quarter after placement. The study also noted that 
individuals who did not receive training received effective short-term 
counseling that enabled them to gain an immediate advantage in the 
labor market.\34\
---------------------------------------------------------------------------

    \30\ Barnow, Burt, and Daniel Gubits. ``Review of Recent Pilot, 
Demonstration, Research, and Evaluation Initiatives to Assist in the 
Implementation of Programs under the Workforce Investment Act.'' 
Baltimore, MD: Johns Hopkins University, 2003. Available at http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_puListingDetails&pub_id=2365&mp=y&start=81
&sort=7.
    \31\ Barnow, Burt, and Daniel Gubits. ``Review of Recent Pilot, 
Demonstration, Research, and Evaluation Initiatives to Assist in the 
Implementation of Programs under the Workforce Investment Act.'' 
Baltimore, MD: Johns Hopkins University, 2003. Available at http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp__puListingDetails&pub__id=2365&mp=y&start=81&sort=7.
    \32\ Earnings Progression among Workforce Development 
Participants: Evidence from Washington State.'' Eugene, OR: 
University of Oregon, 2011. Available at http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp__puListingDetails&pub__id=2468&mp=y&start=1&sort=7.
    \33\ Heinrich, Carolyn J., Peter R. Mueser, and Kenneth R. 
Troske. ``Workforce Investment Act Non-Experimental Net Impact 
Evaluation.'' Columbia, MD: IMPAQ International, LLC, 2009.
    \34\ Heinrich, Carolyn J., Peter R. Mueser, and Kenneth R. 
Troske. ``Workforce Investment Act Non-Experimental Net Impact 
Evaluation.'' Columbia, MD: IMPAQ International, LLC, 2009. 
Available at http://wdr.doleta.gov/research/FullText_Documents/Workforce%20Investment%20Act%20Non-Experimental%20Net%20Impact%20Evaluation%20-%20Final%20Report.pdf.
---------------------------------------------------------------------------

    Another Department program, the Job Corps program for disadvantaged 
youth and young adults, produced sustained increases in earnings for 
participants in their early twenties. Students who completed Job Corps 
vocational training experienced average earnings increases by the 
fourth follow-up year over the comparison group, whereas those who did 
not complete training experienced no increase.\35\
---------------------------------------------------------------------------

    \35\ Gritz, Mark, and Terry Johnson. ``National Job Corps Study: 
Assessing Program Effects on Earnings for Students Achieving Key 
Program Milestones.'' Seattle, WA: Battelle Memorial Institute, 
2001. Available at http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_puListingDetails&pub_id=2257&mp=y&start=14
1&sort=7.
---------------------------------------------------------------------------

    Another publication also noted that, on average, adults experienced 
a $743 quarterly post-exit earnings boost.\36\
---------------------------------------------------------------------------

    \36\ Hollenbeck, Kevin, Daniel Schroeder, Christopher T. King, 
and Wei-Jang Huang. ``Net Impact Estimates for Services Provided 
through the Workforce Investment Act.'' Washington, DC: U.S. 
Department of Labor, 2005. Available at http://wdr.doleta.gov/research/FullText_Documents/Net%20Impact%20Estimates%20for%20Services%20Provided%20through%20the%20Workforce%20Investment%20Act-%20Final%20Report.pdf.
---------------------------------------------------------------------------

    Those who completed training experienced a 15-percent increase in 
employment rates and an increase in hourly wages of $1.21 relative to 
participants without training.\37\ Participation in WIA training also 
had a distinct positive, but smaller, impact on employment and 
earnings, with employment 4.4 percentage points higher and quarterly 
earnings $660 higher than comparison group members.
---------------------------------------------------------------------------

    \37\ Needels, Karen, Jeanne Bellotti, Mina Dadgar, and Walter 
Nicholson. ``Evaluation of the Military Base National Emergency 
Grants: Final Report.'' Princeton, NJ: Mathematica Policy Research, 
2006.
---------------------------------------------------------------------------

    The following are channels through which these benefits might be 
achieved:
    Better information for workers. The accountability measures would 
provide workers with higher-quality information about potential 
training program providers and enable them to make better informed 
choices about which programs to pursue. The information analyzed and 
published by the WDBs about local labor markets also would help 
trainees and providers target their efforts and develop reasonable 
expectations about outcomes.
    Consumers of educational services, including disadvantaged and 
displaced workers, require reliable information on the value of 
different training options to make informed choices. Displaced workers 
tend to be farther removed from schooling and lack information about 
available courses and the fields with the highest financial return.\38\ 
Given these information gaps and financial pressures, it is important 
that displaced workers learn of the returns to various training 
plans.\39\ Still, one study determined that the cost-effectiveness of 
WIA job training for disadvantaged workers is ``modestly positive'' due 
perhaps to the limited sample of States on which the research was 
based.\40\
---------------------------------------------------------------------------

    \38\ Greenstone, Michael, and Adam Looney. ``Building America's 
Job Skills with Effective Workforce Programs: A Training Strategy to 
Raise Wages and Increase Work Opportunities.'' Washington, DC: 
Brookings Institution, 2011.
    \39\ Jacobson, Louis, Robert LaLonde, and Daniel Sullivan. 
``Policies to reduce high-tenured displaced workers' earnings losses 
through retraining.'' Discussion Paper 2011-11, The Hamilton 
Project, Brookings Institution, Washington, DC, 2011.
    \40\ Heinrich, Carolyn J., Peter R. Mueser, Kenneth R. Troske, 
Kyung-Seong Jeon, Daver C. Kahvecioglu. 2009 (November). ``New 
Estimates of Public Employment and Training Program Net Impacts: A 
Nonexperimental Evaluation of the Workforce Investment Act 
Program.'' Discussion Paper 4569, Institute for the Study of Labor 
(IZA), Bonn, Germany.
---------------------------------------------------------------------------

    Sanctions to under-performing States. WIOA requires the Department 
to place sanctions on States that under-perform for two consecutive 
years. The sanction would be five percent of set-aside funding. Having 
a clear and credible sanction will serve as an incentive for States and 
local entities to monitor performance more effectively and to intervene 
early in order to avoid the loss of funding.
    Evaluations of WIA indicate that sanctions have a larger influence 
on programs than incentives. Two-thirds of local workforce investment 
areas have indicated that the possibility of sanctions influenced their 
programs, whereas only slightly more than half indicated that 
incentives had an influence.\41\ Further, several Job Centers consider 
student placement outcomes in staff performance evaluations and pay for 
vocational instructors.\42\ This practice has significantly increased 
staff interest in successful student placement following program 
completion.\43\
---------------------------------------------------------------------------

    \41\ Dunham, Kate, Melissa Mack, Jeff Salzman, and Andrew 
Wiegand. ``Evaluation of the WIA Performance Measurement System: 
Survey Report.'' Oakland, CA: SPR Associates, 2005. Available at 
http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_puListingDetails&pub_id=2408&mp=y&start=41
&sort=7.
    \42\ Johnson, Terry, Mark Gritz, Russell Jackson, John 
Burghardt, Carol Boussy, Jan Leonard, and Carlyn Orians. ``National 
Job Corps Study: Report on the Process Analysis.'' Princeton, NJ: 
Mathematica Policy Research, 1999. Available at http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_puListingDetails&pub_id=2213&mp=y&start=20
1&sort=7.
    \43\ Ibid.
---------------------------------------------------------------------------

    Researchers expressed concerns over current WIA metrics for 
workforce development program performance. For example, in issuing high 
performance bonuses to States in recognition of high performance 
achievements, the metric negotiation process does not appropriately 
adjust for variations in economic and demographic characteristics or 
service mix.\44\ Additionally, the distribution of these bonuses does 
not directly correlate with program performance, with some lower 
performing States receiving larger bonuses than higher performing 
States.\45\
---------------------------------------------------------------------------

    \44\ Heinrich, Carolyn J. 2007. ``False or Fitting Recognition? 
The Use of High Performance Bonuses in Motivating Organizational 
Achievements.'' Journal of Policy Analysis and Management 26(2) 281-
304.
    \45\ Ibid.
---------------------------------------------------------------------------

    It is possible that the proposed rule might result in unintended 
consequences. For example, the efficacy of incentives may be reduced 
with poor measures, as compensation or recognition may not be 
commensurate with effort and subsequent performance, which could dampen 
employee motivation.\46\ Other unintended consequences may include 
distortion involving behavior intended to insure against the loss of 
compensation; also, misrepresentation of outcomes may occur.\47\ 
Researchers have expressed concerns about the current measures used to 
evaluate performance.\48\ High performance incentives may 
unintentionally impact performance negatively if they encourage 
programs to focus on receiving the award rather than improving program 
design, delivery, and outcomes. High performance

[[Page 20828]]

bonuses, therefore, could represent an inefficient use of 
resources.\49\
---------------------------------------------------------------------------

    \46\ Ibid.
    \47\ Ibid.
    \48\ Ibid.
    \49\ Wandner, Stephen, and Michael Wiseman. ``Financial 
performance incentives for United States government programs: 
Lessons learned from the Workforce Investment Act, Temporary 
Assistance to Needy Families, and food stamps.'' What the European 
Social Fund can learn from the WIA experience, Washington, DC 
Retrieved January 16 (2009): 2011.
---------------------------------------------------------------------------

    State performance accountability measures. This requirement would 
include significant data collection for Local Boards to address 
performance measures for the core programs in their jurisdictions. This 
data collection would permit the State WDBs to assess performance 
across each State. Training providers would be required to provide data 
to Local Boards, which would represent a cost in the form of increased 
data collection and processing. Employers and employees also would have 
to provide information to the training providers, which would take 
time. This provision, in combination with the board membership 
provision requiring employer/business representation, is expected to 
improve the quality of local training and, ultimately, the number and 
caliber of job placements.
    Implementation of follow-up measures, rather than termination-based 
measures, might improve long-term labor market outcomes, although some 
could divert resources from training activities.\50\
---------------------------------------------------------------------------

    \50\ Courty, Pascal, and Gerald Marschke. ``Making Government 
Accountable: Lessons from a Federal Job Training Program.'' Public 
Administration Review 67.5 (2007): 904-916.
---------------------------------------------------------------------------

    Before-after earning metrics capture the contribution of training 
to earnings potential and minimize incentives to select only training 
participants with high initial earnings.\51\ The study found that value 
added net of social cost is one objective that is too difficult to 
measure on a regular basis. With the exception of programs in a few 
States, current incentives do not reward enrollment of the least 
advantaged.\52\ In addition, the study noted evidence that the 
performance-standards can be ``gamed'' in an attempt to maximize their 
centers' measured performance.\53\
---------------------------------------------------------------------------

    \51\ Heckman, James J., Carolyn Heinrich, and Jeffrey A. Smith. 
1997. ``Assessing the Performance of Performance Standards in Public 
Bureaucracies.'' American Economic Review 87(2): 389-95.
    \52\ Ibid.
    \53\ Ibid.
---------------------------------------------------------------------------

    Pressure to meet performance levels could lead providers to focus 
on offering services to participants most likely to succeed. For 
example, current accountability measures might create incentives for 
training providers to screen participants for motivation, delay 
participation for those needing significant improvement, or discourage 
participation by those with high existing wages.\54\
---------------------------------------------------------------------------

    \54\ Dunham, Kate, Melissa Mack, Jeff Salzman, and Andrew 
Wiegand. ``Evaluation of the WIA Performance Measurement System: 
Survey Report.'' Oakland, CA: SPR Associates, 2005. Available at 
http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_puListingDetails&pub_id=2408&mp=y&start=41
&sort=7.
---------------------------------------------------------------------------

    The following subsections present additional channels by which 
economic benefits may be associated with various aspects of the 
proposed rule.
    Dislocated workers. A study found that for dislocated workers, 
receiving WIA services significantly increased employment rates by 13.5 
percent and boosted post-exit quarterly earnings by $951.\55\ However, 
another study found that training in the WIA dislocated worker program 
had a net benefit close to zero or even negative.\56\
---------------------------------------------------------------------------

    \55\ Hollenbeck, Kevin, Daniel Schroeder, Christopher T. King, 
and Wei-Jang Huang. ``Net Impact Estimates for Services Provided 
through the Workforce Investment Act.'' Washington, DC: U.S. 
Department of Labor, 2005. Available at http://wdr.doleta.gov/research/FullText_Documents/Net%20Impact%20Estimates%20for%20Services%20Provided%20through%20the%20Workforce%20Investment%20Act-%20Final%20Report.pdf.
    \56\ Heinrich, Carolyn J., Peter R. Mueser, and Kenneth R. 
Troske. ``Workforce Investment Act Non-Experimental Net Impact 
Evaluation.'' Columbia, MD: IMPAQ International, LLC, 2009. 
Available at http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_puListingDetails&pub_id=2419&mp=y&start=41
&sort=7.
---------------------------------------------------------------------------

    Self-employed individuals. Job seekers who received self-employment 
services started businesses sooner and had longer lasting businesses 
than nonparticipants. Self-employment assistance participants were 19 
times more likely to be self-employed than nonparticipants and 
expressed high levels of satisfaction with self-employment. A study of 
Maine, New Jersey, and New York programs found that participants were 
four times more likely to obtain employment of any kind than 
nonparticipants.\57\
---------------------------------------------------------------------------

    \57\ Kosanovich, William, Heather Fleck, Berwood Yost, Wendy 
Armon, and Sandra Siliezar. ``Comprehensive Assessment of Self-
Employment Assistance Programs.'' Arlington, VA: DTI Associates, 
2002. Available at http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_puListingDetails&pub_id=2293&mp=y&start=12
1&sort=7.
---------------------------------------------------------------------------

    Workers with disabilities. A study of individuals with disabilities 
enrolled in training for a broad array of occupations (including 
wastewater treatment, auto body repair, meat cutter/wrapper, clerical 
support staff, surgical tools technician, and veterinary assistant) 
found that the mean hourly wage and hours worked per quarter for 
program graduates were higher than for individuals who did not complete 
the program.
    In conclusion, after a review of the quantitative and qualitative 
analysis of the impacts of this NPRM, the Department has determined 
that the societal benefits justify the anticipated costs.

B. 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 general public and Federal agencies with an opportunity to 
comment on proposed and continuing collections of information in 
accordance with the PRA. See 44 U.S.C. 3506(c)(2)(A). This activity 
helps to ensure that the public understands the Department's collection 
instructions, respondents can provide the requested data in the desired 
format, reporting burden (time and financial resources) is minimized, 
collection instruments are clearly understood, and the Department can 
properly assess the impact of collection requirements on respondents. 
Furthermore, the PRA requires all Federal agencies to analyze proposed 
regulations for potential time burdens on the regulated community 
created by provisions in the proposed regulations, which require the 
submission of information. The information collection requirements must 
also be submitted to the OMB for approval.
    The Department notes that a Federal agency may not conduct or 
sponsor a collection of information unless it is approved by the OMB 
under the PRA and displays a currently valid OMB control number. The 
public is also not required to respond to a collection of information 
unless it displays a currently valid OMB control number. In addition, 
notwithstanding any other provisions of law, no person will be subject 
to penalty for failing to comply with a collection of information if 
the collection of information does not display a currently valid OMB 
control number (44 U.S.C. 3512).
    The information collections in this rule are summarized as follows. 
(Detailed information about the information collections identified in 
this summary is available in the section-

[[Page 20829]]

by-section discussion of this NPRM, Section IV.) The table below 
captures the current and proposed burden hours associated with the 
information collections.

                               Current and Proposed Information Collection Burdens
----------------------------------------------------------------------------------------------------------------
                                                                   Burden hours
                        OMB approval No.                             currently     Burden hours       Change
                                                                     approved        proposed
----------------------------------------------------------------------------------------------------------------
1205-0NEW.......................................................               0           8,550           8,550
1205-3NEW.......................................................       * 161,373         161,373               0
1205-0001.......................................................             416             416               0
1205-0039.......................................................           8,521           8,521               0
1205-0219.......................................................          38,610          38,610               0
1205-0426.......................................................          11,440          19,153           7,713
1205-0439.......................................................           1,006           1,066              60
1205-0461.......................................................           3,392           5,088           1,696
                                                                 -----------------------------------------------
    Total.......................................................         224,758         242,777          18,019
----------------------------------------------------------------------------------------------------------------
* OMB 1205-3NEW would not increase burden hours because it would consolidate information collections from three
  currently approved information collections: OMB 1205-0422, OMB 1205-0425, OMB 1205-0464.

    The Department anticipates that the above collections may be phased 
out or modified, as appropriate, as WIOA requirements are fully 
implemented.

    Agency: DOL-ETA.
    Title of Collection: State Training Provider Eligibility 
Collection.
    OMB Control Number: 1205-0NEW.
    Description: Under WIOA sec. 122, the Governor, after consultation 
with the State Board, must establish criteria, information 
requirements, and procedures regarding the eligibility of providers of 
training services to receive funds under WIOA for the provision of 
training services in local areas in the State. The proposed rule 
describes the process for adding ``new''' providers to the ETPL, 
explains the detailed application process for previously WIA-eligible 
providers to remain eligible under WIOA, describes the performance 
information that providers are required to submit to the State in order 
to establish or renew eligibility, and explains the requirements for 
distributing the ETPL and accompanying information about the programs 
and providers on the list.
    Affected Public: State, local, and tribal governments, and private 
sector.
    Obligation to Respond: Required to obtain or retain a benefit (WIOA 
sec. 122).
    Total Estimated Number of Respondents Annually: 11,400 (11,400 
additional respondents resulting from this rulemaking).
    Total Estimated Number of Annual Responses: 11,400 (11,400 
additional responses resulting from this rulemaking).
    Total Estimated Annual Time Burden: 8,550 hours (8,550 additional 
hours resulting from this rulemaking).
    Total Estimated Annual Other Costs Burden: $0 (no change as a 
result of this rulemaking).
    NPRM Sections Containing Information Collections Approved Under 
this Control Number: Sec.  680.450, Sec.  680.460, Sec.  680.490, Sec.  
680.500.
    Title of Collection: WIOA Performance Management and Information 
and Reporting System (YouthBuild, National Farmworkers Jobs Program, 
Indian and Native Americans Program).
    OMB Control Number: 1205-3NEW.
    Description: This new information collection will consolidate the 
existing information collections for YouthBuild, National Farmworkers 
Jobs Program, Indian and Native Americans Program participants. These 
information collections are currently approved under OMB Control 
Numbers 1205-0422, 1205-0425, and 1205-0464. The WIOA Performance 
Management and Information and Reporting System would standardize the 
initial application, quarterly, and annual reporting processes for 
program participants.
    Affected Public: State, local, and tribal governments, and private 
sector.
    Obligation to Respond: Required to obtain or retain benefits (WIOA, 
sections 166, 167, and 171).
    Total Estimated Number of Respondents Annually: 377 (no additional 
respondents resulting from this rulemaking).
    Total Estimated Number of Annual Responses: 29,682 (no additional 
respondents resulting from this rulemaking).
    Total Estimated Annual Time Burden: 161,373 hours (no additional 
respondents resulting from this rulemaking).
    Total Estimated Annual Other Costs Burden: $0 (no change as a 
result of this rulemaking).
    NPRM Sections Containing Information Collections Approved Under 
this Control Number: Sec.  684.420, Sec.  684.610, Sec.  684.700, Sec.  
684.800, Sec.  685.210, Sec.  685.400, Sec.  688.420, Sec.  688.610.

    Title of Collection: Work Application and Job Order Recordkeeping.
    OMB Control Number: 1205-0001.
    Description: The proposed rule would not affect the burden hours 
associated with creating work application and job order records. 
However, the rule would change the record retention requirements for 
work applications and job orders from 1 year to 3 years in order to 
align with other Wagner-Peyser record retention requirements.
    Affected Public: State governments.
    Obligation to Respond: Required to obtain or retain a benefit (WIOA 
sec. 121).
    Total Estimated Number of Respondents Annually: 52 (no change as a 
result of this rulemaking).
    Total Estimated Number of Annual Responses: 52 (no change as a 
result of this rulemaking).
    Total Estimated Annual Time Burden: 416 hours (no change as a 
result of this rulemaking).
    Total Estimated Annual Other Costs Burden: $0 (no change as a 
result of this rulemaking).
    NPRM Sections Containing Information Collections Approved Under 
this Control Number: Sec.  652.8.

    Title of Collection: Migrant and Seasonal Farmworker Monitoring 
Report and One-Stop Career Center Complaint/Referral Record.
    OMB Control Number: 1205-0039.
    Description: WIOA expands the existing complaint system under 20 
CFR

[[Page 20830]]

part 658 subpart E to require most employment-related law complaints by 
MSFWs to be recorded, referred, and tracked to resolution. Under 
existing regulations, employment-related law complaints by MSFWs are 
not recorded, referred, and tracked to resolution.
    Affected Public: State and local governments, and individuals.
    Obligation to Respond: Required to obtain or retain a benefit (WIOA 
sec. 167).
    Total Estimated Number of Respondents Annually: 3,586 (no change as 
a result of this rulemaking).
    Total Estimated Number of Annual Responses: 3,786 (no change as a 
result of this rulemaking).
    Total Estimated Annual Time Burden: 8,521 hours (no change as a 
result of this rulemaking).
    Total Estimated Annual Other Costs Burden: $0 (no change as a 
result of this rulemaking).
    NPRM Sections Containing Information Collections Approved Under 
this Control Number: Sec.  653.107, Sec.  653.108(g)(6), Sec.  
653.108(s), Sec.  653.108(i), Sec.  653.108(m), Sec.  653.410, Sec.  
658.601, Sec.  658.601(a).

    Title of Collection: Standard Job Corps Contractor Gathering 
Information.
    OMB Control Number: 1205-0219.
    Description: The proposed rule would retain the same information 
collection requirements as those currently found at 20 CFR 670.960, but 
would relocate the requirements to 20 CFR 686.945. Consistent with 
existing rules, the proposed rule would require the Department to 
provide guidelines for maintaining records for each student during 
enrollment and for disposition of records after separation. As a 
result, the Department does not anticipate any changes in the 
information collection.
    Affected Public: Private sector.
    Obligation to Respond: Required to obtain or retain a benefit (WIOA 
sec. 147).
    Total Estimated Number of Respondents Annually: 97 (no change as a 
result of this rulemaking).
    Total Estimated Number of Annual Responses: 184,628 (no change as a 
result of this rulemaking).
    Total Estimated Annual Time Burden: 38,610 hours (no change as a 
result of this rulemaking).
    Total Estimated Annual Other Costs Burden: $0 (no change as a 
result of this rulemaking).
    NPRM Sections Containing Information Collections Approved Under 
this Control Number: Sec.  686.945.

    Title of Collection: Placement Verification and Follow-up of Job 
Corps Participants.
    OMB Control Number: 1205-0426.
    Description: Job Corps' performance management system, which 
includes the OMS, is a well-established measurement system the Job 
Corps community has been using to track performance of centers and 
service providers for many years. It will be updated to reflect the new 
requirements of WIOA, including the new primary indicators of 
performance, but may also include breakouts of data that will help 
program managers target interventions in order to achieve the primary 
indicators. As a result, additional information would be collected from 
respondents.
    Affected Public: Individuals or households and private sector.
    Obligation to Respond: Voluntary.
    Total Estimated Number of Respondents Annually: 88,060 (34,737 
additional respondents resulting from this rulemaking).
    Total Estimated Number of Annual Responses: 88,060 (34,737 
additional responses resulting from this rulemaking).
    Total Estimated Annual Time Burden: 19,153 hours (7,713 additional 
hours resulting from this rulemaking).
    Total Estimated Annual Other Costs Burden: $0 (no change as a 
result of this rulemaking).
    NPRM Sections Containing Information Collections Approved Under 
this Control Number: Sec.  686.945, Sec.  686.955, Sec.  686.1000, 
Sec.  686.1010, Sec.  686.1020, Sec.  686.1030, and Sec.  686.1040.

    Title of Collection: National Emergency Grant Assistance--
Application and Reporting Procedures.
    OMB Control Number: 1205-0439.
    Description: Specified activities must be conducted before an 
application for a National Dislocated Worker Grant (NDWG) is submitted. 
The proposed rule requires that a project implementation plan, which is 
already required for all NEGs under WIA, be submitted post-NDWG award. 
However, currently this requirement is included only in guidance; this 
NPRM proposes to add this requirement to the regulations. The project 
implementation plan includes more detailed information about project 
operations than is required for the initial application. This 
information allows the Department to provide grantees with targeted 
technical assistance, and to exercise appropriate oversight and 
monitoring over the NDWG award.
    Affected Public: State, local, and tribal governments.
    Obligation to Respond: Required to obtain or retain a benefit (WIOA 
sec. 170).
    Total Estimated Number of Respondents Annually: 159 (9 additional 
respondents resulting from this rulemaking).
    Total Estimated Number of Annual Responses: 1,574 (89 additional 
responses resulting from this rulemaking).
    Total Estimated Annual Time Burden: 1,066 hours (60 additional 
hours resulting from this rulemaking).
    Total Estimated Annual Other Costs Burden: $0 (no change as a 
result of this rulemaking).
    NPRM Sections Containing Information Collections Approved Under 
this Control Number: Sec.  687.150.

    Title of Collection: Employment and Training Administration 
Financial Report Form 9130.
    OMB Control Number: 1205-0461.
    Description: Existing rules require grantees to submit quarterly 
financial reports. The proposed rule reflects OMB's Uniform Guidance, 
which standardizes the administrative, cost, and audit provisions for 
all grants and cooperative agreements provided under part 683. The 
proposed rule would establish consistent and uniform guidance that 
increases accountability and transparency, promotes fiscal integrity, 
and reduces duplication in the quarterly financial reports.
    Affected Public: State, local, and tribal governments, and private 
sector.
    Obligation to Respond: Required to obtain or retain a benefit (2 
CFR 200.327).
    Total Estimated Number of Respondents Annually: 848 (no change as a 
result of this rulemaking).
    Total Estimated Number of Annual Responses: 6,784 (no change as a 
result of this rulemaking).
    Total Estimated Annual Time Burden: 5,088 hours (1,696 additional 
hours as a result of this rulemaking).
    Total Estimated Annual Other Costs Burden: $0 (no change as a 
result of this rulemaking).
    NPRM Sections Containing Information Collections Approved Under 
this Control Number: Sec.  681.430, Sec.  683.150, Sec.  683.200, Sec.  
683.300, Sec.  683.730, Sec.  683.740, Sec.  683.750.

    Interested parties may obtain a copy free of charge of one or more 
of the information collection requests submitted to the OMB on the 
reginfo.gov Web site 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. A free copy of the 
requests may also be obtained by contacting the person named in the 
ADDRESSES section of this preamble.

[[Page 20831]]

    As noted in the ADDRESSES section of this NPRM, interested parties 
may send comments about the information collections to the Department 
throughout the 60-day comment period and/or to the OMB within 30 days 
of publication of this notice in the Federal Register. In order to help 
ensure appropriate consideration, comments should mention the 
applicable OMB Control Number(s). The Department and OMB are 
particularly interested in comments that:
     Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
     Evaluate the accuracy of the agency's estimate of the 
burden of the proposed collection of information, including the 
validity of the methodology and assumptions used;
     Enhance the quality, utility, and clarity of the 
information to be collected; and
     Minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses.
    The Department notes that in order to meet WIOA requirements, 
several information collections mentioned in this NPRM need to be in 
place prior to the final rule taking effect. The Department will follow 
PRA requirements in clearing the collections (emergency procedures, as 
appropriate), including providing appropriate public engagement and 
taking into account the comments received as part of this rulemaking.

C. Executive Order 13132: Federalism

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

D. Unfunded Mandates Reform Act of 1995

    This Act directs agencies to assess the effects of Federal 
regulatory actions on State, local, and tribal governments, and the 
private sector. A Federal mandate is any provision in a regulation that 
imposes an enforceable duty upon State, local, or tribal governments, 
or imposes a duty on the private sector that is not voluntary.
    The WIOA contains specific language supporting employment and 
training activities for Indian, Alaska Natives, and Native Hawaiian 
individuals. These program requirements are supported, as is the WIOA 
workforce development system generally, by Federal formula grant funds 
and accordingly are not considered unfunded mandates. Similarly, 
migrant and seasonal farmworker activities are authorized and funded 
under the WIOA program as is currently done under the WIA program. The 
States are mandated to perform certain activities for the Federal 
Government under the WIOA program and will be reimbursed (grant 
funding) for the resources required to perform those responsibilities. 
The same process and grant relationship exists between States and Local 
WDBs under the WIA program and shall continue under the WIOA program 
and as identified in this NPRM.
    WIOA contains language establishing procedures regarding the 
eligibility of training providers to receive funds under the WIOA 
program. It also contains clear State information collection 
requirements for training entities, for example, submission of 
appropriate, accurate, and timely information. A decision by a private 
training entity to participate as a provider under the WIOA program is 
purely voluntary and therefore information collection burdens do not 
impose a duty on the private sector that is not voluntarily assumed.
    The Department's following consideration of these factors has 
determined that this proposed rule contains no unfunded Federal 
mandates, which are defined in 2 U.S.C. 658(6) to include either a 
``Federal intergovernmental mandate'' or a ``Federal private sector 
mandate.''

E. Plain Language

    The Department drafted this WIOA NPRM in plain language.

F. Assessment of Federal Regulations and Policies on Families

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

G. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 603, requires 
agencies to prepare a regulatory flexibility analysis to determine 
whether a regulation will have a significant economic impact on a 
substantial number of small entities. Section 605 of the RFA allows an 
agency to certify a rule in lieu of preparing an analysis if the 
regulation is not expected to have a significant economic impact on a 
substantial number of small entities. Further, under the Small Business 
Regulatory Enforcement Fairness Act of 1996, 5 U.S.C 801 (SBREFA), an 
agency is required to produce compliance guidance for small entities if 
the rule has a significant economic impact.
    The Small Business Administration (SBA) defines a small business as 
one that is ``independently owned and operated and which is not 
dominant in its field of operation.'' The definition of small business 
varies from industry to

[[Page 20832]]

industry to the extent necessary to reflect industry size differences 
properly. An agency must either use the SBA definition for a small 
entity or establish an alternative definition, in this instance, for 
the workforce industry. The Department has adopted the SBA definition 
for the purposes of this certification.
    The Department has notified the Chief Counsel for Advocacy, SBA, 
under the RFA at 5 U.S.C. 605(b), and proposes to certify that this 
rule will not have a significant economic impact on a substantial 
number of small entities. This finding is supported, in large measure, 
by the fact that small entities are already receiving financial 
assistance under the WIA program and will likely continue to do so 
under the WIOA program as articulated in this NPRM.
Affected Small Entities
    The proposed rule can be expected to impact small one-stop center 
operators. One-stop operators can be a single entity (public, private, 
or nonprofit) or a consortium of entities. The types of entities that 
might be a one-stop operator include: (1) An institution of higher 
education; (2) an employment service State agency established under the 
Wagner-Peyser Act; (3) a community-based organization, nonprofit 
organization, or workforce intermediary; (4) a private for-profit 
entity; (5) a government agency; (6) a Local Board, with the approval 
of the local CEO and the Governor; or (7) another interested 
organization or entity that can carry out the duties of the one-stop 
operator. Examples include a local chamber of commerce or other 
business organization, or a labor organization.
Impact on Small Entities
    The Department indicates that transfer payments are a significant 
aspect of this analysis in that the majority of WIOA program cost 
burdens on State and Local WDBs will be fully financed through Federal 
transfer payments to States. We have highlighted costs that are new to 
WIOA implementation and this NPRM. Therefore, the Department expects 
that the WIOA NPRM will have no cost impact on small entities.

H. Small Business Regulatory Enforcement Fairness Act of 1996

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

I. Executive Order 13175 (Indian Tribal Governments)

    The Department reviewed this proposed rule under the terms of E.O. 
13175 and has determined it to have no tribal implications in addition 
to those created through the reimbursement of WIA and future WIOA 
program expenses via Federally disbursed formula grant funds. The 
proposed rule would 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. As a result, a tribal 
summary impact statement has been prepared.
    Prior to developing this proposed rule, the Department held three 
events to talk with the tribal institutions about their concerns about 
the current state of Indian and Native American Programs (INAP) as well 
as what concerns they see in the future. These three events consisted 
of a consultation webinar and two in-person town hall meetings. The 
consultation webinar, entitled ``Listening session on Indian and Native 
American Programs,'' occurred on September 15, 2014. Two other 
consultations were held, including an October 21, 2014, town hall 
meeting with Indian and Native American leaders and membership 
organizations serving Indians and Native Americans, Hawaiians, and 
Alaskan Natives, and a formal consultation December 17, 2014, with 
members of the Native American Employment and Training Advisory Council 
to the Secretary of Labor.
    The Department received feedback from the Indian and Native 
American (INA) community and the general public that established 
several areas of interest concerning the Department of Labor's 
relationship with Indian and Native American Tribes and Tribal 
Governments. These areas of interest are summarized below.
Services Received in American Job Centers
    Specifically, the INA community expressed interest in learning how 
American Job Centers will account for the use of their INA funding 
dollars and how to ensure that the funds intended for the INA 
population will be dedicated to that population. In addition, there 
were also several individuals that had concerns that INA individuals 
that enter an American Job Center may not get the general assistance 
that is intended for all people that seek assistance. In other words, 
several commenters wanted to ensure that INA individuals should receive 
assistance intended for other populations that they may qualify for 
when seeking service. Finally, several commenters were interested in 
learning more about how INA programs may be required to contribute to 
American Job Center infrastructure funding and how American Job Centers 
will account for INA members served to ensure that the American Job 
Center network is responding to the relevant INA population needs.
Funding Per Participant Was Low for INA Programs Especially When 
Compared to Other Job Training Programs
    Many of the commenters expressed concern that the funds made 
available on a per participant basis for INA programs were not 
sufficient to meet the needs of the populations being served. 
Specifically, many commenters stated that funds available for INA youth 
are inadequate to fully meet their needs. In addition, commenters felt 
that more funds were needed for INA job training programs to ensure 
that career pathway training could be carried out. Several commenters 
compared the cost per participant funding for other programs, such as 
Job Corps, as evidence of the lack of funding for INA programs. The 
commenters went on to request a comparison of other WIA-funded programs 
and the INA programs. Finally, one commenter felt that because of the 
lack of funds, INA youth were being served instead of INA adults.
    The majority of comments focused on the use of new funding streams 
and the requirements attached to those funds. Commenters expressed 
concern about the issue of using and transferring WIOA funding to 
support activities under Indian Employment, Training, and Related 
Services Demonstration Act of 1992, as amended (Pub. L. 102-477). 
Specifically, commenters talked about the importance of flexibility in 
adherence to the requirements because Public Law 102-477 programs are 
tribal programs, may be located in rural areas, and have been 
effectively and efficiently reporting through existing processes, 
including a single reporting feature in the annual report. 
Additionally, commenters suggested that vocational rehabilitation, 
adult education reentry, and other applicable job/education-related 
program funding also should be allowed to support Public Law 102-477 
programs. Clarity around which funding streams are allowable also was 
suggested. Commenters also expressed hope that the Department of 
Education

[[Page 20833]]

will integrate Carl D. Perkins funding under Public Law 102-477 which 
allows Federally-recognized Tribes and Alaska Native entities to 
combine formula-funded Federal grant funds administered by the 
Department of Interior, which are employment and training-related into 
a single plan with a single budget and a single reporting system. 
Commenters noted that the Native American Career and Technical 
Education Program (NACTEP) is a required partner, and that NACTEP has 
limited the partner funds available to fund supportive services and 
work experiences. One commenter asked if statutory language regarding 
key investments in vulnerable populations would result in an increase 
in funding for Division of Indian and Native American Programs (DINAP) 
programs. Lastly, it was suggested that the 166 Advisory Council 
continue, and DINAP programs continue to be staffed with Native 
Americans and Native American Chiefs.
Concerns About the Effects of the New Performance Reporting 
Requirements Established in WIOA on the INA Community
    Many commenters expressed concern that INA programs would not be 
able to meet the performance reporting requirements established by WIOA 
for several reasons, including limited funds to train individuals for 
the new performance standards and the need to purchase new technology 
and equipment to meet the reporting requirements. In addition, several 
commenters said that INA programs will have to be more selective in 
determining eligibility for training programs because of insufficient 
of funding and the increased focus on performance outcomes.
Lack of Funding To Hire and Effectively Train Staff and Ensuring Policy 
Is Responsive to INA Community Needs
    Commenters stated concerns that INA programs will not be able to 
achieve expected performance levels because they lacked funding to 
adequately staff programs. Several commenters stated concerns about the 
limited number of staff, increased training needs for staff, and the 
need to ensure that technical assistance is made available to staff. 
Specifically, commenters are concerned that INA programs may transition 
slower than States to the new WIOA requirements because of funding and 
staff needs. In addition, they stated that INA programs need more funds 
to implement new administrative tasks as well as provide services to 
the INA community.
Working With States and Other Programs
    Commenters expressed concerns about States' accountability to the 
INA community and how to make other training programs administered by 
the State work comprehensively with INA programs. Others encouraged 
flexibility and freedom in funding in working with these same entities 
and lauded this flexibility as a way to get more out of funds. 
Furthermore, the commenters emphasized how important it is for Indian 
and Native American Leaders to have a voice in the policy and guidance 
formulation process so that policy is directly responsive to the needs 
and funding has to go hand in hand with the needs identified. Some 
commenters suggested an on-going dialogue between Indian and Native 
American leaders, Workforce Investment Boards, local and State 
agencies, and the American Job Centers to discuss training and 
education that leads to jobs. Some commenters stated that State-run 
programs need to be more accountable for how they interact with INA 
populations. Other commenters expressed frustration that some State 
programs do not see a need to work with INA programs because the States 
think that the INA programs get money from other sources, such as 
casinos. Many of the commenters said that they wanted better 
collaboration with State-run programs and increased networking among 
INA programs and State agencies. Finally, one commenter stated that 
collaboration between INA programs and the State-run training systems 
would make services to individuals more efficient because it would 
prevent ``double-dipping'' in programs.
    The Department invites public comment about what can be done to 
address the areas summarized above.

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

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

K. Executive Order 12988 (Civil Justice Reform)

    This NPRM was drafted and reviewed in accordance with E.O. 12988, 
Civil Justice Reform, and the Department has determined that the 
proposed rule will not burden the Federal court system. The proposed 
WIOA regulation was written to minimize litigation and to the extent 
feasible, provides a clear legal standard for affected conduct, and has 
been reviewed carefully to eliminate drafting errors and ambiguities.

L. Executive Order 13211 (Energy Supply)

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

List of Subjects

20 CFR Part 603

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

20 CFR Part 651

    Employment, Grant programs-labor.

20 CFR Part 652

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

20 CFR Part 653

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

20 CFR Part 654

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

20 CFR Part 658

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

20 CFR Part 675

    Employment, Grant programs-labor.

20 CFR Parts 679-680

    Employment, Grant programs-labor.

20 CFR Part 681

    Employment, Grant programs-labor, Youth.

20 CFR Part 682

    Employment, Grant programs-labor.

20 CFR Part 683

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

[[Page 20834]]

20 CFR Part 684

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

20 CFR Part 685

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

20 CFR Part 686

    Employment, Grant programs-labor, Job Corps.

20 CFR Part 687

    Employment, Grant programs-labor.

20 CFR Part 688

    Employment, Grant programs-labor, Youth, YouthBuild.

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

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

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

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

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


Sec.  603.2  What definitions apply to this part?

* * * * *
    (d) Public official means:
    (1) An official, agency, or public entity within the executive 
branch of Federal, State, or local government who (or which) has 
responsibility for administering or enforcing a law, or an elected 
official in the Federal, State, or local government.
    (2) Public post-secondary educational institutions established and 
governed under the laws of the State. These include the following:
    (i) Institutions that are part of the State's executive branch. 
This means the head of the institution must derive his or her authority 
from the Governor, either directly or through a State Board, 
commission, or similar entity established in the executive branch under 
the laws of the State.
    (ii) Institutions which are independent of the executive branch. 
This means the head of the institution derives his or her authority 
from the State's chief executive officer for the State education 
authority or agency when such officer is elected or appointed 
independently of the Governor.
    (iii) Publicly governed, publicly funded community and technical 
colleges.
    (3) Performance accountability and customer information agencies 
designated by the Governor of a State to be responsible for 
coordinating the assessment of State and local education or workforce 
training program performance and/or evaluating education or workforce 
training provider performance.
    (4) The chief elected official of a local Workforce Development 
Area as defined in WIOA sec. 3(9).
    (5) A State educational authority, agency or institution as those 
terms are used in the Family Educational Rights and Privacy Act, to the 
extent they are public entities.
* * * * *
0
3. Amend Sec.  603.5 by revising paragraph (e) to read as follows:


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

* * * * *
    (e) Public official. Disclosure of confidential UC information to a 
public official for use in the performance of his or her official 
duties is permissible.
    (1) ``Performance of official duties'' means administration or 
enforcement of law or the execution of the official responsibilities of 
a Federal, State, or local elected official. Administration of law 
includes research related to the law administered by the public 
official. Execution of official responsibilities does not include 
solicitation of contributions or expenditures to or on behalf of a 
candidate for public or political office or a political party.
    (2) For purposes of Sec.  603.2(d)(2) through (5), ``performance of 
official duties'' includes, in addition to the activities set out in 
paragraph (e)(1) of this section, use of the confidential UC 
information for the following limited purposes:
    (i) State and local performance accountability under WIOA sec. 116, 
including eligible training provider performance accountability under 
WIOA secs. 116(d) and 122;
    (ii) The requirements of discretionary Federal grants awarded under 
WIOA; or
    (iii) As otherwise required for education or workforce training 
program performance accountability and reporting under Federal or State 
law.
* * * * *
0
4. Amend Sec.  603.6 by adding paragraph (b)(8) to read as follows:


Sec.  603.6  What disclosures are required by this subpart?

* * * * *
    (b) * * *
    (8) To comply with WIOA sec. 116(e)(4), States must, to the extent 
practicable, cooperate in the conduct of evaluations (including related 
research projects) provided for by the Secretary of Labor or the 
Secretary of Education under the provisions of Federal law identified 
in WIOA sec. 116(e)(1); WIOA secs. 169 and 242(c)(2)(D); sec. 12(a)(5), 
14, and 107 of the Rehabilitation Act of 1973 (29 U.S.C. 709(a)(5), 
711, 727) (applied with respect to programs carried out under title I 
of that Act (29 U.S.C. 720 et seq.)); and the investigations provided 
for by the Secretary of Labor under sec. 10(b) of the Wagner-Peyser Act 
(29 U.S.C. 49i(b)). For purposes of this part, States must disclose 
confidential UC information to a Federal official (or an agent or 
contractor of a Federal official) requesting such information in the 
course of such evaluations. This disclosure must be done in accordance 
with appropriate privacy and confidentiality protections established in 
this part. This disclosure must be made to the ``extent practicable'', 
which means that the disclosure would not interfere with the efficient 
administration of the State UC law, as required by Sec.  603.5.
* * * * *
0
5. Add part 675 to read as follows:

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

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

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


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

    The purposes of title I of the Workforce Innovation and Opportunity 
Act (WIOA) include:
    (a) Increasing access to, and opportunities for individuals to 
receive, the employment, education, training, and support services 
necessary to succeed in the labor market, with a particular focus on 
those individuals with disabilities or other barriers to employment 
including out of school

[[Page 20835]]

youth with the goal of improving their outcomes;
    (b) Enhancing the strategic role for States and elected officials, 
and Local Workforce Development Boards in the workforce system by 
increasing flexibility to tailor services to meet employer and worker 
needs at State, regional, and local levels;
    (c) Streamlining service delivery across multiple programs by 
requiring colocation, coordination, and integration of activities and 
information to make the system understandable and accessible for 
individuals, including people with disabilities and those with other 
barriers to employment, and businesses.
    (d) Supporting the alignment of the workforce investment, 
education, and economic development systems in support of a 
comprehensive, accessible, and high-quality workforce development 
system at the Federal, State, and local and regional levels;
    (e) Improving the quality and labor market relevance of workforce 
investment, education, and economic development efforts by promoting 
the use of industry and sector partnerships, career pathways, and 
regional service delivery strategies in order to both provide America's 
workers with the skills and credentials that will enable them to secure 
and advance in employment with family-sustaining wages, and to provide 
America's employers with the skilled workers the employers need to 
succeed in a global economy;
    (f) Promoting accountability using core indicators of performance 
measured across all WIOA authorized programs, sanctions, and high 
quality evaluations to improve the structure and delivery of services 
through the workforce development system to address and improve the 
employment and skill needs of workers, jobseekers, and employers;
    (g) Increasing the prosperity and economic growth of workers, 
employers, communities, regions, and States; and
    (h) Providing workforce development activities through statewide 
and local workforce development systems to increase employment, 
retention and earnings of participants and to increase industry-
recognized post-secondary credential attainment to improve the quality 
of the workforce, reduce welfare dependency, increase economic self-
sufficiency, meet skill requirements of employers, and enhance 
productivity and competitiveness of the nation.


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

    The regulations found in 20 CFR parts 675 through 687 set forth the 
regulatory requirements that are applicable to programs operated with 
funds provided under title I of WIOA. This part 675 describes the 
purpose of that Act, explains the format of these regulations and sets 
forth definitions for terms that apply to each part. Part 676 contains 
regulations relating to statewide and local governance of the workforce 
investment system. Part 677 describes the one-stop system and the roles 
of one-stop partners. Part 678 sets forth requirements applicable to 
WIOA title I programs serving adults and dislocated workers. Part 679 
sets forth requirements applicable to WIOA title I programs serving 
youth. Part 680 contains regulations relating to statewide activities. 
Part 681 describes the WIOA performance accountability system. Part 682 
sets forth the administrative requirements applicable to programs 
funded under WIOA title I. Parts 684 and 685 contain the particular 
requirements applicable to programs serving Indians and Native 
Americans and Migrant and Seasonal Farmworkers, respectively. Parts 686 
and 687 describe the particular requirements applicable to the Job 
Corps and the national dislocated worker grant programs, respectively. 
Part 687 contains the regulations governing the YouthBuild program. In 
addition, part 652 describes the establishment and functioning of State 
Employment Services under the Wagner-Peyser Act, and 29 CFR part 37 
contains the Department's nondiscrimination regulations implementing 
WIA sec. 188.


Sec.  675.300  What definitions apply to these regulations?

    In addition to the definitions set forth in WIOA and the WIOA 
Regulations the following definitions apply to the regulations in 20 
CFR parts 675 through 687:
    Consultation means an interactive discussion between two or more 
parties for the purpose of exchanging viewpoints and ideas.
    Contract means a legal instrument by which a non-Federal entity 
purchases property or services needed to carry out the project or 
program under a Federal award. The term as used in this part does not 
include a legal instrument, even if the non-Federal entity considers it 
a contract, when the substance of the transaction meets the definition 
of a Federal award or subaward as defined in this section.
    Contractor means an entity that receives a contract as defined in 
this section.
    Cooperative Agreement means a legal instrument of financial 
assistance between a Federal awarding agency or pass-through entity and 
a non-Federal entity that, consistent with 31 U.S.C. 6302-6305:
    (1) Is used to enter into a relationship the principal purpose of 
which is to transfer anything of value from the Federal awarding agency 
or pass- through entity to the non-Federal entity to carry out a public 
purpose authorized by a law of the United States (see 31 U.S.C. 
6101(3)); and not to acquire property or services for the Federal 
government or pass-through entity's direct benefit or use;
    (2) Is distinguished from a grant in that it provides for 
substantial involvement between the Federal awarding agency or pass-
through entity and the non-Federal entity in carrying out the activity 
contemplated by the Federal award.
    (3) The term does not include:
    (i) A cooperative research and development agreement as defined in 
15 U.S.C. 3710a; or
    (ii) An agreement that provides only:
    (A) Direct United States Government cash assistance to an 
individual;
    (B) A subsidy;
    (C) A loan;
    (D) A loan guarantee; or
    (E) Insurance.
    Department or DOL means the U.S. Department of Labor, including its 
agencies and organizational units.
    Employment and training activity means a workforce investment 
activity that is carried out for an adult or dislocated worker under 20 
CFR part 678.
    Equal opportunity data or EO data means data on race and ethnicity, 
age, sex, and disability required by 29 CFR part 37 of the DOL 
regulations implementing sec. 188 of WIA, governing nondiscrimination.
    Employment and Training Administration or ETA means the Employment 
and Training Administration of the U.S. Department of Labor, or its 
successor organization.
    Federal Award means:
    (1) The Federal financial assistance that a non-Federal entity 
receives directly from a Federal awarding agency or indirectly from a 
pass-through entity, as described in 2 CFR 200.101 Applicability;
    (2) The cost-reimbursement contract under the Federal Acquisition 
Regulations that a non-Federal entity receives directly from a Federal 
awarding agency or indirectly from a

[[Page 20836]]

pass-through entity, as described in 2 CFR 200.101 Applicability; and
    (3) The instrument setting forth the terms and conditions. The 
instrument is the grant agreement, cooperative agreement, other 
agreement for assistance covered in paragraph (b) of 2 CFR 200.40 
Federal financial assistance, or the cost-reimbursement contract 
awarded under the Federal Acquisition Regulations.
    (4) Federal award does not include other contracts that a Federal 
agency uses to buy goods or services from a contractor or a contract to 
operate Federal government owned, contractor operated facilities 
(GOCOs).
    Federal Financial Assistance means:
    (1) For grants and cooperative agreements, assistance in the form 
of:
    (i) Grants;
    (ii) Cooperative agreements;
    (iii) Non-cash contributions or donations of property (including 
donated surplus property);
    (iv) Direct appropriations;
    (v) Food commodities; and
    (vi) Other financial assistance, except assistance listed in 
paragraph (2) of this definition.
    (2) For purposes of the audit requirements at 2 CFR part 200, 
subpart F, Federal financial assistance includes assistance that non-
Federal entities receive or administer in the form of:
    (i) Loans;
    (ii) Loan Guarantees;
    (iii) Interest subsidies; and
    (iv) Insurance.
    (3) Federal financial assistance does not include amounts received 
as reimbursement for services rendered to individuals as described in 2 
CFR 200.502, which outlines the basis for determining Federal awards 
expended.
    Grant or Grant Agreement means a legal instrument of financial 
assistance between a Federal awarding agency and a non-Federal entity 
that, consistent with 31 U.S.C. 6302, 6304:
    (1) Is used to enter into a relationship the principal purpose of 
which is to transfer anything of value from the Federal awarding agency 
to carry out a public purpose authorized by a law of the United States 
(see 31 U.S.C. 6101(3)); and not to acquire property or services for 
the Federal awarding agency's direct benefit or use;
    (2) Is distinguished from a cooperative agreement in that it does 
not provide for substantial involvement between the Federal awarding 
agency or pass-through entity and the non-Federal entity in carrying 
out the activity contemplated by the Federal award.
    (3) Grant agreement does not include an agreement that provides 
only:
    (i) Direct United States Government cash assistance to an 
individual;
    (ii) A subsidy;
    (iii) A loan;
    (iv) A loan guarantee; or
    (v) Insurance.
    Grantee means the direct recipient of grant funds from the 
Department of Labor under a grant or grant agreement. A grantee may 
also be referred to as a recipient.
    Individual with a disability means an individual with any 
disability (as defined in sec. 3 of the Americans with Disabilities Act 
of 1990 (42 U.S.C. 12102)). For purposes of WIOA sec. 188, this term is 
defined at 29 CFR 37.4.
    Labor Federation means an alliance of two or more organized labor 
unions for the purpose of mutual support and action.
    Literacy means an individual's ability to read, write, and speak in 
English, and to compute, and solve problems, at levels of proficiency 
necessary to function on the job, in the family of the individual, and 
in society.
    Local Board means a Local Workforce Development Board established 
under WIOA sec. 107, to set policy for the local workforce investment 
system.
    Non-Federal entity, as defined in 2 CFR part 2900.2, means a State, 
local government, Indian tribe, institution of higher education (IHE), 
for-profit entity, foreign public entity, foreign organization or 
nonprofit organization that carries out a Federal award as a recipient 
or subrecipient.
    Obligations when used in connection with a non-Federal entity's 
utilization of funds under a Federal award, means orders placed for 
property and services, contracts and subawards made, and similar 
transactions during a given period that require payment by the non- 
Federal entity during the same or a future period.
    Outlying area means:
    (1) The United States Virgin Islands, Guam, American Samoa, the 
Commonwealth of the Northern Mariana Islands; and
    (2) The Republic of Palau, except during a period that the 
Secretaries determine both that a Compact of Free Association is in 
effect and that the Compact contains provisions for training and 
education assistance prohibiting the assistance provided under the 
Workforce Innovation and Opportunity Act.
    Pass-through entity means a non-Federal entity that provides a 
subaward to a subrecipient to carry out part of a Federal program.
    Recipient means a non-Federal entity that receives a Federal award 
directly from a Federal awarding agency to carry out an activity under 
a Federal program. The term recipient does not include subrecipients.
    Register means the process for collecting information, including 
identifying information, to determine an individual's eligibility for 
services under WIOA title I. Individuals may be registered in a variety 
ways, as described in 20 CFR parts 678.105.
    Secretary means the Secretary of the U.S. Department of Labor, or 
their designee.
    Secretaries means the Secretaries of the U.S. Department Labor and 
the U.S. Department of Education, or their designees.
    Self-certification means an individual's signed attestation that 
the information they submit to demonstrate eligibility for a program 
under title I of WIOA is true and accurate.
    State means each of the several States of the United States, the 
District of Columbia and the Commonwealth of Puerto Rico. The term 
``State'' does not include outlying areas.
    State Board means a State Workforce Development Board established 
under WIOA sec. 101.
    Subgrant or subaward means an award provided by a pass-through 
entity to a subrecipient for the subrecipient to carry out part of a 
Federal award received by the pass-through entity. It does not include 
payments to a contractor or payments to an individual that is a 
beneficiary of a Federal program. A subaward may be provided through 
any form of legal agreement, including an agreement that the pass-
through entity considers a contract.
    Subrecipient means a non-Federal entity that receives a subaward 
from a pass-through entity to carry out part of a Federal program, but 
does not include an individual that is a beneficiary of such program. A 
subrecipient may also be a recipient of other Federal awards directly 
from a Federal awarding agency.
    Unliquidated obligations means, for financial reports prepared on a 
cash basis, obligations incurred by the non-Federal entity that have 
not been paid (liquidated). For reports prepared on an accrual 
expenditure basis, these are obligations incurred by the non-Federal 
entity for which an expenditure has not been recorded.
    Unobligated balance means the amount of funds under a Federal award 
that the non-Federal entity has not obligated. The amount is computed 
by subtracting the cumulative amount of the non-Federal entity's 
unliquidated obligations and expenditures of funds under the Federal 
award from the cumulative amount of the funds that the Federal awarding 
agency or pass-

[[Page 20837]]

through entity authorized the non- Federal entity to obligate.
    Wagner-Peyser Act means the Act of June 6, 1933, as amended, 
codified at 29 U.S.C. 49 et seq.
    WIA Regulations mean the regulations in 20 CFR parts 660 through 
672, the Wagner-Peyser Act regulations in 20 CFR part 652, subpart C, 
and the regulations implementing WIA sec. 188 in 29 CFR part 37.
    WIOA regulations mean the regulations in 20 CFR parts 675 through 
687, the Wagner-Peyser Act regulations in 20 CFR part 652, subpart C, 
and the regulations implementing WIA sec. 188 in 29 CFR part 37.
    Workforce investment activities mean the array of activities 
permitted under title I of WIOA, which include employment and training 
activities for adults and dislocated workers, as described in WIOA sec. 
134, and youth activities, as described in WIOA sec. 129.
    Youth Workforce Investment Activity means a workforce investment 
activity that is carried out for eligible youth under 20 CFR part 679.
0
6. Add part 679 to read as follows:

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

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

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

Subpart A--State Workforce Development Board


Sec.  679.100  What the purpose of the State Board?

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

[[Page 20838]]

Sec.  679.110  What is the State Workforce Development Board?

    (a) The State Board is a board established by the Governor in 
accordance with the requirements of WIOA sec. 101 and this section.
    (b) The membership of the State Board must meet the requirements of 
WIOA 101(b) and must represent diverse geographic areas of the State, 
including urban, rural, and suburban areas. The Board membership and 
must include:
    (1) The Governor;
    (2) A member of each chamber of the State legislature, appointed by 
the appropriate presiding officers of such chamber, as appropriate 
under State law; and
    (3) Members appointed by the Governor, which must include:
    (i) A majority of representatives of businesses or organizations 
who:
    (A) Are the owner or chief executive officer for the business or 
organization, or is an executive with the business or organization with 
optimum policy-making or hiring authority, and may also be members of a 
Local Board as described in WIOA sec. 107(b)(2)(A)(i);
    (B) Represent businesses, or organizations that represent 
businesses described in 679.110(b)(3)(i), that, at a minimum, provide 
employment and training opportunities that include high-quality, work-
relevant training and development in in-demand industry sectors or 
occupations in the State; and
    (C) Are appointed from a list of potential members nominated by 
State business organizations and business trade associations; and
    (D) At a minimum, one member representing small businesses as 
defined by the U.S. Small Business Administration.
    (ii) Not less than 20 percent who are representatives of the 
workforce within the State, which:
    (A) Must include two or more representatives of labor organizations 
nominated by State labor federations;
    (B) Must include one representative who must be a member of a labor 
organization or training director from a joint labor-management 
apprenticeship program, or, if no such joint program exists in the 
State, a member of a labor organization or training director who is a 
representative of an apprenticeship program;
    (C) May include one or more representatives of community-based 
organizations that have demonstrated experience and expertise in 
addressing the employment, training, or education needs of individuals 
with barriers to employment, including organizations that serve 
veterans or provide or support competitive, integrated employment for 
individuals with disabilities; and
    (D) May include one or more representatives of organizations that 
have demonstrated experience and expertise in addressing the 
employment, training, or education needs of eligible youth, including 
representatives of organizations that serve out-of-school youth.
    (iii) The balance of the members:
    (A) Must include representatives of the Government including:
    (1) The lead State officials with primary responsibility for each 
of the core programs. Where the lead official represents more than one 
core program, that official must ensure adequate representation of the 
needs of all core programs under his or her jurisdiction.
    (2) Two or more chief elected officials (collectively representing 
both cities and counties, where appropriate).
    (B) May include other appropriate representatives and officials 
designated by the Governor, such as, but not limited to, State agency 
officials responsible for one-stop partner programs, economic 
development or juvenile justice programs in the State, individuals who 
represent an Indian tribe or tribal organization as defined in WIOA 
sec. 166(b), and State agency officials responsible for education 
programs in the State, including chief executive officers of community 
colleges and other institutions of higher education.
    (c) The Governor must select a chairperson for the State Board from 
the business representatives on the board described in paragraph 
(b)(3)(i) of this section).
    (d) The Governor must establish by-laws that at a minimum address:
    (1) The nomination process used by the Governor to select the State 
Board chair and members;
    (2) The term limitations and how the term appointments will be 
staggered to ensure only a portion of membership expire in a given 
year;
    (3) The process to notify the Governor of a board member vacancy to 
ensure a prompt nominee;
    (4) The proxy and alternative designee process that will be used 
when a board member is unable to attend a meeting and assigns a 
designee as per the requirements at 679.110(d)(4);
    (i) If the alternative designee is a business representative, he or 
she must have optimum policy-making hiring authority.
    (ii) Other alternative designees should have demonstrated 
experience and expertise and optimum policy-making authority.
    (5) The use of technology, such as phone and Web-based meetings, 
that must be used to promote board member participation; and
    (6) The process to ensure members actively participate in convening 
the workforce development system's stakeholders, brokering 
relationships with a diverse range of employers, and leveraging support 
for workforce development activities; and
    (7) Other conditions governing appointment or membership on the 
State Board as deemed appropriate by the Governor.
    (e) Members who represent organizations, agencies or other entities 
described in (b)(3)(ii) through (iii) above must be individuals who 
have optimum policy-making authority in the organizations that they 
represent.
    (f)(1) A State Board member may not represent more than one of the 
categories described in:
    (i) Paragraph (b)(3)(i) of this section (business representatives);
    (ii) Paragraph (b)(3)(ii) of this section (workforce 
representatives); or
    (iii) Paragraph (b)(3)(iii) of this section (government 
representatives).
    (2) A State Board member may not serve as a representative of more 
than one subcategory under paragraph (b)(3)(ii) of this section.
    (3) A State Board member may not serve as a representative of more 
than one subcategory under paragraph (b)(3)(iii) of this section, 
except that where a single government agency is responsible for 
multiple required programs, the head of the agency may represent each 
of the required programs.
    (g) All required board members must have voting privileges. The 
Governor may also convey voting privileges to non-required members.


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

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

[[Page 20839]]

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

    Under WIOA sec. 101(d), the State Board must assist the Governor in 
the:
    (a) Development, implementation, and modification of the 4-year 
State Plan;
    (b) Review of statewide policies, programs, and recommendations on 
actions that should be taken by the State to align workforce 
development programs to support a comprehensive and streamlined 
workforce development system. Such review of policies, programs, and 
recommendations must include a review and provision of comments on the 
State plans, if any, for programs and activities of one-stop partners 
that are not core programs.
    (c) Development and continuous improvement of the workforce 
development system, including--
    (1) Identification of barriers and means for removing barriers to 
better coordinate, align, and avoid duplication among programs and 
activities;
    (2) Development of strategies to support career pathways for the 
purpose of providing individuals, including low-skilled adults, youth, 
and individuals with barriers to employment, including individuals with 
disabilities, with workforce investment activities, education, and 
supportive services to enter or retain employment;
    (3) Development of strategies to provide effective outreach to and 
improved access for individuals and employers who could benefit from 
workforce development system;
    (4) Development and expansion of strategies to meet the needs of 
employers, workers, and jobseekers particularly through industry or 
sector partnerships related to in-demand industry sectors and 
occupations;
    (5) Identification of regions, including planning regions for the 
purposes of WIOA sec. 106(a), and the designation of local areas under 
WIOA sec. 106, after consultation with Local Boards and chief elected 
officials;
    (6) Development and continuous improvement of the one-stop delivery 
system in local areas, including providing assistance to Local Boards, 
one-stop operators, one-stop partners, and providers. Such assistance 
includes assistance with planning and delivering services, including 
training and supportive services, to support effective delivery of 
services to workers, jobseekers, and employers; and
    (7) Development of strategies to support staff training and 
awareness across the workforce development system and its programs.
    (d) Development and updating of comprehensive State performance and 
accountability measures to assess core program effectiveness under WIOA 
sec. 116(b).
    (e) Identification and dissemination of information on best 
practices, including best practices for--
    (1) The effective operation of one-stop centers, relating to the 
use of business outreach, partnerships, and service delivery 
strategies, including strategies for serving individuals with barriers 
to employment;
    (2) The development of effective Local Boards, which may include 
information on factors that contribute to enabling Local Boards to 
exceed negotiated local levels of performance, sustain fiscal 
integrity, and achieve other measures of effectiveness; and
    (3) Effective training programs that respond to real-time labor 
market analysis, that effectively use direct assessment and prior 
learning assessment to measure an individual's prior knowledge, skills, 
competencies, and experiences for adaptability, to support efficient 
placement into employment or career pathways.
    (f) Development and review of statewide policies affecting the 
coordinated provision of services through the State's one-stop delivery 
system described in WIOA sec. 121(e), including the development of--
    (1) Objective criteria and procedures for use by Local Boards in 
assessing the effectiveness, physical and programmatic accessibility 
and continuous improvement of one-stop centers. Where a Local Board 
serves as the one-stop operator, the State Board must use such criteria 
to assess and certify the one-stop center;
    (2) Guidance for the allocation of one-stop center infrastructure 
funds under 121(h); and
    (3) Policies relating to the appropriate roles and contributions of 
entities carrying out one-stop partner programs within the one-stop 
delivery system, including approaches to facilitating equitable and 
efficient cost allocation in the system.
    (g) Development of strategies for technological improvements to 
facilitate access to, and improve the quality of services and 
activities provided through the one-stop delivery system, including 
such improvements to--
    (1) Enhance digital literacy skills (as defined in sec. 202 of the 
Museum and Library Service Act, 20 U.S.C. 9101);
    (2) Accelerate acquisition of skills and recognized post-secondary 
credentials by participants;
    (3) Strengthen professional development of providers and workforce 
professionals; and
    (4) Ensure technology is accessible to individuals with 
disabilities and individuals residing in remote areas;
    (h) Development of strategies for aligning technology and data 
systems across one-stop partner programs to enhance service delivery 
and improve efficiencies in reporting on performance accountability 
measures, including design implementation of common intake, data 
collection, case management information, and performance accountability 
measurement and reporting processes and the incorporation of local 
input into such design and implementation to improve coordination of 
services across one-stop partner programs;
    (i) Development of allocation formulas for the distribution of 
funds for employment and training activities for adults and youth 
workforce investment activities, to local areas as permitted under WIOA 
secs. 128(b)(3) and 133(b)(3);
    (j) Preparation of the annual reports described in paragraphs (1) 
and (2) of WIOA sec. 116(d);
    (k) Development of the statewide workforce and labor market 
information system described in sec. 15(e) of the Wagner-Peyser Act; 
and
    (l) Development of other policies as may promote statewide 
objectives for and enhance the performance of the workforce development 
system in the State.


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

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


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

    (a) The State may use any State entity that meets the requirements 
of WIOA sec. 101(e) to perform the functions of the State Board. This 
may include:

[[Page 20840]]

    (1) A State council;
    (2) A State Workforce Development Board within the meaning of the 
Workforce Investment Act of 1998, as in effect on the day before the 
date of enactment of WIOA; or
    (3) A combination of regional Workforce Development Boards or 
similar entity.
    (b) If the State uses an alternative entity, the State Plan must 
demonstrate that the alternative entity meets all three of the 
requirements of WIOA sec. 101(e)(1):
    (1) Was in existence on the day before the date of enactment of the 
Workforce Investment Act of 1998;
    (2) Is substantially similar to the State Board described in WIOA 
secs. 101(a)-(c) and Sec.  679.110; and
    (3) Includes representatives of business and labor organizations in 
the State.
    (c) If the alternative entity does not provide representatives for 
each of the categories required under WIOA sec. 101(b), the State Plan 
must explain the manner in which the State will ensure an ongoing role 
for any unrepresented membership group in the workforce development 
system. The State Board must maintain an ongoing and meaningful role 
for an unrepresented membership group, including entities carrying out 
the core programs, by such methods as:
    (1) Regularly scheduled consultations with entities within the 
unrepresented membership groups;
    (2) Providing an opportunity for input into the State Plan or other 
policy development by unrepresented membership groups, and
    (3) Establishing an advisory committee of unrepresented membership 
groups.
    (d) If the membership structure of the alternative entity had a 
significant change after August 7, 1998, the entity will no longer be 
eligible to perform the functions of the State Board. In such case, the 
Governor must establish a new State Board which meets all of the 
criteria of WIOA sec. 101(b).
    (e) A significant change in the membership structure includes a 
significant change in the organization of the alternative entity or in 
the categories of entities represented on the alternative entity which 
requires a change to the alternative entity's charter or a similar 
document that defines the formal organization of the alternative 
entity, regardless of whether the required change to the document has 
or has not been made.
    (1) A significant change in the membership structure occurs when 
the alternative entity adds members to represent groups not previously 
represented on the entity.
    (2) A significant change in the membership structure does not occur 
when the alternative entity adds members to an existing membership 
category, when it adds non-voting members, or when it adds members to 
fill a vacancy created in an existing membership category.
    (f) In 20 CFR parts 675 through 687, all references to the State 
Board also apply to an alternative entity used by a State.


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

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

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


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

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


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

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


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

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


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

    As part of the process of designating or redesignating a local 
workforce development area, the Governor must develop a policy for 
designation of local workforce development areas that must include:

[[Page 20841]]

    (a) Consultation with the State Board;
    (b) Consultation with the chief elected officials and affected 
Local Boards; and
    (c) Consideration of comments received through a public comment 
process which must:
    (1) Offer adequate time for public comment prior to designation of 
the local workforce development area; and
    (2) Provide an opportunity for comment by representatives of Local 
Boards, chief elected officials, businesses, institutions of higher 
education, labor organizations, other primary stakeholders, and the 
general public regarding the designation of the local area.


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

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


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

    (a) If the chief elected official and Local Board in a local area 
submits a request for initial designation, the Governor must approve 
the request if, for the 2 program years preceding the date of enactment 
of WIOA, the following criteria are met:
    (1) The local area was designated as a local area for purposes of 
WIA;
    (2) The local area performed successfully; and
    (3) The local area sustained fiscal integrity.
    (b) If a local area is approved for initial designation, the period 
of initial designation applies to program years 2015 and 2016.
    (c) After the period of initial designation, if the chief elected 
official and Local Board in a local area submits a request for 
subsequent designation, the Governor must approve the request if the 
following criteria are met for the 2 program years of initial 
designation:
    (1) The local area performed successfully;
    (2) The local area sustained fiscal integrity; and
    (3) In the case of a local area in a planning region, the local 
area met the regional planning requirements described in WIOA 
sec.106(c) paragraph (1).
    (d) The Governor:
    (1) May review a local area designated under paragraph (c) of this 
section at any time to evaluate whether that the area continues to meet 
the requirements for subsequent designation under that paragraph; and
    (2) Must review a local area designated under paragraph (c) of this 
section before submitting its State Plan during each 4-year State 
planning cycle to evaluate whether the area continues to meet the 
requirements for subsequent designation under that paragraph.
    (e) For purposes of subsequent designation under paragraphs (c) and 
(d) of this section, the local area and chief elected official must be 
considered to have requested continued designation unless the local 
area and chief elected official notify the Governor that they no longer 
seek designation.
    (f) Local areas designated under Sec.  679.240 or States designated 
as single-area States under Sec.  679.270 are not subject to the 
requirements described in paragraph (c) of this section related to the 
subsequent designation of a local area.
    (g) Rural concentrated employment programs are not eligible to 
apply for initial designation as a local area under paragraph (c) of 
this section.


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

    (a) For the purpose of initial local area designation, the term 
``performed successfully'' means that the local area met or exceeded 
the levels of performance the Governor negotiated with Local Board and 
chief elected official under WIA sec. 136(c) for the last 2 full 
program years before the enactment of WIOA, and that the local area has 
not failed any individual measure for the last 2 consecutive program 
years before the enactment of WIOA.
    (1) The terms ``met or exceeded'' and ``failure'' must be defined 
by the Governor consistent with how those terms were defined at the 
time the performance levels were negotiated.
    (2) When designating local areas, the Governor may not 
retroactively apply any higher WIOA threshold to performance negotiated 
and achieved under WIA.
    (b) For the purpose of determining subsequent local area 
designation, the term ``performed successfully'' means that the local 
area met or exceeded the levels of performance the Governor negotiated 
with Local Board and chief elected official for core indicators of 
performance described under WIA sec. 136(c) or WIOA sec. 116(b)(2)(A), 
as appropriate, and in accordance with a State-established definition, 
provided in the State Plan, of met or exceeded performance.
    (c) For the purpose of determining initial and subsequent local 
area designation under Sec.  679.250(a) and (c), the term ``sustained 
fiscal integrity'' means that the Secretary has not made a formal 
determination that either the grant recipient or the administrative 
entity of the area misexpended funds due to willful disregard of the 
requirements of the provision involved, gross negligence, or failure to 
comply with accepted standards of administration for the 2-year period 
preceding the determination.


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

    (a) The Governor of any State that was a single-State local area 
under the Workforce Investment Act as in effect on July 1, 2013 may 
designate the State as a single-State local workforce development area 
under WIOA.
    (b) The Governor of a State local workforce development area under 
paragraph (a) of this section who seeks to designate the State as a 
single-State local workforce development area under WIOA must:
    (1) Identify the State as a single State local area in the Unified 
or Combined State Plan; and
    (2) Include the local plan for approval as part of the Unified or 
Combined State Plan.
    (c) The State Board for a single-State local workforce development 
area must act as the Local Board and carry out the

[[Page 20842]]

functions of the Local Board in accordance with WIOA sec. 107 and Sec.  
679.370, except that the State is not required to meet and report on a 
set of local performance accountability measures.


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

    (a) When the chief elected officials and Local Boards of each local 
area within a planning region make a request to the Governor to 
redesignate into a single local area, the State Workforce Development 
Board must authorize statewide adult, dislocated worker (WIOA sec. 
133(a)(1)), and youth program (WIOA sec. 128(a)) funds to facilitate 
such redesignation.
    (b) When statewide funds are not available, the State may provide 
funds for redesignation in the next available program year.
    (c) Redesignation activities that may be carried out by the local 
areas include:
    (1) Convening sessions and conferences;
    (2) Renegotiation of contracts and agreements; and
    (3) Other activities directly associated with the redesignation as 
deemed appropriate by the State Board.


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

    (a) A unit of local government (or combination of units) or a local 
area which has requested but has been denied its request for 
designation as a workforce development area under Sec.  679.250 may 
appeal the decision to the State Board, in accordance with appeal 
procedures established in the State Plan and 20 CFR 683.630(a).
    (b) If a decision on the appeal is not rendered in a timely manner 
or if the appeal to the State Board does not result in designation, the 
entity may request review by the Secretary of Labor, under the 
procedures set forth at 20 CFR 683.640.

Subpart C--Local Boards


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

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


Sec.  679.310  What is the Local Workforce Development Board?

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


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

    (a) For each local area in the State, the members of Local Board 
must be selected by the chief elected official consistent with criteria 
established under WIOA sec. 107(b)(1) and criteria established by the 
Governor, and must meet the requirements of WIOA sec. 107(b)(2).
    (b) A majority of the members of the Local Board must be 
representatives of business in the local area. At a minimum, two 
members must represent small business as defined by the U.S. Small 
Business Administration. Business representatives serving on Local 
Boards may also serve on the State Board. Each business representative 
must meet the following criteria:
    (1) Be an owner, chief executive officer, chief operating officer, 
or other individual with optimum policy-making or hiring authority; and
    (2) provide employment opportunities in in-demand industry sectors 
or occupations, as those terms are defined in WIOA sec. 3(23).
    (c) At least 20 percent of the members of the Local Board must be 
workforce representatives. These representatives:

[[Page 20843]]

    (1) Must include two or more representatives of labor 
organizations, where such organizations exist in the local area. Where 
labor organizations do not exist, representatives must be selected from 
other employee representatives;
    (2) Must include one or more representatives of a joint labor-
management, or union affiliated, registered apprenticeship program 
within the area who must be a training director or a member of a labor 
organization. If no union affiliated registered apprenticeship programs 
exist in the area, a representative of a registered apprenticeship 
program with no union affiliation must be appointed, if one exists;
    (3) May include one or more representatives of community-based 
organizations that have demonstrated experience and expertise in 
addressing the employment, training or education needs of individuals 
with barriers to employment, including organizations that serve 
veterans or provide or support competitive integrated employment for 
individuals with disabilities; and
    (4) May include one or more representatives of organizations that 
have demonstrated experience and expertise in addressing the 
employment, training, or education needs of eligible youth, including 
representatives of organizations that serve out-of-school youth.
    (d) The Local Board must also include:
    (1) At least one eligible provider administering adult education 
and literacy activities under WIOA title II;
    (2) At least one representative from an institution of higher 
education providing workforce investment activities, including 
community colleges; and
    (3) At least one representative from each of the following 
governmental and economic and community development entities:
    (i) Economic and community development entities;
    (ii) The State employment service office under the Wagner-Peyser 
Act (29 U.S.C. 49 et seq.) serving the local area; and
    (iii) The programs carried out under title I of the Rehabilitation 
Act of 1973, other than sec. 112 or part C of that title;
    (e) The membership of Local Boards may include individuals or 
representatives of other appropriate entities in the local area, 
including:
    (1) Entities administering education and training activities who 
represent local educational agencies or community-based organizations 
with demonstrated expertise in addressing the education or training 
needs for individuals with barriers to employment;
    (2) Governmental and economic and community development entities 
who represent transportation, housing, and public assistance programs;
    (3) Philanthropic organizations serving the local area; and
    (4) Other appropriate individuals as determined by the chief 
elected official.
    (f) Members must be individuals with optimum policy-making 
authority within the entities they represent.
    (g) Chief elected officials must establish a formal nomination and 
appointment process, consistent with the criteria established by the 
Governor and State Board under sec. 107(b)(1) of WIOA for appointment 
of members of the Local Boards, that ensures:
    (1) Business representatives are appointed from among individuals 
who are nominated by local business organizations and business trade 
associations.
    (2) Labor representatives are appointed from among individuals who 
are nominated by local labor federations (or, for a local area in which 
no employees are represented by such organizations, other 
representatives of employees); and
    (3) When there is more than one local area provider of adult 
education and literacy activities under title II, or multiple 
institutions of higher education providing workforce investment 
activities as described in WIOA 107(b)(2)(C)(i) or (ii), nominations 
are solicited from those particular entities. (WIOA sec. 107(b)(6))
    (h) An individual may be appointed as a representative of more than 
one entity if the individual meets all the criteria for representation, 
including the criteria described in paragraphs (c) through (g) of this 
section, for each entity.
    (i) All required board members must have voting privilege. The 
chief elected official may convey voting privileges to non-required 
members.


Sec.  679.330  Who must chair a Local Board?

    The Local Board must elect a chairperson from among the business 
representatives on the board. (WIOA sec. 107(b)(3))


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

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


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

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


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

    (a) Standing committees may be established by the Local Board to 
provide information and assist the Local Board in carrying out its 
responsibilities under WIOA sec. 107. Standing committees must be 
chaired by a member of the Local Board, may include other members of 
the Local Board, and must include other individuals appointed by the 
Local Board who are not members of the Local Board and who have 
demonstrated experience and expertise in accordance with Sec.  
679.340(b) and as determined by the Local Board. Standing committees 
may include each of the following:
    (1) A standing committee to provide information and assist with 
operational and other issues relating to the one-stop delivery system, 
which may include representatives of the one-stop partners.
    (2) A standing committee to provide information and to assist with 
planning, operational, and other issues relating to the provision of 
services to youth, which must include community-based organizations 
with a demonstrated record of success in serving eligible youth.
    (3) A standing committee to provide information and to assist with 
operational and other issues relating to the provision of services to 
individuals with disabilities, including issues relating to compliance 
with WIOA sec. 188, if applicable, and applicable provisions of the 
Americans with Disabilities Act of 1990 (42 U.S.C. 12101

[[Page 20844]]

et seq.) regarding providing programmatic and physical access to the 
services, programs, and activities of the one-stop delivery system, as 
well as appropriate training for staff on providing supports for or 
accommodations to, and finding employment opportunities for, 
individuals with disabilities.
    (b) The Local Board may designate other standing committees in 
addition to those specified in paragraph (a) of this section.
    (c) Local Boards may designate an entity in existence as of the 
date of the enactment of WIOA, such as an effective youth council, to 
serve as a standing committee as long as the entity meets the 
requirements of WIOA sec. 107(b)(4).


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

    As provided in WIOA sec. 107(d), the Local Board must:
    (a) Develop and submit a 4-year local plan for the local area, in 
partnership with the chief elected official and consistent with WIOA 
sec. 108;
    (b) If the local area is part of a planning region that includes 
other local areas, develop and submit a regional plan in collaboration 
with other local areas. If the local area is part of a planning region, 
the local plan must be submitted as a part of the regional plan;
    (c) Conduct workforce research and regional labor market analysis 
to include:
    (1) analyses and regular updates of economic conditions, needed 
knowledge and skills, workforce, and workforce development (including 
education and training) activities to include an analysis of the 
strengths and weaknesses (including the capacity to provide) of such 
services to address the identified education and skill needs of the 
workforce and the employment needs of employers;
    (2) Assistance to the Governor in developing the statewide 
workforce and labor market information system under the Wagner-Peyser 
Act for the region;
    (3) Other research, data collection, and analysis related to the 
workforce needs of the regional economy as the board, after receiving 
input from a wide array of stakeholders, determines to be necessary to 
carry out its functions.
    (d) Convene local workforce development system stakeholders to 
assist in the development of the local plan under Sec.  679.550 and in 
identifying non-Federal expertise and resources to leverage support for 
workforce development activities. Such stakeholders may assist the 
Local Board and standing committees in carrying out convening, 
brokering, and leveraging functions at the direction of the Local 
Board;
    (e) Lead efforts to engage with a diverse range of employers and 
other entities in the region in order to:
    (1) Promote business representation (particularly representatives 
with optimum policy-making or hiring authority from employers whose 
employment opportunities reflect existing and emerging employment 
opportunities in the region) on the Local Board;
    (2) Develop effective linkages (including the use of 
intermediaries) with employers in the region to support employer 
utilization of the local workforce development system and to support 
local workforce investment activities;
    (3) Ensure that workforce investment activities meet the needs of 
employers and support economic growth in the region by enhancing 
communication, coordination, and collaboration among employers, 
economic development entities, and service providers; and
    (4) Develop and implement proven or promising strategies for 
meeting the employment and skill needs of workers and employers (such 
as the establishment of industry and sector partnerships), that provide 
the skilled workforce needed by employers in the region, and that 
expand employment and career advancement opportunities for workforce 
development system participants in in-demand industry sectors or 
occupations.
    (f) With representatives of secondary and post-secondary education 
programs, lead efforts to develop and implement career pathways within 
the local area by aligning the employment, training, education, and 
supportive services that are needed by adults and youth, particularly 
individuals with barriers to employment.
    (g) Lead efforts in the local area to identify and promote proven 
and promising strategies and initiatives for meeting the needs of 
employers, workers and jobseekers, and identify and disseminate 
information on proven and promising practices carried out in other 
local areas for meeting such needs.
    (h) Develop strategies for using technology to maximize the 
accessibility and effectiveness of the local workforce development 
system for employers, and workers and jobseekers, by:
    (1) Facilitating connections among the intake and case management 
information systems of the one-stop partner programs to support a 
comprehensive workforce development system in the local area;
    (2) Facilitating access to services provided through the one-stop 
delivery system involved, including access in remote areas;
    (3) Identifying strategies for better meeting the needs of 
individuals with barriers to employment, including strategies that 
augment traditional service delivery, and increase access to services 
and programs of the one-stop delivery system, such as improving digital 
literacy skills; and
    (4) Leveraging resources and capacity within the local workforce 
development system, including resources and capacity for services for 
individuals with barriers to employment.
    (i) In partnership with the chief elected official for the local 
area:
    (1) Conduct oversight of youth workforce investment activities 
authorized under WIOA sec. 129(c), adult and dislocated worker 
employment and training activities under WIOA secs. 134 (c) and (d); 
and entire one-stop delivery system in the local area; and
    (2) Ensure the appropriate use and management of the funds provided 
under WIOA subtitle B for the youth, adult, and dislocated worker 
activities and one-stop delivery system in the local area; and
    (3) Ensure the appropriate use management, and investment of funds 
to maximize performance outcomes under WIOA sec. 116.
    (j) Negotiate and reach agreement on local performance measures 
with the chief elected official and the Governor.
    (k) Negotiate with CLEO and required partners on the methods for 
funding the infrastructure costs of one-stop centers in the local area 
in accordance with Sec.  678.715 or must notify the Governor if they 
fail to reach agreement at the local level and will use a State 
infrastructure funding mechanism.
    (l) Select the following providers in the local area, and where 
appropriate terminate such providers in accordance with 2 CFR part 200:
    (1) Providers of youth workforce investment activities through 
competitive grants or contracts based on the recommendations of the 
youth standing committee (if such a committee is established); however, 
if the Local Board determines there is an insufficient number of 
eligible providers in a local area, the Local Board may award contracts 
on a sole-source basis as per the provisions at WIOA sec. 123(b);
    (2) Providers of training services consistent with the criteria and 
information requirements established by the Governor and WIOA sec. 122;

[[Page 20845]]

    (3) Providers of career services through the award of contracts, if 
the one-stop operator does not provide such services; and
    (4) One-stop operators in accordance with Sec. Sec.  678.600 
through 678.635.
    (m) In accordance with WIOA sec. 107(d)(10)(E) work with the State 
to ensure there are sufficient numbers and types of providers of career 
services and training services serving the local area and providing the 
services in a manner that maximizes consumer choice, as well as 
providing opportunities that lead to competitive integrated employment 
for individuals with disabilities.
    (n) Coordinate activities with education and training providers in 
the local area, including:
    (1) Reviewing applications to provide adult education and literacy 
activities under title II for the local area to determine whether such 
applications are consistent with the local plan;
    (2) making recommendations to the eligible agency to promote 
alignment with such plan; and
    (3) Replicating and implementing cooperative agreements to enhance 
the provision of services to individuals with disabilities and other 
individuals, such as cross training of staff, technical assistance, use 
and sharing of information, cooperative efforts with employers, and 
other efforts at cooperation, collaboration, and coordination.
    (o) Develop a budget for the activities of the Local Board, with 
approval of the chief elected official and consistent with the local 
plan and the duties of the Local Board.
    (p) Assess, on an annual basis, the physical and programmatic 
accessibility of all one-stop centers in the local area, in accordance 
with WIOA sec. 188, if applicable, and applicable provisions of the 
Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.).
    (q) Certification of one-stop centers in accordance with Sec.  
678.800.


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

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


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

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


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

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


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

    (a)(1) A Local Board may be selected as a one-stop operator:
    (i) Through sole source procurement in accordance with Sec.  
678.610; or
    (ii) Through successful competition in accordance with Sec.  
678.615.
    (2) The chief elected official in the local area and the Governor 
must agree to the selection described in paragraph (a)(1) of this 
section.
    (3) Where a Local Board acts as a one-stop operator, the State must 
ensure certification of one-stop centers in accordance with Sec.  
662.600.
    (b) A Local Board may act as a provider career services only with 
the agreement of the chief elected official in the local area and the 
Governor.
    (c) A Local Board is prohibited from providing training services, 
unless the Governor grants a waiver in accordance with the provisions 
in WIOA sec. 107(g)(1).
    (1) The State must develop a procedure for approving waivers that 
includes the criteria at WIOA sec. 107(g)(1)(B)(i):
    (i) Satisfactory evidence that there is an insufficient number of 
eligible providers of such a program of training services to meet local 
demand in the local area;
    (ii) Information demonstrating that the board meets the 
requirements for an

[[Page 20846]]

eligible provider of training services under WIOA sec. 122; and
    (iii) Information demonstrating that the program of training 
services prepares participants for an in-demand industry sector or 
occupation in the local area.
    (2) The local area must make the proposed request for a waiver 
available to eligible providers of training services and other 
interested members of the public for a public comment period of not 
less than 30 days and includes any comments received during this time 
in the final request for the waiver.
    (3) The waiver must not exceed the duration of the local plan and 
may be renewed by submitting a new waiver request consistent with 
paragraphs (c)(1) and (2) of this section for additional periods, not 
to exceed the durations of such subsequent plans.
    (4) The Governor may revoke the waiver if the Governor determines 
the waiver is no longer needed or that the Local Board involved has 
engaged in a pattern of inappropriate referrals to training services 
operated by the Local Board.
    (d) The restrictions on the provision of career and training 
services by the Local Board, and on as one-stop operator, also apply to 
staff of the Local Board.


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

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


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

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

Subpart D--Regional and Local Plan


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

    (a) The local plan serves as 4-year action plan to develop, align, 
and integrate service delivery strategies and to support the State's 
vision and strategic and operational goals. The local plan sets forth 
the strategy to:
    (1) Direct investments in economic, education, and workforce 
training programs to focus on providing relevant education and training 
to ensure that individuals, including youth and individuals with 
barriers to employment, have the skills to compete in the job market 
and that employers have a ready supply of skilled workers;
    (2) Apply job-driven strategies in the one-stop system;
    (3) Enable economic, education, and workforce partners to build a 
skilled workforce through innovation in, and alignment of, employment, 
training, and education programs; and
    (4) Incorporate the local plan into the regional plan per 20 CFR 
679.540.
    (b) In the case of planning regions, a regional plan is required to 
meet the purposes described in paragraph (a) of this section and to 
coordinate resources among multiple boards in a region.


Sec.  679.510  What are the requirements for regional planning?

    (a) Local Boards and chief elected officials within an identified 
planning region (as defined in WIOA secs. 106(a)(2)(B)-(C) and Sec.  
679.200 of this part) must:
    (1) Participate in a regional planning process that results in:
    (i) The preparation of a regional plan, as described in paragraph 
(a)(2) of this section and consistent with any guidance issued by the 
Department;
    (ii) The establishment of regional service strategies, including 
use of cooperative service delivery agreements;
    (iii) The development and implementation of sector initiatives for 
in-demand industry sectors or occupations for the planning region;
    (iv) The collection and analysis of regional labor market data (in 
conjunction with the State) which must include the local planning 
requirements at Sec.  679.560(a)(1)(i) and (ii);
    (v) The coordination of administrative cost arrangements, including 
the pooling of funds for administrative costs, as appropriate;
    (vi) The coordination of transportation and other supportive 
services as appropriate;
    (vii) The coordination of services with regional economic 
development services and providers; and
    (viii) The establishment of an agreement concerning how the 
planning region will collectively negotiate and reach agreement with 
the Governor on local levels of performance for, and report on, the 
performance accountability measures described in WIOA sec. 116(c) for 
local areas or the planning region.
    (2) Prepare, submit, and obtain approval of a single regional plan 
that:
    (i) Includes a description of the activities described in paragraph 
(a)(1) of this section; and
    (ii) Incorporates local plans for each of the local areas in the 
planning region, consistent with Sec.  679.540(a).
    (b) Consistent with Sec.  679.550(b), the Local Boards representing 
each local area in the planning region must provide an opportunity for 
public comment on the development of the regional plan or subsequent 
plan modifications before submitting the plan to the Governor. To 
provide adequate opportunity for public comment, the Local Boards must:
    (1) Make copies of the proposed regional plan available to the 
public through electronic and other means, such as public hearings and 
local news media;
    (2) Include an opportunity for comment by members of the public, 
including representatives of business, labor organizations, and 
education;
    (3) Provide no more than a 30-day period for comment on the plan 
before its submission to the Governor,

[[Page 20847]]

beginning on the date on which the proposed plan is made available; and
    (4) The Local Boards must submit any comments that express 
disagreement with the plan to the Governor along with the plan.
    (5) Consistent with WIOA sec. 107(e), the Local Board must make 
information about the plan available to the public on a regular basis 
through electronic means and open meetings.
    (c) The State must provide technical assistance and labor market 
data, as requested by local areas, to assist with regional planning and 
subsequent service delivery efforts.
    (d) As they relate to regional areas and regional plans, the terms 
local area and local plan are defined in WIOA secs. 106(c)(3)(A)-(B).


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

    Consistent with Sec.  679.570, the Governor must review completed 
plans (including a modification to the plan). Such plans will be 
considered approved 90 days after submission unless the Governor 
determines in writing that:
    (a) There are deficiencies in workforce investment activities that 
have been identified through audits and the local area has not made 
acceptable progress in implementing plans to address deficiencies; or
    (b) The plan does not comply with applicable provisions of WIOA and 
the WIOA regulations, including the required consultations and public 
comment provisions, and the nondiscrimination requirements of 29 CFR 
part 37.
    (c) The plan does not align with the State Plan, including with 
regard to the alignment of the core programs to support the strategy 
identified in the State Plan in accordance with WIOA sec. 102(b)(1)(E) 
and 20 CFR 676.105.


Sec.  679.530  When must the regional plan be modified?

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


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

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


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

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


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

    (a) The local workforce investment plan must describe strategic 
planning elements, including:
    (1) A regional analysis of:
    (i) Economic conditions including existing and emerging in-demand 
industry sectors and occupations; and
    (ii) Employment needs of employers in existing and emerging in-
demand industry sectors and occupations.
    (iii) As appropriate, a local area may use an existing analysis, 
which is a timely current description of the regional economy, to meet 
the requirements of paragraphs (a)(1)(i) and (ii) of this section.
    (2) Knowledge and skills needed to meet the employment needs of the 
employers in the region, including employment needs in in-demand 
industry sectors and occupations;
    (3) An analysis of the regional workforce, including current labor 
force employment and unemployment data, information on labor market 
trends, and educational and skill levels of the workforce, including 
individuals with barriers to employment;
    (4) An analysis of workforce development activities, including 
education and training, in the region. This analysis must include the 
strengths and weaknesses of workforce development activities and 
capacity to provide the workforce development activities to address the 
education and skill needs of the workforce, including individuals with 
barriers to employment, and the employment needs of employers;
    (5) A description of the Local Board's strategic vision to support 
regional economic growth and economic self-sufficiency. This must 
include goals for preparing an educated and skilled workforce 
(including youth and individuals with barriers to employment), and 
goals relating to the performance accountability measures based on 
performance indicators described in 20 CFR 677.155(a)(1); and
    (6) Taking into account analyses described in paragraphs (a)(1) 
through (4) of this section, a strategy to work with the entities that 
carry out the core programs and required partners to align resources 
available to the local area, to achieve the strategic vision and goals 
described in paragraph (a)(5) of this section;
    (b) The plan must include a description of the following 
requirements at WIOA secs. 108(b)(2)-(21):
    (1) The workforce development system in the local area that 
identifies:

[[Page 20848]]

    (i) The programs that are included in the system; and
    (ii) How the Local Board will support the strategy identified in 
the State Plan under 20 CFR 676.105 and work with the entities carrying 
out core programs and other workforce development programs, including 
programs of study authorized under the Carl D. Perkins Career and 
Technical Education Act of 2006 (20 U.S.C. 2301 et seq.) to support 
service alignment.
    (2) How the Local Board will work with entities carrying out core 
programs to:
    (i) Expand access to employment, training, education, and 
supportive services for eligible individuals, particularly eligible 
individuals with barriers to employment;
    (ii) Facilitate the development of career pathways and co-
enrollment, as appropriate, in core programs; and
    (iii) Improve access to activities leading to a recognized post-
secondary credential (including a credential that is an industry-
recognized certificate or certification, portable, and stackable);
    (3) The strategies and services that will be used in the local 
area:
    (i) To facilitate engagement of employers in workforce development 
programs, including small employers and employers in in-demand industry 
sectors and occupations;
    (ii) To support a local workforce development system that meets the 
needs of businesses in the local area;
    (iii) To better coordinate workforce development programs and 
economic development;
    (iv) To strengthen linkages between the one-stop delivery system 
and unemployment insurance programs; and
    (v) That may include the implementation of initiatives such as 
incumbent worker training programs, on-the-job training programs, 
customized training programs, industry and sector strategies, career 
pathways initiatives, utilization of effective business intermediaries, 
and other business services and strategies designed to meet the needs 
of regional employers. These initiatives should support the strategy 
described in this paragraph (b)(3).
    (4) An examination of how the Local Board will coordinate local 
workforce investment activities with regional economic development 
activities that are carried out in the local area and how the Local 
Board will promote entrepreneurial skills training and microenterprise 
services;
    (5) The one-stop delivery system in the local area, including:
    (i) How the Local Board will ensure the continuous improvement of 
eligible providers of services through the system and that such 
providers will meet the employment needs of local employers, workers, 
and jobseekers;
    (ii) How the Local Board will facilitate access to services 
provided through the one-stop delivery system, including in remote 
areas, through the use of technology and other means;
    (iii) How entities within the one-stop delivery system, including 
one-stop operators and the one-stop partners, will comply with WIOA 
sec. 188, if applicable, and applicable provisions of the Americans 
with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) regarding the 
physical and programmatic accessibility of facilities, programs and 
services, technology, and materials for individuals with disabilities, 
including providing staff training and support for addressing the needs 
of individuals with disabilities; and
    (iv) The roles and resource contributions of the one-stop partners;
    (6) A description and assessment of the type and availability of 
adult and dislocated worker employment and training activities in the 
local area;
    (7) A description of how the Local Board will coordinate workforce 
investment activities carried out in the local area with statewide 
rapid response activities;
    (8) A description and assessment of the type and availability of 
youth workforce investment activities in the local area including 
activities for youth who are individuals with disabilities, which must 
include an identification of successful models of such activities;
    (9) How the Local Board will coordinate relevant secondary and 
post-secondary education programs and activities with education and 
workforce investment activities to coordinate strategies, enhance 
services, and avoid duplication of services;
    (10) How the Local Board will coordinate WIOA title I workforce 
investment activities with the provision of transportation and other 
appropriate supportive services in the local area;
    (11) Plans, assurances, and strategies for maximizing coordination, 
improving service delivery, and avoiding duplication of Wagner-Peyser 
Act (29 U.S.C. 49 et seq.) services and other services provided through 
the one-stop delivery system;
    (12) How the Local Board will coordinate WIOA title I workforce 
investment activities with adult education and literacy activities 
under WIOA title II. This description must include how the Local Board 
will carry out the review of local applications submitted under title 
II consistent with WIOA secs. 107(d)(11)(A) and (B)(i) and WIOA sec. 
232;
    (13) Copies of executed cooperative agreements which define how all 
local service providers, including additional providers, will carry out 
the requirements for integration of and access to the entire set of 
services available in the local one-stop system. This includes 
cooperative agreements (as defined in WIOA sec. 107(d)(11)) between the 
Local Board or other local entities described in WIOA sec. 
101(a)(11)(B) of the Rehabilitation Act of 1973 (29 U.S.C. 
721(a)(11)(B)) and the local office of a designated State agency or 
designated State unit administering programs carried out under title I 
of such Act (29 U.S.C. 720 et seq.) (other than sec. 112 or part C of 
that title (29 U.S.C. 732, 741) and subject to sec. 121(f)) in 
accordance with sec. 101(a)(11) of such Act (29 U.S.C. 721(a)(11)) with 
respect to efforts that will enhance the provision of services to 
individuals with disabilities and to other individuals, such as cross 
training of staff, technical assistance, use and sharing of 
information, cooperative efforts with employers, and other efforts at 
cooperation, collaboration, and coordination;
    (14) An identification of the entity responsible for the disbursal 
of grant funds described in WIOA sec. 107(d)(12)(B)(i)(III), as 
determined by the chief elected official or the Governor under WIOA 
sec. 107(d)(12)(B)(i).
    (15) The competitive process that will be used to award the 
subgrants and contracts for WIOA title I activities;
    (16) The local levels of performance negotiated with the Governor 
and chief elected official consistent with WIOA sec. 116(c), to be used 
to measure the performance of the local area and to be used by the 
Local Board for measuring the performance of the local fiscal agent 
(where appropriate), eligible providers under WIOA title I subtitle B, 
and the one-stop delivery system in the local area;
    (17) The actions the Local Board will take toward becoming or 
remaining a high-performing board, consistent with the factors 
developed by the State Board (WIOA sec. 101(d)(6));
    (18) How training services outlined in WIOA sec. 134 will be 
provided through the use of individual training accounts, including, if 
contracts for training services will be used, how the use of such 
contracts will be coordinated with the use of individual training 
accounts under that chapter, and how the Local Board will ensure 
informed customer choice in the selection of training programs 
regardless of how the training services are to be provided;

[[Page 20849]]

    (19) The process used by the Local Board, consistent with WIOA 
108(d), to provide a 30-day public comment period prior to submission 
of the plan, including an opportunity to have input into the 
development of the local plan, particularly for representatives of 
businesses, education, and labor organizations;
    (20) How one-stop centers are implementing and transitioning to an 
integrated, technology-enabled intake and case management information 
system for programs carried out under WIOA and by one-stop partners; 
and
    (21) The direction given by the Governor and the Local Board to the 
one-stop operator to ensure priority for adult career and training 
services will be given to recipients of public assistance, other low-
income individuals, and individuals who are basic skills deficient 
consistent with WIOA 134(c)(3)(E) and Sec.  680.600.
    (c) The local plan must include any additional information required 
by the Governor.
    (d) The local plan should identify the portions that the Governor 
has designated as appropriate for common response in the regional plan 
where there is a shared regional responsibility, as permitted by Sec.  
679.540(b).
    (e) Comments submitted during the public comment period that 
represent disagreement with the plan must be submitted with the local 
plan.


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

    (a) Consistent with the requirements at Sec.  679.520 the Governor 
must review completed plans (including a modification to the plan). 
Such plans will be considered approved 90 days after submission unless 
the Governor determines in writing that:
    (1) There are deficiencies in workforce investment activities that 
have been identified through audits and the local area has not made 
acceptable progress in implementing plans to address deficiencies; or
    (2) The plan does not comply with applicable provisions of WIOA and 
the WIOA regulations, including the required consultations and public 
comment provisions, and the nondiscrimination requirements of 29 CFR 
part 37.
    (3) The plan does not align with the State Plan, including with 
regard to the alignment of the core programs to support the strategy 
identified in the State Plan in accordance with WIOA sec. 102(b)(1)(E) 
and 20 CFR 676.105.
    (b) In cases where the State is a single local area:
    (1) The State must incorporate the local plan into the State's 
Unified or Combined State Plan and submit it to the Department of Labor 
in accordance with the procedures described in 20 CFR 676.105.
    (2) The Secretary of Labor performs the roles assigned to the 
Governor as they relate to local planning activities.
    (3) The Secretary of Labor will issue planning guidance for such 
States.


Sec.  679.580  When must the local plan be modified?

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

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


Sec.  679.600  What is the purpose of the General Statutory and 
Regulatory Waiver Authority in the Workforce Innovation and Opportunity 
Act?

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


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

    (a) The Secretary may waive for a State, or local area in a State, 
any of the statutory or regulatory requirements of subtitles A, B and E 
of title I of WIOA, except for requirements relating to:
    (1) Wage and labor standards;
    (2) Non-displacement protections;
    (3) Worker rights;
    (4) Participation and protection of workers and participants;
    (5) Grievance procedures and judicial review;
    (6) Nondiscrimination;
    (7) Allocation of funds to local areas;
    (8) Eligibility of providers or participants;
    (9) The establishment and functions of local areas and Local 
Boards;
    (10) Procedures for review and approval of State and Local plans;
    (11) The funding of infrastructure costs for one-stop centers; and
    (12) Other requirements relating to the basic purposes of title I 
of WIOA described in Sec.  675.100 of this chapter.
    (b) The Secretary may waive for a State, or local area in a State, 
any of the statutory or regulatory requirements of secs. 8 through 10 
of the Wagner-Peyser Act (29 U.S.C. 49g-49i) except for requirements 
relating to:
    (1) The provision of services to unemployment insurance claimants 
and veterans; and
    (2) Universal access to the basic labor exchange services without 
cost to job seekers.


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

    (a) The Secretary will issue guidelines under which the States may 
request general waivers of WIOA and Wagner-Peyser requirements.
    (b) A Governor may request a general waiver in consultation with 
appropriate chief elected officials:
    (1) By submitting a waiver plan which may accompany the State's 
WIOA 4-year Unified or Combined State Plan or 2-year modification; or
    (2) After a State's WIOA Plan is approved, by separately submitting 
a waiver plan.
    (c) A Governor's waiver request may seek waivers for the entire 
State or for one or more local areas within the State.
    (d) A Governor requesting a general waiver must submit to the 
Secretary a plan to improve the statewide workforce investment system 
that:
    (1) Identifies the statutory or regulatory requirements for which a 
waiver is requested and the goals that the State or local area, as 
appropriate, intends to achieve as a result of the waiver and how those 
goals relate to the Unified or Combined State Plan;
    (2) Describes the actions that the State or local area, as 
appropriate, has

[[Page 20850]]

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


Sec.  679.630  Under what conditions may the Governor submit a 
Workforce Flexibility Plan?

    (a) A State may submit to the Secretary, and the Secretary may 
approve, a workforce flexibility (workflex) plan under which the State 
is authorized to waive, in accordance with the plan:
    (1) Any of the statutory or regulatory requirements under title I 
of WIOA applicable to local areas, if the local area requests the 
waiver in a waiver application, except for:
    (i) Requirements relating to the basic purposes of title I of WIOA 
described in Sec.  675.100 of this chapter;
    (ii) Wage and labor standards;
    (iii) Grievance procedures and judicial review;
    (iv) Nondiscrimination;
    (v) Eligibility of participants;
    (vi) Allocation of funds to local areas;
    (vii) Establishment and functions of local areas and Local Boards;
    (viii) Procedures for review and approval of local plans; and
    (ix) Worker rights, participation, and protection.
    (2) Any of the statutory or regulatory requirements applicable to 
the State under secs. 8 through 10 of the Wagner-Peyser Act (29 U.S.C. 
49g-49i), except for requirements relating to:
    (i) The provision of services to unemployment insurance claimants 
and veterans; and
    (ii) Universal access to basic labor exchange services without cost 
to job seekers.
    (3) Any of the statutory or regulatory requirements applicable 
under the Older Americans Act of 1965 (OAA) (42 U.S.C. 3001 et seq.), 
to State agencies on aging with respect to activities carried out using 
funds allotted under OAA sec. 506(b) (42 U.S.C. 3056d(b)), except for 
requirements relating to:
    (i) The basic purposes of OAA;
    (ii) Wage and labor standards;
    (iii) Eligibility of participants in the activities; and
    (iv) Standards for grant agreements.
    (b) A workforce flexibility plan submitted under paragraph (a) of 
this section must include descriptions of:
    (1) The process by which local areas in the State may submit and 
obtain State approval of applications for waivers of requirements under 
title I of WIOA;
    (2) A description of the criteria the State will use to approve 
local area waiver requests and how such requests support implementation 
of the goals identified State Plan;
    (3) The statutory and regulatory requirements of title I of WIOA 
that are likely to be waived by the State under the workforce 
flexibility plan;
    (4) The statutory and regulatory requirements of secs. 8 through 10 
of the Wagner-Peyser Act that are proposed for waiver, if any;
    (5) The statutory and regulatory requirements of the Older 
Americans Act of 1965 that are proposed for waiver, if any;
    (6) The outcomes to be achieved by the waivers described in 
paragraphs (b)(1) to (b)(5) of this section including, where 
appropriate, revisions to adjusted levels of performance included in 
the State or local plan under title I of WIOA, and a description of the 
data or other information the State will use to track and assess 
outcomes; and
    (7) The measures to be taken to ensure appropriate accountability 
for Federal funds in connection with the waivers.
    (c) A State's workforce flexibility plan may accompany the State's 
Unified or Combined State Plan, 2-year modification, or may be 
submitted separately as a modification to that plan.
    (d) The Secretary may approve a workforce flexibility plan 
consistent with the period of approval of the State's Unified or 
Combined State Plan, and not for more than 5 years.
    (e) Before submitting a workforce flexibility plan to the Secretary 
for approval, the State must provide adequate notice and a reasonable 
opportunity for comment on the proposed waiver requests under the 
workforce flexibility plan to all interested parties and to the general 
public.
    (f) The Secretary will issue guidelines under which States may 
request designation as a work-flex State. These guidelines may require 
a State to implement an evaluation of the impact of work-flex in the 
State.


Sec.  679.640  What limitations apply to the State's Workforce 
Flexibility Plan authority under the Workforce Innovation and 
Opportunity Act?

    (a)(1) Under work-flex waiver authority a State must not waive the 
WIOA, Wagner-Peyser or Older

[[Page 20851]]

Americans Act requirements which are excepted from the work-flex waiver 
authority and described in Sec.  679.630(a).
    (2) Requests to waive statutory and regulatory requirements of 
title I of WIOA applicable at the State level may not be granted under 
work-flex waiver authority granted to a State. Such requests may only 
be granted by the Secretary under the general waiver authority 
described at Sec. Sec.  679.610 through 679.620.
    (b) As required in Sec.  679.630(b)(6), States must address the 
outcomes to result from work-flex waivers as part of its workforce 
flexibility plan. The Secretary may terminate a State's work-flex 
designation if the State fails to meet agreed-upon outcomes or other 
terms and conditions contained in its workforce flexibility plan.
0
7. Add part 680 to read as follows:

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

Subpart A--Delivery of Adult and Dislocated Worker Activities Under 
Title I of the Workforce Innovation and Opportunity Act
Sec.
680.100 What is the role of the adult and dislocated worker programs 
in the one-stop delivery system?
680.110 When must adults and dislocated workers be registered and 
considered a participant?
680.120 What are the eligibility criteria for career services for 
adults in the adult and dislocated worker programs?
680.130 What are the eligibility criteria for career services for 
dislocated workers in the adult and dislocated worker programs?
680.140 What Workforce Innovation and Opportunity Act title I adult 
and dislocated worker services are Local Boards required and 
permitted to provide?
680.150 What career services must be provided to adults and 
dislocated workers?
680.160 How are career services delivered?
680.170 What is an internship or work experience for adults and 
dislocated workers?
680.180 What is the individual employment plan?
Subpart B--Training Services
680.200 What are training services for adults and dislocated 
workers?


680.210  Who may receive training services?

680.220 Are there particular career services an individual must 
receive before receiving training services under Workforce 
Innovation and Opportunity Act?
680.230 What are the requirements for coordination of Workforce 
Innovation and Opportunity Act training funds and other grant 
assistance?
Subpart C--Individual Training Accounts
680.300 How are training services provided?
680.310 Can the duration and amount of Individual Training Accounts 
be limited?
680.320 Under what circumstances may mechanisms other than 
Individual Training Accounts be used to provide training services?
680.330 How can Individual Training Accounts, supportive services, 
and needs-related payments be used to support placing participating 
adults and dislocated workers into a registered apprenticeship 
program and support participants once they are in a registered 
apprenticeship program?
680.340 What are the requirements for consumer choice?
Subpart D--Eligible Training Providers
680.400 What is the purpose of this subpart?
680.410 What entities are eligible providers of training services?
680.420 What is a ``program of training services''?
680.430 Who is responsible for managing the eligible provider 
process?
680.440 What are the transition procedures for Workforce Investment 
Act-eligible providers to become eligible under the Workforce 
Innovation and Opportunity Act?
680.450 What is the initial eligibility procedure for new providers?
680.460 What is the application procedure for continued eligibility?
680.470 What is the procedure for registered apprenticeship programs 
that seek to be included in a State's eligible training provider 
list?
680.480 May an eligible training provider lose its eligibility?
680.490 What kind of performance and cost information must eligible 
training providers provide for each program of training?
680.500 How is the State list of eligible training providers 
disseminated?
680.510 In what ways can a Local Board supplement the information 
available from the State list?
680.520 May individuals choose training providers located outside of 
the local area?
680.530 What requirements apply to providers of on-the-job-training, 
customized training, incumbent worker training, and other training 
exceptions?
Subpart E--Priority and Special Populations
680.600 What priority must be given to low-income adults and public 
assistance recipients and individuals who are basic skills deficient 
served with adult funds under title I?
680.610 Does the statutory priority for use of adult funds also 
apply to dislocated worker funds?
680.620 How does the Temporary Assistance for Needy Families program 
relate to the one-stop delivery system?
680.630 How does a displaced homemaker qualify for services under 
title I?
680.640 May an individual with a disability whose family does not 
meet income eligibility criteria under the Act be eligible for 
priority as a low-income adult?
680.650 Do veterans receive priority of service under the Workforce 
Innovation and Opportunity Act?
680.660 Are separating military service members eligible for 
dislocated worker activities under the Workforce Innovation and 
Opportunity Act?
Subpart F--Work-Based Training
680.700 What are the requirements for on-the-job training?
680.710 What are the requirements for on-the-job training contracts 
for employed workers?
680.720 What conditions govern on-the-job training payments to 
employers?
680.730 Under what conditions may a Governor or Local Board raise 
the on-the-job training reimbursement rate up to 75 percent of the 
wage rate?
680.740 How can on-the-job training funds be used to support placing 
participants into a registered apprenticeship program?
680.750 Can Individual Training Account and on-the-job training 
funds be combined to support placing participants into a registered 
apprenticeship program?
680.760 What is customized training?
680.770 What are the requirements for customized training for 
employed workers?
680.780 Who is an ``incumbent worker'' for purposes of statewide and 
local employment and training activities?
680.790 What is incumbent worker training?
680.800 What funds may be used for incumbent worker training?
680.810 What criteria must be taken into account for an employer to 
be eligible to receive local incumbent worker funds?
680.820 Are there cost sharing requirements for local area incumbent 
worker training?
680.830 What is a transitional job?
680.840 What funds may be used for transitional jobs?
680.850 May funds provided to employers for work-based training be 
used to assist, promote, or deter union organizing?
Subpart G--Supportive Services
680.900 What are supportive services for adults and dislocated 
workers?
680.910 When may supportive services be provided to participants?
680.920 Are there limits on the amounts or duration of funds for 
supportive services?
680.930 What are needs-related payments?
680.940 What are the eligibility requirements for adults to receive 
needs-related payments?
680.950 What are the eligibility requirements for dislocated workers 
to receive needs-related payments?

[[Page 20852]]

680.960 May needs-related payments be paid while a participant is 
waiting to start training classes?
680.970 How is the level of needs-related payments determined?

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

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


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

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


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

    (a) Registration is the process for collecting information to 
support a determination of eligibility. This information may be 
collected through methods that include electronic data transfer, 
personal interview, or an individual's application. Participation 
occurs after the registration process of collecting information to 
support an eligibility determination and begins when the individual 
receives a staff-assisted WIOA service, which does not include self-
service or informational activities.
    (b) Adults and dislocated workers who receive services funded under 
title I other than self-service or informational activities must be 
registered and must be a participant.
    (c) Employment Opportunity data must be collected on every 
individual who is interested in being considered for WIOA title I 
financially assisted aid, benefits, services, or training by a 
recipient, and who has signified that interest by submitting personal 
information in response to a request from the grant recipient or 
designated service provider.


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

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


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

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


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

    (a) WIOA title I formula funds allocated to local areas for adults 
and dislocated workers must be used to provide career and training 
services through the one-stop delivery system. Local Boards determine 
the most appropriate mix of these services, but both types must be 
available for eligible adults and dislocated workers. Different 
eligibility criteria apply for each type of services. See Sec. Sec.  
680.120, 680.130, and 680.210.
    (b) WIOA title I funds may also be used to provide the additional 
services described in WIOA sec. 134(d), including:
    (1) Job seeker services:
    (i) Customer support to enable individuals with barriers to 
employment (including individuals with disabilities) and veterans, to 
navigate among multiple services and activities (WIOA sec. 
134(d)(1)(A)(iv));
    (ii) Training programs for displaced homemakers and for individuals 
training for nontraditional occupations (as defined in WIOA sec. 3(37) 
as occupations or fields of work in which individuals of one gender 
comprise less than 25 percent of the individuals so employed), in 
conjunction with programs operated in the local area (WIOA sec. 
134(d)(1)(A)(viii));
    (iii) Work support activities for low-wage workers, in coordination 
with one-stop partners, which will provide opportunities for these 
workers to retain or enhance employment. These activities may include 
any activities available under the WIOA adult and dislocated worker 
programs in coordination with activities and resources available 
through partner programs. These activities may be provided in a manner 
that enhances the worker's ability to participate, for example by 
providing them at nontraditional hours or providing on-site child care 
(WIOA sec. 134(d)(1)(B));
    (iv) Supportive services, including needs-related payments, as 
described in subpart G of this part (WIOA secs. 134(d)(2) and (3)); and
    (v) Providing transitional jobs, as described in Sec.  680.830, to 
individuals with barriers to employment who are chronically unemployed 
or have an inconsistent work history (WIOA sec. 134(d)(5)).
    (2) Employer services:
    (i) Customized screening and referral of qualified participants in 
training services to employers (WIOA sec. 134(d)(1)(A)(i));
    (ii) Customized employment-related services to employers, employer 
associations, or other such organization on a fee-for-service basis 
that are in addition to labor exchange services available to employers 
under the Wagner-Peyser Act (WIOA sec. 134(d)(1)(A)(ii));

[[Page 20853]]

    (iii) Activities to provide business services and strategies that 
meet the workforce investment needs of area employers, as determined by 
the Local Board and consistent with the local plan (see Sec.  678.435 
and WIOA sec. 134(d)(1)(A)(ix)); and
    (3) Coordination activities:
    (i) Employment and training activities in coordination with child 
support enforcement activities, as well as child support services and 
assistance activities, of the State and local agencies carrying out 
part D of title IV of the Social Security Act (42 U.S.C. 651 et seq.) 
(WIOA secs. 134(d)(1)(A)(vi)(I)-(II));
    (ii) Employment and training activities in coordination with 
cooperative extension programs carried out by the Department of 
Agriculture (WIOA sec. 134(d)(1)(A)(vi)(III));
    (iii) Employment and training activities in coordination with 
activities to facilitate remote access to services provided through a 
one-stop delivery system, including facilitating access through the use 
of technology (WIOA sec. 134(d)(1)(A)(vi)(IV));
    (iv) Improving coordination between workforce investment activities 
and economic development activities carried out within the local area 
involved, and to promote entrepreneurial skills training and 
microenterprise services (WIOA sec. 134(d)(1)(A)(vii)(I));
    (v) Improving services and linkages between the local workforce 
investment system (including the local one-stop delivery system) and 
employers, including small employers, in the local area (WIOA sec. 
134(d)(1)(A)(vii)(II));
    (vi) Strengthening linkages between the one-stop delivery system 
and the unemployment insurance programs (WIOA sec. 
134(d)(1)(A)(vii)(III)); and
    (vii) Improving coordination between employment and training 
activities and programs carried out in the local area for individuals 
with disabilities, including programs carried out by State agencies 
relating to intellectual disabilities and developmental disabilities, 
activities carried out by Statewide Independent Living Councils 
established under sec. 705 of the Rehabilitation Act of 1973 (29 U.S.C. 
796d), programs funded under part B of chapter 1 of title VII of such 
Act (29 U.S.C. 796e et seq.), and activities carried out by centers for 
independent living, as defined in sec. 702 of such Act (29 U.S.C. 796a) 
(WIOA sec. 134(d)(1)(A)(xi)).
    (4) Implementing a pay-for-performance contract strategy for 
training services in accordance with Sec. Sec.  683.500 through 683.530 
for which up to 10 percent of the Local Board's total adult and 
dislocated worker funds may be used (WIOA sec. 134(d)(1)(A)(iii)).
    (5) Technical assistance for one-stop operators, partners, and 
eligible training providers on the provision of service to individuals 
with disabilities in local areas, including staff training and 
development, provision of outreach and intake assessments, service 
delivery, service coordination across providers and programs, and 
development of performance accountability measures (WIOA sec. 
134(d)(1)(A)(v)).
    (6) Activities to adjust the economic self-sufficiency standards 
referred to in WIOA sec. 134(a)(3)(A)(xii) for local factors or 
activities to adopt, calculate or commission for approval, economic 
self-sufficiency standards for the local areas that specify the income 
needs of families, by family size, the number and ages of children in 
the family, and sub-State geographical considerations (WIOA sec. 
134(d)(1)(A)(x)).
    (7) Implementing promising service to workers and businesses, which 
may include support for education, training, skill upgrading, and 
statewide networking for employees to become workplace learning 
advisors and maintain proficiency in carrying out the activities 
associated with such advising (WIOA sec. 134(d)(1)(A)(xii)).
    (8) Incumbent worker training programs, as described in subpart F 
of this part (WIOA sec. 134(d)(4)).


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

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


Sec.  680.160  How are career services delivered?

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


Sec.  680.170  What is an internship or work experience for adults and 
dislocated workers?

    For the purposes of WIOA sec. 134(c)(2)(A)(xii)(VII), internships 
or work experiences are a planned, structured learning experience that 
takes place in a workplace for a limited period of time. Work 
experience may be paid or unpaid, as appropriate. An internship or work 
experience may be arranged within the private for profit sector, the 
non-profit sector, or the public sector. Labor standards apply in any 
work experience setting where an employee/employer relationship, as 
defined by the Fair Labor Standards Act, exists.


Sec.  680.180  What is the individual employment plan?

    The individual employment plan is an individualized career service, 
under WIOA sec. 134(c)(2)(A)(xii)(II), that is jointly developed by the 
participant and case manager when determined appropriate by the one-
stop operator or one-stop partner. The plan is an ongoing strategy to 
identify employment goals, achievement objectives, and an appropriate 
combination of services for the participant to achieve the employment 
goals.

Subpart B--Training Services


Sec.  680.200  What are training services for adults and dislocated 
workers?

    Training services are listed in WIOA sec. 134(c)(3)(D). The list in 
the Act is not all-inclusive and additional training services may be 
provided.


Sec.  680.210  Who may receive training services?

    Under WIOA sec. 134(c)(3)(A) training services may be made 
available to employed and unemployed adults and dislocated workers who:
    (a) A one-stop operator or one-stop partner determines, after an 
interview, evaluation, or assessment, and career planning, are:
    (1) Unlikely or unable to obtain or retain employment that leads to 
economic self-sufficiency or wages comparable to or higher than wages 
from previous employment through career services;
    (2) In need of training services to obtain or retain employment 
leading to economic self-sufficiency or wages comparable to or higher 
than wages from previous employment; and

[[Page 20854]]

    (3) Have the skills and qualifications to participate successfully 
in training services;
    (b) Have selected a program of training services that is directly 
linked to the employment opportunities in the local area or the 
planning region, or in another area to which the individuals are 
willing to commute or relocate;
    (c) Are unable to obtain grant assistance from other sources to pay 
the costs of such training, including such sources as State-funded 
training funds, Trade Adjustment Assistance, and Federal Pell Grants 
established under title IV of the Higher Education Act of 1965, or 
require WIOA assistance in addition to other sources of grant 
assistance, including Federal Pell Grants (provisions relating to fund 
coordination are found at Sec.  680.230 and WIOA sec. 134(c)(3)(B)); 
and
    (d) If training services are provided through the adult funding 
stream, are determined eligible in accordance with the State and local 
priority system, if any, in effect for adults under WIOA sec. 
134(c)(3)(E) and Sec.  680.600.


Sec.  680.220  Are there particular career services an individual must 
receive before receiving training services under Workforce Innovation 
and Opportunity Act?

    (a) Yes, an individual must at a minimum receive either an 
interview, evaluation, or assessment, and career planning or any other 
method through which the one-stop operator or partner can obtain enough 
information to make an eligibility determination to be determined 
eligible for training services see WIOA sec. 134(c)(3)(A)(i). Where 
appropriate, a recent interview, evaluation, or assessment, may be used 
for the assessment purpose; see WIOA sec. 134(c)(3)(A)(ii); and
    (b) The case file must contain a determination of need for training 
services under Sec.  680.210 as determined through the interview, 
evaluation, or assessment, and career planning informed by local labor 
market information and training provider performance information, or 
through any other career service received. There is no requirement that 
career services be provided as a condition to receipt of training 
services; however, if career services are not provided before training, 
the Local Board must document the circumstances that justified its 
determination to provide training without first providing the services 
described in paragraph (a) of this section.
    (c) There is no Federally-required minimum time period for 
participation in career services before receiving training services.


Sec.  680.230  What are the requirements for coordination of Workforce 
Innovation and Opportunity Act training funds and other grant 
assistance?

    (a) WIOA funding for training is limited to participants who:
    (1) Are unable to obtain grant assistance from other sources to pay 
the costs of their training; or
    (2) Require assistance beyond that available under grant assistance 
from other sources to pay the costs of such training. Program operators 
and training providers must coordinate funds available to pay for 
training as described in paragraphs (b) and (c) of this section. In 
making the determination under this paragraph, one-stop operators 
should take into account the full cost of participating in training 
services, including the cost of support services and other appropriate 
costs.
    (b) One-stop operators must coordinate training funds available and 
make funding arrangements with one-stop partners and other entities to 
apply the provisions of paragraph (a) of this section. One-stop 
operators must consider the availability of other sources of grants to 
pay for training costs such as Temporary Assistance for Needy Families 
(TANF), State-funded training funds, and Federal Pell Grants, so that 
WIOA funds supplement other sources of training grants.
    (c) A WIOA participant may enroll in WIOA-funded training while 
his/her application for a Pell Grant is pending as long as the one-stop 
operator has made arrangements with the training provider and the WIOA 
participant regarding allocation of the Pell Grant, if it is 
subsequently awarded. In that case, the training provider must 
reimburse the one-stop operator the WIOA funds used to underwrite the 
training for the amount the Pell Grant covers. Reimbursement is not 
required from the portion of Pell Grant assistance disbursed to the 
WIOA participant for education-related expenses. (WIOA sec. 
134(c)(3)(B))

Subpart C--Individual Training Accounts


Sec.  680.300  How are training services provided?

    Training service for eligible individuals are typically provided by 
training providers who receive payment for their services through an 
Individual Training Account (ITA). The ITA is a payment agreement 
established on behalf of a participant with a training provider. WIOA 
title I adult and dislocated workers purchase training services from 
eligible providers they select in consultation with the case manager, 
which includes discussion of quality and performance information on the 
available training providers. Payments from ITAs may be made in a 
variety of ways, including the electronic transfer of funds through 
financial institutions, vouchers, or other appropriate methods. 
Payments may also be made incrementally, e.g., through payment of a 
portion of the costs at different points in the training course. (WIOA 
sec. 134(c)(4)(G)) Under limited conditions, as provided in Sec.  
680.320 and WIOA sec. 134(d)(3)(G), a Local Board may contract for 
these services, rather than using an ITA for this purpose. In some 
limited circumstances, the Local Board may itself provide the training 
services, but only if it obtains a waiver from the Governor for this 
purpose, and the Local Board meets the other requirements of Sec.  
679.410 and WIOA sec. 107(g)(1).


Sec.  680.310  Can the duration and amount of Individual Training 
Accounts be limited?

    (a) Yes, the State or Local Board may impose limits on ITAs, such 
as limitations on the dollar amount and/or duration.
    (b) Limits to ITAs may be established in different ways:
    (1) There may be a limit for an individual participant that is 
based on the needs identified in the individual employment plan, such 
as the participant's occupational choice or goal and the level of 
training needed to succeed in that goal; or
    (2) There may be a policy decision by the State Board or Local 
Board to establish a range of amounts and/or a maximum amount 
applicable to all ITAs.
    (c) Limitations established by State or Local Board policies must 
be described in the State or Local Plan, respectively, but must not be 
implemented in a manner that undermines the Act's requirement that 
training services are provided in a manner that maximizes customer 
choice in the selection of an eligible training provider. ITA 
limitations may provide for exceptions to the limitations in individual 
cases.
    (d) An individual may select training that costs more than the 
maximum amount available for ITAs under a State or local policy when 
other sources of funds are available to supplement the ITA. These other 
sources may include: Pell Grants; scholarships; severance pay; and 
other sources.

[[Page 20855]]

Sec.  680.320  Under what circumstances may mechanisms other than 
Individual Training Accounts be used to provide training services?

    (a) Contracts for services may be used instead of ITAs only when 
one or more of the following five exceptions apply:
    (1) When the services provided are on-the-job training (OJT), 
customized training, incumbent worker training or transitional jobs;
    (2) When the Local Board determines that there are an insufficient 
number of eligible providers in the local area to accomplish the 
purpose of a system of ITAs. The Local Plan must describe the process 
to be used in selecting the providers under a contract for services. 
This process must include a public comment period for interested 
providers of at least 30 days;
    (3) When the Local Board determines that there is a training 
services program of demonstrated effectiveness offered in the area by a 
community-based organization (CBO) or another private organization to 
serve individuals with barriers to employment, as described in 
paragraph (b) of this section. The Local Board must develop criteria to 
be used in determining demonstrated effectiveness, particularly as it 
applies to the individuals with barriers to employment to be served. 
The criteria may include:
    (i) Financial stability of the organization;
    (ii) Demonstrated performance in the delivery of services to hard 
to serve participant populations through such means as program 
completion rate; attainment of the skills, certificates or degrees the 
program is designed to provide; placement after training in 
unsubsidized employment; and retention in employment; and
    (iii) How the specific program relates to the workforce investment 
needs identified in the local plan.
    (4) When the Local Board determines that it would be most 
appropriate to contract with an institution of higher education or 
other eligible provider of training services will facilitate the 
training of multiple individuals in in-demand industry sectors or 
occupations, provided that the contract does not limit consumer choice.
    (5) When the Local Board is considering entering into a pay-for-
performance contract, the Local Board ensures that the contract is 
consistent with Sec.  683.510.
    (b) Under paragraph (a)(3) of this section, individuals with 
barriers to employment include those individuals in one or more of the 
following categories, as prescribed by WIOA sec. 3(24):
    (1) Displaced homemakers;
    (2) Low-income individuals;
    (3) Indians, Alaska Natives, and Native Hawaiians;
    (4) Individuals with disabilities;
    (5) Older individuals, i.e., those aged 55 or over;
    (6) Ex-offenders;
    (7) Homeless individuals;
    (8) Youth who are in or have aged out of the foster care system;
    (9) Individuals who are English language learners, individuals who 
have low levels of literacy, and individuals facing substantial 
cultural barriers;
    (10) Eligible migrant and seasonal farmworkers, defined in WIOA 
sec. 167(i);
    (11) Individuals within 2 years of exhausting lifetime eligibility 
under TANF (part A of title IV of the Social Security Act);
    (12) Single-parents (including single pregnant women);
    (13) Long-term unemployed individuals;
    (14) Other groups determined by the Governor to have barriers to 
employment.


Sec.  680.330  How can Individual Training Accounts, supportive 
services, and needs-related payments be used to support placing 
participating adults and dislocated workers into a registered 
apprenticeship program and support participants once they are in a 
registered apprenticeship program?

    Registered apprenticeships automatically qualify to be a on a 
State's eligible training provider list (ETPL) as described in Sec.  
680.470. ITAs can be used to support participants in:
    (a) Pre-apprenticeship training, as defined in Sec.  681.480;
    (b) Training tuition for a registered apprenticeship program to the 
training provider;
    (c) Supportive services may be provided as described in Sec. Sec.  
680.900 and 680.910; and
    (d) Needs-related payments may be provided as described in 
Sec. Sec.  680.930, 680.940, 680.950, 680.960, and 680.970;
    (e) Work-based training options may also be used to support 
participants in registered apprenticeship programs (see Sec. Sec.  
680.740 and 680.750).


Sec.  680.340  What are the requirements for consumer choice?

    (a) Training services, whether under ITA's or under contract, must 
be provided in a manner that maximizes informed consumer choice in 
selecting an eligible provider.
    (b) Each Local Board, through the one-stop center, must make 
available to customers the State list of eligible providers required in 
WIOA sec. 122(e). The list includes a description of the programs 
through which the providers may offer the training services, the 
information identifying eligible providers of on-the-job training and 
customized training required under WIOA sec. 122(h) (where applicable), 
and the performance and cost information about eligible providers of 
training services described in WIOA secs. 122(d) and 122(h).
    (c) An individual who has been determined eligible for training 
services under Sec.  680.210 may select a provider described in 
paragraph (b) of this section after consultation with a career planner. 
Unless the program has exhausted training funds for the program year, 
the operator must refer the individual to the selected provider, and 
establish an ITA for the individual to pay for training. For purposes 
of this paragraph, a referral may be carried out by providing a voucher 
or certificate to the individual to obtain the training.
    (d) The cost of referral of an individual with an ITA to a training 
provider is paid by the applicable adult or dislocated worker program 
under title I of WIOA.
    (e) Each Local Board, through the one-stop center, may coordinate 
funding for ITAs with funding from other Federal, State, local, or 
private job training programs or sources to assist the individual in 
obtaining training services.
    (f) Consistent with paragraph (a) of this section, priority 
consideration must be given to programs that lead to recognized post-
secondary credentials that are aligned with in-demand industry sectors 
or occupations in the local area.

Subpart D--Eligible Training Providers


Sec.  680.400  What is the purpose of this subpart?

    (a) This subpart describes the process for determining eligible 
training providers for WIOA title I-B adult and dislocated worker 
training participants and for publicly disseminating the list of these 
providers with relevant information about their programs. The workforce 
development system established under WIOA emphasizes informed consumer 
choice, job-driven training, provider performance, and continuous 
improvement. The quality and selection of providers and programs of 
training services is vital to achieving these core principles.
    (b) The State eligible training provider list and the related 
eligibility procedures ensure the accountability, quality and labor-
market relevance of programs of training services that receive funds 
through WIOA title I-B.

[[Page 20856]]

The State list is also a means for ensuring informed customer choice 
for individuals eligible for training. In administering the eligible 
training provider process, States and local areas must work to ensure 
that qualified providers offering a wide variety of job-driven training 
programs are available. The State list is made publicly available 
online through Web sites and searchable databases as well as any other 
means the State uses to disseminate information to consumers. The list 
must be accompanied by relevant performance and cost information and 
must be presented in a way that is easily understood, in order to 
maximize informed consumer choice and serve all significant population 
groups, and must also be available in an electronic format. The State 
eligible training provider performance reports, as required under WIOA 
sec. 116(d)(4), are addressed separately in Sec.  677.230.


Sec.  680.410  What entities are eligible providers of training 
services?

    (a) Eligible providers of training services are entities that are 
eligible to receive WIOA title I-B funds, according to criteria and 
procedures established by the Governor in accordance with WIOA sec. 
122(b) for adult and dislocated worker participants who enroll in 
training services. Potential providers may include:
    (1) Institutions of higher education that provide a program which 
leads to a recognized post-secondary credential;
    (2) Entities that carry out programs registered under the National 
Apprenticeship Act (29 U.S.C. 50 et seq.);
    (3) Other public or private providers of a program of training 
services, which may include joint labor-management organizations and 
eligible providers of adult education and literacy activities under 
title II if such activities are provided in combination with 
occupational skills training; and
    (4) Local Boards, if they meet the conditions of WIOA sec. 
107(g)(1).
    (b) In order to provide training services, a provider must meet the 
requirements of this part and WIOA sec. 122.
    (1) The requirements of this part apply to the use of WIOA title I-
B adult and dislocated worker funds to provide training:
    (i) To individuals using individual training accounts to access 
training through the eligible training provider list; and
    (ii) To individuals for training provided through the exceptions to 
individual training accounts described at Sec. Sec.  680.320 and 
680.530. Training services under WIOA title I-B may be provided through 
a contract for services rather than Individual Training Accounts under 
conditions identified in WIOA sec. 134(c)(3)(G). These exceptions 
include: on-the-job training, customized training, incumbent worker 
training or transitional employment; instances where the Local Board 
determines there are insufficient number of eligible providers of 
training services in the local area; where the Local Board determines 
an exception is necessary to meet the needs of individuals with 
barriers to employment (including assisting individuals with 
disabilities or adults in need of adult education and literacy 
services); where the Local Board determines that it would be most 
appropriate to award a contract to an institution of higher education 
or other eligible provider to facilitate the training of multiple 
individuals in in-demand industry sectors or occupations (where the 
contract does not limit customer choice); and, for pay-for-performance 
contracts.
    (2) The requirements of this part apply to all entities providing 
training to adult and dislocated workers, with specific exceptions for 
entities that carry out registered apprenticeship programs, as 
described in Sec.  680.470.


Sec.  680.420  What is a ``program of training services''?

    A program of training services, as referred to in Sec.  680.410(a), 
is one or more courses or classes, or a structured regimen that leads 
to:
    (a) A recognized post-secondary credential, secondary school 
diploma or its equivalent,
    (b) Employment, or
    (c) Measurable skill gains toward such a credential or employment.


Sec.  680.430  Who is responsible for managing the eligible provider 
process?

    (a) The Governor, in consultation with the State Board, establishes 
the criteria, information requirements and procedures, including 
procedures identifying the respective roles of the State and local 
areas, governing the eligibility of providers of training services to 
receive funds for adult and dislocated worker training activities as 
described under WIOA sec. 133(b).
    (b) The Governor may designate a State agency (or appropriate State 
entity) to assist in carrying out the process and procedures for 
determining the eligibility of training providers. The Governor or such 
agency (or appropriate State entity) is responsible for:
    (1) Ensuring the development and maintenance of the State list of 
eligible providers and programs, as described is Sec. Sec.  680.450, 
680.460, and 680.490;
    (2) Ensuring that programs meet eligibility criteria and 
performance levels established by the State, including verifying the 
accuracy of the information;
    (3) Removing programs that do not meet State-established program 
criteria or performance levels, as described in Sec.  680.480(c);
    (4) Taking appropriate enforcement actions against providers that 
intentionally provide inaccurate information, or that substantially 
violate the requirements of WIOA, as described in Sec.  680.480(a) and 
(b) (WIOA secs. 122(f)(1)(A) and (B)); and
    (5) Disseminating the State list, accompanied by performance and 
cost information relating to each provider, to the public and the Local 
Boards throughout the State, as further described in Sec.  680.500.
    (c) The Local Board must:
    (1) Carry out the procedures assigned to the Local Board by the 
State, such as determining the initial eligibility of entities 
providing a program of training services, renewing the eligibility of 
providers, and considering the possible termination of an eligible 
provider due to the provider's submission of inaccurate eligibility and 
performance information or the provider's substantial violation of WIOA 
requirements;
    (2) Work with the State to ensure there are sufficient numbers and 
types of providers of training services, including eligible providers 
with expertise in assisting individuals with disabilities and eligible 
providers with expertise in assisting adults in need of adult education 
and literacy activities described under WIOA sec. 107(d)(10)(E), 
serving the local area; and
    (3) Ensure the dissemination and appropriate use of the State list 
through the local one-stop system.
    (d) The Local Board may:
    (1) Make recommendations to the Governor on the procedure used in 
determining eligibility of providers;
    (2) Require additional criteria and information from local 
providers as criteria to become or remain eligible; and
    (3) Set higher levels of performance than those required by the 
State as criteria for local providers to become or remain eligible to 
provide services in that particular local area.


Sec.  680.440  What are the transition procedures for Workforce 
Investment Act-eligible providers to become eligible under the 
Workforce Innovation and Opportunity Act?

    (a) The Governor may establish a transition procedure under which

[[Page 20857]]

providers eligible to provide training services under WIA may continue 
to be eligible to provide such services until December 31, 2015 or such 
earlier date as the Governor determines to be appropriate.
    (b) After this transition period, which may extend no later than 
December 31, 2015, the eligibility of these providers will be 
determined under the application procedure for continued eligibility 
established by the Governor as described in Sec.  680.460.
    (c) Providers that were previously eligible under WIA are not 
subject to the initial eligibility procedures described under Sec.  
680.450.


Sec.  680.450  What is the initial eligibility procedure for new 
providers?

    (a) All providers that have not previously been an eligible 
provider of training services under WIOA sec. 122 or WIA sec. 122, 
except for registered apprenticeship programs, must submit required 
information to be considered for initial eligibility in accordance with 
the Governor's procedures.
    (b) Apprenticeship programs registered under the National 
Apprenticeship Act (NAA) are exempt from initial eligibility 
procedures. Registered apprenticeship programs must be included and 
maintained on the list of eligible providers of training services as 
long as the corresponding program remains registered, as described at 
WIOA sec. 122(a)(3). Procedures for registered apprenticeship programs 
to be added and maintained on the list are described in Sec.  680.470.
    (c) In establishing the State requirements described in paragraph 
(d) of this section, the Governor must, in consultation with the State 
Board, develop a procedure for determining the eligibility of training 
providers. This procedure, which must be described in the State Plan, 
must be developed after:
    (1) Soliciting and taking into consideration recommendations from 
Local Boards and providers of training services within the State;
    (2) Providing an opportunity for interested members of the public, 
including representatives of business and labor organizations, to 
submit comments on the procedure; and
    (3) Designating a specific time period for soliciting and 
considering the recommendations of Local Boards and providers, and for 
providing an opportunity for public comment.
    (d) For institutions of higher education that provide a program 
that leads to a recognized post-secondary credential and for other 
public or private providers of programs of training services, including 
joint labor-management organizations, and providers of adult education 
and literacy activities, the Governor must establish criteria and State 
requirements for providers seeking initial eligibility.
    (e) The Governor must require providers seeking initial eligibility 
to provide verifiable program specific performance information. At a 
minimum, these criteria must require applicant providers to:
    (1) Describe each program of training services to be offered;
    (2) Provide information addressing a factor related to the 
indicators of performance, as described in WIOA secs. 
116(b)(2)(A)(i)(I)-(IV) and Sec.  680.460(g)(1) through (4) which 
include unsubsidized employment during the second quarter after exit, 
unsubsidized employment during the fourth quarter after exit, median 
earnings and credentials attainment;
    (3) Describe whether the provider is in a partnership with a 
business;
    (4) Provide other information the Governor may require in order to 
demonstrate high quality training services, including a program of 
training services that leads to a recognized post-secondary credential; 
and
    (5) Provide information that addresses alignment of the training 
services with in-demand industry sectors and occupations, to the extent 
possible.
    (f) In establishing the initial eligibility procedures and 
criteria, the Governor may establish minimum standards, based on the 
performance information described in paragraph (e) of this section.
    (g) Under WIOA sec. 122(b)(4)(B), providers receive initial 
eligibility for only 1 fiscal year for a particular program.
    (h) After the initial eligibility expires, these initially-eligible 
providers are subject to the Governor's application procedures for 
continued eligibility, described at Sec.  680.460, in order to remain 
eligible.


Sec.  680.460  What is the application procedure for continued 
eligibility?

    (a) The Governor must establish an application procedure for 
training providers to maintain their continued eligibility. The 
application procedure must take into account the provider's prior 
eligibility status.
    (1) Training providers that were previously eligible under WIA, as 
of July 21, 2014, will be subject to the application procedure for 
continued eligibility after the close of the Governor's transition 
period for implementation, described in Sec.  680.440.
    (2) Training providers that were not previously eligible under WIA 
and have been determined to be initially-eligible under WIOA, under the 
procedures described at Sec.  680.450, will be subject to the 
application procedure for continued eligibility after their initial 
eligibility expires.
    (b) The Governor must develop this procedure after:
    (1) Soliciting and taking into consideration recommendations from 
Local Boards and providers of training services within the State;
    (2) Providing an opportunity for interested members of the public, 
including representatives of business and labor organizations, to 
submit comments on such procedure; and
    (3) Designating a specific time period for soliciting and 
considering the recommendations of Local Boards and providers, and for 
providing an opportunity for public comment.
    (c) Apprenticeship programs registered under the National 
Apprenticeship Act (NAA) must be included and maintained on the list of 
eligible providers of training services for as long as the 
corresponding program remains registered. The Governor's procedure must 
include a mechanism for registered apprenticeship programs to indicate 
interest in being included on the list, as described in Sec.  680.470.
    (d) The application procedure must describe the roles of the State 
and local areas in receiving and reviewing provider applications and in 
making eligibility determinations.
    (e) The application procedure must be described in the State Plan.
    (f) In establishing eligibility criteria, the Governor must take 
into account:
    (1) The performance of providers of training services on the 
performance accountability measures described in WIOA secs. 
116(b)(2)(A)(i)(I)-(IV) and required by WIOA sec. 122(b)(2), which may 
include minimum performance standards, and other appropriate measures 
of performance outcomes for program participants receiving training 
under WIOA title I-B, as determined by the Governor. Until data from 
the conclusion of each performance indicator's first data cycle is 
available, the Governor may take into account alternate factors related 
to such performance measure.
    (2) Ensuring access to training services throughout the State 
including rural areas and through the use of technology;
    (3) Information reported to State agencies on Federal and State 
training programs other than programs within WIOA title I-B;
    (4) The degree to which training programs relate to in-demand 
industry sectors and occupations in the State;

[[Page 20858]]

    (5) State licensure requirements of training providers;
    (6) Encouraging the use of industry-recognized certificates and 
credentials;
    (7) The ability of providers to offer programs that lead to post-
secondary credentials;
    (8) The quality of the program of training services including a 
program that leads to a recognized post-secondary credential;
    (9) The ability of the providers to provide training services to 
individuals who are employed and individuals with barriers to 
employment;
    (10) Whether the providers timely and accurately submitted eligible 
training provider performance reports as required under WIOA sec. 
116(d)(4); and
    (11) Other factors that the Governor determines are appropriate in 
order to ensure: the accountability of providers; that one-stop centers 
in the State will meet the needs of local employers and participants; 
and, that participants will be given an informed choice among 
providers.
    (g) The information requirements that the Governor establishes 
under paragraph (f)(1) of this section must require training providers 
to submit appropriate, accurate and timely information for participants 
receiving training under WIOA title I-B. That information must include:
    (1) The percentage of program participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    (2) The percentage of program participants who are in unsubsidized 
employment during the fourth quarter after exit from the program;
    (3) The median earnings of program participants who are in 
unsubsidized employment during the second quarter after exit from the 
program;
    (4) The percentage of program participants who obtain a recognized 
post-secondary credential, or a secondary school diploma or its 
recognized equivalent during participation in or within 1 year after 
exit from the program;
    (5) Information on recognized post-secondary credentials received 
by program participants;
    (6) Information on cost of attendance, including costs of tuition 
and fees, for program participants;
    (7) Information on the program completion rate for such 
participants.
    (h) The eligibility criteria must require that:
    (1) Providers submit performance and cost information as described 
in paragraph (g) of this section and in the Governor's procedures for 
each program of training services for which the provider has been 
determined to be eligible, in a timeframe and manner determined by the 
State, but at least every 2 years; and
    (2) That the collection of information required to demonstrate 
compliance with the criteria is not unduly burdensome or costly to 
providers (WIOA sec. 122(b)(1)(J)(iv)).
    (i) The procedure for continued eligibility must also provide for 
the State to review biennially-required provider eligibility 
information to assess the renewal of training provider eligibility. 
Such procedures may establish minimum levels of training provider 
performance as criteria for continued eligibility.
    (j) The procedure for biennial review of the provider eligibility 
must include verification of the registration status of registered 
apprenticeship programs as described in Sec.  680.470.
    (k) Local Boards may require higher levels of performance for local 
programs than the levels specified in the procedures established by the 
Governor.
    (l) The Governor may establish procedures and timeframes for 
providing technical assistance to eligible providers of training who 
are not intentionally supplying inaccurate information or who have not 
substantially violated any of the requirements under this section but 
are failing to meet the criteria and information requirements due to 
undue cost or burden.


Sec.  680.470  What is the procedure for registered apprenticeship 
programs that seek to be included in a State's eligible training 
provider list?

    (a) All registered apprenticeship programs that are registered with 
the U.S. Department of Labor, Office of Apprenticeship, or a recognized 
State apprenticeship agency are automatically eligible to be included 
in the State list of eligible training providers. Some program sponsors 
may not wish to be included on the State eligible training provider 
list. Therefore, the Governor must establish a mechanism for registered 
apprenticeship program sponsors in the State to indicate that the 
program sponsor wishes to be included on the State eligible training 
provider list. This mechanism should be developed with the assistance 
of the U.S. Department of Labor Office of Apprenticeship representative 
in the State or, if the State oversees the administration of the 
apprenticeship system, with the assistance of the recognized State 
apprenticeship agency.
    (b) Once on the State eligible training provider list, registered 
apprenticeship programs will remain on the list until they are 
deregistered or until the registered apprenticeship program notifies 
the State that it no longer wants to be included on the list.
    (c) Inclusion of a registered apprenticeship in the State eligible 
training provider list allows an individual who is eligible to use WIOA 
title I-B funds to use those funds toward apprentice training, 
consistent with their availability and limitations as prescribed by 
Sec.  680.300. The use of individual training accounts and other WIOA 
title I-B funds toward apprenticeship training is further described in 
Sec.  680.330.
    (d) The Governor is encouraged to consult with the State and Local 
Boards, ETA's Office of Apprenticeship, recognized State apprenticeship 
agencies (where they exist in the Governor's State) or other State 
agencies, to establish voluntary reporting of performance information.


Sec.  680.480  May an eligible training provider lose its eligibility?

    (a) Yes. A training provider must deliver results and provide 
accurate information in order to retain its status as an eligible 
training provider.
    (b) Providers determined to have intentionally supplied inaccurate 
information or to have substantially violated any provision of title I 
of WIOA or the WIOA regulations, including 29 CFR part 37, must be 
removed from the list in accordance with the enforcement provisions of 
WIOA sec. 122(f). A provider whose eligibility is terminated under 
these conditions must be terminated for not less than 2 years and is 
liable to repay all adult and dislocated worker training funds it 
received during the period of noncompliance. The Governor must specify 
in the procedures which individual or entity is responsible for making 
these determinations and the process by which the determination will be 
made, which must include an opportunity for a hearing that meets the 
requirements of 20 CFR 683.630(b).
    (c) As a part of the biennial review of eligibility established by 
the Governor, the State must remove provider programs that fail to meet 
criteria established by the Governor to remain eligible, which may 
include failure to meet established minimum performance levels.
    (d) The Governor must establish an appeals procedure for providers 
of training to appeal a denial of eligibility under this subpart that 
meets the requirements of 20 CFR 683.630(b), which explains the appeals 
process for

[[Page 20859]]

denial or termination of eligibility of a provider of training 
services.
    (e) Where a Local Board has established higher minimum standards, 
according to Sec.  680.460(k), the Local Board may remove a provider 
program from the eligible programs in that local area for failure to 
meet established criteria. The Local Board must establish an appeals 
procedure for providers of training to appeal a denial of eligibility 
under this subpart that meets the requirements of 20 CFR 683.630(b), 
which explains the appeals process for denial or termination of 
eligibility of a provider of training services.


Sec.  680.490  What kind of performance and cost information must 
eligible training providers provide for each program of training?

    (a) In accordance with the State procedure and Sec.  680.460(h), 
eligible providers of training services must submit, at least every 2 
years, appropriate, timely and accurate performance and cost 
information.
    (b) Program-specific performance information must include:
    (1) The information described in WIOA sec. 122(b)(2)(A) for 
individuals participating in the programs of training services who are 
receiving assistance under WIOA sec. 134. This information includes 
indicators of performance as described in WIOA secs. 116(b)(2)(I)-(IV) 
and Sec.  680.460(g)(1) through (4).
    (2) Information identifying the recognized post-secondary 
credentials received by such participants.
    (3) Program cost information, including tuition and fees, for WIOA 
participants in the program, and
    (4) Information on the program completion rate for WIOA 
participants.
    (c) Governors may require any additional performance information 
(such as the information described at WIOA sec. 122(b)(1)) that the 
Governor determines to be appropriate to determine or maintain 
eligibility.
    (d) Governors must establish a procedure by which a provider can 
demonstrate that providing additional information required under this 
section would be unduly burdensome or costly. If the Governor 
determines that providers have demonstrated such extraordinary costs or 
undue burden:
    (1) The Governor must provide access to cost-effective methods for 
the collection of the information;
    (2) The Governor may provide additional resources to assist 
providers in the collection of the information from funds for statewide 
workforce investment activities reserved under WIOA secs. 128(a) and 
133(a)(1); or
    (3) The Governor may take other steps to assist training providers 
in collecting and supplying required information such as offering 
technical assistance.


Sec.  680.500  How is the State list of eligible training providers 
disseminated?

    (a) In order to assist participants in choosing employment and 
training activities, the Governor or State agency must disseminate the 
State list of eligible training providers and accompanying performance 
and cost information to Local Boards in the State and to members of the 
public online including through Web sites and searchable databases and 
through whatever other means the State uses to disseminate information 
to consumers, including the one-stop delivery system and its program 
partners throughout the State.
    (b) The State list and information must be updated regularly and 
provider eligibility must be reviewed biennially according to the 
procedures established by the Governor in Sec.  680.460(i).
    (c) In order to ensure informed consumer choice, the State eligible 
training provider list and accompanying information must be widely 
available to the public through electronic means, including Web sites 
and searchable databases, as well as through any other means the State 
uses to disseminate information to consumers. The list and accompanying 
information must be available through the one-stop delivery system and 
its partners including the State's secondary and post-secondary 
education systems. The eligible training provider list should be 
accessible to individuals seeking information on training outcomes, as 
well as participants in employment and training activities funded under 
WIOA, including those under Sec.  680.210, and other programs. In 
accordance with WIOA sec. 188, the State list must also be accessible 
to individuals with disabilities.
    (d) The State eligible training provider list must be accompanied 
by appropriate information to assist participants in choosing 
employment and training activities. Such information must include:
    (1) Recognized post-secondary credential(s) offered;
    (2) Provider information supplied to meet the Governor's 
eligibility procedure as described in Sec. Sec.  680.450 and 680.460;
    (3) Performance and cost information as described in Sec.  680.490; 
and
    (4) Additional information as the Governor determines appropriate.
    (e) The State list and accompanying information must be made 
available in a manner that does not reveal personally identifiable 
information about an individual participant. In addition, in developing 
the information to accompany the State list described in Sec.  
680.490(b), disclosure of personally identifiable information from an 
education record must be carried out in accordance with the Family 
Educational Rights and Privacy Act, including the circumstances 
relating to prior written consent.


Sec.  680.510  In what ways can a Local Board supplement the 
information available from the State list?

    (a) Local Boards may supplement the criteria and information 
requirements established by the Governor in order to support informed 
consumer choice and the achievement of local performance measures.
    (b) This additional information may include:
    (1) Information on programs of training services that are linked to 
occupations in demand in the local area;
    (2) Performance and cost information, including program-specific 
performance and cost information, for the local outlet(s) of multi-site 
eligible providers;
    (3) Information that shows how programs are responsive to local 
requirements; and
    (4) Other appropriate information related to the objectives of 
WIOA.


Sec.  680.520  May individuals choose training providers located 
outside of the local area?

    Yes, individuals may choose any of the eligible providers and 
programs on the State list. A State may also establish a reciprocal 
agreement with other States to permit providers of eligible training 
programs in each State to accept individual training accounts provided 
by the other State. See WIOA sec. 122(g). Providers of training 
services that are located outside the local area may not be subject to 
State eligibility procedures if the provider has been determined 
eligible by another State with such an agreement.


Sec.  680.530  What requirements apply to providers of on-the-job-
training, customized training, incumbent worker training, and other 
training exceptions?

    Providers of on-the-job training, customized training, incumbent 
worker training, internships, paid or unpaid work experience, or 
transitional employment are not subject to the same requirements as 
entities listed on the eligible training provider list. For these 
training programs, one-stop operators in a local area must collect such 
performance information as the Governor may require and determine 
whether the providers meet the Governor's performance criteria. The 
Governor may require one-stop

[[Page 20860]]

operators to disseminate a list of providers that have met the 
performance criteria, along with the relevant performance information 
about them, through the one-stop delivery system. Providers that meet 
the criteria are considered eligible providers of training services. 
These providers are not subject to the other requirements of WIOA sec. 
122 or this part.

Subpart E--Priority and Special Populations


Sec.  680.600  What priority must be given to low-income adults and 
public assistance recipients and individuals who are basic skills 
deficient served with adult funds under title I?

    (a) WIOA states, in sec. 134(c)(3)(E), that priority for 
individualized career services (see Sec.  678.430(b)) and training 
services funded with title I adult funds must be given to recipients of 
public assistance, other low-income individuals, who are basic skills 
deficient (as defined in WIOA sec. 3(5)(B)) in the local area.
    (b) States and local areas must establish criteria by which the 
one-stop operator will apply the priority under WIOA sec. 134(c)(3)(E). 
Such criteria may include the availability of other funds for providing 
employment and training-related services in the local area, the needs 
of the specific groups within the local area, and other appropriate 
factors.
    (c) The priority established under paragraph (b) of this section 
does not necessarily mean that these services may only be provided to 
recipients of public assistance, other low-income individuals, and 
individuals without basic work skills. The Local Board and the Governor 
may establish a process that also gives priority to other individuals 
eligible to receive such services, provided that it is consistent with 
priority of service for veterans (see Sec.  680.650).


Sec.  680.610  Does the statutory priority for use of adult funds also 
apply to dislocated worker funds?

    No, the statutory priority applies only to adult funds for 
individualized career services, as described in Sec.  680.150(b), and 
training services. Funds allocated for dislocated workers are not 
subject to this requirement.


Sec.  680.620  How does the Temporary Assistance for Needy Families 
program relate to the one-stop delivery system?

    The local TANF program is a required partner in the one-stop 
delivery system. Part 678 describes the roles of such partners in the 
one-stop delivery system and it applies to the TANF program. TANF 
serves individuals who may also be served by the WIOA programs and, 
through appropriate linkages and referrals, these customers will have 
access to a broader range of services through the cooperation of the 
TANF program in the one-stop system. TANF participants, who are 
determined to be WIOA eligible, and who need occupational skills 
training may be referred through the one-stop system to receive WIOA 
training, when TANF grant and other grant funds are not available to 
the individual in accordance with Sec.  680.230(a). WIOA participants 
who are also determined TANF eligible may be referred to the TANF 
operator for assistance.


Sec.  680.630  How does a displaced homemaker qualify for services 
under title I?

    (a) Individuals who meet the definitions of a ``displaced 
homemaker'' (WIOA sec. 3(16)) qualify for career and training services 
with dislocated worker title I funds.
    (b) Displaced homemakers may also qualify for career and training 
services with adult funds under title I if the requirements of this 
part are met (see Sec. Sec.  680.120 and 680.600).
    (c) Displaced homemakers may also be served in statewide employment 
and training projects conducted with reserve funds for innovative 
programs for displaced homemakers, as described in 20 CFR 682.210(c).
    (d) The definition of displaced homemaker includes the dependent 
spouse of a member of the Armed Forces on active duty (as defined in 
sec. 101(d)(1) of title 10, United States Code) and whose family income 
is significantly reduced because of a deployment, a call or order to 
active duty under a provision of law referred to in sec. 101(a)(13)(B) 
of title 10, United State Code, a permanent change of station, or the 
service-connected death or disability of the member.


Sec.  680.640  May an individual with a disability whose family does 
not meet income eligibility criteria under the Act be eligible for 
priority as a low-income adult?

    Yes, even if the family of an individual with a disability does not 
meet the income eligibility criteria, the individual with a disability 
is to be considered a low-income individual if the individual's own 
income:
    (a) Meets the income criteria established in WIOA sec. 
3(36)(A)(vi); or
    (b) Meets the income eligibility criteria for payments under any 
Federal, State or local public assistance program (see WIOA sec. 
3(36)(A)(i)).


Sec.  680.650  Do veterans receive priority of service under the 
Workforce Innovation and Opportunity Act?

    Yes, veterans under WIOA sec. 3(63)(A) and 38 U.S.C. 101 receive 
priority of service in all Department of Labor-funded training programs 
under 38 U.S.C. 4215 and described in 20 CFR 1010. A veteran must still 
meet each program's eligibility criteria to receive services under the 
respective employment and training program. For income-based 
eligibility determinations, amounts paid while on active duty or paid 
by the Department of Veterans Affairs (VA) for vocational 
rehabilitation, disability payments, or related VA-funded programs are 
not to be considered as income in accordance with 38 U.S.C. 4213 and 20 
CFR 683.230.


Sec.  680.660  Are separating military service members eligible for 
dislocated worker activities under the Workforce Innovation and 
Opportunity Act?

    If the separating service member is separating from the Armed 
Forces with a discharge that is anything other than dishonorable, the 
separating service member qualifies for dislocated worker activities 
based on the following criteria:
    (a) The separating service member has received a notice of 
separation, a DD-214 from the Department of Defense, or other 
documentation showing a separation or imminent separation from the 
Armed Forces to satisfy the termination or layoff part of the 
dislocated worker eligibility criteria in WIOA sec. 3(15)(A)(i);
    (b) The separating service member qualifies for the dislocated 
worker eligibility criteria on eligibility for or exhaustion of 
unemployment compensation in WIOA sec. 3(15)(A)(ii)(I) or (II); and,
    (c) As a separating service member, the individual meets the 
dislocated worker eligibility criteria that the individual is unlikely 
to return to a previous industry or occupation in WIOA sec. 
3(15)(A)(iii).

Subpart F--Work-Based Training


Sec.  680.700  What are the requirements for on-the-job training?

    (a) On-the-job training (OJT) is defined at WIOA sec. 3(44). OJT is 
provided under a contract with an employer in the public, private non-
profit, or private sector. Through the OJT contract, occupational 
training is provided for the WIOA participant in exchange for the 
reimbursement, typically up to 50 percent of the wage rate of the 
participant, for the extraordinary costs of providing the

[[Page 20861]]

training and supervision related to the training. In limited 
circumstances, as provided in WIOA sec. 134(c)(3)(h) and Sec.  680.730, 
the reimbursement may be up to 75 percent of the wage rate of the 
participant.
    (b) On-the-job training contracts under WIOA title I, must not be 
entered into with an employer who has received payments under previous 
contracts under WIOA or WIA if the employer has exhibited a pattern of 
failing to provide on-the-job training participants with continued 
long-term employment as regular employees with wages and employment 
benefits (including health benefits) and working conditions at the same 
level and to the same extent as other employees working a similar 
length of time and doing the same type of work. (WIOA sec. 194(4))
    (c) An OJT contract must be limited to the period of time required 
for a participant to become proficient in the occupation for which the 
training is being provided. In determining the appropriate length of 
the contract, consideration should be given to the skill requirements 
of the occupation, the academic and occupational skill level of the 
participant, prior work experience, and the participant's individual 
employment plan. (WIOA sec. 3(44)(C))


Sec.  680.710  What are the requirements for on-the-job training 
contracts for employed workers?

    OJT contracts may be written for eligible employed workers when:
    (a) The employee is not earning a self-sufficient wage as 
determined by Local Board policy;
    (b) The requirements in Sec.  680.700 are met; and
    (c) The OJT relates to the introduction of new technologies, 
introduction to new production or service procedures, upgrading to new 
jobs that require additional skills, workplace literacy, or other 
appropriate purposes identified by the Local Board.


Sec.  680.720  What conditions govern on-the-job training payments to 
employers?

    (a) On-the-job training payments to employers are deemed to be 
compensation for the extraordinary costs associated with training 
participants and potentially lower productivity of the participants 
while in the OJT.
    (b) Employers may be reimbursed up to 50 percent of the wage rate 
of an OJT participant, and up to 75 percent using the criteria in Sec.  
680.730, for the extraordinary costs of providing the training and 
additional supervision related to the OJT. (WIOA secs. 3(44) and 
134(c)(3)(H)(i))
    (c) Employers are not required to document such extraordinary 
costs.


Sec.  680.730  Under what conditions may a Governor or Local Board 
raise the on-the-job training reimbursement rate up to 75 percent of 
the wage rate?

    (a) The Governor may increase the reimbursement rate for OJT 
contracts funded through the statewide employment and training 
activities described in Sec.  682.210 up to 75 percent, and the Local 
Board may also increase the reimbursement rate for OJT contracts 
described in Sec.  680.320(a)(1) up to 75 percent, when taking into 
account the following factors: (WIOA sec. 134(c)(H)(ii))
    (1) The characteristics of the participants taking into 
consideration whether they are ``individuals with barriers to 
employment,'' as defined in WIOA sec. 3(24);
    (2) The size of the employer, with an emphasis on small businesses;
    (3) The quality of employer-provided training and advancement 
opportunities, for example if the OJT contract is for an in-demand 
occupation and will lead to an industry-recognized credential; and
    (4) Other factors the Governor or Local Board may determine to be 
appropriate, which may include the number of employees participating, 
wage and benefit levels of the employees (both at present and after 
completion), and relation of the training to the competitiveness of the 
participant.
    (b) Governors or Local Boards must document the factors used when 
deciding to increase the wage reimbursement levels above 50 percent up 
to 75 percent.


Sec.  680.740  How can on-the-job training funds be used to support 
placing participants into a registered apprenticeship program?

    (a) OJT contracts may be written with registered apprenticeship 
programs or participating employers in registered apprenticeship 
programs for the on-the-job training portion of the registered 
apprenticeship program consistent with Sec.  680.700. Depending on the 
length of the registered apprenticeship and State and local OJT 
policies, these funds may cover some or all of the registered 
apprenticeship training.
    (b) If the apprentice is unemployed at the time of participation, 
the OJT must be conducted as described in Sec.  680.700. If the 
apprentice is employed at the time of participation, the OJT must be 
conducted as described in Sec.  680.700


Sec.  680.750  Can Individual Training Account and on-the-job training 
funds be combined to support placing participants into a registered 
apprenticeship program?

    There is no Federal prohibition on using both ITA and OJT funds 
when placing participants into a registered apprenticeship program. See 
Sec.  680.330 on using ITAs to support participants in registered 
apprenticeship.


Sec.  680.760  What is customized training?

    Customized training is training:
    (a) That is designed to meet the special requirements of an 
employer (including a group of employers);
    (b) That is conducted with a commitment by the employer to employ 
an individual upon successful completion of the training; and
    (c) For which the employer pays for a significant cost of the 
training, as determined by the Local Board in accordance with the 
factors identified in WIOA sec. 3(14).


Sec.  680.770  What are the requirements for customized training for 
employed workers?

    Customized training of an eligible employed individual may be 
provided for an employer or a group of employers when:
    (a) The employee is not earning a self-sufficient wage as 
determined by Local Board policy;
    (b) The requirements in Sec.  680.760 are met; and
    (c) The customized training relates to the purposes described in 
Sec.  680.710(c) or other appropriate purposes identified by the Local 
Board.


Sec.  680.780  Who is an ``incumbent worker'' for purposes of statewide 
and local employment and training activities?

    States and local areas must establish policies and definitions to 
determine which workers, or groups of workers, are eligible for 
incumbent worker services (WIOA sec. 134(d)(4)). To qualify as an 
incumbent worker, the incumbent worker needs to be employed, meet the 
Fair Labor Standards Act requirements for an employer-employee 
relationship, and have an established employment history with the 
employer for 6 months or more. The training must satisfy the 
requirements in WIOA sec. 134(d)(4) and Sec.  680.790 and increase the 
competitiveness of the employee or employer. An incumbent worker does 
not necessarily have to meet the eligibility requirements for career 
and training services for adults and dislocated workers under this Act.

[[Page 20862]]

Sec.  680.790  What is incumbent worker training?

    Incumbent Worker training, for purposes of WIOA sec. 134(d)(4)(B), 
is training:
    (a) Designed to meet the special requirements of an employer 
(including a group of employers) to retain a skilled workforce or avert 
the need to lay off employees by assisting the workers in obtaining the 
skills necessary to retain employment.
    (b) Conducted with a commitment by the employer to retain or avert 
the layoffs of the incumbent worker(s) trained.


Sec.  680.800  What funds may be used for incumbent worker training?

    (a) The local area may reserve up to 20 percent of their combined 
total of adult and dislocated worker allotments for incumbent worker 
training as described in Sec.  680.790 (see WIOA sec. 134(d)(4)(A)(i));
    (b) The State may use their statewide activities funds (per WIOA 
sec. 134(a)(3)(A)(i)) and Rapid Response funds for statewide incumbent 
worker training activities (see Sec. Sec.  682.210(b) and 
682.320(b)(3)).


Sec.  680.810  What criteria must be taken into account for an employer 
to be eligible to receive local incumbent worker funds?

    The Local Board must consider under WIOA sec. 134(d)(4)(A)(ii):
    (a) The characteristics of the participants in the program;
    (b) The relationship of the training to the competitiveness of a 
participant and the employer; and
    (c) Other factors the Local Board determines appropriate, including 
number of employees trained, wages and benefits including post training 
increases, and the existence of other training opportunities provided 
by the employer.


Sec.  680.820  Are there cost sharing requirements for local area 
incumbent worker training?

    Yes. Under WIOA secs. 134(d)(4)(C) and 134(d)(4)(D)(i)-(iii), 
employers participating in incumbent worker training are required to 
pay the non-Federal share of the cost of providing training to their 
incumbent workers. The amount of the non-Federal share will depend upon 
the limits established under WIOA secs. 134(d)(4)(ii)(C) and (D).


Sec.  680.830  What is a transitional job?

    A transitional job is one that provides a limited work experience, 
that is subsidized in the public, private, or non-profit sectors for 
those individuals with barriers to employment because of chronic 
unemployment or inconsistent work history; these jobs are designed to 
enable an individual to establish a work history, demonstrate work 
success, and develop the skills that lead to unsubsidized employment. 
(WIOA sec. 134 (d)(5))


Sec.  680.840  What funds may be used for transitional jobs?

    The local area may use up to 10 percent of their combined total of 
adult and dislocated worker allotments for transitional jobs as 
described in Sec.  680.810 (see WIOA sec. 134(d)(5)). Transitional jobs 
must be combined with comprehensive career services (see Sec.  680.150) 
and supportive services (see Sec.  680.900).


Sec.  680.850  May funds provided to employers for work-based training 
be used to assist, promote, or deter union organizing?

    No, funds provided to employers for work-based training, as 
described in this subpart, must not be used to directly or indirectly 
assist, promote or deter union organizing. (WIOA sec. 181(b)(7))

Subpart G--Supportive Services


Sec.  680.900  What are supportive services for adults and dislocated 
workers?

    Supportive services for adults and dislocated workers are defined 
at WIOA sec. 3(59) and secs. 134(d)(2) and (3). They include services 
such as transportation, child care, dependent care, housing, and needs-
related payments that are necessary to enable an individual to 
participate in activities authorized under WIOA secs. 134(c)(2) and 
(3). Local Boards, in consultation with the one-stop partners and other 
community service providers, must develop a policy on supportive 
services that ensures resource and service coordination in the local 
area. The policy should address procedures for referral to such 
services, including how such services will be funded when they are not 
otherwise available from other sources. The provision of accurate 
information about the availability of supportive services in the local 
area, as well as referral to such activities, is one of the career 
services that must be available to adults and dislocated workers 
through the one-stop delivery system. (WIOA sec. 134(c)(2)(A)(ix) and 
Sec.  678.430) Local Boards must ensure that needs-related payments are 
made in a manner consistent with Sec. Sec.  680.930, 680.940, 680.950, 
680.960, and 680.970.


Sec.  680.910  When may supportive services be provided to 
participants?

    (a) Supportive services may only be provided to individuals who 
are:
    (1) Participating in career or training services as defined in WIOA 
secs. 134(c)(2) and (3); and
    (2) Unable to obtain supportive services through other programs 
providing such services. (WIOA sec. 134(d)(2)(B))
    (b) Supportive services may only be provided when they are 
necessary to enable individuals to participate in career service or 
training activities. (see WIOA sec. 134(d)(2)(A) and WIOA sec. 3(59))


Sec.  680.920  Are there limits on the amounts or duration of funds for 
supportive services?

    (a) Local Boards may establish limits on the provision of 
supportive services or provide the one-stop operator with the authority 
to establish such limits, including a maximum amount of funding and 
maximum length of time for supportive services to be available to 
participants.
    (b) Procedures may also be established to allow one-stop operators 
to grant exceptions to the limits established under paragraph (a) of 
this section.


Sec.  680.930  What are needs-related payments?

    Needs-related payments provide financial assistance to participants 
for the purpose of enabling them to participate in training and are a 
supportive service authorized by WIOA sec. 134(d)(3). Unlike other 
supportive services, in order to qualify for needs-related payments a 
participant must be enrolled in training.


Sec.  680.940  What are the eligibility requirements for adults to 
receive needs-related payments?

    Adults must:
    (a) Be unemployed,
    (b) Not qualify for, or have ceased qualifying for, unemployment 
compensation; and
    (c) Be enrolled in a program of training services under WIOA sec. 
134(c)(3).


Sec.  680.950  What are the eligibility requirements for dislocated 
workers to receive needs-related payments?

    To receive needs-related payments, a dislocated worker must:
    (a) Be unemployed, and:
    (1) Have ceased to qualify for unemployment compensation or trade 
readjustment allowance under TAA; and
    (2) Be enrolled in a program of training services under WIOA sec. 
134(c)(3) by the end of the 13th week after the most recent layoff that 
resulted in a determination of the worker's

[[Page 20863]]

eligibility as a dislocated worker, or, if later, by the end of the 8th 
week after the worker is informed that a short-term layoff will exceed 
6 months; or
    (b) Be unemployed and did not qualify for unemployment compensation 
or trade readjustment assistance under TAA and be enrolled in a program 
of training services under WIOA sec. 134(c)(3).


Sec.  680.960  May needs-related payments be paid while a participant 
is waiting to start training classes?

    Yes, payments may be provided if the participant has been accepted 
in a training program that will begin within 30 calendar days. The 
Governor may authorize local areas to extend the 30-day period to 
address appropriate circumstances.


Sec.  680.970  How is the level of needs-related payments determined?

    (a) The payment level for adults must be established by the Local 
Board.
    (b) For dislocated workers, payments must not exceed the greater of 
either of the following levels:
    (1) The applicable weekly level of the unemployment compensation 
benefit, for participants who were eligible for unemployment 
compensation as a result of the qualifying dislocation; or
    (2) The poverty level for an equivalent period, for participants 
who did not qualify for unemployment compensation as a result of the 
qualifying layoff. The weekly payment level must be adjusted to reflect 
changes in total family income, as determined by Local Board policies. 
(WIOA sec. 134(d)(3)(C))
0
8. Add part 681 to read as follows:

PART 681--YOUTH ACTIVITIES UNDER TITLE I OF THE WORKFORCE 
INNOVATION AND OPPORTUNITY ACT

Subpart A--Standing Youth Committees
Sec.
681.100 What is a standing youth committee?
681.110 Who is included on a standing youth committee?
681.120 What does a standing youth committee do?
Subpart B--Eligibility for Youth Services
Sec.
681.200 Who is eligible for youth services?
681.210 Who is an ``out-of-school youth''?
681.220 Who is an ``in-school youth''?
681.230 What does ``school'' refer to in the ``not attending or 
attending any school'' in the out-of-school and in-school 
definitions?
681.240 When do local youth programs verify dropout status, 
particular for youth attending alternative schools?
681.250 Who does the low-income eligibility requirement apply to?
681.260 How does the Department define ``high poverty area'' for the 
purposes of the special rule for low-income youth in Workforce 
Innovation and Opportunity Act?
681.270 May a local program use eligibility for free or reduced 
price lunches under the National School Lunch Program as a 
substitute for the income eligibility criteria under title I of the 
Workforce Innovation and Opportunity Act?
681.280 Is a youth with a disability eligible for youth services 
under the Act if their family income exceeds the income eligibility 
criteria?
681.290 How does the Department define the ``basic skills 
deficient'' criterion this part?
681.300 How does the Department define the ``requires additional 
assistance to complete an educational program, or to secure and hold 
employment'' criterion in this part?
681.310 Must youth participants enroll to participate in the youth 
program?
Subpart C--Youth Program Design, Elements, and Parameters
Sec.
681.400 What is the process used to select eligible youth providers?
681.410 Does the requirement that a State and local area expend at 
least 75 percent of youth funds to provide services to out-of-school 
youth apply to all youth funds?
681.420 How must Local Boards design Workforce Innovation and 
Opportunity Act youth programs?
681.430 May youth participate in both the Workforce Innovation and 
Opportunity Act youth and adult programs concurrently, and how do 
local program operators track concurrent enrollment in the Workforce 
Innovation and Opportunity Act youth and adult programs?
681.440 How does a local youth program determine if an 18 to 24 year 
old is enrolled in the Workforce Innovation and Opportunity Act 
youth program or the Workforce Innovation and Opportunity Act adult 
program?
681.450 For how long must a local Workforce Innovation and 
Opportunity Act youth program serve a participant?
681.460 What services must local programs offer to youth 
participants?
681.470 Does the Department require local programs to use WIOA funds 
for each of the 14 program elements?
681.480 What is a pre-apprenticeship program?
681.490 What is adult mentoring?
681.500 What is financial literacy education?
681.510 What is comprehensive guidance and counseling?
681.520 What are leadership development opportunities?
681.530 What are positive social and civic behaviors?
681.540 What is occupational skills training?
681.550 Are Individual Training Accounts permitted for youth 
participants?
681.560 What is entrepreneurial skills training and how is it 
taught?
681.570 What are supportive services for youth?
681.580 What are follow-up services for youth?
681.590 What is the work experience priority?
681.600 What are work experiences?
681.610 How will local Workforce Innovation and Opportunity Act 
youth programs track the work experience priority?
681.620 Does the Workforce Innovation and Opportunity Act require 
Local Boards to offer summer employment opportunities in the local 
youth program?
681.630 How are summer employment opportunities administered?
681.640 What does education offered concurrently with and in the 
same context as workforce preparation activities and training for a 
specific occupation or occupational cluster mean?
681.650 Does the Department allow incentive payments for youth 
participants?
681.660 How can parents, youth, and other members of the community 
get involved in the design and implementation of local youth 
programs?
Subpart D--One-Stop Services to Youth
Sec.
681.700 What is the connection between the youth program and the 
one-stop service delivery system?
681.710 Do Local Boards have the flexibility to offer services to 
area youth who are not eligible under the youth program through the 
one-stop centers?

    Authority:  Secs. 107, 121, 123, 129, 189, 503, Pub. L. 113-128, 
128 Stat. 1425 (Jul. 22, 2014).

Subpart A--Standing Youth Committees


Sec.  681.100  What is a standing youth committee?

    WIOA eliminates the requirement for Local Boards to establish a 
youth council. However, the Local Board may choose to establish a 
standing committee to provide information and to assist with planning, 
operational, oversight, and other issues relating to the provision of 
services to youth. If the Local Board does not designate a standing 
youth committee, it retains responsibility for all aspects of youth 
formula programs.


Sec.  681.110  Who is included on a standing youth committee?

    (a) If a Local Board decides to form a standing youth committee, 
the committee must include a member of the Local Board, who chairs the 
committee, members of community-based organizations with a demonstrated 
record of success in serving eligible youth and other individuals with 
appropriate expertise

[[Page 20864]]

and experience who are not members of the Local Board (WIOA secs. 
107(b)(4)(A) and (ii)).
    (b) The committee should reflect the needs of the local area. The 
committee members appointed for their experience and expertise may 
bring their expertise to help the committee address the employment, 
training education, human and supportive service needs of eligible 
youth including out-of-school youth. Members may represent agencies 
such as education, training, health, mental health, housing, public 
assistance, and justice, or be representatives of philanthropic or 
economic and community development organizations, and employers. The 
committee may also include parents, participants, and youth. (WIOA sec. 
129(c)(3)(C))
    (c) A Local Board may designate an existing entity such as an 
effective youth council as the standing youth committee if it fulfills 
the requirements above in paragraph (a) of this section.


Sec.  681.120  What does a standing youth committee do?

    Under the direction of the Local Board, a standing youth committee 
may:
    (a) Recommend policy direction to the Local Board for the design, 
development, and implementation of programs that benefit all youth;
    (b) Recommend the design of a comprehensive community workforce 
development system to ensure a full range of services and opportunities 
for all youth, including disconnected youth;
    (c) Recommend ways to leverage resources and coordinate services 
among schools, public programs, and community-based organizations 
serving youth;
    (d) Recommends ways to coordinate youth services and recommend 
eligible youth service providers; and
    (e) Provide on-going leadership and support for continuous quality 
improvement for local youth programs;
    (f) Assist with planning, operational, and other issues relating to 
the provision of services to youth; and
    (g) If so delegated by the Local Board after consultation with the 
CEO, oversee eligible youth providers, as well as other youth program 
oversight responsibilities.

Subpart B--Eligibility for Youth Services


Sec.  681.200  Who is eligible for youth services?

    Both in-school youth (ISY) and out-of-school youth (OSY) are 
eligible for youth services. (WIOA sec. 3(18))


Sec.  681.210  Who is an ``out-of-school youth''?

    An out-of-school youth (OSY) is an individual who is:
    (a) Not attending any school (as defined under State law);
    (b) Not younger than 16 or older than age 24 at time of enrollment. 
Because age eligibility is based on age at enrollment, participants may 
continue to receive services beyond the age of 24 once they are 
enrolled in the program; and
    (c) One or more of the following:
    (1) A school dropout;
    (2) A youth who is within the age of compulsory school attendance, 
but has not attended school for at least the most recent complete 
school year calendar quarter. School year calendar quarter is based on 
how a local school district defines its school year quarters;
    (3) A recipient of a secondary school diploma or its recognized 
equivalent who is a low-income individual and is either basic skills 
deficient or an English language learner;
    (4) An individual who is subject to the juvenile or adult justice 
system;
    (5) A homeless individual (as defined in sec. 41403(6) of the 
Violence Against Women Act of 1994 (42 U.S.C. 14043e-2(6))), a homeless 
child or youth (as defined in sec. 725(2) of the McKinney-Vento 
Homeless Assistance Act (42 U.S.C. 11434a(2))), a runaway, in foster 
care or has aged out of the foster care system, a child eligible for 
assistance under sec. 477 of the Social Security Act (42 U.S.C. 677), 
or in an out-of-home placement;
    (6) An individual who is pregnant or parenting;
    (7) An individual with a disability;
    (8) A low-income individual who requires additional assistance to 
enter or complete an educational program or to secure or hold 
employment. (WIOA secs. 3(46) and 129(a)(1)(B))


Sec.  681.220  Who is an ``in-school youth''?

    An in-school youth (ISY) is an individual who is:
    (a) Attending school (as defined by State law), including secondary 
and post-secondary school;
    (b) Not younger than age 14 or (unless an individual with a 
disability who is attending school under State law) older than age 21 
at time of enrollment. Because age eligibility is based on age at 
enrollment, participants may continue to receive services beyond the 
age of 21 once they are enrolled in the program;
    (c) A low-income individual; and
    (d) One or more of the following:
    (1) Basic skills deficient;
    (2) An English language learner;
    (3) An offender;
    (4) A homeless individual (as defined in sec. 41403(6) of the 
Violence Against Women Act of 1994 (42 U.S.C. 14043e-2(6))), a homeless 
child or youth (as defined in sec. 725(2) of the McKinney-Vento 
Homeless Assistance Act (42 U.S.C. 11434a(2))), a runaway, in foster 
care or has aged out of the foster care system, a child eligible for 
assistance under sec. 477 of the Social Security Act (42 U.S.C. 677), 
or in an out-of-home placement;
    (5) An individual who is pregnant or parenting;
    (6) An individual with a disability;
    (7) An individual who requires additional assistance to enter or 
complete an educational program or to secure or hold employment. (WIOA 
secs. 3(27) and 129(a)(1)(C))


Sec.  681.230  What does ``school'' refer to in the ``not attending or 
attending any school'' in the out-of-school and in-school definitions?

    In general, the applicable State law for secondary and post-
secondary institutions defines ``school.'' However, for purposes of 
WIOA, the Department does not consider providers of Adult Education 
under title II of WIOA, YouthBuild programs, and Job Corps programs to 
be schools. Therefore, WIOA youth programs may consider a youth to be 
out-of-school youth for purposes of WIOA youth program eligibility if 
they are attending Adult Education provided under title II of WIOA, 
YouthBuild, or Job Corps.


Sec.  681.240  When do local youth programs verify dropout status, 
particular for youth attending alternative schools?

    Local WIOA youth programs must verify a youth's dropout status at 
the time of WIOA youth program enrollment. A youth attending an 
alternative school at the time of enrollment is not a dropout. States 
must define ``alternative school'' in their State Plan. The definition 
should be consistent with their State Education Agency definition, if 
available. An individual who is out-of-school at the time of enrollment 
and subsequently placed in an alternative school or any school, is an 
out-of-school youth for the purposes of the 75 percent expenditure 
requirement for out-of-school youth.


Sec.  681.250  Who does the low-income eligibility requirement apply 
to?

    (a) For OSY, only those youth who are the recipient of a secondary 
school diploma or its recognized equivalent and are either basic skills 
deficient or an English language learner and youth who require 
additional assistance to enter or complete an educational program or to

[[Page 20865]]

secure or hold employment must be low-income. All other OSY meeting OSY 
eligibility under Sec.  681.210(c)(1), (2) and (4) through (7) are not 
required to be low-income. (WIOA secs. 129(a)(1)(iii)(I)-(II) and 
129(a)(1)(iii)(IV)-(VII))
    (b) All ISY must be low-income to meet the ISY eligibility 
criteria, except those that fall under the low-income exception.
    (c) WIOA allows a low-income exception where five percent of all 
WIOA youth participants may be participants who ordinarily would be 
required to be low-income for eligibility purposes and who meet all 
other eligibility criteria for WIOA youth except the low-income 
criteria. A program must calculate the five percent based on the 
percent of all youth served by the program in the local area's WIOA 
youth program in a given program year.
    (d) In addition to the criteria in the definition of ``low-income 
individual'' in WIOA sec. 3(36), a youth is low-income if he or she 
receives or is eligible to receive a free or reduced price lunch under 
the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et 
seq. or if she or her lives in a high-poverty area.


Sec.  681.260  How does the Department define ``high poverty area'' for 
the purposes of the special rule for low-income youth in Workforce 
Innovation and Opportunity Act?

    A youth who lives in a high poverty area is automatically 
considered to be a low-income individual. A high-poverty area is a 
Census tract, a set of contiguous Census tracts, Indian Reservation, 
tribal land, or Native Alaskan Village or county that has a poverty 
rate of at least 30 percent as set every 5 years using American 
Community Survey 5-Year data.


Sec.  681.270  May a local program use eligibility for free or reduced 
price lunches under the National School Lunch Program as a substitute 
for the income eligibility criteria under title I of the Workforce 
Innovation and Opportunity Act?

    Yes, WIOA sec. 3(36) defines a low-income individual to include an 
individual who receives (or is eligible to receive) a free or reduced 
price lunch under the Richard B. Russell National School Lunch Act.


Sec.  681.280  Is a youth with a disability eligible for youth services 
under the Act if their family income exceeds the income eligibility 
criteria?

    Yes, for an individual with a disability, income level for 
eligibility purposes is based on the individual's own income rather 
than his or her family's income. WIOA sec. 3(36)(A)(vi) states that an 
individual with a disability whose own income meets the low-income 
definition in clause (ii) (income that does not exceed the higher of 
the poverty line or 70 percent of the lower living standard income 
level), but who is a member of a family whose income exceeds this 
income requirement is eligible for youth services.


Sec.  681.290  How does the Department define the ``basic skills 
deficient'' criterion in this part?

    (a) As defined in Sec.  681.210(c)(3), a youth is ``basic skills 
deficient'' if they:
    (1) Have English reading, writing, or computing skills at or below 
the 8th grade level on a generally accepted standardized test; or
    (2) Are unable to compute or solve problems, or read, write, or 
speak English at a level necessary to function on the job, in the 
individual's family, or in society. (WIOA sec. 3(5))
    (b) The State or Local Board must establish its policy on paragraph 
(a)(2) of this section in its respective State or local plan.
    (c) In assessing basic skills, local programs must use assessment 
instruments that are valid and appropriate for the target population, 
and must provide reasonable accommodation in the assessment process, if 
necessary, for people with disabilities.


Sec.  681.300  How does the Department define the ``requires additional 
assistance to complete an educational program, or to secure and hold 
employment'' criterion in this part?

    As defined in Sec.  681.200(c)(8), either the State or the local 
level may establish definitions and eligibility documentation 
requirements for the ``requires additional assistance to complete an 
educational program, or to secure and hold employment'' criterion of 
Sec.  681.200(c)(8). In cases where the State Board establishes State 
policy on this criterion, the State Board must include the definition 
in the State Plan. In cases where the State Board does not establish a 
policy, the Local Board must establish a policy in their local plan if 
using this criterion.


Sec.  681.310  Must youth participants enroll to participate in the 
youth program?

    (a) Yes, to participate in youth programs, participants must enroll 
in the WIOA youth program.
    (b) Enrollment in this case requires:
    (1) The collection of information to support an eligibility 
determination; and
    (2) Participation in any of the fourteen WIOA youth program 
elements.

Subpart C--Youth Program Design, Elements, and Parameters


Sec.  681.400  What is the process used to select eligible youth 
providers?

    (a) As provided in WIOA sec. 123, the Local Board must identify 
eligible providers of youth workforce investment activities in the 
local area by awarding grants or contracts on a competitive basis, 
except as provided below in paragraph (a)(3) of this section, based on 
the recommendation of the youth standing committee, if they choose to 
establish a standing youth committee and assign it that function. If 
such a committee is not established for the local area, this 
responsibility falls to the Local Board.
    (1) Local areas must include the criteria used to identify youth 
providers in the State Plan (including such quality criteria 
established by the Governor for a training program that leads to a 
recognized post-secondary credential) taking into consideration the 
ability of the provider to meet the performance accountability measures 
based on primary indicators of performance for youth programs.
    (2) Local areas must conduct a full and open competition to secure 
youth service providers according to the Federal procurement guidelines 
at 2 CFR parts 200 and 2900, in addition to applicable State and local 
procurement laws.
    (3) Where the Local Board determines there is an insufficient 
number of eligible providers of youth workforce investment activities 
in the local area, such as a rural area, the Local Board may award 
grants or contracts on a sole source basis (WIOA sec. 123(b)).
    (b) The requirement in WIOA sec. 123 that eligible providers of 
youth services be selected by awarding a grant or contract on a 
competitive basis does not apply to the design framework services when 
these services are more appropriately provided by the grant recipient/
fiscal agent. Design framework services include intake, objective 
assessments and the development of individual service strategy, case 
management, and follow-up services.


Sec.  681.410  Does the requirement that a State and local area expend 
at least 75 percent of youth funds to provide services to out-of-school 
youth apply to all youth funds?

    Yes. The 75 percent requirement applies to both statewide youth 
activities funds and local youth funds with two exceptions.
    (a) Only statewide funds spent on direct services to youth are 
subject to the OSY expenditure requirement.

[[Page 20866]]

Funds spent on statewide youth activities that do not provide direct 
services to youth, such as most of the required statewide youth 
activities listed in WIOA sec. 129(b)(1), are not subject to the OSY 
expenditure requirement. For example, administrative costs, monitoring, 
and technical assistance are not subject to OSY expenditure 
requirement; while funds spent on direct services to youth such as 
statewide demonstration projects, are subject to the OSY expenditure 
requirement.
    (b) For a State that receives a small State minimum allotment under 
WIOA sec. 127(b)(1)(C)(iv)(II) or WIOA sec. 132(b)(1)(B)(iv)(II), the 
State may submit a request to the Secretary to decrease the percentage 
to a percentage not less than 50 percent for a local area in the State, 
and the Secretary may approve such a request for that program year, if 
the State meets the following requirements:
    (1) After an analysis of the in-school youth and out-of-school 
youth populations in the local area, the State determines that the 
local area will be unable to use at least 75 percent of the local area 
WIOA youth funds to serve out-of-school youth due to a low number of 
out-of-school youth; and
    (2) The State submits to the Secretary, for the local area, a 
request including a proposed percentage decreased to not less than 50 
percent to provide workforce investment activities for out-of-school 
youth.
    (c) In the exercise of the discretion afforded by WIOA sec. 
129(a)(4) the Secretary has determined that requests to decrease the 
percentage of funds used to provide activities to OSY will not be 
granted to States based on their having received 90 percent of the 
allotment percentage for the preceding year. Therefore, when the 
Secretary receives such a request from a State based on having received 
90 percent of the allotment percentage for the preceding year, the 
request will be denied without the Secretary exercising further 
discretion.
    (d) For local area funds, the administrative costs of carrying out 
local workforce investment activities described in WIOA sec. 128(b)(4) 
are not subject to the OSY expenditure requirement. All other local 
area youth funds beyond the administrative costs are subject to the OSY 
expenditure requirement.


Sec.  681.420  How must Local Boards design Workforce Innovation and 
Opportunity Act youth programs?

    (a) The design framework services of local youth programs must:
    (1) Provide for an objective assessment of each youth participant 
that meets the requirements of WIOA sec. 129(c)(1)(A), and includes a 
review of the academic and occupational skill levels, as well as the 
service needs, of each youth for the purpose of identifying appropriate 
services and career pathways for participants and informing the 
individual service strategy;
    (2) Develop, and update as needed, an individual service strategy 
for each youth participant that is directly linked to one or more 
indicators of performance described in WIOA sec. 116(b)(2)(A)(ii), that 
identifies appropriate career pathways that include education and 
employment goals, that considers career planning and the results of the 
objective assessment and that prescribes achievement objectives and 
services for the participant; and
    (3) Provides case management of youth participants, including 
follow-up services.
    (b) The local plan must describe the design framework for youth 
programs in the local area, and how the fourteen program elements 
required in Sec.  681.460 are to be made available within that 
framework.
    (c) Local Boards must ensure appropriate links to entities that 
will foster the participation of eligible local area youth. Such links 
may include connections to:
    (1) Local area justice and law enforcement officials;
    (2) Local public housing authorities;
    (3) Local education agencies;
    (4) Local human service agencies;
    (5) WIOA title II adult education providers;
    (6) Local disability-serving agencies and providers and health and 
mental health providers;
    (7) Job Corps representatives; and
    (8) Representatives of other area youth initiatives, such as 
YouthBuild, and including those that serve homeless youth and other 
public and private youth initiatives.
    (d) Local Boards must ensure that WIOA youth service providers meet 
the referral requirements in WIOA sec. 129(c)(3)(A) for all youth 
participants, including:
    (1) Providing these participants with information about the full 
array of applicable or appropriate services available through the Local 
Board or other eligible providers, or one-stop partners; and
    (2) Referring these participants to appropriate training and 
educational programs that have the capacity to serve them either on a 
sequential or concurrent basis.
    (e) If a youth applies for enrollment in a program of workforce 
investment activities and either does not meet the enrollment 
requirements for that program or cannot be served by that program, the 
eligible provider of that program must ensure that the youth is 
referred for further assessment, if necessary, or referred to 
appropriate programs to meet the skills and training needs of the 
youth.
    (f) In order to meet the basic skills and training needs of 
applicants who do not meet the eligibility requirements of a particular 
program or who cannot be served by the program, each youth provider 
must ensure that these youth are referred:
    (1) For further assessment, as necessary, and
    (2) To appropriate programs, in accordance with paragraph (d)(2) of 
this section. (WIOA sec. 129(c)(3)(B))
    (g) Local Boards must ensure that parents, youth participants, and 
other members of the community with experience relating to youth 
programs are actively involved in both the design and implementation of 
its youth programs. (WIOA sec. 129(c)(3)(C))
    (h) The objective assessment required under paragraph (a)(1) of 
this section or the individual service strategy required under 
paragraph (a)(2) of this section is not required if the program 
provider determines that it is appropriate to use a recent objective 
assessment or individual service strategy that was developed under 
another education or training program. (WIOA sec. 129(c)(1)(A))
    (i) The Local Board may implement a pay-for-performance contract 
strategy for program elements described at Sec.  681.460, for which the 
Local Board may reserve and use not more than 10 percent of the total 
funds allocated to the local area under WIOA sec. 128(b). For 
additional rules on pay-for-performance contracts see Sec.  683.500.


Sec.  681.430  May youth participate in both the Workforce Innovation 
and Opportunity Act youth and adult programs concurrently, and how do 
local program operators track concurrent enrollment in the Workforce 
Innovation and Opportunity Act youth and adult programs?

    (a) Yes, individuals who meet the respective program eligibility 
requirements may participate in adult and youth programs concurrently. 
Such individuals must be eligible under the youth or adult eligibility 
criteria applicable to the services received. Local program operators 
may determine, for these individuals, the appropriate

[[Page 20867]]

level and balance of services under the youth and adult programs.
    (b) Local program operators must identify and track the funding 
streams which pay the costs of services provided to individuals who are 
participating in youth and adult programs concurrently, and ensure no 
duplication of services.
    (c) Individuals who meet the respective program eligibility 
requirements for WIOA youth title I and title II may participate in 
title I youth and title II concurrently.


Sec.  681.440  How does a local youth program determine if an 18 to 24 
year old is enrolled in the Workforce Innovation and Opportunity Act 
youth program or the Workforce Innovation and Opportunity Act adult 
program?

    A local program should determine the appropriate program for the 
participant based on the service needs of the participant and if the 
participant is career-ready based on an objective assessment of their 
occupational skills, prior work experience, employability, and 
participants needs as required in WIOA sec. 129(c)(1)(A).


Sec.  681.450  For how long must a local Workforce Innovation and 
Opportunity Act youth program serve a participant?

    Local youth programs must provide service to a participant for the 
amount of time necessary to ensure successful preparation to enter 
post-secondary education and/or unsubsidized employment. While there is 
no minimum or maximum time a youth can participate in the WIOA youth 
program, programs must link participation to the individual service 
strategy and not the timing of youth service provider contracts or 
program years.


Sec.  681.460  What services must local programs offer to youth 
participants?

    (a) Local programs must make each of the following 14 services 
available to youth participants (WIOA sec. 129(c)(2)):
    (1) Tutoring, study skills training, instruction and evidence-based 
dropout prevention and recovery strategies that lead to completion of 
the requirements for a secondary school diploma or its recognized 
equivalent (including a recognized certificate of attendance or similar 
document for individuals with disabilities) or for a recognized post-
secondary credential;
    (2) Alternative secondary school services, or dropout recovery 
services, as appropriate;
    (3) Paid and unpaid work experiences that have academic and 
occupational education as a component of the work experience, which may 
include the following types of work experiences:
    (i) Summer employment opportunities and other employment 
opportunities available throughout the school year;
    (ii) Pre-apprenticeship programs;
    (iii) Internships and job shadowing; and
    (iv) On-the-job training opportunities;
    (4) Occupational skill training, which includes priority 
consideration for training programs that lead to recognized post-
secondary credentials that align with in-demand industry sectors or 
occupations in the local area involved, if the Local Board determines 
that the programs meet the quality criteria described in WIOA sec. 123;
    (5) Education offered concurrently with and in the same context as 
workforce preparation activities and training for a specific occupation 
or occupational cluster;
    (6) Leadership development opportunities, including community 
service and peer-centered activities encouraging responsibility and 
other positive social and civic behaviors;
    (7) Supportive services, including the services listed in Sec.  
681.570;
    (8) Adult mentoring for a duration of at least 12 months, that may 
occur both during and after program participation;
    (9) Follow-up services for not less than 12 months after the 
completion of participation, as provided in Sec.  681.580;
    (10) Comprehensive guidance and counseling, which may include drug 
and alcohol abuse counseling, as well as referrals to counseling, as 
appropriate to the needs of the individual youth;
    (11) Financial literacy education;
    (12) Entrepreneurial skills training;
    (13) Services that provide labor market and employment information 
about in-demand industry sectors or occupations available in the local 
area, such as career awareness, career counseling, and career 
exploration services; and
    (14) Activities that help youth prepare for and transition to post-
secondary education and training.
    (b) Local programs have the discretion to determine what specific 
program services a youth participant receives, based on each 
participant's objective assessment and individual service strategy. 
Local programs are not required to provide every program service to 
each participant.


Sec.  681.470  Does the Department require local programs to use WIOA 
funds for each of the 14 program elements?

    No. The Department does not require local programs to use WIOA 
youth funds for each of the program elements. Local programs may 
leverage partner resources to provide some of the readily available 
program elements. However, the local area must ensure that if a program 
element is not funded with WIOA title I youth funds, the local program 
has an agreement in place with a partner organization to ensure that 
the program element will be offered. The Local Board must ensure that 
the program element is closely connected and coordinated with the WIOA 
youth program.


Sec.  681.480  What is a pre-apprenticeship program?

    A pre-apprenticeship is a program or set of strategies designed to 
prepare individuals to enter and succeed in a registered apprenticeship 
program and has a documented partnership with at least one, if not 
more, registered apprenticeship program(s).


Sec.  681.490  What is adult mentoring?

    (a) Adult mentoring for youth must:
    (1) Last at least 12 months and may take place both during the 
program and following exit from the program;
    (2) Be a formal relationship between a youth participant and an 
adult mentor that includes structured activities where the mentor 
offers guidance, support, and encouragement to develop the competence 
and character of the mentee;
    (3) Include a mentor who is an adult other than the assigned youth 
case manager; and
    (4) While group mentoring activities and mentoring through 
electronic means are allowable as part of the mentoring activities, at 
a minimum, the local youth program must match the youth with an 
individual mentor with whom the youth interacts on a face-to-face 
basis.
    (b) Mentoring may include workplace mentoring where the local 
program matches a youth participant with an employer or employee of a 
company.


Sec.  681.500  What is financial literacy education?

    The financial literacy education program element includes 
activities which:
    (a) Support the ability of participants to create budgets, initiate 
checking and savings accounts at banks, and make informed financial 
decisions;
    (b) Support participants in learning how to effectively manage 
spending, credit, and debt, including student loans, consumer credit, 
and credit cards;
    (c) Teach participants about the significance of credit reports and 
credit scores; what their rights are regarding their credit and 
financial information; how to determine the accuracy of a credit report 
and how to correct inaccuracies; and how to improve or maintain good 
credit;

[[Page 20868]]

    (d) Support a participant's ability to understand, evaluate, and 
compare financial products, services, and opportunities and to make 
informed financial decisions;
    (e) Educate participants about identity theft, ways to protect 
themselves from identify theft, and how to resolve cases of identity 
theft and in other ways understand their rights and protections related 
to personal identity and financial data;
    (f) Support activities that address the particular financial 
literacy needs of non-English speakers, including providing the support 
through the development and distribution of multilingual financial 
literacy and education materials;
    (g) Provide financial education that is age appropriate, timely, 
and provides opportunities to put lessons into practice, such as by 
access to safe and affordable financial products that enable money 
management and savings; and
    (h) Implement other approaches to help participants gain the 
knowledge, skills, and confidence to make informed financial decisions 
that enable them to attain greater financial health and stability by 
using high quality, age-appropriate, and relevant strategies and 
channels, including, where possible, timely and customized information, 
guidance, tools, and instruction.


Sec.  681.510  What is comprehensive guidance and counseling?

    Comprehensive guidance and counseling provides individualized 
counseling to participants. This includes career and academic 
counseling, drug and alcohol abuse counseling, mental health 
counseling, and referral to partner programs, as appropriate. (WIOA 
sec. 129(c)(1)(C)(J)) When referring participants to necessary 
counseling that cannot be provided by the local youth program or its 
service providers, the local youth program must coordinate with the 
organization it refers to in order to ensure continuity of service.


Sec.  681.520  What are leadership development opportunities?

    Leadership development opportunities are opportunities that 
encourage responsibility, confidence, employability, self-determination 
and other positive social behaviors such as:
    (a) Exposure to post-secondary educational possibilities;
    (b) Community and service learning projects;
    (c) Peer-centered activities, including peer mentoring and 
tutoring;
    (d) Organizational and team work training, including team 
leadership training;
    (e) Training in decision-making, including determining priorities 
and problem solving;
    (f) Citizenship training, including life skills training such as 
parenting and work behavior training;
    (g) Civic engagement activities which promote the quality of life 
in a community; and
    (h) Other leadership activities that place youth in a leadership 
role such as serving on youth leadership committees, such as a Standing 
Youth Committee. (WIOA sec. 129(c)(2)(F))


Sec.  681.530  What are positive social and civic behaviors?

    Positive social and civic behaviors are outcomes of leadership 
opportunities, which are incorporated by local programs as part of 
their menu of services. Positive social and civic behaviors focus on 
areas that may include the following:
    (a) Positive attitudinal development;
    (b) Self-esteem building;
    (c) Openness to work with individuals from diverse backgrounds;
    (d) Maintaining healthy lifestyles, including being alcohol- and 
drug-free;
    (e) Maintaining positive social relationships with responsible 
adults and peers, and contributing to the well-being of one's 
community, including voting;
    (f) Maintaining a commitment to learning and academic success;
    (g) Avoiding delinquency;
    (h) Postponing parenting and responsible parenting, including child 
support education;
    (i) Positive job attitudes and work skills; and
    (j) Keeping informed in community affairs and current events.


Sec.  681.540  What is occupational skills training?

    (a) The Department defines occupational skills training as an 
organized program of study that provides specific vocational skills 
that lead to proficiency in performing actual tasks and technical 
functions required by certain occupational fields at entry, 
intermediate, or advanced levels. Local areas must give priority 
consideration to training programs that lead to recognized post-
secondary credentials that align with in-demand industry sectors or 
occupations in the local area. Such training must:
    (1) be outcome-oriented and focused on an occupational goal 
specified in the individual service strategy;
    (2) be of sufficient duration to impart the skills needed to meet 
the occupational goal; and
    (3) result in attainment of a recognized post-secondary credential.
    (b) The chosen occupational skills training must meet the quality 
standards in WIOA sec. 123.


Sec.  681.550  Are Individual Training Accounts permitted for youth 
participants?

    Yes. In order to enhance individual participant choice in their 
education and training plans and provide flexibility to service 
providers, the Department allows WIOA ITAs for out-of-school youth, 
ages 18 to 24 using WIOA youth funds when appropriate.


Sec.  681.560  What is entrepreneurial skills training and how is it 
taught?

    Entrepreneurial skills training provides the basics of starting and 
operating a small business.
    (a) Such training must develop the skills associated with 
entrepreneurship. Such skills include, but are not limited to, the 
ability to:
    (1) Take initiative;
    (2) Creatively seek out and identify business opportunities;
    (3) Develop budgets and forecast resource needs;
    (4) Understand various options for acquiring capital and the trade-
offs associated with each option; and
    (5) Communicate effectively and market oneself and one's ideas.
    (b) Approaches to teaching youth entrepreneurial skills include, 
but are not limited to, the following:
    (1) Entrepreneurship education that provides an introduction to the 
values and basics of starting and running a business. Entrepreneurship 
education programs often guide youth through the development of a 
business plan and may also include simulations of business start-up and 
operation.
    (2) Enterprise development which provides supports and services 
that incubate and help youth develop their own businesses. Enterprise 
development programs go beyond entrepreneurship education by helping 
youth access small loans or grants that are needed to begin business 
operation and by providing more individualized attention to the 
development of viable business ideas.
    (3) Experiential programs that provide youth with experience in the 
day-to-day operation of a business. These programs may involve the 
development of a youth-run business that young people participating in 
the program work in and manage. Or, they may facilitate placement in 
apprentice or internship positions with adult entrepreneurs in the 
community.


Sec.  681.570  What are supportive services for youth?

    Supportive services for youth, as defined in WIOA sec. 3(59), are 
services

[[Page 20869]]

that enable an individual to participate in WIOA activities. These 
services include, but are not limited to, the following:
    (a) Linkages to community services;
    (b) Assistance with transportation;
    (c) Assistance with child care and dependent care;
    (d) Assistance with housing;
    (e) Needs-related payments;
    (f) Assistance with educational testing;
    (g) Reasonable accommodations for youth with disabilities;
    (h) Referrals to health care; and
    (i) Assistance with uniforms or other appropriate work attire and 
work-related tools, including such items as eye glasses and protective 
eye gear.


Sec.  681.580  What are follow-up services for youth?

    (a) Follow-up services are critical services provided following a 
youth's exit from the program to help ensure the youth is successful in 
employment and/or post-secondary education and training.
    (b) Follow-up services for youth may include:
    (1) The leadership development and supportive service activities 
listed in Sec. Sec.  681.520 and 681.570;
    (2) Regular contact with a youth participant's employer, including 
assistance in addressing work-related problems that arise;
    (3) Assistance in securing better paying jobs, career pathway 
development, and further education or training;
    (4) Work-related peer support groups;
    (5) Adult mentoring; and/or
    (6) Services necessary to ensure the success of youth participants 
in employment and/or post-secondary education.
    (c) All youth participants must receive some form of follow-up 
services for a minimum duration of 12 months. Follow-up services may be 
provided beyond 12 months at the State or Local Board's discretion. The 
types of services provided and the duration of services must be 
determined based on the needs of the individual and therefore, the type 
and intensity of follow-up services may differ for each participant. 
However, follow-up services must include more than only a contact 
attempted or made for securing documentation in order to report a 
performance outcome. (WIOA sec. 129(c)(2)(I))


Sec.  681.590  What is the work experience priority?

    Local youth programs must expend not less than 20 percent of the 
funds allocated to them to provide in-school youth and out-of-school 
youth with paid and unpaid work experiences that fall under the 
categories listed in Sec.  681.460(a)(3) and further defined in Sec.  
681.600. (WIOA sec. 129(c)(4))


Sec.  681.600  What are work experiences?

    (a) Work experiences are a planned, structured learning experience 
that takes place in a workplace for a limited period of time. Work 
experience may be paid or unpaid, as appropriate. A work experience may 
take place in the private for-profit sector, the non-profit sector, or 
the public sector. Labor standards apply in any work experience where 
an employee/employer relationship, as defined by the Fair Labor 
Standards Act or applicable State law, exists. Work experiences provide 
the youth participant with opportunities for career exploration and 
skill development.
    (b) Work experiences must include academic and occupational 
education.
    (c) The types of work experiences include the following categories:
    (1) Summer employment opportunities and other employment 
opportunities available throughout the school year;
    (2) Pre-apprenticeship programs;
    (3) Internships and job shadowing; and
    (4) On-the-job training opportunities as defined in WIOA sec. 3(44) 
and in Sec.  680.700.


Sec.  681.610  How will local Workforce Innovation and Opportunity Act 
youth programs track the work experience priority?

    Local WIOA youth programs must track program funds spent on paid 
and unpaid work experiences, including wages and staff costs for the 
development and management of work experiences, and report such 
expenditures as part of the local WIOA youth financial reporting. The 
percentage of funds spent on work experience is calculated based on the 
total local area youth funds expended for work experience rather than 
calculated separately for in-school and out-of-school youth. Local area 
administrative costs are not subject to the 20 percent minimum work 
experience expenditure requirement.


Sec.  681.620  Does the Workforce Innovation and Opportunity Act 
require Local Boards to offer summer employment opportunities in the 
local youth program?

    No, WIOA does not require Local Boards to offer summer youth 
employment opportunities as summer employment is no longer its own 
program element under WIOA. However, WIOA does require Local Boards to 
offer work experience opportunities using at least 20 percent of their 
funding, which may include summer employment.


Sec.  681.630  How are summer employment opportunities administered?

    Summer employment opportunities are a component of the work 
experience program element. Providers administering the work experience 
program element must be selected by the Local Board by awarding a grant 
or contract on a competitive basis as described in WIOA sec. 123, based 
on criteria contained in the State Plan. However, the summer employment 
administrator does not need to select the employers who are providing 
the employment opportunities through a competitive process.


Sec.  681.640  What does education offered concurrently with and in the 
same context as workforce preparation activities and training for a 
specific occupation or occupational cluster mean?

    This program element reflects the integrated education and training 
model and requires integrated education and training to occur 
concurrently and contextually with workforce preparation activities and 
workforce training. This program element describes how workforce 
preparations activities, basic academic skills, and hands-on 
occupational skills training are to be taught within the same time 
frame and connected to training in a specific occupation, occupational 
cluster, or career pathway. (WIOA sec. 129(c)(2)(E))


Sec.  681.650  Does the Department allow incentive payments for youth 
participants?

    Yes, the Department allows incentive payments to youth participants 
for recognition and achievement directly tied to training activities 
and work experiences. The local program must have written policies and 
procedures in place governing the awarding of incentives and must 
ensure that such incentive payments are:
    (a) Tied to the goals of the specific program;
    (b) Outlined in writing before the commencement of the program that 
may provide incentive payments;
    (c) Align with the local program's organizational policies; and
    (d) Accord with the requirements contained in 2 CFR 200.


Sec.  681.660  How can parents, youth, and other members of the 
community get involved in the design and implementation of local youth 
programs?

    Local Boards and programs must provide opportunities for parents, 
participants, and other members of the

[[Page 20870]]

community with experience working with youth to be involved in the 
design and implementation of youth programs. Parents, youth 
participants, and other members of the community can get involved in a 
number of ways including serving on youth standing committees, if they 
exist and they are appointed by the Local Board. They can also get 
involved by serving as mentors, serving as tutors, and providing input 
into the design and implementation of other program design elements. 
Local Boards must also make opportunities available to successful 
participants to volunteer to help participants as mentors, tutors or in 
other activities.

Subpart D--One-Stop Services to Youth


Sec.  681.700  What is the connection between the youth program and the 
one-stop service delivery system?

    (a) WIOA sec. 121(b)(1)(B)(i) requires that the youth program 
function as a required one-stop partner and fulfill the roles and 
responsibilities of a one-stop partner described in WIOA sec. 
121(b)(1)(A).
    (b) In addition to the provisions of 20 CFR part 678, connections 
between the youth program and the one-stop system may include those 
that facilitate:
    (1) The coordination and provision of youth activities;
    (2) Linkages to the job market and employers;
    (3) Access for eligible youth to the information and services 
required in Sec.  681.460;
    (4) Services for non-eligible youth such as basic labor exchange 
services, other self-service activities such as job searches, career 
exploration, use of career center resources, and referral as 
appropriate; and
    (5) Other activities described in WIOA secs. 129(b)-(c).
    (c) Local Boards must either collocate WIOA youth program staff at 
one-stop centers and/or ensure one-stop centers and staff are equipped 
to advise youth in order to increase youth access to services and 
connect youth to the program that best aligns with their needs.


Sec.  681.710  Do Local Boards have the flexibility to offer services 
to area youth who are not eligible under the youth program through the 
one-stop centers?

    Yes. However, Local Boards must ensure one-stop centers fund 
services for non-eligible youth through programs authorized to provide 
services to such youth. For example, one-stop centers may provide basic 
labor exchange services under the Wagner-Peyser Act to any youth.
0
9. Add part 682 to read as follows:

PART 682--STATEWIDE ACTIVITIES UNDER TITLE I OF THE WORKFORCE 
INNOVATION AND OPPORTUNITY ACT

Subpart A--General Description
Sec.
682.100 What are the statewide employment and training activities 
under title I of the Workforce Innovation and Opportunity Act?
682.110 How are statewide employment and training activities funded?
Subpart B--Required and Allowable Statewide Employment and Training 
Activities
682.200 What are required statewide employment and training 
activities?
682.210 What are allowable statewide employment and training 
activities?
682.220 What are States' responsibilities in regard to evaluations 
and research?
Subpart C--Rapid Response Activities
682.300 What is rapid response, and what is its purpose?
682.310 Who is responsible for carrying out rapid response 
activities?
682.320 What is layoff aversion, and what are appropriate layoff 
aversion strategies and activities?
682.330 What rapid response activities are required?
682.340 May other activities be undertaken as part of rapid 
response?
682.350 What is meant by ``provision of additional assistance'' in 
the Workforce Innovation and Opportunity Act?
682.360 What rapid response, layoff aversion, or other information 
will States be required to report to the Employment and Training 
Administration?
682.370 What are ``allowable statewide activities'' for which rapid 
response funds remaining unspent at the end of the year of 
obligation may be recaptured by the State?

    Authority: Secs. 129, 134, 189, 503, Pub. L. 113-128, 128 Stat. 
1425 (Jul. 22, 2014).

Subpart A--General Description


Sec.  682.100  What are the statewide employment and training 
activities under title I of the Workforce Innovation and Opportunity 
Act?

    Statewide employment and training activities include those 
activities for adults and dislocated workers, as described in WIOA sec. 
134(a), and statewide youth activities, as described in WIOA sec. 
129(b). They include both required and allowable activities. In 
accordance with the requirements of this subpart, the State may develop 
policies and strategies for use of statewide employment and training 
funds. Descriptions of these policies and strategies must be included 
in the State Plan.


Sec.  682.110  How are statewide employment and training activities 
funded?

    (a) Except for the statewide rapid response activities described in 
paragraph (c) of this section, statewide employment and training 
activities are supported by funds reserved by the Governor under WIOA 
sec. 128(a).
    (b) Funds reserved by the Governor for statewide workforce 
investment activities may be combined and used for any of the 
activities authorized in WIOA sec. 129(b), 134(a)(2)(B), or 
134(a)(3)(A) (which are described in Sec. Sec.  682.200 and 682.210), 
regardless of whether the funds were allotted through the youth, adult, 
or dislocated worker funding streams.
    (c) Funds for statewide rapid response activities are reserved 
under WIOA sec. 133(a)(2) and may be used to provide the activities 
authorized at WIOA sec. 134(a)(2)(A) (which are described in Sec. Sec.  
682.310 through 682.330). (WIOA secs. 129(b), 133(a)(2), 134(a)(2)(A), 
and 134(a)(3)(A))

Subpart B--Required and Allowable Statewide Employment and Training 
Activities


Sec.  682.200  What are required statewide employment and training 
activities?

    Required statewide employment and training activities are:
    (a) Required rapid response activities, as described in Sec.  
682.310;
    (b) Disseminating by various means, as provided by WIOA sec. 
134(a)(2)(B):
    (1) The State list of eligible providers of training services 
(including those providing non-traditional training services), for 
adults and dislocated workers and eligible providers of apprenticeship 
programs;
    (2) Information identifying eligible providers of on-the-job 
training (OJT), customized training, incumbent worker training (see 
Sec.  680.780 of this chapter), internships, paid or unpaid work 
experience opportunities (see Sec.  680.170 of this chapter) and 
transitional jobs (see Sec.  680.830 of this chapter);
    (3) Information on effective outreach and partnerships with 
business;
    (4) Information on effective service delivery strategies and 
promising practices to serve workers and job seekers;
    (5) Performance information and information on the cost of 
attendance, including tuition and fees as described in Sec.  680.490 of 
this chapter;
    (6) A list of eligible providers of youth activities as described 
in WIOA sec. 123; and
    (7) Information of physical and programmatic accessibility for 
individuals with disabilities. (WIOA sec. 134(a)(2)(b)(v)(VI)).

[[Page 20871]]

    (c) States must assure that the information listed in paragraphs 
(b)(1) through (b)(7) of this section is widely available;
    (d) Conducting evaluations (WIOA sec. 134(a)(2)(B)(vi)) under WIOA 
sec. 116(e), consistent with the requirements found under Sec.  
682.220.
    (e) Providing technical assistance to local areas in carrying out 
activities described in the State Plan, including coordination and 
alignment of data systems used to carry out the requirements of this 
Act;
    (f) Assisting local areas, one-stop operators, one-stop partners, 
and eligible providers, including development of staff, including staff 
training to provide opportunities for individuals with barriers to 
employment to enter in-demand industry sectors or occupations and 
nontraditional occupations, and the development of exemplary program 
activities. (WIOA sec. 134(a)(2)(B)(IV));
    (g) Assisting local areas for carrying out the regional planning 
and service delivery efforts required under WIOA sec. 106(c);
    (h) Assisting local areas by providing information on and support 
for the effective development, convening, and implementation of 
industry and sector partnerships;
    (i) Providing technical assistance to local areas that fail to meet 
local performance accountability measure described in 20 CFR 677.205 
(WIOA secs. 129(b)(2)(E) and 134(a)(2)(B)(IV));
    (j) Carrying out monitoring and oversight of activities for 
services to youth, adults, and dislocated workers under WIOA title I, 
and which may include a review comparing the services provided to male 
and female youth (WIOA sec. 129(b)(1)(E));
    (k) Providing additional assistance to local areas that have a high 
concentration of eligible youth (WIOA sec. 129(b)(1)(F)); and
    (l) Operating a fiscal and management accountability information 
system, based on guidelines established by the Secretary (WIOA secs. 
129(b)(1)((D)), 134(a)(2)(B)(iii)).


Sec.  682.210  What are allowable statewide employment and training 
activities?

    Allowable statewide employment and training activities include:
    (a) State administration of the adult, dislocated worker and youth 
workforce investment activities, consistent with the five percent 
administrative cost limitation at WIOA sec. 134(a)(3)(B) and Sec.  
683.205(a)(1) of this chapter;
    (b) Developing and implementing innovative programs and strategies 
designed to meet the needs of all employers (including small employers) 
in the State, including the programs and strategies referenced in WIOA 
sec. 134(a)(3)(A)(i);
    (c) Developing strategies for serving individuals with barriers to 
employment, and for coordinating programs and services among one-stop 
partners (WIOA sec. 134(a)(3)(A)(ii));
    (d) Development or identification of education and training 
programs that have the characteristics referenced in WIOA sec. 
134(a)(3)(A)(iii);
    (e) Implementing programs to increase the number of individuals 
training for and placed in non-traditional employment (WIOA sec. 
134(a)(3)(A)(iv));
    (f) Conducting research and demonstrations related to meeting the 
employment and education needs of youth, adults and dislocated workers 
(WIOA sec. 134(a)(3)(A)(ix));
    (g) Supporting the development of alternative, evidence-based 
programs, and other activities that enhance the choices available to 
eligible youth and which encourage youth to reenter and complete 
secondary education, enroll in post-secondary education and advanced 
training, progress through a career pathway, and enter into 
unsubsidized employment that leads to economic self-sufficiency (WIOA 
sec. 129(b)(2)(B);
    (h) Supporting the provision of career services in the one-stop 
delivery system in the State as described in Sec.  678.430 and WIOA 
secs. 129(b)(2)(C) and 134(c)(2);
    (i) Supporting financial literacy activities as described in Sec.  
681.500 and WIOA sec. 129(b)(2)(D);
    (j) Providing incentive grants to local areas for performance by 
the local areas on local performance accountability measures (WIOA sec. 
134(a)(3)(A)(xi));
    (k) Providing technical assistance to Local Boards, chief elected 
officials, one-stop operators, one-stop partners, and eligible 
providers in local areas on the development of exemplary program 
activities and on the provision of technology to facilitate remote 
access to services provided through the one-stop delivery system in the 
State (WIOA sec. 129(b)(2)(E));
    (l) Providing technical assistance to local areas that are 
implementing WIOA Pay-for-Performance contract strategies and 
conducting evaluations of such strategies. Technical assistance may 
include providing assistance with data collections, meeting data entry 
requirements, and identifying level of performance (WIOA sec. 
134(a)(3)(A)(xiv));
    (m) Carrying out activities to facilitate remote access to training 
services provided through the one-stop delivery system (WIOA sec. 
134(a)(3)(A)(v));
    (n) Activities that include:
    (1) Activities to improve coordination of workforce investment 
activities, with economic development activities (WIOA sec. 
134(a)(3)(A)(viii)(I)); and
    (2) Activities to improve coordination of employment and training 
activities with child support services and activities, cooperative 
extension programs carried out by the Department of Agriculture, 
programs carried out by local areas for individuals with disabilities 
(including the programs identified in WIOA sec. 
134(a)(3)(A)(viii)(II)(cc)), adult education and literacy activities 
including those provided by public libraries, activities in the 
correction systems to assist ex-offenders in reentering the workforce 
and financial literacy activities (WIOA sec. 134(a)(3)(A)(viii)(II)); 
and
    (3) Developing and disseminating workforce and labor market 
information (WIOA sec. 134(a)(3)(A)(viii)(III)).
    (o) Implementation of promising practices for workers and 
businesses as described in WIOA sec. 134(a)(3)(A)(x);
    (p) Adopting, calculating, or commissioning for approval an 
economic self-sufficiency standard for the State that specifies the 
income needs of families, by family size, the number and ages of 
children in the family, and sub-State geographical considerations (WIOA 
sec. 134(a)(3)(A)(xii));
    (q) Developing and disseminating common intake procedures and 
related items, including registration processes, across core and 
partner programs (WIOA sec. 134(A)(3)(A)(xiii)); and
    (r) Coordinating activities with the child welfare system to 
facilitate provision of services for children and youth who are 
eligible for assistance under sec. 477 of the Social Security Act (WIOA 
sec. 134(a)(3)(A)(vii)).


Sec.  682.220  What are States' responsibilities in regard to 
evaluations and research?

    (a)(1) As required by Sec.  682.200(d), States must use funds 
reserved by the Governor for statewide activities to conduct 
evaluations of activities under the WIOA title I core programs, in 
order to promote continuous improvement; test innovative services and 
strategies, and achieve high levels of performance and outcomes;
    (2) States may use the funds reserved by the Governor for statewide 
activities (under Sec.  682.210(f)), to conduct research and 
demonstration projects relating to the education and employment needs 
of youth, adults, and dislocated worker programs;

[[Page 20872]]

    (3) States may use funds from any WIOA title II-IV core program to 
conduct evaluations and other research, as determined through the 
processes associated with paragraph (b)(1) of this section;
    (b) Evaluations and research projects funded in whole or in part 
with WIOA title I funds must:
    (1) Be coordinated with and designed in conjunction with State and 
Local Boards and with State agencies responsible for the administration 
of all core programs;
    (2) When appropriate, include analysis of customer feedback and 
outcome and process measures in the statewide workforce development 
system;
    (3) Use designs that employ the most rigorous analytical and 
statistical methods that are reasonably feasible, such as the use of 
control groups; and
    (4) To the extent feasible, be coordinated with the evaluations 
provided for by the Secretary of Labor and the Secretary of Education 
under WIOA sec. 169 (regarding title I programs and other employment-
related programs), WIOA sec. 242(c)(2)(D) (regarding Adult Education), 
secs. 12(a)(5), 14, and 107 of the Rehabilitation Act of 1973 (29 
U.S.C. 709(a)(5), 711, 727) [applied with respect to programs carried 
out under title I of that Act (29 U.S.C. 720 et seq.)] and the 
investigations provided by the Secretary of Labor under sec. 10(b) of 
the Wagner-Peyser Act [29 U.S.C. 49i(b)].
    (c) States must annually prepare, submit to the State Board and 
Local Boards in the State, and make available to the public (including 
by electronic means), reports containing the results of the evaluations 
and other research described in paragraph (a) of this section.
    (d) States must cooperate, to the extent practicable, in 
evaluations and related research projects conducted by the Secretaries 
of Labor and Education or their agents under sec. 116(e)(4) of WIOA. 
Such cooperation must, at a minimum, meet the following requirements:
    (1) The timely provision of:
    (i) Data, in accordance with appropriate privacy protections 
established by the Secretary of Labor;
    (ii) Responses to surveys;
    (iii) Site visits; and
    (iv) Data and survey responses from local subgrantees and State and 
Local Boards, and assuring that subgrantees and boards allow timely 
site visits.
    (2) Encouraging other one-stop partners at the local level to 
cooperate in timely provision of data, survey responses and site visits 
as listed in paragraphs (f)(1)(a)-(c) of this section.
    (3) If a State determines that timely cooperation in data provision 
as described in paragraph (d)(1) of this section is not practicable, 
the Governor must inform the Secretary in writing and explain the 
reasons why it is not practicable. In such circumstances, the State 
must cooperate with the Department in developing a plan or strategy to 
mitigate or overcome the problems preventing timely provision of data, 
survey responses, and site visits.
    (e) States may use or combine funds, consistent with Federal and 
State law, regulation and guidance, from other public or private 
sources, to conduct evaluations, research, and demonstration projects 
relating to activities under the WIOA title I-IV core programs.

Subpart C--Rapid Response Activities


Sec.  682.300  What is rapid response, and what is its purpose?

    (a) Rapid response is described in Sec. Sec.  682.310 through 
682.370, and encompasses the strategies and activities necessary to:
    (1) Plan for and respond to as quickly as possible following 
either:
    (i) An announcement of a closure or layoff; or,
    (ii) Mass job dislocation resulting from a natural or other 
disaster; and
    (2) Deliver services to enable dislocated workers to transition to 
new employment as quickly as possible.
    (b) The purpose of rapid response is to promote economic recovery 
and vitality by developing an ongoing, comprehensive approach to 
identifying, planning for, responding to layoffs and dislocations, and 
preventing or minimizing their impacts on workers, businesses, and 
communities. A successful rapid response system includes:
    (1) Informational and direct reemployment services for workers, 
including but not limited to information and support for filing 
unemployment insurance claims, information on the impacts of layoff on 
health coverage or other benefits, information on and referral to 
career services, reemployment-focused workshops and services, and 
training;
    (2) Delivery of solutions to address the needs of businesses in 
transition, provided across the business lifecycle (expansion and 
contraction), including comprehensive business engagement and layoff 
aversion strategies and activities designed to prevent or minimize the 
duration of unemployment;
    (3) Convening, brokering, and facilitating the connections, 
networks and partners to ensure the ability to provide assistance to 
dislocated workers and their families such as home heating assistance, 
legal aid, and financial advice; and
    (4) Strategic planning, data gathering and analysis designed to 
anticipate, prepare for, and manage economic change.


Sec.  682.310  Who is responsible for carrying out rapid response 
activities?

    (a) Rapid response activities must be carried out by the State or 
an entity designated by the State, in conjunction with the Local 
Boards, chief elected officials, and other stakeholders, as provided by 
WIOA secs. 133(a)(2) and 134(a)(2)(A);
    (b) States must establish and maintain a rapid response unit to 
carry out statewide rapid response activities and to oversee rapid 
response activities undertaken by a designated State entity, Local 
Board, or the chief elected officials for affected local areas, as 
provided under WIOA sec. 134(a)(2)(A)(i)(I).


Sec.  682.320  What is layoff aversion, and what are appropriate layoff 
aversion strategies and activities?

    (a) Layoff aversion consists of strategies and activities, 
including those provided in paragraph (b)(2) of this section and 
Sec. Sec.  682.330 and 682.340, to prevent or minimize the duration of 
unemployment resulting from layoffs;
    (b) Layoff aversion activities may include:
    (1) Providing assistance to employers in managing reductions in 
force, which may include early identification of firms at risk of 
layoffs, assessment of the needs of and options for at-risk firms, and 
the delivery of services to address these needs, as provided by WIOA 
sec. 134(d)(1)(A)(ix)(II)(cc);
    (2) Ongoing engagement, partnership, and relationship-building 
activities with businesses in the community, in order to create an 
environment for successful layoff aversion efforts and to enable the 
provision of assistance to dislocated workers in obtaining reemployment 
as soon as possible;
    (3) Funding feasibility studies to determine if a company's 
operations may be sustained through a buyout or other means to avoid or 
minimize layoffs;
    (4) Developing and managing incumbent worker training programs or 
other worker up skilling approaches;
    (5) Connecting companies to:
    (i) Short-time compensation or other programs designed to prevent 
layoffs or

[[Page 20873]]

to quickly reemploy dislocated workers, available under Unemployment 
Insurance programs;
    (ii) Employer loan programs for employee skill upgrading; and
    (iii) Other Federal, State and local resources as necessary to 
address other business needs that cannot be funded with resources 
provided under this title.
    (6) Establishing linkages with economic development activities at 
the Federal, State and local levels, including Federal Department of 
Commerce programs and available State and local business retention and 
expansion activities;
    (7) Partnering or contracting with business-focused organizations 
to assess risks to companies, propose strategies to address those 
risks, implement services, and measure impacts of services delivered;
    (8) Conducting analyses of the suppliers of an affected company to 
assess their risks and vulnerabilities from a potential closing or 
shift in production of their major customer;
    (9) Engaging in proactive measures to identify opportunities for 
potential economic transition and training needs in growing industry 
sectors or expanding businesses; and
    (10) Connecting businesses and workers to short-term, on-the-job, 
or customized training programs and apprenticeships before or after 
layoff to help facilitate rapid reemployment.


Sec.  682.330  What rapid response activities are required?

    Rapid response activities must include:
    (a) Layoff aversion activities as described in Sec.  682.320, as 
applicable.
    (b) Immediate and on-site contact with the employer, 
representatives of the affected workers, and the local community, 
including an assessment of and plans to address the:
    (1) Layoff plans and schedule of the employer;
    (2) Background and probable assistance needs of the affected 
workers;
    (3) Reemployment prospects for workers; and
    (4) Available resources to meet the short and long-term assistance 
needs of the affected workers.
    (c) The provision of information and access to unemployment 
compensation benefits and programs, such as Short-Time Compensation, 
comprehensive one-stop system services, and employment and training 
activities, including information on the Trade Adjustment Assistance 
(TAA) program (19 U.S.C. 2271 et seq.), Pell Grants, the GI Bill, and 
other resources;
    (d) The delivery of other necessary services and resources 
including workshops and classes, use of worker transition centers, and 
job fairs, to support reemployment efforts for affected workers;
    (e) Partnership with the Local Board(s) and chief elected 
official(s) to ensure a coordinated response to the dislocation event 
and, as needed, obtain access to State or local economic development 
assistance. Such coordinated response may include the development of an 
application for a national dislocated worker grant as provided under 
WIOA secs. 101(38) and 134(a)(2)(A) and 20 CFR part 687;
    (f) The provision of emergency assistance adapted to the particular 
layoff or disaster;
    (g) As appropriate, developing systems and processes for:
    (1) Identifying and gathering information for early warning of 
potential layoffs or opportunities for layoff aversion;
    (2) Analyzing, and acting upon, data and information on 
dislocations and other economic activity in the State, region, or local 
area; and
    (3) Tracking outcome and performance data and information related 
to the activities of the rapid response program.
    (h) Developing and maintaining partnerships with other appropriate 
Federal, State and local agencies and officials, employer associations, 
technical councils, other industry business councils, labor 
organizations, and other public and private organizations, as 
applicable, in order to:
    (1) Conduct strategic planning activities to develop strategies for 
addressing dislocation events and ensuring timely access to a broad 
range of necessary assistance;
    (2) Develop mechanisms for gathering and exchanging information and 
data relating to potential dislocations, resources available, and the 
customization of layoff aversion or rapid response activities, to 
ensure the ability to provide rapid response services as early as 
possible;
    (i) Delivery of services to worker groups for which a petition for 
Trade Adjustment Assistance has been filed;
    (j) The provision of additional assistance, as described in Sec.  
682.350, to local areas that experience disasters, layoffs, or other 
dislocation events when such events exceed the capacity of the local 
area to respond with existing resources as provided under WIOA sec. 
134(a)(2)(A)(i)(II).
    (k) Provision of guidance and financial assistance as appropriate, 
in establishing a labor-management committee if voluntarily agreed to 
by the employee's bargaining representative and management. The 
committee may devise and oversee an implementation strategy that 
responds to the reemployment needs of the workers. The assistance to 
this committee may include:
    (1) The provision of training and technical assistance to members 
of the committee; and;
    (2) Funding the operating costs of a committee to enable it to 
provide advice and assistance in carrying out rapid response activities 
and in the design and delivery of WIOA-authorized services to affected 
workers.


Sec.  682.340  May other activities be undertaken as part of rapid 
response?

    (a) Yes, in order to conduct layoff aversion activities, or to 
prepare for and respond to dislocation events, in addition to the 
activities required under Sec.  682.330, a State or designated entity 
may devise rapid response strategies or conduct activities that are 
intended to minimize the negative impacts of dislocation on workers, 
businesses, and communities and ensure rapid reemployment for workers 
affected by layoffs.
    (b) When circumstances allow, rapid response may provide guidance 
and/or financial assistance to establish community transition teams to 
assist the impacted community in organizing support for dislocated 
workers and in meeting the basic needs of their families, including 
heat, shelter, food, clothing and other necessities and services that 
are beyond the resources and ability of the one-stop delivery system to 
provide.


Sec.  682.350  What is meant by ``provision of additional assistance'' 
in the Workforce Innovation and Opportunity Act?

    As stated in WIOA sec. 134(a)(2)(A)(ii), up to 25 percent of 
dislocated worker funds may be reserved for rapid response activities. 
Once the State has reserved adequate funds for rapid response 
activities, such as those described in Sec. Sec.  682.310, 682.320, and 
682.330, any of the remaining funds reserved may be provided to local 
areas that experience increases of unemployment due to natural 
disasters, layoffs or other events, for provision of direct career 
services to participants if there are not adequate local funds 
available to assist the dislocated workers. States may wish to 
establish the policies or procedures governing the provision of 
additional assistance as described in Sec.  682.330.

[[Page 20874]]

Sec.  682.360  What rapid response, layoff aversion, or other 
information will States be required to report to the Employment and 
Training Administration?

    States must report information regarding the receipt of rapid 
response services by individuals enrolled as dislocated workers on the 
WIOA individual record.


Sec.  682.370  What are ``allowable statewide activities'' for which 
rapid response funds remaining unspent at the end of the year of 
obligation may be recaptured by the State?

    WIOA permits a State to recapture rapid response funds, which 
remain unspent at the end of the program year in which they were 
obligated, to be used for allowable statewide activities, including 
prioritizing the planning for and delivery of activities designed to 
prevent job loss, increasing the rate of reemployment, building 
relationships with businesses and other stakeholders, building and 
maintaining early warning networks and systems, and otherwise 
supporting efforts to allow long-term unemployed workers to return to 
work.
0
10. Add part 683 to read as follows:

PART 683--ADMINISTRATIVE PROVISIONS UNDER TITLE I OF THE WORKFORCE 
INNOVATION AND OPPORTUNITY ACT

Subpart A--Funding and Closeout
Sec.
683.100 When do Workforce Innovation and Opportunity Act grant funds 
become available for obligation?
683.105 What award document authorizes the expenditure of funds 
under title I of the Workforce Innovation and Opportunity Act and 
the Wagner-Peyser Act?
683.110 What is the period of performance of Workforce Innovation 
and Opportunity Act title I and Wagner-Peyser Act funds?
683.115 What planning information must a State submit in order to 
receive a formula grant?
683.120 How are Workforce Innovation and Opportunity Act title I 
formula funds allocated to local areas?
683.125 What minimum funding provisions apply to Workforce 
Innovation and Opportunity Act adult, dislocated worker, and youth 
allocations?
683.130 Does a Local Board have the authority to transfer funds 
between the adult employment and training activities allocation and 
the dislocated worker employment and training activities allocation?
683.135 What reallotment procedures does the Secretary use?
683.140 What reallocation procedures must the Governors use?
683.145 What merit review and risk assessment does the Department 
conduct for Federal financial assistance awards made under the 
Workforce Innovation and Opportunity Act title I, subtitle D?
683.150 What closeout requirements apply to grants funded with 
Workforce Innovation and Opportunity Act title I and Wagner-Peyser 
funds?
Subpart B--Administrative Rules, Costs, and Limitations
683.200 What general fiscal and administrative rules apply to the 
use of Workforce Innovation and Opportunity Act title I and Wagner-
Peyser funds?
683.205 What administrative cost limitations apply to Workforce 
Innovation and Opportunity Act title I grants?
683.210 What audit requirements apply to the use of Workforce 
Innovation and Opportunity Act title I and Wagner-Peyser funds?
683.215 What Workforce Innovation and Opportunity Act title I 
functions and activities constitute the costs of administration 
subject to the administrative cost limitation?
683.220 What are the internal controls requirements for recipients 
and subrecipients of Workforce Innovation and Opportunity Act title 
I and Wagner-Peyser funds?
683.225 What requirements relate to the enforcement of the Military 
Selective Service Act?
683.230 Are there special rules that apply to veterans when income 
is a factor in eligibility determinations?
683.235 May Workforce Innovation and Opportunity Act title I funds 
be spent for construction?
683.240 What are the instructions for using real property with 
Federal equity?
683.245 Are employment generating activities, or similar activities, 
allowable under the Workforce Innovation and Opportunity Act title 
I?
683.250 What other activities are prohibited under title I of the 
Workforce Innovation and Opportunity Act?
683.255 What are the limitations related to religious activities of 
title I of the Workforce Innovation and Opportunity Act?
683.260 What prohibitions apply to the use of Workforce Innovation 
and Opportunity Act title I funds to encourage business relocation?
683.265 What procedures and sanctions apply to violations of this 
part?
683.270 What safeguards are there to ensure that participants in 
Workforce Innovation and Opportunity Act employment and training 
activities do not displace other employees?
683.275 What wage and labor standards apply to participants in 
activities under title I of the Workforce Innovation and Opportunity 
Act?
683.280 What health and safety standards apply to the working 
conditions of participants in activities under title I of the 
Workforce Innovation and Opportunity Act?
683.285 What are a recipient's obligations to ensure 
nondiscrimination and equal opportunity, and what are a recipient's 
obligations with respect to religious activities?
683.290 Are there salary and bonus restrictions in place for the use 
of title I and Wagner-Peyser funds?
683.295 Is earning of profit allowed under the Workforce Innovation 
and Opportunity Act?
Subpart C--Reporting Requirements
683.300 What are the reporting requirements for programs funded 
under the Workforce Innovation and Opportunity Act?
Subpart D--Oversight and Resolution of Findings
683.400 What are the Federal and State monitoring and oversight 
responsibilities?
683.410 What are the oversight roles and responsibilities of 
recipients and subrecipients of Federal financial assistance awarded 
under title I of the Workforce Innovation and Opportunity Act and 
Wagner-Peyser?
683.420 What procedures apply to the resolution of findings arising 
from audits, investigations, monitoring, and oversight reviews?
683.430 How does the Secretary resolve investigative and monitoring 
findings?
683.440 What is the Grant Officer resolution process?
Subpart E--Pay-for-Performance Contract Strategies
683.500 What is a Workforce Innovation and Opportunity Act Pay-for-
Performance contract strategy?
683.510 What is a Workforce Innovation and Opportunity Act Pay-for-
Performance contract?
683.520 What funds can be used to support Workforce Innovation and 
Opportunity Act Pay-for-Performance contract strategies?
683.530 How long are funds used for Workforce Innovation and 
Opportunity Act Pay-for-Performance contract strategies available?
683.540 What is the State's role in assisting local areas in using 
Workforce Innovation and Opportunity Act Pay-for-Performance 
contract strategies?
Subpart F--Grievance Procedures, Complaints, and State Appeals 
Processes
683.600 What local area, State, and direct recipient grievance 
procedures must be established?
683.610 What processes does the Secretary use to review grievances 
and complaints of title I recipients?
683.620 How are complaints and reports of criminal fraud and abuse 
addressed under the Workforce Innovation and Opportunity Act?
683.630 What additional appeal processes or systems must a State 
have for the Workforce Innovation and Opportunity Act program?
683.640 What procedures apply to the appeals of non-designation of 
local areas?
683.650 What procedures apply to the appeals of the Governor's 
imposition of sanctions for substantial violations or performance 
failures by a local area?

[[Page 20875]]

Subpart G--Sanctions, Corrective Actions, and Waiver of Liability
683.700 When can the Secretary impose sanctions and corrective 
actions on recipients and subrecipients of title I Workforce 
Innovation and Opportunity Act funds?
683.710 Who is responsible for funds provided under title I and 
Wagner-Peyser?
683.720 What actions are required to address the failure of a local 
area to comply with the applicable uniform administrative 
provisions?
683.730 When can the Secretary waive the imposition of sanctions?
683.740 What is the procedure to handle a recipient of title I 
Workforce Innovation and Opportunity Act funds' request for advance 
approval of contemplated corrective actions?
683.750 What procedure must be used for administering the offset/
deduction provisions of the Workforce Innovation and Opportunity 
Act?
Subpart H--Administrative Adjudication and Judicial Review
683.800 What actions of the Department may be appealed to the Office 
of Administrative Law Judges?
683.810 What rules of procedure apply to hearings conducted under 
this subpart?
683.820 What authority does the Administrative Law Judge have in 
ordering relief as an outcome of an administrative hearing?
683.830 When will the Administrative Law Judge issue a decision?
683.840 Is there an alternative dispute resolution process that may 
be used in place of an Office of Administrative Law Judges hearing?
683.850 Is there judicial review of a final order of the Secretary 
issued under WIOA?

    Authority:  Secs. 102, 116, 121, 127, 128, 132, 133, 147, 167, 
169, 171, 181, 185, 189, 195, 503, Pub. L. 113-128, 128 Stat. 1425 
(Jul. 22, 2014).

Subpart A--Funding and Closeout


Sec.  683.100  When do Workforce Innovation and Opportunity Act grand 
funds become available for obligation?

    (a) Title I. Except as provided in paragraph (b) of this section or 
in the applicable fiscal year appropriation, fiscal year appropriations 
for programs and activities carried out under title I are available for 
obligation on the basis of a program year. A program year begins on 
July 1 in the fiscal year for which the appropriation is made and ends 
on June 30 of the following year.
    (b) Youth funds. Fiscal year appropriations for a program year's 
youth activities, authorized under chapter 2, subtitle B, title I of 
WIOA may be made available for obligation beginning on April 1 of the 
fiscal year for which the appropriation is made.
    (c) Wagner-Peyser Employment Service. Fiscal year appropriations 
for activities authorized under sec. 6 of the Wagner Peyser Act, 29 
U.S.C. 49e, are available for obligation on the basis of a program 
year. A program year begins July 1 in the fiscal year for which the 
appropriation is made and ends on June 30 of the following year.
    (d) Discretionary Grants. Discretionary grant funds are available 
for obligation in accordance with the fiscal year appropriation.


Sec.  683.105  What award document authorizes the expenditure of funds 
under title I of the Workforce Innovation and Opportunity Act and the 
Wagner-Peyser Act?

    (a) Agreement. All WIOA title I and Wagner-Peyser funds are awarded 
by grant or cooperative agreement, as defined under 2 CFR 200.51 and 2 
CFR 200.24 respectively, or contract, as defined in 2 CFR 200.22. All 
grant or cooperative agreements are awarded by the Grant Officer 
through negotiation with the recipient (the non-Federal entity). The 
agreement describes the terms and conditions applicable to the award of 
WIOA title I and Wagner-Peyser funds and will conform to the 
requirements of 2 CFR 200.210. Contracts are issued by the Contracting 
Officer in compliance with the Federal Acquisition Regulations.
    (b) Grant funds awarded to States and outlying areas. The Federal 
funds allotted to the States and outlying areas each program year in 
accordance with secs. 127(b) and 132(b) of WIOA will be obligated by 
grant agreement.
    (c) Native American programs. Awards of grants, contracts or 
cooperative agreements for the WIOA Native American program will be 
made to eligible entities on a competitive basis every 4 program years 
for a 4-year period, in accordance with the provisions of sec. 166 of 
WIOA.
    (d) Migrant and seasonal farmworker programs. Awards of grants or 
contracts for the Migrant and Seasonal Farmworker Program will be made 
to eligible entities on a competitive basis every 4 program years for a 
4-year period, in accordance with the provisions of sec. 167 of WIOA.
    (e) Awards for evaluation and research under sec. 169 of WIOA. (1) 
Awards of grants, contracts or cooperative agreements will be made to 
eligible entities for programs or activities authorized under WIOA sec. 
169. These funds are for:
    (i) Evaluations;
    (ii) Research;
    (iii) Studies;
    (iv) Multi-State projects; and
    (v) Dislocated worker projects.
    (2) Contracts and grants under paragraphs (e)(1)(ii) through (iv) 
of this section in amounts that exceed $100,000 will be awarded on a 
competitive basis, except that a noncompetitive award may be made in 
the case of a project that is funded jointly with other public or 
private sector entities that provide a substantial portion of the 
assistance under the grant or contract for the project.
    (3) Grants or contracts for carrying out projects in paragraphs 
(e)(1)(ii) through (iv) of this section may not be awarded on a 
noncompetitive basis to the same organization for more than 3 
consecutive years.
    (4) Entities with nationally recognized expertise in the methods, 
techniques and knowledge of workforce investment activities will be 
provided priority in awarding contracts or grants for the projects 
under paragraphs (e)(1)(ii) through (iv) of this section. The duration 
of such projects will be specified in the grant or contract agreement.
    (5) A peer review process will be used to review and evaluate 
projects under this paragraph (e) for grants that exceed $500,000, and 
to designate exemplary and promising programs.
    (f) Termination. Each grant, cooperative agreement, or contract 
terminates as indicated in the terms of the agreement or when the 
period of fund availability has expired. The grant must be closed in 
accordance with the closeout provisions at 2 CFR 200.343 and 2 CFR 2900 
as applicable.


Sec.  683.110  What is the period of performance of Workforce 
Innovation and Opportunity Act title I and Wagner-Peyser Act funds?

    (a) The statutory period of availability for expenditure for WIOA 
title I grants will be established as the period of performance for 
such grants unless otherwise provided in the grant agreement or 
cooperative agreement. All funds should be fully expended by the 
expiration of the period of performance or they risk losing their 
availability. Unless otherwise authorized in a grant or cooperative 
agreement or subsequent modification, recipients should expend funds 
with the shortest period of availability first.
    (b) Grant funds expended by States. Funds allotted to States under 
WIOA secs. 127(b) and 132(b) for any program year are available for 
expenditure by the State receiving the funds only during that program 
year and the 2 succeeding program years as identified in Sec.  683.100.
    (c) Grant funds expended by local areas as defined in WIOA sec. 
106. (1)(i)

[[Page 20876]]

Funds allocated by a State to a local area under WIOA secs. 128(b) and 
133(b), for any program year are available for expenditure only during 
that program year and the succeeding program year;
    (ii) Pay for performance exception. Funds used to carry out pay-
for-performance contract strategies will remain available until 
expended in accordance with WIOA sec. 189(g)(2)(B).
    (2) Funds which are not expended by a local area(s) in the 2-year 
period described in paragraph (c)(1)(i) of this section, must be 
returned to the State. Funds so returned are available for expenditure 
by State and local recipients and subrecipients only during the third 
program year of availability in accordance with WIOA secs. 128(c) and 
132(c). These funds are available for only the following purposes:
    (i) For statewide projects, or
    (ii) For distribution to local areas which had fully expended their 
allocation of funds for the same program year within the 2-year period.
    (d) Native American programs. Funds awarded by the Department under 
WIOA sec. 166(c) are available for expenditure for the period 
identified in the grant or contract award document, which will not 
exceed 4 years.
    (e) Migrant and seasonal farmworker programs. Funds awarded by the 
Department under WIOA sec. 167 are available for expenditure for the 
period identified in the grant award document, which will not exceed 4 
years.
    (f) Evaluations and research. Funds awarded by the Department under 
WIOA sec. 169 are available for expenditure for any program or activity 
authorized under sec. 169 of WIOA and will remain available until 
expended or as specified in the terms and conditions of award.
    (g) Other programs under title I of WIOA, including secs. 170 and 
171, and all other grants, contracts and cooperative agreements. Funds 
are available for expenditure for a period of performance identified in 
the grant or contract agreement.
    (h) Wagner-Peyser. Funds allotted to States for grants under secs. 
3 and 15 of the Wagner-Peyser Act for any program year are available 
for expenditure by the State receiving the funds only during that 
program year and the 2 succeeding program years. The program year 
begins on July 1 of the fiscal year for which the appropriation is 
made.


Sec.  683.115  What planning information must a State submit in order 
to receive a formula grant?

    Each State seeking financial assistance under subtitle B, chapter 2 
(youth) or chapter 3 (adults and dislocated workers), of title I of 
WIOA, or under the Wagner-Peyser Act must submit a Unified State Plan, 
under sec. 102 of WIOA or a Combined State Plan under WIOA sec. 103. 
The requirements for the plan content and the plan review process are 
described in sec. 102 of WIOA, sec. 8 of Wagner-Peyser Act, and 20 CFR 
676.100 through 676.135 and 20 CFR 652.211 through 652.214.


Sec.  683.120  How are Workforce Innovation and Opportunity Act title I 
formula funds allocated to local areas?

    (a) General. The Governor must allocate WIOA formula funds allotted 
for services to youth, adults and dislocated workers in accordance with 
secs. 128 and 133 of WIOA and this section.
    (1) State Boards must assist Governors in the development of any 
youth or adult discretionary within-State allocation formulas. (WIOA 
secs. 128(b)(3) and 133(b)(3)).
    (2) Within-State allocations must be made:
    (i) In accordance with the allocation formulas contained in secs. 
128(b) and 133(b) of WIOA and in the State Plan, and
    (ii) After consultation with chief elected officials and Local 
Boards in each of the local areas.
    (iii) In accordance with sec. 182(e) of WIOA, and must be made 
available to local areas not later than 30 days after the date funds 
are made available to the State or 7 days after the date the local plan 
for the area is approved, whichever is later.
    (b) State reserve. Of the WIOA formula funds allotted for services 
to youth, adults and dislocated workers, the Governor must reserve not 
more than 15 percent of the funds from each of these sources to carry 
out statewide activities. Funds reserved under this paragraph may be 
combined and spent on statewide activities under secs. 129(b) and 
134(a) of WIOA and statewide employment and training activities, for 
adults and dislocated workers, and youth activities, as described in 20 
CFR 682.200 and 682.210, without regard to the funding source of the 
reserved funds.
    (c) Youth allocation formula. (1) Unless the Governor elects to 
distribute funds in accordance with the discretionary allocation 
formula described in paragraph (c)(2) of this section, the remainder of 
youth funds not reserved under paragraph (b) of this section must be 
allocated:
    (i) 33\1/3\ percent on the basis of the relative number of 
unemployed individuals in areas of substantial unemployment in each 
local area, compared to the total number of unemployed individuals in 
all areas of substantial unemployment in the State;
    (ii) 33\1/3\ percent on the basis of the relative excess number of 
unemployed individuals in each local area, compared to the total excess 
number of unemployed individuals in the State; and
    (iii) 33\1/3\ percent on the basis of the relative number of 
disadvantaged youth in each local area, compared to the total number of 
disadvantaged youth in the State except for local areas as described in 
sec. 107(c)(1)(C) of WIOA where the allotment must be based on the 
greater of either the number of individuals aged 16 to 21 in families 
with an income below the low-income level for the area or the number of 
disadvantaged youth in the area.
    (2) Discretionary youth allocation formula. In lieu of making the 
formula allocation described in paragraph (c)(1) of this section, the 
State may allocate youth funds under a discretionary formula. Under 
this discretionary formula, the State must allocate a minimum of 70 
percent of youth funds not reserved under paragraph (b) of this section 
on the basis of the formula in paragraph (c)(1) of this section, and 
may allocate up to 30 percent on the basis of a formula that:
    (i) Incorporates additional factors (other than the factors 
described in paragraph (c)(1) of this section) relating to:
    (A) Excess youth poverty in urban, rural and suburban local areas; 
and
    (B) Excess unemployment above the State average in urban, rural and 
suburban local areas; and
    (ii) Was developed by the State Board and approved by the Secretary 
of Labor as part of the State Plan.
    (d) Adult allocation formula. (1) Unless the Governor elects to 
distribute funds in accordance with the discretionary allocation 
formula described in paragraph (d)(2) of this section, the remainder of 
adult funds not reserved under paragraph (b) of this section must be 
allocated:
    (i) 33\1/3\ percent on the basis of the relative number of 
unemployed individuals in areas of substantial unemployment in each 
local area, compared to the total number of unemployed individuals in 
areas of substantial unemployment in the State;
    (ii) 33\1/3\ percent on the basis of the relative excess number of 
unemployed individuals in each local area, compared to the total excess 
number of unemployed individuals in the State; and
    (iii) 33\1/3\ percent on the basis of the relative number of 
disadvantaged adults

[[Page 20877]]

in each local area, compared to the total number of disadvantaged 
adults in the State. Except for local areas as described in sec. 
107(c)(1)(C) of WIOA where the allotment must be based on the higher of 
either the number of adults with an income below the low-income level 
for the area or the number of disadvantaged adults in the area.
    (2) Discretionary adult allocation formula. In lieu of making the 
formula allocation described in paragraph (d)(1) of this section, the 
State may allocate adult funds under a discretionary formula, Under 
this discretionary formula, the State must allocate a minimum of 70 
percent of adult funds not reserved under paragraph (b) of this section 
on the basis of the formula in paragraph (d)(1), and may allocate up to 
30 percent on the basis of a formula that:
    (i) Incorporates additional factors (other than the factors 
described in paragraph (d)(1) of this section) relating to:
    (A) Excess poverty in urban, rural and suburban local areas; and
    (B) Excess unemployment above the State average in urban, rural and 
suburban local areas; and
    (ii) Was developed by the State Board and approved by the Secretary 
of Labor as part of the State Plan.
    (e) Dislocated worker allocation formula. (1) The remainder of 
dislocated worker funds not reserved under paragraph (b) of this 
section must be allocated on the basis of a formula prescribed by the 
Governor that distributes funds in a manner that addresses the State's 
dislocated worker needs. Funds so distributed must not be less than 60 
percent of the State's formula allotment.
    (2) The Governor's dislocated worker formula must use the most 
appropriate information available to the Governor, including 
information on:
    (i) Insured unemployment data,
    (ii) Unemployment concentrations,
    (iii) Plant closings and mass layoff data,
    (iv) Declining industries data,
    (v) Farmer-rancher economic hardship data, and
    (vi) Long-term unemployment data.
    (3) The Governor may not amend the dislocated worker formula more 
than once for any program year.
    (f) Rapid response. (1) Of the WIOA formula funds allotted for 
services to dislocated workers in sec. 132(b)(2)(B) of WIOA, the 
Governor must reserve not more than 25 percent of the funds for 
statewide rapid response activities described in WIOA sec. 134(a)(2)(A) 
and 20 CFR 682.300 through 682.370.
    (2) Unobligated funds. Funds reserved by a Governor for rapid 
response activities under sec. 133(a)(2) of WIOA, and sec. 133(a)(2) of 
the Workforce Investment Act (as in effect on the day before the date 
of enactment of WIOA), to carry out sec. 134(a)(2)(A) of WIOA that 
remain unobligated after the first program year for which the funds 
were allotted, may be used by the Governor to carry out statewide 
activities authorized under paragraph (b) of this section and 
Sec. Sec.  682.200 and 682.210.
    (g) Special Rule. For the purpose of the formula in paragraphs 
(c)(1) and (d)(1) of this section, the State must, as appropriate and 
to the extent practicable, exclude college students and members of the 
Armed Forces from the determination of the number of disadvantaged 
youth and disadvantaged adults.


Sec.  683.125  What minimum funding provisions apply to Workforce 
Innovation and Opportunity Act adult, dislocated worker, and youth 
allocations?

    (a) For funding authorized by secs. 128(b)(2)(ii), 133(b)(ii), and 
133(b)(2)(B)(iii) of WIOA, a local area must not receive an allocation 
percentage for fiscal year 2016 or subsequent fiscal year that is less 
than 90 percent of the average allocation percentage of the local area 
for the 2 preceding fiscal years.
    (b) Amounts necessary to increase allocations to local areas to 
comply with paragraph (a) of this section must be obtained by ratably 
reducing the allocations to be made to other local areas.
    (c) If the amounts of WIOA funds appropriated in a fiscal year are 
not sufficient to provide the amount specified in paragraph (a) of this 
section to all local areas, the amounts allocated to each local area 
must be ratably reduced.


Sec.  683.130  Does a Local Board have the authority to transfer funds 
between the adult employment and training activities allocation and the 
dislocated worker employment and training activities allocation?

    (a) A Local Board may transfer up to 100 percent of a program year 
allocation for adult employment and training activities, and up to 100 
percent of a program year allocation for dislocated worker employment 
and training activities between the two programs.
    (b) Before making any such transfer, a Local Board must obtain the 
Governor's written approval.
    (c) Local Boards may not transfer funds to or from the youth 
program.


Sec.  683.135  What reallotment procedures does the Secretary use?

    (a) The Secretary determines, during the second quarter of each 
program year, whether a State has obligated its required level of at 
least 80 percent of the funds allotted under secs. 127 and 132 of WIOA 
for programs serving youth, adults, and dislocated workers for the 
prior program year, as separately determined for each of the three 
funding streams. The amount to be recaptured from each State for 
reallotment, if any, is based on State obligations of the funds 
allotted to each State under secs. 127 and 132 of WIOA for programs 
serving youth, adults or dislocated workers, less any amount reserved 
(up to five percent at the State level) for the costs of 
administration. The recapture amount, if any, is separately determined 
for each funding stream.
    (b) The Secretary reallots youth, adult and dislocated worker funds 
among eligible States in accordance with the provisions of secs. 127(c) 
and 132(c) of WIOA, respectively. To be eligible to receive a 
reallotment of youth, adult, or dislocated worker funds under the 
reallotment procedures, a State must have obligated at least 80 percent 
of the prior program year's allotment, less any amount reserved for the 
costs of administration at the State level of youth, adult, or 
dislocated worker funds. A State's eligibility to receive a reallotment 
is separately determined for each funding stream.
    (c) The term ``obligation'' is defined at 2 CFR 200.71. Obligations 
must be reported on the required Department of Labor (DOL or the 
Department) financial form, such as the ETA-9130 form. For purposes of 
this section, the Secretary will also treat as State obligations:
    (1) Amounts allocated by the State, under secs. 128(b) and 133(b) 
of WIOA, to the local area, including a single-State local area if the 
State has been designated as a single local area as described in sec. 
106(d) of WIOA or to a balance of State local area administered by a 
unit of the State government, and;
    (2) Inter-agency transfers and other actions treated by the State 
as encumbrances against amounts reserved by the State under secs. 
128(a) and 133(a) of WIOA for statewide workforce investment 
activities.


Sec.  683.140  What reallocation procedures must the Governors use?

    (a) The Governor, after consultation with the State Board, may 
reallocate youth, adult, and dislocated worker funds among local areas 
within the State in accordance with the provisions of secs. 128(c) and 
133(c) of WIOA. If the

[[Page 20878]]

Governor chooses to reallocate funds, the provisions in paragraphs (b) 
and (c) of this section apply.
    (b) For the youth, adult and dislocated worker programs, the amount 
to be recaptured from each local area for purposes of reallocation, if 
any, must be based on the amount by which the prior year's unobligated 
balance of allocated funds exceeds 20 percent of that year's allocation 
for the program, less any amount reserved (up to 10 percent) for the 
costs of administration. Unobligated balances must be determined based 
on allocations adjusted for any allowable transfer between funding 
streams. The amount to be recaptured, if any, must be separately 
determined for each funding stream. The term ``obligation'' is defined 
at 2 CFR 200.71.
    (c) To be eligible to receive youth, adult or dislocated worker 
funds under the reallocation procedures, a local area must have 
obligated at least 80 percent of the prior program year's allocation, 
less any amount reserved (up to 10 percent) for the costs of 
administration, for youth, adult, or dislocated worker activities, as 
separately determined. A local area's eligibility to receive a 
reallocation must be separately determined for each funding stream.


Sec.  683.145  What merit review and risk assessment does the 
Department conduct for Federal financial assistance awards made under 
Workforce Innovation and Opportunity Act title I, subtitle D?

    (a) For competitive awards, the Department will design and execute 
a merit review process for applications as prescribed under 2 CFR 
200.204 when issuing Federal financial assistance awards made under 
WIOA title I, subtitle D. This process will be described or 
incorporated by reference in the applicable funding opportunity 
announcement.
    (b) Prior to issuing a Federal financial assistance award under 
WIOA title I, subtitle D, the Department will conduct a risk assessment 
to assess the organization's overall ability to administer Federal 
funds as required under 2 CFR 200.205. As part of this assessment, the 
Department may consider any information that has come to its attention 
and will consider the organization's history with regard to the 
management of other grants, including DOL grants.
    (c) In evaluating risks posed by applicants, the Department will 
consider the following:
    (1) Financial stability;
    (2) Quality of management systems and ability to meet the 
management standards prescribed in this part;
    (3) History of performance. The applicant's record in managing 
Federal awards, if it is a prior recipient of Federal awards, including 
timeliness of compliance with applicable reporting requirements, 
conformance to the terms and conditions of previous Federal awards, and 
if applicable, the extent to which any previously awarded amounts will 
be expended prior to future awards;
    (4) Reports and findings from audits; and
    (5) The applicant's ability to implement effectively statutory, 
regulatory, or other requirements imposed on non-Federal entities.


Sec.  683.150  What closeout requirements apply to grants funded with 
Workforce Innovation and Opportunity Act title I and Wagner-Peyser 
funds?

    (a) After the expiration of the period of performance, the 
Department will close-out the Federal award when it determines that all 
applicable administrative actions and all required work of the Federal 
award have been completed by the grant recipient. This section 
specifies the actions the grant recipient and the Department must take 
to complete this process.
    (1) The grant recipient must submit, no later than 90 calendar days 
after the end date of the period of performance, all financial, 
performance, and other reports as required by the terms and conditions 
of the Federal award.
    (2) The Department may approve extensions when requested by the 
grant recipient.
    (b) Unless the Department authorizes an extension, the grant 
recipient must liquidate all obligations and/or accrued expenditures 
incurred under the Federal award not later than 90 calendar days after 
the end date of the period of performance as specified in the terms and 
conditions of the Federal award.
    (c) The Department must make prompt payments to the grant recipient 
for allowable reimbursable costs under the Federal award being closed 
out.
    (d) The grant recipient must promptly refund any balances of 
unobligated cash that the Department paid in advance or paid and that 
is not authorized to be retained by the grant recipient. See Office of 
Management and Budget Circular A-129, 2 CFR 200.345, and 2 CFR part 
2900 for requirements regarding unreturned amounts that become 
delinquent debts.
    (e) Consistent with the terms and conditions of the Federal award, 
the Department must make a settlement for any upward or downward 
adjustments to the Federal share of costs after closeout reports are 
received.
    (f) The grant recipient must account for any real and personal 
property acquired with Federal funds or received from the Federal 
government in accordance with 2 CFR 200.310 to 200.316, and 200.329.
    (g) The Department should complete all closeout actions for Federal 
awards no later than 1 year after receipt and acceptance of all 
required final reports.
    (h) The closeout of an award does not affect any of the following:
    (1) The right of the Department to disallow costs and recover funds 
on the basis of a later audit or other review.
    (2) The obligation of the grant recipient to return any funds due 
as a result of later refunds, corrections, or other transactions.
    (3) Audit requirements as described in 2 CFR part 200, subpart F.
    (4) Property management requirements in 2 CFR 200.310 to 200.316.
    (5) Records retention as required in 2 CFR 200.333 to 200.337.
    (i) After closeout of an award, a relationship created under the 
award may be modified or ended in whole or in part with the consent of 
the Department and the grant recipient, provided the responsibilities 
of the grant recipient referred to in 2 CFR 200.344(a) and 2 CFR 
200.310 to 200.316 are considered, and provisions are made for 
continuing responsibilities of the grant recipient, as appropriate.
    (j) Grant recipients that award WIOA funds to subrecipients must 
institute a timely closeout process after the end of performance to 
ensure a timely closeout in accordance with 2 CFR 200.343 to 200.344.

Subpart B--Administrative Rules, Costs, and Limitations


Sec.  683.200  What general fiscal and administrative rules apply to 
the use of Workforce Innovation and Opportunity Act title I and Wagner-
Peyser funds?

    (a) Uniform guidance. Recipients and subrecipients of a Federal 
award under title I of WIOA and Wagner-Peyser must follow the uniform 
guidance at 2 CFR parts 200, 215, 225, 230 and Appendices I through XI, 
including any exceptions identified by the Department at 2 CFR part 
2900.
    (1) Commercial organizations, for-profit entities, and foreign 
entities that are recipients and subrecipients of a Federal award must 
adhere to 2 CFR part 200, including any exceptions identified by the 
Department under 2 CFR part 2900 and to the Federal Acquisition 
Regulations (FAR), including 48 CFR part 31.
    (b) Allowable costs and cost principles. (1) Recipients and 
subrecipients of a Federal award under title I of WIOA and Wagner-
Peyser must

[[Page 20879]]

follow the cost principles at subpart E and Appendices III through IX 
of 2 CFR part 200, including any exceptions identified by the 
Department at 2 CFR part 2900.
    (2) Prior approval: Unless specified in the grant agreement, for 
those items requiring prior approval in the Uniform Guidance (e.g., 
selected items of cost, budget realignment), the authority to grant or 
deny approval is delegated to the Governor for programs funded under 
sec. 127 or 132 of WIOA or under Wagner-Peyser.
    (3) Costs of workforce councils, advisory councils, Native American 
Employment and Training Councils, and Local Board committees 
established under title I of WIOA are allowable.
    (c) Uniform administrative requirements. (1) Except as provided in 
paragraphs (c)(3) through (6) of this section, all recipients and 
subrecipients of a Federal award under title I of WIOA and under 
Wagner-Peyser must follow subparts A through D and Appendices I through 
II of 2 CFR part 200, including any exceptions identified by the 
Department at 2 CFR part 2900.
    (2) Unless otherwise specified in the grant agreement, expenditures 
must be reported on accrual basis.
    (3) In accordance with the requirements at 2 CFR 200.400(g), 
subgrantees may not earn or keep any profit resulting from Federal 
financial assistance, unless expressly authorized by the terms and 
conditions of the Federal award.
    (4) In addition to the requirements at 2 CFR 200.317 through 
200.326 (as appropriate), all procurement contracts between Local 
Boards and units of State or local governments must be conducted only 
on a cost reimbursement basis.
    (5) In addition to the requirements at 2 CFR 200.318, which address 
codes of conduct and conflict of interest the following applies:
    (i) A State Board member, Local Board member, or Board standing 
committee member must neither cast a vote on, nor participate in any 
decision-making capacity, on the provision of services by such member 
(or any organization which that member directly represents), nor on any 
matter which would provide any direct financial benefit to that member 
or a member of his immediate family.
    (ii) Neither membership on the State Board, the Local Board, or a 
Board standing committee, nor the receipt of WIOA funds to provide 
training and related services, by itself, violates these conflict of 
interest provisions.
    (iii) In accordance with the requirements at 2 CFR 200.112, 
recipients of Federal awards must disclose in writing any potential 
conflict of interest to the Department. Subrecipients must disclose in 
writing any potential conflict of interest to the recipient of grant 
funds.
    (6) The addition method, described at 2 CFR 200.307, must be used 
for all program income earned under title I of WIOA and Wagner-Peyser 
grants. When the cost of generating program income has been charged to 
the program, the gross amount earned must be added to the WIOA program. 
However, the cost of generating program income must be subtracted from 
the amount earned to establish the net amount of program income 
available for use under the grants when these costs have not been 
charged to the WIOA program.
    (7) Any excess of revenue over costs incurred for services provided 
by a governmental or non-profit entity must be included in program 
income. (WIOA secs. 194(7)(A)-(B))
    (8) Interest income earned on funds received under title I of WIOA 
and Wagner-Peyser must be included in program income. (WIOA sec. 
194(7)(B)(iii))
    (9) On a fee-for-service basis, employers may use local area 
services, facilities, or equipment funded under title I of WIOA to 
provide employment and training activities to incumbent workers:
    (i) When the services, facilities, or equipment are not being used 
by eligible participants;
    (ii) If their use does not affect the ability of eligible 
participants to use the services, facilities, or equipment; and
    (iii) If the income generated from such fees is used to carry out 
programs authorized under this title.
    (d) Government-wide debarment and suspension, and government-wide 
drug-free workplace requirements. All WIOA title I and Wagner-Peyser 
grant recipients and subrecipients must comply with the government-wide 
requirements for debarment and suspension, and the government-wide 
requirements for a drug-free workplace, codified at 29 CFR part 98.
    (e) Restrictions on lobbying. All WIOA title I and Wagner-Peyer 
grant recipients and subrecipients must comply with the restrictions on 
lobbying specified in WIOA sec. 195 and codified in the Department 
regulations at 29 CFR part 93.
    (f) Buy-American. As stated in sec. 502 of WIOA, all funds 
authorized in title I of WIOA and Wagner- Peyser must be expended on 
only American-made equipment and products, as required by the Buy 
American Act (41 U.S.C. 8301-8305).
    (g) Nepotism. (1) No individual may be placed in a WIOA employment 
activity if a member of that person's immediate family is directly 
supervised by or directly supervises that individual.
    (2) To the extent that an applicable State or local legal 
requirement regarding nepotism is more restrictive than this provision, 
such State or local requirement must be followed.
    (h) Mandatory disclosures. All WIOA title I and Wagner-Peyser 
recipients of Federal awards must disclose as required at 2 CFR 
200.113, in a timely manner, in writing to the Federal awarding agency 
or pass-through entity all violations of Federal criminal law involving 
fraud, bribery, or gratuity violations potentially affecting the 
Federal award. Failure to make required disclosures can result in any 
of the remedies described in 2 CFR 200.338 (Remedies for 
noncompliance), including suspension or debarment.


Sec.  683.205  What administrative cost limitations apply to Workforce 
Innovation and Opportunity Act title I grants?

    (a) State formula grants. (1) As part of the 15 percent that a 
State may reserve for statewide activities, the State may spend up to 5 
percent of the amount allotted under secs. 127(b)(1), 132(b)(1), and 
132(b)(2) of WIOA for the administrative costs of statewide activities.
    (2) Local area expenditures for administrative purposes under WIOA 
formula grants are limited to no more than 10 percent of the amount 
allocated to the local area under secs. 128(b) and 133(b) of WIOA.
    (3) The 5 percent reserved for statewide administrative costs and 
the 10 percent reserved for local administrative costs may be used for 
administrative costs for any of the statewide youth workforce 
investment activities or statewide employment and training activities 
under secs. 127(b)(1), 128(b), and 132(b) of WIOA.
    (4) In a one-stop environment, administrative costs borne by other 
sources of funds, such as the Wagner-Peyser Act, are not included in 
the administrative cost limit calculation. Each program's 
administrative activities are chargeable to its own grant and subject 
to its own administrative cost limitations.
    (5) Costs of negotiating a MOU or infrastructure agreement under 
title I of WIOA are excluded from the administrative cost limitations.
    (b) Discretionary grants. (1) Limits on administrative costs, if 
any, for programs operated under subtitle D of

[[Page 20880]]

title I of WIOA will be identified in the grant or cooperative 
agreement.


Sec.  683.210  What audit requirements apply to the use of Workforce 
Innovation and Opportunity Act title I and Wagner-Peyser funds?

    (a)(1) All recipients of WIOA title I and Wagner-Peyser funds that 
expend more than the minimum amounts specified in 2 CFR part 200, 
subpart F in Federal awards during their fiscal year must have a 
program specific or single audit conducted in accordance with 2 CFR 
part 200, subpart F.
    (2) Commercial or for-profit. Grant recipients and subrecipients of 
title I and Wagner-Peyser funds that are commercial or for-profit 
entities must adhere to the requirements contained in 2 CFR part 200, 
subpart F.
    (3) Subrecipients and contractors. An auditee may simultaneously be 
a recipient, a subrecipient, and a contractor depending on the 
substance of its agreements with Federal awarding agencies and pass-
through entities. Federal awards expended as a recipient or 
subrecipient are subject to audit requirements under 2 CFR part 200, 
subpart F.
    (4) Contractors. The payments received for goods or services 
provided as a contractor are not Federal awards. Subrecipient and 
contractor determinations made under 2 CFR 200.330 should be considered 
in determining whether payments constitute a Federal award or a payment 
for goods and services provided as a contractor.


Sec.  683.215  What Workforce Innovation and Opportunity Act title I 
functions and activities constitute the costs of administration subject 
to the administrative cost limitation?

    (a) The costs of administration are expenditures incurred by State 
and Local Workforce Development Boards, Regions, direct grant 
recipients, including State grant recipients under subtitle B of title 
I of WIOA, and recipients of awards under subtitle D of title I, as 
well as local grant recipients, local grant subrecipients, local fiscal 
agents and one-stop operators that are associated with those specific 
functions identified in paragraph (b) of this section and which are not 
related to the direct provision of workforce investment services, 
including services to participants and employers. These costs can be 
both personnel and non-personnel and both direct and indirect.
    (b) The costs of administration are the costs associated with 
performing the following functions:
    (1) Performing the following overall general administrative 
functions and coordination of those functions under title I of WIOA:
    (i) Accounting, budgeting, financial and cash management functions;
    (ii) Procurement and purchasing functions;
    (iii) Property management functions;
    (iv) Personnel management functions;
    (v) Payroll functions;
    (vi) Coordinating the resolution of findings arising from audits, 
reviews, investigations and incident reports;
    (vii) Audit functions;
    (viii) General legal services functions;
    (ix) Developing systems and procedures, including information 
systems, required for these administrative functions; and
    (x) Fiscal agent responsibilities;
    (2) Performing oversight and monitoring responsibilities related to 
WIOA administrative functions;
    (3) Costs of goods and services required for administrative 
functions of the program, including goods and services such as rental 
or purchase of equipment, utilities, office supplies, postage, and 
rental and maintenance of office space;
    (4) Travel costs incurred for official business in carrying out 
administrative activities or the overall management of the WIOA system;
    and
    (5) Costs of information systems related to administrative 
functions (for example, personnel, procurement, purchasing, property 
management, accounting and payroll systems) including the purchase, 
systems development and operating costs of such systems.
    (c)(1) Awards to subrecipients or contractors that are solely for 
the performance of administrative functions are classified as 
administrative costs.
    (2) Personnel and related non-personnel costs of staff that perform 
both administrative functions specified in paragraph (b) of this 
section and programmatic services or activities must be allocated as 
administrative or program costs to the benefitting cost objectives/
categories based on documented distributions of actual time worked or 
other equitable cost allocation methods.
    (3) Specific costs charged to an overhead or indirect cost pool 
that can be identified directly as a program cost are to be charged as 
a program cost. Documentation of such charges must be maintained.
    (4) Except as provided at paragraph (c)(1) of this section, all 
costs incurred for functions and activities of subrecipients and 
contractors are program costs.
    (5) Continuous improvement activities are charged to administration 
or program category based on the purpose or nature of the activity to 
be improved. Documentation of such charges must be maintained.
    (6) Costs of the following information systems including the 
purchase, systems development, and operational costs (e.g., data entry) 
are charged to the program category:
    (i) Tracking or monitoring of participant and performance 
information;
    (ii) Employment statistics information, including job listing 
information, job skills information, and demand occupation information;
    (iii) Performance and program cost information on eligible 
providers of training services, youth activities, and appropriate 
education activities;
    (iv) Local area performance information; and
    (v) Information relating to supportive services and unemployment 
insurance claims for program participants.
    (d) Where possible, entities identified in item (a) must make 
efforts to streamline the services in paragraphs (b)(1) through (5) of 
this section to reduce administrative costs by minimizing duplication 
and effectively using information technology to improve services.


Sec.  683.220  What are the internal controls requirements for 
recipients and subrecipients of Workforce Innovation and Opportunity 
Act title I and Wagner-Peyser funds?

    (a) Recipients and subrecipients of WIOA title I and Wagner-Peyser 
Act funds must have an internal control structure and written policies 
in place that provide safeguards to protect personally identifiable 
information, records, contracts, grant funds, equipment, sensitive 
information, tangible items, and other information that is readily or 
easily exchanged in the open market, or that the Department or the 
recipient or subrecipient considers to be sensitive, consistent with 
applicable Federal, State and local privacy and confidentiality laws. 
Internal controls also must include reasonable assurance that the 
entity is:
    (1) Managing the award in compliance with Federal statutes, 
regulations, and the terms and conditions of the Federal award;
    (2) Complying with Federal statutes, regulations, and the terms and 
conditions of the Federal awards;
    (3) Evaluating and monitoring the recipient's and subrecipient's 
compliance with the statute, regulations and the terms and conditions 
of Federal awards; and

[[Page 20881]]

    (4) Taking prompt action when instances of noncompliance are 
identified.
    (b) Internal controls should be in compliance with the guidance in 
``Standards for Internal Control in the Federal Government'' issued by 
the Comptroller General of the United States and the ``Internal Control 
Integrated Framework'', issued by the Committee of Sponsoring 
Organizations of the Treadway Commission (COSO). See 2 CFR 200.303.


Sec.  683.225  What requirements relate to the enforcement of the 
Military Selective Service Act?

    The requirements relating to the enforcement of the Military 
Selective Service Act are found at WIOA sec. 189(h).


Sec.  683.230  Are there special rules that apply to veterans when 
income is a factor in eligibility determinations?

    Yes, under 38 U.S.C. 4213, when past income is an eligibility 
determinant for Federal employment or training programs, any amounts 
received as military pay or allowances by any person who served on 
active duty, and certain other specified benefits must be disregarded 
for the veteran and for other individuals for whom those amounts would 
normally be applied in making an eligibility determination. This 
applies when determining if a person is a ``low-income individual'' for 
eligibility purposes (for example, in the WIOA youth, or NFJP 
programs). Also, it applies when income is used as a factor when a 
local area provides priority of service for ``low-income individuals'' 
with title I WIOA funds (see 20 CFR 680.600 and 20 CFR 680.650). 
Questions regarding the application of 38 U.S.C. 4213 should be 
directed to the Veterans' Employment and Training Service.


Sec.  683.235  May Workforce Innovation and Opportunity Act title I 
funds be spent for construction?

    WIOA title I funds must not be spent on construction, purchase of 
facilities or buildings, or other capital expenditures for improvements 
to land or buildings, except with the prior written approval of the 
Secretary.


Sec.  683.240  What are the instructions for using real property with 
Federal equity?

    (a) SESA properties. Federal equity acquired in real property 
through grants to States awarded under title III of the Social Security 
Act or the Wagner-Peyser Act, including State Employment Security 
Agency (SESA) real property, is transferred to the States that used the 
grant to acquire such equity.
    (1) The portion of any real property that is attributable to the 
Federal equity transferred under this section must be used to carry out 
activities authorized under WIOA, title III of the Social Security Act 
(Unemployment Compensation program) or the Wagner-Peyser Act.
    (2) When such real property is no longer needed for the activities 
described in paragraph (a)(1) of this section, the States must request 
disposition instructions from the Grant Officer prior to disposition or 
sale of the property. The portion of the proceeds from the disposition 
of the real property that is attributable to the Federal equity 
transferred under this section must be used to carry out activities 
authorized under WIOA, title III of the Social Security Act, or the 
Wagner-Peyser Act.
    (3) Limitation on use of funds. States must not use funds awarded 
under WIOA, title III of the Social Security Act, or the Wagner-Peyser 
Act to amortize the costs of real property that is purchased by any 
State on or after February 15, 2007, the date of enactment of the 
Revised Continuing Appropriations Resolution, 2007.
    (4) Properties occupied by Wagner-Peyser must be collocated with 
one-stop centers.
    (b) Reed Act-funded properties. Properties with Reed Act equity may 
be used for the one-stop service delivery system to the extent that the 
proportionate share of Reed Act equity is less than or equal to the 
proportionate share of occupancy by the Unemployment Compensation and 
Wagner-Peyser Act programs in such properties. When such real property 
is no longer needed as described in the previous sentence, the State 
must request disposition instructions from the Grant Officer prior to 
disposition or sale.
    (c) Job Training Partnership Act-funded properties. Real property 
that was purchased with JTPA funds and transferred to WIA, is now 
transferred to the WIOA title I programs and must be used for WIOA 
purposes. When such real property is no longer needed for the 
activities of WIOA, the recipient or subrecipient must seek 
instructions from the Grant Officer or State (in the case of a 
subrecipient) prior to disposition or sale.


Sec.  683.245  Are employment generating activities, or similar 
activities, allowable under the Workforce Innovation and Opportunity 
Act title I?

    (a) Under sec. 181(e) of WIOA, title I funds must not be spent on 
employment generating activities, investment in revolving loan funds, 
capitalization of businesses, investment in contract bidding resource 
centers, economic development activities, or similar activities, unless 
they are directly related to training for eligible individuals. For 
purposes of this prohibition, employer outreach and job development 
activities are directly related to training for eligible individuals.
    (b) These employer outreach and job development activities may 
include:
    (1) Contacts with potential employers for the purpose of placement 
of WIOA participants;
    (2) Participation in business associations (such as chambers of 
commerce); joint labor management committees, labor associations, and 
resource centers;
    (3) WIOA staff participation on economic development boards and 
commissions, and work with economic development agencies to:
    (i) Provide information about WIOA programs,
    (ii) Coordinate activities in a region or local area to promote 
entrepreneurial training and microenterprise services,
    (iii) Assist in making informed decisions about community job 
training needs, and
    (iv) Promote the use of first source hiring agreements and 
enterprise zone vouchering services;
    (4) Active participation in local business resource centers 
(incubators) to provide technical assistance to small businesses and 
new businesses to reduce the rate of business failure;
    (5) Subscriptions to relevant publications;
    (6) General dissemination of information on WIOA programs and 
activities;
    (7) The conduct of labor market surveys;
    (8) The development of on-the-job training opportunities; and
    (9) Other allowable WIOA activities in the private sector.


Sec.  683.250  What other activities are prohibited under title I of 
the Workforce Innovation and Opportunity Act?

    (a) WIOA title I funds must not be spent on:
    (1) The wages of incumbent employees during their participation in 
economic development activities provided through a statewide workforce 
investment system (WIOA secs. 181(b)(1) and 181(b)(2));
    (2) Public service employment, except as specifically authorized 
under title I of WIOA (WIOA sec. 194(10)).
    (3) Expenses prohibited under any other Federal, State or local law 
or regulation.

[[Page 20882]]

    (4) Subawards or contracts with parties that are debarred, 
suspended, or otherwise excluded from or ineligible for participation 
in Federal programs or activities.
    (5) Contracts with persons falsely labeling products made in 
America.
    (b) WIOA formula funds available to States and local areas under 
subtitle B, title I must not be used for foreign travel (WIOA sec. 
181(e)).


Sec.  683.255  What are the limitations related to religious activities 
of title I of the Workforce Innovation and Opportunity Act?

    (a) Section 188(a)(3) of WIOA prohibits the use of funds to employ 
participants to carry out the construction, operation, or maintenance 
of any part of any facility used for sectarian instruction or as a 
place for religious worship with the exception of maintenance of 
facilities that are not primarily used for instruction or worship and 
are operated by organizations providing services to WIOA participants.
    (b) 29 CFR part 2, subpart D governs the circumstances under which 
Department support, including WIOA title I financial assistance, may be 
used to employ or train participants in religious activities. Under 
that subpart, such assistance may be used for such employment or 
training only when the assistance is provided indirectly within the 
meaning of the Establishment Clause of the U.S. Constitution, and not 
when the assistance is provided directly. That subpart also contains 
requirements related to equal treatment in Department of Labor programs 
for religious organizations, and to protecting the religious liberty of 
Department of Labor social service providers and beneficiaries. (29 CFR 
part 2, subpart D--Equal Treatment in Department of Labor Programs for 
Religious Organizations, Protection of Religious Liberty of Department 
of Labor Social Service Providers and Beneficiaries).


Sec.  683.260  What prohibitions apply to the use of Workforce 
Innovation and Opportunity Act title I funds to encourage business 
relocation?

    (a) Section 181(d) of WIOA states that funds must not be used or 
proposed to be used for:
    (1) The encouragement or inducement of a business, or part of a 
business, to relocate from any location in the United States, if the 
relocation results in any employee losing his or her job at the 
original location;
    (2) Customized training, skill training, on-the-job training, 
incumbent worker training, transitional employment, or company specific 
assessments of job applicants for or employees of any business or part 
of a business that has relocated from any location in the United 
States, until the company has operated at that location for 120 days, 
if the relocation has resulted in any employee losing his or her jobs 
at the original location.
    (b) Pre-award review. To verify that a business establishment which 
is new or expanding is not, in fact, relocating employment from another 
area, standardized pre-award review criteria developed by the State 
must be completed and documented jointly by the local area and the 
business establishment as a prerequisite to WIOA assistance.
    (1) The review must include names under which the establishment 
does business, including predecessors and successors in interest; the 
name, title, and address of the company official certifying the 
information, and whether WIOA assistance is sought in connection with 
past or impending job losses at other facilities, including a review of 
whether WARN notices relating to the employer have been filed.
    (2) The review may include consultations with labor organizations 
and others in the affected local area(s).


Sec.  683.265  What procedures and sanctions apply to violations of 
this part?

    (a) The Grant Officer will promptly review and take appropriate 
action on alleged violations of the provisions relating to:
    (1) Construction (Sec.  683.235);
    (2) Employment generating activities (Sec.  683.245);
    (3) Other prohibited activities (Sec.  683.250);
    (4) The limitation related to religious activities (Sec.  683.255); 
and
    (5) The use of WIOA title I funds to encourage business relocation 
(Sec.  683.260).
    (b) Procedures for the investigation and resolution of the 
violations are provided under the Grant Officer's resolution process at 
Sec.  683.440.
    (c) Sanctions and remedies are provided for under sec. 184(c) of 
WIOA for violations of the provisions relating to:
    (1) Construction (Sec.  683.235);
    (2) Employment generating activities (Sec.  683.245);
    (3) Other prohibited activities (Sec.  683.250); and
    (4) The limitation related to religious activities (Sec.  
683.255(b)).
    (d) Sanctions and remedies are provided for in sec. 181(d)(3) of 
WIOA for violations of Sec.  683.260, which addresses business 
relocation.
    (e) Violations of Sec.  683.255(a) will be handled in accordance 
with the Department's nondiscrimination regulations implementing sec. 
188 of WIOA, codified at 29 CFR part 37.


Sec.  683.270  What safeguards are there to ensure that participants in 
Workforce Innovation and Opportunity Act employment and training 
activities do not displace other employees?

    (a) A participant in a program or activity authorized under title I 
of WIOA must not displace (including a partial displacement, such as a 
reduction in the hours of non-overtime work, wages, or employment 
benefits) any currently employed employee (as of the date of the 
participation).
    (b) A program or activity authorized under title I of WIOA must not 
impair existing contracts for services or collective bargaining 
agreements. When a program or activity authorized under title I of WIOA 
would be inconsistent with a collective bargaining agreement, the 
appropriate labor organization and employer must provide written 
concurrence before the program or activity begins.
    (c) A participant in a program or activity under title I of WIOA 
may not be employed in or assigned to a job if:
    (1) Any other individual is on layoff from the same or any 
substantially equivalent job;
    (2) The employer has terminated the employment of any regular, 
unsubsidized employee or otherwise caused an involuntary reduction in 
its workforce with the intention of filling the vacancy so created with 
the WIOA participant; or
    (3) The job is created in a promotional line that infringes in any 
way on the promotional opportunities of currently employed workers as 
of the date of the participation.
    (d) Regular employees and program participants alleging 
displacement may file a complaint under the applicable grievance 
procedures found at Sec.  683.600. (WIOA sec. 181)


Sec.  683.275  What wage and labor standards apply to participants in 
activities under title I of the Workforce Innovation and Opportunity 
Act?

    (a) Individuals in on-the-job training or individuals employed in 
activities under title I of WIOA must be compensated at the same rates, 
including periodic increases, as trainees or employees who are 
similarly situated in similar occupations by the same employer and who 
have similar training, experience and skills. Such rates must be in 
accordance with applicable law, but may not be less than the higher of 
the rate specified in sec. 6(a)(1) of the Fair Labor Standards Act of 
1938 (29 U.S.C. 206(a)(1)) or the

[[Page 20883]]

applicable State or local minimum wage law. (WIOA sec. 181(a)(1)(A))
    (b) The reference in paragraph (a) of this section to sec. 6(a)(1) 
of the Fair Labor Standards Act of 1938 (29 U.S.C. 206(a)(1)) is not 
applicable for individuals in territorial jurisdictions in which sec. 
6(a)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 206(a)(1)) 
does not apply. (WIOA sec. 181(a)(1)(B))
    (c) Individuals in on-the-job training or individuals employed in 
programs and activities under title I of WIOA must be provided benefits 
and working conditions at the same level and to the same extent as 
other trainees or employees working a similar length of time and doing 
the same type of work. (WIOA sec. 181(b)(5)).
    (d) Allowances, earnings, and payments to individuals participating 
in programs under title I of WIOA are not considered as income for 
purposes of determining eligibility for and the amount of income 
transfer and in-kind aid furnished under any Federal or Federally-
assisted program based on need, other than as provided under the Social 
Security Act (42 U.S.C. 301 et seq.). (WIOA sec. 181(a)(2))
    (e) Funds under title I of WIOA must not be used to pay the wages 
of incumbent employees during their participation in economic 
development activities provided through a statewide workforce delivery 
system. (WIOA sec. 181(b)(1))


Sec.  683.280  What health and safety standards apply to the working 
conditions of participants in activities under title I of the Workforce 
Innovation and Opportunity Act?

    (a) Health and safety standards established under Federal and State 
law otherwise applicable to working conditions of employees are equally 
applicable to working conditions of participants engaged in programs 
and activities under title I of WIOA.
    (b)(1) To the extent that a State workers' compensation law 
applies, workers' compensation must be provided to participants in 
programs and activities under title I of WIOA on the same basis as the 
compensation is provided to other individuals in the State in similar 
employment.
    (2) If a State workers' compensation law applies to a participant 
in work experience, workers' compensation benefits must be available 
for injuries suffered by the participant in such work experience. If a 
State workers' compensation law does not apply to a participant in work 
experience, insurance coverage must be secured for injuries suffered by 
the participant in the course of such work experience.


Sec.  683.285  What are a recipient's obligations to ensure 
nondiscrimination and equal opportunity, and what are a recipient's 
obligations with respect to religious activities?

    (a)(1) Recipients, as defined in 29 CFR 37.4, must comply with the 
nondiscrimination and equal opportunity provisions of WIOA sec. 188 and 
its implementing regulations, codified at 29 CFR part 37. Under that 
definition, the term ``recipients'' includes State and Local Workforce 
Development Boards, one-stop operators, service providers, Job Corps 
contractors, and subrecipients, as well as other types of individuals 
and entities.
    (2) Nondiscrimination and equal opportunity requirements and 
procedures, including complaint processing and compliance reviews, are 
governed by the regulations implementing sec. 188 of WIOA, codified at 
29 CFR part 37, and are administered and enforced by the DOL Civil 
Rights Center.
    (3) As described in sec. 188 of WIOA, financial assistance provided 
under title I of WIOA may be used to meet a recipient's obligation to 
provide physical and programmatic accessibility and reasonable 
accommodation/modification in regard to the WIOA program, as required 
by sec. 504 of the Rehabilitation Act of 1973, as amended, the 
Americans with Disabilities Act of 1990, as amended, sec. 188 of WIOA, 
and the regulations implementing these statutory provisions.
    (4) No person may discriminate against an individual who is a 
participant in a program or activity that receives funds under title I 
of WIOA, with respect to the terms and conditions affecting, or rights 
provided to, the individual, solely because of the status of the 
individual as a participant.
    (5) Participation in programs and activities or receiving funds 
under title I of WIOA must be available to citizens and nationals of 
the United States, lawfully admitted permanent resident aliens, 
refugees, asylees, and parolees, and other immigrants authorized by the 
Attorney General to work in the United States.
    (b)(1) 29 CFR part 2, subpart D governs the circumstances under 
which recipients may use Department support, including WIOA title I and 
Wagner-Peyser Act financial assistance, to employ or train participants 
in religious activities. As explained in that subpart, such assistance 
may be used for such employment or training only when the assistance is 
provided indirectly within the meaning of the Establishment Clause of 
the U.S. Constitution, and not when the assistance is provided 
directly. As explained in that subpart, assistance provided through an 
Individual Training Account is generally considered indirect, and other 
mechanisms may also be considered indirect. See also Sec.  683.255 and 
29 CFR 37.6(f)(1).
    (2) 29 CFR part 2, subpart D also contains requirements related to 
equal treatment of religious organizations in Department of Labor 
programs, and to protection of religious liberty for Department of 
Labor social service providers and beneficiaries. Limitations on the 
employment of participants under WIOA title I to carry out the 
construction, operation, or maintenance of any part of any facility 
used or to be used for religious instruction or as a place of religious 
worship are described at 29 CFR 37.6(f)(2). See also WIOA sec. 
188(a)(3).


Sec.  683.290  Are there salary and bonus restrictions in place for the 
use of title I and Wagner-Peyser funds?

    (a) No funds available under title I of WIOA or the Wagner-Peyser 
Act may be used by a recipient or subrecipient of such funds to pay the 
salary and bonuses of an individual, either as direct costs or indirect 
costs, at a rate in excess of the annual rate of basic pay prescribed 
for level II of the Executive Schedule under 5 U.S.C. 5313, which can 
be found at www.opm.gov.
    (b) In instances where funds awarded under title I of WIOA or the 
Wagner-Peyser Act pay only a portion of the salary or bonus, the WIOA 
title I or Wagner-Peyser Act funds may only be charged for the share of 
the employee's salary or bonus attributable to the work performed on 
the WIOA title I or Wagner-Peyser Act grant. That portion cannot exceed 
the proportional Executive level II rate. The restriction applies to 
the sum of salaries and bonuses charged as either direct costs or 
indirect costs under title I of WIOA and the Wagner-Peyser Act.
    (c) The limitation described in paragraph (a) of this section will 
not apply to contractors (as defined in 2 CFR 200.23) providing goods 
and services. In accordance with 2 CFR part 200.330, characteristics 
indicative of contractor are the following:
    (1) Provides the goods and services within normal business 
operations;
    (2) Provides similar goods or services to many different 
purchasers;
    (3) Normally operates in a competitive environment;

[[Page 20884]]

    (4) Provides goods or services that are ancillary to the operation 
of the Federal program; and
    (5) Is not subject to compliance requirements of the Federal 
program as a result of the agreement, though similar requirements may 
apply for other reasons.
    (d) If a State is a recipient of such funds, the State may 
establish a lower limit than is provided in paragraph (a) of this 
section for salaries and bonuses of those receiving salaries and 
bonuses from a subrecipient of such funds, taking into account factors 
including the relative cost of living in the State, the compensation 
levels for comparable State or local government employees, and the size 
of the organizations that administer the Federal programs involved.
    (e) When an individual is working for the same recipient or 
subrecipient in multiple offices that are funded by title I of WIOA or 
the Wagner-Peyser Act, the recipient or subrecipient must ensure that 
the sum of the individual's salary and bonus does not exceed the 
prescribed limit in paragraph (a) of this section.


Sec.  683.295  Is earning of profit allowed under the Workforce 
Innovation and Opportunity Act?

    (a)(1) Under secs. 121(d) and 134(b) of WIOA, for-profit entities 
are eligible to be one-stop operators, service providers, and eligible 
training providers.
    (2) Where for-profit entities are one-stop operators, service 
providers, and eligible training providers, and those entities are 
recipients of Federal financial assistance, the recipient or 
subrecipient and the for-profit entity must follow 2 CFR 200.323.
    (3) Where for-profit entities are one-stop operators, service 
providers, and eligible training providers, and those entities are 
providing services under a contract, profit is allowable, and the 
requirements of 2 CFR 200.323 apply.
    (b) For programs authorized by other sections of WIOA, 2 CFR 
200.400(g) prohibits earning and keeping of profit in Federal financial 
assistance unless expressly authorized by the terms and conditions of 
the Federal award.
    (c) Income earned by a public or private nonprofit entity may be 
retained by such entity only if such income is used to continue to 
carry out the program. (WIOA sec. 194(7)).

Subpart C--Reporting Requirements


Sec.  683.300  What are the reporting requirements for programs funded 
under the Workforce Innovation and Opportunity Act?

    (a) General. All States and other direct grant recipients must 
report financial, participant, and other performance data in accordance 
with instructions issued by the Secretary. Reports, records, plans, or 
any other data required to be submitted or made available must, to the 
extent practicable, be submitted or made available through electronic 
means. Reports will not be required to be submitted more frequently 
than quarterly (unless otherwise specified by Congress) within a time 
period specified in the reporting instructions.
    (b) Subrecipient reporting. (1) For the annual eligible training 
provider performance reports described in Sec.  677.230 of this chapter 
and local area performance reports described in Sec.  677.205 of this 
chapter, the State must require the template developed under WIOA sec. 
116(d)(1) to be used.
    (2) For financial reports and performance reports other than those 
described in paragraph (b)(1) of this section, a State or other grant 
recipient may impose different forms or formats, shorter due dates, and 
more frequent reporting requirements on subrecipients.
    (3) If a State intends to impose different reporting requirements 
on subrecipients, it must describe those reporting requirements in its 
State WIOA Plan.
    (c) Financial reports. (1) Each grant recipient must submit 
financial reports on a quarterly basis.
    (2) Local Boards will submit quarterly financial reports to the 
Governor.
    (3) Each State will submit to the Secretary a summary of the 
reports submitted to the Governor pursuant to paragraph (c)(2) of this 
section.
    (4) Reports must include cash on hand, obligations, expenditures, 
any income or profits earned, including such income or profits earned 
by subrecipients, indirect costs, recipient share of expenditures and 
any expenditures incurred (such as stand-in costs) by the recipient 
that are otherwise allowable except for funding limitations.
    (5) Reported expenditures, matching funds, and program income, 
including any profits earned, must be reported on the accrual basis of 
accounting and cumulative by fiscal year of appropriation. If the 
recipient's accounting records are not normally kept on the accrual 
basis of accounting, the recipient must develop accrual information 
through an analysis of the documentation on hand.
    (d) Performance reports. (1) States must submit an annual 
performance report for each of the core workforce programs administered 
under WIOA as required by sec. 116(d) of WIOA and in accordance with 20 
CFR part 667, subpart A.
    (2) For all programs authorized under subtitle D of WIOA, each 
grant recipient must complete reports on performance measures or goals 
specified in its grant agreement.
    (e) Due date. (1) For the core programs, performance reports are 
due on the date set forth in guidance.
    (2) Financial reports and all performance and data reports not 
described in paragraph (e)(1) of this section are due no later than 45 
days after the end of each quarter unless otherwise specified in 
reporting instructions. A final financial report is required 90 days 
after the expiration of a period of performance or period of fund 
availability (whichever comes first) and/or termination of the grant.
    (f) Format. All reports whenever practicable should be collected, 
transmitted, and stored in open and machine readable formats.
    (g) Systems compatibility. States and grant recipients will develop 
strategies for aligning data systems based upon guidelines issued by 
the Secretary of Labor and the Secretary of Education.

Subpart D--Oversight and Resolution of Findings


Sec.  683.400  What are the Federal and State monitoring and oversight 
responsibilities?

    (a) The Secretary is authorized to monitor all recipients and 
subrecipients of all Federal financial assistance awarded and funds 
expended under title I of WIOA and Wagner-Peyser to determine 
compliance with the Acts and Department regulations, and may 
investigate any matter deemed necessary to determine such compliance. 
Federal oversight will be conducted primarily at the recipient level.
    (b) As funds allow, in each fiscal year, the Secretary will also 
conduct in-depth reviews in several States, including financial and 
performance monitoring, to assure that funds are spent in accordance 
with the Acts.
    (c)(1) Each recipient and subrecipient must monitor grant-supported 
activities in accordance with 2 CFR part 200.
    (2) In the case of grants under secs. 128 and 133 of WIOA, the 
Governor must develop a State monitoring system that meets the 
requirements of Sec.  683.410(b). The Governor must

[[Page 20885]]

monitor Local Boards and regions annually for compliance with 
applicable laws and regulations in accordance with the State monitoring 
system. Monitoring must include an annual review of each local area's 
compliance with 2 CFR part 200.
    (d) Documentation of monitoring, including monitoring reports and 
audit work papers, conducted under paragraph (c) of this section, along 
with corrective action plans, must be made available for review upon 
request of the Secretary, Governor, or a representative of the Federal 
government authorized to request the information.


Sec.  683.410  What are the oversight roles and responsibilities of 
recipients and subrecipients of Federal financial assistance awarded 
under title I of the Workforce Innovation and Opportunity Act and 
Wagner-Peyser?

    (a) Each recipient and subrecipient of funds under title I of WIOA 
and under Wagner-Peyser must conduct regular oversight and monitoring 
of its WIOA and Wagner-Peyser program(s) and those of its subrecipients 
and contractors as required under title I of WIOA and Wagner-Peyser, as 
well as under 2 CFR part 200, including 2 CFR 200.327, 200.328, 
200.330, 200.331, and Department exceptions at 2 CFR part 2900, in 
order to:
    (1) Determine that expenditures have been made against the proper 
cost categories and within the cost limitations specified in the Act 
and the regulations in this part;
    (2) Determine whether there is compliance with other provisions of 
the Act and the WIOA regulations and other applicable laws and 
regulations;
    (3) Assure compliance with 2 CFR part 200; and
    (4) Determine compliance with the nondiscrimination, disability, 
and equal opportunity requirements of sec. 188 of WIOA, including the 
Assistive Technology Act of 1998 (29 U.S.C. 3003).
    (b) State roles and responsibilities for grants under secs. 128 and 
133 of WIOA:
    (1) The Governor is responsible for the development of the State 
monitoring system. The Governor must be able to demonstrate, through a 
monitoring plan or otherwise, that the State monitoring system meets 
the requirements of paragraph (b)(2) of this section.
    (2) The State monitoring system must:
    (i) Provide for annual on-site monitoring reviews of local areas' 
compliance with 2 CFR part 200, as required by sec. 184(a)(3) of WIOA;
    (ii) Ensure that established policies to achieve program 
performance and outcomes meet the objectives of the Act and the WIOA 
regulations;
    (iii) Enable the Governor to determine if subrecipients and 
contractors have demonstrated substantial compliance WIOA and Wagner-
Peyser requirements;
    (iv) Enable the Governor to determine whether a local plan will be 
disapproved for failure to make acceptable progress in addressing 
deficiencies, as required in sec. 108(e) of WIOA; and
    (v) Enable the Governor to ensure compliance with the 
Nondiscrimination, disability, and equal opportunity requirements of 
sec. 188 of WIOA, including the Assistive Technology Act of 1998 (29 
U.S.C. 3003).
    (3) The State must conduct an annual on-site monitoring review of 
each local area's compliance with 2 CFR part 200, as required by sec. 
184(a)(4) of WIOA.
    (4) The Governor must require that prompt corrective action be 
taken if any substantial violation of standards identified in 
paragraphs (b)(2) or (3) of this section is found (WIA sec. 184(a)(5)).
    (5) The Governor must impose the sanctions provided in secs. 
184(b)-(c) of WIOA in the event of a subrecipient's failure to take 
required corrective action required under paragraph (b)(4) of this 
section.
    (6) The Governor may issue additional requirements and instructions 
to subrecipients on monitoring activities.
    (7) The Governor must certify to the Secretary every 2 years that:
    (i) The State has implemented 2 CFR part 200;
    (ii) The State has monitored local areas to ensure compliance with 
2 CFR part 200, including annual certifications and disclosures as 
outlined in 2 CFR 200.113, Mandatory Disclosures. Failure to do so may 
result in remedies described under 2 CFR 200.338, including suspension 
and debarment; and
    (iii) The State has taken appropriate corrective action to secure 
such compliance (WIOA secs. 184 and 188).


Sec.  683.420  What procedures apply to the resolution of findings 
arising from audits, investigations, monitoring, and oversight reviews?

    (a) Resolution of subrecipient-level findings. (1) The Governor or 
direct grant recipient is responsible for resolving findings that arise 
from the monitoring reviews, investigations, other Federal monitoring 
reviews, and audits (including under 2 CFR part 200) of subrecipients 
awarded funds through title I of WIOA or Wagner-Peyser.
    (i) A State or direct grant recipient must utilize the written 
monitoring and audit resolution, debt collection and appeal procedures 
that it uses for other Federal grant programs.
    (ii) If a State or direct grant recipient does not have such 
written procedures, it must prescribe standards and procedures to be 
used for this grant program.
    (2) For subrecipients awarded funds through a recipient of grant 
funds under subtitle D of title I of WIOA, the direct recipient of the 
grant funds must have written monitoring and resolution procedures in 
place that are consistent with 2 CFR part 200.
    (b) Resolution of State and other direct recipient-level findings. 
(1) The Secretary is responsible for resolving findings that arise from 
Federal audits, monitoring reviews, investigations, incident reports, 
and audits under 2 CFR part 200 for direct recipients of Federal awards 
under title I of WIOA and Wagner Peyser.
    (2) The Secretary will use the Department audit resolution process, 
consistent with 2 CFR part 200 (and Department modifications at 2 CFR 
part 2900), and Grant Officer Resolution provisions of Sec.  683.440, 
as appropriate.
    (3) A final determination issued by a Grant Officer under this 
process may be appealed to the DOL Office of Administrative Law Judges 
under the procedures at Sec.  683.800.
    (c) Resolution of nondiscrimination findings. Findings arising from 
investigations or reviews conducted under nondiscrimination laws will 
be resolved in accordance with WIOA sec. 188 of WIOA and the Department 
of Labor nondiscrimination regulations implementing sec. 188 of WIOA, 
codified at 29 CFR part 37.


Sec.  683.430  How does the Secretary resolve investigative and 
monitoring findings?

    (a) As a result of an investigation, on-site visit, other 
monitoring, or an audit (i.e., Single Audit, OIG Audit, GAO Audit, or 
other audit), the Secretary will notify the direct recipient of the 
Federal award of the findings of the investigation and give the direct 
recipient a period of time (not more than 60 days) to comment and to 
take appropriate corrective actions.
    (1) Adequate resolution. The Grant Officer in conjunction with the 
Federal project officer, reviews the complete file of the monitoring 
review, monitoring report, or final audit report and the recipient's 
response and actions under this paragraph (a). The Grant Officer's 
review takes into account the sanction provisions of secs. 184(b)-(c) 
of WIOA. If the Grant Officer agrees with the recipient's handling of 
the situation, the Grant Officer so notifies the recipient.

[[Page 20886]]

This notification constitutes final agency action.
    (2) Inadequate resolution. If the direct recipient's response and 
actions to resolve the findings are found to be inadequate, the Grant 
Officer will begin the Grant Officer resolution process under Sec.  
683.440.
    (b) Audits from 2 CFR part 200 will be resolved through the Grant 
Officer resolution process, as discussed in Sec.  683.440.


Sec.  683.440  What is the Grant Officer resolution process?

    (a) General. When the Grant Officer is dissatisfied with the a 
recipient's disposition of an audit or other resolution of findings 
(including those arising out of site visits, incident reports or 
compliance reviews), or with the recipient's response to findings 
resulting from investigations or monitoring reports, the initial and 
final determination process as set forth in this section is used to 
resolve the matter.
    (b) Initial determination. The Grant Officer makes an initial 
determination on the findings for both those matters where there is 
agreement and those where there is disagreement with the recipient's 
resolution, including the allowability of questioned costs or 
activities. This initial determination is based upon the requirements 
of WIOA, Wagner-Peyser, and applicable regulations, and the terms and 
conditions of the grants, contracts, or other agreements under the 
award.
    (c) Informal resolution. Except in an emergency situation, when the 
Secretary invokes the authority described in sec. 184(e) of WIOA, the 
Grant Officer may not revoke a recipient's grant in whole or in part, 
nor institute corrective actions or sanctions, without first providing 
the recipient with an opportunity to present documentation or arguments 
to resolve informally those matters in dispute contained in the initial 
determination. The initial determination must provide for an informal 
resolution period of at least 60 days from issuance of the initial 
determination. If the matters are resolved informally, the Grant 
Officer must issue a final determination under paragraph (d) of this 
section which notifies the parties in writing of the nature of the 
resolution and may close the file.
    (d) Final determination. (1) Upon completion of the informal 
resolution process, the Grant Officer provides each party with a 
written final determination by certified mail, return receipt 
requested. For audits of recipient-level entities and other recipients 
which receive WIOA funds directly from the Department, ordinarily, the 
final determination is issued not later than 180 days from the date 
that the Office of Inspector General (OIG) issues the final approved 
audit report to the Employment and Training Administration. For audits 
of subrecipients conducted by the OIG, ordinarily the final 
determination is issued not later than 360 days from the date the OIG 
issues the final approved audit report to ETA.
    (2) A final determination under this paragraph (d) must:
    (i) Indicate whether efforts to resolve informally matters 
contained in the initial determination have been unsuccessful;
    (ii) List those matters upon which the parties continue to 
disagree;
    (iii) List any modifications to the factual findings and 
conclusions set forth in the initial determination and the rationale 
for such modifications;
    (iv) Establish a debt, if appropriate;
    (v) Require corrective action, when needed;
    (vi) Determine liability, method of restitution of funds, and 
sanctions; and
    (vii) Offer an opportunity for a hearing in accordance with Sec.  
683.800.
    (3) Unless a hearing is requested, a final determination under this 
paragraph (d) is final agency action and is not subject to further 
review.

Subpart E--Pay-for-Performance Contract Strategies


Sec.  683.500  What is a Workforce Innovation and Opportunity Act Pay-
for-Performance contract strategy?

    (a) A WIOA Pay-for-Performance contract strategy is a specific type 
of performance-based contract strategy that has four distinct 
characteristics:
    (1) It is a strategy to use WIOA Pay-for-Performance contracts as 
they are described in Sec.  683.510;
    (2) It must include the identification of the problem space and 
target populations for which a local area will pursue a WIOA Pay-for-
Performance contract strategy; the outcomes the local area would hope 
to achieve through a Pay-for-Performance contract relative to baseline 
performance; the acceptable cost to government associated with 
implementing such a strategy; and a feasibility study to determine 
whether the intervention is suitable for a WIOA Pay-for-Performance 
contracting strategy;
    (3) It must include a strategy for independently validating the 
performance outcomes achieved under each contract within the strategy 
prior to payment occurring;
    (4) It must include a description of how the State or local area 
will reallocate funds to other activities under the contract strategy 
in the event a service provider does not achieve performance benchmarks 
under a WIOA Pay-for-Performance contract.
    (b) The WIOA Pay-for-Performance contract strategy must be 
developed in accordance with guidance issued by the Secretary.


Sec.  683.510  What is a Workforce Innovation and Opportunity Act Pay-
for-Performance contract?

    (a) Pay-for-Performance contract. A WIOA Pay-for-Performance 
contract is a type of Performance-Based contract.
    (b) Applicability. WIOA Pay-for-Performance contracts may only be 
entered into when they are a part of a WIOA Pay-for-Performance 
contract strategy described in Sec.  683.500.
    (c) Cost-plus percentage contracts. Use of cost-plus percentage 
contracts is prohibited. (2 CFR 200.323.)
    (d) Services provided. WIOA Pay-for-Performance contracts must be 
used to provide adult training services described in sec. 134(c)(3) of 
WIOA or youth activities described in sec. 129(c)(2) of WIOA.
    (e) Structure of payment. WIOA Pay-for-Performance contracts must 
specify a fixed amount that will be paid to the service provider based 
on the achievement of specified levels of performance on the 
performance outcomes in sec. 116(b)(2)(A) of WIOA for target 
populations within a defined timetable. Outcomes must be independently 
validated, as described in Sec. Sec.  683.500 and 683.510(j), prior to 
disbursement of funds.
    (f) Eligible service providers. WIOA Pay-for-Performance contracts 
may be entered into with eligible service providers, which may include 
local or national community-based organizations or intermediaries, 
community colleges, or other training providers that are eligible under 
sec. 122 or 123 of WIOA (as appropriate). (WIOA sec. 3(47)(A))
    (g) Target populations. WIOA Pay-for-Performance contracts must 
identify target populations as specified by the Local Board, which may 
include individuals with barriers to employment. (WIOA sec. 3(47)(A))
    (h) Bonus and incentive payments. WIOA Pay-for-Performance 
contracts may include bonus and/or incentive payments for the 
contractor, based on achievement of specified levels of performance.
    (1) Bonus payments for achieving outcomes above and beyond those 
specified in the contract must be used

[[Page 20887]]

by the service provider to expand capacity to provide effective 
training.
    (2) Incentive payments must be consistent with incentive payments 
for performance-based contracting as described in the Federal 
Acquisition Regulations.
    (i) Performance reporting. Performance outcomes achieved under the 
WIOA Pay-for-Performance contract, measured against the levels of 
performance specified in the contract, must be tracked by the local 
area and reported to the State pursuant to WIOA sec. 116(d)(2)(K) and 
Sec.  677.160.
    (j) Validation. WIOA Pay-for-Performance contracts must include 
independent validation of the contractor's achievement of the 
performance benchmarks specified in the contract. (WIOA sec. 3(47)(B)) 
This validation must be based on high-quality, reliable, and verified 
data.
    (k) Guidance. The Secretary may issue additional guidance related 
to use of WIOA Pay-for-Performance contracts.


Sec.  683.520  What funds can be used to support Workforce Innovation 
and Opportunity Act Pay-for-Performance contract strategies?

    (a) For WIOA Pay-for-Performance contract strategies providing 
adults and dislocated worker training services, funds allocated under 
secs. 133(b)(2)-(3) of WIOA can be used. For WIOA Pay-for-Performance 
contract strategies providing youth activities, funds allocated under 
WIOA sec. 128(b) can be used.
    (b) No more than 10 percent of the total local adult and dislocated 
worker allotments can be expended on the implementation of WIOA Pay-
for-Performance contract strategies for adult training services 
described in sec. 134(c)(3) of WIOA. No more than 10 percent of the 
local youth allotment can be expended on the implementation of WIOA 
Pay-for-Performance contract strategies for youth training services and 
other activities described in secs. 129(c)(1)-(2) of WIOA.


Sec.  683.530  How long are funds used for Workforce Innovation and 
Opportunity Act Pay-for-Performance contract strategies available?

    Section 189(g)(2)(D) of WIOA authorizes funds used for WIOA Pay-
for-Performance contract strategies to be available until expended. 
Under WIOA sec. 3(47)(C), funds that are obligated but not expended due 
to a contractor not achieving the levels of performance specified in a 
WIOA Pay-for-Performance contract may be reallocated for further 
activities related to WIOA Pay-for-Performance contract strategies 
only. The Secretary will issue additional guidance related to the funds 
availability and reallocation.


Sec.  683.540  What is the State's role in assisting local areas in 
using Workforce Innovation and Opportunity Act Pay-for-Performance 
contract strategies?

    (a) Using funds from the Governor's reserve the State may:
    (1) Provide technical assistance to local areas including 
assistance with structuring WIOA Pay-for-Performance contracting 
strategies, performance data collection, meeting performance data entry 
requirements, and identifying levels of performance.
    (2) Conduct evaluations of local WIOA Pay-for-Performance 
contracting strategies, if appropriate.
    (b) Using non-Federal funds, Governors may establish incentives for 
Local Boards to implement WIOA Pay-for-Performance contract strategies 
as described in this subpart.
    (c) In the case of a State in which local areas are implementing 
WIOA Pay-for-Performance contract strategies, the State must:
    (1) Collect and report to DOL data on the performance of service 
providers entering into WIOA Pay-for-Performance contracts, measured 
against the levels of performance benchmarks specified in the 
contracts, pursuant to sec. 116(d)(2)(K) of WIOA and Sec.  677.160 and 
in accordance with any additional guidance issued by the Secretary.
    (2) Collect and report to DOL State and/or local evaluations of the 
design and performance of the WIOA Pay-for-Performance contract 
strategies, and, where possible, the level of satisfaction with the 
strategies among employers and participants benefitting from the 
strategies, pursuant to sec. 116(d)(2)(K) of WIOA and Sec.  677.160, 
and in accordance with any guidance issued by the Secretary.
    (3) Monitor local areas' use of WIOA Pay-for-Performance contract 
strategies to ensure compliance with the five required elements listed 
in Sec.  683.500, the contract specifications in Sec.  683.510, and 
State procurement policies.
    (4) Monitor local areas' expenditures to ensure that no more than 
10 percent of a local area's adult and dislocated worker allotment and 
no more than 10 percent of a local area's youth allotments is expended 
on WIOA Pay-for-Performance contract strategies.
    (d) The Secretary will issue additional guidance on State roles in 
WIOA Pay-for-Performance contract strategies.

Subpart F--Grievance Procedures, Complaints, and State Appeals 
Processes


Sec.  683.600  What local area, State, and direct recipient grievance 
procedures must be established?

    (a) Each local area, State, outlying area, and direct recipient of 
funds under title I of WIOA, except for Job Corps, must establish and 
maintain a procedure for participants and other interested parties to 
file grievances and complaints alleging violations of the requirements 
of title I of WIOA, according to the requirements of this section. The 
grievance procedure requirements applicable to Job Corps are set forth 
at 20 CFR 686.1050.
    (b) Each local area, State, and direct recipient must:
    (1) Provide information about the content of the grievance and 
complaint procedures required by this section to participants and other 
interested parties affected by the local Workforce Investment System, 
including one-stop partners and service providers;
    (2) Require that every entity to which it awards title I funds 
provide the information referred to in paragraph (b)(1) of this section 
to participants receiving title I-funded services from such entities; 
and
    (3) Must make reasonable efforts to assure that the information 
referred to in paragraph (b)(1) of this section will be understood by 
affected participants and other individuals, including youth and those 
who are limited-English speaking individuals. Such efforts must comply 
with the language requirements of 29 CFR 37.35 regarding the provision 
of services and information in languages other than English.
    (c) Local area procedures must provide:
    (1) A process for dealing with grievances and complaints from 
participants and other interested parties affected by the local 
Workforce Investment System, including one-stop partners and service 
providers;
    (2) An opportunity for an informal resolution and a hearing to be 
completed within 60 days of the filing of the grievance or complaint;
    (3) A process which allows an individual alleging a labor standards 
violation to submit the grievance to a binding arbitration procedure, 
if a collective bargaining agreement covering the parties to the 
grievance so provides; and
    (4) An opportunity for a local level appeal to a State entity when:
    (i) No decision is reached within 60 days; or
    (ii) Either party is dissatisfied with the local hearing decision.

[[Page 20888]]

    (d) State procedures must provide:
    (1) A process for dealing with grievances and complaints from 
participants and other interested parties affected by the statewide 
Workforce Investment programs;
    (2) A process for resolving appeals made under paragraph (c)(4) of 
this section;
    (3) A process for remanding grievances and complaints related to 
the local Workforce Innovation and Opportunity Act programs to the 
local area grievance process; and
    (4) An opportunity for an informal resolution and a hearing to be 
completed within 60 days of the filing of the grievance or complaint; 
and
    (5) An opportunity for appeal to the Secretary under the 
circumstances described in Sec.  683.610(a).
    (e) Procedures of direct recipients must provide:
    (1) A process for dealing with grievance and complaints from 
participants and other interested parties affected by the recipient's 
Workforce Innovation and Opportunity Act programs; and
    (2) An opportunity for an informal resolution and a hearing to be 
completed within 60 days of the filing of the grievance or complaint.
    (f) The remedies that may be imposed under local, State and direct 
recipient grievance procedures are enumerated at WIOA sec. 181(c)(3).
    (g)(1) The provisions of this section on grievance procedures do 
not apply to discrimination complaints brought under WIOA sec. 188 and/
or 29 CFR part 37. Such complaints must be handled in accordance with 
the procedures set forth in that regulatory part.
    (2) Questions about or complaints alleging a violation of the 
nondiscrimination provisions of WIOA sec. 188 may be directed or mailed 
to the Director, Civil Rights Center, U.S. Department of Labor, Room 
N4123, 200 Constitution Avenue NW., Washington, DC 20210, for 
processing.
    (h) Nothing in this subpart precludes a grievant or complainant 
from pursuing a remedy authorized under another Federal, State or local 
law.


Sec.  683.610  What processes does the Secretary use to review 
grievances and complaints of title I recipients?

    (a) The Secretary investigates allegations arising through the 
grievance procedures described in Sec.  683.600 when:
    (1) A decision on a grievance or complaint under Sec.  683.600(d) 
has not been reached within 60 days of receipt of the grievance or 
complaint or within 60 days of receipt of the request for appeal of a 
local level grievance and either party appeals to the Secretary; or
    (2) A decision on a grievance or complaint under Sec.  683.600(d) 
has been reached and the party to which such decision is adverse 
appeals to the Secretary.
    (b) The Secretary must make a final decision on an appeal under 
paragraph (a) of this section no later than 120 days after receiving 
the appeal.
    (c) Appeals made under paragraph (a)(2) of this section must be 
filed within 60 days of the receipt of the decision being appealed. 
Appeals made under paragraph (a)(1) of this section must be filed 
within 120 days of the filing of the grievance with the State, or the 
filing of the appeal of a local grievance with the State. All appeals 
must be submitted by certified mail, return receipt requested, to the 
Secretary, U.S. Department of Labor, 200 Constitution Ave. NW., 
Washington, DC 20210, Attention: ASET. A copy of the appeal must be 
simultaneously provided to the appropriate ETA Regional Administrator 
and the opposing party.
    (d) Except for complaints arising under WIOA sec. 184(f) or sec. 
188, grievances or complaints made directly to the Secretary will be 
referred to the appropriate State or local area for resolution in 
accordance with this section, unless the Department notifies the 
parties that the Department of Labor will investigate the grievance 
under the procedures at Sec.  683.430. Discrimination complaints 
brought under WIOA sec. 184(f) or sec. 188 or 29 CFR part 37 will be 
referred to the Director of the Civil Rights Center.
    (e) Complaints and grievances from participants receiving services 
under the Wagner-Peyser Act will follow the procedures outlined at 20 
CFR 658.


Sec.  683.620  How are complaints and reports of criminal fraud and 
abuse addressed under the Workforce Innovation and Opportunity Act?

    (a) Information and complaints involving criminal fraud, waste, 
abuse or other criminal activity must be reported immediately through 
the Department's Incident Reporting System to the DOL Office of 
Inspector General, Office of Investigations, Room S5514, 200 
Constitution Avenue NW., Washington, DC 20210, or to the corresponding 
Regional Inspector General for Investigations, with a copy 
simultaneously provided to the Employment and Training Administration. 
The Hotline number is 1-800-347-3756. The Web site is http://www.oig.dol.gov/contact.htm.
    (b) Complaints of a non-criminal nature may be handled under the 
procedures set forth in Sec.  683.600 or through the Department's 
Incident Reporting System.


Sec.  683.630  What additional appeal processes or systems must a State 
have for the Workforce Innovation and Opportunity Act program?

    (a) Non-designation of local areas:
    (1) The State must establish, and include in its State Plan, due 
process procedures which provide expeditious appeal to the State Board 
for a unit of general local government (including a combination of such 
units) or grant recipient that requests, but is not granted, initial or 
subsequent designation of an area as a local area under WIOA sec. 
106(b)(2) or 106(b)(3) and 20 CFR 679.250.
    (2) These procedures must provide an opportunity for a hearing and 
prescribe appropriate time limits to ensure prompt resolution of the 
appeal.
    (3) If the appeal to the State Board does not result in 
designation, the appellant may request review by the Secretary under 
Sec.  683.640.
    (b) Denial or termination of eligibility as a training provider:
    (1) A State must establish procedures which allow providers of 
training services the opportunity to appeal:
    (i) Denial of eligibility by a Local Board or the designated State 
agency under WIOA sec. 122(b), 122(c), or 122(d).
    (ii) Termination of eligibility or other action by a Local Board or 
State agency under WIOA sec. 122(f); or
    (iii) Denial of eligibility as a provider of on-the-job training 
(OJT) or customized training by a one-stop operator under WIOA sec. 
122(h).
    (2) Such procedures must provide an opportunity for a hearing and 
prescribe appropriate time limits to ensure prompt resolution of the 
appeal.
    (3) A decision under this State appeal process may not be appealed 
to the Secretary.
    (c) Testing and sanctioning for use of controlled substances.
    (1) A State must establish due process procedures, in accordance 
with WIOA sec. 181(f), which provide expeditious appeal for:
    (i) Participants in programs under title I subtitle B of WIOA 
subject to testing for use of controlled substances, imposed under a 
State policy established under WIOA sec. 181(f)(1); and
    (ii) Participants in programs under title I subtitle B of WIOA who 
are sanctioned, in accordance with WIOA sec. 181(f)(2), after testing 
positive for

[[Page 20889]]

the use of controlled substances, under the policy described in 
paragraph (c)(1)(i) of this section.
    (2) A decision under this State appeal process may not be appealed 
to the Secretary.


Sec.  683.640  What procedures apply to the appeals of non-designation 
of local areas?

    (a) A unit of general local government (including a combination of 
such units) or grant recipient whose appeal of the denial of a request 
for initial or subsequent designation as a local workforce investment 
area to the State Board has not resulted in such designation, may 
appeal the State Board's denial to the Secretary.
    (b) Appeals made under paragraph (a) of this section must be filed 
no later than 30 days after receipt of written notification of the 
denial from the State Board, and must be submitted by certified mail, 
return receipt requested, to the Secretary, U.S. Department of Labor, 
200 Constitution Ave. NW., Washington, DC 20210, Attention: ASET. A 
copy of the appeal must be simultaneously provided to the State Board.
    (c) The appellant must establish that it was not accorded 
procedural rights under the appeal process set forth in the State Plan, 
or establish that it meets the requirements for designation in WIOA 
sec. 106(b)(2) or 106(b)(3) and 20 CFR 679.250.
    (d) If the Secretary determines that the appellant has met its 
burden of establishing that it was not accorded procedural rights under 
the appeal process set forth in the State Plan, or that it meets the 
requirements for designation in WIOA sec. 106(b)(2) or 106(b)(3) and 20 
CFR 679.250, the Secretary may require that the area be designated as a 
local workforce investment area. In making this determination the 
Secretary may consider any comments submitted by the State Board in 
response to the appeal made under paragraph (a) of this section.
    (e) The Secretary must issue a written decision to the Governor and 
the appellant.


Sec.  683.650  What procedures apply to the appeals of the Governor's 
imposition of sanctions for substantial violations or performance 
failures by a local area?

    (a) A local area which has been found in substantial violation of 
WIOA title I, and has received notice from the Governor that either all 
or part of the local plan will be revoked or that a reorganization will 
occur, may appeal such sanctions to the Secretary under WIOA sec. 
184(b). The appeal must be filed no later than 30 days after receipt of 
written notification of the revoked plan or imposed reorganization.
    (b) The sanctions described in paragraph (a) of this section do not 
become effective until:
    (1) The time for appeal has expired; or
    (2) The Secretary has issued the decision described in paragraph 
(e) of this section.
    (c) A local area which has failed to meet local performance 
accountability measures for 3 consecutive program years, and has 
received the Governor's notice of intent to impose a reorganization 
plan, may appeal to the Governor to rescind or revise such plan, in 
accordance with 20 CFR 677.225.
    (d) Appeals to the Secretary made under paragraph (a) of this 
section must be submitted by certified mail, return receipt requested, 
to the Secretary, U.S. Department of Labor, 200 Constitution Ave. NW., 
Washington, DC 20210, Attention: ASET. A copy of the appeal must be 
simultaneously provided to the Governor.
    (e) The Secretary will notify the Governor and the appellant in 
writing of the Secretary's decision under paragraph (a) of this section 
within 45 days after receipt of the appeal. In making this 
determination the Secretary may consider any comments submitted by the 
Governor in response to the appeals.

Subpart G--Sanctions, Corrective Actions, and Waiver of Liability


Sec.  683.700  When can the Secretary impose sanctions and corrective 
actions on recipients and subrecipients of title I Workforce Innovation 
and Opportunity Act funds?

    (a)(1) Except for actions under WIOA secs. 116 and 188(a) or 29 CFR 
parts 31, 32, 35, 37 and 49 CFR part 25, the Grant Officer must use the 
procedures outlined in Sec.  683.440 before imposing a sanction on, or 
require corrective action by, recipients of funds under title I of 
WIOA.
    (2) To impose a sanction or corrective action for a violation of 
WIOA sec. 188(a) the Department will use the procedures set forth in 29 
CFR part 37.
    (3) To impose a sanction or corrective action for a violation of 
WIOA sec. 116 the Department will use the procedures set forth in 20 
CFR part 677.
    (b) States. When a Grant Officer determines that the Governor has 
not fulfilled its requirements under 2 CFR part 200, an audit, or a 
monitoring compliance review set forth at sec. 184(a)(4) of WIOA and 
Sec.  683.200(a), or has not taken corrective action to remedy a 
violation as required by WIOA secs. 184(a)(5) and 184(b)(1), the Grant 
Officer must require the Governor to impose the necessary corrective 
actions set forth at WIOA secs. 184(a)(5) and 184(b)(1), or may require 
repayment of funds under WIOA sec. 184(c). If the Secretary determines 
it is necessary to protect the funds or ensure the proper operation of 
a program or activity, the Secretary may immediately suspend or 
terminate financial assistance in accordance with WIOA sec. 184(e).
    (c) Local areas. If the Governor fails to promptly take the actions 
specified in WIOA sec. 184(b)(1) when it determines that a local area 
has failed to comply with the requirements described in Sec.  
683.720(a), and that the local area has not taken the necessary 
corrective action, the Grant Officer may impose such actions directly 
against the local area.
    (d) Direct grant recipients. When the Grant Officer determines that 
a direct grant recipient of subtitle D of title I of WIOA has not taken 
corrective action to remedy a substantial violation as the result of 
noncompliance with 2 CFR part 200, the Grant Officer may impose 
sanctions against the grant recipient.
    (e) Subrecipients. The Grant Officer may impose a sanction directly 
against a subrecipient, as authorized in WIOA sec. 184(d)(3) and 2 CFR 
200.338. In such a case, the Grant Officer will inform the direct grant 
recipient of the action.


Sec.  683.710  Who is responsible for funds provided under title I and 
Wagner-Peyser?

    (a) The recipient of the funds is responsible for all funds under 
its grant(s) awarded under WIOA title I and the Wagner-Peyser Act.
    (b)(1) The local government's chief elected official(s) in a local 
workforce investment area is liable for any misuse of the WIOA grant 
funds allocated to the local area under WIOA secs. 128 and 133, unless 
the chief elected official(s) reaches an agreement with the Governor to 
bear such liability.
    (2) When a local workforce area or region is composed of more than 
one unit of general local government, the liability of the individual 
jurisdictions must be specified in a written agreement between the 
chief elected officials.
    (3) When there is a change in the chief elected official(s), the 
Local Board is required to inform the new chief elected official(s), in 
a timely manner, of their responsibilities and liabilities as well as 
the need to review and update any written agreements among the chief 
elected official(s).
    (4) The use of a fiscal agent does not relieve the chief elected 
official, or

[[Page 20890]]

Governor if designated under paragraph (b)(1) of this section, of 
responsibility for any misuse of grant funds allocated to the local 
area under WIOA secs. 128 and 133.


Sec.  683.720  What actions are required to address the failure of a 
local area to comply with the applicable uniform administrative 
provisions?

    (a) If, as part of the annual on-site monitoring of local areas, 
the Governor determines that a local area is not in compliance with 2 
CFR part 200, including the failure to make the required disclosures in 
accordance with 2 CFR 200.113 or the failure to address all violations 
of Federal criminal law involving fraud, bribery or gratuity violations 
(2 CFR part 180), the Governor must:
    (1) Require corrective action to secure prompt compliance; and
    (2) Impose the sanctions provided for at WIOA sec. 184(b) if the 
Governor finds that the local area has failed to take timely corrective 
action.
    (b) An action by the Governor to impose a sanction against a local 
area, in accordance with this section, may be appealed to the Secretary 
in accordance with Sec.  683.650.
    (c)(1) If the Secretary finds that the Governor has failed to 
monitor and certify compliance of local areas with the administrative 
requirements under WIOA sec. 184(a), or that the Governor has failed to 
take the actions promptly required upon a determination under paragraph 
(a) of this section, the Secretary must take the action described in 
Sec.  683.700(b).
    (2) If the Governor fails to take the corrective actions required 
by the Secretary under paragraph (c)(1) of this section, the Secretary 
may immediately suspend or terminate financial assistance under WIOA 
sec. 184(e).


Sec.  683.730  When can the Secretary waive the imposition of 
sanctions?

    (a)(1) A recipient of title I funds may request that the Secretary 
waive the imposition of sanctions authorized under WIOA sec. 184.
    (2) A Grant officer may approve the waiver described in paragraph 
(a)(1) of this section if the grant officer finds that the recipient 
has demonstrated substantial compliance with the requirements of WIOA 
sec. 184(d)(2).
    (b)(1) When the debt for which a waiver is request was established 
in a non-Federal resolution proceeding, the resolution report must 
accompany the waiver request.
    (2) When the waiver request is made during the ETA Grant Officer 
resolution process, the request must be made during the informal 
resolution period described in Sec.  683.440(c).
    (c) A waiver of the recipient's liability must be considered by the 
Grant Officer only when:
    (1) The misexpenditure of WIOA funds occurred at a subrecipient's 
level;
    (2) The misexpenditure was not due to willful disregard of the 
requirements of title I of the Act, gross negligence, failure to 
observe accepted standards of administration, and did not constitute 
fraud or failure to make the required disclosures in accordance with 2 
CFR part 200.113 addressing all violations of Federal criminal law 
involving fraud, bribery or gratuity violations (2 CFR part 180 and 31 
U.S.C 3321)
    (3) If fraud did exist, was perpetrated against the recipient/
subrecipients, and:
    (i) The recipient/subrecipients discovered, investigated, reported, 
and cooperated in any prosecution of the perpetrator of the fraud; and
    (ii) After aggressive debt collection action, it has been 
documented that further attempts at debt collection from the 
perpetrator of the fraud would be inappropriate or futile;
    (4) The recipient has issued a final determination which disallows 
the misexpenditure, the recipient's appeal process has been exhausted, 
and a debt has been established; and
    (5) The recipient provides documentation to demonstrate that it has 
substantially complied with the requirements of WIOA sec. 184(d)(2) and 
this section.
    (d) The recipient will not be released from liability for misspent 
funds under the determination required by WIOA sec. 184(d) unless the 
Grant Officer determines that further collection action, either by the 
recipient or subrecipient(s), would be inappropriate or would prove 
futile.


Sec.  683.740  What is the procedure to handle a recipient of title I 
Workforce Innovation and Opportunity Act funds' request for advance 
approval of contemplated corrective actions?

    (a) The recipient may request advance approval from the Grant 
Officer for contemplated corrective actions, including debt collection 
actions, which the recipient plans to initiate or to forego. The 
recipient's request must include a description and an assessment of all 
actions taken to collect the misspent funds.
    (b) Based on the recipient's request, the Grant Officer may 
determine that the recipient may forego certain debt collection actions 
against a subrecipient when:
    (1) The subrecipient meets the criteria set forth in WIOA sec. 
184(d)(2);
    (2) The misexpenditure of funds:
    (i) Was not made by that subrecipient but by an entity that 
received WIOA funds from that subrecipient;
    (ii) Was not a violation of WIOA sec. 184(d)(1), did not constitute 
fraud, or failure to disclose, in a timely manner, all violations of 
Federal criminal law involving fraud, bribery, or gratuity violations 
potentially affecting the Federal award; or
    (iii) If fraud did exist,
    (A) It was perpetrated against the subrecipient;
    (B) The subrecipient discovered, investigated, reported, and 
cooperated in any prosecution of the perpetrator of the fraud; and
    (C) After aggressive debt collection action, it has been documented 
that further attempts at debt collection from the perpetrator of the 
fraud would be inappropriate or futile;
    (3) A determination which disallows the misexpenditure and 
establishes a debt has been issued at the appropriate level; and,
    (4) Further debt collection action by that subrecipient or the 
recipient would be either inappropriate or futile.


Sec.  683.750  What procedure must be used for administering the 
offset/deduction provisions of the Workforce Innovation and Opportunity 
Act?

    (a)(1) For misexpenditures by direct recipients of title I and 
Wagner-Peyser formula funds the Grant Officer may determine that a 
debt, or a portion thereof, may be offset against amounts that are 
allotted to the recipient. Recipients must submit a written request for 
an offset to the Grant Officer. Generally, the Grant Officer will apply 
the offset against amounts that are available at the recipient level 
for administrative costs.
    (2) The Grant Officer may approve an offset request, under 
paragraph (a)(1) of this section, if the misexpenditures were not due 
to willful disregard of the requirements of the Act and regulations, 
fraud, gross negligence, failure to observe accepted standards of 
administration or a pattern of misexpenditure.
    (b) For subrecipient misexpenditures that were not due to willful 
disregard of the requirements of the Act and regulations, fraud, gross 
negligence, failure to observe accepted standards of administration or 
a pattern of misexpenditure, if the Grant Officer has required the 
State to repay or offset such amount, the State may deduct an amount 
equal to the misexpenditure from the subrecipient's allocation of the 
program year after the determination was made. Deductions are to be 
made

[[Page 20891]]

from funds reserved for the administrative costs of the local programs 
involved, as appropriate.
    (c) If offset is granted, the debt will not be fully satisfied 
until the Grant Officer reduces amounts allotted to the recipient by 
the amount of the misexpenditure.
    (d) For recipients of funds under title I and Wagner-Peyser funds, 
a direct recipient may not make a deduction under paragraph (b) of this 
section until the State has taken appropriate corrective action to 
ensure full compliance within the local area with regard to appropriate 
expenditure of WIOA funds.

Subpart H--Administrative Adjudication and Judicial Review


Sec.  683.800  What actions of the Department may be appealed to the 
Office of Administrative Law Judges?

    (a) An applicant for financial assistance under title I of WIOA who 
is dissatisfied by a determination not to award Federal financial 
assistance, in whole or in part, to such applicant; or a recipient, 
subrecipient, or a contractor against which the Grant Officer has 
directly imposed a sanction or corrective action under sec. 184 of 
WIOA, including a sanction against a State under 20 CFR part 677, may 
appeal to the U.S. Department of Labor, Office of Administrative Law 
Judges (OALJ) within 21 days of receipt of the final determination.
    (b) Failure to request a hearing within 21 days of receipt of the 
final determination constitutes a waiver of the right to a hearing.
    (c) A request for a hearing under this subpart must specifically 
state those issues or findings in the final determination upon which 
review is requested. Issues or findings in the final determination not 
specified for review, or the entire final determination when no hearing 
has been requested within the 21 days, are considered resolved and not 
subject to further review. Only alleged violations of the Act, its 
regulations, the grant or other agreement under the Act raised in the 
final determination and the request for hearing are subject to review.
    (d) A request for a hearing must be transmitted by certified mail, 
return receipt requested, to the Chief Administrative Law Judge, U.S. 
Department of Labor, Suite 400, 800 K Street NW., Washington, DC 20001, 
with one copy to the Departmental official who issued the 
determination.
    (e) The procedures in this subpart apply in the case of a 
complainant who has engaged in the alternative dispute resolution 
process set forth in Sec.  683.840, if neither a settlement was reached 
nor a decision issued within the 60 days, except that the request for 
hearing before the OALJ must be filed within 15 days of the conclusion 
of the 60-day period provided in Sec.  683.840. In addition to 
including the final determination upon which review is requested, the 
complainant must include a copy of any Stipulation of Facts and a brief 
summary of proceedings.


Sec.  683.810  What rules of procedure apply to hearings conducted 
under this subpart?

    (a) Rules of practice and procedure. The rules of practice and 
procedure promulgated by the OALJ at subpart A of 29 CFR part 18, 
govern the conduct of hearings under this subpart. However, a request 
for hearing under this subpart is not considered a complaint to which 
the filing of an answer by the Department or a DOL agency or official 
is required. Technical rules of evidence will not apply to hearings 
conducted pursuant to this part. However, rules or principles designed 
to assure production of the most credible evidence available and to 
subject testimony to cross-examination will apply.
    (b) Prehearing procedures. In all cases, the Administrative Law 
Judge (ALJ) should encourage the use of prehearing procedures to 
simplify and clarify facts and issues.
    (c) Subpoenas. Subpoenas necessary to secure the attendance of 
witnesses and the production of documents or other items at hearings 
must be obtained from the ALJ and must be issued under the authority 
contained in WIOA sec. 183(c), incorporating 15 U.S.C. 49.
    (d) Timely submission of evidence. The ALJ must not permit the 
introduction at the hearing of any documentation if it has not been 
made available for review by the other parties to the proceeding either 
at the time ordered for any prehearing conference, or, in the absence 
of such an order, at least 3 weeks prior to the hearing date.
    (e) Burden of production. The Grant Officer has the burden of 
production to support her or his decision. This burden is satisfied 
once the Grant Officer prepares and files an administrative file in 
support of the decision which must be made part of the record. 
Thereafter, the party or parties seeking to overturn the Grant 
Officer's decision has the burden of persuasion.


Sec.  683.820  What authority does the Administrative Law Judge have in 
ordering relief as an outcome of an administrative hearing?

    (a) In ordering relief the ALJ has the full authority of the 
Secretary under the Act, except as described in paragraph (b) of this 
section.
    (b) In grant selection appeals of awards funded under WIOA title I, 
subtitle D:
    (1) If the Administrative Law Judge rules, under Sec.  683.800, 
that the appealing organization should have been selected for an award, 
the matter must be remanded to the Grant Officer. The Grant Officer 
must, within 10 working days, determine whether the organization 
continues to meet the requirements of the applicable solicitation, 
whether the funds which are the subject of the ALJ's decision will be 
awarded to the organization, and the timing of the award. In making 
this determination, the Grant Officer must take into account disruption 
to participants, disruption to grantees, and the operational needs of 
the program.
    (2) If the Administrative Law Judge rules that additional 
application review is required, the Grant Officer must implement that 
review and, if a new organization is selected, follow the steps laid 
out in paragraph (b)(1) of this section to determine whether the grant 
funds will be awarded to that organization.
    (3) In the event that the Grant Officer determines that the funds 
will not be awarded to the appealing organization for the reasons 
discussed in paragraph (b)(1) of this section, an organization which 
does not have an approved Negotiated Indirect Cost Rate Agreement will 
be awarded its reasonable application preparation costs.
    (4) If funds are awarded to the appealing organization, the Grant 
Officer will notify the current grantee within 10 days. In addition, 
the appealing organization is not entitled to the full grant amount but 
will only receive the funds remaining in the grant that have not been 
obligated by the current grantee through its operation of the grant and 
its subsequent closeout.
    (5) In the event that an organization, other than the appealing 
organization, is adversely effected by the Grant Officer's 
determination upon completion of the additional application review 
under paragraph (b)(2) of this section, that organization may appeal 
that decision to the Office of Administrative Law Judges by following 
the procedures set forth in Sec.  683.800.
    (6) Any organization selected and/or funded under WIOA title I, 
subtitle D, is subject to having its award removed

[[Page 20892]]

if an ALJ decision so orders. As part of this process, the Grant 
Officer will provide instructions on transition and closeout to both 
the newly selected grantee and to the grantee whose position is 
affected or which is being removed. All awardees must agree to the 
provisions of this paragraph as a condition of accepting a grant award.


Sec.  683.830  When will the Administrative Law Judge issue a decision?

    (a) The ALJ should render a written decision not later than 90 days 
after the closing of the record.
    (b) The decision of the ALJ constitutes final agency action unless, 
within 20 days of the decision, a party dissatisfied with the ALJ's 
decision has filed a petition for review with the Administrative Review 
Board (ARB) (established under Secretary's Order No. 02-2012), 
specifically identifying the procedure, fact, law or policy to which 
exception is taken. Any exception not specifically raised in the 
petition is deemed to have been waived. A copy of the petition for 
review must also be sent to the opposing party and if an applicant or 
recipient, to the Grant Officer and the Grant Officer's Counsel at the 
time of filing. Unless the ARB, within 30 days of the filing of the 
petition for review, notifies the parties that the case has been 
accepted for review, the decision of the ALJ constitutes final agency 
action. Any case accepted by the ARB must be decided within 180 days of 
acceptance. If not so decided, the decision of the ALJ constitutes 
final agency action.


Sec.  683.840  Is there an alternative dispute resolution process that 
may be used in place of an Office of Administrative Law Judges hearing?

    (a) The parties to a complaint which has been filed according to 
the requirements of Sec.  683.800 may choose to waive their rights to 
an administrative hearing before the OALJ. Instead, they may choose to 
transfer the settlement of their dispute to an individual acceptable to 
all parties who will conduct an informal review of the stipulated facts 
and render a decision in accordance with applicable law. A written 
decision must be issued within 60 days after submission of the matter 
for informal review.
    (b) The waiver of the right to request a hearing before the OALJ 
described in paragraph (a) of this section will automatically be 
revoked if a settlement has not been reached or a written decision has 
not been issued within the 60 days provided in paragraph (a) of this 
section.
    (c) The decision rendered under this informal review process will 
be treated as a final decision of an Administrative Law Judge under 
WIOA sec. 186(b).


Sec.  683.850  Is there judicial review of a final order of the 
Secretary issued under WIOA?

    (a) Any party to a proceeding which resulted in a Secretary's final 
order under WIOA sec. 186 in which the Secretary awards, declines to 
award, or only conditionally awards financial assistance or with 
respect to a corrective action or sanction imposed under WIOA sec. 184 
may obtain a review in the United States Court of Appeals having 
jurisdiction over the applicant or recipient of funds involved, by 
filing a review petition within 30 days of the issuance of the 
Secretary's final order in accordance with WIOA sec. 187.
    (b) The court has jurisdiction to make and enter a decree 
affirming, modifying, or setting aside the order of the Secretary, in 
whole or in part.
    (c) No objection to the Secretary's order may be considered by the 
court unless the objection was specifically urged, in a timely manner, 
before the Secretary. The review is limited to questions of law, and 
the findings of fact of the Secretary are conclusive if supported by 
substantial evidence.
    (d) The judgment of the court is final, subject to certiorari 
review by the United States Supreme Court.
0
11. Add part 684 to read as follows:

PART 684--INDIAN AND NATIVE AMERICAN PROGRAMS UNDER TITLE I OF THE 
WORKFORCE INNOVATION AND OPPORTUNITY ACT

Subpart A--Purposes and Policies
Sec.
684.100 What is the purpose of the programs established to serve 
Indians and Native Americans under of the Workforce Innovation and 
Opportunity Act?
684.110 How must Indian and Native American programs be 
administered?
684.120 What obligation does the Department have to consult with the 
Indian and Native American program grantee community in developing 
rules, regulations, and standards of accountability for Indian and 
Native American programs?
684.130 What definitions apply to terms used in this part?
Subpart B--Service Delivery Systems Applicable to Section 166 Programs
684.200 What are the requirements to apply for a Workforce 
Innovation and Opportunity Act grant?
684.210 What priority for awarding grants is given to eligible 
organizations?
684.220 What is the process for applying for a Workforce Innovation 
and Opportunity Act grant?
684.230 What appeal rights are available to entities that are denied 
a grant award?
684.240 Are there any other ways in which an entity may be awarded a 
Workforce Innovation and Opportunity Act grant?
684.250 Can an Indian and Native American program grantee's grant 
award be terminated?
684.260 Does the Department have to award a grant for every part of 
the country?
684.270 How are Workforce Innovation and Opportunity Act funds 
allocated to Indian and Native American program grantees?
Subpart C--Services to Customers
684.300 Who is eligible to receive services under the Indian and 
Native American program?
684.310 What are Indian and Native American program grantee 
allowable activities?
684.320 Are there any restrictions on allowable activities?
684.330 What is the role of Indian and Native American program 
grantees in the one-stop system?
684.340 What policies govern payments to participants, including 
wages, training allowances or stipends, or direct payments for 
supportive services?
684.350 What will the Department do to strengthen the capacity of 
Indian and Native American program grantees to deliver effective 
services?
Subpart D--Supplemental Youth Services
684.400 What is the purpose of the supplemental youth services 
program?
684.410 What entities are eligible to receive supplemental youth 
services funding?
684.420 What are the planning requirements for receiving 
supplemental youth services funding?
684.430 What individuals are eligible to receive supplemental youth 
services?
684.440 How is funding for supplemental youth services determined?
684.450 How will supplemental youth services be provided?
684.460 What performance measures are applicable to the supplemental 
youth services program?
Subpart E--Services to Communities
684.500 What services may Indian and Native American program 
grantees provide to or for employers under the WIOA?
684.510 What services may Indian and Native American program 
grantees provide to the community at large under the WIOA?
684.520 Must Indian and Native American program grantees give 
preference to Indian and Native American entities in the selection 
of contractors or service providers?
684.530 What rules govern the issuance of contracts and/or 
subgrants?
Subpart F--Accountability for Services and Expenditures
684.600 To whom is the Indian and Native American program grantee 
accountable for the provision of services and the expenditure of 
Indian and Native American funds?

[[Page 20893]]

684.610 How is this accountability documented and fulfilled?
684.620 What performance measures are in place for the Indian and 
Native American program?
684.630 What are the requirements for preventing fraud and abuse 
under the WIOA?
684.640 What grievance systems must an Indian and Native American 
program grantee provide?
684.650 Can Indian and Native American program grantees exclude 
segments of the eligible population?
Subpart G--Section 166 Planning/Funding Process
684.700 What is the process for submitting a 4-year plan?
684.710 What information must be included in the 4-year plans as 
part of the competitive application?
684.720 When must the 4-year plan be submitted?
684.730 How will the Department review and approve such plans?
684.740 Under what circumstances can the Department or the Indian 
and Native American program grantee modify the terms of the 
grantee's plan(s)?
Subpart H--Administrative Requirements
684.800 What systems must an Indian and Native American program 
grantee have in place to administer an Indian and Native American 
program?
684.810 What types of costs are allowable expenditures under the 
Indian and Native American program?
684.820 What rules apply to administrative costs under the Indian 
and Native American program?
684.830 Does the Workforce Innovation and Opportunity Act 
administrative cost limit for States and local areas apply to WIOA 
grants?
684.840 How should Indian and Native American program grantees 
classify costs?
684.850 What cost principles apply to Indian and Native American 
funds?
684.860 What audit requirements apply to Indian and Native American 
grants?
684.870 What is ``program income'' and how is it regulated in the 
Indian and Native American program?
Subpart I--Miscellaneous Program Provisions
684.900 Does the Workforce Innovation and Opportunity Act provide 
regulatory and/or statutory waiver authority?
684.910 What information is required in a waiver request?
684.920 What provisions of law or regulations may not be waived?
684.930 May Indian and Native American program grantees combine or 
consolidate their employment and training funds?
684.940 What is the role of the Native American Employment and 
Training Council?
684.950 Does the Workforce Innovation and Opportunity Act provide 
any additional assistance to unique populations in Alaska and 
Hawaii?

    Authority:  Secs. 134, 166, 189, 503, Pub. L. 113-128, 128 Stat. 
1425 (Jul. 22, 2014).

Subpart A--Purposes and Policies


Sec.  684.100  What is the purpose of the programs established to serve 
Indians and Native Americans under the Workforce Innovation and 
Opportunity Act?

    (a) The purpose of WIOA INA programs in sec. 166 is to support 
employment and training activities for INAs in order to:
    (1) Develop more fully the academic, occupational, and literacy 
skills of such individuals;
    (2) Make such individuals more competitive in the workforce and to 
equip them with entrepreneurial skills necessary for successful self-
employment; and
    (3) Promote the economic and social development of INA communities 
in accordance with the goals and values of such communities.
    (b) The principal means of accomplishing these purposes is to 
enable tribes and Native American organizations to provide employment 
and training services to INAs and their communities. Services should be 
provided in a culturally appropriate manner, consistent with the 
principles of the Indian Self-Determination and Education Assistance 
Act (25 U.S.C. 450 et seq.). (WIOA sec. 166(a)(2)).


Sec.  684.110  How must Indian and Native American programs be 
administered?

    (a) INA programs will be administered to maximize the Federal 
commitment to support the growth and development of INAs and their 
communities as determined by representatives of such communities.
    (b) In administering these programs, the Department will follow the 
Congressional declaration of policy set forth in the Indian Self-
Determination and Education Assistance Act, at 25 U.S.C. 450a, as well 
as the Department of Labor's ``American Indian and Alaska Native 
Policies.
    (c) The regulations in this part are not intended to abrogate the 
trust responsibilities of the Federal government to federally-
recognized tribes in any way.
    (d) The Department will administer INA programs through a single 
organizational unit and consistent with the requirements in sec. 166(i) 
of WIOA. The Division of Indian and Native American Programs (DINAP) 
within the Employment and Training Administration (ETA) is designated 
as this single organizational unit as required by sec. 166(i)(1) of 
WIOA.
    (e) The Department will establish and maintain administrative 
procedures for the selection, administration, monitoring, and 
evaluation of INA employment and training programs authorized under 
this Act.


Sec.  684.120  What obligation does the Department have to consult with 
the Indian and Native American grantee community in developing rules, 
regulations, and standards of accountability for Indian and Native 
American programs?

    The Department's primary consultation vehicle for INA programs is 
the Native American Employment and Training Council. The Department 
will consult with the INA grantee community in developing policies for 
the INA programs, actively seeking and considering the views of INA 
grantees prior to establishing INA program policies and regulations. 
(WIOA sec. 166(i)(4)). The Department will follow DOL's tribal 
consultation policy and Executive Order 13175 of November 6, 2000.


Sec.  684.130  What definitions apply to terms used in this part?

    In addition to the definitions found in secs. 3 and 166 of WIOA, 
and 20 CFR 675.300, the following definitions apply:
    Alaska Native-Controlled Organization means an organization whose 
governing board is comprised of 51 percent or more of individuals who 
are Alaska Native as defined in secs. 3(b) and 3(r) of the Alaska 
Native Claims Settlement Act (43 U.S.C. 1602(b), (r)).
    Carry-in means the total amount of funds unobligated by a grantee 
at the end of a program year. If the amount of funds unobligated by a 
grantee at the end of a program year is more than 20 percent of the 
grantee's ``total funds available'' for that program year, such excess 
amount is considered ``excess carry-in.''
    DINAP means the Division of Indian and Native American Programs 
within the Employment and Training Administration of the U.S. 
Department of Labor.
    Governing body means a body of representatives who are duly 
elected, appointed by duly elected officials, or selected according to 
traditional tribal means. A governing body must have the authority to 
provide services to and to enter into grants on behalf of the 
organization that selected or designated it.
    Grant Officer means a U.S. Department of Labor official authorized 
to obligate Federal funds.
    High-poverty area means a Census tract, a set of contiguous Census 
tracts, or a county or Indian reservation that has a poverty rate of at 
least 30 percent

[[Page 20894]]

as set every 5 years using American Community Survey 5-Year data.
    INA Grantee means an entity which is formally selected under 
subpart B of this part to operate an INA program and which has a grant 
agreement.
    Incumbent Grantee means an entity that is currently receiving a 
grant under this subpart.
    Indian and Native American or INA means, for the purpose of this 
part, an individual that is an American Indian, Native American, Native 
Hawaiian, or Alaska Native.
    Indian-Controlled Organization means an organization whose 
governing board is comprised of 51 percent or more individuals who are 
members of one or more Federally-recognized tribes. Incumbent grantees 
who received funding under WIA can include members of ``State 
recognized tribes'' in meeting the 51 percent threshold to continue to 
be eligible for WIOA sec. 166 funds as an Indian-Controlled 
Organization. Tribal Colleges and Universities meet the definition of 
Indian-Controlled Organization for the purposes of this regulation.
    Native Hawaiian-Controlled Organization means an organization whose 
governing board is comprised of 51 percent or more individuals who are 
Native Hawaiian as defined in sec. 7207 of the Native Hawaiian 
Education Act (20 U.S.C. 7517).
    Total funds available means all funds that a grantee had 
``available'' at the beginning of a program year.
    Underemployed means an individual who is working part-time but 
desires full-time employment, or who is working in employment not 
commensurate with the individual's demonstrated level of educational 
and/or skill achievement.

Subpart B--Service Delivery Systems Applicable to Section 166 
Programs


Sec.  684.200  What are the requirements to apply for a Workforce 
Innovation and Opportunity Act grant?

    (a) To be eligible to apply for a WIOA, sec. 166 grant, an entity 
must have:
    (1) Legal status as a government or as an agency of a government, 
private non-profit corporation, or a consortium whose members all 
qualify as one of these entities; and
    (2) A new entity (which is not an incumbent grantee) must have a 
population within the designated geographic service area which would 
receive at least $100,000 under the funding formula found at Sec.  
684.270(b), including any amounts received for supplemental youth 
services under the funding formula at Sec.  684.440(a). Incumbent 
grantees which do not meet this dollar threshold will be grandfathered 
in. Additionally, the Department will make an exception to the $100,000 
minimum for grantees wishing to participate in the demonstration 
program under Public Law 102-477 if all resources to be consolidated 
under the Public Law 102-477 plan total at least $100,000, with at 
least $20,000 derived from sec. 166 funds. However, incumbent Public 
Law 102-477 grantees that are receiving WIA funding of less than 
$20,000 as of the date of implementation of WIOA will be grandfathered 
into the program and can continue to be awarded the same amount.
    (b) To be eligible to apply as a consortium, each member of the 
consortium must meet the requirements of paragraph (a) of this section 
and must:
    (1) Be in close proximity to one another, but may operate in more 
than one State;
    (2) Have an administrative unit legally authorized to run the 
program and to commit the other members to contracts, grants, and other 
legally-binding agreements; and
    (3) Be jointly and individually responsible for the actions and 
obligations of the consortium, including debts.
    (c) Entities eligible under paragraph (a)(1) of this section are:
    (1) Federally-recognized Indian tribes;
    (2) Tribal organizations, as defined in 25 U.S.C. 450b;
    (3) Alaska Native-controlled organizations;
    (4) Native Hawaiian-controlled organizations;
    (5) Indian-controlled organizations serving INAs; and
    (6) A consortium of eligible entities which meets the legal 
requirements for a consortium described in paragraph (b) of this 
section.
    (d) State-recognized tribal organizations that meet the definition 
of an Indian-controlled organization are eligible to apply for WIOA 
sec. 166 grant funds. State-recognized tribes that do not meet this 
definition but are grantees under WIA will be grandfathered into WIOA 
as Indian-controlled organizations.


Sec.  684.210  What priority for awarding grants is given to eligible 
organizations?

    (a) Federally-recognized Indian tribes, Alaska Native entities, or 
a consortium of such entities will have priority to receive grants 
under this part for those geographic service areas in which they have 
legal jurisdiction, such as an Indian reservation, Oklahoma Tribal 
Service Area (OTSA), or Alaska Native Village Service Area (ANVSA).
    (b) If the Department decides not to make an award to an Indian 
tribe or Alaska Native entity that has legal jurisdiction over a 
service area, it will consult with such tribe or Alaska Native entity 
that has jurisdiction before selecting another entity to provide 
services for such areas.
    (c) The priority described in paragraphs (a) and (b) of this 
section does not apply to service areas outside the legal jurisdiction 
of an Indian tribe or Alaska Native entity.


Sec.  684.220  What is the process for applying for a Workforce 
Innovation and Opportunity Act grant?

    (a) Entities seeking a WIOA sec. 166 grant, including incumbent 
grantees, will be provided an opportunity to apply for a WIOA sec. 166 
grant every 4 years through a competitive grant process.
    (b) As part of the competitive application process, applicants will 
be required to submit a 4-year plan as described at Sec.  684.710. The 
requirement to submit a 4-year plan does not apply to entities that 
have been granted approval to transfer their WIOA funds to the 
Department of Interior pursuant to Public Law 102-477.


Sec.  684.230  What appeal rights are available to entities that are 
denied a grant award?

    Any entity that is denied a grant award for which it applied in 
whole or in part may appeal the denial to the Office of the 
Administrative Law Judges using the procedures at 20 CFR 683.800 or the 
alternative dispute resolution procedures at 20 CFR 683.840. The Grant 
Officer will provide an entity whose request for a grant award was 
denied, in whole or in part, with a copy of the appeal procedures.


Sec.  684.240  Are there any other ways in which an entity may be 
awarded a Workforce Innovation and Opportunity Act grant?

    Yes. For areas that would otherwise go unserved, the Grant Officer 
may designate an entity, which has not submitted a competitive 
application, but which meets the qualifications for a grant award, to 
serve the particular geographic area. Under such circumstances, DINAP 
will seek the views of INA leaders in the community that would 
otherwise go unserved before making the decision to designate the 
entity that would serve the community. DINAP will inform the Grant 
Officer of the INA leaders' views. The Grant Officer will accommodate 
views of INA leaders in such areas to the extent possible.

[[Page 20895]]

Sec.  684.250  Can an Indian and Native American grantee's grant award 
be terminated?

    (a) Yes, the Grant Officer can terminate a grantee's award for 
cause, or the Secretary or another Department of Labor official 
confirmed by the Senate can terminate a grantee's award in emergency 
circumstances where termination is necessary to protect the integrity 
of Federal funds or ensure the proper operation of the program under 
sec. 184(e) of WIOA.
    (b) The Grant Officer may terminate a grantee's award for cause 
only if there is a substantial or persistent violation of the 
requirements in WIOA or the WIOA regulations. The grantee must be 
provided with written notice 60 days before termination, stating the 
specific reasons why termination is proposed. The appeal procedures at 
20 CFR 683.800 apply.


Sec.  684.260  Does the Department have to award a grant for every part 
of the country?

    No, if there are no entities meeting the requirements for a grant 
award in a particular area, or willing to serve that area, the 
Department will not award funds for that service area. The funds that 
otherwise would have been allocated to that area under Sec.  684.270 
will be distributed to other INA program grantees, or used for other 
program purposes such as technical assistance and training (TAT). 
Unawarded funds used for technical assistance and training are in 
addition to, and not subject to the limitations on, amounts reserved 
under Sec.  684.270(e). Areas which are unserved by the INA program may 
be restored during a subsequent grant award cycle, when and if a 
current grantee or other eligible entity applies for a grant award to 
serve that area.


Sec.  684.270  How are Workforce Innovation and Opportunity Act funds 
allocated to Indian and Native American program grantees?

    (a) Except for reserved funds described in paragraph (e) of this 
section and funds used for other program purposes under Sec.  684.260, 
all funds available for WIOA sec. 166(d)(2)(A)(i) comprehensive 
workforce investment services program at the beginning of a program 
year will be allocated to INA program grantees for the geographic 
service area(s) awarded to them through the grant competition.
    (b) Each INA program grantee will receive the sum of the funds 
calculated using the following formula:
    (1) One-quarter of the funds available will be allocated on the 
basis of the number of unemployed American Indian, Alaska Native and 
Native Hawaiian individuals in the grantee's geographic service area(s) 
compared to all such unemployed persons in the United States.
    (2) Three-quarters of the funds available will be allocated on the 
basis of the number of American Indian, Alaska Native and Native 
Hawaiian individuals in poverty in the grantee's geographic service 
area(s) as compared to all such persons in poverty in the United 
States.
    (3) The data and definitions used to implement these formulas are 
provided by the U.S. Bureau of the Census.
    (c) In years immediately following the use of new data in the 
formula described in paragraph (b) of this section, based upon criteria 
to be described in the Funding Opportunity Announcement (FOA), the 
Department may utilize a hold harmless factor to reduce the disruption 
in grantee services which would otherwise result from changes in 
funding levels. This factor will be determined in consultation with the 
grantee community and the Native American Employment and Training 
Council.
    (d) The Department may reallocate funds from one INA program 
grantee to another if a grantee is unable to serve its area for any 
reason, such as audit or debt problems, criminal activity, internal 
(political) strife, failure to adhere to or meet grant terms and 
conditions, or lack of ability or interest. If a grantee has excess 
carry-in for a program year, the Department may also readjust the 
awards granted under the funding formula so that an amount that equals 
the previous program year's carry-in will be allocated to another INA 
program grantee(s).
    (e) The Department may reserve up to one percent of the funds 
appropriated under WIOA sec. 166(d)(2)(A)(i) for any program year for 
technical assistance and training (TAT) purposes. It will consult with 
the Native American Employment and Training Council in planning how the 
TAT funds will be used, designating activities to meet the unique needs 
of the INA communities served by the INA program. Section 166 grantees 
also will have access to resources available to other Department 
programs to the extent permitted under other law.

Subpart C--Services to Customers


Sec.  684.300  Who is eligible to receive services under the Indian and 
Native American program?

    (a) A person is eligible to receive services under the INA program 
if that person is:
    (1) An Indian, as determined by a policy of the INA program 
grantee. The grantee's definition must at least include anyone who is a 
member of a Federally-recognized tribe; or
    (2) An Alaska Native, as defined in WIOA sec. 166(b)(1); or
    (3) A Native Hawaiian, as defined in WIOA sec. 166(b)(3).
    (b) The person also must be any one of the following:
    (1) Unemployed; or
    (2) Underemployed, as defined in Sec.  684.130; or
    (3) A low-income individual, as defined in sec. 3(36) of WIOA; or
    (4) The recipient of a bona fide lay-off notice which has taken 
effect in the last 6 months or will take effect in the following 6-
month period, who is unlikely to return to a previous industry or 
occupation, and who is in need of retraining for either employment with 
another employer or for job retention with the current employer; or
    (5) An individual who is employed, but is determined by the grantee 
to be in need of employment and training services to obtain or retain 
employment that allows for self-sufficiency.
    (c) If applicable, male applicants must also register or be 
registered for the Selective Service.


Sec.  684.310  What are Indian and Native American program grantee 
allowable activities?

    (a) Generally, INA program grantees must make efforts to provide 
employment and training opportunities to eligible individuals (as 
described in Sec.  684.300) who can benefit from, and who are most in 
need of, such opportunities. In addition, INA program grantees must 
make efforts to develop programs that contribute to occupational 
development, upward mobility, development of new careers, and 
opportunities for nontraditional employment (WIOA sec. 194(1)).
    (b) Allowable activities for INA program grantees are any services 
consistent with the purposes of this part that are necessary to meet 
the needs of INAs preparing to enter, reenter, or retain unsubsidized 
employment leading to self-sufficiency (WIOA sec. 166(d)(1)(B)).
    (c) Examples of career services, which may be delivered in 
partnership with the one-stop delivery system, are described in sec. 
134(c)(2) of WIOA and Sec.  678.430.
    (d) Follow-up services, including counseling and supportive 
services for up to 12 months after the date of exit to assist 
participants in obtaining and retaining employment.
    (e) Training services include the activities described in WIOA sec. 
134(c)(3)(D).

[[Page 20896]]

    (f) Allowable activities specifically designed for youth, as listed 
in sec. 129 of WIOA, include:
    (1) Tutoring, study skills training, instruction, and evidence-
based dropout prevention and recovery strategies that lead to 
completion of the requirements for a secondary school diploma or its 
recognized equivalent (including a recognized certificate of attendance 
or similar document for individuals with disabilities) or for a 
recognized post-secondary credential;
    (2) Alternative secondary school services, or dropout recovery 
services, as appropriate;
    (3) Paid and unpaid work experiences that have as a component 
academic and occupational education, which may include:
    (i) Summer employment opportunities and other employment 
opportunities available throughout the school year;
    (ii) Pre-apprenticeship programs;
    (iii) Internships and job shadowing; and
    (iv) On-the-job training opportunities;
    (4) Occupational skill training, which must include priority 
consideration for training programs that lead to recognized post-
secondary credentials that are aligned with in-demand industry sectors 
or occupations in the local area involved;
    (5) Education offered concurrently with and in the same context as 
workforce preparation activities and training for a specific occupation 
or occupational cluster;
    (6) Leadership development opportunities, which may include 
community service and peer-centered activities encouraging 
responsibility and other positive social and civic behaviors, as 
appropriate;
    (7) Supportive services as defined in WIOA sec. 3(59);
    (8) Adult mentoring for the period of participation and a 
subsequent period, for a total of not less than 12 months;
    (9) Follow-up services for not less than 12 months after the 
completion of participation, as appropriate;
    (10) Comprehensive guidance and counseling, which may include drug 
and alcohol abuse counseling and referral, as appropriate;
    (11) Financial literacy education;
    (12) Entrepreneurial skills training;
    (13) Services that provide labor market and employment information 
about in-demand industry sectors or occupations available in the local 
area, such as career awareness, career counseling, and career 
exploration services; and
    (14) Activities that help youth prepare for and transition to post-
secondary education and training.
    (g) In addition, allowable activities include job development and 
employment outreach, including:
    (1) Support of the Tribal Employment Rights Office (TERO) program;
    (2) Negotiation with employers to encourage them to train and hire 
participants;
    (3) Establishment of linkages with other service providers to aid 
program participants;
    (4) Establishment of management training programs to support tribal 
administration or enterprises; and
    (5) Establishment of linkages with remedial education, such as 
Adult Basic Education (ABE), basic literacy training, and English-as-a-
second-language (ESL) training programs, as necessary.
    (h) Participants may be enrolled in more than one activity at a 
time and may be sequentially enrolled in multiple activities.
    (i) Services may be provided to a participant in any sequence based 
on the particular needs of the participant.


Sec.  684.320  Are there any restrictions on allowable activities?

    (a) Training services must be directly linked to an in-demand 
industry sector or occupation in the service area, or in another area 
to which a participant receiving such services is willing to relocate 
(WIOA sec. 134(c)(3)(A)(i)(II)).
    (b) INA grantees must provide On-the-Job Training (OJT) services 
consistent with the definition provided in WIOA sec. 3(44) and other 
limitations in WIOA. Individuals in OJT must:
    (1) Be compensated at the same rates, including periodic increases, 
as trainees or employees who are similarly situated in similar 
occupations by the same employer and who have similar training, 
experience, and skills (WIOA sec. 181(a)(1)); and
    (2) Be provided benefits and working conditions at the same level 
and to the same extent as other trainees or employees working a similar 
length of time and doing the same type of work. (WIOA sec. 181(b)(5))
    (c) In addition, OJT contracts under this title must not be entered 
into with employers who have:
    (1) Received payments under previous contracts under WIOA or the 
Workforce Investment Act of 1998 and have exhibited a pattern of 
failing to provide on-the-job training participants with continued, 
long-term employment as regular employees with wages and employment 
benefits (including health benefits) and working conditions at the same 
level and to the same extent as other employees working a similar 
length of time and doing the same type of work (WIOA sec. 194(4)); or
    (2) Have exhibited a pattern of violating paragraphs (b)(1) and/or 
(2) of this section. (WIOA sec. 194(4)).
    (d) INA program grantees are prohibited from using funds to 
encourage the relocation of a business, as described in WIOA sec. 
181(d) and 20 CFR 683.260.
    (e) INA program grantees must only use WIOA funds for activities 
that are in addition to those that would otherwise be available to the 
INA population in the area in the absence of such funds (WIOA sec. 
194(2)).
    (f) INA program grantees must not spend funds on activities that 
displace currently employed individuals, impair existing contracts for 
services, or in any way affect union organizing.
    (g) Under 20 CFR 683.255, sectarian activities involving WIOA 
financial assistance or participants are limited in accordance with the 
provisions of sec. 188(a)(3) of WIOA.


Sec.  684.330  What is the role of Indian and Native American program 
grantees in the one-stop system?

    (a) In those local workforce investment areas where an INA program 
grantee conducts field operations or provides substantial services, the 
INA program grantee is a required partner in the local one-stop 
delivery system and is subject to the provisions relating to such 
partners described in 20 CFR part 678. Consistent with those 
provisions, a Memorandum of Understanding (MOU) between the INA program 
grantee and the Local Board over the operation of the one-stop 
center(s) in the Local Board's workforce investment area also must be 
executed. Where the Local Board is an alternative entity under 20 CFR 
679.150, the INA program grantee must negotiate with the alternative 
entity on the terms of its MOU and the scope of its on-going role in 
the local workforce investment system, as specified in 20 CFR 
679.410(b)(2). In local areas with a large concentration of potentially 
eligible INA participants, which are in an INA program grantee's 
service area but in which the grantee does not conduct operations or 
provide substantial services, the INA program grantee should encourage 
such individuals to participate in the one-stop system in that area in 
order to receive WIOA services.
    (b) At a minimum, the MOU must contain to the provisions listed in 
WIOA sec. 121(c) and:
    (1) The exchange of information on the services available and 
accessible through the one-stop system and the INA program;
    (2) As necessary to provide referrals and case management services, 
the

[[Page 20897]]

exchange of information on INA participants in the one-stop system and 
the INA program;
    (3) Arrangements for the funding of services provided by the one-
stop(s), consistent with the requirements at 20 CFR 678.425 that no 
expenditures may be made with INA program funds for individuals who are 
not eligible or for services not authorized under this part.
    (c) Where the INA program grantee has failed to enter into a MOU 
with the Local Board, the INA program grantee must describe in its 4-
year plan the good-faith efforts made in order to negotiate an MOU with 
the Local Board.
    (d) Pursuant to WIOA sec. 121(h)(2)(D)(iv), INA program grantees 
will not be subject to the funding of the one-stop infrastructure 
unless otherwise agreed upon in the MOU under subpart C of 20 CFR part 
678.


Sec.  684.340  What policies govern payments to participants, including 
wages, training allowances or stipends, or direct payments for 
supportive services?

    (a) INA program grantees may pay training allowances or stipends to 
participants for their successful participation in and completion of 
education or training services (except such allowance may not be 
provided to participants in OJT). Allowances or stipends may not exceed 
the Federal or State minimum wage, whichever is higher.
    (b) INA program grantees may not pay a participant in a training 
activity when the person fails to participate without good cause.
    (c) If a participant in a WIOA-funded activity, including 
participants in OJT, is involved in an employer-employee relationship, 
that participant must be paid wages and fringe benefits at the same 
rates as trainees or employees who have similar training, experience 
and skills and which are not less than the higher of the applicable 
Federal, State or local minimum wage.
    (d) In accordance with the policy described in the 4-year plan 
submitted as part of the competitive process, INA program grantees may 
pay incentive bonuses to participants who meet or exceed individual 
employability or training goals established in writing in the 
individual employment plan.
    (e) INA program grantees must comply with other restrictions listed 
in WIOA secs. 181 through 195, which apply to all programs funded under 
title I of WIOA, including the provisions on labor standards in WIOA 
sec. 181(b).


Sec.  684.350  What will the Department do to strengthen the capacity 
of Indian and Native American program grantees to deliver effective 
services?

    The Department will provide appropriate technical assistance and 
training (TAT), as necessary, to INA program grantees. This TAT will 
assist INA program grantees to improve program performance and improve 
the quality of services to the target population(s), as resources 
permit. (WIOA sec. 166(i)(5))

Subpart D--Supplemental Youth Services


Sec.  684.400  What is the purpose of the supplemental youth services 
program?

    The purpose of this program is to provide supplemental employment 
and training and related services to low-income INA youth on or near 
Indian reservations and in Oklahoma, Alaska, or Hawaii. (WIOA sec. 
166(d)(2)(A)(ii))


Sec.  684.410  What entities are eligible to receive supplemental youth 
services funding?

    Entities eligible to receive supplemental youth services funding 
are limited to Federally-recognized tribes that have a land base in 
which they have legal jurisdiction such as an Indian reservation, 
Oklahoma Tribal Service Area (OTSA), Alaska Native Village Service Area 
(ANVSA) etc., and Native Hawaiian organizations in the State of Hawaii. 
American Indian, Alaskan Native -controlled non-profit organizations 
may receive youth funding if they are providing services to an area 
where the Indian tribe or Alaska Native entity has legal jurisdiction 
on behalf of the tribe or entity with legal jurisdiction.


Sec.  684.420  What are the planning requirements for receiving 
supplemental youth services funding?

    Applicants eligible to apply for supplemental youth funding must 
describe the supplemental youth services they intend to provide in the 
4-year plan that they will submit as part of the competitive 
application process. The information on youth services will be 
incorporated into the overall 4-year plan, which is more fully 
described in Sec. Sec.  684.700 and 684.710, and is required for both 
adult and youth funds. As indicated in Sec.  684.710(c), additional 
planning information required for applicants requesting supplemental 
youth funding will be provided in the FOA. The Department envisions 
that the strategy for youth funds will not be extensive; however, 
grantees will be required to provide the number of youth it plans to 
serve and projected performance outcomes. The Department also supports 
youth activities that preserve INA culture and will support strategies 
that promote INA values.


Sec.  684.430  What individuals are eligible to receive supplemental 
youth services?

    (a) Participants in supplemental youth services activities must be;
    (1) American Indian, Alaska Native or Native Hawaiian as determined 
by the INA program grantee according to Sec.  684.300(a);
    (2) Between the age of 14 and 24; and
    (3) A low-income individual as defined at WIOA sec. 3(36) except up 
to five percent of the participants during a program year in an INA 
youth program may not be low-income individuals provided they meet the 
eligibility requirements of paragraphs (a)(1) and (2) of this section.
    (b) For the purpose of this section, the term ``low-income'', used 
with respect to an individual, also includes a youth living in a high-
poverty area. (WIOA sec.129(a)(2))


Sec.  684.440  How is funding for supplemental youth services 
determined?

    (a) Supplemental youth funding will be allocated to eligible INA 
program grantees on the basis of the relative number of INA youth 
between the ages of 14 and 24 living in poverty in the grantee's 
geographic service area compared to the number of INA youth between the 
ages of 14 and 24 living in poverty in in all eligible geographic 
service areas. The Department reserves the right to redefine the 
supplemental youth funding stream in future program years, in 
consultation with the Native American Employment and Training Council, 
as program experience warrants and as appropriate data become 
available.
    (b) The data used to implement this formula are provided by the 
U.S. Bureau of the Census.
    (c) The hold harmless factor described in Sec.  684.270(c) also 
applies to supplemental youth services funding. This factor also will 
be determined in consultation with the grantee community and the Native 
American Employment and Training Council.
    (d) The reallocation provisions of Sec.  684.270(d) also apply to 
supplemental youth services funding.
    (e) Any supplemental youth services funds not allotted to a grantee 
or refused by a grantee may be used for the purposes outlined in Sec.  
684.270(e), as described in Sec.  684.260. Any such funds are in 
addition to, and not subject to the limitations on, amounts reserved 
under Sec.  684.270(e).

[[Page 20898]]

Sec.  684.450  How will supplemental youth services be provided?

    (a) INA program grantees may offer supplemental services to youth 
throughout the school year, during the summer vacation, and/or during 
other breaks during the school year at their discretion;
    (b) The Department encourages INA program grantees to work with 
local educational agencies to provide academic credit for youth 
activities whenever possible;
    (c) INA program grantees may provide participating youth with the 
activities referenced in Sec.  684.310(e).


Sec.  684.460  What performance measures are applicable to the 
supplemental youth services program?

    (a) Pursuant to WIOA secs. 166(e)(5) and 166(h), the performance 
measures at WIOA sec. 116(b)(2)(A)(ii) apply to the INA youth program 
which must include:
    (1) The percentage of program participants who are in education or 
training activities, or in unsubsidized employment, during the second 
quarter after exit from the program;
    (2) The percentage of program participants who are in education or 
training activities, or in unsubsidized employment, during the fourth 
quarter after exit from the program;
    (3) The median earnings of program participants who are in 
unsubsidized employment during the second quarter after exit from the 
program;
    (4) The percentage of program participants who obtain a recognized 
post-secondary credential, or a secondary school diploma or its 
recognized equivalent (subject to WIOA sec. 116(b)(2)(A)(iii)) during 
participation in or within 1 year after exit from the program;
    (5) The percentage of program participants who, during a program 
year, are in an education or training program that leads to a 
recognized post-secondary credential or employment and who are 
achieving measurable skill gains toward such a credential or 
employment;
    (6) The indicators of effectiveness in serving employers 
established under WIOA sec. 116(b)(2)(A)(iv).
    (b) In addition to the performance measures indicated in paragraphs 
(a)(1) through (6) of this section, the Secretary, in consultation with 
the Native American Employment and Training Council, must develop a set 
of performance indicators and standards that is in addition to the 
primary indicators of performance that are applicable to the INA 
program under this section.

Subpart E--Services to Communities


Sec.  684.500  What services may Indian and Native American grantees 
provide to or for employers under the WIOA?

    (a) INA program grantees may provide a variety of services to 
employers in their areas. These services may include:
    (1) Workforce planning which involves the recruitment of current or 
potential program participants, including job restructuring services;
    (2) Recruitment and assessment of potential employees, with 
priority given to potential employees who are or who might become 
eligible for program services;
    (3) Pre-employment training;
    (4) Customized training;
    (5) On-the-Job training (OJT);
    (6) Post-employment services, including training and support 
services to encourage job retention and upgrading;
    (7) Work experience for public or private sector work sites;
    (8) Other innovative forms of worksite training.
    (b) In addition to the services listed in paragraph (a) of this 
section, other grantee-determined services (as described in the 
grantee's 4-year plan), which are intended to assist eligible 
participants to obtain or retain employment may also be provided to or 
for employers.


Sec.  684.510  What services may Indian and Native American grantees 
provide to the community at large under the WIOA?

    (a) INA program grantees may provide services to the INA 
communities in their service areas by engaging in program development 
and service delivery activities which:
    (1) Strengthen the capacity of Indian-controlled institutions to 
provide education and work-based learning services to INA youth and 
adults, whether directly or through other INA institutions such as 
tribal colleges;
    (2) Increase the community's capacity to deliver supportive 
services, such as child care, transportation, housing, health, and 
similar services needed by clients to obtain and retain employment;
    (3) Use program participants engaged in education, training, work 
experience, or similar activities to further the economic and social 
development of INA communities in accordance with the goals and values 
of those communities; and
    (4) Engage in other community-building activities described in the 
INA grantee's 4-year plan.
    (b) INA grantees program should develop their 4-year plan in 
conjunction with, and in support of, strategic tribal planning and 
community development goals.


Sec.  684.520  Must Indian and Native American program grantees give 
preference to Indian and Native American entities in the selection of 
contractors or service providers?

    Yes, INA program grantees must give as much preference as possible 
to Indian organizations and to Indian-owned economic enterprises, as 
defined in sec. 3 of the Indian Financing Act of 1974 (25 U.S.C. 1452), 
when awarding any contract or subgrant.


Sec.  684.530  What rules govern the issuance of contracts and/or 
subgrants?

    In general, INA program grantees must follow the rules of Uniform 
administrative requirements, Cost Principles, & Audit Requirements for 
Federal Awards when awarding contracts and/or subgrants under WIA sec. 
166. These requirements are codified at 2 CFR part 200 subpart E. 
Common rules implementing those circulars are codified for Department-
funded programs at 29 CFR part 97 (A-102) or 29 CFR part 95 (A-110), 
and covered in WIA regulations at 20 CFR 683.200. These rules do not 
apply to OJT contract awards.

Subpart F--Accountability for Services and Expenditures


Sec.  684.600  To whom is the Indian and Native American program 
grantee accountable for the provision of services and the expenditure 
of Indian and Native American funds?

    (a) The INA program grantee is responsible to the INA community to 
be served by INA funds.
    (b) The INA program grantee is also responsible to the Department 
of Labor, which is charged by law with ensuring that all WIOA funds are 
expended:
    (1) According to applicable laws and regulations;
    (2) For the benefit of the identified INA client group; and
    (3) For the purposes approved in the grantee's plan and signed 
grant document.


Sec.  684.610  How is this accountability documented and fulfilled?

    (a) Each INA program grantee must establish its own internal 
policies and procedures to ensure accountability to the INA program 
grantee's governing body, as the representative of the INA 
community(ies) served by the INA program. At a minimum, these policies 
and procedures must provide a system for governing body review and 
oversight of program plans and measures and standards for program 
performance.

[[Page 20899]]

    (b) Accountability to the Department is accomplished in part 
through on-site program reviews (monitoring), which strengthen the INA 
program grantee's capability to deliver effective services and protect 
the integrity of Federal funds.
    (c) In addition to audit information, as described at Sec.  684.860 
and program reviews, accountability to the Department is documented and 
fulfilled by the submission of quarterly financial and program reports, 
and compliance with the terms and conditions of the grant award.


Sec.  684.620  What performance measures are in place for the Indian 
and Native American program?

    (a) Pursuant to WIOA secs. 166(e)(5) and 166(h), the performance 
measures at WIOA sec. 116(b)(2)(A)(i) apply to the INA program which 
must include:
    (1) The percentage of program participants who are in unsubsidized 
employment during the second quarter after exit from the program;
    (2) The percentage of program participants who are in unsubsidized 
employment during the fourth quarter after exit from the program;
    (3) The median earnings of program participants who are in 
unsubsidized employment during the second quarter after exit from the 
program;
    (4) The percentage of program participants who obtain a recognized 
post-secondary credential, or a secondary school diploma or its 
recognized equivalent (subject to WIOA sec. 116(b)(2)(A)(iii)) during 
participation in or within 1 year after exit from the program;
    (5) The percentage of program participants who, during a program 
year, are in an education or training program that leads to a 
recognized post-secondary credential or employment and who are 
achieving measurable skill gains toward such a credential or 
employment; and
    (6) The indicators of effectiveness in serving employers 
established under WIOA sec. 116(b)(2)(A)(iv).
    (b) In addition to the performance measures at WIOA sec. 
116(b)(2)(A)(i), the Department, in consultation with the Native 
American Employment and Training Council, must develop a set of 
performance indicators and standards that are applicable to the INA 
program.


Sec.  684.630  What are the requirements for preventing fraud and abuse 
under the WIOA?

    (a) INA program grantees must establish such fiscal control and 
fund accounting procedures as may be necessary to assure the proper 
disbursal of, and accounting for, Federal funds. Such procedures must 
ensure that all financial transactions are conducted and records 
maintained in accordance with generally accepted accounting principles.
    (b) Each INA program grantee must have rules to prevent conflict of 
interest by its governing body. These conflict of interest rules must 
include a rule prohibiting any member of any governing body or council 
associated with the INA program grantee from voting on any matter which 
would provide a direct financial benefit to that member, or to a member 
of his or her immediate family, in accordance with 20 CFR 683.200(a)(4) 
and 2 CFR 200 and 2900.
    (c) Officers or agents of the INA program grantee must not solicit 
or personally accept gratuities, favors, or anything of monetary value 
from any actual or potential contractor, subgrantee, vendor or 
participant. This rule must also apply to officers or agents of the 
grantee's contractors and/or subgrantees. This prohibition does not 
apply to:
    (1) Any rebate, discount or similar incentive provided by a vendor 
to its customers as a regular feature of its business;
    (2) Items of nominal monetary value distributed consistent with the 
cultural practices of the INA community served by the grantee.
    (d) No person who selects program participants or authorizes the 
services provided to them may select or authorize services to any 
participant who is such a person's spouse, parent, sibling, or child 
unless:
    (1)(i) The participant involved is a low-income individual; or
    (ii) The community in which the participant resides has a 
population of less than 1,000 INAs combined; and
    (2) The INA program grantee has adopted and implemented the policy 
described in the 4-year plan to prevent favoritism on behalf of such 
relatives.
    (e) INA program grantees are subject to the provisions of 41 U.S.C. 
8702 relating to kickbacks.
    (f) No assistance provided under this Act may involve political 
activities (WIOA sec. 194(6)).
    (g) INA program grantees must comply with the restrictions on 
lobbying activities pursuant to sec. 195 of WIOA and the restrictions 
on lobbying codified in the Department regulations at 29 CFR part 93.
    (h) The provisions of 18 U.S.C. 665 and 666 prohibiting 
embezzlement apply to programs under WIOA.
    (i) Recipients of financial assistance under WIOA sec. 166 are 
prohibited from discriminatory practices as outlined at WIOA sec. 188, 
and the regulations implementing WIA sec. 188, at 29 CFR part 37. 
However, this does not affect the legal requirement that all INA 
participants be INAs. Also, INA program grantees are not obligated to 
serve populations outside the geographic boundaries for which they 
receive funds. However, INA program grantees are not precluded from 
serving eligible individuals outside their geographic boundaries if the 
INA program grantee chooses to do so.


Sec.  684.640  What grievance systems must an Indian and Native 
American program granteeprovide?

    INA program grantees must establish grievance procedures consistent 
with the requirements of WIOA sec. 181(c) and 20 CFR 683.600.


Sec.  684.650  Can Indian and Native American grantees exclude segments 
of the eligible population?

    (a) No, INA program grantees cannot exclude segments of the 
eligible population except as otherwise provided in this part. INA 
program grantees must document in their 4-year plan that a system is in 
place to afford all members of the eligible population within the 
service area for which the grantee was designated an equitable 
opportunity to receive WIOA services and activities.
    (b) Nothing in this section restricts the ability of INA program 
grantees to target subgroups of the eligible population (for example, 
the disabled, substance abusers, TANF recipients, or similar 
categories), as outlined in an approved 4-year plan. However, it is 
unlawful to target services to subgroups on grounds prohibited by WIOA 
sec. 188 and 29 CFR part 37, including tribal affiliation (which is 
considered national origin). Outreach efforts, on the other hand, may 
be targeted to any subgroups.

Subpart G--Section 166 Planning/Funding Process


Sec.  684.700  What is the process for submitting a 4-year plan?

    Every 4 years, INA program grantees must submit a 4-year strategy 
for meeting the needs of INAs in accordance with WIOA sec. 166(e). This 
plan will be part of, and incorporated with, the 4-year competitive 
process described in WIOA sec. 166(c) and Sec.  684.220. Accordingly, 
specific requirements for the submission of a 4-year plan will be 
provided in a Funding Opportunity Announcement (FOA) and will include 
the information described at Sec.  684.710.

[[Page 20900]]

Sec.  684.710  What information must be included in the 4-year plans as 
part of the competitive application?

    (a) The 4-year plan, which will be submitted as part of the 
competitive process, must include the information required at WIOA 
secs. 166(e)(2)-(5) which are:
    (1) The population to be served;
    (2) The education and employment needs of the population to be 
served and the manner in which the activities to be provided will 
strengthen the ability of the individuals served to obtain or retain 
unsubsidized employment leading to self-sufficiency;
    (3) A description of the activities to be provided and the manner 
in which such activities are to be integrated with other appropriate 
activities; and
    (4) A description of the performance measures and expected levels 
of performance.
    (b) The 4-year plan must also include any additional information 
requested in the FOA.
    (c) INA program grantees receiving supplemental youth funds will be 
required to provide additional information (at a minimum the number of 
youth it plans to serve and the projected performance outcomes) in the 
4-year plan that describes a strategy for serving low-income, INA 
youth. Additional information required for supplemental youth funding 
will be identified in the FOA.


Sec.  684.720  When must the 4-year plan be submitted?

    The 4-year plans will be submitted as part of the competitive FOA 
process described at Sec.  684.220. Accordingly, the due date for the 
submission of the 4-year plan will be specified in the FOA.


Sec.  684.730  How will the Department review and approve such plans?

    (a) It is the Department's intent to approve a grantee's 4-year 
strategic plan before the date on which funds for the program become 
available unless:
    (1) The planning documents do not contain the information specified 
in the regulations in this part and/or the FOA; or
    (2) The services which the INA program grantee proposes are not 
permitted under WIOA or applicable regulations.
    (b) After competitive grant selections have been made, the DINAP 
office will assist INA grantees in resolving any outstanding issues 
with the 4-year plan. However, the Department may delay funding to 
grantees until all issues have been resolved. If the issues with the 
application of an incumbent grantee cannot be solved, the Department 
will reallocate funds from the grantee to other grantees that have an 
approved 4-year plan. The Grant Officer may delay executing a grant 
agreement and obligating funds to an entity selected through the 
competitive process until all the required documents--including the 4-
year plan--are in place and satisfactory.
    (c) The Department may approve a portion of the plan and disapprove 
other portions.
    (d) The grantee also has the right to appeal a nonselection 
decision or a decision by the Department to deny or reallocate funds 
based on unresolved issues with the applicant's application or 4-year 
plan. Such an appeal would go to the Office of the Administrative Law 
Judges under procedures at 20 CFR 683.800 or 683.840 in the case of a 
nonelection.


Sec.  684.740  Under what circumstances can the Department or the 
Indian and Native American grantee modify the terms of the grantee's 
plan(s)?

    (a) The Department may unilaterally modify the INA program 
grantee's plan to add funds or, if required by Congressional action, to 
reduce the amount of funds available for expenditure.
    (b) The INA grantee may request approval to modify its plan to add, 
expand, delete, or diminish any service allowable under the regulations 
in this part. The INA grantee may modify its plan without our approval, 
unless the modification reduces the total number of participants to be 
served annually under the grantee's program by a number which exceeds 
25 percent of the participants previously proposed to be served, or by 
25 participants, whichever is larger.

Subpart H--Administrative Requirements


Sec.  684.800  What systems must an Indian and Native American program 
grantee have in place to administer an Indian and Native American 
program?

    (a) Each INA program grantee must have a written system describing 
the procedures the grantee uses for:
    (1) The hiring and management of personnel paid with program funds;
    (2) The acquisition and management of property purchased with 
program funds;
    (3) Financial management practices;
    (4) A participant grievance system which meets the requirements in 
sec. 181(c) of WIOA and 20 CFR 683.600; and
    (5) A participant records system.
    (b) Participant records systems must include:
    (1) A written or computerized record containing all the information 
used to determine the person's eligibility to receive program services;
    (2) The participant's signature certifying that all the eligibility 
information he or she provided is true to the best of his/her 
knowledge; and
    (3) The information necessary to comply with all program reporting 
requirements.


Sec.  684.810  What types of costs are allowable expenditures under the 
Indian and Native American program?

    Rules relating to allowable costs under WIOA are covered in 20 CFR 
683.200 through 683.215.


Sec.  684.820  What rules apply to administrative costs under the 
Indian and Native American program?

    The definition and treatment of administrative costs are covered in 
20 CFR 683.205(b) and 683.215.


Sec.  684.830  Does the Workforce Innovation and Opportunity Act 
administrative cost limit for States and local areas apply to WIOA 
grants?

    No, under 20 CFR 683.205(b), limits on administrative costs for 
sec. 166 grants will be negotiated with the grantee and identified in 
the grant award document.


Sec.  684.840  How should Indian and Native American program grantees 
classify costs?

    Cost classification is covered in the WIOA regulations at 20 CFR 
683.200 through 683.215. For purposes of the INA program, program costs 
also include costs associated with other activities such as Tribal 
Employment Rights Office (TERO), and supportive services, as defined in 
WIOA sec. 3(59).


Sec.  684.850  What cost principles apply to Indian and Native American 
funds?

    The cost principles at 2 CFR 200 subpart E of the Uniform 
Administrative Requirements, Cost Principles, & Audit Requirements for 
Federal Awards published December 26, 2013 apply to INA program 
grantees.


Sec.  684.860  What audit requirements apply to Indian and Native 
American grants?

    (a) WIOA sec. 166 grantees must follow the audit requirements at 2 
CFR 200 subpart F of the Uniform Administrative Requirements, Cost 
Principles, & Audit Requirements for Federal Awards published December 
26, 2013.
    (b) Grants made and contracts and cooperative agreements entered 
into under sec. 166 of WIOA are subject to the requirements of chapter 
75 of subtitle V of title 31, United States Code, and charging of costs 
under this

[[Page 20901]]

section are subject to appropriate circulars issued by the Office of 
Management and Budget (WIOA, sec. 166(j)).


Sec.  684.870  What is ``program income'' and how is it regulated in 
the Indian and Native American program?

    (a) Program income is regulated by WIOA sec. 194(7)(A), 20 CFR 
683.200(a)(5), and the applicable rules in 2 CFR parts 200 and 2900,
    (b) For grants made under this part, program income does not 
include income generated by the work of a work experience participant 
in an enterprise, including an enterprise owned by an INA entity, 
whether in the public or private sector.
    (c) Program income does not include income generated by the work of 
an OJT participant in an establishment under paragraph (b) of this 
section.

Subpart I--Miscellaneous Program Provisions


Sec.  684.900  Does the Workforce Innovation and Opportunity Act 
provide regulatory and/or statutory waiver authority?

    Yes, WIOA sec. 166(i)(3) permits waivers of any statutory or 
regulatory requirement of title I of WIOA that are inconsistent with 
the specific needs of the INA grantee (except for the areas cited in 
Sec.  684.920). Such waivers may include those necessary to facilitate 
WIOA support of long-term community development goals.


Sec.  684.910  What information is required in a waiver request?

    (a) To request a waiver, an INA program grantee must submit a 
waiver request indicating how the waiver will improve the grantee's 
WIOA program activities which must include the items specified at WIOA 
secs. 189(i)(3)(B)(i)-(v).
    (b) A waiver may be requested at the beginning of a 4-year grant 
award cycle or anytime during a 4-year award cycle. However, all 
waivers expire at the end of the 4-year award cycle. INA program 
grantees seeking to continue an existing waiver in a new 4-year grant 
cycle must submit a new waiver request in accordance with Sec.  
684.910(a). This requirement also applies to grants transferred under 
Public Law 102-477.


Sec.  684.920  What provisions of law or regulations may not be waived?

    Requirements relating to:
    (a) Wage and labor standards;
    (b) Worker rights;
    (c) Participation and protection of workers and participants;
    (d) Grievance procedures;
    (e) Judicial review;
    (f) Non-discrimination may not be waived.


Sec.  684.930  May Indian and Native American program grantees combine 
or consolidate their employment and training funds?

    Yes. INA program grantees may consolidate their employment and 
training funds under WIOA with assistance received from related 
programs in accordance with the provisions of the Public Law 102-477, 
the Indian Employment, Training, and Related Services Demonstration Act 
of 1992, as amended by Public Law 106-568, the Omnibus Indian 
Advancement Act of 2000 (25 U.S.C. 3401 et seq.). WIOA funds 
consolidated under Public Law 102-477 are administered by Department of 
Interior (DOI). Accordingly, the administrative oversight for funds 
transferred to DOI, including the reporting of financial expenditures 
and program outcomes are the responsibility of the DOI. However, the 
Department of Labor must review the initial 477 plan and ensure that 
all Departmental programmatic and financial obligations have been met 
before WIOA funds are approved to be transferred to DOI and 
consolidated with other related programs. The initial plan must meet 
the statutory requirements of WIOA. After approval of the initial plan, 
all subsequent plans that are renewed or updated from the initial plan 
may be approved by the Department of Interior without further review by 
the Department.


Sec.  684.940  What is the role of the Native American Employment and 
Training Council?

    The Native American Employment and Training Council is a body 
composed of representatives of the grantee community which advises the 
Secretary on the operation and administration of the INA employment and 
training program. WIOA sec. 166(i)(4) continues the Council essentially 
as it is currently constituted. The Department continues to support the 
Council.


Sec.  684.950  Does the Workforce Innovation and Opportunity Act 
provide any additional assistance to unique populations in Alaska and 
Hawaii?

    Yes. Notwithstanding any other provision of law, the Secretary is 
authorized to award grants, on a competitive basis, to entities with 
demonstrated experience and expertise in developing and implementing 
programs for the unique populations who reside in Alaska or Hawaii, 
including public and private nonprofit organizations, tribal 
organizations, American Indian tribal colleges or universities, 
institutions of higher education, or consortia of such organizations or 
institutions, to improve job training and workforce investment 
activities for such unique populations. (WIOA, sec. 166(k))
0
12. Add part 685 to read as follows:

PART 685--NATIONAL FARMWORKER JOBS PROGRAM UNDER TITLE I OF THE 
WORKFORCE INNOVATION AND OPPORTUNITY ACT

Subpart A--Purpose and Definitions
Sec.
685.100 What is the purpose of the National Farmworker Jobs Program 
and the other services and activities established under the 
Workforce Innovation and Opportunity Act?
685.110 What definitions apply to this program?
685.120 How does the Department administer the National Farmworker 
Jobs Program?
685.130 How does the Department assist grantees to serve eligible 
migrant and seasonal farmworkers?
685.140 What Workforce Innovation and Opportunity Act regulations 
apply to the programs authorized under the Workforce Innovation and 
Opportunity Act?
Subpart B--The Service Delivery System for the National Farmworker Jobs 
Program
685.200 Who is eligible to receive a National Farmworker Jobs 
Program grant?
685.210 How does an eligible entity become a grantee?
685.220 What is the role of the grantee in the one-stop delivery 
system?
685.230 Can a grantee's designation be terminated?
685.240 How does the Department use funds appropriated under the 
Workforce Innovation and Opportunity Act for the National Farmworker 
Jobs Program?
Subpart C--The National Farmworker Jobs Program Services to Eligible 
Migrant and Seasonal Farmworkers
685.300 What are the general responsibilities of grantees?
685.310 What are the basic components of an National Farmworker Jobs 
Program service delivery strategy?
685.320 Who is eligible to receive services under the National 
Farmworker Jobs Program?
685.330 How are services delivered to eligible migrant and seasonal 
farmworkers?
685.340 What career services must grantees provide to eligible 
migrant and seasonal farmworkers?
685.350 What training services must grantees provide to eligible 
migrant and seasonal farmworkers?
685.360 What housing services must grantees provide to eligible 
migrant and seasonal farmworkers?
685.370 What services may grantees provide to eligible migrant and 
seasonal

[[Page 20902]]

farmworkers youth participants aged 14-24?
685.380 What related assistance services may be provided to eligible 
migrant and seasonal farmworkers?
685.390 When may eligible migrant and seasonal farmworkers receive 
related assistance?
Subpart D--Performance Accountability, Planning, and Waiver Provisions
685.400 What are the indicators of performance that apply to the 
National Farmworker Jobs Program?
685.410 What planning documents must a grantee submit?
685.420 What information is required in the grantee program plan?
685.430 Under what circumstances are the terms of the grantee's 
program plan modified by the grantee or the Department?
685.440 How are costs classified under the National Farmworker Jobs 
Program?
685.450 What is the Workforce Innovation and Opportunity Act 
administrative cost limit for National Farmworker Jobs Program 
grants?
685.460 Are there regulatory and/or statutory waiver provisions that 
apply to the Workforce Innovation and Opportunity Act?
685.470 How can grantees request a waiver?
Subpart E--Supplemental Youth Workforce Investment Activity Funding 
Under the Workforce Innovation and Opportunity Act
685.500 What is supplemental youth workforce investment activity 
funding?
685.510 What requirements apply to grants funded by the Workforce 
Innovation and Opportunity Act?
685.520 What is the application process for obtaining a grant funded 
by the Workforce Innovation and Opportunity Act?
685.530 What planning documents are required for grants funded by 
the Workforce Innovation and Opportunity Act?
685.540 How are funds allocated to grants funded by the Workforce 
Innovation and Opportunity Act?
685.550 Who is eligible to receive services through grants funded by 
the Workforce Innovation and Opportunity Act?

    Authority:  Secs. 167, 189, 503, Pub. L. 113-128, 128 Stat. 1425 
(Jul. 22, 2014).

Subpart A--Purpose and Definitions


Sec.  685.100  What is the purpose of the National Farmworker Jobs 
Program and the other services and activities established under the 
Workforce Innovation and Opportunity Act?

    The purpose of the NFJP and the other services and activities 
established under WIOA sec. 167 is to strengthen the ability of 
eligible migrant and seasonal farmworkers (MSFWs) and their dependents 
to obtain or retain unsubsidized employment, stabilize their 
unsubsidized employment and achieve economic self-sufficiency, 
including upgraded employment in agriculture. This part provides the 
regulatory requirements applicable to the expenditure of WIOA secs. 167 
and 127(a)(1) funds for such programs, services and activities.


Sec.  685.110  What definitions apply to this program?

    In addition to the definitions found in 20 CFR 675.300, the 
following definitions apply to programs under this part:
    Allowances means direct payments made to participants during their 
enrollment to enable them to participate in the career services 
described in WIOA sec. 134(c)(2)(A)(xii) or training services as 
appropriate.
    Dependent means an individual who:
    (1) Was claimed as a dependent on the eligible MSFW's Federal 
income tax return for the previous year; or
    (2) Is the spouse of the eligible MSFW; or
    (3) If not claimed as a dependent for Federal income tax purposes, 
is able to establish:
    (i) A relationship as the eligible MSFW's;
    (A) Child, grandchild, great grandchild, including legally adopted 
children;
    (B) Stepchild;
    (C) Brother, sister, half-brother, half-sister, stepbrother, or 
stepsister;
    (D) Parent, grandparent, or other direct ancestor but not foster 
parent;
    (E) Foster child;
    (F) Stepfather or stepmother;
    (G) Uncle or aunt;
    (H) Niece or nephew;
    (I) Father-in-law, mother-in-law, son-in-law; or
    (J) Daughter-in-law, brother-in-law, or sister-in-law; and
    (ii) The receipt of over half of his/her total support from the 
eligible MSFW's family during the eligibility determination period.
    Eligibility determination period means any consecutive 12-month 
period within the 24-month period immediately preceding the date of 
application for the MSFW program by the applicant MSFW.
    Eligible migrant farmworker means an eligible seasonal farmworker 
as defined in WIOA sec. 167(i)(3) whose agricultural labor requires 
travel to a job site such that the farmworker is unable to return to a 
permanent place of residence within the same day; and dependents of the 
migrant farmworker, as described in WIOA 167(i)(2).
    Eligible migrant and seasonal farmworker means an eligible migrant 
farmworker or an eligible seasonal farmworker, also referred to in this 
regulation as an ``eligible MSFW,'' as defined in WIOA sec. 167(i).
    Eligible MSFW youth means an eligible MSFW aged 14-24 who is 
individually eligible or is a dependent of an eligible MSFW. The term 
eligible MSFW youth is a subset of the term eligible MSFW defined in 
this section.
    Eligible seasonal farmworker means a low-income individual who for 
12 consecutive months out of the 24 months prior to application for the 
program involved, has been primarily employed in agricultural or fish 
farming labor that is characterized by chronic unemployment or 
underemployment; and faces multiple barriers to economic self-
sufficiency; and dependents of the seasonal farmworker as described in 
WIOA 167(i)(3).
    Emergency assistance is a form of ``related assistance'' and means 
assistance that addresses immediate needs of eligible MSFWs and their 
dependents, provided by grantees. An applicant's self-certification is 
accepted as sufficient documentation of eligibility for emergency 
assistance.
    Family, for the purpose of reporting housing assistance grantee 
indicators of performance as described in in Sec.  685.400, means the 
eligible MSFW(s) and all the individuals identified under the 
definition of dependent in this section who are living together in one 
physical residence.
    Farmwork means work while employed in the occupations described in 
20 CFR 651.10.
    Grantee means an entity to which the Department directly awards a 
WIOA grant to carry out programs to serve eligible MSFWs in a service 
area, with funds made available under WIOA sec. 167 or 127(a)(1).
    Housing assistance means housing-related services provided to 
eligible MSFWs.
    Lower living standard income level means the income level as 
defined in WIOA sec. 3(36)(B).
    Low-income individual means an individual as defined in WIOA sec. 
3(36)(A).
    MOU means Memorandum of Understanding.
    National Farmworker Jobs Program (NFJP) is the Department of Labor-
administered workforce investment program for eligible MSFWs 
established by WIOA sec. 167 as a required partner of the one-stop 
system and includes both career services and training grants, and 
housing grants.
    Recognized post-secondary credential means a credential as defined 
in WIOA sec. 3(52).
    Related assistance means short-term forms of direct assistance 
designed to

[[Page 20903]]

assist eligible MSFWs retain or stabilize their agricultural 
employment. Examples of related assistance may include, but are not 
limited to, services such as transportation assistance or providing 
work clothing.
    Self-certification means an eligible MSFW's signed attestation that 
the information he/she submits to demonstrate eligibility for the NFJP 
is true and accurate.
    Service area means the geographical jurisdiction, which may be 
comprised of one or more designated State or sub-State areas, in which 
a WIOA sec. 167 grantee is designated to operate.
    Technical assistance means the guidance provided to grantees and 
grantee staff by the Department to improve the quality of the program 
and the delivery of program services to eligible MSFWs.


Sec.  685.120  How does the Department administer the National 
Farmworker Jobs Program?

    The Department's Employment and Training Administration (ETA) 
administers NFJP activities required under WIOA sec. 167 for eligible 
MSFWs. As described in Sec.  685.210, the Department designates 
grantees using procedures consistent with standard Federal government 
competitive procedures.


Sec.  685.130  How does the Department assist grantees to serve 
eligible migrant and seasonal farmworkers?

    The Department provides guidance, administrative support, technical 
assistance, and training to grantees for the purposes of program 
implementation, and program performance management to enhance services 
and promote continuous improvement in the employment outcomes of 
eligible MSFWs.


Sec.  685.140  What regulations apply to the programs authorized under 
the Workforce Innovation and Opportunity Act?

    The regulations that apply to programs authorized under WIOA sec. 
167 are:
    (a) The regulations found in this part;
    (b) The general administrative requirements found in 20 CFR part 
683, including the regulations concerning Complaints, Investigations 
and Hearings found at 20 CFR part 683, subpart D through subpart H, 
which cover programs under WIOA sec. 167;
    (c) Uniform Guidance at 2 CFR part 200 and the Department's 
exceptions at 2 CFR part 2900 pursuant to the effective dates in 2 CFR 
part 200 and 2 CFR part 2900;
    (d) The regulations on partnership responsibilities contained in 20 
CFR parts 679 (Statewide and Local Governance) and 678 (the One-Stop 
System); and
    (e) The Department's regulations at 29 CFR part 37, which implement 
the nondiscrimination provisions of WIOA sec. 188.

Subpart B--The Service Delivery System for the National Farmworker 
Jobs Program


Sec.  685.200  Who is eligible to receive a National Farmworker Jobs 
Program grant?

    To be eligible to receive a grant under this section, an entity 
must have:
    (a) An understanding of the problems of eligible MSFWs;
    (b) A familiarity with the agricultural industries and the labor 
market needs of the proposed service area;
    (c) The ability to demonstrate a capacity to administer and deliver 
effectively a diversified program of workforce investment activities, 
including youth workforce investment activities, and related assistance 
for eligible MSFWs.


Sec.  685.210  How does an eligible entity become a grantee?

    To become a grantee and receive a grant under this subpart, an 
applicant must respond to a Funding Opportunity Announcement (FOA). 
Under the FOA, grantees will be selected using standard Federal 
government competitive procedures. The entity's proposal must include a 
program plan, which is a 4-year strategy for meeting the needs of 
eligible MSFWs in the proposed service area, and a description of the 
entities experience working with the broader workforce delivery system. 
Unless specified otherwise in the FOA, grantees may serve eligible 
MSFWs, including eligible MSFW youth, under the grant. An applicant 
whose application for funding as a grantee under this section is denied 
in whole or in part may request an administrative review under 20 CFR 
683.800.


Sec.  685.220  What is the role of the grantee in the one-stop delivery 
system?

    In those local workforce investment areas where the grantee 
operates its NFJP as described in its grant agreement, the grantee is a 
required one-stop partner, and is subject to the provisions relating to 
such partners described in 20 CFR part 678. Consistent with those 
provisions, the grantee and Local Workforce Development Board must 
develop and enter into an MOU which meets the requirements of 20 CFR 
678.500, and which sets forth their respective responsibilities for 
providing access to the full range of NFJP services through the one-
stop system to eligible MSFWs.


Sec.  685.230  Can a grantee's designation be terminated?

    Yes, a grantee's designation may be terminated by the Department 
for cause: (a) in emergency circumstances when such action is necessary 
to protect the integrity of Federal funds or to ensure the proper 
operation of the program. Any grantee so terminated will be provided 
with written notice and an opportunity for a hearing within 30 days 
after the termination (WIOA sec. 184(e)); or (b) by the Department's 
Grant Officer, if the recipient materially fails to comply with the 
terms and conditions of the award. In such a case, the Grant Officer 
will follow the administrative regulations at 20 CFR 683.440.


Sec.  685.240  How does the Department use funds appropriated under the 
Workforce Innovation and Opportunity Act for the National Farmworker 
Jobs Program?

    At least 99 percent of the funds appropriated each year for WIOA 
sec. 167 activities must be allocated to service areas, based on the 
distribution of the eligible MSFW population determined under a formula 
established by the Secretary. The Department will use a percentage of 
the funds allocated for State service areas for housing grants, 
specified in a FOA issued by the Department. The Department will use up 
to one percent of the appropriated funds for discretionary purposes, 
such as technical assistance to eligible entities and other activities 
prescribed by the Secretary.

Subpart C--The National Farmworker Jobs Program Services to 
Eligible Migrant and Seasonal Farmworkers


Sec.  685.300  What are the general responsibilities of grantees?

    (a) The Department awards career services and training grants and 
housing grants through the FOA process described in Sec.  685.210. 
Career services and training grantees are responsible for providing 
appropriate career services, training, and related assistance to 
eligible MSFWs. Housing grantees are responsible for providing housing 
assistance to eligible MSFWs.
    (b) Grantees will provide these services in accordance with the 
service delivery strategy meeting the requirements of Sec.  685.310 and 
as described in their approved program plan described in Sec.  685.420. 
These services must reflect the needs of the MSFW population in the 
service area and include the services that are necessary to achieve 
each participant's employment goals or housing needs.

[[Page 20904]]

    (c) Grantees are responsible for coordinating services; 
particularly outreach to MSFWs, with the State Workforce Agency as 
defined in 20 CFR part 651 and the State's monitor advocate.
    (d) Grantees are responsible for fulfilling the responsibilities of 
one-stop partners described in Sec.  678.420.


Sec.  685.310  What are the basic components of an National Farmworker 
Jobs Program service delivery strategy?

    The NFJP service delivery strategy must include:
    (a) A customer-focused case management approach;
    (b) The provision of workforce investment activities to eligible 
MSFWs which include career services and training, as described in WIOA 
secs. 167(d) and 134, and 20 CFR part 680.
    (c) The provision of youth workforce investment activities 
described in WIOA sec. 129 and 20 CFR part 681 may be provided to 
eligible MSFW youth;
    (d) The arrangements under the MOUs with the applicable Local 
Workforce Development Boards for the delivery of the services available 
through the one-stop system to MSFWs; and
    (e) Related assistance services.


Sec.  685.320  Who is eligible to receive services under the National 
Farmworker Jobs Program?

    Eligible migrant farmworkers (including eligible MSFW youth) and 
eligible seasonal farmworkers (including eligible MSFW youth) as 
defined in Sec.  685.110 are eligible for services funded by the NFJP.


Sec.  685.330  How are services delivered to eligible migrant and 
seasonal farmworkers?

    To ensure that all services are focused on the customer's needs, 
services are provided through a case-management approach emphasizing 
customer choice and may include: appropriate career services and 
training; related assistance, which includes emergency assistance; and 
supportive services, which includes allowance payments. The basic 
services and delivery of case-management activities are further 
described in Sec. Sec.  685.340 through 685.390.


Sec.  685.340  What career services must grantees provide to eligible 
migrant and seasonal farmworkers?

    (a) Grantees must provide the career services described in WIOA 
secs. 167(d) and 134(c)(2), and 20 CFR part 680 to eligible MSFWs.
    (b) Grantees must provide other services identified in the approved 
program plan.
    (c) Grantees must provide access to career services through the 
one-stop delivery system. Grantees can also provide career services 
through sources outside the one-stop system.
    (d) The delivery of career services to eligible MSFWs by the 
grantee and through the one-stop system must be discussed in the 
required MOU between the Local Workforce Development Board and the 
grantee.


Sec.  685.350  What training services must grantees provide to eligible 
migrant and seasonal farmworkers?

    (a) Grantees must provide the training activities described in WIOA 
secs. 167(d) and 134(c)(3)(D), and 20 CFR part 680 to eligible MSFWs. 
These activities include, but are not limited to, occupational-skills 
training and on-the-job training. Eligible MSFWs are not required to 
receive career services prior to receiving training services.
    (b) Training services must be directly linked to an in-demand 
industry sector or occupation in the service area, or in another area 
to which an eligible MSFW receiving such services is willing to 
relocate.
    (c) Training activities must encourage the attainment of recognized 
post-secondary credentials as defined in Sec.  685.110 when appropriate 
for an eligible MSFW.


Sec.  685.360  What housing services must grantees provide to eligible 
migrant and seasonal farmworkers?

    (a) Housing grantees must provide housing services to eligible 
MSFWs.
    (b) Career services and training grantees may provide housing 
services to eligible MSFWs as described in their program plan.
    (c) Housing services include the following:
    (1) Permanent housing that is owner-occupied, or occupied on a 
permanent, year-round basis (notwithstanding ownership) as the eligible 
MSFW's primary residence to which he/she returns at the end of the work 
or training day; and
    (2) Temporary housing that is not owner-occupied and is used by 
MSFWs whose employment requires occasional travel outside their normal 
commuting area.
    (d) Permanent housing services include but are not limited to: 
Investments in development services, project management, and resource 
development to secure acquisition, construction/renovation and 
operating funds, property management services, and program management. 
New construction, purchase of existing structures, and rehabilitation 
of existing structures, as well as the infrastructure, utilities, and 
other improvements necessary to complete or maintain those structures 
may also be considered part of managing permanent housing.
    (e) Temporary housing services include but not limited to: Housing 
units intended for temporary occupancy located in permanent structures, 
such as rental units in an apartment complex or in mobile structures, 
tents, and yurts that provide short-term, seasonal housing 
opportunities; temporary structures that may be moved from site to 
site, dismantled and re-erected when needed for farmworker occupancy, 
closed during the off-season, or handled through other similar 
arrangements; and off-farm housing operated independently of employer 
interest in, or control of, the housing, or on-farm housing operated by 
a nonprofit, including faith-based or community non-profit 
organizations, but located on property owned by an agricultural 
employer. Managing temporary housing may involve property management of 
temporary housing facilities, case management, and referral services, 
and emergency housing payments, including vouchers and cash payments 
for rent/lease and utilities.
    (f) Housing services may only be provided when the services are 
required to meet the needs of eligible MSFWs to occupy a unit of 
housing for reasons related to seeking or retaining employment, or 
engaging in training.


Sec.  685.370  What services may grantees provide to eligible migrant 
and seasonal farmworkers youth participants aged 14-24?

    (a) Based on an evaluation and assessment of the needs of eligible 
MSFW youth, grantees may provide activities and services that include 
but are not limited to:
    (1) Career services and training as described in Sec. Sec.  685.340 
and 685.350;
    (2) Youth workforce investment activities specified in WIOA sec. 
129;
    (3) Life skills activities which may include self- and 
interpersonal skills development;
    (4) Community service projects;
    (b) Other activities and services that conform to the use of funds 
for youth activities described in 20 CFR part 681.
    (c) Grantees may provide these services to any eligible MSFW youth, 
regardless of the participant's eligibility for WIOA title I youth 
activities as described in WIOA sec. 129(a).


Sec.  685.380  What related assistance services may be provided to 
eligible migrant and seasonal farmworkers?

    Related assistance may include short-term direct services and 
activities. Examples include emergency assistance, as defined in Sec.  
685.110, and those

[[Page 20905]]

activities identified in WIOA sec. 167(d), such as: English language 
and literacy instruction; pesticide and worker safety training; housing 
(including permanent housing), as described in Sec.  685.360 and as 
provided in the approved program plan; and school dropout prevention 
and recovery activities. Related assistance may be provided to eligible 
MSFWs not enrolled in career services, youth services, or training 
services.


Sec.  685.390  When may eligible migrant and seasonal farmworkers 
receive related assistance?

    Eligible MSFWs may receive related assistance services when the 
grantee identifies and documents the need for the related assistance, 
which may include a statement by the eligible MSFW.

Subpart D--Performance Accountability, Planning, and Waiver 
Provisions


Sec.  685.400  What are the indicators of performance that apply to the 
National Farmworker Jobs Program?

    (a) For grantees providing career services and training, the 
Department will use the indicators of performance common to the adult 
and youth programs, described in WIOA sec. 116(b)(2)(A).
    (b) For grantees providing career services and training, the 
Department will reach agreement with individual grantees on the levels 
of performance for each of the primary indicators of performance, 
taking into account economic conditions, characteristics of the 
individuals served, and other appropriate factors, and using, to the 
extent practicable, the statistical adjustment model under WIOA sec. 
116(b)(3)(A)(viii). Once agreement on the levels of performance for 
each of the primary indicators of performance is reached with 
individual grantees, the Department will incorporate the adjusted 
levels of performance in the grant plan.
    (c) For grantees providing housing services only, grantees will use 
the total number of eligible MSFWs served and the total number of 
eligible MSFW families served as indicators of performance.
    (d) The Department may develop additional performance indicators 
with appropriate levels of performance for evaluating programs that 
serve eligible MSFWs and which reflect the State service area economy, 
local demographics of eligible MSFWs, and other appropriate factors. If 
additional performance indicators are developed, the levels of 
performance for these additional indicators must be negotiated with the 
grantee and included in the approved program plan.
    (e) Grantees may develop additional performance indicators and 
include them in the program plan or in periodic performance reports.


Sec.  685.410  What planning documents must a grantee submit?

    Each grantee receiving WIOA sec. 167 program funds must submit to 
the Department a comprehensive program plan and a projection of 
participant services and expenditures in accordance with instructions 
issued by the Secretary.


Sec.  685.420  What information is required in the grantee program 
plan?

    A grantee's 4-year program plan must describe:
    (a) The service area that the applicant proposes to serve;
    (b) The population to be served and the education and employment 
needs of the MSFW population to be served;
    (c) The manner in which proposed services to eligible MSFWs will 
strengthen their ability to obtain or retain unsubsidized employment or 
stabilize their unsubsidized employment, including upgraded employment 
in agriculture;
    (d) The related assistance and supportive services to be provided 
and the manner in which such assistance and services are to be 
integrated and coordinated with other appropriate services;
    (e) The performance accountability measures that will be used to 
assess the performance of the entity in carrying out the NFJP program 
activities, including the expected levels of performance for the 
primary indicators of performance described in Sec.  685.400;
    (f) The availability and accessibility of local resources, such as 
supportive services, services provided through one-stop delivery 
systems, and education and training services, and how the resources can 
be made available to the population to be served;
    (g) The plan for providing services including strategies and 
systems for outreach, career planning, assessment, and delivery through 
one-stop delivery systems;
    (h) The methods the grantee will use to target its services on 
specific segments of the eligible population, as appropriate; and
    (i) Such other information as required by the Secretary in 
instructions issued under Sec.  685.410.


Sec.  685.430  Under what circumstances are the terms of the grantee's 
program plan modified by the grantee or the Department?

    (a) Plans must be modified to reflect the funding level for each 
year of the grant. The Department will provide instructions annually on 
when to submit modifications for each year of funding, which will 
generally be no later than June 1 prior to the start of the subsequent 
year of the grant cycle.
    (b) The grantee must submit a request to the Department for any 
proposed modifications to its plan to add, delete, expand, or reduce 
any part of the program plan or allowable activities. The Department 
will consider the cost principles, uniform administrative requirements, 
and terms and conditions of award when reviewing modifications to 
program plans.
    (c) If the grantee is approved for a regulatory waiver under 
Sec. Sec.  685.460 and 685.470, the grantee must submit a modification 
of its grant plan to reflect the effect of the waiver.


Sec.  685.440  How are costs classified under the National Farmworker 
Jobs Program?

    (a) Costs are classified as follows:
    (1) Administrative costs, as defined in 20 CFR 683.215; and
    (2) Program costs, which are all other costs not defined as 
administrative.
    (b) Program costs must be classified and reported in the following 
categories:
    (1) Related assistance (including emergency assistance);
    (2) Supportive services; and
    (3) All other program services.


Sec.  685.450  What is the Workforce Innovation and Opportunity Act 
administrative cost limit for National Farmworker Jobs Program grants?

    Under 20 CFR 683.205(b), limits on administrative costs for 
programs operated under subtitle D of WIOA title I will be identified 
in the grant or contract award document. Administrative costs will not 
exceed 15 percent of total grantee funding.


Sec.  685.460  Are there regulatory and/or statutory waiver provisions 
that apply to the Workforce Innovation and Opportunity Act?

    (a) The statutory waiver provision at WIOA sec. 189(i) and 
discussed in 20 CFR 679.600 does not apply to any NFJP grant under WIOA 
sec. 167.
    (b) Grantees may request waiver of any regulatory provisions only 
when such regulatory provisions are:
    (1) Not required by WIOA;
    (2) Not related to wage and labor standards, non-displacement 
protection, worker rights, participation and protection of workers and 
participants, and eligibility of participants, grievance procedures, 
judicial review,

[[Page 20906]]

nondiscrimination, allocation of funds, procedures for review and 
approval of plans; and
    (3) Not related to the basic purposes of WIOA, described in 20 CFR 
675.100.


Sec.  685.470  How can grantees request a waiver?

    To request a waiver, a grantee must submit to the Department a 
waiver plan that:
    (a) Describes the goals of the waiver, the expected programmatic 
outcomes, and how the waiver will improve the provision of program 
activities;
    (b) Is consistent with any guidelines the Department establishes;
    (c) Describes the data that will be collected to track the impact 
of the waiver; and
    (d) Includes a modified program plan reflecting the effect of the 
requested waiver.

Subpart E--Supplemental Youth Workforce Investment Activity Funding 
Under the Workforce Innovation and Opportunity Act


Sec.  685.500  What is supplemental youth workforce investment activity 
funding?

    Pursuant to WIOA sec. 127(a)(1), if Congress appropriates more than 
$925 million for WIOA youth workforce investment activities in a fiscal 
year, 4 percent of the excess amount must be used to provide workforce 
investment activities for eligible MSFW youth under WIOA sec. 167.


Sec.  685.510  What requirements apply to grants funded by the 
Workforce Innovation and Opportunity Act?

    The requirements in subparts A through D of this regulation apply 
to grants funded by WIOA sec. 127(a)(1), except that grants described 
in this subpart must be used only for workforce investment activities 
for eligible MSFW youth, as described in Sec.  685.370 and WIOA sec. 
167(d) (including related assistance and supportive services).


Sec.  685.520  What is the application process for obtaining a grant 
funded by the Workforce Innovation and Opportunity Act?

    The Department will issue a separate FOA for grants funded by WIOA 
sec. 127(a)(1). The selection will be made in accordance with the 
procedures described in Sec.  685.210, except that the Department 
reserves the right to provide priority to applicants that are WIOA sec. 
167 grantees.


Sec.  685.530  What planning documents are required for grants funded 
by the Workforce Innovation and Opportunity Act?

    The required planning documents will be described in the FOA.


Sec.  685.540  How are funds allocated to grants funded by the 
Workforce Innovation and Opportunity Act?

    The allocation of funds will be based on the comparative merits of 
the applications, in accordance with criteria set forth in the FOA.


Sec.  685.550  Who is eligible to receive services through grants 
funded by the Workforce Innovation and Opportunity Act?

    Eligible MSFW youth as defined in Sec.  685.110 are eligible to 
receive services through grants funded by WIOA sec. 127(a)(1).
0
13. Add part 686 to read as follows:

PART 686--THE JOB CORPS UNDER TITLE I OF THE WORKFORCE INNOVATION 
AND OPPORTUNITY ACT

Subpart A--Scope and Purpose
Sec.
686.100 What is the scope of this part?
686.110 What is the Job Corps program?
686.120 What definitions apply to this part?
686.130 What is the role of the Job Corps Director?
Subpart B--Site Selection and Protection and Maintenance of Facilities
686.200 How are Job Corps center locations and sizes determined?
686.210 How are center facility improvements and new construction 
handled?
686.220 Who is responsible for the protection and maintenance of 
center facilities?
Subpart C--Funding and Selection of Center Operators and Service 
Providers
686.300 What entities are eligible to receive funds to operate 
centers and provide training and operational support services?
686.310 How are entities selected to receive funding to operate 
centers?
686.320 What if a current center operator is deemed to be an 
operator of a high-performing center?
686.330 What is the length of an agreement entered into by the 
Secretary for operation of a Job Corps center and what are the 
conditions for renewal of such an agreement?
686.340 How are entities selected to receive funding to provide 
outreach and admission, career transition and other operations 
support services?
686.350 What conditions apply to the operation of a Civilian 
Conservation Center?
686.360 What are the requirements for award of contracts and 
payments to Federal agencies?
Subpart D--Recruitment, Eligibility, Screening, Selection and 
Assignment, and Enrollment
686.400 Who is eligible to participate in the Job Corps program?
686.410 Are there additional factors which are considered in 
selecting an eligible applicant for enrollment?
686.420 Are there any special requirements for enrollment related to 
the Military Selective Service Act?
686.430 What entities conduct outreach and admissions activities for 
the Job Corps program?
686.440 What are the responsibilities of outreach and admissions 
providers?
686.450 How are applicants who meet eligibility and selection 
criteria assigned to centers?
686.460 What restrictions are there on the assignment of eligible 
applicants for nonresidential enrollment in Job Corps?
686.470 May an individual who is determined to be ineligible or an 
individual who is denied enrollment appeal that decision?
686.480 At what point is an applicant considered to be enrolled in 
Job Corps?
686.490 How long may a student be enrolled in Job Corps?
Subpart E--Program Activities and Center Operations
686.500 What services must Job Corps centers provide?
686.505 What types of training must Job Corps centers provide?
686.510 Are entities other than Job Corps center operators permitted 
to provide academic and career technical training?
686.515 What are advanced career training programs?
686.520 What responsibilities do the center operators have in 
managing work-based learning?
686.525 Are students permitted to hold jobs other than work-based 
learning opportunities?
686.530 What residential support services must Job Corps center 
operators provide?
686.535 Are Job Corps centers required to maintain a student 
accountability system?
686.540 Are Job Corps centers required to establish behavior 
management systems?
686.545 What is Job Corps' zero tolerance policy?
686.550 How does Job Corps ensure that students receive due process 
in disciplinary actions?
686.555 What responsibilities do Job Corps centers have in assisting 
students with child care needs?
686.560 What are the center's responsibilities in ensuring that 
students' religious rights are respected?
686.565 Is Job Corps authorized to conduct pilot and demonstration 
projects?
Subpart F--Student Support
686.600 Are students provided with government-paid transportation to 
and from Job Corps centers?
686.610 When are students authorized to take leaves of absence from 
their Job Corps centers?
686.620 Are Job Corps students eligible to receive cash allowances 
and performance bonuses?
686.630 Are student allowances subject to Federal payroll taxes?
686.640 Are students provided with clothing?

[[Page 20907]]

Subpart G--Career Transition and Graduate Services
686.700 What are a Job Corps center's responsibilities in preparing 
students for career transition services?
686.710 What career transition services are provided for Job Corps 
enrollees?
686.720 Who provides career transition services?
686.730 What are the responsibilities of career transition service 
providers?
686.740 What services are provided for program graduates?
686.750 Are graduates provided with transition allowances?
686.760 What services are provided to former enrollees?
Subpart H--Community Connections
686.800 How do Job Corps centers and service providers become 
involved in their local communities?
686.810 What is the makeup of a workforce council and what are its 
responsibilities?
686.820 How will Job Corps coordinate with other agencies?
Subpart I--Administrative and Management Provisions
686.900 Are damages caused by the acts or omissions of students 
eligible for payment under the Federal Tort Claims Act?
686.905 Are loss and damages that occur to persons or personal 
property of students at Job Corps centers eligible for 
reimbursement?
686.910 If a student is injured in the performance of duty as a Job 
Corps student, what benefits may the student receive?
686.915 When is a Job Corps student considered to be in the 
performance of duty?
686.920 How are students protected from unsafe or unhealthy 
situations?
686.925 What are the requirements for criminal law enforcement 
jurisdiction on center property?
686.930 Are Job Corps operators and service providers authorized to 
pay State or local taxes on gross receipts?
686.935 What are the financial management responsibilities of Job 
Corps center operators and other service providers?
686.940 Are center operators and service providers subject to 
Federal audits?
686.945 What are the procedures for management of student records?
686.950 What procedures apply to disclosure of information about Job 
Corps students and program activities?
686.955 What are the reporting requirements for center operators and 
operational support service providers?
686.960 What procedures are available to resolve complaints and 
disputes?
686.965 How does Job Corps ensure that complaints or disputes are 
resolved in a timely fashion?
686.970 How does Job Corps ensure that centers or other service 
providers comply with the Act and the Workforce Innovation and 
Opportunity Act regulations?
686.975 How does Job Corps ensure that contract disputes will be 
resolved?
686.980 How does Job Corps resolve disputes between the U.S. 
Department of Labor and the U.S. Department of Agriculture regarding 
the operation of Job Corps centers?
686.985 What Department of Labor equal opportunity and 
nondiscrimination regulations apply to Job Corps?
Subpart J--Performance
686.1000 How is the performance of the Job Corps program assessed?
686.1010 What are the primary indicators of performance for Job 
Corps centers and the Job Corps program?
686.1020 What are the indicators of performance for Job Corps 
outreach and admissions providers?
686.1030 What are the indicators of performance for Job Corps career 
transition service providers?
686.1040 What information will be collected for use in the Annual 
Report?
686.1050 How are the expected levels of performance for Job Corps 
centers, outreach and admissions providers and career transition 
service providers established?
686.1060 How are center rankings established?
686.1070 How and when will the Secretary use Performance Improvement 
Plans?

    Authority:  Secs. 142, 144, 146, 147, 159, 189, 503, Pub. L. 
113-128, 128 Stat. 1425 (Jul. 22, 2014).

Subpart A--Scope and Purpose


Sec.  686.100  What is the scope of this part?

    The regulations in this part outline the requirements that apply to 
the Job Corps program. More detailed policies and procedures are 
contained in a Policy and Requirements Handbook issued by the 
Secretary. Throughout this part, ``instructions (procedures) issued by 
the Secretary'' and similar references refer to the Policy and 
Requirements Handbook and other Job Corps directives.


Sec.  686.110  What is the Job Corps program?

    Job Corps is a national program that operates in partnership with 
States and communities, Local Workforce Development Boards, Youth 
Standing Committees where established, one-stop centers and partners, 
and other youth programs to provide academic, career and technical 
education, service-learning, and social opportunities primarily in a 
residential setting, for low-income young people. The objective of Job 
Corps is to support responsible citizenship and provide young people 
with the skills they need to lead to successful careers that will 
result in economic self-sufficiency and opportunities for advancement 
in in-demand industry sectors or occupations or the Armed Forces, or to 
enrollment in post-secondary education.


Sec.  686.120  What definitions apply to this part?

    The following definitions apply to this part:
    Absent Without Official Leave (AWOL) means an adverse enrollment 
status to which a student is assigned based on extended, unapproved 
absence from his/her assigned center or off-center place of duty. 
Students do not earn Job Corps allowances while in AWOL status.
    Applicable Local Board means a Local Workforce Development Board 
that:
    (1) Works with a Job Corps center and provides information on local 
employment opportunities and the job skills and credentials needed to 
obtain the opportunities; and
    (2) Serves communities in which the graduates of the Job Corps seek 
employment.
    Applicable one-stop center means a one-stop center that provides 
career transition services, such as referral, assessment, recruitment, 
and placement, to support the purposes of the Job Corps.
    Capital improvement means any modification, addition, restoration 
or other improvement:
    (1) Which increases the usefulness, productivity, or serviceable 
life of an existing site, facility, building, structure, or major item 
of equipment;
    (2) Which is classified for accounting purposes as a ``fixed 
asset;'' and
    (3) The cost of which increases the recorded value of the existing 
building, site, facility, structure, or major item of equipment and is 
subject to depreciation.
    Career technical training means career and technical education and 
training.
    Career transition service provider means an organization acting 
under a contract or other agreement with Job Corps to provide career 
transition services for graduates and, to the extent possible, for 
former students.
    Civilian Conservation Center (CCC) means a center operated on 
public land under an agreement between the Department of Labor (DOL or 
the Department) and the Department of Agriculture, which provides, in 
addition to other training and assistance, programs of work-based 
learning to conserve, develop, or manage public natural resources or 
public recreational areas or to develop community projects in the 
public interest.
    Contract center means a Job Corps center operated under a contract 
with the Department.
    Contracting officer means an official authorized to enter into 
contracts or agreements on behalf of the Department.

[[Page 20908]]

    Enrollee means an individual who has voluntarily applied for, been 
selected for, and enrolled in the Job Corps program, and remains with 
the program, but has not yet become a graduate. Enrollees are also 
referred to as ``students'' in this part.
    Enrollment means the process by which an individual formally 
becomes a student in the Job Corps program.
    Former enrollee means an individual who has voluntarily applied 
for, been selected for, and enrolled in the Job Corps program, but left 
the program prior to becoming a graduate.
    Graduate means an individual who has voluntarily applied for, been 
selected for, and enrolled in the Job Corps program and who, as a 
result of participation in the program, has received a secondary school 
diploma or recognized equivalent, or has completed the requirements of 
a career technical training program that prepares individuals for 
employment leading to economic self-sufficiency or entrance into post-
secondary education or training.
    Individual with a disability means an individual with a disability 
as defined in sec. 3 of the Americans with Disabilities Act of 1990 (42 
U.S.C. 12102).
    Interagency agreement means a formal agreement between the 
Department and another Federal agency administering and operating 
centers. The agreement establishes procedures for the funding, 
administration, operation, and review of those centers as well as the 
resolution of any disputes.
    Job Corps means the Job Corps program established within the 
Department of Labor and described in sec. 143 of the Workforce 
Innovation and Opportunity Act (WIOA).
    Job Corps center means a facility and an organizational entity, 
including all of its parts, providing Job Corps training and designated 
as a Job Corps center, as described in sec. 147 of WIOA.
    Job Corps Director means the chief official of the Job Corps or a 
person authorized to act for the Job Corps Director.
    Low-income individual means an individual who meets the definition 
in WIOA sec. 3(36).
    National Office means the national office of Job Corps.
    National training contractor means a labor union, union-affiliated 
organization, business organization, association or a combination of 
such organizations, which has a contract with the national office to 
provide career technical training, career transition services, or other 
services.
    Operational support services means activities or services required 
to support the operation of Job Corps, including:
    (1) Outreach and admissions services;
    (2) Contracted career technical training and off-center training;
    (3) Career transition services;
    (4) Continued services for graduates;
    (5) Certain health services; and
    (6) Miscellaneous logistical and technical support.
    Operator means a Federal, State or local agency, or a contractor 
selected under this subtitle to operate a Job Corps center under an 
agreement or contract with the Department.
    Outreach and admissions provider means an organization that 
performs recruitment services, including outreach activities, and 
screens and enrolls youth under a contract or other agreement with Job 
Corps.
    Participant, as used in this part, includes both graduates and 
enrollees and former enrollees that have completed their career 
preparation period. It also includes all enrollees and former enrollees 
who have remained in the program for at least 60 days.
    Placement means student employment, entry into the Armed Forces, or 
enrollment in other training or education programs following separation 
from Job Corps.
    Regional appeal board means the board designated by the Regional 
Director to consider student appeals of disciplinary discharges.
    Regional Director means the chief Job Corps official of a regional 
office or a person authorized to act for the Regional Director.
    Regional Office means a regional office of Job Corps.
    Regional Solicitor means the chief official of a regional office of 
the DOL Office of the Solicitor, or a person authorized to act for the 
Regional Solicitor.
    Separation means the action by which an individual ceases to be a 
student in the Job Corps program, either voluntarily or involuntarily.
    Service Provider means an entity selected under this subtitle to 
provide operational support services described in this subtitle to a 
Job Corps center.
    Student means an individual enrolled in the Job Corps.
    Unauthorized goods means:
    (1) Firearms and ammunition;
    (2) Explosives and incendiaries;
    (3) Knives with blades longer than 2 inches;
    (4) Homemade weapons;
    (5) All other weapons and instruments used primarily to inflict 
personal injury;
    (6) Stolen property;
    (7) Drugs, including alcohol, marijuana, depressants, stimulants, 
hallucinogens, tranquilizers, and drug paraphernalia except for drugs 
and/or paraphernalia that are prescribed for medical reasons; and
    (8) Any other goods prohibited by the Secretary, Center Director, 
or center operator in a student handbook.


Sec.  686.130  What is the role of the Job Corps Director?

    The Job Corps Director has been delegated the authority to carry 
out the responsibilities of the Secretary under title I, subtitle C of 
WIOA. Where the term ``Secretary'' is used in this part to refer to 
establishment or issuance of guidelines and standards directly relating 
to the operation of the Job Corps program, the Job Corps Director has 
that responsibility.

Subpart B--Site Selection and Protection and Maintenance of 
Facilities


Sec.  686.200  How are Job Corps center locations and sizes determined?

    (a) The Secretary must approve the location and size of all Job 
Corps centers based on established criteria and procedures.
    (b) The Secretary establishes procedures for making decisions 
concerning the establishment, relocation, expansion, or closing of 
contract centers.


Sec.  686.210  How are center facility improvements and new 
construction handled?

    The Secretary establishes procedures for requesting, approving, and 
initiating capital improvements and new construction on Job Corps 
centers.


Sec.  686.220  Who is responsible for the protection and maintenance of 
center facilities?

    (a) The Secretary establishes procedures for the protection and 
maintenance of contract center facilities owned or leased by the 
Department of Labor, that are consistent with the current Federal 
Property Management Regulations.
    (b) The U.S. Department of Agriculture, when operating Civilian 
Conservation Centers (CCC) on public land, is responsible for the 
protection and maintenance of CCC facilities.
    (c) The Secretary issues procedures for conducting periodic 
facility surveys of centers to determine their condition and to 
identify needs such as correction of safety and health deficiencies, 
rehabilitation, and/or new construction.

[[Page 20909]]

Subpart C--Funding and Selection of Center Operators and Service 
Providers


Sec.  686.300  What entities are eligible to receive funds to operate 
centers and provide training and operational support services?

    (a) Center Operators. Entities eligible to receive funds under this 
subpart to operate centers include:
    (1) Federal, State, and local agencies;
    (2) Private organizations, including for-profit and non-profit 
corporations;
    (3) Indian tribes and organizations; and
    (4) Area career and technical education or residential career and 
technical schools (WIOA sec. 147(a)(1)(A)).
    (b) Service Providers. Entities eligible to receive funds to 
provide outreach and admissions, career transition services and other 
operational support services are local or other entities with the 
necessary capacity to provide activities described in this part to a 
Job Corps center, including:
    (1) Applicable one-stop centers and partners;
    (2) Organizations that have a demonstrated record of effectiveness 
in serving at-risk youth and placing them into employment, including 
community action agencies; business organizations, including private 
for-profit and non-profit corporations; and labor organizations; and
    (3) Child welfare agencies that are responsible for children and 
youth eligible for benefits and services under sec. 477 of the Social 
Security Act (42 U.S.C. 677).


Sec.  686.310  How are entities selected to receive funding to operate 
centers?

    (a) The Secretary selects eligible entities to operate contract 
centers on a competitive basis in accordance with applicable statutes 
and regulations. In selecting an entity, ETA issues requests for 
proposals (RFPs) for the operation of all contract centers according to 
the Federal Acquisition Regulation (48 CFR chapter 1) and DOL 
Acquisition Regulation (48 CFR chapter 29). ETA develops RFPs for 
center operators in consultation with the Governor, the center 
workforce council (if established), and the Local Board for the 
workforce investment area in which the center is located (WIOA sec. 
147(b)(1)(A)).
    (b) The RFP for each contract center describes uniform 
specifications and standards, as well as specifications and 
requirements that are unique to the operation of the specific center.
    (c) The Contracting Officer selects and funds Job Corps contract 
center operators on the basis of an evaluation of the proposals 
received using criteria established by the Secretary, and set forth in 
the RFP. The criteria include the following:
    (1) The offeror's ability to coordinate the activities carried out 
through the Job Corps center with activities carried out under the 
appropriate State and local workforce investment plans;
    (2) The offeror's ability to offer career technical training that 
has been proposed by the workforce council and the degree to which the 
training reflects employment opportunities in the local areas in which 
most of the enrollees intend to seek employment;
    (3) The degree to which the offeror demonstrates relationships with 
the surrounding communities, including employers, labor organizations, 
State Boards, Local Boards, applicable one-stop centers, and the State 
and region in which the center is located; and
    (4) The offeror's past performance, if any, relating to operating 
or providing activities to a Job Corps center, including information 
regarding the offeror in any reports developed by the Office of the 
Inspector General of the Department of Labor and the offeror's 
demonstrated effectiveness in assisting individuals in achieving the 
indicators of performance for eligible youth described in sec. 
116(b)(2)(A)(ii) of WIOA, listed in Sec.  686.1010.
    (5) The offeror's ability to demonstrate a record of successfully 
assisting at-risk youth to connect to the workforce, including 
providing them with intensive academics and career technical training.
    (d) In order to be eligible to operate a Job Corps center, the 
offeror must also submit the following information at such time and in 
such manner as required by the Secretary:
    (1) A description of the program activities that will be offered at 
the center and how the academics and career technical training reflect 
State and local employment opportunities, including opportunities in 
in-demand industry sectors and occupations recommended by the workforce 
council;
    (2) A description of the counseling, career transition, and support 
activities that will be offered at the center, including a description 
of the strategies and procedures the offeror will use to place 
graduates into unsubsidized employment or education leading to a 
recognized post-secondary credential upon completion of the program;
    (3) A description of the offeror's demonstrated record of 
effectiveness in placing at-risk youth into employment and post-
secondary education, including past performance of operating a Job 
Corps center and as appropriate, the entity's demonstrated 
effectiveness in assisting individuals in achieving the indicators of 
performance for eligible youth described in sec. 116(b)(2)(A)(ii) of 
WIOA, listed in Sec.  686.1010;
    (4) A description of the relationships that the offeror has 
developed with State Boards, Local Boards, applicable one-stop centers, 
employers, labor organizations, State and local educational agencies, 
and the surrounding communities in which the center is located;
    (5) A description of the offeror's ability to coordinate the 
activities carried out through the Job Corps center with activities 
carried out under the appropriate State Plan and local plans;
    (6) A description of the strong fiscal controls the offeror has in 
place to ensure proper accounting of Federal funds and compliance with 
the Financial Management Information System established by the 
Secretary under sec. 159(a) of WIOA;
    (7) A description of the steps to be taken to control costs in 
accordance with the Financial Management Information System established 
by the Secretary (WIOA sec. 159(a)(3));
    (8) A detailed budget of the activities that will be supported 
using Federal funds provided under this part and non-Federal resources;
    (9) An assurance the offeror is licensed to operate in the State in 
which the center is located;
    (10) An assurance that the offeror will comply with basic health 
and safety codes, including required disciplinary measures and Job 
Corps' Zero Tolerance Policy (WIOA sec. 152(b)); and
    (11) Any other information on additional selection factors required 
by the Secretary.


Sec.  686.320  What if a current center operator is deemed to be an 
operator of a high-performing center?

    (a) If an offeror meets the requirements as an operator of a high-
performing center as applied to a particular Job Corps center, that 
operator will be allowed to compete in any competitive selection 
process carried out for an award to operate that center (WIOA sec. 
147(b)(1)).
    (b) An offeror is considered to be an operator of a high-performing 
center if the Job Corps center operated by the offeror:
    (1) Is ranked among the top 20 percent of Job Corps centers for the 
most recent preceding program year according to the rankings calculated 
under Sec.  686.1060; and
    (2) Meets the expected levels of performance established under

[[Page 20910]]

Sec.  686.1050 with respect to each of the primary indicators of 
performance for Job Corps centers:
    (i) For the period of the most recent preceding 3 program years for 
which information is available at the time the determination is made, 
achieved an average of 100 percent, or higher, of the expected level of 
performance for the indicator; and
    (ii) For the most recent preceding program year for which 
information is available at the time the determination is made, 
achieved 100 percent, or higher, of the expected level of performance 
established for the indicator.
    (c) If any of the program years described in paragraphs (b)(2)(i) 
and (ii) of this section precedes the implementation of the 
establishment of the expected levels of performance under Sec.  
686.1050 and the application of the primary indicators of performance 
for Job Corps centers identified in Sec.  686.1010, an entity is 
considered an operator of a high-performing center during that period 
if the Job Corps center operated by the entity:
    (1) Meets the requirements of paragraph (b)(2) of this section with 
respect to such preceding program years using the performance of the 
Job Corps center regarding the national goals or targets established by 
the Office of the Job Corps under the previous performance 
accountability system for--
    (i) The 6-month follow-up placement rate of graduates in 
employment, the military, education or training;
    (ii) The 12-month follow-up placement rate of graduates in 
employment, the military, education, or training;
    (iii) The 6-month follow-up average weekly earnings of graduates;
    (iv) The rate of attainment of secondary school diplomas or their 
recognized equivalent;
    (v) The rate of attainment of completion certificates for career 
technical training;
    (vi) Average literacy gains; and
    (vii) Average numeracy gains; or
    (2) Is ranked among the top five percent of Job Corps centers for 
the most recent preceding program year according to the rankings 
calculated under Sec.  686.1060.


Sec.  686.330  What is the length of an agreement entered into by the 
Secretary for operation of a Job Corps center and what are the 
conditions for renewal of such an agreement?

    (a) Agreements are for not more than a 2-year period. The Secretary 
may exercise any contractual option to renew the agreement in 1-year 
increments for not more than 3 additional years.
    (b) The Secretary will establish procedures for evaluating the 
option to renew an agreement that includes: an assessment of the 
factors described in paragraph (c) of this section; a review of 
contract performance and financial reporting compliance; a review of 
the program management and performance data described in Sec. Sec.  
686.1000 and 686.1010; an assessment of whether the center is on a 
performance improvement plan as described Sec.  686.1070 and if so, 
whether the center is making measureable progress in completing the 
actions described in the plan; and an evaluation of the factors 
described in paragraph (d) of this section.
    (c) The Secretary will only renew the agreement of an entity to 
operate a Job Corps center if the entity:
    (1) Has a satisfactory record of integrity and business ethics;
    (2) Has adequate financial resources to perform the agreement;
    (3) Has the necessary organization, experience, accounting and 
operational controls, and technical skills; and
    (4) Is otherwise qualified and eligible under applicable laws and 
regulations, including that the contractor is not under suspension or 
debarred from eligibility for Federal contractors.
    (d) The Secretary will not renew an agreement for an entity to 
operate a Job Corps center for any additional 1-year period if, for 
both of the 2 most recent preceding program years for which information 
is available at the time the determination is made, or if a second 
program year is not available, the preceding year for which information 
is available, such center:
    (1) Has been ranked in the lowest 10 percent of Job Corps centers 
according to the rankings calculated under Sec.  686.1060; and
    (2) Failed to achieve an average of 50 percent or higher of the 
expected level of performance established under Sec.  686.1050 with 
respect to each of the primary indicators of performance for eligible 
youth described in sec. 116(b)(2)(A)(ii) of WIOA, listed in Sec.  
686.1010.
    (e) Information Availability:
    (1) Information will be considered to be available for a program 
year for purposes of paragraph (d) of this section if for each of the 
primary indicators of performance, all of the students included in the 
cohort being measured either began their participation under the 
current center operator or, if they began their participation under the 
previous center operator, were on center for at least 6 months under 
the current operator.
    (2) If complete information for any of the indicators of 
performance described in paragraph (d)(2) of this section is not 
available for either of the 2 program years described in paragraph (d) 
of this section, the Secretary will review partial program year data 
from the most recent program year for those indicators, if at least two 
quarters of data are available, when making the determination required 
under paragraph (d)(2) of this section.
    (f) If any of the program years described in paragraph (d) of this 
section precede the implementation of the establishment of the expected 
levels of performance under Sec.  686.1050 and the application of the 
primary indicators of performance for Job Corps centers described in 
Sec.  686.1010, the evaluation described in paragraph (d) of this 
section will be based on whether in its operation of the center the 
entity:
    (1) Meets the requirement of paragraph (d)(2) of this section with 
respect to such preceding program years using the performance of the 
Job Corps center regarding the national goals or targets established by 
the Office of the Job Corps under the previous performance 
accountability system for--
    (i) The 6-month follow-up placement rate of graduates in 
employment, the military, education, or training;
    (ii) The 12-month follow-up placement rate of graduates in 
employment, the military, education, or training;
    (iii) The 6-month follow-up average weekly earnings of graduates;
    (iv) The rate of attainment of secondary school diplomas or their 
recognized equivalent;
    (v) The rate of attainment of completion certificates for career 
technical training;
    (vi) Average literacy gains; and
    (vii) Average numeracy gains; or
    (2) Is ranked among the lowest 10 percent of Job Corps centers for 
the most recent preceding program year according to the ranking 
calculated under Sec.  686.1060.
    (g) Exception--the Secretary can exercise an option to renew the 
agreement with an entity notwithstanding the requirements in paragraph 
(d) of this section for no more than 2 additional years if the 
Secretary determines that a renewal would be in the best interest of 
the Job Corps program, taking into account factors including:
    (1) Significant improvements in program performance in carrying out 
a performance improvement plan;
    (2) That the performance is due to circumstances beyond the control 
of the entity, such as an emergency or disaster;
    (3) A significant disruption in the operations of the center, 
including in

[[Page 20911]]

the ability to continue to provide services to students, or significant 
increase in the cost of such operations; or
    (4) A significant disruption in the procurement process with 
respect to carrying out a competition for the selection of a center 
operator.
    (h) If the Secretary does make an exception and exercises the 
option to renew per paragraph (g) of this section, the Secretary will 
provide a detailed explanation of the rationale for exercising the 
option to the Committee on Education and the Workforce of the House of 
Representatives and the Committee on Health, Education, Labor, and 
Pensions of the Senate.


Sec.  686.340  How are entities selected to receive funding to provide 
outreach and admission, career transition and other operations support 
services?

    (a) The Secretary selects eligible entities to provide outreach and 
admission, career transition, and operational services on a competitive 
basis in accordance with applicable statutes and regulations. In 
selecting an entity, ETA issues requests for proposals (RFP) for 
operational support services according to the Federal Acquisition 
Regulation (48 CFR chapter 1) and DOL Acquisition Regulation (48 CFR 
chapter 29). ETA develops RFPs for operational support services in 
consultation with the Governor, the center workforce council (if 
established), and the Local Board for the workforce investment area in 
which the center is located (WIOA sec. 147(a)(1)(A)).
    (b) The RFP for each support service contract describes uniform 
specifications and standards, as well as specifications and 
requirements that are unique to the specific required operational 
support services.
    (c) The Contracting Officer selects and funds operational support 
service contracts on the basis of an evaluation of the proposals 
received using criteria established by the Secretary and set forth in 
the RFP. The criteria may include the following, as applicable:
    (1) The ability of the offeror to coordinate the activities carried 
out in relation to the Job Corps center with related activities carried 
out under the appropriate State Plan and local plans;
    (2) The ability of the entity to offer career technical training 
that has been proposed by the workforce council and the degree to which 
the training reflects employment opportunities in the local areas in 
which most of the students intend to seek employment;
    (3) The degree to which the offeror demonstrates relationships with 
the surrounding communities, including employers, labor organizations, 
State Boards, Local Boards, applicable one-stop centers, and the State 
and region in which the services are provided;
    (4) The offeror's past performance, if any, relating to providing 
services to a Job Corps center, including information regarding the 
offeror in any reports developed by the Office of the Inspector General 
of the Department of Labor and the offeror's demonstrated effectiveness 
in assisting individuals in achieving the indicators of performance for 
eligible youth described in sec. 116(b)(2)(A)(ii) of WIOA, listed in 
Sec.  686.1010;
    (5) The offeror's ability to demonstrate a record of successfully 
assisting at-risk youth to connect to the workforce; and
    (6) Any other information on additional selection factors required 
by the Secretary.


Sec.  686.350  What conditions apply to the operation of a Civilian 
Conservation Center?

    (a) The Secretary of Labor may enter into an agreement with the 
Secretary of Agriculture to operate Job Corps centers located on public 
land, which are called Civilian Conservation Centers (CCCs). Located 
primarily in rural areas, in addition to academics, career technical 
training, and workforce preparation skills training, CCCs provide 
programs of work experience to conserve, develop, or manage public 
natural resources or public recreational areas or to develop community 
projects in the public interest.
    (b) When the Secretary of Labor enters into an agreement with the 
Secretary of Agriculture for the funding, establishment, and operation 
of CCCs, provisions are included to ensure that the Department of 
Agriculture complies with the regulations under this part.
    (c) Enrollees in CCCs may provide assistance in addressing 
national, State, and local disasters, consistent with current child 
labor laws. The Secretary of Agriculture must ensure that enrollees are 
properly trained, equipped, supervised, and dispatched consistent with 
the standards for the conservation and rehabilitation of wildlife 
established under the Fish and Wildlife Coordination Act (16 U.S.C. 661 
et seq.).
    (d) The Secretary of Agriculture must designate a Job Corps 
National Liaison to support the agreement between the Departments of 
Labor and Agriculture to operate CCCs.
    (e) The Secretary of Labor, in consultation with the Secretary of 
Agriculture, may select an entity to operate a CCC in accordance with 
the requirements of Sec.  686.310 if the Secretary of Labor determines 
appropriate.
    (f) The Secretary of Labor has the discretion to close CCCs if the 
Secretary determines appropriate.


Sec.  686.360  What are the requirements for award of contracts and 
payments to Federal agencies?

    (a) The requirements of the Federal Property and Administrative 
Services Act of 1949, as amended; the Federal Grant and Cooperative 
Agreement Act of 1977; the Federal Acquisition Regulation (48 CFR 
chapter 1); and the DOL Acquisition Regulation (48 CFR chapter 29) 
apply to the award of contracts and to payments to Federal agencies.
    (b) Job Corps funding of Federal agencies that operate CCCs are 
made by a transfer of obligational authority from the Department to the 
respective operating agency.

Subpart D--Recruitment, Eligibility, Screening, Selection and 
Assignment, and Enrollment


Sec.  686.400  Who is eligible to participate in the Job Corps program?

    (a) To be eligible to participate in the Job Corps, an individual 
must be:
    (1) At least 16 and not more than 24 years of age at the time of 
enrollment, except that:
    (i) The Job Corps Director may waive the maximum age limitation 
described in paragraph (a)(1) of this section, and the requirement in 
paragraph (a)(1)(ii) of this section for an individual with a 
disability if he or she is otherwise eligible according to the 
requirements listed in Sec. Sec.  686.400 and 686.410; and
    (ii) Not more than 20 percent of individuals enrolled nationwide 
may be individuals who are aged 22 to 24 years old;
    (2) A low-income individual;
    (3) An individual who is facing one or more of the following 
barriers to education and employment:
    (i) Is basic skills deficient, as defined in WIOA sec. 3;
    (ii) Is a school dropout;
    (iii) Is homeless as defined in sec. 41403(6) of the Violence 
Against Women Act of 1994 (42 U.S.C. 14043e-2(6)); is a homeless child 
or youth, as defined in sec. 725(2) of the McKinney-Vento Homeless 
Assistance Act (42 U.S.C. 11434a(2)); or is a runaway, an individual in 
foster care; or an individual who was in foster care and has aged out 
of the foster care system.
    (iv) Is a parent; or
    (v) Requires additional education, career technical training, or 
workforce preparation skills in order to obtain and

[[Page 20912]]

retain employment that leads to economic self-sufficiency; and
    (4) Meets the requirements of Sec.  686.420, if applicable.
    (b) Notwithstanding paragraph (a)(2) of this section, a veteran is 
eligible to become an enrollee if the individual:
    (1) Meets the requirements of paragraphs (a)(1) and (3) of this 
section; and
    (2) Does not meet the requirement of paragraph (a)(2) of this 
section because the military income earned by the individual within the 
6-month period prior to the individual's application for Job Corps 
prevents the individual from meeting that requirement.


Sec.  686.410   Are there additional factors which are considered in 
selecting an eligible applicant for enrollment?

    Yes, in accordance with procedures issued by the Secretary, an 
eligible applicant may be selected for enrollment only if:
    (a) A determination is made, based on information relating to the 
background, needs, and interests of the applicant, that the applicant's 
educational and career and technical needs can best be met through the 
Job Corps program;
    (b) A determination is made that there is a reasonable expectation 
the applicant can participate successfully in group situations and 
activities, and is not likely to engage in actions that would 
potentially:
    (1) Prevent other students from receiving the benefit of the 
program;
    (2) Be incompatible with the maintenance of sound discipline; or
    (3) Impede satisfactory relationships between the center to which 
the student is assigned and surrounding local communities.
    (c) The applicant is made aware of the center's rules, what the 
consequences are for failure to observe the rules, and agrees to comply 
with such rules, as described in procedures issued by the Secretary;
    (d) The applicant has not been convicted of a felony consisting of 
murder, child abuse, or a crime involving rape or sexual assault (WIOA 
secs. 145(b)(1)(C), 145(b)(2), and 145(b)(3)). Other than these felony 
convictions, no one will be denied enrollment in Job Corps solely on 
the basis of contact with the criminal justice system. All applicants 
must submit to a background check conducted according to procedures 
established by the Secretary and in accordance with applicable State 
and local laws. If the background check finds that the applicant is on 
probation, parole, under a suspended sentence, or under the supervision 
of any agency as a result of court action or institutionalization, the 
court or appropriate supervising agency may certify in writing that it 
will approve of the applicant's participation in Job Corps, and provide 
full release from its supervision, and that the applicant's 
participation and release does not violate applicable laws and 
regulations; and
    (e) Suitable arrangements are made for the care of any dependent 
children for the proposed period of enrollment.


Sec.  686.420   Are there any special requirements for enrollment 
related to the Military Selective Service Act?

    (a) Yes, each male applicant 18 years of age or older must present 
evidence that he has complied with sec. 3 of the Military Selective 
Service Act (50 U.S.C. App. 451 et seq.) if required; and
    (b) When a male student turns 18 years of age, he must submit 
evidence to the center that he has complied with the requirements of 
the Military Selective Service Act (50 U.S.C. App. 451 et seq.).


Sec.  686.430   What entities conduct outreach and admissions 
activities for the Job Corps program?

    The Secretary makes arrangements with outreach and admissions 
providers to perform Job Corps recruitment, screening and admissions 
functions according to standards and procedures issued by the 
Secretary. Entities eligible to receive funds to provide outreach and 
admissions services are identified in Sec.  686.300.


Sec.  686.440   What are the responsibilities of outreach and 
admissions providers?

    (a) Outreach and admissions agencies are responsible for:
    (1) Developing outreach and referral sources;
    (2) Actively seeking out potential applicants;
    (3) Conducting personal interviews with all applicants to identify 
their needs and eligibility status; and
    (4) Identifying youth who are interested and likely Job Corps 
participants.
    (b) Outreach and admissions providers are responsible for 
completing all Job Corps application forms and determining whether 
applicants meet the eligibility and selection criteria for 
participation in Job Corps as provided in Sec. Sec.  686.400 and 
686.410.
    (c) The Secretary may decide that determinations with regard to one 
or more of the eligibility criteria will be made by the National 
Director or his or her designee.


Sec.  686.450   How are applicants who meet eligibility and selection 
criteria assigned to centers?

    (a) Each applicant who meets the application and selection 
requirements of Sec. Sec.  686.400 and 686.410 is assigned to a center 
based on an assignment plan developed by the Secretary in consultation 
with the operators of Job Corps centers. The assignment plan identifies 
a target for the maximum percentage of students at each center who come 
from the State or region nearest the center, and the regions 
surrounding the center. The assignment plan is based on an analysis of:
    (1) The number of eligible individuals in the State and region 
where the center is located and the regions surrounding where the 
center is located;
    (2) The demand for enrollment in Job Corps in the State and region 
where the center is located and in surrounding regions;
    (3) The size and enrollment level of the center, including the 
education, training, and supportive services provided through the 
center; and
    (4) The performance of the Job Corps center relating to the 
expected levels of performance for indicators described in WIOA sec. 
159(c)(1), and whether any actions have been taken with respect to the 
center under secs. 159(f)(2) and 159(f)(3) of WIOA.
    (b) Eligible applicants are assigned to the center that offers the 
type of career technical training selected by the individual, and among 
the centers that offer such career technical training, is closest to 
the home of the individual. The Secretary may waive this requirement 
if:
    (1) The enrollee would be unduly delayed in participating in the 
Job Corps program because the closest center is operating at full 
capacity; or
    (2) The parent or guardian of the enrollee requests assignment of 
the enrollee to another Job Corps center due to circumstances in the 
community that would impair prospects for successful completion by the 
enrollee.
    (c) If a parent or guardian objects to the assignment of a student 
under the age of 18 to a center other than the center closest to home 
that offers the desired career technical training, the Secretary must 
not make such an assignment.


Sec.  686.460   What restrictions are there on the assignment of 
eligible applicants for nonresidential enrollment in Job Corps?

    No more than 20 percent of students enrolled in Job Corps 
nationwide may be nonresidential students.

[[Page 20913]]

Sec.  686.470   May an individual who is determined to be ineligible or 
an individual who is denied enrollment appeal that decision?

    (a) A person who is determined to be ineligible to participate in 
Job Corps under Sec.  686.400 or a person who is not selected for 
enrollment under Sec.  686.410 may appeal the determination to the 
outreach and admissions agency within 60 days of the determination. The 
appeal will be resolved according to the procedures in Sec. Sec.  
686.960 and 686.965. If the appeal is denied by the outreach/admissions 
contractor or the center, the person may appeal the decision in writing 
to the Regional Director within 60 days of the date of the denial. The 
Regional Director will decide within 60 days whether to reverse or 
approve the appealed decision. The decision by the Regional Director is 
the Department's final decision.
    (b) If an applicant believes that he or she has been determined 
ineligible or not selected for enrollment based upon a factor 
prohibited by sec. 188 of WIOA, the individual may proceed under the 
applicable Department nondiscrimination regulations implementing WIOA 
sec. 188 at 29 CFR part 37.
    (c) An applicant who is determined to be ineligible or a person who 
is denied enrollment must be referred to the appropriate one-stop 
center or other local service provider.


Sec.  686.480  At what point is an applicant considered to be enrolled 
in Job Corps?

    (a) To be considered enrolled as a Job Corps student, an applicant 
selected for enrollment must physically arrive at the assigned Job 
Corps center on the appointed date. However, applicants selected for 
enrollment who arrive at their assigned centers by government furnished 
transportation are considered to be enrolled on their dates of 
departure by such transportation.
    (b) Center operators must document the enrollment of new students 
according to procedures issued by the Secretary.


Sec.  686.490  How long may a student be enrolled in Job Corps?

    (a) Except as provided in paragraph (b) of this section, a student 
may remain enrolled in Job Corps for no more than 2 years.
    (b)(1) An extension of a student's enrollment may be authorized in 
special cases according to procedures issued by the Secretary;
    (2) A student's enrollment in an advanced career training program 
may be extended in order to complete the program for a period not to 
exceed 1 year;
    (3) An extension of a student's enrollment may be authorized in the 
case of a student with a disability who would reasonably be expected to 
meet the standards for a Job Corps graduate if allowed to participate 
in the Job Corps for not more than 1 additional year; and
    (4) An enrollment extension may be granted to a student who 
participates in national service, as authorized by a Civilian 
Conservation Center, for the amount of time equal to the period of 
national service.

Subpart E--Program Activities and Center Operations


Sec.  686.500  What services must Job Corps centers provide?

    (a) Job Corps centers must provide an intensive, well-organized and 
fully supervised program including:
    (1) Educational activities, including:
    (i) Career technical training;
    (ii) Academic instruction; and
    (iii) Employability and independent learning and living skills 
development.
    (2) Work-based learning and experience;
    (3) Residential support services; and
    (4) Other services as required by the Secretary.
    (b) In addition, centers must provide students with access to the 
career services described in secs. 134(c)(2)(A)(i)-(xi) of WIOA.


Sec.  686.505  What types of training must Job Corps centers provide?

    (a) Job Corps centers must provide students with a career technical 
training program that is:
    (1) Aligned with industry-recognized standards and credentials and 
with program guidance; and
    (2) Linked to employment opportunities in in-demand industry 
sectors and occupations both in the area in which the center is located 
and, if practicable, in the area the student plans to reside after 
graduation.
    (b) Each center must provide education programs, including: an 
English language acquisition program, high school diploma or high 
school equivalency certification program, and academic skills training 
necessary for students to master skills in their chosen career 
technical training programs.
    (c) Each center must provide programs for students to learn and 
practice employability and independent learning and living skills 
including: job search and career development, interpersonal relations, 
driver's education, study and critical thinking skills, financial 
literacy and other skills specified in program guidance.
    (d) All Job Corps training programs must be based on industry and 
academic skills standards leading to recognized industry and academic 
credentials, applying evidence-based instructional approaches, and 
resulting in:
    (1) Students' employment in unsubsidized, in-demand jobs with the 
potential for advancement opportunities;
    (2) Enrollment in advanced education and training programs or 
apprenticeships, including registered apprenticeship; or
    (3) Enlistment in the Armed Services.
    (e) Specific career technical training programs offered by 
individual centers must be approved by the Regional Director according 
to policies issued by the Secretary.
    (f) Center workforce councils described in Sec.  670.810 must 
review appropriate labor market information, identify in-demand 
industry sectors and employment opportunities in local areas where 
students will look for employment, determine the skills and education 
necessary for those jobs, and as appropriate, recommend changes in the 
center's career technical training program to the Secretary.
    (g) Each center must implement a system to evaluate and track the 
progress and achievements of each student at regular intervals.
    (h) Each center must develop a training plan that must be available 
for review and approval by the appropriate Regional Director.


Sec.  686.510  Are entities other than Job Corps center operators 
permitted to provide academic and career technical training?

    (a) The Secretary may arrange for the career technical and academic 
education of Job Corps students through local public or private 
educational agencies, career and technical educational institutions or 
technical institutes, or other providers such as business, union or 
union-affiliated organizations as long as the entity can provide 
education and training substantially equivalent in cost and quality to 
that which the Secretary could provide through other means.
    (b) Entities providing these services will be selected in 
accordance with the requirements of Sec.  686.310.


Sec.  686.515  What are advanced career training programs?

    (a) The Secretary may arrange for programs of advanced career 
training (ACT) for selected students, which may be provided through the 
eligible providers of training services identified in WIOA sec. 122 in 
which the students continue to participate in the Job Corps program for 
a period not to exceed 1

[[Page 20914]]

year in addition to the period of participation to which these students 
would otherwise be limited.
    (b) Students participating in an ACT program are eligible to 
receive:
    (1) All of the benefits provided to a residential Job corps 
student; or
    (2) A monthly stipend equal to the average value of the benefits 
described in paragraph (b)(1) of this section.
    (c) Any operator may enroll more students than otherwise authorized 
by the Secretary in an ACT program if, in accordance with standards 
developed by the Secretary, the operator demonstrates:
    (1) Participants in such a program have achieved a satisfactory 
rate of training and placement in training-related jobs; and
    (2) For the most recently preceding 2 program years, the operator 
has, on average, met or exceeded the expected levels of performance 
under WIOA sec. 159(c)(1) for each of the primary indicators described 
in WIOA sec. 116(b)(2)(A)(ii), listed in Sec.  686.1010.


Sec.  686.520  What responsibilities do the center operators have in 
managing work-based learning?

    (a) The center operator must emphasize and implement work-based 
learning programs for students through center program activities, 
including career and technical skills training, and through 
arrangements with employers. Work-based learning must be under actual 
working conditions and must be designed to enhance the employability, 
responsibility, and confidence of the students. Work-based learning 
usually occurs in tandem with students' career technical training.
    (b) The center operator must ensure that students are assigned only 
to workplaces that meet the safety standards described in Sec.  
670.920.


Sec.  686.525  Are students permitted to hold jobs other than work-
based learning opportunities?

    Yes, a center operator may authorize a student to participate in 
gainful leisure time employment, as long as the employment does not 
interfere with required scheduled activities.


Sec.  686.530  What residential support services must Job Corps center 
operators provide?

    Job Corps center operators must provide the following services 
according to procedures issued by the Secretary:
    (a) A center-wide quality living and learning environment that 
supports the overall training program and includes a safe, secure, 
clean and attractive physical and social environment, 7 days a week, 24 
hours a day;
    (b) An ongoing, structured personal counseling program for students 
provided by qualified staff;
    (c) A quality, safe and clean food service, to provide nutritious 
meals for students;
    (d) Medical services, through provision or coordination of a 
wellness program which includes access to basic medical, dental and 
mental health services, as described in the Policy and Requirements 
Handbook, for all students from the date of enrollment until separation 
from the Job Corps program;
    (e) A recreation/avocational program that meets the needs of all 
students;
    (f) A student leadership program and an elected student government; 
and
    (g) A student welfare association for the benefit of all students 
that is funded by non-appropriated funds that come from sources such as 
snack bars, vending machines, disciplinary fines, and donations, and is 
run by an elected student government, with the help of a staff advisor.


Sec.  686.535  Are Job Corps centers required to maintain a student 
accountability system?

    Yes, each Job Corps center must establish and implement an 
effective system to account for and document the daily whereabouts, 
participation, and status of students during their Job Corps 
enrollment. The system must enable center staff to detect and respond 
to instances of unauthorized or unexplained student absence. Each 
center must operate its student accountability system according to 
requirements and procedures issued by the Secretary.


Sec.  686.540  Are Job Corps centers required to establish behavior 
management systems?

    (a) Yes, each Job Corps center must establish and maintain its own 
student incentives system to encourage and reward students' 
accomplishments.
    (b) The Job Corps center must establish and maintain a behavior 
management system, based on a behavior management plan, according to 
standards of conduct and procedures established by the Secretary. The 
behavior management plan must be approved by the Job Corps regional 
office and reviewed annually. The behavior management system must 
include a zero tolerance policy for violence and drugs as described in 
Sec.  686.590. All criminal incidents will be promptly reported to 
local law enforcement.


Sec.  686.545  What is Job Corps' zero tolerance policy?

    (a) All center operators must comply with Job Corps' zero tolerance 
policy as established by the Secretary. Job Corps has a zero tolerance 
policy for infractions including but not limited to:
    (1) Acts of violence, as defined by the Secretary;
    (2) Use, sale, or possession of a controlled substance, as defined 
at 21 U.S.C. 802;
    (3) Abuse of alcohol;
    (4) Possession of unauthorized goods; or
    (5) Other illegal or disruptive activity.
    (b) As part of this policy, all students must be tested for drugs 
as a condition of participation. (WIOA secs. 145(a)(2) and 152(b)(2))
    (c) The zero tolerance policy specifies the offenses that result in 
the separation of students from the Job Corps. The center director is 
expressly responsible for determining when there is a violation of a 
specified offense.


Sec.  686.550  How does Job Corps ensure that students receive due 
process in disciplinary actions?

    The center operator must ensure that all students receive due 
process in disciplinary proceedings according to procedures developed 
by the Secretary. These procedures must include center fact-finding and 
behavior review boards, a code of sanctions under which the penalty of 
separation from Job Corps might be imposed, and procedures for students 
to submit an appeal to a Job Corps regional appeal board following a 
center's decision to discharge involuntarily the student from Job 
Corps.


Sec.  686.555  What responsibilities do Job Corps centers have in 
assisting students with child care needs?

    (a) Job Corps centers are responsible for coordinating with 
outreach and admissions agencies to assist applicants, whenever 
feasible, with making arrangements for child care. Prior to enrollment, 
a program applicant with dependent children who provides primary or 
custodial care must certify that suitable arrangements for child care 
have been established for the proposed period of enrollment.
    (b) Child development programs may be located at Job Corps centers 
with the approval of the Secretary.


Sec.  686.560  What are the center's responsibilities in ensuring that 
students' religious rights are respected?

    (a) Centers must ensure that a student has the right to worship or 
not worship as he or she chooses.
    (b) Students who believe their religious rights have been violated 
may

[[Page 20915]]

file complaints under the procedures set forth in 29 CFR part 37.
    (c) Requirements related to equal treatment of religious 
organizations in Department of Labor programs, and to protection of 
religious liberty of Department of Labor social service providers and 
beneficiaries, are found at subpart D of 29 CFR part 2. See also 20 CFR 
683.255 and 683.285; 29 CFR part 37.


Sec.  686.565  Is Job Corps authorized to conduct pilot and 
demonstration projects?

    Yes, the Secretary may undertake experimental, research and 
demonstration projects related to the Job Corps program according to 
WIOA sec. 156(a), provided that such projects are developed, approved, 
and conducted in accordance with policies and procedures developed by 
the Secretary.

Subpart F--Student Support


Sec.  686.600  Are students provided with government-paid 
transportation to and from Job Corps centers?

    Yes, Job Corps provides for the transportation of students between 
their homes and centers as described in policies and procedures issued 
by the Secretary.


Sec.  686.610  When are students authorized to take leaves of absence 
from their Job Corps centers?

    (a) Job Corps students are eligible for annual leaves, emergency 
leaves and other types of leaves of absence from their assigned centers 
according to criteria and requirements issued by the Secretary. 
Additionally, enrollees in Civilian Conservation Centers may take leave 
to provide assistance in addressing national, State, and local 
disasters, consistent with current laws and regulations, including 
child labor laws and regulations.
    (b) Center operators and other service providers must account for 
student leave according to procedures issued by the Secretary.


Sec.  686.620  Are Job Corps students eligible to receive cash 
allowances and performance bonuses?

    (a) Yes, according to criteria and rates established by the 
Secretary, Job Corps students receive cash living allowances, 
performance bonuses, and allotments for care of dependents. Graduates 
receive post-separation transition allowances according to Sec.  
686.750.
    (b) In the event of a student's death, any amount due under this 
section is paid according to the provisions of 5 U.S.C. 5582 governing 
issues such as designation of beneficiary, order of precedence, and 
related matters.


Sec.  686.630  Are student allowances subject to Federal payroll taxes?

    Yes, Job Corps student allowances are subject to Federal payroll 
tax withholding and social security taxes. Job Corps students are 
considered to be Federal employees for purposes of Federal payroll 
taxes. (WIOA sec. 157(a)(2))


Sec.  686.640  Are students provided with clothing?

    Yes, Job Corps students are provided cash clothing allowances and/
or articles of clothing, including safety clothing, when needed for 
their participation in Job Corps and their successful entry into the 
work force. Center operators and other service providers must issue 
clothing and clothing assistance to students according to rates, 
criteria, and procedures issued by the Secretary.

Subpart G--Career Transition and Graduate Services


Sec.  686.700  What are a Job Corps center's responsibilities in 
preparing students for career transition services?

    Job Corps centers must assess and counsel students to determine 
their competencies, capabilities, and readiness for career transition 
services.


Sec.  686.710  What career transition services are provided for Job 
Corps enrollees?

    Job Corps career transition services focus on placing program 
graduates in:
    (a) Full-time jobs that are related to their career technical 
training and career pathway that lead to economic self-sufficiency;
    (b) Post-secondary education;
    (c) Advanced training programs, including apprenticeship programs; 
or
    (d) The Armed Forces.


Sec.  686.720  Who provides career transition services?

    The one-stop delivery system must be used to the maximum extent 
practicable in placing graduates and former enrollees in jobs. (WIOA 
sec. 149(b)) Multiple other resources may also provide post-program 
services, including but not limited to Job Corps career transition 
service providers under a contract or other agreement with the 
Department of Labor, and State vocational rehabilitation agencies for 
individuals with disabilities.


Sec.  686.730  What are the responsibilities of career transition 
service providers?

    (a) Career transition service providers are responsible for:
    (1) Contacting graduates;
    (2) Assisting them in improving skills in resume preparation, 
interviewing techniques and job search strategies;
    (3) Identifying job leads or educational and training opportunities 
through coordination with Local Workforce Development Boards, one-stop 
operators and partners, employers, unions and industry organizations;
    (4) Placing graduates in jobs, apprenticeship, the Armed Forces, or 
post-secondary education or training, or referring former students for 
additional services in their local communities as appropriate; and
    (5) Providing placement services for former enrollees according to 
procedures issued by the Secretary.
    (b) Career transition service providers must record and submit all 
Job Corps placement information according to procedures established by 
the Secretary.


Sec.  686.740  What services are provided for program graduates?

    According to procedures issued by the Secretary, career transition 
and support services must be provided to program graduates for up to 12 
months after graduation.


Sec.  686.750  Are graduates provided with transition allowances?

    Yes, graduates receive post-separation transition allowances 
according to policies and procedures established by the Secretary. 
Transition allowances are incentive-based to reflect a graduate's 
attainment of academic credentials and those associated with career 
technical training such as industry-recognized credentials.


Sec.  686.760  What services are provided to former enrollees?

    (a) Up to 3 months of employment services, including career 
services offered through a one-stop center, may be provided to former 
enrollees.
    (b) According to procedures issued by the Secretary, other career 
transition services as determined appropriate may be provided to former 
enrollees.

Subpart H--Community Connections


Sec.  686.800  How do Job Corps centers and service providers become 
involved in their local communities?

    (a) The director of each Job Corps center must ensure the 
establishment and development of mutually beneficial business and 
community relationships and networks. Establishing and developing 
networks includes relationships with:
    (1) Local and distant employers;
    (2) Applicable one-stop centers and Local Boards:
    (3) Entities offering apprenticeship opportunities and youth 
programs;
    (4) Labor-management organizations and local labor organizations;

[[Page 20916]]

    (5) Employers and contractors that support national training 
programs and initiatives; and
    (6) Community-based organizations, non-profit organizations, and 
intermediaries providing workforce development-related services.
    (b) Each Job Corps center also must establish and develop 
relationships with members of the community in which it is located. 
Members of the community should be informed of the projects of the Job 
Corps center and changes in the rules, procedures, or activities of the 
center that may affect the community. Events of mutual interest to the 
community and the Job Corps center should be planned to create and 
maintain community relations and community support.


Sec.  686.810  What is the makeup of a workforce council and what are 
its responsibilities?

    (a) Each Job Corps center must establish a workforce council, 
according to procedures established by the Secretary. The workforce 
council must include:
    (1) Non-governmental and private sector employers;
    (2) Representatives of labor organizations (where present) and of 
employees;
    (3) Job Corps enrollees and graduates; and
    (4) In the case of a single-State local area, the workforce council 
must include a representative of the State Board constituted under 
Sec.  679.110.
    (b) A majority of the council members must be business owners, 
chief executives or chief operating officers of nongovernmental 
employers or other private sector employers, who have substantial 
management, hiring or policy responsibility and who represent 
businesses with employment opportunities in the local area and the 
areas in which students will seek employment.
    (c) The workforce council may include, or otherwise provide for 
consultation with, employers from outside the local area who are likely 
to hire a significant number of enrollees from the Job Corps center.
    (d) The workforce council must:
    (1) Work with all applicable Local Boards and review labor market 
information to determine and provide recommendations to the Secretary 
regarding the center's career technical training offerings, including 
identification of emerging occupations suitable for training (WIOA sec. 
154(c)(1));
    (2) Review all relevant labor market information, including related 
information in the State Plan or the local plan, to:
    (i) Recommend in-demand industry sectors or occupations in the area 
in which the center operates;
    (ii) Determine employment opportunities in the areas in which 
enrollees intend to seek employment;
    (iii) Determine the skills and education necessary to obtain the 
identified employment; and
    (iv) Recommend to the Secretary the type of career technical 
training that should be implemented at the center to enable enrollees 
to obtain the employment opportunities identified.
    (3) Meet at least once every 6 months to reevaluate the labor 
market information, and other relevant information, to determine and 
recommend to the Secretary any necessary changes in the career 
technical training provided at the center.


Sec.  686.820  How will Job Corps coordinate with other agencies?

    (a) The Secretary issues guidelines for the national office, 
regional offices, Job Corps centers and operational support providers 
to use in developing and maintaining cooperative relationships with 
other agencies and institutions, including law enforcement, educational 
institutions, communities, and other employment and training programs 
and agencies.
    (b) The Secretary develops polices and requirements to ensure 
linkages with the one-stop delivery system to the greatest extent 
practicable, as well as with other Federal, State, and local programs, 
and youth programs funded under title I of WIOA. These linkages enhance 
services to youth who face multiple barriers to employment and must 
include, where appropriate:
    (1) Referrals of applicants and students;
    (2) Participant assessment;
    (3) Pre-employment and work maturity skills training;
    (4) Work-based learning;
    (5) Job search, occupational, and basic skills training; and
    (6) Provision of continued services for graduates.
    (c) Job Corps is identified as a required one-stop partner. 
Wherever practicable, Job Corps centers and operational support 
contractors must establish cooperative relationships and partnerships 
with one-stop centers and other one-stop partners, Local Boards, and 
other programs for youth.

Subpart I--Administrative and Management Provisions


Sec.  686.900  Are damages caused by the acts or omissions of students 
eligible for payment under the Federal Tort Claims Act?

    Yes, students are considered Federal employees for purposes of the 
FTCA. (28 U.S.C. 2671 et seq.) Claims for such damage should be filed 
pursuant to the procedures found in 29 CFR part 15, subpart D.


Sec.  686.905  Are loss and damages that occur to persons or personal 
property of students at Job Corps centers eligible for reimbursement?

    Yes, the Job Corps may pay students for valid claims under the 
procedures found in 29 CFR part 15, subpart D.


Sec.  686.910  If a student is injured in the performance of duty as a 
Job Corps student, what benefits may the student receive?

    (a) Job Corps students are considered Federal employees for 
purposes of the Federal Employees' Compensation Act (FECA) as specified 
in sec. 157(a)(3) of WIOA. (29 U.S.C. 2897(a)(3))
    (b) Job Corps students may be entitled to benefits under FECA as 
provided by 5 U.S.C. 8143 for injuries occurring in the performance of 
duty.
    (c) Job Corps students must meet the same eligibility tests for 
FECA benefits that apply to all other Federal employees. The 
requirements for FECA benefits may be found at 5 U.S.C. 8101, et seq. 
and part 10 of this title. The Department of Labor's Office of Workers' 
Compensation Programs (OWCP) administers the FECA program; all FECA 
determinations are within the exclusive authority of the OWCP, subject 
to appeal to the Employees' Compensation Appeals Board.
    (d) Whenever a student is injured, develops an occupationally 
related illness, or dies while in the performance of duty, the 
procedures of the OWCP, at part 10 of this title, must be followed. To 
assist OWCP in determining FECA eligibility, a thorough investigation 
of the circumstances and a medical evaluation must be completed and 
required forms must be timely filed by the center operator with the 
Department's OWCP. Additional information regarding Job Corps FECA 
claims may be found in OWCP's regulations and procedures available on 
the Department's Web site located at www.dol.gov


Sec.  686.915  When is a Job Corps student considered to be in the 
performance of duty?

    (a) Performance of duty is a determination that must be made by the

[[Page 20917]]

OWCP under FECA, and is based on the individual circumstances in each 
claim.
    (b) In general, residential students may be considered to be in the 
``performance of duty'' when:
    (1) They are on center under the supervision and control of Job 
Corps officials;
    (2) They are engaged in any authorized Job Corps activity;
    (3) They are in authorized travel status; or
    (4) They are engaged in any authorized offsite activity.
    (c) Non-resident students are generally considered to be ``in 
performance of duty'' as Federal employees when they are engaged in any 
authorized Job Corps activity, from the time they arrive at any 
scheduled center activity until they leave the activity. The standard 
rules governing coverage of Federal employees during travel to and from 
work apply. These rules are described in guidance issued by the 
Secretary.
    (d) Students are generally considered to be not in the performance 
of duty when:
    (1) They are Absent Without Leave (AWOL);
    (2) They are at home, whether on pass or on leave;
    (3) They are engaged in an unauthorized offsite activity; or
    (4) They are injured or ill due to their own willful misconduct, 
intent to cause injury or death to oneself or another, or through 
intoxication or illegal use of drugs.


Sec.  686.920  How are students protected from unsafe or unhealthy 
situations?

    (a) The Secretary establishes procedures to ensure that students 
are not required or permitted to work, be trained, reside in, or 
receive services in buildings or surroundings or under conditions that 
are unsanitary or hazardous. Whenever students are employed or in 
training for jobs, they must be assigned only to jobs or training which 
observe applicable Federal, State and local health and safety 
standards.
    (b) The Secretary develops procedures to ensure compliance with 
applicable DOL Occupational Safety and Health Administration 
regulations and Wage and Hour Division regulations.


Sec.  686.925  What are the requirements for criminal law enforcement 
jurisdiction on center property?

    (a) All Job Corps property which would otherwise be under exclusive 
Federal legislative jurisdiction is considered under concurrent 
jurisdiction with the appropriate State and locality with respect to 
criminal law enforcement. Concurrent jurisdiction extends to all 
portions of the property, including housing and recreational 
facilities, in addition to the portions of the property used for 
education and training activities.
    (b) Centers located on property under concurrent Federal-State 
jurisdiction must establish agreements with Federal, State and local 
law enforcement agencies to enforce criminal laws.
    (c) The Secretary develops procedures to ensure that any searches 
of a student's person, personal area or belongings for unauthorized 
goods follow applicable right-to-privacy laws.


Sec.  686.930  Are Job Corps operators and service providers authorized 
to pay State or local taxes on gross receipts?

    (a) A private for-profit or a non-profit Job Corps service provider 
is not liable, directly or indirectly, to any State or subdivision for 
any gross receipts taxes, business privilege taxes measured by gross 
receipts, or any similar taxes in connection with any payments made to 
or by such service provider for operating a center or other Job Corps 
program or activity. The service provider is not liable to any State or 
subdivision to collect or pay any sales, excise, use, or similar tax 
imposed upon the sale to or use by such deliverer of any property, 
service, or other item in connection with the operation of a center or 
other Job Corps program or activity. (WIOA sec. 158(d))
    (b) If a State or local authority compels a center operator or 
other service provider to pay such taxes, the center operator or 
service provider may pay the taxes with Federal funds, but must 
document and report the State or local requirement according to 
procedures issued by the Secretary.


Sec.  686.935   What are the financial management responsibilities of 
Job Corps center operators and other service providers?

    (a) Center operators and other service providers must manage Job 
Corps funds using financial management information systems that meet 
the specifications and requirements of the Secretary.
    (b) These financial management systems must:
    (1) Provide accurate, complete, and current disclosures of the 
costs of their Job Corps activities;
    (2) Ensure that expenditures of funds are necessary, reasonable, 
allocable and allowable in accordance with applicable cost principles;
    (3) Use account structures specified by the Secretary;
    (4) Ensure the ability to comply with cost reporting requirements 
and procedures issued by the Secretary; and
    (5) Maintain sufficient cost data for effective planning, 
monitoring, and evaluation of program activities and for determining 
the allowability of reported costs.


Sec.  686.940   Are center operators and service providers subject to 
Federal audits?

    (a) Yes, Center operators and service providers are subject to 
Federal audits.
    (b) The Secretary arranges for the survey, audit, or evaluation of 
each Job Corps center and service provider at least once every 3 years, 
by Federal auditors or independent public accountants. The Secretary 
may arrange for more frequent audits. (WIOA sec. 159(b)(2))
    (c) Center operators and other service providers are responsible 
for giving full cooperation and access to books, documents, papers and 
records to duly appointed Federal auditors and evaluators. (WIOA sec. 
159(b)(1))


Sec.  686.945   What are the procedures for management of student 
records?

    The Secretary issues guidelines for a system for maintaining 
records for each student during enrollment and for disposition of such 
records after separation.


Sec.  686.950  What procedures apply to disclosure of information about 
Job Corps students and program activities?

    (a) The Secretary develops procedures to respond to requests for 
information or records or other necessary disclosures pertaining to 
students.
    (b) Department disclosure of Job Corps information must be handled 
according to the Freedom of Information Act and according to Department 
regulations at 29 CFR part 70.
    (c) Job Corps contractors are not ``agencies'' for Freedom of 
Information Act purposes. Therefore, their records are not subject to 
disclosure under the Freedom of Information Act or 29 CFR part 70.
    (d) The regulations at 29 CFR part 71 apply to a system of records 
covered by the Privacy Act of 1974 maintained by the Department or to a 
similar system maintained by a contractor, such as a screening agency, 
contract center operator, or career transition service provider on 
behalf of the Job Corps.


Sec.  686.955  What are the reporting requirements for center operators 
and operational support service providers?

    The Secretary establishes procedures to ensure the timely and 
complete reporting of necessary financial and program information to 
maintain accountability. Center operators and operational support 
service providers are responsible for the accuracy and

[[Page 20918]]

integrity of all reports and data they provide.


Sec.  686.960  What procedures are available to resolve complaints and 
disputes?

    (a) Each Job Corps center operator and service provider must 
establish and maintain a grievance procedure for filing complaints and 
resolving disputes from applicants, students and/or other interested 
parties about its programs and activities. A hearing on each complaint 
or dispute must be conducted within 30 days of the filing of the 
complaint or dispute. A decision on the complaint must be made by the 
center operator or service provider, as appropriate, within 60 days 
after the filing of the complaint, and a copy of the decision must be 
immediately served, by first-class mail, on the complainant and any 
other party to the complaint. Except for complaints under Sec.  670.470 
or complaints alleging fraud or other criminal activity, complaints may 
be filed within 1 year of the occurrence that led to the complaint.
    (b) The procedure established under paragraph (a) of this section 
must include procedures to process complaints alleging violations of 
sec. 188 of WIOA, consistent with Department nondiscrimination 
regulations implementing sec. 188 of WIOA at 29 CFR part 37 and Sec.  
670.998 of this chapter.


Sec.  686.965  How does Job Corps ensure that complaints or disputes 
are resolved in a timely fashion?

    (a) If a complaint is not resolved by the center operator or 
service provider in the time frames described in Sec.  686.960, the 
person making the complaint may request that the Regional Director 
determine whether reasonable cause exists to believe that the Act or 
regulations for this part of the Act have been violated. The request 
must be filed with the Regional Director within 60 days from the date 
that the center operator or service provider should have issued the 
decision.
    (b) Following the receipt of a request for review under paragraph 
(a) of this section, the Regional Director must determine within 60 
days whether there has been a violation of the Act or the WIOA 
regulations. If the Regional Director determines that there has been a 
violation of the Act or regulations, (s)he may direct the operator or 
service provider to remedy the violation or direct the service provider 
to issue a decision to resolve the dispute according to the service 
provider's grievance procedures. If the service provider does not 
comply with the Regional Director's decision within 30 days, the 
Regional Director may impose a sanction on the center operator or 
service provider for violating the Act or regulations, and/or for 
failing to issue a decision. Decisions imposing sanctions upon a center 
operator or service provider may be appealed to the DOL Office of 
Administrative Law Judges under 20 CFR 683.800 or 683.840.


Sec.  686.970  How does Job Corps ensure that centers or other service 
providers comply with the Act and the Workforce Innovation and 
Opportunity Act regulations?

    (a) If the Department receives a complaint or has reason to believe 
that a center or other service provider is failing to comply with the 
requirements of the Act or regulations, the Regional Director must 
investigate the allegation and determine within 90 days after receiving 
the complaint or otherwise learning of the alleged violation, whether 
such allegation or complaint is true.
    (b) As a result of such a determination, the Regional Director may:
    (1) Direct the center operator or service provider to handle a 
complaint through the grievance procedures established under Sec.  
686.960; or
    (2) Investigate and determine whether the center operator or 
service provider is in compliance with the Act and regulations. If the 
Regional Director determines that the center or service provider is not 
in compliance with the Act or regulations, the Regional Director may 
take action to resolve the complaint under Sec.  686.965(b), or will 
report the incident to the DOL Office of the Inspector General, as 
described in 20 CFR 683.620.


Sec.  686.975  How does Job Corps ensure that contract disputes will be 
resolved?

    A dispute between the Department and a Job Corps contractor will be 
handled according to the Contract Disputes Act and applicable 
regulations.


Sec.  686.980  How does Job Corps resolve disputes between the U.S. 
Department of Labor and the U.S. Department of Agriculture regarding 
the operation of Job Corps centers?

    Disputes between the U.S. Department of Labor and the U.S. 
Department of Agriculture regarding operating a center will be handled 
according to the interagency agreement between the two agencies.


Sec.  686.985  What Department of Labor equal opportunity and 
nondiscrimination regulations apply to Job Corps?

    Nondiscrimination requirements, procedures, complaint processing, 
and compliance reviews are governed by, as applicable, provisions of 
the following Department of Labor regulations:
    (a) Regulations implementing sec. 188 of WIOA for programs 
receiving Federal financial assistance under WIOA found at 29 CFR part 
37.
    (b) 29 CFR part 33 for programs conducted by the Department of 
Labor; and
    (c) 41 CFR chapter 60 for entities that have a Federal government 
contract.

Subpart J--Performance


Sec.  686.1000  How is the performance of the Job Corps program 
assessed?

    (a) The performance of the Job Corps program as a whole, and the 
performance of individual centers, outreach and admissions providers, 
and career transition service providers, is assessed in accordance with 
the regulations in this part and procedures and standards issued by the 
Secretary, through a national performance management system, including 
the Outcome Measurement System (OMS).
    (b) The national performance management system will include 
measures that reflect the primary indicators of performance described 
in Sec.  686.1010, the information needed to complete the Annual Report 
described in Sec.  686.1040, and any other information the Secretary 
determines is necessary to manage and evaluate the effectiveness of the 
Job Corps program. The Secretary will issue annual guidance describing 
the performance management system and outcome measurement system.
    (c) Annual performance assessments based on the measures described 
in paragraph (b) of this section are done for each center operator and 
other service providers, including outreach and admissions providers 
and career transition providers.


Sec.  686.1010  What are the primary indicators of performance for Job 
Corps centers and the Job Corps program?

    The primary indicators of performance for eligible youth are 
described in sec. 116(b)(2)(A)(ii) of WIOA. They are:
    (a) The percentage of program participants who are in education or 
training activities, or in unsubsidized employment, during the second 
quarter after exit from the program (WIOA sec. 116(b)(2)(A)(ii)(I));
    (b) The percentage of program participants who are in education or 
training activities, or in unsubsidized employment, during the fourth 
quarter after exit from the program (WIOA sec. 116(b)(2)(A)(ii)(II));
    (c) The median earnings of program participants who are in 
unsubsidized

[[Page 20919]]

employment during the second quarter after exit from the program (WIOA 
sec. 116(b)(2)(A)(i)(III));
    (d) The percentage of program participants who obtain a recognized 
post-secondary credential, or a secondary school diploma or its 
recognized equivalent during participation in or within 1 year after 
exit from the program. (WIOA sec. 116(b)(2)(A)(i)(IV)) Program 
participants who obtain a secondary school diploma or its recognized 
equivalent will be included in the percentage only if they have also 
obtained or retained employment, or are in an education or training 
program leading to a recognized post-secondary credential, within 1 
year after exit from the program (WIOA sec. 116(b)(2)(A)(iii));
    (e) The percentage of program participants who, during a program 
year, are in an education or training program that leads to a 
recognized post-secondary credential or employment and who are 
achieving measurable skill gains toward such a credential or employment 
(WIOA sec. 116(b)(2)(A)(i)(V)); and
    (f) The indicators of effectiveness in serving employers 
established by the Secretaries of Education and Labor, pursuant to sec. 
116(b)(2)(A)(iv) of WIOA. (WIOA sec. 116(b)(2)(A)(i)(VI))


Sec.  686.1020  What are the indicators of performance for Job Corps 
outreach and admissions providers?

    The Secretary establishes performance indicators for outreach and 
admission service providers serving the Job Corps program. They 
include, but are not limited to:
    (a) The number of enrollees recruited, compared to the established 
goals for such recruitment, and the number of enrollees who remain 
committed to the program for 90 days after enrollment (WIOA sec. 
159(c)(2)(A));
    (b) The percentage and number of former enrollees, including the 
number dismissed under the zero tolerance policy described in sec. 
152(b) of WIOA and Sec.  686.545 (WIOA sec. 159(d)(1)(I));
    (c) The maximum attainable percent of enrollees at the Job Corps 
center that reside in the State in which the center is located, and the 
maximum attainable percentage of enrollees at the Job Corps center that 
reside in the State in which the center is located and in surrounding 
regions, as compared to the percentage targets established by the 
Secretary for the center for each of those measures (WIOA sec. 
159(d)(1)(L)); and
    (d) The cost per enrollee, calculated by comparing the number of 
enrollees at the center in a program year to the total budget for such 
center in the same program year. (WIOA sec. 159(d)(1)(M)).


Sec.  686.1030  What are the indicators of performance for Job Corps 
career transition service providers?

    The Secretary establishes performance indicators for career 
transition service providers serving the Job Corps program. These 
include, but are not limited to, the following:
    (a) The primary indicators of performance for eligible youth in 
WIOA sec. 116(b)(2)(A)(ii), as listed in Sec.  686.1010;
    (b) The number of graduates who entered the Armed Forces (WIOA sec. 
159(d)(1)(D));
    (c) The number of graduates who entered apprenticeship programs 
(WIOA sec. 159(d)(1)(E));
    (d) The number of graduates who entered unsubsidized employment 
related to the career technical training received through the Job Corps 
program (WIOA sec. 159(d)(1)(H));
    (e) The number of graduates who entered unsubsidized employment not 
related to the education and training received through the Job Corps 
program (WIOA sec. 159(d)(1)(H));
    (f) The percentage and number of graduates who enter post-secondary 
education (WIOA sec. 159(d)(1)(J)); and
    (g) The average wage of graduates who entered unsubsidized 
employment (WIOA sec. 159(d)(1)(K)):
    (1) On the first day of such employment, and
    (2) On the day that is 6 months after such first day.


Sec.  686.1040  What information will be collected for use in the 
Annual Report?

    The Secretary will collect and submit in the Annual Report 
described in sec. 159(c)(4) of WIOA, which will include the following 
information on each Job Corps center, and the Job Corps program as a 
whole:
    (a) Information on the performance, based on the performance 
indicators described Sec.  686.1010, as compared to the expected level 
of performance established under Sec.  686.1050 for each performance 
indicator;
    (b) Information on the performance of outreach service providers 
and career transition service providers on the performance indicators 
established under Sec. Sec.  686.1020 and 686.1030, as compared to the 
expected levels of performance established under Sec.  686.1050 for 
each of those indicators;
    (c) The number of enrollees served;
    (d) Demographic information on the enrollees served, including age, 
race, gender, and education and income level;
    (e) The number of graduates of a Job Corps center;
    (f) The number of graduates who entered the Armed Forces;
    (g) The number of graduates who entered apprenticeship programs;
    (h) The number of graduates who received a regular secondary school 
diploma;
    (i) The number of graduates who received a State recognized 
equivalent of a secondary school diploma;
    (j) The number of graduates who entered unsubsidized employment 
related to the career technical training received through the Job Corps 
program and the number who entered unsubsidized employment not related 
to the education and training received;
    (k) The percentage and number of former enrollees, including the 
number dismissed under the zero tolerance policy described in Sec.  
686.545;
    (l) The percentage and number of graduates who enter post-secondary 
education;
    (m) The average wage of graduates who enter unsubsidized 
employment:
    (1) On the first day of such employment; and
    (2) On the day that is 6 months after such first day;
    (n) The maximum attainable percent of enrollees at a Job Corps 
center that reside in the State in which the center is located, and the 
maximum attainable percentage of enrollees at a Job Corps center that 
reside in the State in which the center is located and in surrounding 
regions, as compared to the percentage targets established by the 
Secretary for the center for each of those measures;
    (o) The cost per enrollee, which is calculated by comparing the 
number of enrollees at the center in a program year to the total budget 
for such center in the same program year;
    (p) The cost per graduate, which is calculated by comparing the 
number of graduates of the center in a program year compared to the 
total budget for such center in the same program year;
    (q) Information regarding the state of Job Corps buildings and 
facilities, including a review of requested construction, 
rehabilitation, and acquisition projects, by each Job Corps center, and 
a review of new facilities under construction;
    (r) Available information regarding the national and community 
service activities of enrollees, particularly those enrollees at 
Civilian Conservation Centers; and
    (s) Any additional information required by the Secretary.

[[Page 20920]]

Sec.  686.1050  How are the expected levels of performance for Job 
Corps centers, outreach and admissions providers and career transition 
service providers established?

    (a) The Secretary establishes expected levels of performance for 
Job Corps centers, outreach and admissions providers and career 
transition service providers and the Job Corps program relating to each 
of the primary indicators of performance described in Sec. Sec.  
686.1010, 686.1020, and 686.1030.
    (b) As described in Sec.  686.1000, the Secretary will issue annual 
guidance describing the national performance management system and 
outcomes measurement system, which will communicate the expected levels 
of performance for each primary indicator of performance for each 
center, and each indicator of performance for each outreach and 
admission provider, and for each career transition service provider. 
Such guidance will also describe how the expected levels of performance 
were calculated.


Sec.  686.1060  How are center rankings established?

    (a) The Secretary calculates annual rankings of center performance 
based on the performance management system described in Sec.  686.1000 
as part of the annual performance assessment described in Sec.  
686.1000(c).
    (b) The Secretary will issue annual guidance that communicates the 
methodology for calculating the performance rankings for the year.


Sec.  686.1070  How and when will the Secretary use Performance 
Improvement Plans?

    (a) The Secretary establishes standards and procedures for 
developing and implementing performance improvement plans.
    (1) The Secretary will develop and implement a performance 
improvement plan for a center when that center fails to meet the 
expected levels of performance described in Sec.  686.1050,
    (i) The Secretary will consider a center to have failed to meet the 
expected level of performance if the center:
    (A) Is ranked among the lowest 10 percent of Job Corps centers for 
the most recent preceding program year according to the rankings 
calculated under Sec.  686.1060; and
    (B) The center fails to achieve an average of 90 percent of the 
expected level of performance for all of the primary indicators.
    (ii) For any program year that precedes the implementation of the 
establishment of the expected levels of performance under Sec.  
686.1050 and the application of the primary indicators of performance 
for Job Corps centers identified in Sec.  686.1010, the Secretary will 
consider a center to have failed to meet the expected levels of 
performance if the center:
    (A) Is ranked among the lowest 10 percent of Job Corps centers for 
the most recent preceding program year according to the rankings 
calculated under Sec.  686.1060; and
    (B) The center's composite OMS score for the program year is 88 
percent or less of the year's OMS national average.
    (2) The Secretary may also develop and implement additional 
performance improvement plans, which will require improvements for a 
Job Corps center that fails to meet criteria established by the 
Secretary other than the expected levels of performance.
    (b) A performance improvement plan will require action be taken to 
correct identified performance issues within 1 year of the 
implementation of the plan (WIOA sec. 159(f)(2)), and it will identify 
criteria that must be met for the center to complete the performance 
improvement plan.
    (1) The center operator must implement the actions outlined in the 
performance improvement plan.
    (2) If the center fails to take the steps outlined in the 
performance improvement plan or fails to meet the criteria established 
to complete the performance improvement plan after 1 year, the center 
will be considered to have failed to improve performance under a 
performance improvement plan detailed in paragraph (a) of this section.
    (i) Such a center will remain on a performance improvement plan and 
the Secretary will take action as described in paragraph (c) of this 
section.
    (ii) If a Civilian Conservation Center fails to meet expected 
levels of performance relating to the primary indicators of performance 
specified in Sec.  686.1010, or fails to improve performance under a 
performance improvement plan detailed in paragraph (a) of this section 
after 3 program years, the Secretary, in consultation with the 
Secretary of Agriculture, must select an entity to operate the Civilian 
Conservation Center on a competitive basis, in accordance with the 
requirements of Sec.  686.310. (WIOA sec. 159(f)(4))
    (c) Under a performance improvement plan, the Secretary may take 
the following actions, as necessary:
    (1) Providing technical assistance to the center (WIOA sec. 
159(f)(2)(A));
    (2) Changing the management staff of a center (WIOA sec. 
159(f)(2)(C));
    (3) Changing the career technical training offered at the center 
(WIOA sec. 159(f)(2)(B));
    (4) Replacing the operator of the center (WIOA sec. 159(f)(2)(D));
    (5) Reducing the capacity of the center (WIOA sec. 159(f)(2)(E));
    (6) Relocating the center (WIOA sec. 159(f)(2)(F)); or
    (7) Closing the center (WIOA sec. 159(f)(2)(G)) in accordance with 
the criteria established under Sec.  670.200(b).
0
14. Add part 687 to read as follows:

PART 687--NATIONAL DISLOCATED WORKER GRANTS

Sec.
687.100 What are the types and purposes of national disclosed worker 
grants under the Workforce Innovation and Opportunity Act?
687.110 What are major economic dislocations or other events which 
may qualify for a national dislocated worker grant?
687.120 Who is eligible to apply for national dislocated worker 
grants?
687.130 When should applications for national dislocated worker 
grants be submitted to the Department?
687.140 What activities are applicants expected to conduct before a 
national dislocated worker grant application is submitted?
687.150 What are the requirements for submitting applications for 
national dislocated worker grants?
687.160 What is the timeframe for the Department to issue decisions 
on national dislocated worker grant applications?
687.170 Who is eligible to be served under national dislocated 
worker grants?
687.180 What are the allowable activities under national dislocated 
worker grants?
687.190 How do statutory and regulatory waivers apply to national 
dislocated worker grants?
687.200 What are the program and administrative requirements that 
apply to national dislocated worker grants?

    Authority: Secs. 170, 189, 503, Pub. L. 113-128, 128 Stat. 1425 
(Jul. 22, 2014).


Sec.  687.100  What are the types and purposes of national disclosed 
worker grants under the Workforce Innovation and Opportunity Act?

    There are two types of national dislocated worker grants (NDWGs) 
under sec. 170 of the WIOA: Regular NDWGs and Disaster NDWGs.
    (a) Regular NDWGs provide career services for dislocated workers 
and other eligible populations. They are intended to expand service 
capacity temporarily at the State and local levels, by providing time-
limited funding assistance in response to significant events that 
affect the U.S. workforce that cannot be accommodated with WIOA formula 
funds or other relevant existing resources.

[[Page 20921]]

    (b) Disaster NDWGs allow for the creation of temporary employment 
to assist with clean-up and recovery efforts from emergencies or major 
disasters and the provision of career services in certain situations, 
as provided in Sec.  687.180(b).


Sec.  687.110  What are major economic dislocations or other events 
which may qualify for a national dislocated worker grant?

    (a) Qualifying events for Regular NDWGs include:
    (1) Mass layoffs affecting 50 or more workers from one employer in 
the same area;
    (2) Closures and realignments of military installations;
    (3) Layoffs that have significantly increased the total number of 
unemployed individuals in a community;
    (4) Situations where higher than average demand for employment and 
training activities for dislocated members of the Armed Forces, 
dislocated spouses of members of the Armed Forces on active duty (as 
defined in 10 U.S.C. 101(d)(1)), or members of the Armed Forces 
described in Sec.  687.170(a)(1)(iii), exceeds State and local 
resources for providing such activities; and
    (5) Other events, as determined by the Secretary.
    (b) Qualifying events for Disaster NDWGs include:
    (1) Emergencies or major disasters, as defined in paragraphs (1) 
and (2), respectively, of sec. 102 of the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act (42 U.S.C. 5122(1) and (2)) which 
have been declared eligible for public assistance by the Federal 
Emergency Management Agency (FEMA);
    (2) An emergency or disaster situation of national significance 
that could result in a potentially large loss of employment, as 
declared or otherwise recognized by the chief official of a Federal 
Agency with jurisdiction over the Federal response to the emergency or 
disaster situation; and
    (3) Situations where a substantial number of workers from a State, 
tribal area, or outlying area in which an emergency or disaster has 
occurred relocate to another State, tribal area, or outlying area.


Sec.  687.120  Who is eligible to apply for national dislocated worker 
grants?

    (a) For Regular NDWGs, the following entities are eligible to 
apply:
    (1) States or outlying areas, or a consortium of States;
    (2) Local Boards, or a consortium of boards;
    (3) An entity described in sec. 166(c) of WIOA relating to Native 
American programs; and,
    (4) Other entities determined to be appropriate by the Governor of 
the State or outlying area involved; and
    (5) Other entities that demonstrate to the Secretary the capability 
to respond effectively to circumstances relating to particular 
dislocations.
    (b) For Disaster NDWGs, only States, outlying areas, and Indian 
tribal governments as defined by the Robert T. Stafford Disaster Relief 
and Emergency Assistance Act (42 U.S.C. 5122(6)) are eligible to apply.


Sec.  687.130  When should applications for national dislocated worker 
grants be submitted to the Department?

    (a) Applications for Regular NDWGs may be submitted at any time 
during the year and should be submitted to respond to eligible events 
as soon as possible when:
    (1) The applicant receives a notification of a mass layoff or a 
closure as a result of a Worker Adjustment and Retraining Notification 
(WARN) Act notice, a general announcement, or some other means, or in 
the case of applications to address situations described in Sec.  
687.110(a)(4), when higher than average demand for employment and 
training activities for those members of the Armed Forces and military 
spouses exceeds State and local resources for providing such 
activities;
    (2) Worker need and interest in services has been determined 
through Rapid Response, or other means, and is sufficient to justify 
the need for a NDWG; and
    (3) A determination has been made, in collaboration with the 
applicable local area, that State and local formula funds are 
inadequate to provide the level of services needed by the affected 
workers.
    (b) Applications for Disaster NDWGs to respond to an emergency or 
major disaster should be submitted as soon as possible when:
    (1) As described in Sec.  687.110(b)(1), FEMA has declared that the 
affected area is eligible for public assistance;
    (2) An emergency or disaster situation of national significance 
that could result in a potentially large loss of employment occurs, and 
the Federal agency with jurisdiction over the Federal response has 
issued an appropriate declaration, as described in Sec.  687.110(b)(2) 
(such applications must indicate the applicable Federal agency 
declaration, describe the impact on the local and/or State economy, and 
describe the proposed activities); or
    (3) A substantial number of workers from a State, tribal area, or 
outlying area in which an emergency or disaster has occurred relocate 
to another State, tribal area, or outlying area, as provided under 
Sec.  687.110(b)(3), and interest in services has been determined and 
is sufficient to justify the need for a NDWG.


Sec.  687.140  What activities are applicants expected to conduct 
before a national dislocated worker grant application is submitted?

    Prior to submitting an application for NDWG funds, applicants must:
    (a) For Regular NDWGs:
    (1) Collect information to identify the needs and interests of the 
affected workers through Rapid Response activities (described in Sec.  
682.330), or other means;
    (2) Provide appropriate services to eligible workers with State and 
local funds, including funds from State allotments for dislocated 
worker training and statewide activities provided under sec. 
132(b)(2)(B) of WIOA, as available; and
    (3) Coordinate with the Local Board(s) and chief elected 
official(s) of the local area(s) in which the proposed NDWG project is 
to operate.
    (b) For Disaster NDWGs:
    (1) Conduct a preliminary assessment of the clean-up and 
humanitarian needs of the affected areas;
    (2) Put a mechanism in place to reasonably ascertain that there is 
a sufficient population of eligible individuals to conduct the planned 
work; and
    (3) Coordinate with the Local Board(s) and chief elected 
official(s) of the local area(s) in which the proposed project is to 
operate.


Sec.  687.150  What are the requirements for submitting applications 
for national dislocated worker grants?

    The Department will publish additional guidance on NDWGs and the 
requirements for submitting applications for NDWGs. A project 
implementation plan must be submitted after receiving the NDWG award. 
The additional guidance also will identify the information which must 
be included in the required project implementation plan. The project 
implementation plan will include more detailed information than is 
required for the initial application.


Sec.  687.160  What is the timeframe for the Department to issue 
decisions on national dislocated worker grant applications?

    The Department will issue a final decision on a NDWG application 
within 45 calendar days of receipt of an application that meets the 
requirements of this part. Applicants are strongly encouraged to review 
their NDWG

[[Page 20922]]

application submissions carefully and consult with the appropriate 
Employment and Training Administration Regional Office to ensure their 
applications meet the requirements established in this part and those 
that may be set forth in additional guidance.


Sec.  687.170  Who is eligible to be served under national dislocated 
worker grants?

    (a) For Regular NDWGs:
    (1) In order to receive career services, as prescribed by sec. 
134(c)(2)(A) of WIOA and Sec.  680.130(a) of this chapter under a NDWG, 
an individual must be:
    (i) A dislocated worker within the meaning of sec. 3(15) of WIOA;
    (ii) A person who is either:
    (A) A civilian employee of the Department of Defense or the 
Department of Energy employed at a military installation that is being 
closed or will undergo realignment within 24 months after the date of 
determination of eligibility; or
    (B) An individual employed in a non-managerial position with a 
Department of Defense contractor determined by the Secretary of Defense 
to be at risk of termination from employment as a result of reductions 
in defense expenditures and whose employer is converting from defense 
to non-defense applications in order to prevent worker layoffs; or
    (iii) A member of the Armed Forces who:
    (A) was on active duty or full-time National Guard duty;
    (B) is involuntarily separated from active duty or full-time 
National Guard duty (as defined in 10 U.S.C. 1141), or is separated 
from active duty or full-time National Guard duty pursuant to a special 
separation benefits program under 10 U.S.C. 1174a or the voluntary 
separation incentive program under 10 U.S.C. 1175;
    (C) is not entitled to retired or retained pay incident to the 
separation described in paragraph (a)(1)(ii) of this section; and
    (D) applies for employment and training assistance under this part 
before the end of the 180-day period beginning on the date of the 
separation described in paragraph (a)(1)(ii) of this section.
    (iv) For Regular NDWGs awarded for situations described in Sec.  
687.110(a)(4), a person who is:
    (A) A dislocated member of the Armed Forces, or member of the Armed 
Forces described in paragraph (a)(1)(iii) of this section; or
    (B) The dislocated spouse of a member of the Armed Forces on active 
duty (as defined in 10 U.S.C. 101(d)(1)).
    (b) For Disaster NDWGs:
    (1) In order to be eligible to receive disaster relief employment 
under sec. 170(b)(1)(B)(i) of WIOA, an individual must be:
    (i) A dislocated worker;
    (ii) A long-term unemployed individual;
    (iii) An individual who is temporarily or permanently laid off as a 
consequence of the emergency or disaster; or
    (iv) An individual who is self-employed and becomes unemployed or 
significantly underemployed as a result of the emergency or disaster.
    (2) In order to be eligible to receive employment-related 
assistance, and in rare instances, humanitarian-related temporary 
employment under sec. 170(b)(1)(B)(ii) of WIOA, an individual must have 
relocated or evacuated from an area as a result of a disaster that has 
been declared or otherwise recognized, and be:
    (i) A dislocated worker;
    (ii) A long-term unemployed individual;
    (iii) An individual who is temporarily or permanently laid off as a 
consequence of the emergency or disaster; or
    (iv) An individual who is self-employed and becomes unemployed or 
significantly underemployed as a result of the emergency or disaster.


Sec.  687.180  What are the allowable activities under national 
dislocated worker grants?

    (a) For Regular NDWGs:
    (1) Employment and training activities include career services and 
training authorized at secs. 134(c)-(d) and 170(b)(1) of WIOA. The 
services to be provided in a particular project are negotiated between 
the Department and the grantee, taking into account the needs of the 
target population covered by the grant, and may be changed through 
grant modifications, if necessary.
    (2) NDWGs may provide for supportive services, including needs-
related payments (subject to the restrictions in sec. 134(d)(3) of 
WIOA, where applicable), to help workers who require such assistance to 
participate in the activities provided for in the grant. Generally, the 
terms of a grant must be consistent with local policies governing such 
financial assistance under its formula funds (including the payment 
levels and duration of payments). The terms of the grant agreement may 
diverge from established local policies, in the following instances:
    (i) If unemployed dislocated workers served by the project are not 
able to meet the 13 or 8 weeks enrollment in training requirement 
established by sec. 134(d)(3)(B) of WIOA because of the lack of formula 
or NDWG funds in the State or local area at the time of the 
dislocation, such individuals may be eligible for needs-related 
payments if they are enrolled in training by the end of the 6th week 
following the date of the NDWG award; or
    (ii) Under other circumstances as specified in the NDWG application 
requirements.
    (b) For Disaster NDWGs: NDWG funds provided under sec. 170(b)(1)(B) 
of WIOA can support a different array of activities, depending on the 
circumstances surrounding the situation for which the grant was 
awarded:
    (1) For NDWGs serving individuals in a disaster area declared 
eligible for public assistance by FEMA disaster relief, employment is 
authorized to support projects that provide food, clothing, shelter, 
and other humanitarian assistance for emergency and disaster victims, 
and projects regarding demolition, cleaning, repair, renovation, and 
reconstruction of damaged and destroyed structures, facilities, and 
lands located within the disaster area and in offshore areas related to 
the emergency or disaster in coordination with the Administrator of 
FEMA. Employment and training activities may also be provided, as 
appropriate. An individual's disaster relief employment is limited to 
12 months or less for work related to recovery from a single emergency 
or disaster. The Secretary may extend an individual's disaster relief 
employment for up to an additional 12 months, if it is requested and 
sufficiently justified by the State.
    (2) For NDWGs serving individuals who have relocated from a 
disaster area, only career services and training activities will be 
authorized, except where temporary employment for humanitarian 
assistance is appropriate.
    (3) For NDWGs awarded to States for events that have designations 
from Federal agencies (other than FEMA) that recognize an emergency or 
disaster situation as one of national significance that could result in 
a potentially large loss of employment, disaster relief employment and/
or career services may be authorized, depending on the circumstances 
associated with the specific event.
    (4) Disaster NDWG funds may be expended through public and private 
agencies and organizations engaged in the disaster relief, humanitarian 
assistance, and clean-up projects described in this paragraph (b) of 
this section.

[[Page 20923]]

Sec.  687.190  How do statutory and regulatory waivers apply to 
national dislocated worker grants?

    (a) Grantees may request and the Department may approve the 
application of existing general statutory or regulatory waivers to a 
NDWG award. The application for NDWG grant funds must describe any 
statutory waivers which the applicant wishes to apply to the project 
that the State and/or Local Board, as applicable, have been granted 
under its waiver plan. The Department will consider such requests as 
part of the overall application review and decision process.
    (b) If, during the operation of the project, the grantee wishes to 
apply a waiver not identified in the application, the grantee must 
request a modification which includes the provision to be waived, the 
operational barrier to be removed, and the effect upon the outcome of 
the project.


Sec.  687.200  What are the program and administrative requirements 
that apply to national dislocated worker grants?

    (a) Unless otherwise authorized in a NDWG agreement, the financial 
and administrative rules contained in part 683 apply to awards under 
this part.
    (b) Exceptions include:
    (1) Funds provided in response to a disaster may be used for 
temporary job creation in areas declared eligible for public assistance 
by FEMA, and, in some instances, areas impacted by an emergency or 
disaster situation of national significance, as provided in Sec.  
687.110(b)(2), and subject to the limitations of sec. 170(d) of WIOA, 
this part, and any additional guidance issued by the Department;
    (2) Per sec. 170(d)(4) of WIOA, in extremely limited instances, as 
determined by the Secretary or the Secretary's designee, any Disaster 
NDWG funds that are available for expenditure under any grant awarded 
under this part may be used for additional disasters or situations of 
national significance experienced by the State in the same program year 
the funds were awarded;
    (3) NDWG funds may be used to pay an appropriate level of 
administrative costs based on the design and complexity of the project. 
The Department will negotiate administration costs with the applicant 
as part of the application review and grant award and modification 
processes;
    (4) The period of availability for expenditure of funds under a 
NDWG is specified in the grant agreement;
    (5) The Department may establish supplemental reporting, 
monitoring, and oversight requirements for NDWGs. The requirements will 
be identified in the grant application instructions or the grant 
document; and
    (6) The Department may negotiate and fund projects under terms 
other than those specified in this part where it can be clearly 
demonstrated that such adjustments will achieve a greater positive 
benefit for the workers and/or communities being assisted.
0
15. Add part 688 to read as follows:

PART 688--PROVISIONS GOVERNING THE YOUTHBUILD PROGRAM

Subpart A--Purpose and Definitions
Sec.
688.100 What is YouthBuild?
688.110 What are the purposes of the YouthBuild program?
688.120 What definitions apply to this part?
Subpart B--Funding and Grant Applications
Sec.
688.200 How are YouthBuild grants funded and administered?
688.210 How does an eligible entity apply for grant funds to operate 
a YouthBuild program?
688.220 How are eligible entities selected to receive grant funds?
688.230 What are the minimum requirements to apply for YouthBuild 
funds?
688.240 How are eligible entities notified of approval for grant 
funds?
Subpart C--Program Requirements
Sec.
688.300 Who is an eligible participant?
688.310 Are there special rules that apply to veterans?
688.320 What eligible activities may be funded under the YouthBuild 
program?
688.330 What level of training qualifies a construction project as a 
qualifying work site under the YouthBuild program?
688.340 What timeframes apply to participation?
688.350 What timeframes must be devoted to education and workforce 
investment or other activities?
688.360 What timeframes apply to follow-up services?
688.370 What are the requirements for exit from the YouthBuild 
program?
688.380 What is the role of the YouthBuild grantee in the one-stop 
system?
Subpart D--Performance Indicators
Sec.
688.400 What are the performance indicators for YouthBuild grants?
688.410 What are the required levels of performance for the 
performance indicators?
688.420 What are the reporting requirements for YouthBuild grantees?
688.430 What are the due dates for quarterly reporting?
Subpart E--Administrative Rules, Costs, and Limitations
Sec.
688.500 What administrative regulations apply to the YouthBuild 
program?
688.510 How may grantees provide services under the YouthBuild 
program?
688.520 What cost limits apply to the use of YouthBuild program 
funds?
688.530 What are the cost-sharing or matching requirements of the 
YouthBuild program?
688.540 What are considered to be leveraged funds?
688.550 How are the costs associated with real property treated in 
the YouthBuild program?
688.560 What participant costs are allowable under the YouthBuild 
program?
688.570 Does the Department allow incentive payments in the 
YouthBuild program?
688.580 What effect do payments to YouthBuild participants have on 
eligibility for other Federal needs-based benefits?
688.590 What program income requirements apply under the YouthBuild 
program?
688.600 Are YouthBuild programs subject to the Davis-Bacon Act labor 
standards?
688.610 What are the recordkeeping requirements for YouthBuild 
programs?
Subpart F--Additional Requirements
Sec.
688.700 What are the safety requirements for the YouthBuild program?
688.710 What are the reporting requirements for youth safety?
688.720 What environmental protection laws apply to the YouthBuild 
program?
688.730 What requirements apply to YouthBuild housing?

    Authority:  Secs. 171, 189, 503, Pub. L. 113-128, 128 Stat. 1425 
(Jul. 22, 2014).

Subpart A--Purpose and Definitions


Sec.  688.100  What is YouthBuild?

    (a) YouthBuild is a workforce development program that provides 
employment, education, leadership development, and training 
opportunities to disadvantaged and low-income youth between the ages of 
16 and 24, most of whom are secondary school drop outs and are either a 
member of a low-income family, a foster care youth, a youth who is 
homeless, an offender, a youth with a disability, a child of an 
incarcerated parent, or a migrant youth.
    (b) Program participants receive education services that may lead 
to either a high school diploma or its State-recognized equivalent. 
Further, they receive occupational skills training and are encouraged 
to pursue post-secondary education or additional training, including 
registered apprenticeship and pre-apprenticeship programs. The program 
is designed to create a skilled workforce either in the construction 
industry, through the rehabilitation and construction of housing for 
homeless and low-income individuals and families, as well as

[[Page 20924]]

public facilities, or in other in-demand jobs. The program also 
benefits the larger community because it provides increased access to 
affordable housing.


Sec.  688.110  What are the purposes of the YouthBuild program?

    The overarching goal of the YouthBuild program is to provide 
disadvantaged and low-income youth the opportunity to obtain education 
and employment skills in local in-demand jobs to achieve economic self-
sufficiency. Additionally, the YouthBuild program has as goals:
    (a) To enable disadvantaged youth to obtain the education and 
employment skills necessary to achieve economic self-sufficiency 
through employment in in-demand occupations and pursuit of post-
secondary education and training opportunities;
    (b) To provide disadvantaged youth with opportunities for 
meaningful work and service to their communities;
    (c) To foster the development of employment and leadership skills 
and commitment to community development among youth in low-income 
communities;
    (d) To expand the supply of permanent affordable housing for 
homeless individuals and families, homeless youth, and low-income 
families by utilizing the talents of disadvantaged youth. The program 
seeks to increase the number of affordable and transitional housing 
units available to decrease the rate of homelessness in communities 
with YouthBuild programs.
    (e) To improve the quality and energy efficiency of community and 
other non-profit and public facilities, including those that are used 
to serve homeless and low-income families.


Sec.  688.120  What definitions apply to this part?

    In addition to the definitions at sec. 3 of WIOA and 20 CFR 
675.300, the following definitions apply:
    Adjusted income means, with respect to a family, the amount (as 
determined by the Housing Development Agency) of the income of the 
members of the family residing in a dwelling unit or the persons on a 
lease, after any income exclusions as follows:
    (1) Mandatory exclusions. In determining adjusted income, a Housing 
Development Agency must exclude from the annual income of a family the 
following amounts:
    (2) Elderly and disabled families. $400 for any elderly or disabled 
family.
    (3) Medical expenses. The amount by which three percent of the 
annual family income is exceeded by the sum of:
    (i) Unreimbursed medical expenses of any elderly family or disabled 
family;
    (ii) Unreimbursed medical expenses of any family that is not 
covered under paragraph (3)(i) of this definition, except that this 
paragraph applies only to the extent approved in appropriation Acts; 
and
    (iii) Unreimbursed reasonable attendant care and auxiliary 
apparatus expenses for each handicapped member of the family, to the 
extent necessary to enable any member of such family (including such 
handicapped member) to be employed.
    (4) Child care expenses. Any reasonable child care expenses 
necessary to enable a member of the family to be employed or to further 
his or her education.
    (5) Minors, students, and persons with disabilities. $480 for each 
member of the family residing in the household (other than the head of 
the household or his or her spouse) who is less than 18 years of age or 
is attending school or vocational training on a full-time basis, or who 
is 18 years of age or older and is a person with disabilities.
    (6) Child support payments. Any payment made by a member of the 
family for the support and maintenance of any child who does not reside 
in the household, except that the amount excluded under this clause may 
not exceed $480 for each child for whom such payment is made; except 
that this clause applies only to the extent approved in appropriations 
Acts.
    (7) Spousal support expenses. Any payment made by a member of the 
family for the support and maintenance of any spouse or former spouse 
who does not reside in the household, except that the amount excluded 
under this clause must not exceed the lesser of the amount that such 
family member has a legal obligation to pay, or $550 for each 
individual for whom such payment is made; except that this clause 
applies only to the extent approved in appropriations Acts.
    (8) Earned income of minors. The amount of any earned income of a 
member of the family who is not:
    (i) 18 years of age or older; and
    (ii) The head of the household (or the spouse of the head of the 
household).
    (9) Permissive exclusions for public housing. In determining 
adjusted income, a Housing Development Agency may, in the discretion of 
the agency, establish exclusions from the annual income of a family 
residing in a public housing dwelling unit. Such exclusions may include 
the following amounts:
    (10) Excessive travel expenses. Excessive travel expenses in an 
amount not to exceed $25 per family per week, for employment or 
education-related travel.
    (11) Earned income. An amount of any earned income of the family, 
established at the discretion of the Housing Development Agency, which 
may be based on--
    (i) All earned income of the family,
    (ii) The amount earned by particular members of the family;
    (iii) The amount earned by families having certain characteristics; 
or
    (iv) The amount earned by families or members during certain 
periods or from certain sources.
    (12) Others. Such other amounts for other purposes, as the Housing 
Development Agency may establish.
    Applicant means an eligible entity that has submitted an 
application under Sec.  688.210.
    Basic Skills Deficient means an individual:
    (1) Who is a youth, that the individual has English reading, 
writing, or computing skills at or below the 8th grade level on a 
generally accepted standardized test; or
    (2) Who is a youth or adult, that the individual is unable to 
compute or solve problems, or read, write, or speak English, at a level 
necessary to function on the job, in the individual's family, or in 
society.
    Community or other public facility means those facilities which are 
either privately owned by non-profit organizations, including faith-
based and community-based organizations, and publicly used for the 
benefit of the community, or publicly owned and publicly used for the 
benefit of the community.
    Construction Plus means the inclusion of occupational skills 
training for YouthBuild participants in in-demand occupations other 
than construction.
    Eligible entity means a public or private non-profit agency or 
organization (including a consortium of such agencies or 
organizations), including:
    (1) A community-based organization;
    (2) A faith-based organization;
    (3) An entity carrying out activities under this title, such as a 
Local Board;
    (4) A community action agency;
    (5) A State or local housing development agency;
    (6) An Indian tribe or other agency primarily serving Indians;
    (7) A community development corporation;
    (8) A State or local youth service or conservation corps; and
    (9) Any other entity eligible to provide education or employment 
training under a Federal program (other

[[Page 20925]]

than the program carried out under this section).
    English language learner, when used with respect to a participant, 
means an eligible individual who has limited ability in reading, 
writing, speaking, or comprehending the English language, and:
    (1) Whose native language is a language other than English; or
    (2) Who lives in a family or community environment where a language 
other than English is the dominant language.
    Exit, as used in Sec.  688.400, has the same meaning as in Sec.  
676.150(c).
    Follow-up services include:
    (1) The leadership development and supportive service activities 
listed in Sec. Sec.  681.520 and 681.570;
    (2) Regular contact with a youth participant's employer, including 
assistance in addressing work-related problems that arise;
    (3) Assistance in securing better paying jobs, career development 
and further education;
    (4) Work-related peer support groups;
    (5) Adult mentoring; and
    (6) Services necessary to ensure the success of youth participants 
in employment and/or post-secondary education.
    Homeless individual means an individual who lacks a fixed, regular, 
and adequate nighttime residence and includes an individual who:
    (1) Is sharing the housing of other persons due to loss of housing, 
economic hardship, or similar reason;
    (2) Is living in a motel, hotel, trailer park, or campground due to 
the lack of alternative adequate accommodations;
    (3) Is living in an emergency or transitional shelter;
    (4) Is abandoned in a hospital; or is awaiting foster care 
placement;
    (5) An individual who has a primary nighttime residence that is a 
public or private place not designed for or ordinarily used as regular 
sleeping accommodation for human beings; or
    (6) Migratory children who qualify as homeless under this section 
because the children are living in circumstances described in this 
definition.
    Homeless child or youth means an individual who lacks a fixed, 
regular, and adequate nighttime residence and includes:
    (1) Children and youths who are sharing the housing of other 
persons due to loss of housing, economic hardship, or a similar reason;
    (2) Are living in motels, hotels, trailer parks, or camping grounds 
due to the lack of alternative adequate accommodations;
    (3) Are living in emergency or transitional shelters; are abandoned 
in hospitals; or are awaiting foster care placement;
    (4) Children and youths who have a primary nighttime residence that 
is a public or private place not designed for or ordinarily used as a 
regular sleeping accommodation for human beings;
    (5) Children and youths who are living in cars, parks, public 
spaces, abandoned buildings, substandard housing, bus or train 
stations, or similar settings; or
    (6) Migratory children who qualify as homeless for the purposes of 
this part because the children are living in circumstances described in 
this definition.
    Housing Development Agency means any agency of a Federal, State or 
local government, or any private non-profit organization, that is 
engaged in providing housing for homeless individuals or low-income 
families.
    Income, as defined in the United States Housing Act of 1937 (42 
U.S.C. 1437 a(b)(2)), means income is from all sources of each member 
of the household, as determined in accordance with the criteria 
prescribed by the Secretary of Labor, in consultation with the 
Secretary of Agriculture, except that any amounts not actually received 
by the family and any amounts which would be eligible for exclusion 
under sec. 1382b(a)(7) of the United States Housing Act of 1937, may 
not be considered as income under this definition.
    In-Demand Industry Sector or Occupation means:
    (1) An industry sector that has a substantial current or potential 
impact (including through jobs that lead to economic self-sufficiency 
and opportunities for advancement) on the State, regional, or local 
economy, as appropriate, and that contributes to the growth or 
stability of other supporting business, or the growth of other industry 
sectors; or
    (2) An occupation that currently has or is projected to have a 
number of positions (including positions that lead to economic self-
sufficiency and opportunities for advancement) in an industry sector so 
as to have a significant impact on the State, regional, or local 
economy, as appropriate.
    Indian, as defined in the Indian Self- Determination and Education 
Assistance Act (25 U.S.C. 450b), means a person who is a member of an 
Indian tribe.
    Indian tribe means any Indian tribe, band, nation, or other 
organized group or community, including any Alaska Native village or 
regional or village corporation as defined in or established pursuant 
to the Alaska Native Claims Settlement Act (85 Stat. 688) (43 U.S.C. 
1601 et seq.), which is recognized as eligible for the special programs 
and services provided by the United States to Indians because of their 
status as Indians.
    Individual with a disability means an individual:
    (1) With a physical or mental impairment that substantially limits 
one or more major life activities of such individual;
    (2) With a record of such an impairment; or
    (3) Regarded as having such an impairment.
    (i) An individual is regarded as having such an impairment if the 
individual establishes that he or she has been subjected to an action 
prohibited under the Americans with Disabilities Act of 1990 because of 
an actual or perceived physical or mental impairment whether or not the 
impairment limits or is perceived to limit a major life activity.
    (ii) An individual is not considered an individual with a 
disability under paragraph (3) of this section if the impairment has an 
actual or expected duration of 6 months or less.
    (4) For purposes of paragraphs (1) through (3) of this definition, 
major life activity, includes, but is not limited to:
    (i) Caring for oneself, performing manual tasks, seeing, hearing, 
eating, sleeping, walking, standing, lifting, bending, speaking, 
breathing, learning, reading, concentrating, thinking, communicating, 
and working; and
    (ii) The operation of a major bodily function, including but not 
limited to, functions of the immune system, normal cell growth, 
digestive, bowel, bladder, neurological, brain, respiratory, 
circulatory, endocrine, and reproductive functions.
    Low-income family means a family whose income does not exceed 80 
percent of the median income for the area unless the Secretary 
determines that a higher or lower ceiling is warranted. This definition 
includes families consisting of one person as defined by 42 U.S.C. 
1437a(b)(3).
    Migrant youth means a youth, or a youth who is the dependent of 
someone who, during the previous 12 months has:
    (1) Worked at least 25 days in agricultural labor that is 
characterized by chronic unemployment or underemployment;
    (2) Made at least $800 from agricultural labor that is 
characterized by chronic unemployment or underemployment, if at least 
50 percent of his or her income came from such agricultural labor;

[[Page 20926]]

    (3) Was employed at least 50 percent of his or her total employment 
in agricultural labor that is characterized by chronic unemployment or 
underemployment; or
    (4) Was employed in agricultural labor that requires travel to a 
jobsite such that the farmworker is unable to return to a permanent 
place of residence within the same day.
    Needs-based payments means additional payments beyond regular 
stipends for program participation that are based on defined needs that 
enable a youth to participate in the program.
    Occupational skills training means an organized program of study 
that provides specific vocational skills that lead to proficiency in 
performing actual tasks and technical functions required by certain 
occupational fields at entry, intermediate, or advanced levels. 
Occupational skills training includes training programs that lead to 
recognized post-secondary credentials that align with in-demand 
industry sectors or occupations in the local area. Such training must:
    (1) Be outcome-oriented and focused on an occupational goal 
specified in the individual service strategy;
    (2) Be of sufficient duration to impart the skills needed to meet 
the occupational goal; and
    (3) Result in attainment of a recognized post-secondary credential.
    Offender means an adult or juvenile who:
    (1) Is or has been subject to any stage of the criminal justice 
process, and who may benefit from WIOA services; or
    (2) Requires assistance in overcoming artificial barriers to 
employment resulting from a record of arrest or conviction.
    Participant means an individual who has been determined eligible to 
participate in the YouthBuild program, and that enrolls in the program 
and receives services or training described in Sec.  688.320.
    Pre-apprenticeship means a program or set of strategies designed to 
prepare individuals to enter and succeed in a registered apprenticeship 
program and has a documented partnership with at least one, if not 
more, registered apprenticeship programs. A quality pre-apprenticeship 
program incorporates at least one of the following elements:
    (1) Approved training and curriculum;
    (2) Strategies for long-term success;
    (3) Access to appropriate support services;
    (4) Promotes greater use of registered apprenticeship to increase 
future opportunities;
    (5) Meaningful hands-on training that does not displace paid 
employees; and
    (6) Facilitated entry and/or articulation.
    Recognized post-secondary credential means a credential consisting 
of an industry-recognized certificate or certification, a certificate 
of completion of an apprenticeship, a license recognized by the State 
involved or Federal government, or an associate or baccalaureate 
degree.
    Registered apprenticeship program means an apprenticeship program 
that:
    (1) Is registered under the Act of August 16, 1937 (commonly known 
as the ``National Apprenticeship Act''; 50 Stat. 664, chapter 663; 20 
U.S.C. 50 et seq.); and
    (2) Meets such other criteria as the Secretary may establish.
    School dropout means an individual who no longer attends any school 
and who has not received a secondary school diploma or its State-
recognized equivalent.
    Secondary school means a nonprofit institutional day or residential 
school, including a public secondary charter school, that provides 
secondary education, as determined under State law, except that the 
term does not include any education beyond grade twelve.
    Section 3 means to a program described in sec. 3 of the Housing and 
Urban Development Act of 1968, as amended by the Housing and Community 
Development Act of 1992.
    Supportive services means services that enable an individual to 
participate in WIOA activities. These services include, but are not 
limited to, the following:
    (1) Linkages to community services;
    (2) Assistance with transportation;
    (3) Assistance with child care and dependent care;
    (4) Referrals to child support;
    (5) Assistance with housing;
    (6) Needs-related payments;
    (7) Assistance with educational testing;
    (8) Reasonable accommodations for youth with disabilities
    (9) Referrals to medical services; and
    (10) Assistance with uniforms or other appropriate work attire and 
work-related tools, including such items as eye glasses and protective 
eye gear.
    Transitional housing means housing provided to ease the movement of 
individuals and families experiencing homelessness to permanent housing 
within 24 months or such longer period.
    YouthBuild program means any program that receives assistance under 
this section and provides disadvantaged youth with opportunities for 
employment, education, leadership development, and training through the 
rehabilitation (which for purposes of this section, includes energy 
efficiency enhancements) or construction of housing for homeless 
individuals and low-income families, and public facilities.
    Youth in foster care means youth currently in foster care or youth 
who have ever been in foster care.

Subpart B--Funding and Grant Applications


Sec.  688.200  How are YouthBuild grants funded and administered?

    The Secretary uses funds authorized for appropriation under WIOA 
sec. 171(i) to administer YouthBuild as a national program under title 
I, subtitle D of the Act. YouthBuild grants are awarded to eligible 
entities, as defined in Sec.  688.120, through the competitive 
selection process described in Sec.  688.210.


Sec.  688.210  How does an eligible entity apply for grant funds to 
operate a YouthBuild program?

    The Secretary announces the availability of grant funds through a 
Funding Opportunity Announcement (FOA). The FOA contains instructions 
for what the Department requires in the grant application, describes 
eligibility requirements, the rating criteria that the Department will 
use in reviewing grant applications, and special reporting requirements 
to operate a YouthBuild project. The FOA, along with the requisite 
forms needed to apply for grant funds, can be found athttp://
www.doleta.gov/grants/find_grants.cfm.


Sec.  688.220  How are eligible entities selected to receive grant 
funds?

    In order to receive funds under the YouthBuild program, an eligible 
entity must meet selection criteria established by the Secretary which 
include:
    (a) The qualifications or potential capabilities of an applicant;
    (b) An applicant's potential to develop a successful YouthBuild 
program;
    (c) The need for an applicant's proposed program, as determined by 
the degree of economic distress of the community from which 
participants would be recruited (measured by indicators such as 
poverty, youth unemployment, and the number of individuals who have 
dropped out of secondary school) and of the community in which the 
housing and community and public facilities proposed to be 
rehabilitated or constructed are located (measured by indicators such 
as incidence of homelessness, shortage of affordable housing, and 
poverty);

[[Page 20927]]

    (d) The commitment of an applicant to provide skills training, 
leadership development, counseling and case management, and education 
to participants;
    (e) The focus of a proposed program on preparing youth for local 
in-demand sectors or occupations, or post-secondary education and 
training opportunities;
    (f) The extent of an applicant's coordination of activities to be 
carried out through the proposed program with:
    (1) Local Boards, one-stop career center operators, and one-stop 
partners participating in the operation of the one-stop delivery system 
involved, or the extent of the applicant's good faith efforts, as 
determined by the Secretary, in achieving such coordination;
    (2) Public education, criminal justice, housing and community 
development, national service, or post-secondary education or other 
systems that relate to the goals of the proposed program; and
    (3) Employers in the local area.
    (g) The extent to which a proposed program provides for inclusion 
of tenants who were previously homeless individuals or families in the 
rental of housing provided through the program;
    (h) The commitment of additional resources to the proposed program 
(in addition to the funds made available through the grant) by:
    (1) An applicant;
    (2) Recipients of other Federal, State, or local housing and 
community development assistance who will sponsor any part of the 
rehabilitation, construction, operation and maintenance, or other 
housing and community development activities undertaken as part of the 
proposed program; or
    (3) Entities carrying out other Federal, State, or local activities 
or activities conducted by Indian tribes, including vocational 
education programs, adult and language instruction educational 
programs, and job training using funds provided under WIOA;
    (i) An applicant's ability to enter partnerships with:
    (1) Education and training providers including:
    (i) The kindergarten through twelfth grade educational system;
    (ii) Adult education programs;
    (iii) Community and technical colleges;
    (iv) Four-year colleges and universities;
    (v) Registered apprenticeship programs; and
    (vi) Other training entities;
    (2) Employers, including professional organizations and 
associations. An applicant will be evaluated on the extent to which 
employers participate in:
    (i) Defining the program strategy and goals;
    (ii) Identifying needed skills and competencies;
    (iii) Designing training approaches and curricula;
    (iv) Contributing financial support; and
    (v) Hiring qualified YouthBuild graduates.
    (3) The workforce investment system which may include:
    (i) State and Local Workforce Development Boards;
    (ii) State workforce agencies; and
    (iii) One-stop career centers and their cooperating partners.
    (4) The juvenile and adult justice systems, and the extent to which 
they provide:
    (i) Support and guidance for YouthBuild participants with court 
involvement;
    (ii) Assistance in the reporting of recidivism rates among 
YouthBuild participants; and
    (iii) Referrals of eligible participants through diversion or 
reentry from incarceration.
    (5) Faith-based and community organizations, and the extent to 
which they provide a variety of grant services such as:
    (i) Case management;
    (ii) Mentoring;
    (iii) English as a Second Language courses; and
    (iv) Other comprehensive supportive services, when appropriate.
    (j) The applicant's potential to serve different regions, including 
rural areas and States that may not have previously received grants for 
YouthBuild programs; and
    (k) Such other factors as the Secretary determines to be 
appropriate for purposes of evaluating an applicant's potential to 
carry out the proposed program in an effective and efficient manner.
    (l) The weight to be given to these factors will be described in 
the FOA issued under Sec.  688.210.


Sec.  688.230  What are the minimum requirements to apply for 
YouthBuild funds?

    At minimum, applications for YouthBuild funds must include the 
following elements:
    (a) Labor market information for the relevant labor market area, 
including both current data (as of the date of submission of the 
application) and projections on career opportunities in construction 
and in-demand industry sectors or occupations;
    (b) A request for the grant, specifying the amount of the grant 
requested and its proposed uses;
    (c) A description of the applicant and a statement of its 
qualifications, including a description of the applicant's relationship 
with Local Boards, one-stop operators, local unions, entities carrying 
out registered apprenticeship programs, other community groups, and 
employers, and the applicant's past experience, with rehabilitation or 
construction of housing or public facilities (including experience with 
HUD's Section 3 of the Housing and Urban Development Act of 1968 (12 
U.S.C. 1701u), and with youth education and employment training 
programs;
    (d) A description of the proposed site for the proposed program;
    (e) A description of the educational and job training activities, 
work opportunities, post-secondary education and training 
opportunities, and other services that will be provided to 
participants, and how those activities, opportunities and services will 
prepare youth for employment in in-demand industry sectors or 
occupations in the labor market area described in paragraph (a) of this 
section;
    (1) A description of the proposed activities to be undertaken under 
the grant related to rehabilitation or construction, and, in the case 
of an applicant requesting approval from the Secretary to carry out 
additional activities related to in-demand industry sectors or 
occupations, a description of such additional activities.
    (2) The anticipated schedule for carrying out all activities 
proposed under paragraph (f) of this section;
    (f) A description of the manner in which eligible youth will be 
recruited and selected as participants, including a description of 
arrangements that will be made with Local Boards, one-stop operators, 
faith and community-based organizations, State educational agencies or 
local education agencies (including agencies of Indian tribes), public 
assistance agencies, the courts of jurisdictions, agencies that serve 
youth who are homeless individuals (including those that operate 
shelters), foster care agencies, and other appropriate public and 
private agencies;
    (g) A description of the special outreach efforts that will be 
undertaken to recruit eligible young women (including young women with 
dependent children) as participants;
    (h) A description of the specific role of employers in the proposed 
program, such as their role in developing the proposed program and 
assisting in

[[Page 20928]]

service provision and placement activities;
    (i) A description of how the proposed program will be coordinated 
with other Federal, State, and local activities conducted by Indian 
tribes, such as workforce investment activities, career and technical 
education and training programs, adult and language instruction 
educational programs, activities conducted by public schools, 
activities conducted by community colleges, national service programs, 
and other job training provided with funds available under WIOA, in 
particular how programs will coordinate with local Workforce 
Development funds outlined in WIOA sec. 129(c)(2).
    (j) Assurances that there will be a sufficient number of adequately 
trained supervisory personnel in the proposed program;
    (k) A description of the level of performance to be achieved with 
respect to primary indicators of performance for eligible youth as 
described in Sec.  688.410;
    (l) The organization's past performance under a grant issued by the 
Secretary to operate a YouthBuild program;
    (m) A description of the applicant's relationship with local 
building trade unions regarding their involvement in training to be 
provided through the proposed program, the relationship of the proposed 
program to established registered apprenticeship programs and 
employers, the ability of the applicant to grant an industry-recognized 
certificate or certification through the program, and the quality of 
the program leading to the certificate or certification;
    (n) A description of activities that will be undertaken to develop 
leadership skills of participants;
    (o) A detailed budget and description of the system of fiscal 
controls, and auditing and accounting procedures, that will be used to 
ensure fiscal soundness for the proposed program;
    (p) A description of the commitments for any additional resources 
(in addition to funds made available through the grant) to be made 
available to the proposed program from:
    (1) The applicant;
    (2) Recipients of other Federal, State, or local housing and 
community development assistance that will sponsor any part of the 
rehabilitation or construction, operation or maintenance, or other 
housing and community development activities undertaken as part of the 
proposed program; or
    (3) Entities carrying out other Federal, State or local activities 
conducted by Indian tribes, including career and technical education 
and training programs, and job training provided with funds under WIOA.
    (q) Information identifying, and a description of, the financing 
proposed for any:
    (1) Rehabilitation of the property involved;
    (2) Acquisition of the property; or
    (3) Construction of the property;
    (r) Information identifying, and a description, of the entity that 
will manage and operate the property;
    (s) Information identifying, and a description of, the data 
collection systems to be used;
    (t) A certification, by a public official responsible for the 
housing strategy for the State or unit of general local government 
within which the proposed program is located, that the proposed program 
is consistent with the housing strategy; and
    (u) A certification that the applicant will comply with 
requirements of the Fair Housing Act (42 U.S.C. 3601 et seq.) and will 
affirmatively further fair housing.
    (v) Any additional requirements that the Secretary determines are 
appropriate.


Sec.  688.240  How are eligible entities notified of approval for grant 
funds?

    The Secretary will, to the extent practicable, notify each eligible 
entity applying for funds no later than 5 months from the date the 
application is received, whether the application is approved or 
disapproved. In the event additional funds become available, ETA 
reserves the right to use such funds to select additional grantees from 
applications submitted in response to a FOA.

Subpart C--Program Requirements


Sec.  688.300  Who is an eligible participant?

    (a) Eligibility criteria. Except as provided in paragraph (b) of 
this section, an individual is eligible to participate in a YouthBuild 
program if the individual is:
    (1) Not less than age 16 and not more than age 24 on the date of 
enrollment; and
    (2) A school dropout or an individual who has dropped out of school 
and has subsequently reenrolled; and
    (3) Is one or more of the following:
    (i) A member of a low-income family;
    (ii) A youth in foster care;
    (iii) An offender;
    (iv) A youth who is an individual with a disability;
    (v) The child of a current or formerly incarcerated parent; or
    (vi) A migrant youth.
    (b) Exceptions. Not more than 25 percent of the participants in a 
program, under this section, may be individuals who do not meet the 
requirements of paragraph (a)(2) or (3) of this section, if such 
individuals:
    (1) Are basic skills deficient, as defined in Sec.  688.120, 
despite attainment of a secondary school diploma or its recognized 
State equivalent (including recognized certificates of attendance or 
similar documents for individuals with disabilities); or
    (2) Have been referred by a local secondary school for 
participation in a YouthBuild program leading to the attainment of a 
secondary school diploma if such referral is to a YouthBuild program 
offering a secondary school diploma.


Sec.  688.310  Are there special rules that apply to veterans?

    Special rules for determining income for veterans are found in 20 
CFR 683.230 and for the priority of service provisions for qualified 
persons are found in 20 CFR part 1010. Those special rules apply to 
covered persons who are eligible to participate in the YouthBuild 
program.


Sec.  688.320  What eligible activities may be funded under the 
YouthBuild program?

    Grantees may provide one or more of the following education and 
workforce investment and other activities to YouthBuild participants--
    (a) Eligible education and workforce activities including:
    (1) Work experience and skills training (coordinated, to the 
maximum extent feasible, with registered apprenticeship programs), 
including:
    (i) Supervision and training for participants in the rehabilitation 
or construction of housing, including residential housing for homeless 
individuals or low-income families, or transitional housing for 
homeless individuals and in additional in-demand industry sectors or 
occupations in the region in which the program operates (as approved by 
the Secretary);
    (ii) Supervision and training for participants in the 
rehabilitation or construction of community and other public 
facilities, except that not more than 15 percent of grant funds-
appropriated to carry out this section may be used for this activity; 
and
    (iii) Supervision and training for participants in in-demand 
industry sectors or occupations in the region in which the program 
operates, if such activity is approved by the Secretary.
    (2) Occupational skills training;
    (3) Other paid and unpaid work experiences, including internships 
and job shadowing;

[[Page 20929]]

    (4) Services and activities designed to meet the educational needs 
of participants, including:
    (i) Basic skills instruction and remedial education;
    (ii) Language instruction educational programs for participants who 
are English language learners;
    (iii) Secondary education services and activities, including 
tutoring, study skills training, and school dropout prevention and 
recovery activities, designed to lead to the attainment of a secondary 
school diploma or its recognized equivalent (including recognized 
certificates of attendance or similar document for individuals with 
disabilities);
    (iv) Counseling and assistance in obtaining post-secondary 
education and required financial aid and;
    (v) Alternative secondary school services;
    (5) Counseling services and related activities, such as 
comprehensive guidance and counseling on drug and alcohol abuse; 
referrals to mental health services, and referrals to victim services;
    (6) Activities designed to develop employment and leadership 
skills, which may include community service and peer-centered 
activities encouraging responsibility and other positive social 
behaviors, and activities related to youth policy committees that 
participate in decision-making related to the program;
    (7)(i) Supportive services and needs-based payments necessary to 
enable individuals to participate in the program and to assist 
individuals for a period of time not to exceed 12 months after the 
completion of training, in obtaining or retaining employment or 
applying for and transitioning to post-secondary education or training.
    (ii) To provide needs-based payments, a grantee must have a written 
policy which:
    (A) Establishes participant eligibility for such payments;
    (B) Establishes the amounts to be provided;
    (C) Describes the required documentation and criteria for payments, 
and
    (D) Is applied consistently to all program participants.
    (8) Job search and assistance.
    (b) Payment of the administrative costs of the applicant, including 
recruitment and selection of participants, except that not more than 10 
percent of the amount awarded under Sec.  688.210 may be used for such 
costs.
    (c) Adult mentoring.
    (d) Provision of wages, stipends, or benefits to participants in 
the program;
    (e) Ongoing training and technical assistance that is related to 
developing and carrying out the program, and;
    (f) Follow-up services.


Sec.  688.330  What level of training qualifies a construction project 
as a qualifying work site under the YouthBuild program?

    At a minimum, in order to qualify as a work site for the purposes 
of the YouthBuild program, a work site must:
    (a) Provide participants with the opportunity to have hands-on 
training and experience in two or more modules in a construction skills 
training program that offers an industry-recognized credential;
    (b) Be built or renovated for low-income individuals or families;
    (c) Provide substantial hands-on experience for youth;
    (d) Have a restrictive covenant in place that only allows for 
rental or resale to low-income participants as required by Sec.  
688.730.
    (e) Adhere to the allowable construction and other capital asset 
costs applicable to the YouthBuild program.


Sec.  688.340  What timeframes apply to participation?

    An eligible individual selected for participation in the program 
must be offered full-time participation in the program for not less 
than 6 months and not more than 24 months.


Sec.  688.350  What timeframes must be devoted to education and 
workforce investment or other activities?

    YouthBuild grantees must structure programs so that participants in 
the program are offered:
    (a) Education and related services and activities designed to meet 
educational needs, such as those specified in Sec.  688.320(a)(4) 
through (7), during at least 50 percent of the time during which they 
participate in the program; and
    (b) Workforce and skills development activities, such as those 
specified in Sec.  688.320(a)(1) through (3), during at least 40 
percent of the time during which they participate in the program.
    (c) The remaining 10 percent of the time of participation can be 
used for the activities described in paragraphs (a) and (b) of this 
section and/or for leadership development and community service 
activities.


Sec.  688.360  What timeframes apply to follow-up services?

    Grantees must provide follow-up services to all YouthBuild 
participants for a period of 12 months after a participant successfully 
exits a YouthBuild program.


Sec.  688.370  What are the requirements for exit from the YouthBuild 
program?

    At a minimum, to be a successful exit, the Department of Labor 
requires that:
    (a) Participants receive hands-on construction training or hands-on 
training in another industry or occupation, in the case of Construction 
Plus grantees;
    (b) Participants meet the exit policies established by the grantee.
    (1) Such policy must describe the program outcomes and/or 
individual goals that must be met by participants in order to 
successfully complete the program; and
    (2) Grantees must apply the policy consistently to determine when 
successful exit has occurred.


Sec.  688.380  What is the role of the YouthBuild grantee in the one-
stop system?

    In those local workforce investment areas where the grantee 
operates its YouthBuild program, the grantee is a required partner of 
the local one-stop delivery system and is subject to the provisions 
relating to such partners described in 20 CFR part 678.

Subpart D--Performance Indicators


Sec.  688.400  What are the performance indicators for YouthBuild 
grants?

    (a) The percentage of program participants who are in education and 
training activities, or in unsubsidized employment, during the second 
quarter after exit from the program;
    (b) The percentage of program participants who are in education or 
training activities, or in unsubsidized employment, during the fourth 
quarter after exit from the program;
    (c) The median earnings of program participants who are in 
unsubsidized employment during the second quarter after exit from the 
program;
    (d) The percentage of program participants who obtain a recognized 
post-secondary credential or secondary school diploma or its recognized 
equivalent (and for those achieving the secondary diploma or its 
recognized equivalent, such participants have also obtained or retained 
employment or are in an education or training program leading to a 
recognized post-secondary credential within 1 year after exit from the 
program);
    (e) The percentage of program participants, who during a program 
year, are in an education and training program that leads to a 
recognized post-secondary credential or employment and who are 
achieving measurable skill gains toward such a credential or 
employment;

[[Page 20930]]

    (f) The indicator of effectiveness in serving employers described 
at Sec.  676.155(d)(6); and
    (g) Other indicators of performance as may be required by the 
Secretary.


Sec.  688.410  What are the required levels of performance for the 
performance indicators?

    (a) The Secretary must annually establish expected levels of 
performance for YouthBuild programs relating to each of the primary 
indicators of performance. The expected levels of performance for each 
of the common performance indicators are national standards that are 
provided in separately issued guidance. Short-term or other performance 
indicators will be provided in separately issued guidance or as part of 
the FOA or grant agreement. Performance level expectations will be 
based on available YouthBuild data and data from similar WIOA youth 
programs and may change between grant competitions. The expected 
national levels of performance will take into account the extent to 
which the levels promote continuous improvement in performance.
    (b) The levels of performance established will, at a minimum:
    (1) Be expressed in an objective, quantifiable, and measurable 
form; and
    (2) Indicate continuous improvement in performance.


Sec.  688.420  What are the reporting requirements for YouthBuild 
grantees?

    Each grantee must provide such reports as are required by the 
Secretary in separately issued guidance, including:
    (a) The quarterly performance report;
    (b) The quarterly narrative progress report;
    (c) The financial report; and
    (d) Such other reports as may be required by the grant agreement.


Sec.  688.430  What are the due dates for quarterly reporting?

    (a) Quarterly reports are due no later than 45 days after the end 
of the reporting quarter, unless otherwise specified in the reporting 
guidance issued under Sec.  688.420; and
    (b) A final financial report is required 90 days after the 
expiration of a funding period or the termination of grant support.

Subpart E--Administrative Rules, Costs, and Limitations


Sec.  688.500  What administrative regulations apply to the YouthBuild 
program?

    Each YouthBuild grantee must comply with the following:
    (a) The regulations found in this part.
    (b) The general administrative requirements found in 20 CFR part 
683, except those that apply only to the WIOA title I-B program and 
those that have been modified by this section.
    (c) The Department's regulations on government-wide requirements, 
which include:
    (1) The regulations codifying the Office of Management and Budget's 
government-wide grants requirements at 2 CFR 200 and 2900, as 
applicable;
    (2) The Department's regulations at 29 CFR part 37, which implement 
the nondiscrimination provisions of WIA sec. 188;
    (3) The Department's regulations at 29 CFR parts 93, 94, and 98 
relating to restrictions on lobbying, drug free workplace, and 
debarment and suspension; and
    (4) The audit requirements of the Office of Management and Budget 
at 2 CFR 200 and 2900, as applicable.
    (d) Relevant State and local educational standards.


Sec.  688.510  How may grantees provide services under the YouthBuild 
program?

    Each recipient of a grant under the YouthBuild program may provide 
the services and activities described in these regulations either 
directly or through subgrants, contracts, or other arrangements with 
local educational agencies, post-secondary educational institutions, 
State or local housing development agencies, other public agencies, 
including agencies of Indian tribes, or private organizations.


Sec.  688.520  What cost limits apply to the use of YouthBuild program 
funds?

    (a) Administrative costs for programs operated under YouthBuild are 
limited to 10 percent of the grant award. The definition of 
administrative costs can be found in 20 CFR 683.215.
    (b) The cost of supervision and training for participants involved 
in the rehabilitation or construction of community and other public 
facilities is limited to no more than 10 percent of the grant award.


Sec.  688.530  What are the cost-sharing or matching requirements of 
the YouthBuild program?

    (a) In addition to the rules described in paragraphs (b) through 
(f) of this section, the cost-sharing or matching requirements 
applicable to a YouthBuild grant will be addressed in the grant 
agreement.
    (b) The value of construction materials used in the YouthBuild 
program is an allowable cost for the purposes of the required non-
Federal share or match.
    (c) The value of land acquired for the YouthBuild program is not an 
allowable cost-sharing or match.
    (d) Federal funds may not be used as cost-sharing or match 
resources except as provided by Federal law.
    (e) The value of buildings acquired for the YouthBuild program is 
an allowable match, provided that the following conditions apply:
    (1) The purchase cost of buildings used solely for training 
purposes is allowable; and
    (2) For buildings used for training and other purposes, the 
allowable amount is determined based on the proportionate share of the 
purchase price related to direct training activities.
    (f) Grantees must follow the requirements of 2 CFR parts 200 and 
2900 in the accounting, valuation, and reporting of the required non-
Federal share.


Sec.  688.540  What are considered to be leveraged funds?

    (a) Leveraged funds may be used to support allowable YouthBuild 
program activities and consist of payments made for allowable costs 
funded by both non-YouthBuild Federal, and non-Federal, resources which 
include:
    (1) Costs which meet the criteria for cost-sharing or match in 
Sec.  688.530 and are in excess of the amount of cost-sharing or match 
resources required;
    (2) Costs which would meet the criteria in Sec.  688.530 except 
that they are paid for with other Federal resources; and
    (3) Costs which benefit the grant program and are otherwise 
allowable under the cost principles but are not allowable under the 
grant because of some statutory, regulatory, or grant provision, 
whether paid for with Federal or non-Federal resources.
    (b) The use of leveraged funds must be reported in accordance with 
Departmental instructions.


Sec.  688.550  How are the costs associated with real property treated 
in the YouthBuild program?

    (a) As provided in paragraphs (b) and (c) of this section, the 
costs of the following activities associated with real property are 
allowable solely for the purpose of training YouthBuild participants:
    (1) Rehabilitation of existing structures for use by homeless 
individuals and families or low-income families or for use as 
transitional housing.
    (2) Construction of buildings for use by homeless individuals and 
families or low-income families or for use as transitional housing.

[[Page 20931]]

    (3) Construction or rehabilitation of community or other public 
facilities, except, as provided in Sec.  688.520(b), only 15 percent of 
the grant award is allowable for such construction and rehabilitation.
    (b) The costs for acquisition of buildings that are used for 
activities described in paragraph (a) of this section are allowable 
with prior grant officer approval and only under the following 
conditions:
    (1) The purchase cost of buildings used solely for training 
purposes is allowable; and
    (2) For buildings used for training and other purposes, the 
allowable amount is determined based on the proportionate share of the 
purchase cost related to direct training.
    (c) The following costs are allowable to the extent allocable to 
training YouthBuild participants in the construction and rehabilitation 
activities specified in paragraph (a) of this section:
    (1) Trainees' tools and clothing including personal protective 
equipment (PPE);
    (2) On-site trainee supervisors;
    (3) Construction management;
    (4) Relocation of buildings; and
    (5) Clearance and demolition.
    (d) Architectural fees, or a proportionate share thereof, are 
allowable when such fees can be related to items such as architectural 
plans or blueprints on which participants will be trained.
    (e) The following costs are unallowable:
    (1) The costs of acquisition of land.
    (2) Brokerage fees.


Sec.  688.560  What participant costs are allowable under the 
YouthBuild program?

    Allowable participant costs include:
    (a) The costs of payments to participants engaged in eligible work-
related YouthBuild activities.
    (b) The costs of payments provided to participants engaged in non-
work-related YouthBuild activities.
    (c) The costs of needs-based payments.
    (d) The costs of supportive services.
    (e) The costs of providing additional benefits to participants or 
individuals who have exited the program and are receiving follow-up 
services, which may include:
    (1) Tuition assistance for obtaining college education credits;
    (2) Scholarships to an apprenticeship, technical, or secondary 
education program; and
    (3) Sponsored health programs.


Sec.  688.570  Does the Department allow incentive payments in the 
YouthBuild program?

    (a) Grantees are permitted to provide incentive payments to youth 
participants for recognition and achievement directly tied to training 
activities and work experiences. Grantees must tie the incentive 
payments to the goals of the specific grant program and outline such 
goals in writing prior to starting the program that makes incentive 
payments.
    (b) Prior to providing incentive payments the organization must 
have written policies and procedures in place governing the awarding of 
incentives and the incentives provided under the grant must align with 
these organizational policies.
    (c) All incentive payments must comply with the requirements in 2 
CFR 200.


Sec.  688.580  What effect do payments to YouthBuild participants have 
on eligibility for other Federal needs-based benefits?

    Under 20 CFR 683.275(c), the Department does not consider 
allowances, earnings, and payments to individuals participating in 
programs under title I of WIOA as income for purposes of determining 
eligibility for and the amount of income transfer and in-kind aid 
furnished under any Federal or Federally-assisted program based on need 
other than as provided under the Social Security Act (42 U.S.C. 301).


Sec.  688.590  What program income requirements apply under the 
YouthBuild program?

    (a) Except as provided in paragraph (b) of this section, program 
income requirements, as specified in the applicable Uniform 
Administrative Requirements at 2 CFR parts 200 and 2900, apply to 
YouthBuild grants.
    (b) Revenue from the sale of buildings rehabilitated or constructed 
under the YouthBuild program to homeless individuals and families and 
low-income families is not considered program income. Grantees are 
encouraged to use that revenue for the long-term sustainability of the 
YouthBuild program.


Sec.  688.600  Are YouthBuild programs subject to the Davis-Bacon Act 
labor standards?

    (a) YouthBuild programs and grantees are subject to Davis-Bacon 
labor standards requirements under the circumstances set forth in 
paragraph (b) of this section. In those instances where a grantee is 
subject to Davis-Bacon requirements, the grantee must follow applicable 
requirements in the Department's regulations at 29 CFR parts 1, 3, and 
5, including the requirements contained in the Davis-Bacon contract 
provisions set forth in 29 CFR 5.5.
    (b) YouthBuild participants are subject to Davis-Bacon Act labor 
standards when they perform Davis-Bacon-covered laborer or mechanic 
work, defined at 29 CFR 5.2(m), on Federal or Federally-assisted 
projects that are subject to the Davis-Bacon Act labor standards. The 
Davis-Bacon prevailing wage requirements apply to hours worked on the 
site of the work.
    (c) YouthBuild participants who are not registered and 
participating in a training program approved by the Employment and 
Training Administration must be paid not less than the applicable wage 
rate on the wage determination for the classification of work actually 
performed.


Sec.  688.610  What are the recordkeeping requirements for YouthBuild 
programs?

    (a) Grantees must follow the recordkeeping requirements specified 
in the Uniform Administrative Requirements, at 29 CFR 95.53 and 29 CFR 
97.42, as appropriate.
    (b) Grantees must maintain such additional records related to the 
use of buildings constructed or rehabilitated with YouthBuild funds as 
specified in the grant agreement or in the Department's guidance.

Subpart F--Additional Requirements


Sec.  688.700  What are the safety requirements for the YouthBuild 
program?

    (a) YouthBuild Grantees must comply with 20 CFR 683.280, which 
applies Federal and State health and safety standards to the working 
conditions under WIOA-funded projects and programs. These health and 
safety standards include ``hazardous orders'' governing child labor at 
29 CFR part 570.
    (b) YouthBuild grantees are required to:
    (1) Provide comprehensive safety training for youth working on 
YouthBuild construction projects;
    (2) Have written, jobsite-specific safety plans overseen by an on-
site supervisor with authority to enforce safety procedures;
    (3) Provide necessary personal protective equipment to youth 
working on YouthBuild projects; and
    (4) Submit required injury incident reports.


Sec.  688.710  What are the reporting requirements for youth safety?

    YouthBuild grantees must ensure that YouthBuild program sites 
comply with

[[Page 20932]]

the Occupational Safety and Health Administration's (OSHA) reporting 
requirements in 29 CFR part 1904. A YouthBuild grantee is responsible 
for sending a copy of OSHA's injury incident report form, to U.S. 
Department of Labor, Employment and Training Administration within 7 
days of any reportable injury suffered by a YouthBuild participant. The 
injury incident report form is available from OSHA and can be 
downloaded at http://www.osha.gov/recordkeeping/RKforms.html. 
Reportable injuries include those that result in death, days away from 
work, restricted work or transfer to another job, medical treatment 
beyond first aid, or loss of consciousness.


Sec.  688.720  What environmental protection laws apply to the 
YouthBuild program?

    YouthBuild Program grantees are required, where applicable, to 
comply with all environmental protection statutes and regulations.


Sec.  688.730  What requirements apply to YouthBuild housing?

    (a) YouthBuild grantees must ensure that all residential housing 
units which are constructed or rehabilitated using YouthBuild funds 
must be available solely for:
    (1) Sale to homeless individuals and families or low-income 
families;
    (2) Rental by homeless individuals and families or low-income 
families;
    (3) Use as transitional or permanent housing for the purpose of 
assisting in the movement of homeless individuals and families to 
independent living. In the case of transitional housing, the unit(s) 
must be occupied no more than 24 months by the same individual(s); or
    (4) Rehabilitation of homes for low-income homeowners.
    (b) For rentals of residential units located on the property which 
are constructed or rehabilitated using YouthBuild funds:
    (1) The property must maintain at least a 90 percent level of 
occupancy for low-income families. The income test will be conducted 
only at the time of entry for each available unit or rehabilitation of 
occupant-owned home. If the grantee cannot find a qualifying tenant to 
lease the unit, the unit may be leased to a family whose income is 
above the income threshold to qualify as a low-income family but below 
the median income for the area. Leases for tenants with higher incomes 
will be limited to not more than 2 years. The leases provided to 
tenants with higher incomes are not subject to the termination clause 
that is described in paragraph (b)(2) of this section.
    (2) The property owner must not terminate the tenancy or refuse to 
renew the lease of a tenant occupying a residential rental housing unit 
constructed or rehabilitated using YouthBuild funds except for serious 
or repeated violations of the terms and conditions of the lease, for 
violation of applicable Federal, State or local laws, or for good 
cause. Any termination or refusal to renew the lease must be preceded 
by not less than a 30-day written notice to the tenant specifying the 
grounds for the action. The property owner may waive the written notice 
requirement for termination in dangerous or egregious situations 
involving the tenant.
    (c) All transitional or permanent housing for homeless individuals 
or families or low-income families must be safe and sanitary. The 
housing must meet all applicable State and local housing codes and 
licensing requirements in the jurisdiction in which the housing is 
located.
    (d) For sales or rentals of residential housing units constructed 
or rehabilitated using YouthBuild funds, YouthBuild grantees must 
ensure that owners of the property record a restrictive covenant at the 
time that an occupancy permit is issued against such property which 
includes the use restrictions set forth in paragraphs (a), (b), and (c) 
of this section and incorporates the following definitions at Sec.  
688.120: Homeless Individual; Low-Income Housing; and Transitional 
Housing. The term of the restrictive covenant must be at least 5 years 
from the time of the issuance of the occupancy permit, unless a time 
period of more than 5 years has been established by the grantee. Any 
additional stipulations imposed by a grantee or property owner should 
be clearly stated in the covenant.
    (e) Any conveyance document prepared in the 5-year period of the 
restrictive covenant must inform the buyer of the property that all 
residential housing units constructed or rehabilitated using YouthBuild 
funds are subject to the restrictions set forth in paragraphs (a) 
through (d) of this section.

PART 651--GENERAL PROVISIONS GOVERNING THE FEDERAL-STATE EMPLOYMENT 
SERVICE SYSTEM

0
16. Revise the authority citation for part 651 to read as follows:

    Authority: Wagner-Peyser Act sec. 49a, as amended by Pub. L. 
113-128 sec. 302; 38 U.S.C. part III, 4101, 4211; Secs. 503, 3, 189, 
Pub. L. 113-128, 128 Stat. 1425 (Jul. 22, 2014).

0
17. Revise Sec.  651.10 to read as follows:


Sec.  651.10  Definitions of terms used in parts 651, 652, 653, and 
658.

    Act means the Wagner-Peyser Act (codified at 29 U.S.C. 49 et seq.).
    Administrator, Office of Workforce Investment (OWI Administrator) 
means the chief official of the Office of Workforce Investment (OWI) or 
the Administrator's designee.
    Affirmative action means positive, result-oriented action imposed 
on or assumed by an employer pursuant to legislation, court order, 
consent decree, directive of a fair employment practice authority, 
government contract, grant or loan, or voluntary affirmative action 
plan adopted pursuant to the affirmative action guidelines of the Equal 
Employment Opportunity Commission (see 29 CFR part 1608) to provide 
equal employment opportunities for members of a specified group which 
for reasons of past custom, historical practice, or other non-
occupationally valid purposes has been discouraged from entering 
certain occupational fields.
    Agricultural worker see Farmworker.
    Applicant Holding Office means an employment service office that is 
in receipt of a clearance order and has access to U.S.-based workers 
who may be willing and available to perform farmwork on a less than 
year-round basis.
    Applicant Holding State means a State Workforce Agency that is in 
receipt of a clearance order from another State and potentially has 
U.S.-based workers who may be willing and available to perform farmwork 
on a less than year-round basis.
    Bona Fide Occupational Qualification (BFOQ) means that an 
employment decision or request based on age, sex, national origin or 
religion is based on a finding that such characteristic is necessary to 
the individual's ability to perform the job in question. Since a BFOQ 
is an exception to the general prohibition against discrimination on 
the basis of age, sex, national origin or religion, it must be 
interpreted narrowly in accordance with the Equal Employment 
Opportunity Commission regulations set forth at 29 CFR parts 1604, 
1605, and 1627.
    Career Services means the services described in sec. 134(b)(2) of 
WIOA and 20 CFR 678.430.
    Clearance Order means a job order that is processed through the 
clearance system under the Agricultural Recruitment System (ARS).
    Clearance System means the orderly movement of job seekers as they 
are referred through the employment placement process by an employment

[[Page 20933]]

service office. This includes joint action of local employment service 
offices in different labor market areas and/or States.
    Complainant means the individual, employer, organization, 
association, or other entity filing a complaint.
    Complaint means a representation made or referred to a State or 
employment service office of an alleged violation of the employment 
service regulations and/or other Federal laws enforced by DOL's Wage 
and Hour Division (WHD) or Occupational Safety and Health 
Administration (OSHA), as well as other Federal, State, or local 
agencies enforcing employment-related law.
    Decertification means the rescission by the Secretary of the year-
end certification made under sec. 7 of the Wagner-Peyser Act to the 
Secretary of the Treasury that the State agency may receive funds 
authorized by the Wagner-Peyser Act.
    Department or DOL means the United States Department of Labor, 
including its agencies and organizational units.
    Employer means a person, firm, corporation or other association or 
organization which currently has a location within the United States to 
which U.S. workers may be referred for employment, and which proposes 
to employ a worker at a place within the United States and which has an 
employer relationship with respect to employees under this subpart as 
indicated by the fact that it hires, pays, fires, supervises and 
otherwise controls the work of such employees. An association of 
employers is considered an employer if it has all of the indicia of an 
employer set forth in this definition. Such an association, however, is 
considered as a joint employer with the employer member if either 
shares in exercising one or more of the definitional indicia.
    Employment and Training Administration (ETA) means the component of 
the Department of Labor that administers Federal government job 
training and worker dislocation programs, Federal grants to States for 
public employment service programs, and unemployment insurance 
benefits. These services are primarily provided through State and local 
workforce development systems.
    Employment-related laws means those laws enforced by DOL's Wage and 
Hour Division (WHD), Occupational Safety and Health Administration 
(OSHA), or by other Federal, State, or local agencies enforcing 
employment-related laws.
    Employment Service (ES) means the national system of public 
employment service offices described under the Wagner-Peyser Act. The 
employment services are delivered through a nationwide system of one-
stop centers, and are managed by State agencies and the various offices 
of the State agencies, and funded by the United States Department of 
Labor.
    Employment Service Office means a local office of a State Workforce 
Agency (SWA).
    Employment Service regulations means the Federal regulations at 20 
CFR parts 651, 652, 653, 654, 658, and 29 CFR part 75.
    Establishment means a public or private economic employing unit 
generally at a single physical location which produces and/or sells 
goods or services, for example, a mine, factory, store, farm, orchard 
or ranch. It is usually engaged in one, or predominantly one, type of 
commercial or governmental activity. Each branch or subsidiary unit of 
a large employer in a geographical area or community should be 
considered an individual establishment, except that all such units in 
the same physical location is considered a single establishment. A 
component of an establishment which may not be located in the same 
physical structure (such as the warehouse of a department store) should 
also be considered as part of the parent establishment. For the purpose 
of the ``seasonal farmworker'' definition, farm labor contractors and 
crew leaders are not considered establishments; it is the organizations 
to which they supply the workers that are the establishments.
    Farmwork means the cultivation and tillage of the soil, dairying, 
the production, cultivation, growing, and harvesting of any 
agricultural or horticultural commodities. This includes the raising of 
livestock, bees, fur-bearing animals, or poultry, the farming of fish, 
and any practices (including any forestry or lumbering operations) 
performed by a farmer or on a farm as an incident to or in conjunction 
with such farming operations, including preparation for market, 
delivery to storage or to market or to carriers for transportation to 
market. It also includes the handling, planting, drying, packing, 
packaging, processing, freezing, or grading prior to delivery for 
storage of any agricultural or horticultural commodity in its 
unmanufactured state. For the purpose of this section, agricultural 
commodities means all commodities produced on a farm including crude 
gum (oleoresin) from a living tree products processed by the original 
producer of the crude gum (oleoresin) from which they are derived, 
including gum spirits of turpentine and gum rosin. Farmwork also means 
any service or activity covered under 20 CFR 655.103(c) and/or 29 CFR 
500.20(e) and any service or activity so identified through official 
Department guidance such as a Training and Employment Guidance Letter.
    Farmworker means an individual employed in farmwork as defined in 
this section.
    Field Checks means random, unannounced appearances by State agency 
personnel at agricultural worksites to which employment service 
placements have been made through the intrastate or interstate 
clearance system to ensure that conditions are as stated on the job 
order and that the employer is not violating an employment-related law.
    Field Visits means appearances by monitor advocates or State agency 
outreach personnel to the working and living areas of MSFWs. The 
monitor advocates or outreach personnel must keep records to discuss ES 
services and other employment-related programs with MSFWs, crew 
leaders, and employers.
    Governor means the chief executive of a State or an outlying area.
    Hearing Officer means a Department of Labor Administrative Law 
Judge, designated to preside at Department administrative hearings.
    Interstate clearance order means an agricultural job order for 
temporary employment (employment on a less than year-round basis) 
describing one or more hard-to-fill job openings, which an employment 
service office uses to request recruitment assistance from other 
employment service offices in a different State.
    Intrastate clearance order means an agricultural job order for 
temporary employment (employment on a less than year-round basis) 
describing one or more hard-to-fill job openings, which an employment 
service office uses to request recruitment assistance from other 
employment service offices within the State.
    Job development means the process of securing a job interview with 
a public or private employer for a specific applicant for whom the 
employment service office has no suitable opening on file.
    Job information means information derived from data compiled in the 
normal course of employment service activities from reports, job 
orders, applications, and the like.
    Job opening means a single job opportunity for which the employment 
service office has on file a request to select and refer participants.
    Job order means the document containing the material terms and

[[Page 20934]]

conditions of employment relating to wages, hours, working conditions, 
worksite and other benefits, submitted by an employer.
    Job referral means:
    (1) The act of bringing to the attention of an employer an 
applicant or group of applicants who are available for specific job 
openings or for a potential job; and
    (2) The record of such referral. ``Job referral'' means the same as 
``referral to a job.''
    Labor market area means an economically integrated geographic area 
within which individuals can reside and find employment within a 
reasonable distance or can readily change employment without changing 
their place of residence. Such an area must be identified in accordance 
with criteria used by DOL's Bureau of Labor Statistics in defining such 
areas or similar criteria established by a Governor.
    Local Office Manager means the official in charge of all employment 
service activities in a one-stop center.
    Local Workforce Development Board means a Local Workforce 
Development Board established under sec. 107 of WIOA.
    Migrant farmworker means a seasonal farmworker (as defined in this 
section) who travels to the job site so that the farmworker is unable 
to return to his/her permanent residence within the same day. Full-time 
students traveling in organized groups rather than with their families 
are excluded.
    Migrant food processing worker see Migrant Farmworker.
    MSFW means a migrant farmworker or a seasonal farmworker.
    Occupational Information Network (O*NET) system means the online 
reference database which contains detailed descriptions of U.S. 
occupations, distinguishing characteristics, classification codes, and 
information on tasks, knowledge, skills, abilities, and work activities 
as well as information on interests, work styles, and work values.
    One-stop center means a one-stop delivery system described in sec. 
121(e)(2) of WIOA.
    One-stop delivery system means a one-stop delivery system described 
in sec. 121(e) of WIOA.
    One-stop partner means an entity described in sec. 121(b) of WIOA 
and 20 CFR 678.400 that is participating in the operation of a one-stop 
delivery system.
    O*NET-SOC means the occupational codes and titles used in the O*NET 
system, based on and grounded in the Standard Occupational 
Classification (SOC), which are the titles and codes utilized by 
Federal statistical agencies to classify workers into occupational 
categories for the purpose of collecting, calculating, and 
disseminating data. The SOC system is issued by the Office of 
Management and Budget and the Department of Labor is authorized to 
develop additional detailed O*NET occupations within existing SOC 
categories. The Department uses O*NET-SOC titles and codes for the 
purposes of collecting descriptive occupational information and for 
State reporting of data on training, credential attainment, and 
placement in employment by occupation.
    Onsite Review means an appearance by the State monitor advocate 
and/or Federal staff at an employment service office to monitor the 
delivery of services and protections afforded by employment service 
regulations to MSFWs by the State agency and local offices.
    Order Holding Office means an employment service office that has 
accepted a clearance order from an employer seeking U.S.-based workers 
to perform farmwork on a less than year-round basis through the 
Agricultural Recruitment System.
    Outreach Contact means each MSFW that receives the presentation of 
information, offering of assistance, or follow-up activity from an 
outreach worker.
    Participant means a person who applies for or is receiving Wagner-
Peyser Act employment services.
    Placement means the hiring by a public or private employer of an 
individual referred by the employment service office for a job or an 
interview, provided that the employment office completed all of the 
following steps:
    (1) Prepared a job order form prior to referral, except in the case 
of a job development contact on behalf of a specific applicant;
    (2) Made prior arrangements with the employer for the referral of 
an individual or individuals;
    (3) Referred an individual who had not been specifically designated 
by the employer, except for referrals on agricultural job orders for a 
specific crew leader or worker;
    (4) Verified from a reliable source, preferably the employer, that 
the individual had entered on a job; and
    (5) Appropriately recorded the placement.
    Public housing means housing operated by or on behalf of any public 
agency.
    Regional Administrator (RA) means the chief DOL Employment and 
Training Administration (ETA) official in each Department regional 
office.
    Respondent means the employer or State agency (including a State 
agency official) who is alleged to have committed the violation 
described in a complaint.
    Seasonal farmworker means an individual who is employed, or was 
employed in the past 12 months, in farmwork (as described in this 
section) of a seasonal or other temporary nature and is not required to 
be absent overnight from his/her permanent place of residence. Non-
migrant individuals who are full-time students are excluded. Labor is 
performed on a seasonal basis where, ordinarily, the employment 
pertains to or is of the kind exclusively performed at certain seasons 
or periods of the year and which, from its nature, may not be 
continuous or carried on throughout the year. A worker who moves from 
one seasonal activity to another, while employed in farmwork, is 
employed on a seasonal basis even though he/she may continue to be 
employed during a major portion of the year. A worker is employed on 
other temporary basis where he/she is employed for a limited time only 
or his/her performance is contemplated for a particular piece of work, 
usually of short duration. Generally, employment which is contemplated 
to continue indefinitely is not temporary.
    Secretary means the Secretary of the U.S. Department of Labor or 
the Secretary's designee.
    Significant MSFW one-stop centers are those designated annually by 
the Department and include those employment service offices where MSFWs 
account for 10 percent or more of annual participants in employment 
services and those local ES offices which the administrator determines 
should be included due to special circumstances such as an estimated 
large number of MSFWs in the service area. In no event may the number 
of significant MSFW one-stop centers be less than 100 centers on a 
nationwide basis.
    Significant MSFW States are those States designated annually by the 
Department and must include the 20 States with the highest number of 
MSFW participants.
    Significant multilingual MSFW one-stop centers are those designated 
annually by the Department and include those significant MSFW 
employment service offices where 10 percent or more of MSFW 
participants are estimated to require service provisions in a 
language(s) other than English unless the administrator determines 
other one-stop centers also should be included due to special 
circumstances.

[[Page 20935]]

    Solicitor means the chief legal officer of the U.S. Department of 
Labor or the Solicitor's designee.
    Standard Metropolitan Statistical Area (SMSA) means a metropolitan 
area designated by the Bureau of Census which contains:
    (1) At least one city of 50,000 inhabitants or more; or
    (2) Twin cities with a combined population of at least 50,000.
    State means any of the 50 States, the District of Columbia, Guam, 
Puerto Rico, and the Virgin Islands.
    State Administrator means the chief official of the State Workforce 
Agency (SWA).
    State agency or State Workforce Agency (SWA) means the State 
employment service agency designated under sec. 4 of the Wagner-Peyser 
Act.
    State hearing official means a State official designated to preside 
at State administrative hearings convened to resolve complaints 
involving ES-regulations pursuant to subpart E of part 658 of this 
chapter.
    State Workforce Development Board (State Board) means the entity 
within a State appointed by the Governor under sec. 101 of WIOA.
    Supply State(s) means a State that potentially has U.S.-based 
workers who may be recruited for referral through the Agricultural 
Recruitment System to the area of intended employment in a different 
State.
    Supportive services means services such as transportation, child 
care, dependent care, housing, needs-related payments, and others, that 
are necessary to enable an individual to participate in activities 
authorized under WIOA or the Wagner-Peyser Act.
    Training Services means services described in sec. 134(c)(3) of 
WIOA.
    Unemployment Insurance claimant means a person who files a claim 
for benefits under any State or Federal unemployment compensation law.
    United States Employment Service (USES) means the component of the 
Employment and Training Administration of the Department which was 
established under the Wagner-Peyser Act of 1933 to promote and develop 
a national system of public employment service offices.
    WIOA means the Workforce Innovation and Opportunity Act of 2014 
(codified at 29 U.S.C. 3901 et seq.).
    Workforce and Labor Market Information (WLMI) means that body of 
knowledge pertaining to the socio-economic factors influencing the 
employment, training, and business decisions in national, State, sub-
State, and local labor market areas. These factors, which affect labor 
demand-supply relationships, worker preparation, and educational 
program offerings, also define the content of the WLMI programs and 
system. WLMI includes, but is not limited to:
    (1) Employment and unemployment numbers and rates;
    (2) Population growth and decline, classified by age, sex, race, 
and other characteristics;
    (3) Short- and long-term industry and occupational employment 
projections;
    (4) Information on business employment dynamics, including the 
number and nature of business establishments, and share and location of 
industrial production;
    (5) Local employment dynamics, including business turnover rates; 
new hires, job separations, net job losses;
    (6) Job vacancy counts;
    (7) Job search information and employment data from the public 
labor exchange system;
    (8) Identification of high growth and high demand industries, 
occupations, and jobs;
    (9) Payroll, earnings, work hours, benefits, unionization, trade 
disputes, conditions of employment, and retirement;
    (10) Emerging occupations and evolving skill demands;
    (11) Business skill and hiring requirements;
    (12) Workforce characteristics, described by skills, experience, 
education, competencies, etc.;
    (13) Workforce available in geographic areas;
    (14) Regional and local economic development, including job 
creation through business start-ups and expansions;
    (15) Educational programs, training and apprenticeship 
opportunities;
    (16) Trends in industrial and occupational restructuring;
    (17) Shifts in consumer demands;
    (18) Data contained in governmental or administrative reporting 
including wage records as identified in 20 CFR 652.301;
    (19) Labor market intelligence gained from interaction with 
businesses, industry or trade associations, education agencies, 
government entities, and the public; and
    (20) Other economic factors.
    Workforce and Labor Market Information System (WLMIS) means the 
system that collects, analyzes, interprets, and disseminates workforce 
characteristics and employment-related data, statistics, and 
information at national, State, and local labor market areas and makes 
that information available to the public, workforce development system, 
one-stop partner programs, and the education and economic development 
communities.
    Workforce Development Activity means an activity carried out 
through a workforce development program as defined in sec. 3 of WIOA.
    Working days or business days means those days that the order-
holding employment service office is open for public business, for 
purposes of the Agricultural Recruitment System.
    Work test means activities designed to ensure that an individual 
whom a State determines to be eligible for unemployment insurance 
benefits is able to work, available for work, and actively seeking work 
in accordance with the State's unemployment compensation law.
0
18. Revise part 652 to read as follows:

PART 652--ESTABLISHMENT AND FUNCTIONING OF STATE EMPLOYMENT 
SERVICES

Subpart A--Employment Service Operations
Sec.
652.1 Introduction.
652.2 Scope and purpose of the employment service system.
652.3 Public labor exchange services system.
652.4 Allotment of funds and grant agreement.
652.5 Services authorized.
652.6 [Reserved].
652.7 [Reserved].
652.8 Administrative provisions.
652.9 Labor disputes.
Subpart B--Services for Veterans
652.100 Services for veterans.
Subpart C--Wagner-Peyser Act Services in a One-Stop Delivery System 
Environment
652.200 What is the purpose of this subpart?
652.201 What is the role of the State agency in the one-stop 
delivery system?
652.202 May local Employment Service Offices exist outside of the 
one-stop service delivery system?
652.203 Who is responsible for funds authorized under the Act in the 
workforce investment system?
652.204 Must funds authorized under the Act (the Governor's reserve) 
flow through the one-stop delivery system?
652.205 May funds authorized under the Act be used to supplement 
funding for labor exchange programs authorized under separate 
legislation?
652.206 May a State use funds authorized under the Act to provide 
applicable ``career services,'' as defined in the Workforce 
Innovation and Opportunity Act?
652.207 How does a State meet the requirement for universal access 
to services provided under the Act?
652.208 How are applicable career services related to the methods of 
service delivery described in this part?

[[Page 20936]]

652.209 What are the requirements under the Act for providing 
reemployment services and other activities to referred unemployment 
insurance claimants?
652.210 What are the Act's requirements for administration of the 
work test, including eligibility assessments, as appropriate, and 
assistance to unemployment insurance claimants?
652.211 What are State planning requirements under the Act?
652.215 Do any provisions in the Workforce Innovation and 
Opportunity Act change the requirement that State merit staff 
employees must deliver services provided under the Act?
652.216 May the one-stop operator provide guidance to State merit 
staff employees in accordance with the Act?
Subpart D--Workforce and Labor Market Information
Sec.
652.300 What role does the Secretary of Labor have concerning the 
Workforce and Labor Market Information System?
652.301 What are wage records for purposes of the Wagner-Peyser Act?
652.302 How do the Secretary of Labor's responsibilities described 
in this part apply to State wage records?
652.303 How do the requirements of part 603 of this chapter apply to 
wage records?

    Authority:  Wagner-Peyser Act sec. 15 as amended by Pub. L. 113-
128 sec. 308, 29 U.S.C. 491-2; Pub. L. 113-128 secs. 189, 503.

Subpart A--Employment Service Operations


Sec.  652.1  Introduction.

    These regulations implement the provisions of the Wagner-Peyser 
Act, known hereafter as the Act, as amended by the Workforce Innovation 
and Opportunity Act (WIOA), Public Law 113-128. Congress intended that 
the States exercise broad authority in implementing provisions of the 
Act.


Sec.  652.2  Scope and purpose of the employment service system.

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


Sec.  652.3  Public labor exchange services system.

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


Sec.  652.4  Allotment of funds and grant agreement.

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


Sec.  652.5  Services authorized.

    The funds allotted to each State under sec. 6 of the Act must be 
expended consistent with an approved plan under 20 CFR 676.100 through 
676.135 and Sec.  652.211. At a minimum, each State must provide the 
minimum labor exchange elements listed at Sec.  652.3.


Sec.  652.6  [Reserved].


Sec.  652.7  [Reserved].


Sec.  652.8  Administrative provisions.

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

[[Page 20937]]

    (i) The charges against Reed Act funds were for amounts 
appropriated, obligated, and expended for the acquisition of automatic 
data processing installations or for the acquisition or major 
renovation of State-owned office building; and
    (ii) With respect to each acquisition of improvement of property 
pursuant to paragraph (d)(6)(i) of this section, the payments are 
accounted for in the State's records as credits against equivalent 
amounts of Reed Act funds used for administrative expenditures.
    (e) Disclosure of information. (1) The State must assure the proper 
disclosure of information pursuant to sec. 3(b) of the Act.
    (2) The information specified in sec. 3(b) and other sections of 
the Act, must also be provided to officers or any employee of the 
Federal government or of a State government lawfully charged with 
administration of unemployment compensation laws, employment service 
activities under the Act or other related legislation, but only for 
purposes reasonably necessary for the proper administration of such 
laws.
    (f) Audits. (1) The State must follow the audit requirements found 
at 20 CFR 683.210, except that funds expended pursuant to sec. 7(b) of 
the Act must be audited annually.
    (2) The Comptroller General and the Inspector General of the 
Department have the authority to conduct audits, evaluations or 
investigations necessary to meet their responsibilities under sec. 
9(b)(1) and 9(b)(2), respectively, of the Act.
    (3) The audit, conducted pursuant to paragraph (f)(1) or (2) of 
this section, must be submitted to the Secretary who will follow the 
resolution process specified in 20 CFR 667.420 through 667.440.
    (g) Sanctions for violation of the Act. (1) The Secretary may 
impose appropriate sanctions and corrective actions for violation of 
the Act, regulations, or State Plan, including the following:
    (i) Requiring repayment, for debts owed the government under the 
grant, from non-Federal funds;
    (ii) Offsetting debts arising from the misexpenditure of grant 
funds, against amounts to which the State is or may be entitled under 
the Act, provided that debts arising from gross negligence or willful 
misuse of funds may not be offset against future grants. When the 
Secretary reduces amounts allotted to the State by the amount of the 
misexpenditure, the debt must be fully satisfied;
    (iii) Determining the amount of Federal cash maintained by the 
State or a subrecipient in excess of reasonable grant needs, 
establishing a debt for the amount of such excessive cash, and charging 
interest on that debt;
    (iv) Imposing other appropriate sanctions or corrective actions, 
except where specifically prohibited by the Act or regulations.
    (2) To impose a sanction or corrective action, the Secretary must 
utilize the initial and final determination procedures outlined in 
(f)(3) of this section.
    (h) Other violations. Violations or alleged violations of the Act, 
regulations, or grant terms and conditions except those pertaining to 
audits or discrimination must be determined and handled in accordance 
with 20 CFR part 658, subpart H.
    (i) Fraud and abuse. Any persons having knowledge of fraud, 
criminal activity or other abuse must report such information directly 
and immediately to the Secretary. Similarly, all complaints involving 
such matters should also be reported to the Secretary directly and 
immediately.
    (j) Nondiscrimination and affirmative action requirements. States 
must:
    (1) Assure that no individual be excluded from participation in, 
denied the benefits of, subjected to discrimination under, or denied 
employment in the administration or in connection with any services or 
activities authorized under the Act in violation of any applicable 
nondiscrimination law, including laws prohibiting discrimination on the 
basis of age, race, sex, color, religion, national origin, disability, 
political affiliation or belief. All complaints alleging discrimination 
must be filed and processed according to the procedures in the 
applicable DOL nondiscrimination regulations.
    (2) Assure that discriminatory job orders will not be accepted, 
except where the stated requirement is a bona fide occupational 
qualification (BFOQ). See, generally, 42 U.S.C. 2000(e)-2(e), 29 CFR 
parts 1604, 1606, 1625.
    (3) Assure that employers' valid affirmative action requests will 
be accepted and a significant number of qualified applicants from the 
target group(s) will be included to enable the employer to meet its 
affirmative action obligations.
    (4) Assure that employment testing programs will comply with 41 CFR 
part 60-3 and 29 CFR part 32 and 29 CFR 1627.3(b)(iv).
    (5) Nondiscrimination and equal opportunity requirements and 
procedures, including complaint processing and compliance reviews, will 
be governed by the applicable DOL nondiscrimination regulations.


Sec.  652.9  Labor disputes.

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

Subpart B--Services for Veterans


Sec.  652.100  Services for veterans.

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

[[Page 20938]]

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


Sec.  652.200  What is the purpose of this subpart?

    (a) This subpart provides guidance to States to implement the 
services provided under the Act, as amended by WIOA, in a one-stop 
delivery system environment.
    (b) Except as otherwise provided, the definitions contained in 20 
CFR part 651 and sec. 2 of the Act apply to this subpart.


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

    (a) The role of the State agency in the one-stop delivery system is 
to ensure the delivery of services authorized under sec. 7(a) of the 
Act. The State agency is a required one-stop partner in each local one-
stop delivery system and is subject to the provisions relating to such 
partners that are described at 20 CFR part 678.
    (b) Consistent with those provisions, the State agency must:
    (1) Participate in the one-stop delivery system in accordance with 
sec. 7(e) of the Act;
    (2) Be represented on the Workforce Development Boards that oversee 
the local and State one-stop delivery system and be a party to the 
Memorandum of Understanding, described at 20 CFR 678.500, addressing 
the operation of the one-stop delivery system; and
    (3) Provide these services as part of the one-stop delivery system.


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

    No. Local Employment Service Offices may not exist outside of the 
one-stop service delivery system. A State must collocate employment 
services, as provided in 20 CFR 678.310-678.315.


Sec.  652.203  Who is responsible for funds authorized under the Act in 
the workforce investment system?

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


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

    No, these funds are reserved for use by the Governor for 
performance incentives, supporting exemplary models of service 
delivery, and services for groups with special needs, as described in 
sec. 7(b) of the Act. However, these funds may flow through the one-
stop delivery system.


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

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


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

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


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

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


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

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


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

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

[[Page 20939]]

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

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


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

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


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

    This section stipulates that only State merit staff may provide 
Wagner-Peyser services. The only change proposed in this section is to 
change ``WIA'' to ``WIOA'' in the section question; the remainder of 
the text has not changed from the existing regulation. The Department 
has followed this policy since the earliest years of the ES, in order 
to ensure minimum standards for the quality of the services provided. A 
1998 U.S. District Court decision, Michigan v. Herman, 81 F. Supp. 2nd 
840 (http://law.justia.com/cases/federal/district-courts/FSupp2/81/840/2420800/) upheld this policy. State merit staff employees are directly 
accountable to State government entities, and the standards for their 
performance and their determinations on the use of public funds require 
that decisions be made in the best interest of the public and of the 
population to be served. State merit staff meet objective professional 
qualifications and provide impartial, transparent information and 
services to all customers while complying with established government 
standards.


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

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

Subpart D--Workforce and Labor Market Information


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

    (a) The Secretary of Labor must oversee the development, 
maintenance, and continuous improvement of the workforce and labor 
market information system defined in Wagner-Peyser Act sec. 15 and 20 
CFR 651.10.
    (b) With respect to data collection, analysis, and dissemination of 
workforce and labor market information as defined in Wagner-Peyser Act 
sec. 15 and 20 CFR 651.10, the Secretary must:
    (1) Assign responsibilities within the Department of Labor for 
elements of the workforce and labor market information system described 
in sec. 15(a) of the Wagner-Peyser Act to ensure that the statistical 
and administrative data collected are consistent with appropriate 
Bureau of Labor Statistics standards and definitions, and that the 
information is accessible and understandable to users of such data;
    (2) Actively seek the cooperation of heads of other Federal 
agencies to establish and maintain mechanisms for ensuring 
complementarity and non-duplication in the development and operation of 
statistical and administrative data collection activities;
    (3) Solicit, receive, and evaluate the recommendations of the 
Workforce Information Advisory Council established by Wagner-Peyser Act 
sec. 15(d);
    (4) Eliminate gaps and duplication in statistical undertakings;
    (5) Through the Bureau of Labor Statistics and the Employment and 
Training Administration, and in collaboration with States, develop and 
maintain the elements of the workforce and labor market information 
system, including the development of consistent procedures and 
definitions for use by States in collecting and reporting the workforce 
and labor market information data described in Wagner-Peyser Act sec. 
15 and defined in 20 CFR 651.10; and
    (6) Establish procedures for the system to ensure that the data and 
information are timely, and paperwork and reporting for the system are 
reduced to a minimum.


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

    Wage records, for purposes of the Wagner-Peyser Act, are records 
that contain ``wage information'' as defined in 20 CFR 603.2(k). In 
this part, ``State wage records'' refers to wage records produced or 
maintained by a State.


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

    (a) State wage records, as defined in Sec.  652.301, are source 
data used in the development of a significant portion of the workforce 
and labor market information defined in Sec.  651.10.
    (b) Based on the Secretary of Labor's responsibilities described in 
Wagner-Peyser Act sec. 15 and 20 CFR 652.300, the Secretary of Labor 
will, in consultation with the Workforce Information Advisory Council 
described in Wagner-Peyser Act sec. 15(d), Federal agencies, and 
States, develop:
    (1) Standardized definitions for the data elements comprising 
``wage records'' as defined in Sec.  652.301; and
    (2) Improved processes and systems for the collection and reporting 
of wage records.
    (c) In carrying out these activities, the Secretary may also 
consult with other stakeholders, such as employers.


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

    All information collected by the State in wage records referred to 
in Sec.  652.302 is subject to the confidentiality regulations at 20 
CFR part 603.
0
19. Revise part 653 to read as follows:

[[Page 20940]]

PART 653--SERVICES OF THE EMPLOYMENT SERVICE SYSTEM

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

    Authority:  Pub. L. 113-128 secs. 167, 189, 503; Wagner-Peyser 
Act, as amended by Pub. L. 113-128 secs. 302-308, 29 U.S.C. 49 et 
seq.; 38 U.S.C. part III, chapters 41 and 42.

Subpart A--[Reserved]

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


Sec.  653.100  Purpose and scope of subpart.

    (a) This subpart sets forth the principal regulations of the United 
States Employment Service (USES) concerning the provision of services 
for MSFWs consistent with the requirement that all services of the 
workforce development system be available to all job seekers in an 
equitable fashion. This includes ensuring that MSFWs have access to 
these services in a way that meets their unique needs. MSFWs must 
receive services on a basis which is qualitatively equivalent and 
quantitatively proportionate to services provided to non-MSFWs.
    (b) This subpart contains requirements that State agencies 
establish a system to monitor their own compliance with USES 
regulations governing services to MSFWs.
    (c) Special services to ensure that MSFWs receive the full range of 
employment related services are established under this subpart.


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

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


Sec.  653.102  Job information.

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


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

    (a) Each employment service office must determine whether or not 
participants are MSFWs as defined at Sec.  651.10 of this chapter.
    (b) All State Workforce Agencies (SWAs) will ensure that MSFWs with 
limited English proficiency (LEP) receive, free of charge, the language 
assistance necessary to afford them meaningful access to the programs, 
services, and information offered by the one-stop centers.
    (c) Employment service office staff members must provide MSFWs a 
list of available career and supportive services in their native 
language.
    (d) Employment service staff must refer and/or register MSFWs for 
services, as appropriate, if the MSFW is interested in obtaining such 
services.


Sec.  653.107  Outreach and Agricultural Outreach Plan.

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

[[Page 20941]]

    (2) Outreach workers may not enter an employer's property or work 
area to perform outreach duties described in this section without 
permission of the employer, owner, or farm labor contractor, unless 
otherwise authorized to enter by law. Outreach workers may not enter 
workers' living areas without the permission of the workers, and must 
comply with appropriate State laws regarding access.
    (3) After making the presentation, outreach workers must urge the 
MSFWs to go to the local one-stop center to obtain the full range of 
employment and training services.
    (4) If an MSFW cannot or does not wish to visit the local one-stop 
center, the outreach worker must offer to provide on-site the 
following:
    (i) Assistance in the preparation of applications for employment 
services;
    (ii) Assistance in obtaining referral(s) to current and future 
employment opportunities;
    (iii) Assistance in the preparation of either employment service or 
employment-related law complaints;
    (iv) Referral of complaints to the employment service office 
complaint specialist or employment service officer manager;
    (v) Referral to supportive services and/or career services in which 
the individual or a family member may be interested; and
    (vi) As needed, assistance in making appointments and arranging 
transportation for individual MSFW(s) or members of his/her family to 
and from local one-stop centers or other appropriate agencies.
    (5) Outreach workers must make follow-up contacts as necessary and 
appropriate to provide the assistance specified in paragraphs (b)(1) 
through (b)(4) of this section.
    (6) Outreach workers must be alert to observe the working and 
living conditions of MSFWs and, upon observation or upon receipt of 
information regarding a suspected violation of Federal or State 
employment-related law, document and refer information to the 
employment service office manager for processing in accordance with 
Sec.  658.411 of this chapter. Additionally, if an outreach worker 
observes or receives information about apparent violations (as 
described in 20 CFR 658.419), the outreach worker must document and 
refer the information to the appropriate local employment service 
office manager.
    (7) Outreach workers must be trained in local office procedures and 
in the services, benefits, and protections afforded MSFWs by the 
employment service system, including training on protecting farmworkers 
against sexual harassment. They must also be trained in the procedure 
for informal resolution of complaints. The program for such training 
must be formulated by the State Administrator, pursuant to uniform 
guidelines developed by ETA; the State monitor advocate must be given 
an opportunity to review and comment on the State's program.
    (8) Outreach workers must maintain complete records of their 
contacts with MSFWs and the services they perform. These records must 
include a daily log, a copy of which must be sent monthly to the 
employment service office manager and maintained on file for at least 2 
years. These records must include the number of contacts, the names of 
contacts (if available), and the services provided (e.g., whether a 
complaint was received, whether a request for career services was 
received, and whether a referral was made). Outreach workers also must 
maintain records of each possible violation or complaint of which they 
have knowledge, and their actions in ascertaining the facts and 
referring the matters as provided herein. These records must include a 
description of the circumstances and names of any employers who have 
refused outreach workers access to MSFWs pursuant to Sec.  
653.107(b)(2).
    (9) Outreach workers must not engage in political, unionization or 
anti-unionization activities during the performance of their duties.
    (10) Outreach workers must be provided with, carry and display, 
upon request, identification cards or other material identifying them 
as employees of the State agency.
    (c) Employment service office outreach responsibilities. Each 
employment service office manager must file with the State monitor 
advocate a monthly summary report of outreach efforts. These reports 
must summarize information collected, pursuant to paragraph (b)(8) of 
this section. The employment service office manager and/or other 
appropriate State office staff members must assess the performance of 
outreach workers by examining the overall quality and productivity of 
their work, including the services provided and the methods and tools 
used to offer services. Performance must not be judged solely by the 
number of contacts made by the outreach worker. The monthly reports and 
daily outreach logs must be made available to the State monitor 
advocate and Federal on-site review teams.
    (d) State Agricultural Outreach Plan (AOP). (1) Each State agency 
must develop an AOP every 4 years as part of the Unified or Combined 
State Plan required under sec. 102 or 103 of WIOA.
    (2) The AOP must:
    (i) Provide an assessment of the unique needs of MSFWs in the area 
based on past and projected agricultural and MSFW activity in the 
State;
    (ii) Provide an assessment of available resources for outreach;
    (iii) Describe the State agency's proposed outreach activities 
including strategies on how to contact MSFWs who are not being reached 
by the normal intake activities conducted by the employment service 
offices;
    (iv) Describe the activities planned for providing the full range 
of employment and training services to the agricultural community, both 
MSFWs and agricultural employers, through the one-stop centers.
    (v) Provide an assurance that the State agency is complying with 
the requirements under Sec.  653.111 if the State has significant MSFW 
one-stop centers.
    (3) The AOP must be submitted in accordance with the regulations at 
20 CFR 653.107(d) and planning guidance issued by the Department.
    (4) The Annual Summaries required at Sec.  653.108(s) must update 
annually the Department on the State agency's progress toward meetings 
its goals set forth in the AOP.


Sec.  653.108  State Workforce Agency and State monitor advocate 
responsibilities.

    (a) State Administrators must assure that their State agencies 
monitor their own compliance with ES regulations in serving MSFWs on an 
ongoing basis. The State Administrator has overall responsibility for 
State agency self-monitoring.
    (b) The State Administrator must appoint a State monitor advocate. 
The State Administrator must inform farmworker organizations and other 
organizations with expertise concerning MSFWs of the opening and 
encourage them to refer qualified applicants to apply through the State 
merit system prior to appointing a State monitor advocate. Among 
qualified candidates determined through State merit system procedures, 
the State agencies must seek persons:
    (1) Who are from MSFW backgrounds; and/or
    (2) Who speak Spanish or other languages of a significant 
proportion of the State MSFW population; and/or
    (3) Who have substantial work experience in farmworker activities.
    (c) The State monitor advocate must have direct, personal access, 
when necessary, to the State Administrator. The State monitor advocate 
must have

[[Page 20942]]

status and compensation as approved by the civil service classification 
system and be comparable to other State positions assigned similar 
levels of tasks, complexity, and responsibility.
    (d) The State monitor advocates must be assigned staff necessary to 
fulfill effectively all of their duties as set forth in this subpart. 
The number of staff positions must be determined by reference to the 
number of MSFWs in the State, as measured at the time of the peak MSFW 
population, and the need for monitoring activity in the State. The 
State monitor advocates must devote full-time to monitor advocate 
functions. Any State that proposes less than full-time dedication must 
demonstrate to its Regional Administrator that the State monitor 
advocate function can be effectively performed with part-time staffing.
    (e) All State monitor advocates and their staff must attend, within 
the first 3 months of their tenure, a training session conducted by the 
regional monitor advocate. They must also attend whatever additional 
training sessions are required by the regional or national monitor 
advocate.
    (f) The State monitor advocate must provide any relevant 
documentation requested from the State agency by the regional monitor 
advocate.
    (g) The State monitor advocate must:
    (1) Conduct an ongoing review of the delivery of services and 
protections afforded by employment service regulations to MSFWs by the 
State agency and local employment service offices (including progress 
made in achieving affirmative action staffing goals). The State monitor 
advocate, without delay, must advise the State agency and local offices 
of problems, deficiencies, or improper practices in the delivery of 
services and protections afforded by these regulations and may request 
a corrective action plan to address these deficiencies. The State 
monitor advocate must advise the State agency on means to improve the 
delivery of services.
    (2) Participate in on-site reviews on a regular basis, using the 
following procedures:
    (i) Before beginning an onsite review, the State monitor advocate 
and/or review staff must study:
    (A) Program performance data;
    (B) Reports of previous reviews;
    (C) Corrective action plans developed as a result of previous 
reviews;
    (D) Complaint logs; and
    (E) Complaints elevated from the office or concerning the office.
    (ii) Ensure that the onsite review format, developed by ETA, is 
used as a guideline for onsite reviews.
    (iii) Upon completion of an onsite monitoring review, the State 
monitor advocate must hold one or more wrap-up sessions with the 
employment service office manager and staff to discuss any findings and 
offer initial recommendations and appropriate technical assistance.
    (iv) After each review the State monitor advocate must conduct an 
in-depth analysis of the review data. The conclusions and 
recommendations of the State monitor advocate must be put in writing, 
and must be sent to the State Administrator, to the official of the 
State agency with line authority over the employment service office, 
and other appropriate State agency officials.
    (v) If the review results in any findings of noncompliance with the 
regulations under this chapter, the employment service office manager 
must develop and propose a written corrective action plan. The plan 
must be approved or revised by appropriate superior officials and the 
State monitor advocate. The plan must include actions required to 
correct or to take major steps to correct any compliance issues within 
30 days, and if the plan allows for more than 30 days for full 
compliance, the length of, and the reasons for, the extended period 
must be specifically stated. State agencies are responsible for 
assuring and documenting that the employment service office is in 
compliance within the time period designated in the plan.
    (vi) State agencies must submit to the appropriate ETA regional 
office copies of the onsite review reports and corrective action plans 
for employment service offices.
    (vii) The State monitor advocate may recommend that the review 
described in paragraph (g)(2) of this section be delegated to a 
responsible, professional member of the administrative staff of the 
State agency, if and when the State Administrator finds such delegation 
necessary. In such event, the State monitor advocate is responsible for 
and must approve the written report of the review.
    (3) Assure that all significant MSFW one-stop centers not reviewed 
onsite by Federal staff, are reviewed at least once per year by State 
staff, and that, if necessary, those employment service offices in 
which significant problems are revealed by required reports, management 
information, the employment service complaint system, or other means 
are reviewed as soon as possible.
    (4) Review and approve the State agency's Agricultural Outreach 
Plan (AOP).
    (5) On a random basis, review outreach workers' daily logs and 
other reports including those showing or reflecting the workers' 
activities.
    (6) Write and submit annual summaries to the State Administrator 
with a copy to the Regional Administrator as described in paragraph (s) 
of this section.
    (h) The State monitor advocate must participate in Federal reviews 
conducted pursuant to 20 CFR part 658 subpart G.
    (i) At the discretion of the State Administrator, the State monitor 
advocate may be assigned the responsibility as the complaint 
specialist. The State monitor advocate must participate in and monitor 
the performance of the complaint system, as set forth at 20 CFR 658.400 
et seq. The State monitor advocate must review the employment service 
office managers' informal resolution of complaints relating to MSFWs 
and must ensure that the local employment service office manager 
transmits copies of the logs of all MSFW complaints pursuant to 20 CFR 
658 subpart E to the State agency.
    (j) The State monitor advocate must serve as an advocate to improve 
services for MSFWs.
    (k) The State monitor advocate must establish an ongoing liaison 
with WIOA title I sec. 167 National Farmworker Jobs Program (NFJP) 
grantees and other organizations serving farmworkers, employers, and 
employer organizations in the State.
    (l) The State monitor advocate must meet (either in person or by 
alternative means), at minimum, quarterly, with representatives of the 
organizations pursuant to paragraph (k) of this section, to receive 
complaints, assist in referrals of alleged violations to enforcement 
agencies, receive input on improving coordination with employment 
service offices or improving the coordination of services to MSFWs. To 
foster such collaboration, a Memorandum of Understanding (MOU) (or 
multiple MOUs) must be established between the State monitor advocate 
and the different organizations.
    (m) The State monitor advocate must conduct frequent field visits 
to the working and living areas of MSFWs, and must discuss employment 
services and other employment-related programs with MSFWs, crew 
leaders, and employers. Records must be kept of each such field visit.
    (n) The State monitor advocate must participate in the appropriate 
regional public meeting(s) held by the Department of Labor Regional 
Farm Labor Coordinated Enforcement Committee, other Occupational Safety

[[Page 20943]]

and Health Administration and Wage and Hour Division task forces, and 
other committees as appropriate.
    (o) The State monitor advocate must ensure that outreach efforts in 
all significant MSFW employment service offices are reviewed at least 
yearly. This review will include accompanying at least one outreach 
worker from each significant MSFW local office on their field visits to 
MSFWs' working and living areas. The State monitor advocate must review 
findings from these reviews with the employment service office 
managers.
    (p) The State monitor advocate must review on at least a quarterly 
basis all statistical and other MSFW-related data reported by 
employment service offices in order:
    (1) To determine the extent to which the State agency has complied 
with the employment service regulations; and
    (2) To identify the areas of non-compliance.
    (q) The State monitor advocate must have full access to all 
statistical and other MSFW-related information gathered by State 
agencies and local employment service offices, and may interview State 
and local employment service office staff with respect to reporting 
methods. Subsequent to each review, the State monitor advocate must 
consult, as necessary, with State and local employment service offices 
and provide technical assistance to ensure accurate reporting.
    (r) The State monitor advocate must review and comment on proposed 
State employment service directives, manuals, and operating 
instructions relating to MSFWs and must ensure:
    (1) That they accurately reflect the requirements of the 
regulations, and
    (2) That they are clear and workable. The State monitor advocate 
also must explain and make available at the requestor's cost, pertinent 
directives and procedures to employers, employer organizations, 
farmworkers, farmworker organizations and other parties expressing an 
interest in a readily identifiable directive or procedure issued and 
receive suggestions on how these documents can be improved.
    (s) Annual summary. The State monitor advocates must prepare for 
the State Administrator, the regional monitor advocate, and the 
national monitor advocate an annual summary describing how the State 
provides employment services to MSFWs within their State based on 
statistical data and their reviews and activities as required in this 
chapter. The summary must include:
    (1) A description of the activities undertaken during the program 
year by the State monitor advocate pertaining to his/her 
responsibilities set forth in this section and other applicable 
regulations in this part.
    (2) An assurance that the State monitor advocate has direct, 
personal access, whenever he/she finds it necessary, to the State 
Administrator and that the State monitor advocate has status and 
compensation approved by the civil service classification system, and 
is comparable to other State positions assigned similar levels of 
tasks, complexity, and responsibility.
    (3) An assurance that the State monitor advocate devotes all of 
his/her time to monitor advocate functions, or, if the State agency 
proposes conducting necessary State monitor advocate functions on a 
part-time basis, an explanation of how the State monitor advocate 
functions are effectively performed with part-time staffing.
    (4) A summary of the monitoring reviews conducted by the State 
monitor advocate, including:
    (i) A description of any problems, deficiencies, or improper 
practices the State monitor advocate identified in the delivery of 
services,
    (ii) A summary of the actions taken by the State agency to resolve 
the problems, deficiencies, or improper practices described in its 
service delivery, and
    (iii) A summary of any technical assistance the State monitor 
advocate provided for the State agency and the local employment service 
offices.
    (5) A summary of the outreach efforts undertaken by all significant 
and non-significant MSFW employment service offices.
    (6) A summary of the State's actions taken under the complaint 
system described in 20 CFR 658 subpart E, identifying any challenges, 
complaint trends, findings from reviews of the complaint system, 
trainings offered throughout the year, and steps taken to inform MSFWs 
and employers, and farmworker advocacy groups about the complaint 
system.
    (7) A summary of how the State monitor advocate is working with 
WIOA title I sec. 167 NFJP grantees and other organizations serving 
farmworkers, employers and employer organizations, in the State, and an 
assurance that the State monitor advocate is meeting at least quarterly 
with representatives of these organizations.
    (8) A summary of the statistical and other MSFW-related data and 
reports gathered by State agencies and employment service offices for 
the year, including an overview of the State monitor advocate's 
involvement in the State agency's reporting systems.
    (9) A summary of the training conducted for State agency personnel, 
including local office personnel, on techniques for accurately 
reporting data.
    (10) A summary of activities related to the agricultural outreach 
plan, and an explanation of how those activities helped the State reach 
the goals and objectives described in the AOP. At the end of the 4-year 
AOP cycle, the summary must include a synopsis of the State agency's 
achievements over the previous 4 years to accomplish the goals set 
forth in the AOP, and a description of the goals which were not 
achieved and the steps the State agency will take to address those 
deficiencies.
    (11) For significant MSFW employment offices, a summary of the 
functioning of the State's affirmative action staffing program under 20 
CFR 653.111.


Sec.  653.109  Data collection and performance accountability measures.

    State agencies must:
    (a) Collect career service indicator data specified in WIOA title I 
sec. 134(c)(2)(A)(xii).
    (b) Collect data, in accordance with applicable ETA Reports and 
Guidance, on:
    (1) The number of MSFWs contacted through outreach activities;
    (2) The number of MSFWs and non-MSFWs registered for career 
services;
    (3) The number of MSFWs referred to and placed in agricultural 
jobs;
    (4) The number of MSFWs referred to and placed in non-agricultural 
jobs;
    (5) The entered employment rate for MSFWs;
    (6) The average earnings for MSFWs in both agricultural and non-
agricultural jobs;
    (7) The employment retention rate for MSFWs;
    (8) The number of MSFWs served who identified themselves as male, 
female, African-American, Hispanic, American Indian, Asian, or Pacific 
Islander;
    (9) Agricultural clearance orders (including field checks), MSFW 
complaints, and monitoring activities; and
    (10) Any other data required by the Department.
    (c) Provide necessary training to State agency personnel, including 
local office personnel, on techniques for accurately reporting data;
    (d) Collect and submit data on MSFWs required by the Unified State 
Plan, as directed by the Department.
    (e) Periodically verify data required to be collected under this 
section, take necessary steps to ensure its validity, and submit the 
data for verification to

[[Page 20944]]

the Department, as directed by the Department.
    (f) Submit additional reports to the Department as directed.
    (g) Meet equity indicators that address ES controllable services 
and include, at a minimum, individuals referred to a job, receiving job 
development, and referred to supportive or career services.
    (h) Meet minimum levels of service in significant MSFW States. That 
is, only significant MSFW State agencies will be required to meet 
minimum levels of service to MSFWs. Minimum level of service indicators 
must include, at a minimum, individuals placed in a job; individuals 
placed long-term (150 days or more) in a non-agricultural job; a review 
of significant MSFW local employment service offices; field checks 
conducted, outreach contacts per week; and processing of complaints. 
The determination of the minimum service levels required of significant 
MSFW States for each year must be based on the following:
    (1) Past State agency performance in serving MSFWs, as reflected in 
on-site reviews and data collected under Sec.  653.109;
    (2) The need for services to MSFWs in the following year, comparing 
prior and projected levels of MSFW activity.


Sec.  653.110  Disclosure of data.

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


Sec.  653.111  State agency staffing requirements.

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

Subpart C-E--[Reserved]

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


Sec.  653.500  Purpose and scope of subpart.

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


Sec.  653.501  Requirements for processing clearance orders.

    (a) No local employment service office or State agency may place a 
job order seeking workers to perform farmwork into intrastate or 
interstate clearance unless:
    (1) The local employment service office and employer have 
attempted, and have not been able, to obtain sufficient workers within 
the local labor market area, or
    (2) The local employment service office anticipates a shortage of 
local workers.
    (b) Employment service office responsibilities. (1) Each employment 
service office must ensure that the agricultural clearance form 
prescribed by the Department (ETA Form 790 or its subsequently issued 
form), and its attachments are complete when placing intrastate or 
interstate clearance orders seeking farmworkers.
    (2) All clearance orders must be posted in accordance with 
applicable ETA guidance. If the job order for the local employment 
service office incorporates offices beyond the local office commuting 
area, the employment service office must suppress the employer 
information in order to facilitate the orderly movement of workers 
within the employment service system.

[[Page 20945]]

    (3) Employment service staff must determine, through a preoccupancy 
housing inspection performed by employment service staff or other 
appropriate public agency, that the housing assured by the employer is 
either available and meets the applicable housing standards or has been 
approved for conditional access to the clearance system as set forth in 
20 CFR 653.502; except that mobile range housing for sheepherders and 
goatherders must meet existing Departmental guidelines and/or 
applicable regulations.
    (c) State agency responsibilities. (1) State agencies must ensure 
that intrastate and interstate orders:
    (i) Include the following language: ``In view of the statutorily 
established basic function of the employment service as a no-fee labor 
exchange, that is, as a forum for bringing together employers and job 
seekers, neither the ETA nor the State agencies are guarantors of the 
accuracy or truthfulness of information contained on job orders 
submitted by employers. Nor does any job order accepted or recruited 
upon by the employment service constitute a contractual job offer to 
which the ETA or a State agency is in any way a party;''
    (ii) Do not contain an unlawful discriminatory specification by 
race, color, religion, national origin, sex, sexual orientation, gender 
identity, age, disability, or genetic information;
    (iii) Are signed by the employer; and
    (iv) State all the material terms and conditions of the employment, 
including:
    (A) The crop;
    (B) The nature of the work;
    (C) The anticipated period and hours of employment;
    (D) The anticipated starting and ending date of employment and the 
anticipated number of days and hours per week for which work will be 
available;
    (E) The hourly wage rate or the piece rate estimated in hourly wage 
rate equivalents for each activity and unit size;
    (F) Any deductions to be made from wages;
    (G) A specification of any non-monetary benefits to be provided by 
the employer;
    (H) Any hours, days or weeks for which work is guaranteed, and, for 
each guaranteed week of work except as provided in paragraph (c)(3)(i) 
of this section, the exclusive manner in which the guarantee may be 
abated due to weather conditions or other acts of God beyond the 
employer's control; and
    (I) Any bonus or work incentive payments or other expenses which 
will be paid by the employer in addition to the basic wage rate, 
including the anticipated time period(s) within which such payments 
will be made.
    (2) State agencies must ensure that:
    (i) The wages and working conditions offered are not less than the 
prevailing wages and working conditions among similarly employed 
farmworkers in the area of intended employment or the applicable 
Federal or State minimum wage, whichever is higher. If the wages 
offered are expressed as piece rates or as base rates and bonuses, the 
employer must make the method of calculating the wage and supporting 
materials available to employment service staff who must check if the 
employer's calculation of the estimated hourly wage rate is reasonably 
accurate and is not less than the prevailing wage rate or applicable 
Federal or State minimum wage, whichever is higher; and
    (ii) The employer has agreed to provide or pay for the 
transportation of the workers and their families at or before the end 
of the period of employment specified in the job order on at least the 
same terms as transportation is commonly provided by employers in the 
area of intended employment to farmworkers and their families recruited 
from the same area of supply. Under no circumstances may the payment or 
provision of transportation occur later than the departure time needed 
to return home to begin the school year, in the case of any worker with 
children 18 years old or younger, or be conditioned on the farmworker 
performing work after the period of employment specified in the job 
order.
    (3) State agencies must ensure that the clearance order includes 
the following assurances:
    (i) The employer will provide to workers referred through the 
clearance system the number of hours of work cited in paragraph 
(c)(1)(iv)(D) of this section for the week beginning with the 
anticipated date of need, unless the employer has amended the date of 
need at least 10 working days prior to the original date of need 
(pursuant to paragraph (c)(3)(iv) of this section) by so notifying the 
order-holding office. The State agency must make a record of this 
notification and must attempt to expeditiously inform referred workers 
of the change.
    (ii) No extension of employment beyond the period of employment 
specified in the clearance order may relieve the employer from paying 
the wages already earned, or if specified in the clearance order as a 
term of employment, providing transportation or paying transportation 
expenses to the worker's home.
    (iii) The working conditions comply with applicable Federal and 
State minimum wage, child labor, social security, health and safety, 
farm labor contractor registration and other employment-related laws.
    (iv) The employer will expeditiously notify the order-holding 
office or State agency by emailing and telephoning immediately upon 
learning that a crop is maturing earlier or later, or that weather 
conditions, over-recruitment or other factors have changed the terms 
and conditions of employment.
    (v) The employer, if acting as a farm labor contractor (``FLC'') or 
farm labor contractor employee (``FLCE'') on the order, has a valid 
Federal FLC certificate or Federal FLCE identification card; and when 
appropriate, any required State farm labor contractor certificate.
    (vi) The availability of no cost or public housing which meets the 
Federal standards and which is sufficient to house the specified number 
of workers requested through the clearance system. This assurance must 
cover the availability of housing for only those workers, and, when 
applicable, family members who are unable to return to their residence 
in the same day.
    (vii) Outreach workers must have reasonable access to the workers 
in the conduct of outreach activities pursuant to Sec.  653.107.
    (viii) The job order contains all the material terms and conditions 
of the job. The employer must assure this by signing the following 
statement in the clearance order: ``This clearance order describes the 
actual terms and conditions of the employment being offered by me and 
contains all the material terms and conditions of the job.''
    (4) If a State agency discovers that an employer's clearance order 
contains a material misrepresentation, the State agency may initiate 
the Discontinuation of Services as set forth in 20 CFR part 658, 
subpart F.
    (5) If there is a change to the anticipated date of need and the 
employer fails to notify the order-holding office at least 10 working 
days prior to the original date of need the employer must pay eligible 
(pursuant to paragraph (d)(4) of this section) workers referred through 
the clearance system the specified hourly rate of pay, or if the pay is 
piece-rate, the higher of the Federal or State minimum wage for the 
first week starting with the originally anticipated date of need or 
provide alternative work if such alternative work is stated on the 
clearance order. If an employer fails to comply under this

[[Page 20946]]

section the order holding office may notify DOL's Wage and Hour 
Division for possible enforcement.
    (d) Processing clearance orders. This section does not apply to 
clearance orders that are attached to applications for foreign 
temporary agricultural workers pursuant to 20 CFR 655 subpart B.
    (1) The order-holding office must transmit an electronic copy of 
the approved clearance order to the State agency. The State agency must 
distribute additional electronic copies of the form with all 
attachments (except that the State agency may, at its discretion, 
delegate this distribution to the local office) as follows:
    (i) At least one copy of the clearance order must be sent to each 
of the State agencies selected for recruitment (areas of supply);
    (ii) At least one copy of the clearance order must be sent to each 
applicant-holding ETA regional office;
    (iii) At least one copy of the clearance order must be sent to the 
order-holding ETA regional office; and
    (iv) At least one copy of the clearance order must be sent to the 
Regional Farm Labor Coordinated Enforcement Committee and/or other 
Occupational Safety and Health Administration and Wage and Hour 
Division regional agricultural coordinators, and/or other committees as 
appropriate in the area of employment.
    (2) The local office may place an intrastate or interstate order 
seeking workers to perform farmwork for a specific farm labor 
contractor or for a worker preferred by an employer provided the order 
meets employment service nondiscrimination criteria. The order would 
not meet such criteria, for example, if it requested a ``white male 
crew leader'' or ``any white male crew leader.''
    (3) The ETA regional office must review and approve the order 
within 10 working days of its receipt of the order, and the Regional 
Administrator or his/her designee must approve the areas of supply to 
which the order will be extended. Any denial by the Regional 
Administrator or his/her designee must be in writing and state the 
reasons for the denial.
    (4) The applicant holding office must notify all referred 
farmworkers, farm labor contractors on behalf of farmworkers, or family 
heads on behalf of farmworker family members, to contact a local 
employment service office, preferably the order-holding office, to 
verify the date of need cited in the clearance order between nine and 5 
working days prior to the original date of need cited in the clearance 
order; and that failure to do so will disqualify the referred 
farmworker from the first weeks' pay as described in paragraph 
(c)(3)(i) of this section. The State agency must make a record of this 
notification.
    (5) If the worker referred through the clearance system contacts a 
local employment service office (in any State) other than the order 
holding office, that local employment service office must assist the 
referred worker in contacting the order holding office on a timely 
basis. Such assistance must include, if necessary, contacting the order 
holding office by telephone or other timely means on behalf of the 
worker referred through the clearance system.
    (6) Local employment service office staff must assist all 
farmworkers, upon request in their native language, to understand the 
terms and conditions of employment set forth in intrastate and 
interstate clearance orders and must provide such workers with 
checklists in their native language showing wage payment schedules, 
working conditions, and other material specifications of the clearance 
order.
    (7) If an order holding office learns that a crop is maturing 
earlier than expected or that other material factors, including weather 
conditions and recruitment levels, have changed since the date the 
clearance order was accepted, the agency must immediately contact the 
applicant holding office which must immediately inform crews and 
families scheduled to report to the job site of the changed 
circumstances and must adjust arrangements on behalf of such crews and 
families.
    (8) When there is a delay in the date of need, State agencies must 
document notifications by employers and contacts by individual 
farmworkers or crew leaders on behalf of farmworkers or family heads on 
behalf of farmworker family members to verify the date of need.
    (9) If weather conditions, over-recruitment or other conditions 
have eliminated the scheduled job opportunities, the State agencies 
involved must make every effort to place the workers in alternate job 
opportunities as soon as possible, especially if the worker(s) is 
already en-route or at the job site. Employment service office staff 
must keep records of actions under this section.
    (10) Applicant-holding offices must provide workers referred on 
clearance orders with a checklist summarizing wages, working conditions 
and other material specifications in the clearance order. Such 
checklists, where necessary, must be in the workers' native language. 
The checklist must include language notifying the worker that a copy of 
the original clearance order is available upon request. State agencies 
must use a standard checklist format provided by the Department (such 
as in Form WH516 or a successor form).
    (11) The applicant-holding office must give each referred worker a 
copy of the list of worker's rights described in the Department's ARS 
Handbook.
    (12) If the labor supply State agency accepts a clearance order, 
the State agency must actively recruit workers for referral. In the 
event a potential labor supply State agency rejects a clearance order, 
the reasons for rejection must be documented and submitted to the 
Regional Administrator having jurisdiction over the State agency. The 
Regional Administrator will examine the reasons for rejection, and, if 
the Regional Administrator agrees, will inform the Regional 
Administrator with jurisdiction over the order-holding State agency of 
the rejection and the reasons. If the Regional Administrator who 
receives the notification of rejection does not concur with the reasons 
for rejection, that Regional Administrator will inform the national 
monitor advocate, who, in consultation with the Administrator of ETA's 
Office of Workforce Investment, will make a final determination on the 
acceptance or rejection of the order.


Sec.  653.502  Conditional access to the agricultural recruitment 
system.

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

[[Page 20947]]

employment certification under the H-2A program.
    (3) Assurance. The employer's request pursuant to paragraphs (a)(1) 
or (2) of this section must contain an assurance that the housing will 
be in full compliance with the applicable housing standards at least 20 
calendar days (stating the specific date) before the housing is to be 
occupied.
    (b) Processing requests--(1) State agency processing. Upon receipt 
of a written request for conditional access to the intrastate or 
interstate clearance system under paragraph (a)(1) of this section, the 
local employment service office must send the request to the State 
agency, which, in turn, must forward it to the Regional Administrator.
    (2) Regional office processing and determination. Upon receipt of a 
request for conditional access pursuant to paragraph (b)(1) of this 
section, the Regional Administrator must review the matter and, as 
appropriate, must either grant or deny the request.
    (c) Authorization. The authorization for conditional access to the 
intrastate or interstate clearance system must be in writing, and must 
state that although the housing does not comply with the applicable 
standards, the employer's job order may be placed into intrastate or 
interstate clearance until a specified date. The Regional Administrator 
must send the authorization to the employer and must send copies (hard 
copy or electronic) to the appropriate State agency and local 
employment service office. The employer must submit and the local 
employment service office must attach copies of the authorization to 
each of the employer's clearance orders which is placed into intrastate 
or interstate clearance.
    (d) Notice of denial. If the Regional Administrator denies the 
request for conditional access to the intrastate or interstate 
clearance system they must provide written notice to the employer, the 
appropriate State agency, and the local employment service office, 
stating the reasons for the denial.
    (e) Inspection. The local employment service office serving the 
area containing the housing of any employer granted conditional access 
to the intrastate or interstate clearance system must assure that the 
housing is inspected no later than the date by which the employer has 
promised to have its housing in compliance with the applicable housing 
standards. An employer, however, may request an earlier preliminary 
inspection. If, on the date set forth in the authorization, the housing 
is not in full compliance with the applicable housing standards as 
assured in the request for conditional access, the local employment 
service office must afford the employer 5 calendar days to bring the 
housing into full compliance. After the 5-calendar-day period, if the 
housing is not in full compliance with the applicable housing standards 
as assured in the request for conditional access, the local employment 
service office immediately:
    (1) Must notify the RA, or the NPC designated by the Regional 
Administrator;
    (2) Must remove the employer's clearance orders from intrastate and 
interstate clearance; and
    (3) Must, if workers have been recruited against these orders, in 
cooperation with the employment service agencies in other States, make 
every reasonable attempt to locate and notify the appropriate crew 
leaders or workers, and to find alternative and comparable employment 
for the workers.


Sec.  653.503  Field checks.

    (a) If a worker is placed on a clearance order, the State agency 
must notify the employer in writing that the State agency, through its 
local employment service offices, and/or Federal staff, must conduct 
random, unannounced field checks to determine and document whether 
wages, hours, and working and housing conditions are being provided as 
specified in the clearance order.
    (b) The State agency must conduct field checks on at least 25 
percent of all agricultural worksites where placements have been made 
through the intrastate or interstate clearance system or at 100 percent 
of the worksites where less than 10 employment service placements have 
been made. This requirement must be met on a quarterly basis.
    (c) Field checks must include visit(s) to the worksite at a time 
when workers are present. When conducting field checks, local 
employment service staff must consult both the employees and the 
employer to ensure compliance with the full terms and conditions of 
employment.
    (d) If State agency or Federal personnel observe or receive 
information, or otherwise have reason to believe that conditions are 
not as stated in the clearance order or that an employer is violating 
an employment-related law, the State agency must document the finding 
and attempt informal resolution. If the matter has not been resolved 
within 5 working days, the State agency must initiate the 
Discontinuation of Services as set forth at 20 CFR part 658 subpart F 
and must refer apparent violations of employment-related laws to 
appropriate enforcement agencies in writing.
    (e) State agencies may enter into formal or informal arrangements 
with appropriate State and Federal enforcement agencies where the 
enforcement agency staff may conduct field checks instead of and on 
behalf of State agency personnel. The agreement may include the sharing 
of information and any actions taken regarding violations of the terms 
and conditions of the employment as stated in the clearance order and 
any other violations of employment related laws. An enforcement agency 
field check must satisfy the requirement for State agency field checks 
where all aspects of wages, hours, working and housing conditions have 
been reviewed by the enforcement agency. The State agency must 
supplement enforcement agency efforts with field checks focusing on 
areas not addressed by enforcement agencies.
    (g) ES staff must keep records of all field checks.

PART 654--SPECIAL RESPONSIBILITIES OF THE EMPLOYMENT SERVICE SYSTEM

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

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

0
21. Revise subpart E of part 654 to read as follows:
Subpart E--Housing for Agricultural Workers

Purpose and Applicability

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

Housing Standards

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

Subpart E--Housing for Agricultural Workers

Purpose and Applicability


Sec.  654.400  Scope and purpose.

    (a) This subpart sets forth the Department's Employment and 
Training Administration (ETA) standards for agricultural housing and 
variances.

[[Page 20948]]

Local employment service offices, as part of the State employment 
service agencies and in cooperation with the United States Employment 
Service, assist employers in recruiting agricultural workers from 
places outside the area of intended employment. The experiences of the 
employment service agencies indicate that employees so referred have on 
many occasions been provided with inadequate, unsafe, and unsanitary 
housing conditions. To discourage this practice, it is the policy of 
the Federal-State employment service system to deny its intrastate and 
interstate recruitment services to employers until the State employment 
service agency has ascertained that the employer's housing meets 
certain standards.
    (b) To implement this policy, Sec.  653.501 of this chapter 
provides that recruitment services must be denied unless the employer 
has signed an assurance that if the workers are to be housed, a 
preoccupancy inspection has been conducted and the employment service 
staff has ascertained that, with respect to intrastate or interstate 
clearance orders, the employer's housing meets the full set of 
standards set forth at 29 CFR 1910.142 or 20 CFR 654 subpart E, except 
that mobile range housing for sheepherders or goatherders must meet 
existing Departmental guidelines and/or applicable regulations.
    (c) Per Sec.  654.401(a) below, this subpart is effective only 
until [ONE YEAR AFTER DATE OF PUBLICATION OF THE FINAL RULE IN THE 
FEDERAL REGISTER].


Sec.  654.401  Applicability.

    (a) Housing that was completed or under construction prior to April 
3, 1980 or was under a signed contract for construction prior to March 
4, 1980 may continue to follow the full set of the Department's ETA 
standards set forth in this subpart until the date specified in 
paragraph (b) of this section.
    (b) On [ONE YEAR AFTER DATE OF PUBLICATION OF THE FINAL RULE IN THE 
FEDERAL REGISTER] all housing for agricultural workers governed by the 
standards set forth in this subpart must comply with the Occupational 
Safety and Health Administration's (OSHA) housing standards set forth 
in 29 CFR 1910.142.
    (c) To effectuate the transition to the OSHA standards, 
agricultural housing to which this subpart applies and which complies 
with the full set of standards and provisions set forth in this subpart 
must be considered to be in compliance with the OSHA temporary labor 
camp standards at 29 CFR 1910.142 until [ONE YEAR AFTER DATE OF 
PUBLICATION OF THE FINAL RULE IN THE FEDERAL REGISTER].


Sec.  654.402  Variances.

    (a) An employer may apply for a structural variance from a specific 
standard(s) in this subpart by filing a written application for such a 
variance with the local employment service office serving the area in 
which the housing is located. This application must:
    (1) Clearly specify the standard(s) from which the variance is 
desired;
    (2) Provide adequate justification that the variance is necessary 
to obtain a beneficial use of an existing facility, and to prevent a 
practical difficulty or unnecessary hardship; and
    (3) Clearly set forth the specific alternative measures which the 
employer has taken to protect the health and safety of workers and 
adequately show that such alternative measures have achieved the same 
result as the standard(s) from which the employer desires the variance.
    (b) Upon receipt of a written request for a variance under 
paragraph (a) of this section, the local employment service office must 
send the request to the State office which, in turn, must forward it to 
the ETA Regional Administrator (RA). The RA must review the matter and, 
after consultation with OSHA, must either grant or deny the request for 
a variance.
    (c) The variance granted by the RA must be in writing, must state 
the particular standard(s) involved, and must state as conditions of 
the variance the specific alternative measures which have been taken to 
protect the health and safety of the workers. The RA must send the 
approved variance to the employer and must send copies to OSHA's 
Regional Administrator, the Regional Administrator of the Wage and Hour 
Division (WHD), and the appropriate State agency and the local 
employment service office. The employer must submit and the local 
employment service office must attach copies of the approved variance 
to each of the employer's job orders which is placed into intrastate or 
interstate clearance.
    (d) If the RA denies the request for a variance, the RA must 
provide written notice stating the reasons for the denial to the 
employer, the appropriate State agency and the local employment service 
office. The notice must also offer the employer an opportunity to 
request a hearing before a DOL Hearing Officer, provided the employer 
requests such a hearing from the RA within 30 calendar days of the date 
of the notice. The request for a hearing must be handled in accordance 
with the complaint procedures set forth at Sec. Sec.  658.424 and 
658.425 of this chapter.
    (e) The procedures of paragraphs (a) through (d) of this section 
only apply to an employer who has chosen, as evidenced by its written 
request for a variance, to comply with the ETA housing standards at 
Sec. Sec.  654.404-654.417 of this subpart.
    (f) All requests and/or approvals for variance under this section 
will expire on [ONE YEAR AFTER DATE OF PUBLICATION OF THE FINAL RULE IN 
THE FEDERAL REGISTER]. After that date no requests for variance will be 
accepted by the Department.


Sec.  654.403  [Reserved].

Housing Standards


Sec.  654.404  Housing site.

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


Sec.  654.405  Water supply.

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


Sec.  654.406  Excreta and liquid waste disposal.

    (a) Facilities must be provided and maintained for effective 
disposal of excreta and liquid waste. Raw or treated liquid waste may 
not be discharged or allowed to accumulate on the ground surface.
    (b) Where public sewer systems are available, all facilities for 
disposal of excreta and liquid wastes must be connected thereto.
    (c) Where public sewers are not available, a subsurface septic 
tank-

[[Page 20949]]

seepage system or other type of liquid waste treatment and disposal 
system, privies or portable toilets must be provided. Any requirements 
of the State health authority must be complied with.


Sec.  654.407  Housing.

    (a) Housing must be structurally sound, in good repair, in a 
sanitary condition and must provide protection to the occupants against 
the elements.
    (b) Housing must have flooring constructed of rigid materials, 
smooth finished, readily cleanable, and so located as to prevent the 
entrance of ground and surface water.
    (c) The following space requirements must be provided:
    (1) For sleeping purposes only in family units and in dormitory 
accommodations using single beds, not less than 50 square feet of floor 
space per occupant;
    (2) For sleeping purposes in dormitory accommodations using double 
bunk beds only, not less than 40 square feet per occupant;
    (3) For combined cooking, eating, and sleeping purposes not less 
than 60 square feet of floor space per occupant.
    (d) Housing used for families with one or more children over 6 
years of age must have a room or partitioned sleeping area for the 
husband and wife. The partition must be of rigid materials and 
installed so as to provide reasonable privacy.
    (e) Separate sleeping accommodations must be provided for each sex 
or each family.
    (f) Adequate and separate arrangements for hanging clothing and 
storing personal effects for each person or family must be provided.
    (g) At least one-half of the floor area in each living unit must 
have a minimum ceiling height of 7 feet. No floor space may be counted 
toward minimum requirements where the ceiling height is less than 5 
feet.
    (h) Each habitable room (not including partitioned areas) must have 
at least one window or skylight opening directly to the out-of-doors. 
The minimum total window or skylight area, including windows in doors, 
must equal at least 10 percent of the usable floor area. The total 
openable area must equal at least 45 percent of the minimum window or 
skylight area required, except where comparably adequate ventilation is 
supplied by mechanical or some other method.


Sec.  654.408  Screening.

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


Sec.  654.409  Heating.

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


Sec.  654.410  Electricity and lighting.

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


Sec.  654.411  Toilets.

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


Sec.  654.412  Bathing, laundry, and hand washing.

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

[[Page 20950]]

be provided for the use of all occupants. Laundry trays or tubs must be 
provided in the ratio of 1 per 25 persons. Mechanical washers may be 
provided in the ratio of 1 per 50 persons in lieu of laundry trays, 
although a minimum of 1 laundry tray per 100 persons must be provided 
in addition to the mechanical washers.


Sec.  654.413  Cooking and eating facilities.

    (a) When workers or their families are permitted or required to 
cook in their individual unit, a space must be provided and equipped 
for cooking and eating. Such space must be provided with:
    (1) A cookstove or hot plate with a minimum of two burners;
    (2) Adequate food storage shelves and a counter for food 
preparation;
    (3) Provisions for mechanical refrigeration of food at a 
temperature of not more than 45 [deg]F;
    (4) A table and chairs or equivalent seating and eating 
arrangements, all commensurate with the capacity of the unit; and
    (5) Adequate lighting and ventilation.
    (b) When workers or their families are permitted or required to 
cook and eat in a common facility, a room or building separate from the 
sleeping facilities must be provided for cooking and eating. Such room 
or building must be provided with:
    (1) Stoves or hot plates, with a minimum equivalent of two burners, 
in a ratio of 1 stove or hot plate to 10 persons, or 1 stove or hot 
plate to 2 families;
    (2) Adequate food storage shelves and a counter for food 
preparation;
    (3) Mechanical refrigeration for food at a temperature of not more 
than 45 [deg]F.;
    (4) Tables and chairs or equivalent seating adequate for the 
intended use of the facility;
    (5) Adequate sinks with hot and cold water under pressure;
    (6) Adequate lighting and ventilation; and
    (7) Floors must be of nonabsorbent, easily cleaned materials.
    (c) When central mess facilities are provided, the kitchen and mess 
hall must be in proper proportion to the capacity of the housing and 
must be separate from the sleeping quarters. The physical facilities, 
equipment and operation must be in accordance with provisions of 
applicable State codes.
    (d) Wall surface adjacent to all food preparation and cooking areas 
must be of nonabsorbent, easily cleaned material. In addition, the wall 
surface adjacent to cooking areas must be of fire-resistant material.


Sec.  654.414  Garbage and other refuse.

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


Sec.  654.415  Insect and rodent control.

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


Sec.  654.416  Sleeping facilities.

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


Sec.  654.417  Fire, safety, and first aid.

    (a) All buildings in which people sleep or eat must be constructed 
and maintained in accordance with applicable State or local fire and 
safety laws.
    (b) In family housing and housing units for less than 10 persons, 
of one story construction, two means of escape must be provided. One of 
the two required means of escape may be a readily accessible window 
with an openable space of not less than 24 x 24 inches.
    (c) All sleeping quarters intended for use by 10 or more persons, 
central dining facilities, and common assembly rooms must have at least 
two doors remotely separated so as to provide alternate means of escape 
to the outside or to an interior hall.
    (d) Sleeping quarters and common assembly rooms on the second story 
must have a stairway, and a permanent, affixed exterior ladder or a 
second stairway.
    (e) Sleeping and common assembly rooms located above the second 
story must comply with the State and local fire and building codes 
relative to multiple story dwellings.
    (f) Fire extinguishing equipment must be provided in a readily 
accessible place located not more than 100 feet from each housing unit. 
Such equipment must provide protection equal to a 2\1/2\ gallon stored 
pressure or 5-gallon pump-type water extinguisher.
    (g) First aid facilities must be provided and readily accessible 
for use at all time. Such facilities must be equivalent to the 16 unit 
first aid kit recommended by the American Red Cross, and provided in a 
ratio of 1 per 50 persons.
    (h) No flammable or volatile liquids or materials must be stored in 
or adjacent to rooms used for living purposes, except for those needed 
for current household use.
    (i) Agricultural pesticides and toxic chemicals may not be stored 
in the housing area.
0
22. Revise part 658 to read as follows:

PART 658--ADMINISTRATIVE PROVISIONS GOVERNING THE EMPLOYMENT 
SERVICE SYSTEM

Subpart A-D--[Reserved]
Subpart E--Employment Service and Employment-Related Law Complaint 
System (Complaint System)
Sec.
658.400 Purpose and scope of subpart.
Complaints Filed at the Local and State Level
658.410 Establishment of local and State complaint systems.
658.411 Action on complaints.
658.417 State hearings.
658.418 Decision of the State hearing official.
658.419 Apparent violations.

When a Complaint Rises to the Federal Level

658.420 Responsibilities of the Employment and Training 
Administration regional office.
658.421 Handling of employment service regulation-related 
complaints.
658.422 Handling of employment-related law complaints by the 
Regional Administrator.
658.424 Proceedings before the Office of Administrative Law Judges.
658.425 Decision of Department of Labor Administrative Law Judge.
658.426 Complaints against the United States Employment Service.
Subpart F--Discontinuation of Services to Employers by the Employment 
Service System
658.500 Scope and purpose of subpart.
658.501 Basis for discontinuation of services.
658.502 Notification to employers.
658.503 Discontinuation of services.
658.504 Reinstatement of services.

[[Page 20951]]

Subpart G--Review and Assessment of State Agency Compliance With 
Employment Service Regulations
658.600 Scope and purpose of subpart.
658.601 State agency responsibility.
658.602 Employment and Training Administration National Office 
responsibility.
658.603 Employment and Training Administration regional office 
responsibility.
658.604 Assessment and evaluation of program performance data.
658.605 Communication of findings to State agencies.
Subpart H--Federal Application of Remedial Action to State Agencies
658.700 Scope and purpose of subpart.
658.701 Statements of policy.
658.702 Initial action by the Regional Administrator.
658.703 Emergency corrective action.
658.704 Remedial actions.
658.705 Decision to decertify.
658.706 Notice of decertification.
658.707 Requests for hearings.
658.708 Hearings.
658.709 Conduct of hearings.
658.710 Decision of the Administrative Law Judge.
658.711 Decision of the Administrative Review Board.

    Authority:  Pub. L. 113-128 secs. 189, 503; Wagner-Peyser Act, 
as amended by Pub. L. 113-128 secs. 302-308, 29 U.S.C. 49 et seq.

Subpart A-D--[Reserved]

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


Sec.  658.400  Purpose and scope of subpart.

    (a) This subpart sets forth the regulations governing the Complaint 
System for the employment service system at the State and Federal 
levels. Specifically, the Complaint System handles complaints against 
an employer about the specific job to which the applicant was referred 
through the employment service system and complaints involving the 
failure to comply with the employment service regulations under this 
part. As noted below, this subpart only covers employment service-
related complaints made within 2 years of the alleged violation.
    (b) Any complaints alleging violations under the Unemployment 
Insurance program, under WIOA title I programs, or complaints by 
veterans alleging employer violations of the mandatory listing 
requirements under 38 U.S.C. 4212 are not covered by this subpart, 
rather they are referred to the appropriate administering agency which 
would follow the procedures set forth in the respective regulations.
    (c) The Complaint System also accepts, refers, and, under certain 
circumstances, tracks complaints involving employment-related laws as 
defined in 20 CFR 651.10.

Complaints Filed at the Local and State Level


Sec.  658.410  Establishment of local and State complaint systems.

    (a) Each State Workforce Agency (SWA) must establish and maintain a 
Complaint System pursuant to this subpart.
    (b) The State Administrator must have overall responsibility for 
the operation of the Complaint System. At the local employment service 
office level the manager must be responsible for the operation of the 
Complaint System.
    (c) SWAs must ensure that centralized control procedures are 
established for the processing of complaints. The manager of the local 
employment service office and the SWA Administrator must ensure that a 
central complaint log is maintained, listing all complaints taken by 
the local employment service office or the SWA, and specifying for each 
complaint:
    (1) The name of the complainant;
    (2) The name of the respondent (employer or State agency);
    (3) The date the complaint is filed;
    (4) Whether the complaint is by or on behalf of an MSFW;
    (5) Whether the complaint concerns an employment-related law or the 
employment services regulations; and
    (6) The action taken and whether the complaint has been resolved.
    (d) State agencies must ensure that information pertaining to the 
use of the Complaint System is publicized, which must include, but is 
not limited to, the prominent display of an ETA-approved Complaint 
System poster in each one-stop center.
    (e) Each local employment service office must ensure that there is 
appropriate staff available during regular office hours to take 
complaints.
    (f) Complaints may be accepted in any local employment service 
office of the State employment service agency, or by a State Workforce 
Agency, or elsewhere by an outreach worker.
    (g) All complaints filed through the local employment service 
office must be handled by a trained Complaint System representative.
    (h) All complaints received by a SWA must be assigned to a State 
agency official designated by the State Administrator, provided that 
the State agency official designated to handle MSFW complaints must be 
the State monitor advocate (SMA).
    (i) State agencies must ensure that any action taken by the 
Complaint System representative, including referral, on a complaint 
from an MSFW is fully documented containing all relevant information, 
including a notation of the type of each complaint pursuant to 
Department guidance, a copy of the original complaint form, a copy of 
any employment service related reports, any relevant correspondence, a 
list of actions taken, a record of pertinent telephone calls and all 
correspondence relating thereto.
    (j) Within 1 month after the end of the calendar quarter, the 
employment service office manager must transmit an electronic copy of 
the quarterly Complaint System log described in paragraph (c) of this 
section to the SMA. These logs must be made available to the Department 
upon request.
    (k) The appropriate SWA or local employment office representative 
handling a complaint must offer to assist the complainant through the 
provision of appropriate services.
    (l) The State Administrator must establish a referral system for 
cases where a complaint is filed alleging a violation that occurred in 
the same State but through a different local employment service office.
    (m) Follow-up on unresolved complaints. When a complaint is 
submitted or referred to a SWA, the Complaint System representative 
(where the complainant is an MSFW, the Complaint System representative 
will be the SMA), must follow-up monthly regarding MSFW complaints and 
quarterly regarding non-MSFW complaints, and must inform the 
complainant of the status of the complaint periodically.


Sec.  658.411  Action on complaints.

    (a) Filing complaints. (1) Whenever an individual indicates an 
interest in filing a complaint with a local employment service office 
or SWA representative, or an outreach worker, the individual receiving 
the complaint must offer to explain the operation of the Complaint 
System and must offer to take the complaint in writing.
    (2) During the initial discussion with the complainant, the staff 
taking the complaint must:
    (i) Make every effort to obtain all the information he/she 
perceives to be necessary to investigate the complaint;
    (ii) Request that the complainant indicate all of the physical 
addresses, email, and telephone numbers through which he/she might be 
contacted during the investigation of the complaint;
    (iii) Request that the complainant contact the Complaint System

[[Page 20952]]

representative before leaving the area if possible, and explain the 
need to maintain contact during the investigation.
    (3) The staff must ensure that the complainant submits the 
complaint on the Complaint/Referral Form prescribed or approved by the 
Department. The Complaint/Referral Form must be used for all 
complaints, including complaints about unlawful discrimination, except 
as provided in paragraph (a)(4) of this section. The staff must offer 
to assist the complainant in filling out the form, and must do so if 
the complainant desires such assistance. If the complainant also 
represents several other complainants, all such complainants must be 
named on the Complaint/Referral Form. The complainant must sign the 
completed form in writing or electronically. The identity of the 
complainant(s) and any persons who furnish information relating to, or 
assisting in, an investigation of a complaint must be kept confidential 
to the maximum extent possible, consistent with applicable law and a 
fair determination of the complaint. A copy of the completed Complaint/
Referral Form must be given to the complainant(s), and the complaint 
form must be given to the appropriate Complaint System representative 
described in Sec.  658.410 (g).
    (4) Any complaint in a reasonable form (letter or email) which is 
signed by the complainant and includes sufficient information to 
initiate an investigation must be treated as if it were a properly 
completed Complaint/Referral Form filed in person. A letter (via hard 
copy or email) confirming that the complaint was received must be sent 
to the complainant and the document must be sent to the appropriate 
Complaint System representative. The Complaint System representative 
must request additional information from the complainant if the 
complaint does not provide sufficient information to investigate the 
matter expeditiously.
    (b) Complaints regarding an employment-related law. (1) When a 
complaint is filed regarding an employment-related law with a local 
employment service office or a SWA the office must determine if the 
complainant is an MSFW.
    (i) If the complainant is a non-MSFW, the office must immediately 
refer the complainant to the appropriate enforcement agency, another 
public agency, a legal aid organization, and/or a consumer advocate 
organization, as appropriate, for assistance. Upon completing the 
referral the local or State representative is not required to follow-up 
with the complainant.
    (ii) If the complainant is a MSFW, the local employment service 
office or SWA Complaint System representative must:
    (A) Take from the MSFW or his/her representative, in writing (hard 
copy or electronic), the complaint(s) describing the alleged 
violation(s) of the employment-related law(s);
    (B) Attempt to resolve the issue at the local level, except in 
cases where the complaint was submitted to the SWA and the SMA 
determines that he/she must take immediate action. Concurrently, the 
representative must offer to refer the MSFW to other employment 
services should the MSFW be interested.
    (C) If the issue is not resolved within 5 business days, the 
representative must determine if the complaint should be referred to 
the appropriate enforcement agency, another public agency, a legal aid 
organization, or a consumer advocate organization, as appropriate, for 
further assistance.
    (D) If the local employment service office or SWA Complaint System 
representative determines that the complaint should be referred to a 
State or Federal agency, he/she must refer the complaint to the SMA who 
must immediately refer the complaint to the appropriate enforcement 
agency for prompt action.
    (E) If the complaint was referred to the SMA under paragraph 
(b)(1)(ii)(D) of this section, the representative must provide the 
SMA's contact information to the complainant. The SMA must notify the 
complainant of the enforcement agency to which the complaint was 
referred.
    (2) If an enforcement agency makes a final determination that the 
employer violated an employment-related law and the complaint is 
connected to a job order, the SWA must initiate procedures for 
discontinuation of services immediately in accordance with subpart F. 
If this occurs, the SWA must notify the complainant and the employer of 
this action.
    (c) Complaints alleging a violation of rights under the Equal 
Employment Opportunity Commission Regulations. (1) All complaints 
received by a local employment service office alleging unlawful 
discrimination by race, color, religion, national origin, sex, sexual 
orientation, gender identity, age, disability, or genetic information, 
as well as reprisal for protected activity, the local Complaint System 
representative must refer the complaint to a local employment service 
Equal Opportunity (EO) representative and must notify the complainant 
of the referral in writing.
    (2) If the local employment service office does not have an EO 
representative, the complaint must be sent to the SWA for assignment to 
the State EO representative or, where appropriate, handled in 
accordance with the procedures set forth at 29 CFR part 31.
    (3) All such complaints initially received by the State Agency must 
be assigned to the State EO and, where appropriate, handled in 
accordance with the procedures set forth at 29 CFR part 31.
    (4) Regardless of whether the complaint is initially received or 
referred to the State agency, the State EO representative must 
determine if the complaint is alleging discrimination by an employer. 
If so, the State EO representative must refer the complaint to the 
Equal Employment Opportunity Commission (EEOC) or another appropriate 
enforcement agency. Complaints not referred must be subject to the 
hearing and appeal rights provided in this subpart. The Complaint 
System representative must notify the complainant of the referral in 
writing.
    (d) Complaints regarding the Employment Services Regulations (ES 
Complaints). (1) When an ES complaint is filed with a local employment 
service office or a SWA the following procedures apply:
    (i) When an ES complaint is filed against an employer, the proper 
office to handle the complaint is the local employment service office 
serving the area in which the employer is located.
    (ii) When a complaint is against an employer in another State or 
against another SWA:
    (A) The local employment service office or SWA receiving the 
complaint must send, after ensuring that the Complaint/Referral Form is 
adequately completed, a copy of the Complaint/Referral Form and copies 
of any relevant documents to the SWA in the other State. Copies of the 
referral letter must be sent to the complainant, and copies of the 
complaint and referral letter must be sent to the ETA Regional 
Office(s) with jurisdiction over the transferring and receiving State 
agencies. All such copies must be sent via hard copy or electronic 
mail.
    (B) The SWA receiving the complaint must handle the complaint as if 
it had been initially filed with that SWA.
    (C) The ETA regional office with jurisdiction over the receiving 
SWA must follow-up with it to ensure the complaint is handled in 
accordance with these regulations.
    (D) If the complaint is against more than one SWA, the complaint 
must so clearly state.

[[Page 20953]]

    (The complaint must be processed as separate complaints and must be 
handled according to procedures at paragraph (d) of this section.)
    (iii) When an ES complaint is filed against a local employment 
service office, the proper office to handle the complaint is the local 
employment service office serving the area in which the alleged 
violation occurred.
    (iv) When an ES complaint is filed against more than one local 
employment service office and is in regard to an alleged agency-wide 
violation the SWA representative or his/her designee must process the 
complaint.
    (v) When a complaint is filed alleging a violation that occurred in 
the same State but through a different local employment service office, 
the local employment service office where the complaint is filed must 
ensure that the Complaint/Referral Form is adequately completed and 
send the form to the appropriate local employment service office for 
tracking, further referral if necessary, and follow-up. A copy of the 
referral letter must be sent to the complainant via hard copy or 
electronic mail.
    (2)(i) If a complaint regarding the employment services regulations 
is filed in a local employment service office by either a non-MSFW or 
MSFW, or their representatives, the appropriate local employment 
service office Complaint System representative must investigate and 
attempt to resolve the complaint immediately upon receipt.
    (ii) If resolution has not been achieved to the satisfaction of the 
complainant within 15 working days after receipt of the complaint, or 5 
working days with respect to complaints filed by or on behalf of MSFWs, 
the Complaint System representative must send the complaint to the SWA 
for resolution or further action, except that if the local employment 
service office has made a written request (via hard copy or electronic 
mail) for information pursuant to paragraph (e)(3) of this section. 
These time periods do not apply until the complainant's response is 
received in accordance with paragraph (e)(3) of this section.
    (iii) The local employment service office must notify the 
complainant and the respondent, in writing (via hard copy or electronic 
mail), of the determination (pursuant to paragraph(d)(5) of this 
section) of its investigation under paragraph (d)(2)(i) of this 
section, or of the referral to the SWA (if referred).
    (3) When a non-MSFW or his/her representative files a complaint 
regarding the employment service regulations with a SWA, or when a non-
MSFW complaint is referred from a local employment office the following 
procedures apply:
    (i) If the complaint is not transferred to an enforcement agency 
under paragraph (b)(1)(i) of this section the Complaint System 
representative must investigate and attempt to resolve the complaint 
immediately upon receipt.
    (ii) If resolution at the SWA level has not been accomplished 
within 30 working days after the complaint was received by the SWA, 
whether the complaint was received directly or from a local employment 
service office pursuant to paragraph (d)(2)(ii) of this section, the 
SWA must make a written determination regarding the complaint and must 
send electronic copies to the complainant and the respondent except if 
the SWA has made a written request for information pursuant to 
paragraph (e)(3) of this section, this time period does not apply until 
the complainant's response is received in accordance with paragraph 
(e)(3) of this section. The determination must follow the procedures 
set forth in paragraph (d)(5) of this section.
    (4)(i) When a MSFW or his/her representative files a complaint 
regarding the employment service regulations directly with a SWA, or 
when a MSFW complaint is referred from a local employment office, the 
SMA must investigate and attempt to resolve the complaint immediately 
upon receipt and may, if necessary, conduct a further investigation.
    (ii) If resolution at the SWA level has not been accomplished 
within 20 business days after the complaint was received by the SWA, 
the SMA must make a written determination regarding the complaint and 
must send electronic copies to the complainant and the respondent 
except that if the SWA has made a written request for information 
pursuant to paragraph (a)(4) of this section, this time period does not 
apply until the complainant's response is received in accordance with 
paragraph (e)(3) of this section. The determination must follow the 
procedures set forth in paragraph (d)(5) of this section.
    (5) Written Determinations.
    (i) All written determinations by local employment service or SWA 
officials on complaints under the employment services regulations must 
be sent by certified mail (or another legally viable method) and a copy 
of the determination may be sent via electronic mail. The determination 
must include all of the following:
    (A) The results of any SWA investigation;
    (B) The conclusions reached on the allegations of the complaint;
    (C) If a resolution was not reached, an explanation of why the 
complaint was not resolved;
    (D) If the complaint is against the SWA, an offer to the 
complainant of the opportunity to request, in writing, a hearing within 
20 working days after the certified date of receipt of the 
notification.
    (ii) If the SWA determines that the employer has not violated the 
employment service regulations, the SWA must offer to the complainant 
the opportunity to request a hearing within 20 working days after the 
certified date of receipt of the notification.
    (iii) If the SWA, within 20 working days from the certified date of 
receipt of the notification provided for in paragraph (d)(5) of this 
section, receives a written request (via hard copy or electronic mail) 
for a hearing, the SWA must refer the complaint to a State hearing 
official for hearing. The SWA must, in writing (via hard copy or 
electronic mail), notify the respective parties to whom the 
determination was sent that:
    (A) The parties will be notified of the date, time, and place of 
the hearing;
    (B) The parties may be represented at the hearing by an attorney or 
other representative;
    (C) The parties may bring witnesses and/or documentary evidence to 
the hearing;
    (D) The parties may cross-examine opposing witnesses at the 
hearing;
    (E) The decision on the complaint will be based on the evidence 
presented at the hearing;
    (F) The State hearing official may reschedule the hearing at the 
request of a party or its representative; and
    (G) With the consent of the SWA's representative and of the State 
hearing official, the party who requested the hearing may withdraw the 
request for hearing in writing before the hearing.
    (iv) If the State agency makes a final determination that the 
employer who has or is currently using the employment service system 
has violated the employment service regulations, the determination, 
pursuant to paragraph (d)(5) of this section, must state that the State 
will initiate procedures for discontinuation of services to the 
employer in accordance with subpart F of this part.
    (6) A complaint regarding the employment service regulations must 
be handled to resolution by these regulations only if it is made within 
2 years of the alleged occurrence.
    (e) Resolution of complaints. A complaint is considered resolved 
when:

[[Page 20954]]

    (1) The complainant indicates satisfaction with the outcome via 
written correspondence;
    (2) The complainant chooses not to elevate the complaint to the 
next level of review;
    (3) The complainant or the complainant's authorized representative 
fails to respond within 20 working days or, in cases where the 
complainant is an MSFW, 40 working days of a written request by the 
appropriate local employment service office or State agency;
    (4) The complainant exhausts all available options for review; or
    (5) A final determination has been made by the enforcement agency 
to which the complaint was referred.


Sec.  658.417  State hearings.

    (a) The hearing described in Sec.  658.411 must be held by State 
hearing officials. A State hearing official may be any State official 
authorized to hold hearings under State law. Examples of hearing 
officials are referees in State unemployment compensation hearings and 
officials of the State agency authorized to preside at State 
administrative hearings.
    (b) The State hearing official may decide to conduct hearings on 
more than one complaint concurrently if he/she determines that the 
issues are related or that the complaints will be handled more 
expeditiously if conducted together.
    (c) The State hearing official, upon the referral of a case for a 
hearing, must:
    (1) Notify all involved parties of the date, time, and place of the 
hearing; and
    (2) Reschedule the hearing, as appropriate.
    (d) In conducting a hearing, the State hearing official must:
    (1) Regulate the course of the hearing;
    (2) Issue subpoenas if necessary, provided the official has the 
authority to do so under State law;
    (3) Ensure that all relevant issues are considered;
    (4) Rule on the introduction of evidence and testimony; and
    (5) Take all actions necessary to ensure an orderly proceeding.
    (e) All testimony at the hearing must be recorded and may be 
transcribed when appropriate.
    (f) The parties must be afforded the opportunity to present, 
examine, and cross-examine witnesses.
    (g) The State hearing official may elicit testimony from witnesses, 
but may not act as advocate for any party.
    (h) The State hearing official must receive and include in the 
record, documentary evidence offered by any party and accepted at the 
hearing. Copies thereof must be made available by the party submitting 
the document to other parties to the hearing upon request.
    (i) Federal and State rules of evidence do not apply to hearings 
conducted pursuant to this section; however rules or principles 
designed to assure production of the most credible evidence available 
and to subject testimony to test by cross-examination, must be applied 
where reasonably necessary by the State hearing official. The State 
hearing official may exclude irrelevant, immaterial, or unduly 
repetitious evidence.
    (j) The case record, or any portion thereof, must be available for 
inspection and copying by any party at, prior to, or subsequent to the 
hearing upon request. Special procedures may be used for disclosure of 
medical and psychological records such as disclosure to a physician 
designated by the individual.
    (k) The State hearing official must, if feasible, resolve the 
dispute at any time prior to the conclusion of the hearing.
    (l) At the State hearing official's discretion, other appropriate 
individuals, organizations, or associations may be permitted to 
participate in the hearing as amicus curiae (friends of the court) with 
respect to any legal or factual issues relevant to the complaint. Any 
documents submitted by the amicus curiae must be included in the 
record.
    (m) If the parties to the hearing are located in more than one 
State or are located in the same State but access to the hearing 
location is extremely inconvenient for one or more parties as 
determined by the State hearing official, the hearing official must:
    (1) Whenever possible, hold a single hearing at a location 
convenient to all parties or their representatives wishing to appear 
and present evidence, with all such parties and/or their 
representatives present.
    (2) If a hearing location cannot be established by the State 
hearing official under paragraph (m)(1) of this section, the State 
hearing official may conduct, with the consent of the parties, the 
hearing by a telephone conference call from a State agency office. If 
the hearing is conducted via telephone conference call the parties and 
their representatives must have the option to participate in person or 
via telephone.
    (3) Where the State agency is not able, for any reason, to conduct 
a telephonic hearing under paragraph (m)(2) of this section, the State 
agencies in the States where the parties are located must take evidence 
and hold the hearing in the same manner as used for appealed interstate 
unemployment claims in those States, to the extent that such procedures 
are consistent with this section.


Sec.  658.418  Decision of the State hearing official.

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


Sec.  658.419  Apparent violations.

    (a) If a State agency, local employment service office employee, or 
outreach worker, observes, has reason to believe, or is in receipt of 
information regarding a suspected violation of employment-related laws 
or employment service regulations by an employer, except as provided at 
Sec.  658.419 (field checks) or Sec.  658.411 (complaints), the 
employee must

[[Page 20955]]

document the suspected violation and refer this information to the 
local employment service office manager.
    (b) If the employer has filed a job order with the employment 
service office within the past 12 months, the local employment service 
office must attempt informal resolution provided at Sec.  658.411.
    (c) If the employer has not filed a job order with the local office 
during the past 12 months, the suspected violation of an employment-
related law must be referred to the appropriate enforcement agency in 
writing.

When a Complaint Rises to the Federal Level


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

    (a) Each Regional Administrator must establish and maintain a 
Complaint System within each ETA regional office.
    (b) The Regional Administrator must designate DOL officials to 
handle employment service regulation-related complaints as follows:
    (1) All complaints alleging discrimination by race, color, 
religion, national origin, sex, sexual orientation, gender identity, 
age, disability, or genetic information, as well as reprisal for 
protected activity, must be assigned to a Regional Director for Equal 
Opportunity and Special Review and, where appropriate, handled in 
accordance with procedures at 29 CFR part 31.
    (2) All complaints other than those described in paragraph (b)(1) 
of this section, must be assigned to a regional office official 
designated by the Regional Administrator, provided that the regional 
office official designated to handle MSFW complaints must be the 
regional monitor advocate (RMA).
    (c) The Regional Administrator must designate DOL officials to 
handle employment-related law complaints in accordance with Sec.  
658.411, provided that the regional official designated to handle MSFW 
employment-related law complaints must be the RMA.
    (d) The Regional Administrator must assure that all complaints and 
all related documents and correspondence are logged with a notation of 
the nature of each item.


Sec.  658.421  Handling of employment service regulation-related 
complaints.

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


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

    (a) Each complaint filed by an MSFW alleging violation(s) of 
employment-related laws must be taken in writing, logged, and referred 
to the appropriate enforcement agency for prompt action.
    (b) Each complaint submitted by a non-MSFW alleging violation(s) of 
employment-related laws must be referred to the appropriate enforcement 
agency for prompt action.
    (c) Upon referring the complaint in accordance with paragraph (a) 
of this section, the regional official must inform the complainant of 
the enforcement agency (and individual, if known) to which the 
complaint was referred.


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

    (a) If a party requests a hearing pursuant to Sec.  658.417 or 
Sec.  658.707, the Regional Administrator must:
    (1) Send the party requesting the hearing and all other parties to 
the prior State level hearing, a written notice (hard copy or 
electronic) containing the statements set forth at Sec.  658.418(c);
    (2) Compile four hearing files (hard copy or electronic) containing 
copies of all documents relevant to the case, indexed and compiled 
chronologically;
    (3) Send simultaneously one hearing file to the DOL Chief 
Administrative Law Judge (ALJ), 800 K Street NW.,

[[Page 20956]]

Suite 400, Washington, DC 20001-8002, one hearing file to the OWI 
Administrator, and one hearing file to the Solicitor of Labor, Attn: 
Associate Solicitor for Employment and Training Legal Services, and 
retain one hearing file.
    (b) Proceedings under this section are governed by the rules of 
practice and procedure at subpart A of 29 CFR part 18, except where as 
otherwise specified in this section or Sec.  658.425.
    (c) Upon the receipt of a hearing file, the ALJ designated to the 
case must notify the party requesting the hearing, all parties to the 
prior State hearing official hearing (if any), the State agency, the 
Regional Administrator, the OWI Administrator, and the Solicitor of 
Labor of the receipt of the case. After conferring all the parties, the 
ALJ may decide to make a determination on the record in lieu of 
scheduling a hearing.
    (d) The ALJ may decide to consolidate cases and conduct hearings on 
more than one complaint concurrently if he/she determines that the 
issues are related or that the complaints will be handled more 
expeditiously.
    (e) If the parties to the hearing are located in more than one 
State or are located in the same State but access to the hearing 
location is extremely inconvenient for one or more parties as 
determined by the ALJ, the ALJ must:
    (1) Whenever possible, hold a single hearing, at a location 
convenient to all parties or their representatives wishing to appear 
and present evidence, with all such parties and/or their 
representatives present.
    (2) If a hearing location cannot be established by the ALJ at a 
location pursuant to paragraph (e)(1) of this section, the ALJ may 
conduct, with the consent of the parties, the hearing by a telephone 
conference call. If the hearing is conducted via telephone conference 
call the parties and their representatives must have the option to 
participate in person or via telephone.
    (3) Where the ALJ is unable, for any reason, to conduct a 
telephonic hearing under paragraph (e)(2) of this section, the ALJ must 
confer with the parties on how to proceed.
    (f) Upon deciding to hold a hearing, the ALJ must:
    (1) Notify all involved parties of the date, time and place of the 
hearing; and
    (2) Reschedule the hearing, as appropriate.
    (g) The parties to the hearing must be afforded the opportunity to 
present, examine, and cross-examine witnesses. The ALJ may elicit 
testimony from witnesses, but may not act as advocate for any party.
    (h) The ALJ must receive, and make part of the record, documentary 
evidence offered by any party and accepted at the hearing, provided 
that copies of such evidence is provided to the other parties to the 
proceeding prior to the hearing at the time required by the ALJ and 
agreed to by the parties.
    (i) Technical rules of evidence do not apply to hearings conducted 
pursuant to this part, but rules or principles designed to assure 
production of the most credible evidence available and to subject 
testimony to test by cross-examination must be applied where reasonably 
necessary by the ALJ conducting the hearing. The ALJ may exclude 
irrelevant, immaterial, or unduly repetitious evidence.
    (j) The case record, or any portion thereof, must be available for 
inspection and copying by any party to the hearing at, prior to, or 
subsequent to the hearing upon request. Special procedures may be used 
for disclosure of medical and psychological records such as disclosure 
to a physician designated by the individual concerned.
    (k) The ALJ must, if feasible, encourage resolution of the dispute 
by conciliation at any time prior to the conclusion of the hearing.


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

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


Sec.  658.426  Complaints against the United States Employment Service.

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

Subpart F--Discontinuation of Services to Employers by the 
Employment Service System


Sec.  658.500  Scope and purpose of subpart.

    This subpart contains the regulations governing the discontinuation 
of services provided pursuant to 20 CFR part 653 to employers by the 
USES, including SWAs.


Sec.  658.501  Basis for discontinuation of services.

    (a) The State agency must initiate procedures for discontinuation 
of services to employers who:
    (1) Submit and refuse to alter or withdraw job orders containing 
specifications which are contrary to employment-related laws;
    (2) Submit job orders and refuse to provide assurances, in 
accordance with the Agricultural Recruitment System U.S. Workers at 20 
CFR 653 subpart F, that the jobs offered are in compliance with 
employment-related laws, or to withdraw such job orders;
    (3) Are found through field checks or otherwise to have either 
misrepresented the terms or conditions of employment specified on job 
orders or failed to comply fully with assurances made on job orders;
    (4) Are found by a final determination by an appropriate 
enforcement agency to have violated any employment-related laws and 
notification of this final determination has been provided to the ES by 
that enforcement agency;
    (5) Are found to have violated ES regulations pursuant to Sec.  
658.411;
    (6) Refuse to accept qualified workers referred through the 
clearance system;

[[Page 20957]]

    (7) Refuse to cooperate in the conduct of field checks conducted 
pursuant to Sec.  653.503; or
    (8) Repeatedly cause the initiation of the procedures for 
discontinuation of services pursuant to paragraphs (a)(1) through (7) 
of this section.
    (b) The SWA may discontinue services immediately if, in the 
judgment of the State Administrator, exhaustion of the administrative 
procedures set forth in this subpart in paragraphs (a)(1) through (7) 
of this section would cause substantial harm to a significant number of 
workers. In such instances, procedures at Sec. Sec.  658.503 et seq. 
must be followed.
    (c) If it comes to the attention of a local employment service 
office or SWA that an employer participating in the employment service 
system may not have complied with the terms of its temporary labor 
certification, under, for example the H-2A and H-2B visa programs, 
State agencies must engage in the procedures for discontinuation of 
services to employers pursuant to paragraphs (a)(1) through (a)(8) of 
this section and simultaneously notify the Chicago National Processing 
Center (CNPC) of the alleged non-compliance for investigation and 
consideration of ineligibility pursuant to 20 CFR 655.184 or 20 CFR 
655.73 respectively for subsequent temporary labor certification.


Sec.  658.502  Notification to employers.

    (a) The SWA must notify the employer in writing that it intends to 
discontinue the provision of ES services pursuant to 20 CFR parts 652, 
653, 654, and 658, and the reason therefore:
    (1) Where the decision is based on submittal and refusal to alter 
or to withdraw job orders containing specifications contrary to 
employment-related laws, the SWA must specify the date the order was 
submitted, the job order involved, the specifications contrary to 
employment-related laws and the laws involved. The employer must be 
notified in writing that all ES services will be terminated in 20 
working days unless the employer within that time:
    (i) Provides adequate evidence that the specifications are not 
contrary to employment-related laws, or
    (ii) Withdraws the specifications and resubmits the job order in 
compliance with all employment-related laws, or
    (iii) If the job is no longer available makes assurances that all 
future job orders submitted will be in compliance with all employment-
related laws, or
    (iv) Requests a hearing from the SWA pursuant to Sec.  658.417.
    (2) Where the decision is based on the employer's submittal of an 
order and refusal to provide assurances that the job is in compliance 
with employment-related laws or to withdraw the order, the SWA must 
specify the date the order was submitted, the job order involved and 
the assurances involved. The employer must be notified that all ES 
services will be terminated within 20 working days unless the employer 
within that time:
    (i) Resubmits the order with the appropriate assurances;
    (ii) If the job is no longer available, make assurances that all 
future job orders submitted will contain all necessary assurances that 
the job offered is in compliance with employment-related laws; or
    (iii) Requests a hearing from the SWA pursuant to Sec.  658.417.
    (3) Where the decision is based on a finding that the employer has 
misrepresented the terms or conditions of employment specified on job 
orders or failed to comply fully with assurances made on job orders, 
the State agency must specify the basis for that determination. The 
employer must be notified that all ES services will be terminated in 20 
working days unless the employer within that time:
    (i) Provides adequate evidence that terms and conditions of 
employment were not misrepresented; or
    (ii) Provides adequate evidence that there was full compliance with 
the assurances made on the job orders; or
    (iii) Provides resolution of a complaint which is satisfactory to a 
complainant referred by the ES; and
    (iv) Provides adequate assurance that specifications on future 
orders will accurately represent the terms and conditions of employment 
and that there will be full compliance with all job order assurances; 
or
    (v) Requests a hearing from the SWA pursuant to Sec.  658.417.
    (4) Where the decision is based on a final determination by an 
enforcement agency, the SWA must specify the enforcement agency's 
findings of facts and conclusions of law. The employer must be notified 
that all ES services will be terminated in 20 working days unless the 
employer within that time:
    (i) Provides adequate evidence that the enforcement agency has 
reversed its ruling and that the employer did not violate employment-
related laws; or
    (ii) Provides adequate evidence that the appropriate fines have 
been paid and/or appropriate restitution has been made; and
    (iii) Provides assurances that any policies, procedures, or 
conditions responsible for the violation have been corrected and the 
same or similar violations are not likely to occur in the future.
    (5) Where the decision is based on a finding of a violation of ES 
regulations under Sec.  658.411, the SWA must specify the finding. The 
employer must be notified that all ES services will be terminated in 20 
working days unless the employer within that time:
    (i) Provides adequate evidence that the employer did not violate ES 
regulations; or
    (ii) Provides adequate evidence that appropriate restitution has 
been made or remedial action taken; and
    (iii) Provides assurances that any policies, procedures, or 
conditions responsible for the violation have been corrected and the 
same or similar violations are not likely to occur in the future; or
    (iv) Requests a hearing from the SWA pursuant to Sec.  658.417.
    (6) Where the decision is based on an employer's failure to accept 
qualified workers referred through the clearance system, the SWA must 
specify the workers referred and not accepted. The employer must be 
notified that all ES services will be terminated in 20 working days 
unless the employer within that time:
    (i) Provides adequate evidence that the workers were accepted; or
    (ii) Provides adequate evidence that the workers were not available 
to accept the job; or
    (iii) Provides adequate evidence that the workers were not 
qualified; and
    (iv) Provides adequate assurances that qualified workers referred 
in the future will be accepted; or
    (v) Requests a hearing from the SWA pursuant to Sec.  658.417.
    (7) Where the decision is based on lack of cooperation in the 
conduct of field checks, the SWA must specify the lack of cooperation. 
The employer must be notified that all ES services will be terminated 
in 20 working days unless the employer within that time:
    (i) Provides adequate evidence that he/she did cooperate; or
    (ii) Cooperates immediately in the conduct of field checks; and
    (iii) Provides assurances that he/she will cooperate in future 
field checks in further activity; or
    (iv) Requests a hearing from the SWA pursuant to Sec.  658.417.
    (b) If the employer chooses to respond pursuant to this section by 
providing documentary evidence or assurances, he/she must at the same 
time request a hearing if such hearing is desired in the event that the 
State agency does not accept the documentary evidence or assurances as 
adequate.

[[Page 20958]]

    (c) Where the decision is based on repeated initiation of 
procedures for discontinuation of services, the employer must be 
notified that services have been terminated.
    (d) If the employer makes a timely request for a hearing, in 
accordance with this section, the SWA must follow procedures set forth 
at Sec.  658.411 and notify the complainant whenever the 
discontinuation of services is based on a complaint pursuant to Sec.  
658.411.


Sec.  658.503  Discontinuation of services.

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


Sec.  658.504  Reinstatement of services.

    (a) Services may be reinstated to an employer after discontinuation 
under Sec.  658.502, if:
    (1) The State is ordered to do so by a Federal ALJ Judge or 
Regional Administrator, or
    (2)(i) The employer provides adequate evidence that any policies, 
procedures or conditions responsible for the previous discontinuation 
of services have been corrected and that the same or similar 
circumstances are not likely to occur in the future, and
    (ii) The employer provides adequate evidence that he/she has 
responded adequately to any findings of an enforcement agency, State ES 
agency, or USES, including restitution to the complainant and the 
payment of any fines, which were the basis of the discontinuation of 
services.
    (b) The SWA must notify, the employer requesting reinstatement 
within 20 working days whether his/her request has been granted. If the 
State denies the request for reinstatement, the basis for the denial 
must be specified and the employer must be notified that he/she may 
request a hearing within 20 working days.
    (c) If the employer makes a timely request for a hearing, the SWA 
must follow the procedures set forth at Sec.  658.417.
    (d) The SWA must reinstate services to an employer if ordered to do 
so by a State hearing official, Regional Administrator, or Federal ALJ 
as a result of a hearing offered pursuant to paragraph (c) of this 
section.

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


Sec.  658.600  Scope and purpose of subpart.

    This subpart sets forth the regulations governing review and 
assessment of State Workforce Agency (SWA) compliance with the 
Employment Service regulations at 20 CFR parts 651, 652, 653, 654, and 
658. All recordkeeping and reporting requirements contained in parts 
653 and 658 have been approved by the Office of Management and Budget 
as required by the Federal Reports Act of 1942.


Sec.  658.601  State agency responsibility.

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

[[Page 20959]]

    (B) Review of documents used in service provisions; and
    (C) Solicitation of input from applicants, employers, and the 
community.
    (iv) The result of non-numerical reviews must be documented and 
deficiencies identified. A corrective action plan that addresses these 
deficiencies as described in paragraph (a)(6) of this section must be 
developed.
    (v) The result of local employment service office non-numerical 
appraisal, including corrective actions, must be communicated in 
writing to the next higher level of authority for review. This review 
must cover thoroughness and adequacy of local employment service office 
appraisal, appropriateness of corrective actions, and need for higher 
level involvement. When this review is conducted at an area or district 
level, a report summarizing local employment service office performance 
within that jurisdiction must be communicated to the SWA on an annual 
basis.
    (4) As part of its oversight responsibilities, the SWA must conduct 
onsite reviews in those local employment service offices which show 
continuing internal problems or deficiencies in performance as 
indicated by such sources as data analysis, non-numerical appraisal, or 
other sources of information.
    (5) Non-numerical (qualitative) review of SWA employment service 
activities must be conducted as follows:
    (i) SWA operations must be assessed annually to determine 
compliance with Federal regulations.
    (ii) Results of non-numerical reviews must be documented and 
deficiencies identified. A corrective action plan that addresses these 
deficiencies must be developed.
    (6) Corrective action plans developed to address deficiencies 
uncovered at any administrative level within the State as a result of 
the self-appraisal process must include:
    (i) Specific descriptions of the type of action to be taken, the 
time frame involved and the assignment of responsibility.
    (ii) Provision for the delivery of technical assistance as needed.
    (iii) A plan to conduct follow-up on a timely basis to determine if 
action taken to correct the deficiencies has been effective.
    (7)(i) The provisions of the ES regulations which require numerical 
and non-numerical assessment of service to special applicant groups, 
e.g., services to veterans at 20 CFR part 1001--Services for Veterans 
and services to MSFWs at 20 CFR 653 and 658, are supplementary to the 
provisions of this section.
    (ii) Each State Administrator and local employment service office 
manager must ensure that their staff know and carry out ES regulations, 
including regulations on performance standards and program emphases, 
and any corrective action plans imposed by the SWA or by the 
Department.
    (iii) Each State Administrator must ensure that the SWA complies 
with its approved Unified State Plan.
    (iv) Each State Administrator must ensure to the maximum extent 
feasible the accuracy of data entered by the SWA into Department-
required management information systems. Each SWA must establish and 
maintain a data validation system pursuant to Department instructions. 
The system must review every local employment service office at least 
once every 4 years. The system must include the validation of time 
distribution reports and the review of data gathering procedures.


Sec.  658.602  Employment and Training Administration National Office 
responsibility.

    The ETA National Office must:
    (a) Monitor ETA Regional Offices' operations under ES regulations;
    (b) From time to time, conduct such special reviews and audits as 
necessary to monitor ETA regional office and SWA compliance with ES 
regulations;
    (c) Offer technical assistance to the ETA regional offices and SWAs 
in carrying out ES regulations and programs;
    (d) Have report validation surveys conducted in support of resource 
allocations;
    (e) Develop tools and techniques for reviewing and assessing SWA 
performance and compliance with ES regulations.
    (f) ETA must appoint a national monitor advocate (NMA), who must 
devote full time to the duties set forth in this subpart. The NMA must:
    (1) Review the effective functioning of the Regional monitor 
advocates (RMAs) and SMAs;
    (2) Review the performance of SWAs in providing the full range of 
ES services to MSFWs;
    (3) Take steps to resolve or refer ES-related problems of MSFWs 
which come to his/her attention;
    (4) Take steps to refer non ES-related problems of MSFWs which come 
to his/her attention;
    (5) Recommend to the Administrator changes in policy toward MSFWs; 
and
    (6) Serve as an advocate to improve services for MSFWs within the 
employment service system. The NMA must be a member of the National 
Farm Labor Coordinated Enforcement Staff Level Working Committee and/or 
other OSHA and WHD task forces, and/or other committees as appropriate.
    (g) The NMA must be appointed by the Office of Workforce Investment 
Administrator (Administrator) after informing farmworker organizations 
and other organizations with expertise concerning MSFWs of the opening 
and encouraging them to refer qualified applicants to apply through the 
Federal merit system. Among qualified candidates, determined through 
merit systems procedures, individuals must be sought who meet the 
criteria used in the selection of the SMAs, as provided in 20 CFR 
653.108(b).
    (h) The NMA must be assigned staff necessary to fulfill effectively 
all the responsibilities set forth in this subpart.
    (i) The NMA must submit an annual report (Annual Report) to the OWI 
Administrator, the ETA Assistant Secretary, and the National Farm Labor 
Coordinated Enforcement Committee covering the matters set forth in 
this subpart.
    (j) The NMA must monitor and assess SWA compliance with ES 
regulations affecting MSFWs on a continuing basis. His/her assessment 
must consider:
    (1) Information from RMAs and SMAs;
    (2) Program performance data, including the service indicators;
    (3) Periodic reports from regional offices;
    (4) All Federal on-site reviews;
    (5) Selected State on-site reviews;
    (6) Other relevant reports prepared by USES;
    (7) Information received from farmworker organizations and 
employers; and
    (8) His/her personal observations from visits to State ES offices, 
agricultural work sites and migrant camps. In the annual report, the 
NMA must include both a quantitative and qualitative analysis of his/
her findings and the implementation of his/her recommendations by State 
and Federal officials, and must address the information obtained from 
all of the foregoing sources.
    (k) The NMA must review the activities of the State/Federal 
monitoring system as it applies to services to MSFWs and the Complaint 
System including the effectiveness of the regional monitoring function 
in each region and must recommend any appropriate changes in the 
operation of the system. The NMA's findings and recommendations must be 
fully set forth in the annual report.

[[Page 20960]]

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


Sec.  658.603  Employment and Training Administration regional office 
responsibility.

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

[[Page 20961]]

whether the expenditure of grant funds has been in accordance with the 
approved budget. Regional Administrators may also conduct audits 
through other agencies or organizations or may require the SWA to have 
audits conducted;
    (4) Validations of data entered into management information systems 
to assess:
    (i) The accuracy of data entered by the SWAs into the management 
information system;
    (ii) Whether the SWAs' data validating and reviewing procedures 
conform to Department instructions; and
    (iii) Whether SWAs have implemented any corrective action plans 
required by the Department to remedy deficiencies in their validation 
programs;
    (5) Technical assistance programs to assist SWAs in carrying out ES 
regulations and programs;
    (6) Reviews to assess whether the SWA has complied with corrective 
action plans imposed by the Department or by the SWA itself; and
    (7) Random, unannounced field checks of a sample of agricultural 
work sites to which ES placements have been made through the clearance 
system to determine and document whether wages, hours, working and 
housing conditions are as specified on the job order. If regional 
office staff find reason to believe that conditions vary from job order 
specifications, findings should be documented on the ES Complaint 
Referral Form and provided to the State agency to be handled as a 
complaint under Sec.  658.411.
    (e) The Regional Administrator must provide technical assistance to 
SWAs to assist them in carrying out ES regulations and programs.
    (f) The Regional Administrator must appoint a RMA who must devote 
full time to the duties set forth in this subpart. The RMA must:
    (1) Review the effective functioning of the SMAs in his/her region;
    (2) Review the performance of SWAs in providing the full range of 
ES services to MSFWs;
    (3) Take steps to resolve ES-related problems of MSFWs which come 
to his/her attention;
    (4) Recommend to the Regional Administrator changes in policy 
towards MSFWs;
    (5) Review the operation of the Complaint System; and
    (6) Serve as an advocate to improve service for MSFWs within the ES 
system. The RMA must be a member of the Regional Farm Labor Coordinated 
Enforcement Committee.
    (g) The RMA must be appointed by the Regional Administrator after 
informing farmworker organizations and other organizations in the 
region with expertise concerning MSFWs of the opening and encouraging 
them to refer qualified applicants to apply through the Federal merit 
system. The RMA must have direct personal access to the Regional 
Administrator wherever he/she finds it necessary. Among qualified 
candidates, individuals must be sought who meet the criteria used in 
the selection of the SMAs, as provided in 20 CFR 653.108(b).
    (h) The Regional Administrator must ensure that staff necessary to 
fulfill effectively all the regional office responsibilities set forth 
in this section are assigned. The RMA must notify the Regional 
Administrator of any staffing deficiencies and the Regional 
Administrator must take appropriate action.
    (i) The RMA within the first 3 months of their tenure must 
participate in a training session(s) approved by the National Office.
    (j) At the regional level, the RMA must have primary responsibility 
for:
    (1) Monitoring the effectiveness of the Complaint System set forth 
at subpart E of this part;
    (2) Apprising appropriate State and ETA officials of deficiencies 
in the Complaint System; and
    (3) Providing technical assistance to SMAs in the region.
    (k) At the ETA regional level, the RMA must have primary 
responsibility for ensuring that SWA compliance with ES regulations as 
they pertain to services to MSFWs is monitored by the regional office. 
He/she must independently assess on a continuing basis the provision of 
ES services to MSFWs, seeking out and using:
    (1) Information from SMAs, including all reports and other 
documents;
    (2) Program performance data;
    (3) The periodic and other required reports from State ES offices;
    (4) Federal on-site reviews;
    (5) Other reports prepared by the National Office;
    (6) Information received from farmworker organizations and 
employers; and
    (7) Any other pertinent information which comes to his/her 
attention from any possible source.
    (8) In addition, the RMA must consider his/her personal 
observations from visits to ES offices, agricultural work sites and 
migrant camps.
    (l) The RMA must assist the Regional Administrator and other 
appropriate line officials in applying appropriate corrective and 
remedial actions to State agencies.
    (m) The Regional Administrator's quarterly report to the National 
Office must include the RMA's summary of his/her independent assessment 
as required in paragraph (f)(5) of this section. The fourth quarter 
summary must include an annual summary from the region. The summary 
also must include both a quantitative and a qualitative analysis of 
his/her reviews and must address all the matters with respect to which 
he/she has responsibilities under these regulations.
    (n) The RMA must review the activities and performance of the SMAs 
and the State monitoring system in the region, and must recommend any 
appropriate changes in the operation of the system to the Regional 
Administrator. The RMA's review must include a determination whether 
the SMA:
    (1) Does not have adequate access to information;
    (2) Is being impeded in fulfilling his/her duties; or
    (3) Is making recommendations which are being consistently ignored 
by SWA officials. If the RMA believes that the effectiveness of any SMA 
has been substantially impeded by the State Administrator, other State 
agency officials, or any Federal officials, he/she must report and 
recommend appropriate actions to the Regional Administrator. Copies of 
the recommendations must be provided to the NMA electronically or in 
hard copy.
    (o) The RMA must be informed of all proposed changes in policy and 
practice within USES, including ES regulations, which may affect the 
delivery of services to MSFWs. He/she must advise the Regional 
Administrator on all such proposed changes which, in his/her opinion, 
may adversely affect MSFWs or which may substantially improve the 
delivery of services to MSFWs. The RMA may also recommend changes in ES 
policy or regulations, as well as changes in the funding of State 
agencies and/or adjustments of reallocation of the discretionary 
portions of funding formulae as they pertain to MSFWs.
    (p) The RMA must participate in the review and assessment 
activities required in this section and 20 CFR part 658.700 et seq. He/
she, an assistant, or another RMA, must participate in National Office 
and regional office on-site statewide reviews of ES services to MSFWs 
in States in the region. The RMA must engage in the following 
activities in the course of participating in an on-site SWA review:
    (1) He/she must accompany selected outreach workers on their field 
visits;
    (2) He/she must participate in a random field check of migrant 
camps or

[[Page 20962]]

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


Sec.  658.604  Assessment and evaluation of program performance data.

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

[[Page 20963]]

required by ES regulations as a violation of the ES regulations.


Sec.  658.605  Communication of findings to State agencies.

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

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


Sec.  658.700  Scope and purpose of subpart.

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


Sec.  658.701  Statements of policy.

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


Sec.  658.702  Initial action by the Regional Administrator.

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

[[Page 20964]]

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


Sec.  658.703  Emergency corrective action.

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


Sec.  658.704  Remedial actions.

    (a) If a SWA fails to correct violations as determined pursuant to 
Sec.  658.702, the Regional Administrator must apply one or more of the 
following remedial actions to the SWA:
    (1) Imposition of special reporting requirements for a specified 
period of time;
    (2) Restrictions of obligational authority within one or more 
expense classifications;
    (3) Implementation of specific operating systems or procedures for 
a specified time;
    (4) Requirement of special training for SWA personnel;
    (5) With the approval of the Assistant Secretary and after 
affording the State Administrator the opportunity to request a 
conference with the Assistant Secretary, the elevation of specific 
decision-making functions from the State Administrator to the Regional 
Administrator;
    (6) With the approval of the Assistant Secretary and after 
affording the State Administrator the opportunity to request a 
conference with the Assistant Secretary, the imposition of Federal 
staff in key State agency positions;
    (7) With the approval of the Assistant Secretary and after 
affording the State Administrator the opportunity to request a 
conference with the Assistant Secretary, funding of the State agency on 
a short-term basis or partial withholding of funds for a specific 
function or for a specific geographical area;
    (8) Holding of public hearings in the State on the SWA's 
deficiencies;
    (9) Disallowance of funds pursuant to Sec.  658.702 (g); or
    (10) If the matter involves a serious or continual violation, the 
initiation of decertification procedures against the State agency, as 
set forth in paragraph (e) of this section.
    (b) The Regional Administrator must send, by registered mail, a 
Notice of Remedial Action to the SWA. The Notice of Remedial Action 
must set forth the reasons for the remedial action. When such a notice 
is the result of violations of regulations governing services to MSFWs 
(20 CFR 653.100 et seq.) or the Complaint System (Sec. Sec.   658.400 
et seq.), a copy of said notice must be sent to the Administrator, who 
must publish the notice promptly in the Federal Register.
    (c) If the remedial action is other than decertification, the 
notice must state that the remedial action must take effect 
immediately. The notice must also state that the SWA may request a 
hearing pursuant to Sec.  658.707 by filing a request in writing with 
the Regional Administrator pursuant to Sec.  658.707 within 20 working 
days of the SWA's receipt of the notice. The offer of

[[Page 20965]]

hearing, or the acceptance thereof, however, does not stay or otherwise 
delay the implementation of remedial action.
    (d) Within 60 working days after the initial application of 
remedial action, the Regional Administrator must conduct a review of 
the SWA's compliance with ES regulations unless the Regional 
Administrator determines that a longer time period is necessary. In 
such cases, the Regional Administrator must notify the Administrator in 
writing of the circumstances which necessitate a longer time period, 
and specify that time period. If necessary, Department staff must 
conduct a follow-up visit as part of this review. If the SWA is in 
compliance with the ES regulations, the Regional Administrator must 
fully document these facts and must terminate the remedial actions. The 
Regional Administrator must notify the SWA of his/her findings. When 
the case involves violations of regulations governing services to MSFWs 
or the Complaint System, a copy of said notice must be sent to the 
Administrator, who must promptly publish the notice in the Federal 
Register. The Regional Administrator must conduct, within a reasonable 
time after terminating the remedial actions, a review of the SWA's 
compliance to determine whether any remedial actions should be 
reapplied.
    (e) If, upon conducting the on-site review referred to in paragraph 
(c) of this section, the Regional Administrator finds that the SWA 
remains in noncompliance, the Regional Administrator must continue the 
remedial action and/or impose different additional remedial actions. 
The Regional Administrator must fully document all such decisions and, 
when the case involves violations of regulations governing services to 
MSFWs or the Complaint System, must send copies to the Administrator, 
who must promptly publish the notice in the Federal Register.
    (f)(1) If the SWA has not brought itself into compliance with ES 
regulations within 120 working days of the initial application of 
remedial action, the Regional Administrator must initiate 
decertification unless the Regional Administrator determines that 
circumstances necessitate continuing remedial action for a longer 
period of time. In such cases, the Regional Administrator must notify 
the Administrator in writing of the circumstances which necessitate the 
longer time period, and specify the time period.
    (2) The Regional Administrator must notify the SWA by registered 
mail or by other legally viable means of the decertification 
proceedings, and must state the reasons therefor. Whenever such a 
notice is sent to a State agency, the Regional Administrator must 
prepare five copies (hard copies or electronic copies) containing, in 
chronological order, all the documents pertinent to the case along with 
a request for decertification stating the grounds therefor. One copy 
must be retained. Two must be sent to the ETA National Office, one must 
be sent to the Solicitor of Labor, Attention: Associate Solicitor for 
Employment and Training, and, if the case involves violations of 
regulations governing services to MSFWs or the Complaint System, one 
copy must be sent to the NMA. All copies must also be sent 
electronically to each respective party. The notice sent by the 
Regional Administrator must be published promptly in the Federal 
Register.


Sec.  658.705  Decision to decertify.

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


Sec.  658.706  Notice of decertification.

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

[[Page 20966]]

Sec.  658.707  Requests for hearings.

    (a) Any SWA which received a Notice of Decertification under Sec.  
658.706 or a notice of disallowance under Sec.  658.702(g) may request 
a hearing on the issue by filing a written request for hearing with the 
Secretary within 10 working days of receipt of the notice. This request 
must state the reasons the SWA believes the basis of the decision to be 
wrong, and it must be signed by the State Administrator (electronic 
signatures may be accepted).
    (b) When the Secretary receives a request for a hearing from a 
State agency, he/she must send copies of a file containing all 
materials and correspondence relevant to the case to the Assistant 
Secretary, the Regional Administrator, the Solicitor of Labor, and the 
DOL Chief Administrative Law Judge. When the case involves violations 
of regulations governing services to MSFWs or the Complaint System, a 
copy must be sent to the NMA.
    (c) The Secretary must publish notice of hearing in the Federal 
Register. This notice must invite all interested parties to attend and 
to present evidence at the hearing. All interested parties who make 
written request to participate must thereafter receive copies (hard 
copy and/or electronic) of all documents filed in said proceedings.


Sec.  658.708  Hearings.

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


Sec.  658.709  Conduct of hearings.

    (a) Hearings must be conducted in accordance with secs. 5-8 of the 
Administrative Procedure Act, 5 U.S.C. 553 et seq.
    (b) Technical rules of evidence do not apply, but rules or 
principles designed to assure production of the most credible evidence 
available and to subject testimony to test by cross-examination, must 
be applied if necessary by the ALJ conducting the hearing. The ALJ may 
exclude irrelevant, immaterial or unduly repetitious evidence. All 
documents and other evidence offered or taken for the record must be 
open to examination by the parties. Opportunity must be given to refute 
facts and arguments advanced on either side of the issue. A transcript 
must be made of the oral evidence except to the extent the substance 
thereof is stipulated for the record.
    (c) The general provisions governing discovery as provided in the 
Rules of Civil Procedure for the United States District Court, title V, 
28 U.S.C., rules 26 through 37, may be made applicable to the extent 
that the Administrative Law Judge concludes that their use would 
promote the proper advancement of the hearing.
    (d) When a public officer is a respondent in a hearing in an 
official capacity and during its pendency dies, resigns, or otherwise 
ceases to hold office, the proceeding does not abate and the officer's 
successor is automatically substituted as a party. Proceedings 
following the substitution must be in the name of the substituted 
party, but any misnomer not affecting the substantive rights of the 
parties must be disregarded. An order of substitution may be entered at 
any time, but the omission to enter such an order may not affect the 
substitution.


Sec.  658.710  Decision of the Administrative Law Judge.

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


Sec.  658.711  Decision of the Administrative Review Board.

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

Thomas E. Perez,
Secretary of Labor.
[FR Doc. 2015-05530 Filed 4-2-15; 4:15 pm]
 BILLING CODE 4510-FR-P; 4510-FT-P`