Employer-Directed Skills Act

Bill: 119-hr-4049
Sponsor: full_name: Rep. Stefanik, Elise M. [R-NY-21]
Introduced: 2025-06-17
Policy area: Labor and Employment
Latest action: action_date: 2025-06-17
text: Referred to the House Committee on Education and Workforce.

Summaries:

tv_txt: I 119th CONGRESS 1st Session H. R. 4049 IN THE HOUSE OF REPRESENTATIVES June 17, 2025 Ms. Stefanik introduced the following bill; which was referred to the Committee on Education and Workforce A BILL To amend the Workforce Innovation and Opportunity Act to establish employer-directed skills accounts, and for other purposes.

1. Short title This Act may be cited as the Employer-Directed Skills Act . 2. Employer-directed skills accounts (a) Definitions (1) Employer-sponsored skills development Section 3 of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3102 ) is amended— (A) by redesignating paragraphs (19) through (71) as paragraphs (20) through (72), respectively; and (B) by inserting after paragraph (18), the following: (19) Employer-sponsored skills development The term employer-sponsored skills development means a skills development program— (A) that is selected by an employer to meet the specific skill demands of the employer; (B) that is conducted pursuant to terms and conditions which are established under an employer-sponsored skills development agreement described in section 134(c)(3)(I)(iv), including a commitment by the employer to employ an individual upon successful completion of the program; (C) for which an employer pays a portion of the cost of the program, which shall not be less than— (i) 10 percent of the cost, in the case of an employer with not more than 50 employees; (ii) 25 percent of the cost, in the case of an employer with more than 50 employees but not more than 100 employees; and (iii) 50 percent of the cost, in the case of an employer with more than 100 employees; and (D) for which the Federal share of the cost of the program is provided to the employer through an employer-directed skills account in accordance with section 134(c)(3)(I)(ii). . (2) On-the-job training Paragraph (45) of section 3 of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3102 ) is amended, as redesignated by paragraph (1)(A)— (A) in subparagraph (B), by striking and at the end; (B) in subparagraph (C), by striking the period at the end and inserting ; and ; and (C) by adding at the end the following: (D) in a case in which each of the conditions under section 134(c)(3)(I)(i) are met with respect to such training (including the establishment of an on-the-job training agreement described in section 134(c)(3)(I)(iii)), provides the Federal share of the cost of training to the employer through an employer-directed skills account. . (3) Related conforming amendments The Workforce Innovation and Opportunity Act ( 29 U.S.C. 3101 et seq. ) is amended— (A) in section 134(c)(3)(H)(i) ( 20 U.S.C. 3174(c)(3)(H)(i) ), by striking section 3(44) and by inserting section 3(45) ; (B) in section 211(e)(3) ( 20 U.S.C. 3291(e)(3) ), by striking section 3(45) and inserting section 3(46) ; (C) in section 181(d)(2) ( 20 U.S.C. 3241(d)(2) ), by striking transitional employment, and inserting transitional employment, employer-sponsored skills development ; and (D) in section 194(4) ( 20 U.S.C. 3254(4) ), by inserting or employer-sponsored skills development after On-the-job training . (b) Exceptions for employer-Sponsored skills development Section 122(h) of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3152(h) ) is amended— (1) in paragraph (1), by inserting employer-sponsored skills development, after incumbent worker training, ; and (2) in paragraph (2), by inserting employer-sponsored skills development, after incumbent worker training, . (c) Career services Section 134(c)(2)(A) of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3174(c)(2)(A) ) is amended— (1) in clause (xii), by striking and at the end; (2) in clause (xiii), by striking the period and inserting a semicolon; and (3) by adding at the end the following: (xiv) provision of information on employers in the local areas that are offering employer-sponsored skills development or on-the-job training programs that may be reimbursed through an employer-directed skills account established under section 134(c)(3)(I) and the performance information available on such programs; and (xv) provision of assistance, in coordination with employers in the local areas that are offering employer-sponsored skills development or on-the-job training, in establishing employer-sponsored skills development agreements or on-the-job training agreements. . (d) Eligibility for training services Section 134(c)(3) of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3174(c)(3) ) is amended— (1) in subparagraph (A)— (A) in clause (i), by inserting or (iii) after clause (ii) ; (B) by redesignating clause (iii) as clause (iv); and (C) by inserting after clause (ii) the following: (iii) Participants selected for on-the-job training or employer-sponsored skills development A one-stop operator or one-stop partner shall not be required to conduct an interview, evaluation, or assessment of a participant under clause (i) if such participant is selected by an employer under section 134(c)(3)(I)(i) to receive on-the-job training or employer-sponsored skills development, and the applicable conditions under such section are met for such individual to receive such services. ; and (2) in subparagraph (D)— (A) in clause (x), by striking and at the end; (B) in clause (xi), by striking the period at the end and inserting ; and ; and (C) by adding at the end the following: (xii) employer-sponsored skills development programs conducted with a commitment by an employer to employ an individual upon successful completion of such a program. . (e) Employer-Directed skills accounts (1) Local plan Section 108(b)(19) of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3123 ) is amended by inserting or employer-directed skills accounts after individual training accounts . (2) Consumer choice requirements Section 134(c)(3)(F) of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3174(c)(3)(F) ) is amended— (A) by redesignating clauses (iv) and (v) as clauses (v) and (vi), respectively; (B) by inserting after clause (iii), the following: (iv) Employer-directed skills accounts In a case in which an individual is selected by an employer under section 134(c)(3)(I)(i) to receive on-the-job training or employer-sponsored skills development, and the applicable conditions under such section are met for such individual to receive such services, the local board involved shall arrange for payment for such services through an employer-directed skills account in accordance with section 134(c)(3)(I)(ii). ; and (C) in clause (v), as redesignated by subparagraph (A), by inserting or employer-directed skills accounts after individual training accounts . (3) Additional exception to use of individual training accounts Section 134(c)(3)(G) of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3174(c)(3)(G) ) is amended— (A) by redesignating clauses (iii) and (iv) as clauses (iv) and (v), respectively; (B) in clause (i), by striking clause (ii) and inserting clauses (ii) and (iii) ; (C) by inserting after clause (ii), the following: (iii) Employer-directed skills accounts Services authorized under this paragraph may be provided pursuant to an employer-directed skills account in lieu of an individual training account if such services are employer-sponsored skills development or on-the-job training and the applicable conditions under section 134(c)(3)(I)(i) are met for an individual to receive such services. ; and (D) in clause (v) (as redesignated by subparagraph (A)), by inserting , employer-directed skills accounts, after individual training accounts . (4) Establishment of employer-directed skills accounts Section 134(c)(3) of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3174(c)(3) ) is amended by adding at the end the following: (I) Employer-directed skills accounts (i) In general An individual shall receive on-the-job training or employer-sponsored skills development through the use of an employer-directed skills account, if each of the following conditions are met: (I) An employer selects the individual, who is not an employee of such employer, for on-the-job training or employer-sponsored skills development. (II) (aa) In the case of an individual selected under subclause (I) to receive on-the-job training, an on-the-job training agreement that meets the requirements of clause (iii) is established and signed by the individual and the employer; or (bb) in the case of an individual selected under subclause (I) to receive employer-sponsored skills development, an employer-sponsored skills development agreement that meets the requirements of clause (iv) is established and signed by the individual and the employer. (III) The employer submits to the local board each of the following: (aa) A certification that the individual requires an on-the-job training or employer-sponsored skills development program to obtain employment with the employer, and has the skills and qualifications to successfully participate in such a program. (bb) A certification that the employer will submit the necessary performance information to the local board in accordance with section 122(h). (cc) The on-the-job training agreement or the employer-sponsored skills development agreement described in subclause (II), as applicable. (IV) The local board involved reviews and approves each certification and agreement received under subclause (III), by considering the following: (ii) Approval of agreements In determining whether to approve an employer-sponsored skills development agreement or an on-the-job training agreement under clause (i)(IV), the local board involved shall consider the following: (I) The characteristics of the participants of the on-the-job training or employer-sponsored skills development that is the subject of the agreement. (II) The size of the employer submitting such agreement, with a priority on supporting agreements submitted by small businesses. (III) The alignment of the agreement with the workforce investment needs identified in the local plan of the local area under section 108. (IV) In the case of an employer-sponsored skills development agreement, if the employer-sponsored skills development offered— (aa) is for preparation to work in an in-demand industry sector or occupation; and (bb) leads to a recognized postsecondary credential. (V) Any other factors the local board determines appropriate. (iii) Payment to employers The local board involved in on-the-job training or employer-sponsored skills development under clause (i) shall arrange for the appropriate payment of such services through an employer-directed skills account as follows: (I) On-the-job training For on-the-job training, the local board involved shall reimburse the employer from funds in the employer-directed skills account in accordance to the reimbursement requirements of section 3(45)(B) and after receipt of documentation of the wages earned by the individual during such training. (II) Employer-sponsored skills development For employer-sponsored skills development services, the local board involved shall reimburse the employer from funds in the employer-directed skills account for the Federal share of the costs of the program after receipt of documentation from the employer of payment of such costs. (iv) On-the-job training agreement An on-the-job training agreement under clause (i) shall— (I) establish— (aa) the length of the on-the-job training; (bb) the hourly wage rate of the individual; (cc) the skills necessary for the job and the individual’s current skill level as of the date of the agreement; and (dd) the skills to be learned during the on-the-job training; and (II) include an assurance that the employer will provide the local board involved with documentation of the wages earned by the individual while engaged in such on-the-job training for the purpose of reimbursement to the employer. (v) Employer-Sponsored skills development agreement An employer-sponsored skills development agreement referred to in clause (i) shall establish— (I) the provider of the employer-sponsored skills development program; (II) the length of such program; (III) the skills to be learned during such program; (IV) a commitment by the employer to employ the individual upon successful completion of the program; (V) the cost of the program; (VI) the amount of such cost that will be paid by the employer (the non-Federal share), which shall be not less than the amount specified in section 3(19)(C); and (VII) any recognized postsecondary credentials that will be awarded to successful participants. .