Editorial · November 18, 2014
Workforce Innovation and Opportunity Act: Employer Guide
Workforce Innovation and Opportunity Act (WIOA) keeps business in the lead on local workforce boards. President Barack Obama signed the law on July 22, 2014. It replaces the Workforce Investment Act of 1998. In general, it takes effect on July 1 of next year. Business members still hold a majority of the seats. The chair must come from business. The U.S. Department of Labor (DOL) says the boards also take on added duties to engage employers.
What the law does and when it starts
Section 511 of the law repeals the Workforce Investment Act of 1998 (the 1998 Act). In general, the 1998 Act stays in place until July 1 of next year. DOL says the old plan and performance rules still apply for the first full program year. That year starts next July 1. The WIOA versions take effect in the second full program year, a year later. WIOA plans for that year are written, submitted and approved during the first full program year.
Who sits on a local board
Under WIOA, local workforce development boards replace the 1998 Act's local workforce investment boards. Each area's chief elected official appoints the members, using criteria the Governor and the state board set. Working with that official, each board oversees local youth, adult and dislocated worker programs and one-stop centers. DOL calls these centers American Job Centers.
A majority of each board must come from local business. The board must elect its chair from the business members. The 1998 Act had the same two rules. DOL says WIOA retains them. Business members must be owners, chief executives or operating officers, or other business executives or employers with optimum policymaking or hiring authority. Their businesses must offer jobs that include high-quality, work-relevant training and development in in-demand local industries or occupations. Small businesses count. So do groups that represent businesses with such jobs. The 1998 Act's test asked instead for businesses whose jobs reflect the local area's jobs. Business members are appointed from people nominated by local business groups and trade associations.
A local board must also have:
- at least 20 percent who represent the local workforce, including labor representatives (or other employee representatives where no workers have a union) and, where the area has one, an apprenticeship program representative;
- a seat for adult education providers;
- a seat for colleges that offer workforce training, community colleges included;
- a seat for economic and community development groups;
- seats for the state employment service office and vocational rehabilitation programs.
DOL says WIOA cuts board size mainly by dropping the old rule that every one-stop program must have a seat.
What local boards must do for employers
DOL lists employer engagement among the added board duties, though the 1998 Act also named employer links. Under WIOA, each board must lead efforts to engage a diverse range of employers and groups in the region. The efforts have four aims:
- to promote business representation on the board;
- to build links that help employers use the local workforce system;
- to make sure programs meet employer needs and support economic growth in the region;
- to develop and carry out proven or promising strategies, such as industry and sector partnerships.
The law defines an industry or sector partnership as a workforce group of key players in an industry cluster. A state or local board either convenes the partnership or partners with it. At the right stage of its development, the partnership includes multiple employers. These include small and medium-sized ones when practicable. At that stage it also includes a labor representative, as appropriate, and a college or other education or training provider whose programs support the cluster.
Each local plan must describe the strategies and services to engage employers in workforce programs. These employers include small ones and those in in-demand industries and occupations. Boards must regularly share information about their work with the public. They do so through open meetings and electronic means. On request, they must give out minutes of formal meetings.
Training money rules from next July
In on-the-job training, an employer trains a paid worker who is doing productive work. The program pays the employer back up to 50 percent of the worker's wage. The payment is for the extra costs of training and added supervision. The Governor may raise that cap to as much as 75 percent for state-reserved funds. The local board may do so for local funds. Whoever raises the cap must weigh who is being trained, how big the employer is, and the quality of the employer's training and chances for advancement. Other factors may count too.
For incumbent worker training, a local board may use up to 20 percent of its Adult and Dislocated Worker funds. The training is for an employer's current workers, to help them keep their jobs or avoid layoffs. Those funds pay the federal share of the cost. The employer pays the rest. The board sets the employer's share. The minimum is 10 percent of the cost for employers with 50 or fewer employees. The minimum is 25 percent for 51 to 100 employees and 50 percent for more than 100. Wages paid during training can count toward the employer's share.
Local areas may also use funds to screen and refer qualified training participants to employers. A registered apprenticeship program goes on the state's list of eligible training providers. It stays there while it remains registered.
What to watch and what to do now
The law's core programs, such as adult job training and adult education, must measure how well they serve employers. DOL says this is a first. The Labor and Education secretaries must jointly set one or more such measures before the second full program year. That year starts a year after next July 1.
Employers can start with these steps:
- Find your nearest American Job Center with America's Service Locator.
- Ask the center who sits on your local board, since the board oversees the centers.
- Ask a local business group or trade association how it picks nominees for the board.
- Ask the board how it will handle on-the-job training rates, incumbent worker training and sector partnerships.
- Watch for proposed rules, due by January 18, and final rules, due within 18 months of signing.