Workforce Innovation and Opportunity Act, 56071-56469 [2016-15975]

Download as PDF Vol. 81 Friday, No. 161 August 19, 2016 Part VI Department of Labor mstockstill on DSK3G9T082PROD with RULES6 Employment and Training Administration 20 CFR Parts 603, 651, 652, et al. Workforce Innovation and Opportunity Act; Final Rule VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\19AUR6.SGM 19AUR6 56072 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations 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 Employment and Training Administration (ETA), Labor. ACTION: Final rule. AGENCY: The Department of Labor (DOL or the Department) issues this Final Rule to implement titles I and III of the Workforce Innovation and Opportunity Act (WIOA). Through these regulations, the Department reforms and modernizes our nation’s workforce development system. This rule provides the framework for changes for statewide and local workforce development systems to increase the employment, retention, earnings, and occupational skill attainment of U.S. workers, particularly those individuals with barriers to employment, so they can move into good jobs and careers and provide businesses with the skilled workforce needed to make the United States more competitive in the 21st Century global economy. DATES: This Final Rule is effective October 18, 2016. FOR FURTHER INFORMATION CONTACT: Adele Gagliardi, Administrator, Office of Policy Development and Research (OPDR), U.S. Department of Labor, Employment and Training Administration, 200 Constitution Avenue NW., Room N–5641, Washington, DC 20210, Telephone: (202) 693–3700 (voice) (this is not a tollfree number). If you use a telecommunications device for the deaf (TDD), call 1–800–326–2577. SUPPLEMENTARY INFORMATION: SUMMARY: mstockstill on DSK3G9T082PROD with RULES6 Table of Contents I. Executive Summary A. Purpose of the Regulatory Action B. Summary of Major Provisions C. Costs and Benefits II. Acronyms and Abbreviations III. Rulemaking Authority and Background A. Workforce Innovation and Opportunity Act Principles B. Major Changes From the Workforce Investment Act of 1998 C. Workforce Innovation and Opportunity Act Rulemaking Process D. Legal Basis IV. Public Comments Received on the Notice of Proposed Rulemaking VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 V. Section-by-Section Discussion of the Public Comments and Final Regulations A. Part 603—Federal-State Unemployment Compensation Program B. Part 675—Introduction to the Regulations for the Workforce Development Systems Under Title I of the Workforce Innovation and Act C. Part 679—Statewide and Local Governance of the Workforce Development System Under Title I of the Workforce Innovation and Opportunity Act D. Part 680—Adult and Dislocated Worker Activities Under Title I of the Workforce Innovation and Opportunity Act E. Part 681—Youth Activities Under Title I of the Workforce Innovation and Opportunity Act F. Part 682—Statewide Activities Under Title I of the Workforce Innovation and Opportunity Act G. Part 683—Administrative Provisions Under Title I of the Workforce Innovation and Opportunity Act H. Part 684—Indian and Native American Programs Under Title I of the Workforce Innovation and Opportunity Act I. Part 685—National Farmworker Jobs Program Under Title I of the Workforce Innovation and Opportunity Act J. Part 686—The Job Corps Under Title I of the Workforce Innovation and Opportunity Act K. Part 687—National Dislocated Worker Grants L. Part 688—Provisions Governing the YouthBuild Program M. Part 651—General Provisions Governing the Wagner-Peyser Act Employment Service N. Part 652—Establishment and Functioning of State Employment Service O. Part 653—Services of the Wagner-Peyser Act Employment Service P. Part 654—Special Responsibilities of the Employment Service Q. Part 658—Administrative Provisions Governing the Wagner-Peyser Act Employment Service VI. Rulemaking Analyses and Notices A. Executive Orders 12866 and 13563: Regulatory Planning and Review B. Regulatory Flexibility Act C. Small Business Regulatory Enforcement Fairness Act of 1996 D. Paperwork Reduction Act E. Executive Order 13132 (Federalism) F. Unfunded Mandates Reform Act of 1995 G. Plain Language H. Assessment of Federal Regulations and Policies on Families I. Executive Order 13175 (Indian Tribal Governments) J. Executive Order 12630 (Government Actions and Interference With Constitutionally Protected Property Rights) K. Executive Order 12988 (Civil Justice Reform) L. Executive Order 13211 (Energy Supply) PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 I. Executive Summary A. Purpose of the Regulatory Action On July 22, 2014, President Obama signed the Workforce Innovation and Opportunity Act (WIOA) (Pub. L. 113– 128), comprehensive legislation that reforms and modernizes the public workforce system. WIOA reaffirms the role of the public workforce system, and brings together and enhances several key employment, education, and training programs. This new law provides resources, services, and leadership tools for the public workforce system to help individuals find good jobs and stay employed and improves employer prospects for success in the global marketplace. It ensures that the public workforce system operates as a comprehensive, integrated, and streamlined system to provide pathways to prosperity for those it serves and continuously improves the quality and performance of its services. The Department is publishing this Final Rule to implement those provisions of WIOA that affect the core programs under title I, the WagnerPeyser Act Employment Service (ES) program, as amended by WIOA title III (ES program), and the Job Corps and national programs authorized under title I which will be administered by the Department. In addition to this DOL WIOA Final Rule, the Departments of Education (ED) and Labor jointly are publishing a Final Rule to implement those provisions of WIOA that affect all of the WIOA core programs (titles I through IV) and which will have to be overseen and administered jointly by both Departments. Readers should note that in this DOL WIOA Final Rule there are a number of cross-references to the Joint WIOA Final Rule published by ED and DOL, including those provisions in the Joint WIOA Final Rule regarding performance reporting. In addition to the Joint WIOA Final Rule, ED and DOL are issuing separate final rules to implement program-specific requirements of WIOA that fall under each Department’s purview. DOL is issuing this Final Rule governing program-specific requirements under WIOA title I and for the ES program, as amended by WIOA title III. ED is issuing three final rules: One implementing program-specific requirements of the Adult Education and Family Literacy Act (AEFLA), as reauthorized by title II of WIOA; and two final rules implementing all program-specific requirements for programs authorized under the Rehabilitation Act of 1973, as amended by title IV of WIOA. The Joint WIOA Final Rule and other Departmentspecific final rules are published E:\FR\FM\19AUR6.SGM 19AUR6 56073 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 elsewhere in this issue of the Federal Register. WIOA seeks to deliver a broad array of integrated services to customers of the public workforce system, which include both individuals seeking jobs and skills training and employers seeking skilled workers. The law improves the public workforce system by more closely aligning it with regional economies and strengthening the network of about 2,500 one-stop centers. Customers must have access to a seamless system of high-quality services through coordination of programs, services, and governance structures. The Act builds closer ties among key workforce partners—business leaders, State and Local Workforce Development Boards (WDBs), labor unions, community colleges, non-profit organizations, youth-serving organizations, and State and local officials—in striving for a more jobdriven approach to training and skills development. WIOA will help job seekers and workers access employment, education, training, and support services to succeed in the labor market and match employers with the skilled workers they need to compete in the global economy. The purposes of WIOA described in the statute include: • Increasing access to and opportunities for the employment, education, training, and support services that individuals need, particularly those with barriers to employment. • Supporting the alignment of workforce investment, education, and economic development systems, in support of a comprehensive, accessible, and high-quality workforce development system. • Improving the quality and labor market relevance of workforce investment, education, and economic development efforts. • Promoting improvement in the structure and delivery of services. • Increasing the prosperity of workers and employers. • Providing workforce development activities that increase employment, retention, and earnings of participants and that increase postsecondary credential attainment and as a result, improve the quality of the workforce, reduce welfare dependency, increase economic self-sufficiency, meet skill requirements of employers, and enhance productivity, and the competitiveness of our nation. WIOA’s passage and implementation builds upon the groundwork already laid by an Administration-wide review of employment, education, and training programs to ensure Federal agencies do everything possible to prepare ready-towork-Americans with ready-to-be-filled jobs. That review identified several priorities for Federally supported training programs, including employer engagement; promoting work-based learning strategies, such as on-the job training and registered apprenticeships, career pathways, and regional collaboration; increasing access to training by breaking down barriers; and data-driven program management and evaluation. As WIOA implementation progresses, success in accomplishing the purposes of WIOA at the State, local, and regional levels, will be determined by whether: • One-stop centers are recognized as a valuable community resource and are known for high quality, comprehensive services for customers. • The core programs and one-stop partners provide seamless, integrated customer service. • Program performance, labor market, and related data drive policy and strategic decisions and inform customer choice. • Youth programs reconnect out-ofschool youth (OSY) to education and jobs. • Job seekers access quality career services either online or in a one-stop center through a ‘‘common front door’’ that connects them to the right services. • One-stop centers facilitate access to high quality, innovative education and training. • Services to businesses are robust and effective, meeting businesses’ workforce needs across the business lifecycle. As noted throughout this Final Rule, the Department will be issuing guidance to help our regulated communities understand their rights and responsibilities under WIOA and these regulations. Consistent with the Administrative Procedure Act’s exemption from its notice and comment requirement for general statements of policy, interpretations, and procedural instructions, this guidance will provide interpretations of many of the terms and provisions of these regulations and more detailed procedural instructions that would not be appropriate to set out in regulations. The Department also will be issuing guidance to provide information on current priorities and initiatives, suggested best practices, and in response to stakeholder questions. B. Summary of Major Provisions To implement WIOA title I, the Department has added several new CFR parts to title 20, chapter V (ETA’s regulations). In particular, because the WIA regulations will continue to be referenced in existing and historic documents for some time after the WIOA transition, the Department is creating entirely new programmatic regulations to reflect the requirements of WIOA, rather than amending the WIA title I regulations found at 20 CFR parts 660 through 672. Table 1 below presents a crosswalk for these new CFR parts to illustrate how they relate to the existing WIA regulations. In addition, the Department is revising in this DOL WIOA Final Rule certain other CFR parts in accordance with WIOA, rather than creating entirely new parts, where it was not necessary to retain the WIA version of the regulation. For example, the Department retains the Wagner-Peyser Act implementing regulations in 20 CFR parts 651 through 658 and is revising in this Final Rule only those parts that are affected by WIOA, i.e., parts 651 through 654 and 658. Further, the Department is amending portions of part 603 (Federal-State Unemployment Compensation (UC) Program; Confidentiality and Disclosure of State UC Information) in accordance with WIOA. These CFR parts that are amended but not new in this DOL WIOA Final Rule are indicated in Table 1 by showing that they do not change location in the CFR from WIA to WIOA. The remainder of this section I.B briefly summarizes each CFR part in this Final Rule and any significant differences between the notice of proposed rulemaking (NPRM) and Final Rule. TABLE 1—CROSSWALK OF WIA AND WIOA REGULATIONS Subject matter WIA CFR part Federal-State UC Program ............................................................................................ Definitions/Introduction to Regulations .......................................................................... State and Local WDBs, Local and Regional Plans, Waivers ....................................... Adult and Dislocated Workers ....................................................................................... VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 20 20 20 20 CFR CFR CFR CFR part part part part 603 660 661 663 E:\FR\FM\19AUR6.SGM ................ ................ ................ ................ 19AUR6 WIOA CFR part 20 20 20 20 CFR CFR CFR CFR part part part part 603. 675. 679. 680. 56074 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations TABLE 1—CROSSWALK OF WIA AND WIOA REGULATIONS—Continued Subject matter WIA CFR part Youth Activities .............................................................................................................. Statewide Activities ........................................................................................................ Administrative Provisions ............................................................................................... Indian and Native American Programs ......................................................................... National Farmworker Jobs Program .............................................................................. Job Corps ...................................................................................................................... National Dislocated Worker Grants ............................................................................... YouthBuild ...................................................................................................................... Wagner-Peyser Act Employment Service—Definitions ................................................. Wagner-Peyser Act Employment Service—Establishment and Functioning ................ Wagner-Peyser Act Employment Service—Services .................................................... Wagner-Peyser Act Employment Service—Special Responsibilities ............................ Wagner-Peyser Act Employment Service—Administrative Provisions ......................... 1. Part 603—Federal-State Unemployment Compensation Program The Department is amending its regulations at 20 CFR part 603 to help States comply with WIOA. WIOA requires that States use ‘‘quarterly wage records’’ in assessing the performance of certain Federally funded employment and training programs. In particular, this Final Rule amends part 603 to clarify and expand, in a limited fashion, those public officials with whom the State may share certain confidential information to carry out requirements under WIOA, including the use of wage records to meet performance reporting requirements and cooperation with certain DOL and ED evaluations. The Department is amending part 603 as proposed in the NPRM. mstockstill on DSK3G9T082PROD with RULES6 2. Part 675—Introduction to the Regulations for the Workforce Development System Under Title I of the Workforce Innovation and Opportunity Act Part 675 discusses the purpose of title I of the WIOA, explains the format of the regulations governing title I, and provides additional definitions for terms used in the law. The most notable changes to this part from the regulatory text proposed in the NPRM include the addition of a definition of ‘‘family’’ and strengthening the definition of ‘‘consultation.’’ The DOL WIOA Final Rule defines ‘‘family’’ in the same way as the WIA definition of ‘‘family,’’ except that instead of using the gender-specific ‘‘husband’’ and ‘‘wife’’ terms that were in WIA, it substitutes ‘‘a married couple.’’ This is intended to bring the definition into conformance with the recent Supreme Court decisions about marriage equality. Regarding the revised definition of ‘‘consultation,’’ in response to public comments expressing concern that the proposed definition was not specific enough, the Final Rule definition better VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 20 20 20 20 20 20 20 20 20 20 20 20 20 CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR part part part part part part part part part part part part part focuses on the public workforce system and is necessary to clarify that consultation constitutes a coming together of stakeholders, robust conversation, and opportunity for all parties to express thoughts and opinions. The Department also changed the terms ‘‘workforce innovation and opportunity system,’’ and ‘‘workforce investment system’’ to ‘‘workforce development system’’ throughout this rule. This was done to enhance consistency across parts and avoid confusion, and to be emphasize the role of workforce development boards in this system. 3. Part 679—Statewide and Local Governance of the Workforce Development System Under Title I of the Workforce Innovation and Opportunity Act Part 679 addresses the statewide and local governance provisions of the workforce development system under WIOA title I. This part includes provisions that govern the conditions under which the Governor must establish the State WDB (subpart A); the requirements for designation of regions and local areas under WIOA (subpart B); the role of Local WDBs, Local WDB membership, and the role of chief elected officials (CEOs) (subpart C); the requirements relating to regional and local plans (subpart D); the statutory and regulatory waiver authority provided by WIOA sec. 189(i), including the requirements for submitting a workforce flexibility plan under WIOA sec. 190 (subpart E). As for notable changes to this part from the NPRM regulatory text, to address concerns about representation of core programs on the State WDB was raised by many commenters, the Department has revised the final regulations to clarify that, for the WIOA title I and ES programs, a single lead State official with primary PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 664 665 667 668 669 670 671 662 651 652 653 654 658 ................ ................ ................ ................ ................ ................ ................ ................ ................ ................ ................ ................ ................ WIOA CFR part 20 20 20 20 20 20 20 20 20 20 20 20 20 CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR CFR part part part part part part part part part part part part part 681. 682. 683. 684. 685. 686. 687. 688. 651. 652. 653. 654. 658. responsibility for those programs may represent more than one of those programs. However, WIOA title II programs must have a single, unique representative, and the Vocational Rehabilitation (VR) program administered by ED and authorized under title I of the Rehabilitation Act of 1973, as amended by WIOA title IV (VR program), must have a single, unique representative. See § 679.110(b)(3)(iii)(A)(1)(i) through (iii). Further, the Department clarified the regulatory text by providing details on the duration of initial local area designation and the timing of the first available opportunity for local area subsequent designation to occur. The Department revised the proposed requirement to clarify that initial designation is applicable only to Program Year (PY) 2016 and PY 2017. Noting the commenters’ concerns regarding availability of WIOA performance data, which is required for the determination of designation, the Department added § 679.250(c) to clarify that no determination of subsequent designation may be made before the conclusion of PY 2017. The section-bysection discussion of part 679 below details other changes to the part 679 regulatory text, as well as Department responses to all substantive public comments. 4. Part 680—Adult and Dislocated Worker Activities Under Title I of the Workforce Innovation and Opportunity Act In this part of the Final Rule, the Department describes requirements relating to the services that are available for adults and dislocated workers under WIOA title I. Under WIOA, adults and dislocated workers may access career services and training services. Training is provided through a robust eligible training provider and program list (ETPL), comprised of entities with a demonstrated capability of training E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations individuals to enter quality employment. WIOA also provides enhanced access and flexibility for work-based training options, such as onthe-job training (OJT), customized training, and incumbent worker training. In this part, the Department also discusses supportive services and needs-related payments that can be provided, based on customer needs, to enable them to participate in WIOA career and training services. Some of the notable changes to this part from the NPRM regulatory text include that the Final Rule clarifies that the priority of service in the adult program for individuals who are public assistance recipients, other low-income individuals and for individuals who are basic skills deficient exists at all times, not just when funds are limited. Regarding the role of registered apprenticeship programs, the Final Rule emphasizes the key role WIOA envisions for registered apprenticeship programs by highlighting these programs as a training service for both Individual Training Accounts (ITAs) and as OJT. The Final Rule allows apprenticeship programs that are not registered to go through the eligible training provider (ETP) process if they want to be on the ETP list; the rule does not provide apprenticeship programs that are not registered special access to the ETPL. The Department also clarifies in this Final Rule that registered apprenticeship programs are automatically eligible for the ETPL and the State is required to notify them of their automatic eligibility and allow the registered apprenticeship program an opportunity to consent to be on the State ETPL (see § 680.470). This mechanism must be minimal burden to registered apprenticeship programs and must comply with Federal guidance. The Department further clarifies in this Final Rule that local areas, which have the authority to set more stringent standards than the State for eligibility of training providers, may not do so for registered apprenticeship programs that are on the State ETPL. Finally, the Department clarifies in this Final Rule that registered apprenticeship programs may be removed from the State ETPL for enforcement reasons other than performance, such as a clear violation of WIOA (see § 680.470). Although registered apprenticeship programs are not required to report in the same way as other ETPs, they are required to be a part of the State annual ETP performance report under WIOA sec. 116(d)(2). VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 5. Part 681—Youth Activities Under Title I of the Workforce Innovation and Opportunity Act Part 681 describes requirements relating to the services that are available to youth under WIOA title I, subtitle B, as part 664 did for youth activities funded under WIA. The most significant change to the youth formula program under WIOA is the shift to focus resources primarily on OSY. WIOA increases the minimum percentage of program funds required to be spent on OSY from 30 to 75 percent. The Department plans to release subsequent guidance and technical assistance on how States and local areas can incorporate strategies for recruiting and serving more OSY. In addition, WIOA includes a major focus on providing youth with work experience opportunities with a requirement that local areas must spend a minimum of 20 percent of local area funds on work experience. And although work experience becomes the most important of the program elements, WIOA also introduces 5 new program elements: Financial literacy; entrepreneurial skills training; services that provide labor market and employment information about indemand industry sectors or occupations available in the local areas; activities that help youth prepare for and transition to postsecondary education and training; and education offered concurrently with and in the same context as workforce preparation activities and training for a specific occupation or occupational cluster. The most significant change between the NPRM and the Final Rule occurs in § 681.400. This section clarifies that youth activities may be conducted by the local grant recipient and that when the Local WDB chooses to award grants or contracts to youth service providers, such awards must be made using a competitive procurement process in accordance with WIOA sec. 123. The section-by-section discussion of part 681 below details other changes to the part 681 regulatory text, as well as Department responses to all substantive public comments. 6. Part 682—Statewide Activities Under Title I of the Workforce Innovation and Opportunity Act WIOA provides a reservation of funds for statewide employment and training activities. These activities are undertaken by the States, rather than by Local WDBs; both the required and allowable activities are addressed by part 682. WIOA designates the percentage of funds that may be devoted PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 56075 to these activities from annual allotments to the States—up to 15 percent must be reserved from youth, adult, and dislocated worker funding streams, and up to an additional 25 percent of dislocated worker funds must be reserved for statewide rapid response activities. Some of the notable changes to this part from the NPRM regulatory text include the specification that layoff aversion is a required rapid response activity, as applicable. Layoff aversion activities may include employer-focused activities such as providing assistance to employers in managing reductions in force, funding feasibility studies to determine if the employer’s operation may be sustained through a buy-out, etc. Further, the DOL WIOA Final Rule specifies that a successful rapid response system includes comprehensive business engagement. Finally, the DOL WIOA Final Rule specifies that rapid response funds may be used to pay for incumbent worker training as long as it is part of a broader layoff aversion strategy. Incumbent worker training is also a valuable layoff aversion tool and, under WIA, many States requested a waiver to allow such training with rapid response funds. This Final Rule change recognizes the value of incumbent worker training for this purpose and includes it as allowable under rapid response within the context of layoff aversion activities. 7. Part 683—Administrative Provisions Under Title I of the Workforce Innovation and Opportunity Act Part 683 establishes the administrative provisions for the programs authorized under title I of WIOA. Some of the provisions are also applicable to grants provided under the Wagner-Peyser Act, as indicated in specific sections of the part. The remaining Wagner-Peyser Act administrative regulations are located in part 658. Additionally, please note that administrative provisions for Job Corps (subtitle C of title I of WIOA) contracts are addressed separately in part 686. This DOL WIOA Final Rule adds a requirement that the Governor establish criteria or factors for approving Local WDB transfers of funds between the adult and dislocated worker programs and that these criteria must be in a written policy, such as the State Plan or other written policy. Regarding Pay-for-Performance contract strategies, the final regulations made a change from the NPRM in that the Department has added a new section that maintained the requirement for a feasibility study prior to implementing a Pay-for-Performance contract strategy E:\FR\FM\19AUR6.SGM 19AUR6 56076 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations but removed it from the 10 percent limitation of funds. 8. Part 684—Indian and Native American Programs Under Title I of the Workforce Innovation and Opportunity Act Part 684 governs the Indian and Native American (INA) program authorized under WIOA sec. 166. WIOA and part 684 streamline the competitive process for awarding the INA program grants. Section 166 of WIOA requires both that grants be awarded through a competitive process and that grantees submit a 4-year plan (WIOA secs. 166(c) and 166(e)). These WIOA regulations streamline the grant award process to ease the administrative burdens. The Department will no longer designate grantees or require a notice of intent. Moreover, the part 684 WIOA regulations have incorporated the 4-year plan into the competitive grant award process. Because these changes will help streamline the process for awarding grants, these WIOA regulations should result in less of an administrative burden on both applicants and the Department. Other than a few technical, nonsubstantive edits, the Department has made no changes to the regulatory text in part 684. mstockstill on DSK3G9T082PROD with RULES6 9. Part 685—National Farmworker Jobs Program Under Title I of the Workforce Innovation and Opportunity Act The purpose of part 685 is to implement WIOA sec. 167, which authorizes migrant and seasonal farmworker (MSFW) programs. In drafting these regulations, the Department consulted with States and MSFW groups during stakeholder consultation sessions conducted in August and September 2014, as required by WIOA sec. 167(f). MSFW programs include career services and training, housing assistance, youth services, and related assistance to eligible MSFWs. The regulations in part 685 support strategic alignment across workforce development programs by: Aligning the definition of ‘‘farmwork’’ found in this part with that used in the ES program; adjusting the upper and lower age ranges of eligible MSFW youth to conform to those established in WIOA sec. 129 for OSY and ISY; and requiring that grantees coordinate services, particularly outreach to MSFWs, with the State Workforce Agency (SWA) in their service area and the State Monitor Advocate. These changes are intended to support coordination between MSFW programs and other workforce programs such as the ES program, and facilitate VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 MSFW youth co-enrollments with other WIOA title I programs. Part 685 includes language regarding training services that reinforces that training must be directly linked to an indemand industry or occupation that leads to economic self-sufficiency and encourages the attainment of recognized postsecondary credentials when appropriate (see § 685.350). Part 685 also establishes that grantees funded under WIOA sec. 167 can serve eligible MSFW youth participants (see §§ 685.320 and 685.510). These regulations also require that a percentage of the total funds appropriated each year for WIOA sec. 167 activities must be used for housing grants, and described specific housing assistance activities to better articulate the types of services that can be delivered to eligible MSFWs (see § 685.360). Based on the public comments received in response to the NPRM, the Department made the following significant changes to part 685 as proposed: • The Final Rule permits a National Farmworker Jobs Program (NFJP) grantee some flexibility to increase the OJT reimbursement rate up to 75 percent of the wage rate of a participant, provided that such reimbursement rates are consistent with the rates set by the Governor in the State or Local WDB(s) in the local area(s) in which the grantee operates in accordance with WIOA sec. 134(c)(3)(H)(i); • The Final Rule revises § 685.360(d) to clarify that NFJP-funded permanent housing development activities that benefit eligible MSFWs do not require individual eligibility determinations; • The Final Rule clarifies in § 685.360 that development of on-farm housing located on property owned and operated by an agricultural employer is an allowable activity; and • In response to commenters’ concerns regarding the negative impact that would result on performance indicator calculations by including individuals who receive only certain minimal ‘‘related assistance’’ services, which do not require a significant investment of staff time and resources, the Department has added language to § 685.400 that puts the NFJP program in alignment with other WIOA authorized programs regarding performance accountability calculations. 10. Part 686—The Job Corps Under Title I of the Workforce Innovation and Opportunity Act This part establishes regulations for the Job Corps program, authorized in title I, subtitle C of WIOA. The PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 regulations address the scope and purpose of the Job Corps program and provide requirements relating to site selection, protection, and maintenance of Job Corps facilities; funding and selection of center operators and service providers; recruitment, eligibility, screening, selection and assignment, and enrollment of Job Corps students; Job Corps program activities and center operations; student support; career transition services and graduate services; community connections; and administrative and management requirements. The regulations carry out Congressional direction on contracting and competition for centers and incorporate the requirements of title I, subtitle C of WIOA. Specifically, the regulations describe how the Job Corps program is operated in order to deliver relevant academic and career technical training (CTT) that leads to meaningful employment or postsecondary education and explain the requirements necessitated by the unique residential environment of a Job Corps center. Although the Department received some public comments that opposed the proposed provision stating that the Secretary of Labor, in consultation with the Secretary of Agriculture, may select an entity to operate a Civilian Conservation Center (CCC) or close low performing CCCs if the Secretary of Labor deems appropriate (§ 686.350(e) through (f)), the DOL WIOA Final Rule retains these paragraphs as proposed because the regulatory text mirrors the statutory requirements at WIOA sec. 159(f)(2). In addition, regarding concerns expressed by commenters that the proposed high-performing center criteria were too difficult to achieve, the Department is retaining § 686.320 as proposed because the language in the regulation mirrors that of WIOA and the Department does not have the discretion to loosen the criteria. 11. Part 687—National Dislocated Worker Grants National Dislocated Worker Grants (DWGs) are discretionary awards that temporarily expand service capacity at the State and local levels through timelimited funding assistance in response to significant dislocation events. These grants are governed by sec. 170 of WIOA. The part 687 regulations set forth the key elements and requirements for DWGs. Additional guidance on DWGs and the application requirements for these grants was published separately by the Department in Training and Employment Guidance Letter (TEGL) No. 01–15, ‘‘Operational Guidance for National Dislocated Worker Grants, pursuant to the E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations Workforce Innovation and Opportunity Act (WIOA or Opportunity Act).’’ The part 687 regulations establish a framework that will enable eligible applicants to apply quickly for grants to relieve the impact of layoffs, emergencies, and disasters on employment in the impacted area and to meet the training and reemployment needs of affected workers and to enable them to obtain new jobs as quickly as possible. These regulations call for early assessment of the needs and interests of the affected workers, through either rapid response activities or other means, as well as an indication of the other resources available to meet these needs, to aid in the creation of a customercentered service proposal. The early collection of information about affected workers will allow applicants to have an understanding of the needs and interests of the impacted workers to enable a prompt application for the appropriate level of DWG funds. Early collection of information also will facilitate the receipt of DWG funds when the Secretary determines that there are insufficient State and local formula funds available. Early intervention to assist workers being dislocated is critical to enable them to access workbased learning opportunities and other types of training that lead to industryrecognized credentials, as appropriate, to help them find new employment in in-demand industries and occupations as soon as possible after their dislocation occurs. The Department has made several global changes and technical edits to the part 687 regulations proposed in the NPRM for clarity and technical accuracy. For example, ‘‘National Dislocated Worker Grants’’ will be referred to by the acronym ‘‘DWGs’’ in this part for simplicity. In addition, the Department has determined it is necessary to alter the labels of what the NPRM called ‘‘Regular’’ and ‘‘Disaster’’ DWGs to describe more accurately their purpose and intended use. ‘‘Regular’’ DWGs have been renamed ‘‘Employment Recovery’’ DWGs, and ‘‘Disaster’’ DWGs have been renamed ‘‘Disaster Recovery’’ DWGs. Further, the terms ‘‘career services’’ and ‘‘employment-related assistance’’ have been changed to ‘‘employment and training assistance’’ to clarify that the use of DWG funds is not limited to only career services. Training and supportive services also may be provided as appropriate and in accordance with the requirements of part 687. Finally, the term ‘‘temporary employment’’ has been replaced with the term ‘‘disaster relief employment’’ to better align the text of this part 687 with that of WIOA sec. VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 170. In addition, this DOL WIOA Final Rule clarifies that individuals who relocate to another State, tribal, or outlying area after a disaster may receive services in either the disaster area or the area to which they relocate. However, the Final Rule also includes a provision for the Secretary to allow, in certain circumstances, individuals to receive services in both the disaster and the relocation area. Other nonsubstantive changes and technical edits are described in detail in the section-bysection discussion of part 687 below. 12. Part 688—Provisions Governing the YouthBuild Program The YouthBuild program authorizes grants for job training and educational activities for at-risk youth who, as part of their training, help construct or rehabilitate housing for homeless individuals and families and lowincome families in their respective communities. Participants receive a combination of classroom training, job skills development, and on-site training in the construction trades. The Department wants to emphasize the connections across all of our youthserving programs under WIOA, including the WIOA youth formula program and associated boards and youth committees, connections to preapprenticeship and registered apprenticeship programs, and Job Corps centers across the country. WIOA is an opportunity to align and coordinate service strategies for these ETA youth training programs, as well as to align with our Federal partners that serve these same customers. WIOA also ensures that these programs are using common performance indicators and standard definitions, which includes aligning the definitions for homeless youth, basic skills deficient, occupational skills training, and supportive services. Additionally, the YouthBuild regulation adopts the six new performance indicators that were codified across WIOA youth-serving programs and aligns YouthBuild with the WIOA youth formula program performance outcomes. WIOA affirms the Department’s commitment to providing high-quality education, training, and employment services for youth and young adults through YouthBuild grants by expanding the occupational skills training offered at local YouthBuild programs. YouthBuild programs can offer occupational skills training in indemand occupations, such as health care, advanced manufacturing, and IT, as approved by the Secretary and based on the maturity of the program and local labor market information. PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 56077 Other changes include revisions to the duration of the restrictive covenant clause, clarifying eligibility criteria for participation, and describing qualifying work sites and minimum criteria for successful exit from the YouthBuild program. Beyond these regulations, the Department will continue to develop guidance and technical assistance to help grantees and the workforce development community operate highly effective YouthBuild programs. 13. Part 651—General Provisions Governing the Wagner-Peyser Act Employment Service The Wagner-Peyser Act of 1933 established the ES program, which is a nationwide system of public employment offices that provide public labor exchange services. The ES program seeks to improve the functioning of the nation’s labor markets by bringing together individuals seeking employment with employers seeking workers. In 1998, the ES program was amended to make it part of the one-stop delivery system established under WIA. The ES program has now been amended again under title III of WIOA. WIOA expands upon the previous workforce reforms in the WIA and, among other provisions, identifies the ES as a core program in the one-stop delivery system, embeds ES State planning requirements into a unified planning approach, and requires the colocation of ES offices into the onestop centers. The regulations in parts 651, 652, 653, 654, and 658 update the language and content of the regulations to implement amendments made by title III of WIOA to the Wagner-Peyser Act. In some areas, these regulations establish entirely new responsibilities and procedures. In other areas, the regulations clarify and update requirements already established. The regulations make important changes to the following components of the ES program: definitions, data submission, and increased collaboration requirements, among others. Part 651 sets forth definitions for 20 CFR parts 652, 653, 654, and 658. The Department received several comments regarding these definitions and has eliminated, revised, and added definitions, as needed. Some commenters suggested new terms they would like to see defined in part 651, and other commenters expressed concerns or suggestions relating to specific proposed definitions. Additionally, the Department has made technical and clarifying changes to some of the definitions. E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56078 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations 14. Part 652—Establishment and Functioning of State Employment Service The regulations at 20 CFR part 652 set forth standards and procedures regarding the establishment and functioning of State ES operations. These regulations align part 652 with the WIOA amendments to the ES program, and with the WIOA reforms to the public workforce system that affect the ES program. The WIOA-amended Wagner-Peyser Act furthers longstanding goals of closer collaboration with other employment and training programs by mandating colocation of ES offices with one-stop centers; aligning service delivery in the one-stop delivery system; and ensuring alignment of State planning and performance indicators in the one-stop delivery system. Other new WagnerPeyser Act provisions are consistent with long-term Departmental policies, including increased emphasis on reemployment services for UI claimants (sec. 7(a)); promoting robust Workforce Labor Market Information (WLMI); the development of national electronic tools for job seekers and businesses (sec. 3(e)); dissemination of information on best practices (sec. 3(c)(2)); and professional development for ES staff (secs. 3(c)(4) and 7(b)(3)). Several public comments received in response to the NPRM prompted the Department to make minor changes to parts of the regulations in this section. For example, the Department agreed with comments regarding ensuring comprehensive front-line staff training; and direct language has been added to § 652.204 from sec. 3(c)(4) of the Wagner-Peyser Act (as amended by WIOA sec. 303(b)(4)) to indicate that professional development and career advancement can be supported by the Governor’s Reserve. The Department agreed with the commenter-suggested benefits of aligning definitions across the core programs, and as a result, the terms ‘‘reportable individual’’ and ‘‘participant’’ have been revised to align with the performance accountability of the other core programs. The Department also agreed with commenters who suggested that career services under WIOA are not a substitute for Wagner-Peyser Act sec. 7(a) services; § 652.3(f) has been amended to reference sec. 7(a) of the Wagner-Peyser Act. The Department continues to seek alignment of service delivery with WIOA core programs. The Department received several varying comments regarding colocation. This part clarifies the intent of colocation; how ES-only affiliate sites VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 do not meet the intent of WIOA; the Department’s decision to broaden language in 20 CFR 678.315(b) to allow multiple programs to meet the more than 50 percent threshold by combining the time their staff members are physically present (see Joint WIOA Final Rule); and the expectation that colocation should be completed as expeditiously as possible, and that the Department will issue future guidance on this topic. Many commenters also raised questions and provided comments regarding the allowable uses of Wagner-Peyser Act funds. The Department clarified that there are no changes in the activities that may be funded by Wagner-Peyser Act funds. Specifically, training services may not be provided with sec. 7(a) of the Wagner-Peyser Act funding; however, appropriate career services and labor exchange services may be provided to individuals in training and there is no restriction on funding training services with sec. 7(b) funds under the WagnerPeyser Act. In regard to WLMI, some of the clarifications identified in this part include: There is a need to provide extensive education and technical assistance with regard to accessing wage record data; the Workforce Information Advisory Council (WIAC) will advise on WLMI and may consider what kind of information is needed for planning, but it will not be involved in developing State Plans; and the Departments of Labor and Education will issue joint guidance with regard to use of wage data for performance in the context of the confidentiality requirements for the use of UI wage record data and education data under the Family Educational Rights and Privacy Act (FERPA). The Department also made other clarifying changes to part 652, as discussed elsewhere in this Final Rule. 15. Part 653—Services of the WagnerPeyser Act Employment Service Part 653 sets forth standards and procedures for providing services to MSFWs and provides regulations governing the Agricultural Recruitment System (ARS), a system for interstate and intrastate agricultural job recruitment. In subparts B and F of part 653, the Department is implementing the WIOA title III amendments to the Wagner-Peyser Act, as well as streamlining and updating certain sections to eliminate duplicative and obsolete provisions. Despite these changes, part 653 remains consistent with the ‘‘Richey Order.’’ NAACP v. Brennan, 1974 WL 229, at *7 (D.D.C. Aug. 13, 1974). PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 Upon the consideration of comments suggesting that the Department require outreach workers to be trained on not only how to identify and refer possible incidents of sexual harassment, but also on similar issues such as sexual coercion, assault, and human trafficking, the Department has added such language to the regulatory text at § 653.107(b)(7). Training outreach workers in this way is key in helping to connect victims with appropriate resources and support networks. 16. Part 654—Special Responsibilities of the Employment Service System In 1980, the Department published amended regulations at 20 CFR part 654, subpart E, providing agricultural housing standards for MSFWs. In the NPRM, the Department proposed to revise these agricultural housing regulations (hereinafter ‘‘ETA standards’’) by updating outdated terminology and by establishing an expiration date for the ETA standards. This proposed expiration date was intended to transition housing currently governed by the ETA standards to the Occupational Safety and Health Administration (OSHA) regulations governing temporary labor camps for agricultural workers as set forth at 29 CFR 1910.142. After considering the public comments received on this aspect of the proposal, the Department is rescinding its proposal to establish an expiration date for the ETA standards in order to transition housing currently governed by the ETA standards to the OSHA standards, as explained in further detail in this Final Rule. 17. Part 658—Administrative Provisions Governing the Wagner-Peyser Act Employment Service Part 658 sets forth systems and procedures for complaints, monitoring for compliance assessment, enforcement, and sanctions for violations of the ES regulations and employment-related laws, including discontinuation of services to employers and decertification of SWAs. The Department’s proposed changes to part 658 updated terminology and responsibilities and reorganized various regulations to increase the clarity and efficiency of the provisions involved. Additionally, headings were revised, when necessary, to reflect changes to the regulations, and language was added to permit, where relevant, the use of electronic mail and electronic signatures. Overall, the Department received several comments seeking clarification on processing complaints and apparent violations, attempting informal E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 resolution, and the role of MSFW complainant’s representatives, among many others. The Department has addressed these requests for clarification in the responses to public comments contained in the part 658 section-by-section discussion below (see section V.Q). Additionally, the Department will issue guidance on the Complaint System, informal resolution, referring complaints and apparent violations, and on part 658, subpart F (Discontinuation of Services to Employers by the Employment Service System). C. Costs and Benefits This Final Rule has been designated an ‘‘economically significant rule’’ under sec. 3(f)(4) of Executive Order (E.O.) 12866. Therefore, the Office of Management and Budget (OMB) has reviewed the Final Rule, and the Department has conducted a regulatory impact analysis to estimate the costs, benefits, and transfers associated with the Final Rule, which is detailed in full in section V.A of the Final Rule below. In total, the Department estimates that this Final Rule will have an average annual net benefit of $14,806,210 and a total 10-year net benefit of $95,836,706 (with 7-percent discounting). The Department estimates that this Final Rule will have an average annual cost of $35,037,540 and a total 10-year cost of $278,750,652 (with 7-percent discounting). The largest contributor to the cost is the requirement related to the development and continuous improvement of the workforce development system, followed by the career pathways development and the colocation of ES services. The Department quantified the expected incremental benefits associated with this Final Rule relative to the baseline of the current practice under the Workforce Investment Act of 1998 (WIA), where possible. Specifically, the Department quantified the benefits expected to result from required competition for all one-stop operators. Competition for all one-stop operators will result in cost reductions for Local WDBs due to increases in efficiency, which are estimated to amount to approximately $49,843,750 per year and $374,587,357 over the 10year period (with 7-percent discounting). This quantified benefit resulting from increased competition for all one-stop operators, however, does not account for several other important benefits to society that the Department was unable to quantify due to data limitations or lack of existing data or evaluation findings. Based on a review of empirical studies (primarily studies VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 published in peer-reviewed academic publications and studies sponsored by the Department), however, the Department identified a variety of societal benefits: (1) Training services increase job placement rates; (2) participants in occupational training experience higher reemployment rates; (3) training is associated with higher earnings; and (4) State performance accountability measures, in combination with the board membership provision requiring employer/business representation, can be expected to improve the quality of the training and, ultimately, the number and caliber of job placements. The Department identified several channels through which these benefits might be achieved: (1) Better information about training providers will enable workers to make better informed choices about programs to pursue; (2) sanctions to underperforming States will serve as an incentive for both States and local entities to monitor performance more effectively and to intervene early; and (3) enhanced services for dislocated workers, self-employed individuals, and workers with disabilities will lead to the benefits discussed above. In addition, the Final Rule will result in transfer payments, i.e., a shift in costs or benefits from one group to another that does not affect total resources available to society. The Department estimates that this Final Rule will result in annual average transfer payments of $12,887,628 and a total 10-year transfer payment of $96,853,514 (with 7-percent discounting). These transfers result from increased funding for targeting OSY. The Department has determined that the Final Rule will have no cost impact on small entities and will not impose an unfunded mandate on Federal, State, local, or tribal governments as defined by the Unfunded Mandates Reform Act of 1995. II. Acronyms and Abbreviations AEFLA Adult Education and Family Literacy Act ALJ Administrative Law Judge ACS American Community Survey ADA Americans with Disabilities Act ANRC Alaska Native Regional Corporation ANVSA Alaska Native Village Service Area AOP Agricultural Outreach Plan ARC Analyst Resource Center ARS Agricultural Recruitment System ATAP Assistive Technology Act Program AWPA Migrant and Seasonal Agricultural Worker Protection Act AWOL Absent Without Official Leave BCL Business and Community Liaison BLS Bureau of Labor Statistics CBO Community-based organization CCC Civilian Conservation Center CDBG Community Development Block Grant PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 56079 CEO Chief elected official CEP Concentrated Employment Program CFR Code of Federal Regulations Complaint System Employment Service and Employment-Related Law Complaint System COO Chief operating officer COSO Committee of Sponsoring Organizations of the Treadway Commission CPARS Contract Performance Assessment Reports CPP Career Preparation Period CRIS Common Reporting Information System CTS Career Transition Services CTT Career Technical Training DACA Deferred Action for Childhood Arrivals DINAP Division of Indian and Native American Programs DOL Department of Labor DVOP Disabled Veterans Outreach Program DWG Dislocated Worker Grant EBSS Enterprise Business Support System ED Department of Education EEOC Equal Employment Opportunity Commission E.O. Executive Order EO Equal opportunity ES Employment Service ESA Employment Standards Administration ESARS Employment Security Automated Reporting System ETA Employment and Training Administration ETP Eligible training provider ETPL Eligible training provider list FAR Federal Acquisition Regulations FECA Federal Employees Compensation Act FEIN Federal employer identification number FEMA Federal Emergency Management Agency FERPA Family Educational Rights and Privacy Act FLSA Fair Labor Standards Act FOA Funding Opportunity Announcement FPO Federal Project Officer FR Federal Register FTE Full Time Equivalent GED General Educational Development GIS Geographic information system GPRA Government Performance and Results Act HEARTH Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009 HHS Department of Health and Human Services HOME HOME Investment Partnerships HSD High School Diploma HSE High School Equivalent HUD U.S. Department of Housing and Urban Development IC Information collection ICR Information Collection Request IEP Individual Employment Plan IEVS Income and Eligibility Verification System INA Indian and Native American IRFA Initial Regulatory Flexibility Analysis IRS Internal Revenue Service ISDEAA Indian Self-Determination and Education Assistance Act E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56080 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations ISS Individual Service Strategy ISY In-school youth IT Information technology ITA Individual Training Account JIS Job Information Service JS Job Service JTPA Job Training Partnership Act JVSG Jobs for Veterans State Grants LEARS Labor Exchange Agricultural Reporting System LEHD Longitudinal Employer-Household Dynamics LEP Limited English proficiency LEWIS Local Employment and Wage Information System LLC Limited Liability Corporation LLSIL Lower Living Standard Income Level LMI Labor Market Information Local WDB Local Workforce Development Board MOU Memorandum of Understanding MPO Management Performance Outcome MSFW Migrant and Seasonal Farmworker MSWR Medical Separation with Reinstatement Rights NAA National Apprenticeship Act NAACP National Association for the Advancement of Colored People NAETC Native American Employment and Training Council NAFTA North American Free Trade Agreement NAICS North American Industry Classification System NDWG National Dislocated Worker Grant NEG National Emergency Grant NFJP National Farmworker Jobs Program NICRA Negotiated Indirect Cost Rate Agreement NIEM National Information Exchange Model NLX National Labor Exchange NPRM Notice of Proposed Rulemaking OA Outreach and Admissions OALJ Office of Administrative Law Judges OBS On-board strength ODEP Office of Disability and Employment Policy OFLC Office of Foreign Labor Certification OIG Office of the Inspector General OJT On-the-job training OMB Office of Management and Budget OMS Outcome Measurement System OPDR Office of Policy Development and Research OSHA Occupational Safety and Health Administration OSY Out-of-school youth OTSA Oklahoma Tribal Service Area OWI Office of Workforce Investment PART Program Assessment and Rating Tool PBP Program Budget Plan PEDCS Post Enrollment Data Collection System PIA Privacy Impact Assessment PII Personally identifiable information PIP Performance improvement plan PIRL Participant Individual Record Layout PMP Projections Managing Partnership PPACA Patient Protection and Affordable Care Act PRA Paperwork Reduction Act of 1995 PREP Profiling Reemployment Program PRH Policy and Requirements Handbook Pub. L. Public Law PY Program year VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 REA Reemployment and Eligibility Assessment RESEA Reemployment Services and Eligibility RFA Regulatory Flexibility Act RFP Requests for proposals RHY Runaway or Homeless Youth Richey Order Judge Richey Court Order RIN Regulatory Information Number RMA Regional Monitor Advocate RSA Rehabilitation Services Administration SBA Small Business Administration SBREFA Small Business Regulatory Enforcement Fairness Act of 1996 SDA Service delivery area sec. Section of a Public Law or the United States Code SESA State Employee Security Act S–FTP Secure File Transfer Protocol SMA State Monitor Advocate SOC Standard Occupational Classification SNAP Supplemental Nutrition Assistance Program SSA Social Security Act SSDI Social Security Disability Insurance SSN Social Security Number State WDB State Workforce Development Board STAWRS Simplified Tax and Wage Reporting System SWA State Workforce Agency SWCAP Statewide Cost Allocation Plans TAA Trade Adjustment Assistance TANF Temporary Assistance for Needy Families TAPR Trade Act Participant Report TAT Technical Assistance and Training TDD Telephone device for the deaf TEAP Trainee Employee Assistance Program TEGL Training and Employment Guidance Letter TEN Training and Employment Notice UC Unemployment Compensation UCX Unemployment Compensation for Exservice members UI Unemployment insurance U.S.C. United States Code VA Department of Veterans Affairs VETS Veterans’ Employments and Training Service VR Vocational rehabilitation Wagner-Peyser Act Wagner-Peyser Act of 1933 WARN Worker Adjustment and Retraining Notification WDB Workforce Development Board WHD Wage and Hour Division WIA Workforce Investment Act of 1998 WIAC Workforce Information Advisory Council WIASRD Workforce Investment Act Standardized Record Data WIB Workforce investment boards WIC Workforce Information Council WIOA Workforce Innovation and Opportunity Act WLMI Workforce and Labor Market Information WLMIS Workforce and Labor Market Information System WPRS Worker Profiling and Reemployment Services WRIS Wage Record Interchange System YB-TAP YouthBuild Trainee Apprenticeship Program PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 ZT Zero Tolerance III. Rulemaking Authority and Background A. Workforce Innovation and Opportunity Act Principles On July 22, 2014, President Obama signed WIOA, the first legislative reform of the public workforce system in more than 15 years, which passed Congress by a wide bipartisan majority. WIOA supersedes WIA and amends the Adult Education and Family Literacy Act (AEFLA), the Wagner-Peyser Act, and the Rehabilitation Act of 1973. WIOA presents an extraordinary opportunity for the public workforce system to accelerate its transformational efforts and demonstrate its ability to improve job and career options for our citizens through an integrated, job-driven public workforce system that links diverse talent to our nation’s businesses. It supports the development of strong, vibrant regional economies where businesses thrive and people want to live and work. WIOA reaffirms the role of the customer-focused one-stop delivery system, a cornerstone of the public workforce development system, and enhances and increases coordination among several key employment, education, and training programs. Most provisions in WIOA took effect on July 1, 2015, the first full program year after enactment, although the new statutory State Plans and performance accountability system requirements take effect July 1, 2016. Title IV of WIOA, however, took effect upon enactment. WIOA is designed to help job seekers access employment, education, training, and support services to succeed in the labor market and to match employers with the skilled workers they need to compete in the global economy. WIOA has six main purposes: (1) Increasing access to and opportunities for the employment, education, training, and support services for individuals, particularly those with barriers to employment; (2) supporting the alignment of workforce investment, education, and economic development systems in support of a comprehensive, accessible, and high-quality workforce development system; (3) improving the quality and labor market relevance of workforce investment, education, and economic development efforts; (4) promoting improvement in the structure and delivery of services; (5) increasing the prosperity of workers and employers; and (6) providing workforce development activities that increase employment, retention, and earnings of participants and that increase E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations postsecondary credential attainment and as a result, improve the quality of the workforce, reduce welfare dependency, increase economic selfsufficiency, meet skill requirements of employers, and enhance productivity and competitiveness of the nation. Beyond achieving the requirements of the new law, WIOA offers an opportunity to continue to modernize the public workforce system, and achieve key hallmarks of a customer centered public workforce system, where the needs of business and workers drive workforce solutions, where one-stop centers and partners provide excellent customer service to job seekers and businesses, where the public workforce system pursues continuous improvement through evaluation and data-driven policy, and where the public workforce system supports strong regional economies. Regulations and guidance implementing WIOA titles I and III are issued by DOL, with the exception of the joint regulations issued by DOL and ED on the provisions in title I relating to unified and combined planning, performance, and the one-stop delivery system. Regulations and guidance on implementing titles II and IV of WIOA are issued by ED. The Joint WIOA Final Rule and the ED WIOA Final Rules are published elsewhere in this issue of the Federal Register. WIOA retains much of the structure of WIA, but with critical changes to advance greater coordination and alignment. Under title I, subtitle A, each State will be required to develop a single, unified strategic plan that is applicable to six core workforce development programs. The core programs consist of the adult, dislocated worker, and youth formula programs administered by the Department under WIOA title I; the Adult Education and Family Literacy program administered by ED under WIOA title II; the ES program administered by the Department and authorized by the Wagner-Peyser Act, as amended by WIOA title III; and the VR program administered by ED and authorized under title I of the Rehabilitation Act of 1973, as amended by WIOA title IV (VR program). In addition to core programs, WIOA provides States the opportunity to include other key one-stop partner programs such as the Supplemental Nutrition Assistance Program (SNAP), Unemployment Insurance (UI), Temporary Assistance for Needy Families (TANF), and Perkins Career Technical Education in a Combined State Plan. The law also includes a common performance accountability VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 system applicable to all of the core programs. The remainder of WIOA title I authorizes the adult, dislocated worker, and youth formula programs; the State and local WDBs (formerly workforce investment boards or WIBs); the designation of regions and local areas; local plans; the one-stop delivery system; national programs, including Job Corps, YouthBuild, Indian and Native American (INA) programs, and Migrant and Seasonal Farmworker (MSFW) programs; technical assistance and evaluations; and general administrative provisions currently authorized under title I of WIA. Title II retains and amends the Adult Education and Family Literacy Program currently authorized under title II of WIA. Title III contains amendments to the WagnerPeyser Act relating to the ES and Workforce and Labor Market Information System (WLMIS), and requires the Secretary to establish a WIAC. Title IV contains amendments to the Rehabilitation Act of 1973, which were also included under title IV of WIA; it also requires the Secretary of Labor to establish an Advisory Committee on Increasing Competitive Integrated Employment for Individuals with Disabilities. Finally, title V contains general provisions similar to the provisions applicable under title V of WIA as well as the effective dates and transition provisions. B. Major Changes From the Workforce Investment Act of 1998 This section contains a summary of the major changes from WIA. As indicated above, WIOA retains much of the structure of WIA. Major changes in WIOA are: • Aligns Federal investments to support job seekers and employers. The Act provides for States to prepare a single Unified State Plan that identifies a 4-year strategy for achieving the strategic vision and goals of the State for preparing an educated and skilled workforce and for meeting the skilled workforce needs of employers. States govern the core programs as one system assessing strategic needs and aligning them with service strategies to ensure the public workforce system meets employment and skill needs of all workers and employers. • Streamlines the governing bodies that establish State, regional and local workforce investment priorities. WIOA makes State and Local WDBs more agile and well positioned to meet local and regional employers’ workforce needs by reducing the size of the WDBs and assigning them additional responsibilities to assist in the PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 56081 achievement of the State and local strategic workforce vision and goals. The State WDBs continue to have a majority of business representation and a business chair and work for all workers and job seekers, including lowskilled 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 datadriven, and accountable to participants and the public. It establishes a performance accountability system that applies across the core programs, by generally applying six primary indicators of performance: Entry into unsubsidized employment at two points in time, median earnings, attainment of postsecondary credentials, measurable skill gains, and effectiveness in serving employers. • Fosters regional collaboration to meet the needs of regional economies. WIOA promotes alignment of workforce development programs with regional economic development strategies to meet the needs of local and regional employers. • Enhances access to high quality services through the network of one-stop delivery system. WIOA helps job seekers and employers acquire the services they need in centers and online, clarifies the roles and responsibilities of the one-stop partner programs, adds the TANF program as a required one-stop partner unless the Governor objects, requires competitive selection of one-stop operators, and requires the use by the one-stop delivery system of a common one-stop delivery identifier or brand developed by the Secretary of Labor (‘‘American Job Center,’’ see Joint WIOA Final Rule). • Improves services to individuals with disabilities. WIOA stresses physical and programmatic accessibility, including the use of accessible technology to increase individuals with disabilities’ access to high quality workforce services. • Makes key investments for disconnected youth. WIOA emphasizes services to disconnected youth to prepare them for successful employment by requiring that a minimum of 75 percent of youth formula program funds be used to help OSY, in contrast to the 30 percent required under WIA. WIOA increases OSYs’ access to WIOA services, including pre-apprenticeship E:\FR\FM\19AUR6.SGM 19AUR6 56082 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations opportunities that result in registered apprenticeship. It adds a requirement that at least 20 percent of formula funds at the local level be used on work-based training activities such as summer jobs, OJT, and apprenticeship. • Helps employers find workers with the necessary skills. WIOA contributes to economic growth and business expansion by ensuring the public workforce system is job-driven— matching employers with skilled individuals. WIOA requires Local WDBs to promote the use of industry and sector partnerships that include key stakeholders in an industry cluster or sector that work with public entities to identify and address the workforce needs of multiple employers. Additionally, successful implementation of many of the approaches called for within WIOA, such as career pathways and sector strategies, require robust relationships across programs and with businesses, economic development, education and training institutions, including community colleges and career and technical education, local entities, and supportive services agencies. mstockstill on DSK3G9T082PROD with RULES6 C. Workforce Innovation and Opportunity Act Rulemaking Process Since the enactment of WIOA, the Department has used a variety of means to coordinate with other Federal agencies that have roles and responsibilities under the Act. The Department works closely with staff at ED and the Department of Health and Human Services (HHS) on all shared policy and implementation matters. Key areas of collaboration include the Unified State Plan, performance reporting, one-stop service delivery, and services to disconnected youth and to individuals with disabilities. WIOA created an opportunity to enhance coordination and collaboration across other Federal programs through the Combined State Plan and the Department meets with the other Federal agencies regarding those plans. Before publishing the WIOA NPRM (80 FR 20690, Apr. 16, 2015), the Department solicited broad input through a variety of mechanisms including: • Issued Training and Employment Notice (TEN) No. 05–14 to notify the public workforce system that WIOA was enacted, accompanied by a statutory implementation timeline, a fact sheet that identified key reforms to the public workforce system, and a list of frequently asked questions. • Issued TEN No. 06–14 to announce a series of webinars to engage WIOA VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 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 (DOL.WIOA@dol.gov); • 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 onestop partners, employers, and performance staff. This included a town hall with INA leaders and membership organizations serving Indians and Native Americans, Hawaiians, and Alaskan Natives as well as a formal consultation with members of the Native American Employment and Training Advisory Council to the Secretary of Labor. • Conducted readiness assessments to implement WIOA in all States and 70 local workforce areas to inform technical assistance. Since the DOL WIOA NPRM was published, the Department has issued additional WIOA guidance using various mechanisms including the following: • Issued numerous pieces of official guidance to the public workforce system on policies related to WIOA implementation (some jointly with ED), including ‘‘Vision for the One-Stop Delivery System under WIOA’’ (Aug. 13, 2015) and TEGL No. 14–15, ‘‘Workforce Innovation and Opportunity Act (WIOA) Requirements for Unified and Combined State Plans.’’ See http://wdr.doleta.gov/ directives/All_WIOA_Related_ Advisories.cfm. • Provided on-going technical assistance to the public workforce system in the form of Frequently Asked Questions. See https://www.doleta.gov/ wioa/FAQs.cfm. • Developed a network of peer learners titled the Innovation and Opportunity Network (ION) that is designed to help all levels of workforce development professionals, stakeholders, and partners connect with others throughout the public workforce PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 system who are working to implement WIOA. ION’s in-person collaboration is provided through the Department’s regional Federal Project Officers, and regional meetings with State and local stakeholders. Regarding online collaboration, the ION Web site provides webinars, quick start action planners, podcasts from voices in the field describing their experiences in implementation, and other online resources. • Conducted, in conjunction with ED and HHS, webinars for stakeholders on a variety of topics, including: Credentials that Count for Youth (Apr. 29, 2015); ION (May 13 and June 3, 2015); Firing Up Youth Standing Committees (May 27, 2015); Making the Shift—Successfully Leveraging InSchool Youth (ISY) and OSY Resources and Services (June 24, 2015); WIOA Act Now Series: Partnerships in Action (July 1, 2015); Webinar Series Act Now: Governance, Leadership, and Building a Strategic Board (July 15, 2015); Collaborative Partnerships Serving Youth wish Disabilities (July 29, 2015); Customer-Centered Design Implementation WIOA (July 29, 2015); WIOA Eligible Training Provider Provisions: The First Year (Aug. 5, 2015); WIOA Performance Accountability Reporting Requirements—Overview of Layout and Templates (Aug. 12 and 13, 2015); Career Pathways for Youth (Aug. 26, 2015); Proposed Information Collection: Required Elements for Submission of the Unified or Combined State Plan and Plan Modifications Under WIOA (Aug. 27, 2015); Implementing WIOA in Rural Areas (Sept. 30, 2015); DEI Lessons Learned for WIA/WIOA: How Integrated Resource Teams Achieved WIA Outcomes for Populations that Experience Multiple Challenges to Employment and Implications for WIOA (Oct. 22, 2015); ApprenticeshipUSA Online Toolkit: A New Tool to Advance Apprenticeship Under WIOA (Oct. 26, 2015); Partnership Between WIOA and TANF to Serve Youth (Oct. 28, 2015). Workforce Innovation and Opportunity Act Information Collection Requests There are two new Information Collection Requests (ICRs) and six existing OMB-approved information collections that are being revised as part of this DOL WIOA Final Rule. Section V.B of the NPRM (Paperwork Reduction Act) included descriptions of the new ICRs and how the proposal would change each of the existing information collections. Section VI.D of this Final Rule (Paperwork Reduction Act) provides summary information about the public comments received on these E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations ICRs and details the final burden estimates for the revised information collections. Soon after publication of the DOL WIOA NPRM and the Joint WIOA NPRM, DOL and ED published a notice in the Federal Register announcing the joint ICR for the WIOA Performance Management, Information, and Reporting System (80 FR 43474, July 22, 2015) and requested comments on this ICR during a 60-day public comment period (hereinafter ‘‘WIOA Joint Performance ICR’’) (see https:// www.regulations.gov/ #!docketDetail;D=ETA-2015-0007). On September 1, 2015, DOL solicited comments on its own WIOA performance accountability ICR to require the following programs to report on a standardized set of data elements through the WIOA Workforce Performance Accountability, Information, and Reporting System: WIOA adult, dislocated worker, and youth, ES, National Farmworker Jobs, Trade Adjustment Assistance, YouthBuild, INA, and the Jobs for Veterans’ State Grants (80 FR 52798) (hereinafter ‘‘DOL Performance ICR’’) (see https://www.regulations.gov/ #!docketDetail;D=ETA-2015-0008). On April 16, 2015, ED solicited comments on its ICR related to the VR program Case Service Report (RSA–911) to require VR agencies to report data required under sec. 101(a)(10) of the Rehabilitation Act of 1973, as amended by WIOA, as well as performance accountability data under title I of WIOA (hereinafter ‘‘RSA–911’’). DOL and ED received 112 public comment submissions in response to the WIOA Joint Performance ICR, DOL received public comments on the DOL Performance ICR, and ED received public comments on the RSA–911, respectively. The Departments address those comments in the final WIOA Joint Performance and DOL WIOA ICRs. On August 6, 2015, the U.S. Departments of Labor, Education, Health and Human Services, Agriculture, and Housing and Urban Development proposed a new information collection regarding required elements for submission of the Unified or Combined State Plan and Plan modifications under WIOA (hereinafter ‘‘WIOA State Plan ICR’’) (80 FR 47003) (see https:// www.regulations.gov/ #!docketDetail;D=ETA-2015-0006). The WIOA State Plan ICR received a total of 16 public comments. These public comment submissions informed the development of the final WIOA State Plan ICR, which OMB approved on February 19, 2016. See http:// VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 www.reginfo.gov/public/do/PRASearch (ICR Reference No. 201601–1205–001). D. Legal Basis On July 22, 2014, the President signed WIOA (Pub. L. 113–128) into law. WIOA repeals WIA (29 U.S.C. 2801 et seq.). As a result, the WIA regulations no longer reflect current law. Section 503(f) of WIOA required that the Department issue an NPRM and then a Final Rule that implements the changes WIOA makes to the public workforce system in regulations. Therefore, the Department has developed and issued this Final Rule that implements WIOA. The Department has issued regulations regarding the WIOA sec. 188 nondiscrimination and equal opportunity provisions through separate rulemaking. See 80 FR 43872 (July 23, 2015) (establishing WIOA sec. 188 implementing regulations at 29 CFR part 38); 81 FR 4494 (Jan. 26, 2016) (proposing updates to 29 CFR part 38 consistent with current equal opportunity law). IV. Public Comments Received on the Notice of Proposed Rulemaking The Department’s NPRM to implement titles I and III of WIOA was published on April 16, 2015 (80 FR 20690). During the 60-day public comment period, the Department received a total of 767 public comments on the WIOA NPRM. In addition to these submissions, the Department also considered portions of 84 public comment submissions from the Joint WIOA NPRM docket that the Department determined related to the DOL WIOA NPRM. The Joint WIOA NPRM, which proposed regulations to implement jointly administered activities authorized under WIOA title I, was also published on April 16, 2015 (80 FR 20574). General Comments Comments: Several commenters expressed general support for the proposed regulation, commenting that the regulations would increase employment, make the United States more competitive, lead to higher wages, and produce other benefits. Some of these commenters expressed confidence that that the Department can deliver on this proposal, and that the associated expense is necessary. Several comments made general positive remarks about WIOA, and specifically cited an emphasis on one or more specific aspects of the law, such as adult education, college and career readiness, strengthening connections among programs and recognizing the role of distance learning and technology in PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 56083 reaching broader audiences. The commenters suggested that WIOA provides adequate flexibility to accommodate differences among States (e.g., size, population density and population diversity. Some commenters discussed workforce developmentrelated services currently provided or cited statistics that they asserted illustrate the current or historical use of the public workforce system in terms of services and participant demographics. For example, one organization cited statistics regarding which aspects of titles I and II are being used by LEP individuals. Department Response: Since these comments require no response, they are not addressed in this DOL WIOA Final Rule. No submissions expressed general opposition to the proposal. Instead, many commenters discussed their disagreement with specific aspects of the proposal. These comments are addressed in the associated and appropriate sections of the section-bysection discussion of the Final Rule (see section V below). Requests To Extend the Comment Period Comments: A few commenters requested a 60-day extension of the comment period. The commenters cited the size and complexity of the five proposed NPRMs implementing WIOA. Department Response: While the Department recognizes that the issues addressed in the DOL WIOA NPRM are complex and important, the Department concluded that the 60-day comment period was sufficient to provide the public a meaningful opportunity to comment, and this conclusion is supported by the hundreds of complex and thoughtful comments received. Additionally, the NPRM was available to the public for a preliminary review on the Federal Register Web site upon submission of the NPRMs to the Federal Register, which was several weeks prior to publication, thereby providing stakeholders additional time prior to the publication date. Coordination and the WIOA Rulemaking Process Comments: A commenter urged the Departments of Labor and Education to increase collaboration, including more coordinated implementation guidance, providing incentives for programs within the two Departments to participate in a Combined Plan, and affording flexibility in use of funding streams and on performance accountability. Two commenters said that aspects of the proposed regulations suggest lesser coordination of WIOA E:\FR\FM\19AUR6.SGM 19AUR6 56084 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations guidance and oversight across Departments than envisioned by WIOA. Further, these commenters expressed concern that the lack of specificity in areas of the proposed regulations could result in the issuance of Federal guidance on levels that should be in regulation to ensure that States and local areas have an opportunity to comment. Department Response: The Departments of Labor and Education have taken great care to coordinate the issuance of collaborative guidance regarding WIOA implementation, including TEGL No. 14–15, ‘‘Workforce Innovation and Opportunity Act (WIOA) Requirements for Unified and Combined State Plans’’; TEGL No. 04–15, ‘‘Vision for the One-Stop Delivery System under the Workforce Innovation and Opportunity Act (WIOA).’’ The Departments will continue to issue guidance collaboratively. As appropriate, the Department will reach out and consult other stakeholders as it develops guidance and technical assistance. As the Department implements WIOA, it anticipates lots of stakeholder outreach, building on our long established relationships. The Department will continue this robust outreach throughout implementation. V. Section-by-Section Discussion of Public Comments and Final Regulations The analysis in this section provides the Department’s response to public comments received on the DOL WIOA NPRM. If a proposed CFR section is not addressed in the discussion below, it is because the public comments submitted in response to the NPRM did not substantively address that specific section and no changes have been made to the regulatory text. Further, the Department received a number of comments on the NPRM that were outside the scope of the proposed regulation and the Department offers no response to such comments. Lastly, the Department has made a number of nonsubstantive changes to correct grammatical and typographical errors to improve the readability and conform the document stylistically that are not discussed in the analysis below. mstockstill on DSK3G9T082PROD with RULES6 A. Part 603—Federal-State Unemployment Compensation Program Relationship Between 20 CFR part 603 and WIOA The disclosure of wage record data is governed by 20 CFR part 603, which establishes requirements for maintaining the confidentiality of unemployment compensation (UC) information along with standards for VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 mandatory and permissive disclosure of such information. Part 603 permits State agencies to disclose confidential unemployment compensation information—including ‘‘wage information’’ (referred to in § 603.2(k))— to ‘‘public officials’’ (defined at § 603.2(d)) under limited circumstances (under § 603.5), and authorizes such public officials in turn to use the information to meet certain Federal requirements in the performance of their official duties. The Department has decided to amend 20 CFR part 603 as proposed in the NPRM. These Final Rules amend current regulations to clarify and expand, in a limited fashion, those public officials with whom the State may share certain confidential information to carry out requirements under WIOA. The regulations enumerate certain additional public officials who may access confidential State wage records for the State’s performance reporting. Ensuring such access to these State records will allow State agencies to manage better the information for the purpose of making Federally required reports on certain program outcomes, and to cooperate more effectively and be more informative with respect to Federal program evaluations. WIOA sec. 116(i)(2) and 20 CFR 677.175(a) (see Joint WIOA Final Rule) require State workforce, training, and education programs to use quarterly wage records to measure the progress of the State on State and local performance accountability measures. The Department interpreted at 20 CFR 677.175(b) the reference to ‘‘quarterly wage records’’ in WIOA sec. 116(i)(2) to require States to use the confidential UC information in the employer-provided wage reports collected under sec. 1137 of the Social Security Act (SSA), 42 U.S.C. 1320b–7. These are the reports that the State UC agency obtains from employers for determining UC tax liability, monetary eligibility, or for cross-matching against State UC agencies’ files to determine if improper payments have been made. The regulation at 20 CFR 677.175(b) (see Joint WIOA Final Rule) defines ‘‘quarterly wage record information’’ to include three data elements or categories of data elements: (1) A program participant’s Social Security Number (SSN); (2) information about the wages that program participants earn after exiting from the program; and (3) the name, address, State, and (when known) Federal Employer Identification Number (FEIN) of the employer paying those wages. The ‘‘wage information’’ defined in § 603.2(k)—which the PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 regulations allow State agencies to disclose under limited circumstances— includes the three data categories or elements (wages, SSN(s), employer information) that States must use as their data source for State and local performance reporting under WIOA. These terms are different but refer to the same information: wage records. As explained in greater detail below, in the NPRM the Department proposed to change and expand § 603.2 (definition of ‘‘public official’’) and change § 603.5 (governing disclosures to public officials) to help States comply with WIOA’s performance requirements, including the performance reports of the States, local areas, and Eligible Training Providers (ETPs). In addition, the Department amended § 603.6 to add a provision requiring disclosure of confidential UC information to a Federal official (or an agent or contractor of a Federal official) requesting such information to meet the new statutory requirement on State cooperation with certain DOL and ED evaluations. These changes facilitate States’ obligations to report on performance through the use of quarterly wage records, and to cooperate in DOL and ED evaluations. The amendments to 20 CFR part 603 only relate to State agency disclosures necessary to comply with certain provisions of WIOA. Much of part 603 was left intact and was not considered for amendment in the NPRM, the purpose of which was to implement WIOA, not to otherwise impact partner programs. The Department invited comments on the proposed amendments to part 603, but did not consider comments on other portions of part 603 or other UC matters that are outside the scope of the proposed rulemaking. The Department received 22 comments in response to the proposed changes to part 603. While normally the Department does not discuss comments that are outside the scope of the amendment, the Department notes that only the portions of part 603 that are being amended were part of the NPRM and open for comment. The existing data protections required under other portions of part 603 will continue and will be enforced. These required protections, laid out in §§ 603.8, 603.9, 603.10, and 603.12, ensure that confidential UC data are secure. These portions of part 603 were not considered for amendment and so were excluded from the NPRM. The analysis that follows provides the Department’s response to public comments received on the proposed part 603 regulations. If a section is not addressed in the discussion below, it is because the public comments submitted E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 in response to the NPRM did not substantively address that specific section and no changes have been made to the regulatory text. Further, the Department received a number of comments on this part that were outside the scope of the regulation and the Department offers no response. Lastly, the Department has made a number of non-substantive changes to correct grammatical and typographical errors to improve the readability and conform the document stylistically that are not discussed in the analysis below. Section 603.2 What definitions apply to this part? Definition of ‘‘public official’’: The changes to this section amend the definition of ‘‘public official’’ as used throughout part 603. The changes to § 603.2(d), to facilitate State compliance with WIOA’s reporting requirements, clarify and expand the definition of who and what entities are considered ‘‘public officials.’’ The amendments to § 603.2(d) clearly enumerate that ‘‘public official’’ includes officials from public postsecondary educational organizations; State performance accountability and customer information agencies; the chief elected officials of local areas (as that term is used in WIOA sec. 106); and a public State educational authority, agency, or institution. Some of these officials already would meet the definition of ‘‘public official’’ under current § 603.2(d); however, the amendments make this clear. Comments: The Department received some comments suggesting clarification of the definition and application of the phrase ‘‘chief elected official.’’ Department Response: No changes were made to the regulatory text in response to these comments. Such clarification is best accomplished through guidance and technical assistance as needed. Disclosure to public postsecondary institutions: Section 603.2(d)(2) permits disclosure to public postsecondary educational institutions, regardless of how those institutions are structured or organized under State law. Section 603.2(d)(2) clearly delineates the types of postsecondary educational institutions that are allowed access to confidential UC information: (1) Public postsecondary educational institutions that are part of a State’s executive branch, i.e., that derive their authority either directly from the Governor or from an entity (State WDB, commission, etc.) somewhere in that line of authority (see § 603.2.(d)(2)(i)); (2) Public postsecondary educational institutions that are independent of the VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 State’s executive branch, which means those institutions whose directors derive their authority either directly from an elected official in the State other than the Governor or from an entity (again, a State WDB, commission, or other entity) in that line of authority. This covers any public postsecondary educational institution established and governed under State law, for example, a State Board of Regents (see § 603.2(d)(2)(ii)); (3) State technical colleges and community colleges, which may also be covered under (1) or (2) (see § 603.2(d)(2)(iii)). Section 603.2(d)(5) permits disclosure to a public State educational authority, agency, or institution; the Department considers the heads of public institutions deriving their authority from a State educational authority or agency to be ‘‘public officials’’ for purposes of part 603. These changes are designed to help States comply with WIOA’s requirement to use wage records to measure performance (WIOA sec. 116(i)(2)) and to facilitate the performance reporting required for ETPs under secs. 116(d) and 122 of WIOA. As long as the recipients of the data adhere to all of the requirements in 20 CFR part 603, this section permits States to make these disclosures to comply with WIOA requirements for Federal, State, or local government reporting on program outcomes and for other specified purposes. Comments: The Department received several comments requesting that nonpublic educational institutions, community-based organizations, and for-profit educational institutions be added to the list of entities included in the term ‘‘public official.’’ Department Response: As explained in the NPRM, non-public educational institutions, including non-profit or forprofit educational institutions, community-based organizations, and eligible training providers that are not subject to the authority of the executive branch of a State or other elected official, are not permitted to obtain confidential UC information, including wage information, under this authority. In first proposing the ‘‘public official’’ exception to the UC confidentiality requirement in 69 FR 50,022, 50,027 (2004), the Department explained that ‘‘there is less risk of unauthorized use or disclosure of UC information if responsibility for safeguarding confidentiality rests within the executive or legislative branches of government.’’ Any disclosures of confidential UC information to those entities for purposes of complying with PO 00000 Frm 00015 Fmt 4701 Sfmt 4700 56085 WIOA must be authorized under an exception contained in § 603.5 other than § 603.5(e). The Department is issuing guidance to address how nonpublic entities that need wage record information to complete reports required under WIOA will be able to obtain access to aggregate wage record information for this purpose. No changes were made to the regulatory text in response to these comments. Section 603.6(b)(8) What disclosures are required by this subpart? Section 603.6(b)(8) makes the disclosure of confidential UC information mandatory for certain Federal evaluations when the disclosure does not interfere with the efficient administration of State UC law. The addition of § 603.6(b)(8) implements the requirement that States cooperate in conducting evaluations under the authority of either the Secretary of Labor or the Secretary of Education under WIOA sec. 116(e)(4). This cooperation, defined in WIOA, must include ‘‘the provision of data (in accordance with appropriate privacy protections established by the Secretary of Labor)’’; this includes 20 CFR part 603 and any other privacy protections the Secretary may establish. The final regulation requires disclosure of confidential UC information to Federal officials or their agents or contractors, requesting such information in the course of an evaluation covered by WIOA secs. 116(e)(4) and 116(e)(1) to the extent that such disclosure is ‘‘practicable.’’ The Department interprets ‘‘to the extent practicable’’ to mean that the disclosure would not interfere with the efficient administration of State UC law. This interpretation is consistent with the application of regulations that apply to disclosures under § 603.5. The introductory language to § 603.5 provides that, in situations where the disclosure of confidential UC information is permitted, the State may make the disclosure only if doing so would not interfere with the efficient administration of State UC law. In effect, § 603.6(b)(8) requires that State UC agencies make disclosures to DOL and ED for the purposes of the Departments’ conducting evaluations, when the disclosures do not interfere with the efficient administration of the State UC law. The Department expects this cooperation and related disclosures to include responding to surveys and allowing site visits, as well as disclosing confidential UC information needed for evaluations. Comments: The Department received two comments that raised concerns that the adoption of § 603.6(b)(8) would E:\FR\FM\19AUR6.SGM 19AUR6 56086 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 allow the creation of a national UC database and require a State’s ‘‘entire UI file.’’ Department Response: The information required to be disclosed for a given evaluation is considerably less than what may be included in a State’s UC file. Additionally, these disclosures are required only for research, evaluation, and investigation purposes found in WIOA, the Rehabilitation Act of 1973, and the Wagner-Peyser Act, as well as evaluations under other laws. The information disclosed may not be used for purposes other than that for which it was obtained. These disclosures are subject to the appropriate privacy and confidentiality protections found throughout 20 CFR part 603. Research projects, evaluations, and investigations have set time frames for which data are being reviewed and are generally limited in scope. In general, the Department would not be in possession of any of the information requested under the disclosure provisions at § 603.6(b)(8). The researcher, evaluator, or investigator would be in possession of the information and use it for their stated purposes under proper authority or would be subject to sanctions for breach of the agreement under which the data were obtained. No changes were made to the regulatory text in response to these comments. B. Part 675—Introduction to the Regulations for the Workforce Development Systems Under Title I of the Workforce Innovation and Opportunity Act Part 675 discusses the purpose of title I of the WIOA, explains the format of the regulations governing title I, and provides additional definitions which are not found and defined in WIOA. Section 675.100 describes the purposes of title I of WIOA. Section 675.200 outlines the structure of the WIOA regulations. Section 675.300 provides a list of definitions that are applicable across the WIOA regulations. Included in this list of definitions, the Department includes the following relevant definitions from the Office of Management and Budget’s (OMB) ‘‘Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards’’ found at 2 CFR part 200: Contract, Contractor, Cooperative Agreement, Federal Award, Federal Financial Assistance, Grant Agreement, Non-Federal Entity, Obligations, PassThrough Entity, Recipient, Subaward, Subrecipient, Unliquidated Obligations, and Unobligated Balance. All other definitions at 2 CFR part 200 apply to VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 these regulations where relevant, but have not been included in this section. Contract. The definition for ‘‘contract’’ incorporates the definition established by OMB at 2 CFR 200.22. Specifically, the term ‘‘contract’’ refers to the legal document that a non-Federal entity uses to purchase property or services used to carry out its duties under a grant authorized under WIOA. If the Department determines that a particular transaction entered into by the entity is a Federal award or subaward it will not be considered a contract. Contractor. The definition of ‘‘contractor’’ incorporates the definition contained in OMB’s Uniform Guidance at 2 CFR 200.23. The Uniform Guidance has replaced the term ‘‘vendor’’ with the term ‘‘contractor.’’ As used in these regulations, the term ‘‘contractor’’ includes entities that WIOA refers to as ‘‘vendors.’’ Additionally, it is important to note that contractors are not subrecipients. Additional guidance on distinguishing between a contractor and a subrecipient can be found at 2 CFR 200.330. Cooperative Agreement. The definition of ‘‘cooperative agreement’’ incorporates the definition contained in the Uniform Guidance at 2 CFR 200.24. Department or DOL. This term refers to the United States Department of Labor, its agencies, and organizational units. Employment and Training Activity. As used in these regulations, the term ‘‘employment and training activity’’ refers to any workforce investment activities carried out for an adult or dislocated worker under sec. 134 of WIOA and 20 CFR part 678 (see Joint WIOA Final Rule). Equal Opportunity (EO) Data. This term refers to the data required by the Department’s regulations at 29 CFR part 37 implementing sec. 188 of WIOA. ETA. This term refers to the Employment and Training Administration, which is an agency of DOL, or its successor organization. Federal Award. This definition incorporates the definition in the Uniform Guidance at 2 CFR 200.38. Federal Financial Assistance. The definition of ‘‘Federal financial assistance’’ incorporates the definition contained in the Uniform Guidance at 2 CFR 200.40. Grant or Grant Agreement. The definition of ‘‘grant agreement’’ incorporates the definition contained in the Uniform Guidance at 2 CFR 200.51. Because both WIOA and these regulations use ‘‘grant’’ and ‘‘grant agreement’’ interchangeably, the PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 inclusion of both terms here clarifies that the terms are synonymous. Grantee. The definition of ‘‘grantee’’ refers to a recipient of funds under a grant or grant agreement. Grantees are also referred to as recipients in these regulations. Individual with a Disability. This definition uses the definition from sec. 3 of the Americans with Disabilities Act, as amended, and is further defined at 29 CFR 37.4. Labor Federation. This definition remains unchanged from the definition used in the regulations under WIA at 20 CFR 660.300. Literacy. The definition for ‘‘literacy’’ as used in these regulations is a measure of an individual’s ability to participate and successfully function both in the workplace and in society. Local WDB. This definition clarifies that the term ‘‘Local WDB’’ as used in these regulations refers to the Local Workforce Development Boards (WDB) established under WIOA sec. 107, to set policy for the local workforce development system. Non-Federal Entity. The definition of ‘‘non-Federal entity’’ incorporates the definition contained in the Department’s Exceptions to the Uniform Guidance at 2 CFR 2900.2. Obligations. The definition of ‘‘obligations’’ incorporates the definition contained in the Uniform Guidance at 2 CFR 200.71. Outlying Area. The term ‘‘outlying area’’ refers to those Territories of the United States which are not within the definition of ‘‘State,’’ including the U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and, in certain circumstances, the Republic of Palau. Pass-through entity. The definition of pass-through entity incorporates the definition in the Uniform Guidance at 2 CFR 200.74. Recipient. The definition of ‘‘recipient,’’ which is different than the current definition of recipient under WIA at 20 CFR 660.300, incorporates the definition in the Uniform Guidance at 2 CFR 200.86. Register. The definition of ‘‘register’’ means the point at which an individual seeks more than minimal assistance from staff in taking the next step towards self-sufficient employment. This is also when information that is used in performance information begins to be collected. At a minimum, individuals must provide identifying information to be registered. Secretary. This term refers to the Secretary of the U.S. DOL, or their officially delegated designees. E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations Secretaries. This term refers to the Secretaries of the U.S. DOL and the U.S. ED, or their officially designated designees. Self-Certification. The term ‘‘selfcertification’’ refers to the certification made by an individual that they are eligible to receive services under title I of WIOA. State. The term ‘‘State’’ refers to each of the several States of the United States, the District of Columbia, and the Commonwealth of Puerto Rico. State WDB. This definition clarifies that the term ‘‘State WDB’’ as used in these regulations refers to the State Workforce Development Boards (WDB) established under WIOA sec. 101. Subgrant or Subaward. This term incorporates the definition of ‘‘subaward’’ in the Uniform Guidance at 2 CFR 200.92. This term replaces the term ‘‘subgrant’’ found in WIA at 20 CFR 660.300. Because both WIOA and these regulations use ‘‘subgrant’’ and ‘‘subaward’’ interchangeably, the inclusion of both terms here clarifies that the terms are synonymous. Subrecipient. The definition of ‘‘subrecipient’’ incorporates the definition in the Uniform Guidance at 2 CFR 200.93. This term is synonymous with the term ‘‘subgrantee.’’ Unliquidated Obligations. The definition of ‘‘unliquidated obligations’’ incorporates the definition contained in the Uniform Guidance at 2 CFR 200.97. Unobligated Balance. The definition of ‘‘unobligated balance’’ incorporates the definition in the Uniform Guidance at 2 CFR 200.98. Wagner-Peyser Act. As used in these regulations, the term ‘‘Wagner-Peyser Act’’ refers to the Wagner-Peyser Act passed on June 6, 1933, and codified at 29 U.S.C. 49 et seq. WIA Regulations. The term ‘‘WIA Regulations’’ as used in this regulation or subsequently by the Department refers to the regulations 20 CFR parts 660 through 672. This definition is necessary because, as described in the introduction to these regulations, the Department has chosen to retain the WIA regulations at parts 660 through 672 of title 20 of the CFR. WIOA Regulations. This term, as used in this regulation or generally by the Department means those regulations in 20 CFR parts 675 through 687, the Wagner-Peyser Act regulations in 20 CFR part 652, subpart C, and the regulations implementing WIOA sec. 188 in 29 CFR part 37. Workforce Investment Activities. The term ‘‘workforce investment activities’’ is a general term that describes the broad array of activities and services provided to eligible adults, dislocated VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 workers, and youth under secs. 129 and 134 of title I of WIOA. Youth Workforce Investment Activity. The term ‘‘youth workforce investment activity’’ refers to those activities carried out for eligible youth that fall within the broad definition of ‘‘workforce investment activity.’’ Section 675.100 What are the purposes of title I of the Workforce Innovation and Opportunity Act? Comments: An advocacy organization urged the Department to include in § 675.100 a reminder to States and employers of their existing obligations under the Americans with Disabilities Act (ADA), notwithstanding anything else reflected in the WIOA regulations. Department Response: The Department takes nondiscrimination seriously and addresses it in the regulation at 20 CFR part 38. No change to the regulatory text was made in response to this comment. Section 675.200 What do the regulations for workforce development systems under title I of the Workforce Innovation and Opportunity Act cover? Comments: Some commenters provided feedback on technical corrections for this section, while others provided comments that addressed specific provisions found elsewhere in this regulation. Department Response: Technical corrections were made to this section. In addition, several comments that referenced this section were more appropriately addressed in other parts of the regulation, and have been so addressed. Section 675.300 What definitions apply to these regulations? Comments: Some commenters suggested that the Department should provide additional detail on what is involved in a requirement to consult. These commenters generally emphasized the importance of meaningful consultation. For example, referring to the proposed definition of consultation, a Local WDB commented that ‘‘exchanging viewpoints and ideas’’ is only helpful when both parties feel equally empowered to influence the outcome of the discussion. Two commenters expressed concern that the requirement to consult could be interpreted to mean just share information or whatever else is in the best interest of the entity required to consult. Another commenter suggested that consultation should be defined as strongly as possible to stress advanced notice, robust conversation, and collaborative efforts with local areas PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 56087 prior to the State’s decision-making process. Some commenters made specific suggestions for what the Department should or could include in a definition of consultation, including active engagement, good faith discussion and decision-making agreement and consent from local elected officials, the Local WDB, and the State WDB, provision of written notice of intended changes with a cost-benefit analysis and a specific timeframe for public comment, process to contest decisions through a formal grievance process, requiring consultation with the largest and smallest local areas in the State, and requiring State WDB members to visit and engage local areas. Department Response: The Department agrees with the need to emphasize meaningful consultation and revised the definition of consultation in this section to emphasize convening, robust conversation, and an opportunity for all stakeholders to share their thoughts and opinions. In addition, some of the specific suggestions not incorporated into this definition are addressed in other parts of this regulation and the Joint WIOA Final Rule. For example, 20 CFR part 676 requires public comment on Unified and Combined State Plans (see Joint WIOA Final Rule), and part 679 of this regulation requires governors to appoint only persons who have been nominated by certain stakeholder organizations to certain positions on the State WDB. Comments: A commenter recommended clearly defining ‘‘career pathways’’ in this regulation in such a way to ensure flexibility in deviation from a pathway if education and employment requirements are met. Department Response: WIOA secs. 3(7)(A) through (G) define career pathways as a combination of rigorous high-quality education, training, and other services that meet specified guidelines. The Department agrees that additional guidance would help State and Local WDBs implement career pathways. With the Department of Education, the Department has published a Career Pathways Toolkit, which can be found at www.DOLETA.gov, and continues to provide guidance and technical assistance on the implementation of career pathways under WIOA. Comments: Asserting that neither WIOA sec. 3 nor the WIOA NPRMs include a definition of ‘‘family,’’ some commenters suggested that the Department provide clarification on this term. Department Response: The Department agrees that ‘‘family’’ is a term that should be defined in this E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56088 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations regulation and has added a definition of family that is based on the WIA definition and has been updated to reflect the Supreme Court decision in United States v. Windsor, 133 S. Ct. 2675 (2013). While this definition applies to all parts of this regulation, the Department notes that part 681 of this regulation adds a reference to dependents, per specifications of the Internal Revenue Service, when this definition is considered as part of a determination of eligibility to participate in the WIOA youth programs described in that part. Comments: Several commenters recommended adding to this part definitions of terms not addressed above or in the NPRM. Most of them were related to indicators of performance of WIOA title I programs, which are addressed in 20 CFR part 677 of the Joint WIOA Final Rule. Several other comments focused on defining or revising definitions of terms that are used in regulations applying solely to Department of Education programs. The Department worked with the Department of Education to ensure they were addressed where they most appropriately fit, which was often in the Joint WIOA Final Rule and sometimes in specific parts of this regulation. Department Response: The Department considered these comments and addressed them in other parts of this regulation, as appropriate, and worked with the Department of Education to address these comments in the most relevant part of the most appropriate regulation. For example, some commenters suggested definitions of terms related to performance under WIOA title I programs are addressed in 20 CFR part 677 (see Joint WIOA Final Rule) and comments related to serving youth under WIOA title I programs are addressed in part 681. In addition, the Department realized that the NPRM contained minor inconsistencies in how it defined ‘‘individual with a disability’’ across parts. The Department therefore edited such definitions using the statutory definition at WIOA sec. 3(25), which uses the definition from the Americans with Disabilities Act (ADA), to make them consistent with each other. The Department interprets all references to the ADA to include case law and interpretive guidance. The Department also changed the terms ‘‘workforce innovation and opportunity system,’’ and ‘‘workforce investment system’’ to ‘‘workforce development system’’ throughout this rule. This was done to enhance consistency across parts and avoid confusion, and to be emphasize VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 the role of workforce development boards in this system. C. Part 679—Statewide and Local Governance of the Workforce Development System Under Title I of the Workforce Innovation and Opportunity Act 20 CFR part 679 addresses the Statewide and Local Governance provisions of the Workforce Development System under title I of WIOA. This part includes provisions on the State WDB, the Workforce Innovation and Opportunity Act Local Governance (Workforce Development Areas), Local WDBs, Regional and Local Plans, and Waivers/Workforce Flexibility Plans. The analyses that follows provides the Department’s response to public comments received on the proposed Statewide and Local Governance regulations. If a section is not addressed in the discussion below, it is because the public comments submitted in response to the NPRM did not substantively address that specific section and no changes have been made to the regulatory text. Further, the Department received a number of comments on this part that were outside the scope of the regulation and the Department offers no response. Lastly, the Department has made a number of non-substantive changes to correct grammatical and typographical errors to improve the readability and conform the document stylistically that are not discussed in the analysis below. 1. Subpart A—State Workforce Development Board Subpart A sets forth the conditions under which the Governor must establish the State WDB. 20 CFR 679.100(a) through (e) explain the purpose of the State WDB. The State WDB represents a wide variety of individuals, businesses, and organizations throughout the State. WIOA is designed to help job seekers and workers access employment, education, training, and support services needed to succeed in the labor market, and match employers with the skilled workers needed to compete in the global economy. The State WDB has the critical role of leading and guiding the State’s implementation of WIOA, which requires aligning Federal investments in job training, integrating service delivery across programs, and ensuring that workforce investments are job-driven and match employers with skilled workers. The State WDB serves as a convener of State, regional, and local workforce system partners to enhance the capacity and performance PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 of the workforce development system and align and improve employment, training, and education programs, and through these efforts, promote economic growth. The State WDB’s role as a strategic convening place where key stakeholders and partnerships come together can be accomplished only if each State WDB member is an active participant in the business of the board. State WDB members must establish a platform in which all members actively participate and collaborate closely with the required partners of the workforce development system, and other stakeholders, including public and private organizations. This engagement is crucial in the State WDB’s role to help integrate and align a more effective jobdriven workforce development system that invests in the connection between education and career preparation. Overarching Comments on State WDBs Comments: Commenters expressed concern with the WIOA implementation timelines for establishing compliant State WDBs. They said that States should have more flexibility in the time allowable to become compliant with new requirements, including new membership requirements and the new State WDB role, which could require changes by the State legislature. Department Response: WIOA called for the implementation of most of WIOA, including the State WDB requirements, by July 1, 2015. State WDB requirements are outlined in WIOA sec. 101 and § 679.100. The Department issued operating guidance in TEGL No. 27–14 on April 15, 2015, titled ‘‘Workforce Innovation and Opportunity Act Transition Authority for Immediate Implementation of Governance Provisions.’’ This guidance can be found at http://wdr.doleta.gov/ directives/All_WIOA_Related_ Advisories.cfm. Comments: One commenter was concerned with potential political influence the Governor holds over State and Local WDBs as well as procurement requirements. Department Response: WIOA vests certain authority with the Governor, including State WDB appointments, and the Department has no authority to change it. WIOA sec. 107(e) requires Boards to operate in a transparent manner; §§ 679.140 and 679.390 set forth the parameters for State and Local WDBs to conduct business in an open and transparent manner. Transparency in operations also assures that all parties are held accountable to the public and can mitigate concerns of inappropriate influence. Transparency promotes E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 accountability and provides valuable information to citizens on the Federal, State, and local government’s activities. The State WDB must make available to the public on a regular basis, through electronic means and open meetings, information about State WDB activities such as the State Plan, modifications to the State Plan, board membership, the board’s by-laws, and the minutes of meetings. This information must be easily accessed by interested parties. Ensuring that this information is widely available promotes transparency and provides access to the public on how the State WDB works to align, integrate, and continuously improve the workforce development system. No change to the regulatory text was made in response to this comment. Comments: Another commenter recommended that developing an overarching vision for the workforce development system and monitoring of progress toward that vision should be a function of the State WDB. Department Response: These actions are a function of the State WDB. 20 CFR 679.100 implements WIOA sec. 101(d) and outlines the vision and purpose of the State WDB. Among other responsibilities, the State WDB is required to assist the Governor in the ‘‘development, implementation, and modification of the State Plan’’ (WIOA sec. 101(d)(1)) and to support the function of the public workforce system enumerated in WIOA sec. 101(d)(2) through (12). The State Plans must detail the State’s strategic workforce approach and vision as outlined in 20 CFR 676.100(a) (see Joint WIOA Final Rule) and no change to the regulatory text was made in response to this comment. Section 679.100 What is the purpose of the State Workforce Development Board? 20 CFR 679.100 implements WIOA sec. 101 and outlines the purpose of the State WDB. A key goal of Federallyfunded training programs is to get more U.S. workers jobs and marketable skills and support businesses to find workers with the skills that are needed. The State WDB is responsible for engaging employers, education providers, economic development, and other stakeholders to help the workforce development system achieve the purpose of WIOA and the State’s strategic and operational vision and goals outlined in the State Plan. The Department encourages the State to take a broad and strategic view when considering representatives of the State WDB, and also in establishing processes which it will use to include necessary VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 perspectives in carrying out State WDB functions. For example, alignment of required one-stop partner investments is essential to achieving strategic and programmatic alignment at the State, regional, and local level. Further, States are encouraged to examine factors like the natural bounds of regional economies, commuting patterns, and how economic sectors impact the State, which may benefit from inputs either from formal members of the board, or through other engagement. Broad geographic representation as well as a reflection of diversity of populations within the State is critical. Comments: A commenter emphasized the need for Boards to remain connected to local and regional programs, and another requested more information on how employer engagement would be measured and how a State WDB would know if their engagement was successful. This commenter suggested surveys of partners (both pre-WIOA and annually) to determine the level of engagement. Department Response: There is a primary indicator of performance in WIOA sec. 116(b)(2)(i)(vi) to gauge the system’s effectiveness in serving business. WIOA does not provide parameters for measuring the Board’s effectiveness in engaging employers. However, this engagement is crucial in the State WDB’s role to help integrate and align a more effective job-driven workforce development system that invests in the connection between education and career preparation. The Department will continue to provide technical assistance and guidance to Boards to assist their efforts to fulfill this vision. The Department envisions that the State WDB will serve as a convener of State, regional, and local workforce system partners to enhance the capacity and performance of the workforce development system; align and improve employment, training, and education programs, and through these efforts, promote economic growth. Comments: A commenter suggested that more information regarding the State Plan and how States will satisfy the needs of individuals with disabilities, and the specific performance metrics that will be used for systemic improvement be included in § 679.100. Department Response: State Plan requirements as a function of the State WDB are addressed in § 679.130. WIOA sec. 102 describes the requirements for the State Plan; State Plan requirements are also addressed in 20 CFR part 676, including requirements to address the needs of the State’s workforce and services to individuals with barriers to PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 56089 employment (see Joint WIOA Final Rule). No change to the regulatory text was made in response to this comment. Section 679.110 What is the State Workforce Development Board? Local Elected Officials Comments: Commenters citing the needs of large and diverse States that are concerned with adequate representation of local level interests recommended that Governors include the chief elected official from the smallest and largest workforce areas on the State WDB. Similarly, other commenters recommended that the local elected officials be increased from a minimum of two representatives to a percentage of the Board. Department Response: Both WIOA and the regulations offer the Governor the flexibility to ‘‘include other appropriate representatives and officials designated by the Governor’’ as detailed in § 679.110(b)(3)(iii)(B). The Governor has the flexibility to appoint more local elected officials to the State WDB as he/ she sees fit and a Governor may seek to have such officials represent the range of local government entities. The Department encourages the Governor to use this authority, which may include increasing the representation of CEOs, to ensure accurate representation of the interests of job seekers and businesses in the State. No change to the regulatory text was made in response to these comments. Representation of Core Programs Comments: Commenters opposed the Department’s interpretation of WIOA allowing for representation of multiple core programs by a single person (as proposed in § 679.110(b)(3)(iii)(A)) and indicated that this situation fails to adequately represent adult education. Some commenters called for specifically mandating the State director of adult education on the State WDB. Others were concerned that the Department’s interpretation does not satisfy the requirement to have a representative of the lead State official with primary responsibility for each of the core programs. Department Response: The Governor is responsible for ensuring adequate representation of the core programs, which the Department interprets to mean that the core program’s State WDB representative has not only primary responsibility for the program, but also the expertise to actively and meaningfully contribute to the State WDB’s understanding of the program’s role in the public workforce system, especially with regard to the strategic E:\FR\FM\19AUR6.SGM 19AUR6 56090 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 planning for that system, and in the development and implementation of the State Plan. The Department has added § 679.110(b)(3)(iii)(A)(1)(i) through (iii) to clarify that, for title I and WagnerPeyser Act programs, a single lead State official with primary responsibility for those programs may represent more than one of those programs. However, the WIOA title II and VR programs must have a single, unique representative. When appointing a board member to represent multiple core programs under § 679.110(b)(3)(iii), Governors should take into account the requirement that the representative has the primary responsibility for the core program which includes direct responsibility for, and understanding of, policy issues involving the core program and the public workforce system. The Department encourages Governors to ensure an ongoing role for all core programs to inform the Boards’ actions. Meeting these requirements may be achieved in a number of ways, such as directly appointing a State’s director for those core programs to the Board, gathering direct input from program administrators via a subcommittee or staffing structure, or frequent efforts to gather input. These provisions are intended to ensure that all core programs have meaningful input on the State WDB, but neither WIOA nor the regulation requires that the adult education director be appointed to the State WDB. The regulation is not changed to require a specific title be named as representative; however, representatives must meet the requirement of primary responsibility. The Department will issue guidance to support the implementation and maintenance of compliant State WDBs. Labor Union, Small Business, and Registered Apprenticeship Representation Comments: Comments on the membership requirements of representatives of labor organizations and registered apprenticeship included multiple suggestions for regulatory text changes. One commenter suggested changing ‘‘exists’’ in § 679.110(b)(3)(ii)(B) to ‘‘operating,’’ because ‘‘exists’’ could cause confusion. Another commenter suggested that the term ‘‘registered’’ precede apprenticeship, out of concern that the NPRM language would allow lowquality apprenticeship programs that are not registered be considered. Department Response: The Department disagrees that ‘‘exists’’ will cause confusion in reference to registered apprenticeship programs VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 available in the State. The Department agrees that the reference to apprenticeship should be changed to ‘‘registered apprenticeship’’ because references throughout WIOA are generally references to registered apprenticeship. No change to the regulatory text was made in response to these comments, with the exception of revising § 679.110(b)(3)(ii)(B) to refer to apprenticeship as ‘‘registered apprenticeship.’’ Comments: Commenters requested clarification of the total number of labor representatives required on the State WDB, and suggested labor representatives include employee representatives for non-unionized employees. Department Response: WIOA requires at least two representatives of labor organizations nominated by State labor federations, and a representative of a registered apprenticeship program. Because State WDB members may not serve multiple roles for the categories included in WIOA sec. 101(b)(1)(C)(ii) (as outlined in WIOA sec. 101(b)(3)(B)), the Department’s proposed language clarified that, at minimum, two labor representatives and one joint labormanagement of a registered apprenticeship program are required. The State WDB must include not less than 20 percent representation of the workforce, including at a minimum these three representatives. In addition to these representatives, WIOA sec. 101(b)(1)(C)(iii)(II) and § 679.110(b)(3)(iii)(B), give the Governor the flexibility to appoint ‘‘other representatives and officials as the Governor may designate.’’ This would allow the Governor to designate nonunion employee organizations as additional members of the State WDB. No change to the regulatory text was made in response to these comments. Nominations Comments: Two union commenters urged the Department to clarify that the nominations for representatives of joint labor-management registered apprenticeship programs on State and Local WDBs should be made by State and local building and construction trades councils, except where none exist in the State, in which case the representative(s) should be nominated by the local Building Trades Councils within the State. Regarding the proposed § 679.110(b)(3)(i)(C) requirement that the Governor must appoint required representatives of businesses or organizations based on nominations from business organizations and trade PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 associations in the State, a commenter asked what would qualify these organizations to submit such nominations and requested that the Department clarify the definition of these organizations. Department Response: Paragraph (b)(3)(i)(C) of § 679.110 implements WIOA sec. 101(b)(1)(C)(i)(III), which requires State WDB members who represent businesses or organizations representing businesses to be appointed from a list of potential members nominated by State business organizations and business trade associations. WIOA does not further define trade associations; restricting the nominating entity would not comply with WIOA sec. 101(b)(1)(C)(i)(III), but Governors may accept nominations of representatives to the State WDB from Trade Councils. Furthermore, WIOA does not require that the representatives of joint labor-management registered apprenticeship programs (under WIOA sec. 101(b)(1)(C)(ii)(II) be nominated by any organization. The Department declines to add the requirement that trades councils must nominate these members. No change to the regulatory text was made in response to these comments. Single-Area States Comments: Relating specifically to concerns for single-area States, one commenter suggested that the core programs can be improved by CEOs on the State WDB and that the Departments of Labor and Education must look critically at any Unified or Combined State Plan that is submitted from a single-area State that does not obviously and fully represent the local viewpoint from a diverse set of stakeholders, as is the intention of this section. Another commenter stated that because local control is primarily with the State WDB in single-area States, the local community advisory groups, who are more familiar with the specific community needs, do not have the influence that they should. Multiple commenters also requested that the Department clarify the meaning of the proposed § 679.110(b)(3)(iii)(A)(2) requirement that the State WDB include two or more CEOs (collectively representing both cities and counties ‘‘where appropriate’’) and indicate whether this language would exempt single-area States from requiring CEOs to serve on the State WDB. Department Response: 20 CFR 679.270 implements WIOA sec. 107(c)(4), which describes the requirements of Local WDBs in singlearea States. Section 679.270 requires that the State WDB, acting as the Local E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 WDB, carry out the functions of both Boards except that the State is not required to meet and report on a set of local performance accountability measures. Section 679.110(b) requires CEO representation on the State WDB. There is no exemption for membership categories on the State WDB in singlearea States. No change to the regulatory text was made in response to these comments. Community-Based Organizations Comments: A few commenters recommended that State WDBs should be required to have at least one representative from community-based organizations (CBOs) with experience and expertise in addressing individuals’ training, employment, and educational needs. For example, one commenter suggested adding § 679.110(b)(3)(ii)(E) that states ‘‘State Boards are strongly encouraged to include organization representatives in (C) and (D).’’ Department Response: Many comments from stakeholders with mandated representation on the Board under WIA requested that they again be mandated Board members or that they be referenced in regulation. WIOA reduced mandated Board membership in an effort to streamline State WDBs and provide Governors the flexibility to establish Boards that best reflect the diversity of the State’s job seeker and employer communities. The Department recognizes that many important system partners with experience with specific job seeker populations, such as required one-stop partner programs, tribal organizations, other Department program grantees, and those serving the disadvantaged and disabled populations are no longer required members of the Board. However, § 679.110(b)(3)(ii) permits representatives of communitybased organizations that have demonstrated experience and expertise in addressing the employment, training, or education needs of individuals with barriers to employment to contribute to the 20 percent workforce threshold. Paragraph (b)(3)(iii)(B) says the Governor has the flexibility to appoint ‘‘other appropriate representatives and officials designated by the Governor’’ which does not preclude any organization as the Governor deems appropriate for the State. The Department encourages the Governor to ensure that State WDB members represent the diversity of job seekers, and employers across the State, which includes ensuring adequate representation on the State WDB. The Department has made no changes to the regulatory text in response to these comments. VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Chairperson Requirements Paragraph (c) of § 679.110 implements WIOA sec. 101(c) requiring the Governor to select a chairperson of the Board from among the business representatives on the Board who are the owner or chief executive officer for the business or organization, or a person who is an executive with the business or organization with optimum policymaking or hiring authority. Comments: One commenter requested amending the statutory language to allow outlying areas to appoint a representative from a non-governmental organization, a community-based organization, or a small business rather than a business as chair of the State WDB, expressing concern about finding a chairperson who would be willing to dedicate the time and effort to the Board. Department Response: A small business owner would meet the qualifications outlined in the statue and would not require a change to the regulations. However, WIOA does not delineate specific Board membership exemptions for outlying areas. No change to the regulatory text was made in response to these comments. Individuals With Disabilities and Other Barriers to Employment Comments: Many commenters from stakeholders with mandated representation on the Board under WIA and from other interest groups requested that they again be mandated Board members or that they be referenced in regulation. Various commenters suggested that Governors be required to appoint individuals with disabilities, disability service providers, and direct support professionals, lead State officials from agencies with primary responsibility for providing services to individuals with intellectual, developmental, and other significant disabilities as members of the State WDB. Another commenter recommended that because it is not required, the Department should strongly urge representation of populations with disabilities on State and Local WDBs. Department Response: WIOA reduced mandated Board membership in an effort to streamline State WDBs and provide Governors the flexibility to establish Boards that best reflect the diversity of the State’s job seeker and employer communities. The Department recognizes that many important system partners with experience with specific job seeker populations, such as required one-stop partner programs, tribal organizations, other Department PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 56091 program grantees, and those serving the disadvantaged and individuals with disabilities are no longer mandated members of the Board. However, § 679.110(b)(3)(ii) requires not less than 20 percent of the Board be comprised of workforce representatives which may include one or more individuals who have demonstrated experience and expertise in addressing the employment, training, or education needs of individuals with barriers to employment. Paragraph (b)(3)(iii)(B) says the Governor has the flexibility to appoint ‘‘other appropriate representatives and officials designated by the Governor,’’ which does not preclude representatives of any required partner program, community based organizations or other organizations as the Governor deems appropriate for the State. The Department encourages the Governor to ensure that State WDB members represent the diversity of job seekers, and employers across the State, which includes ensuring adequate representation on the State WDB. The Department has made no changes to the regulatory text in response to these comments. Work-Relevant Training Comments: Relating to the WIOA provision that provides that State WDB business representatives may represent businesses that provide ‘‘employment opportunities that, at a minimum, include high-quality, work-relevant training and development in in-demand industry sectors,’’ some commenters asked the Department to clarify the definition of ‘‘work-relevant training’’ in proposed § 679.110(b)(3)(i)(B). In particular, some of these commenters asked whether it pertains to for-profit training providers. Another commenter stated while the definition of ‘‘indemand’’ is located at WIOA sec. 3(23), there are no definitions for the terms ‘‘high-quality’’ and ‘‘work-relevant.’’ This commenter recommended that the Department allow definition of these terms at the State or local level. Department Response: Paragraph (b)(3)(i)(B) of § 679.110 implements WIOA sec. 101(b)(1)(C)(i)(II), which provides that State WDB business representatives must represent businesses that provide ‘‘employment opportunities that, at a minimum, include high-quality, work-relevant training and development in in-demand industry sectors.’’ WIOA sec. 3 provides definitions used in the law, however the terms ‘‘work-relevant’’ training and ‘‘high quality’’ are not defined in WIOA. The State WDB, in conjunction with the Governor, is responsible for crafting appropriate parameters to address E:\FR\FM\19AUR6.SGM 19AUR6 56092 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 circumstances in the State; States are therefore responsible for defining ‘‘work-relevant’’ and ‘‘high-quality’’ in accordance with the particular circumstances faced by that State. The Department has made no changes to the regulatory text in response to these comments. Comments: Other commenters said that while they agree that customized training, registered apprenticeship, or OJT are all work-relevant, the Department should clarify that these are just a few examples and not a comprehensive list because such limitation could deem ineligible representatives of the business community who may successfully offer alternative types of training such as a non-registered apprenticeship. Similarly, another commenter recommended that § 679.110(b)(3)(i)(B) should clarify that ‘‘a representative of a business providing an alternative form of training can serve on the State Board.’’ Department Response: The Department acknowledges that the training options mentioned in this section are illustrative, and that other training strategies could reasonably satisfy this requirement. The Department has determined that no further definition is required and has made no changes to the regulatory text in response to these comments. Voting Rights Comments: Expressing concern that allowing a Governor to selectively grant voting rights among non-required members could skew a Board or lead to the appearance of discrimination against some of the non-required member interests, a commenter recommended that § 679.110(g) state clearly that the Governor may grant voting privileges to either all or none of the non-required members of the State WDB. Another commenter said that allowing a CEO to give voting rights to non-required members could lead to political tension. Some commenters were concerned that a Governor’s authority to convey voting privileges to non-required members, as stated in § 679.110(g), would be used to circumvent the requirement of a business majority on the State WDB, or otherwise impact the functionality of the Board. Department Response: WIOA sec. 101(b)(1) mandates certain State WDB members in order to ensure a core set of interests are represented. Title 20 CFR 679.110(g) requires all mandated Board members to have voting rights. This section also permits the Governor to grant voting privileges to the nonrequired members of the board, and the VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Department encourages the Governor to do so, if doing so would further the mission and goals of the board. Additionally, as described below, the Governor may not award voting rights in such a way that would upset the balance of required membership categories. Under the regulations as proposed, Governors cannot circumvent membership requirements by granting voting rights to non-mandated State WDB members because the membership requirements explained in paragraph (b) will always cause the majority of members on the Board to be mandated members. No change to the regulatory text was made in response to these comments. Indian and Native American Representation Comments: Paragraph (b) of § 679.110 implements WIOA sec. 101(b) describing the required State WDB membership. Many comments from stakeholders with mandated representation on the Board under WIA and other interest groups requested that they again be mandated Board members or that they be referenced in regulation. Several commenters suggested that Indian and Native American representatives be required as Board members. As part of a Council resolution submitted as a public comment, the Native American Employment and Training Council (NAETC) proposed that each State WDB should have a representative from a tribe or tribal organization. Department Response: WIOA reduced mandated Board membership in an effort to streamline the State WDBs and provide Governors the flexibility to establish Boards that best reflect the diversity of the State’s job seeker and employer communities. Many important system partners with experience with specific job seeker populations, such as tribal organizations, other Department program grantees, and those serving the disadvantaged and disabled populations are no longer required members of the Board. However, § 679.110(b)(3)(ii) requires not less than 20 percent of the Board be representatives of the workforce, which may include representatives of community-based organizations that have demonstrated experience and expertise in addressing the employment, training, or education needs of individuals with barriers to employment. It also says the Governor has the flexibility to appoint ‘‘other appropriate representatives and officials designated by the Governor’’ (§ 679.110(b)(3)(iii)(B)); the Department encourages the Governor to ensure that State WDB members represent the PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 diversity of job seekers and employers across the State. No change to the regulatory text was made in response to these comments. Section 679.120 What is meant by the terms ‘‘optimum policy-making authority’’ and ‘‘demonstrated experience and expertise’’? Paragraph (a) of § 679.120 defines the term ‘‘optimum policy-making authority’’ as an individual who can reasonably be expected to speak affirmatively on behalf of the entity he or she represents and to commit that entity to a chosen course of action. This section retains the same requirements that were included in the WIA regulations at 20 CFR 661.203(a). Paragraph (b) of § 679.120 defines the term ‘‘demonstrated experience and expertise’’ as an individual who has documented leadership in developing or implementing workforce development, human resources, training and development, or a core program function.’’ Comments: The Department sought comment on the definition of optimum policy-making authority, and demonstrated experience and expertise. Commenters recommended adding education and training expertise to § 679.120 by indicating that documented leadership in any of the areas in § 679.110(b)(3)(ii)(C) and (D) also would be considered. Department Response: The Department agrees with these commenters and changed the regulatory language in § 679.120 to reference § 679.110(b)(3)(ii)(C) and (D). Comments: Commenters also recommended in-depth criteria including: A successful track record, leveraging of funds, documented service track record, quality partnerships, culturally competent, and a physical location in the area. However, the majority of commenters supported leaving the definition open to State and local discretion. Some commenters expressed concern that the definition proposed in § 679.120 was too specific and may limit the types of representatives on the State WDB to those with experience in human resources. Department Response: With the clarification that demonstrated experience and expertise may include individuals with experience in education or training of job seekers with barriers to employment as described in § 679.110(b)(3)(ii)(C) and (D), the Department has determined that the definition is sufficiently clear to provide parameters to State WDBs. E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 Comments: Another commenter suggested removal of the term ‘‘documented,’’ referencing experience in the areas described in § 679.120, to avoid added administrative burdens of processing documentation. Department Response: The use of the term ‘‘documented’’ assures that the selected representatives meet the criteria necessary to contribute meaningfully to the Board’s actions for job seekers but does not require any specific administrative burden. Processes and procedures related to membership are the responsibility of the elected official. No change to the regulatory text was made in response to these comments. Section 679.130 What are the functions of the State Workforce Development Board? 20 CFR 679.130 implements sec. 101(d) of WIOA and describes the role and functions of the State WDB. Paragraphs (a), (d) through (e), and (g) through (k) of § 679.130 reiterate the relevant statutory requirements at WIOA secs. 101(d)(1), (4) and (5), and (7) through (11). These functions are the primary functions of the State WDB. Comments: A few commenters suggested text changes such as requiring State WDBs to partner with public television stations due to those stations’ experience creating instructional materials on employability skills for job agencies and one-stop centers, providing professional development tools like workshops, and hosting job fairs. Department Response: The Department encourages State WDBs to partner with a wide variety of organizations, however it declines to require entities not identified in statute. No change to the regulatory text was made in response to these comments. Comments: One commenter suggested that § 679.130(a) and (b) should require State WDBs to create and implement an appeal process for all policies, monitoring, and negotiations that take place by the Governor, State WDB, or State pass-through entity and the Local WDBs. Department Response: Section 679.130 implements WIOA sec. 101(d), which does not include the requirement to establish such an appeals process. No change to the regulatory text was made in response to these comments. Clarification of Role of the State WDB Comments: Commenters requested clarification of the roles of the State WDB such as how the State WDB is to assist in reviewing recommendations ‘‘on actions that should be taken by the VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 State to align workforce development programs to support a comprehensive and streamlined workforce development system’’ and whose recommendations the Board is to review. Department Response: WIOA sec. 101(d) indicates that the role of the State WDB is to assist the Governor in the development, implementation, and modification of the State Plan. To that end the Board is to review policies, programs, and recommendations on actions that should be taken by the State to align workforce development programs in the State. The State WDB is not limited in the types of recommendations that can be reviewed. The Board may consider recommendations from any number of areas, not limited to those resulting from the public comment on the State Plan, from State WDB meetings, or standing committees. In its role in assisting the Governor, the State WDB should review relevant comments regarding State WDB actions, as well as provide its own recommendations of actions to the Governor. No change to the regulatory text was made in response to these comments. Comments: Commenters requested clarification of the role of the State WDB when other entities perform the same functions such the development and oversight of the State’s labor market information (LMI) system, which involves the State WDB and State Unemployment Insurance (UI) Administrator. Department Response: State WDBs have several roles related to the use of LMI in the State. Paragraph (e)(3) of § 679.130 implements WIOA sec. 101(d)(5)(C) and requires State WDBs to develop effective training programs that respond to real-time data analysis of the labor market. WIOA sec. 101(d)(11) and § 679.130(k) require the development of the statewide workforce and labor market information system described in sec. 15(e) of the Wagner-Peyser Act which refers to the State’s responsibilities. The responsibilities are complementary rather than duplicative of the roles of other State agencies in these areas. The State WDB should coordinate with all relevant parties to develop and implement a plan for ensuring activities are cohesively leveraged rather than duplicated. No change to the regulatory text was made in response to these comments. Comments: Two commenters urged the Department to incorporate into § 679.130 an active review of State policies that encourage innovation or hinder innovative strategies that are developed at the local level and both PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 56093 cautioned against over-regulation by the State. Department Response: Under § 679.130 State WDBs are already required to review policies, programs, and recommendations on actions that should be taken by the State to align workforce development programs in the State. No change to the regulatory text was made in response to these comments. Comments: A commenter asked whether, for the purpose of carrying out sec. 101(d), WIOA authorizes the Governor to ignore or otherwise disregard existing State laws with regard to agency rulemaking. Department Response: WIOA does not provide this authority to the Governor. However, States are required to comply with the Final Rule as a condition of the WIOA grant. The Governor should follow applicable State laws in a manner best designed to comply with these regulations when implementing the functions of the State WDB. Single-Area States Comments: Single-area States, which operated as such under WIA, are permitted under WIOA. A commenter urged the Department to mandate use of Local WDBs and/or regional consortia in single-area States. Department Response: WIOA sec. 107(c)(4) requires that State WDBs operating as the Local WDB carry out the same functions, except as noted, required of the Local WDB as detailed in § 679.270. Therefore, State WDBs in single-area States are already required by statute and regulation to meet all requirements of membership and functions of both State and Local WDBs. No change to the regulatory text was made in response to these comments. Career Pathways (§ 679.130(c)(2)) WIOA sec. 101(d)(3)(B) outlines ‘‘the development of strategies to support the use of career pathways for the purpose of providing individuals, including lowskilled adults, youth, and individuals with barriers to employment (including individuals with disabilities), with workforce investment activities, education’’ as a function of the State WDB and is described in § 679.130(c)(2). WIOA sec. 107(d) and § 679.300 extends the requirement to Local WDBs. WIOA sec. 3(7)(A) through (G) defines career pathways as a combination of rigorous and high-quality education, training, and other services that meet specified guidelines. Comments: Commenters requested that the Department provide more comprehensive guidance on the implementation of career pathways. E:\FR\FM\19AUR6.SGM 19AUR6 56094 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 Several commenters provided recommended changes to the regulatory text that included adding criteria, including a section specific to Local WDB implementation of career pathways, requiring the State and Local WDBs to define the roles and responsibilities of WIOA programs related to career pathways, listing required partners (such as Job Corps, and public television), and developing strategies to include job seekers with specific barriers. Department Response: The ideas and suggestions provided by the commenters support career pathways as a dynamic topic that involves input of multiple partners and stakeholders throughout the system. The statutory language provides general criteria for both State and Local WDBs to reference in developing career pathway strategies. The Department has concluded that more prescriptive regulatory language may limit State WDBs’ innovation in developing career pathways to support individuals to retain and enter employment; however, the Department will issue further guidance and technical assistance to help States. No change to the regulatory text was made in response to these comments. Industry or Sector Partnerships (§ 679.130(c)(4)) Paragraph (c)(4) of § 679.130 implements WIOA sec. 101(d)(3)(D) states that the roles and functions of the State WDB include the development and expansion of strategies to meet the needs of employers, workers, and job seekers particularly through industry or sector partnerships related to in-demand industry sectors and occupations. Comments: A commenter suggested that the Department should revise § 679.130(c)(4)’s requirement for State WDBs to assist with strategies related to industry or sector partnerships to include the language ‘‘with an emphasis on attainment of recognized postsecondary credentials.’’ Department Response: Title 20 CFR 679.130(c)(4) states that State WDBs have responsibility for the development and expansion of strategies to meet the needs of employers, including sector strategies. State WDB functions already include the requirement to develop and update comprehensive State performance and accountability measures to assess core program effectiveness under WIOA sec. 116, which includes a credential attainment measure. Therefore, attainment of credentials, including postsecondary credentials, should already be a State WDB priority, as should sector strategies. No change to the regulatory VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 text was made in response to these comments. Best Practices (§ 679.130(e)) Paragraph (e) of § 679.130 requires the Board to identify and disseminate best practices in a number of areas (paragraphs (e)(1) through (3)). Comments: Commenters had concerns about dissemination of best practices surrounding assessments. One commenter urged the Department to explain further how States would use assessments by including how to report this in title-specific data. This commenter expressed concerns that the value of requiring these assessments could be undercut through a perverse incentive for programs to avoid coenrollment if the assessments’ use in an accountability system is not clearly defined and recommended that States ensure that title II providers have processes for sharing assessment data with title I providers and vice versa. Department Response: The regulation does not require the reporting of the use of assessments in this section. The State WDB’s purpose, as outlined in WIOA sec. 101 and § 679.100, is to convene State, regional, and local workforce system, and partners to align and improve the outcomes and effectiveness of Federally-funded and other workforce programs and investments. Therefore, the Board’ responsibility already includes aligning the strategies related to best practices in assessments. The State Plan should address the State’s strategic and operational vision. No change to the regulatory text was made in response to these comments. State WDB One-Stop Delivery System Guidance (§ 679.130(f)) Paragraph (f) of § 679.130 requires the State WDB to develop and review statewide policies affecting the coordinated provision of services through the State’s one-stop delivery system which is to include developing objective criteria and procedures for the Local WDBs’ use in assessing the physical and programmatic accessibility of one-stop centers. Comments: A commenter suggested that the language in § 679.130(f) should be strengthened to better reflect the importance of including programmatic and physical accessibility in the assessment of one-stop centers. This commenter recommended that accessibility of one-stop centers must include the removal of barriers as defined in the Americans with Disabilities Act (ADA) and 28 CFR 36.304 and should extend to technological accessibility, citing sec. 508 of the Rehabilitation Act of 1973. PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 Department Response: The Department agrees that accessibility is paramount for all job seekers, and it is the State WDB’s function to develop the tools to assist local areas to ensure that one-stop centers are both physically and programmatically accessible to all job seekers. As noted by the commenter, physical accessibility is already required under existing statute and individual State laws as well as the regulation implementing WIOA sec. 188 at 29 CFR part 38. WIOA sec. 102(2)(vii) and the WIOA State Plan ICR require that the State Plan address how the onestop delivery system will comply with the Americans with Disabilities Act of 1990. No change to the regulatory text was made in response to these comments. Strategies for Technological Improvements To Improve One-Stop Services (§ 679.130(g)) and Strategies for Aligning Technology and Data Systems Across One-Stop Partner Programs (§ 679.130(h)) Comments: A State agency expressed concern that the requirement that State WDBs develop strategies to ensure technology is accessible to individuals with disabilities and individuals residing in remote areas (§ 679.130(g)(4)) could become costly and asked the Department for information on if each State would create its own plan and for the expectations for the scope of available technology. A commenter expressed concern that the requirement that State WDBs develop strategies to for aligning technology and data systems across one-stop partner programs in § 679.130(h) could become costly, and asked the Department for an explanation of why this responsibility is necessary and what the plan development schedule would look like. Department Response: Paragraph (g)(4) of § 679.130 and paragraph (h) of § 679.130 address technology improvements, and data system alignment across one-stop partner programs. Neither paragraph (g) nor (h) require the development of a plan, or outline specific technology expectations; rather, the Board is responsible for developing strategies for technological improvements. Although the State WDB may choose to develop a technology plan to achieve those requirements, neither WIOA nor the regulations require the submission of a formal technology plan. No change to the regulatory text was made in response to these comments. E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations Development of Statewide Workforce and Labor Market Information System (§ 679.130(k)) Comments: WIOA sec. 101(d)(11) and § 679.130(k) require the development of the statewide workforce and labor market information system described in sec. 15(e) of the Wagner-Peyser Act which refers to the State’s responsibilities. A commenter requested clarification of the role of the State WDB in the development and oversight of the State’s labor market information (LMI) system. State WDBs have several roles related to the use of LMI in the State. Department Response: Paragraph (e)(3) of § 679.130 implements WIOA sec. 101(d)(5)(C) and requires State WDBs to develop effective training programs that respond to real-time data analysis of the labor market. WIOA sec. 101(d)(11) and § 679.130(k) require the development of the statewide workforce and labor market information system described in sec. 15(e) of the WagnerPeyser Act which refers to the State’s responsibilities. The responsibilities are complementary rather than duplicative of the roles of other State agencies in these areas. The State WDB should coordinate with all relevant parties to develop and implement a plan for ensuring activities are cohesively leveraged rather than duplicated. mstockstill on DSK3G9T082PROD with RULES6 Section 679.140 How does the State Workforce Development Board meet its requirement to conduct business in an open manner under ‘‘sunshine provision’’ of the Workforce Innovation and Opportunity Act? Title 20 CFR 679.140 implements WIOA sec. 101(g) requiring the State WDB to conduct business in an open manner. Comments: A commenter recommended the Department revise § 679.140(b)(3) to require State WDBs to make available the minutes of meetings and any public comments, feedback, or requests for service, and to provide a written response to such comments or requests. Department Response: The Department notes that paragraph (b)(3) already implements the WIOA sec. 101(g) requirement that meeting minutes be available to the public upon request. The Department encourages all State WDBs to operate with transparency; State WDBs are free to make additional information, such as public comments and other information it deems appropriate, available to the public. No change to the regulatory text was made in response to these comments. VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Section 679.150 Under what circumstances may the Governor select an alternative entity in place of the State Workforce Development Board? Title 20 CFR 679.150 implements WIOA sec. 101(e), which authorizes the use of alternative entities to the State WDB under the following conditions: The alternative entity was in existence on the day before the date of enactment of the Workforce Investment Act of 1998; is substantially similar to the WIOA State WDB; and includes representatives of business and labor organizations in the State. As outlined in § 679.150(c), if the alternative entity does not provide representatives for each of the categories required under WIOA sec. 101(b), the State Plan must explain the manner in which the State will ensure an ongoing role for any unrepresented membership group in the workforce development system. The State WDB must maintain an ongoing and meaningful role for an unrepresented membership group, including entities carrying out the core programs. Comments: Commenters disagreed with the interpretation at § 679.150(d) that required a new State WDB if the membership of the alternative entity had changed significantly after August 7, 1998 and paragraph (e) that defined the criteria for a significant change. Commenters interpreted the alternate entity provisions of WIOA to mean that an alternative entity may add or remove membership categories and maintain alternative entity status unless those changes make the State WDB ‘‘substantially dissimilar’’ to the State WDB. Commenters requested the Governor be given the authority to make a determination regarding the definition of ‘‘substantially similar.’’ Department Response: The Department agrees and has deleted the proposed text at § 679.150(d) and (e) from the Final Rule. The Department declines to further define ‘‘substantially similar’’ in § 679.150 but considers substantially similar to be aligned with the composition of the WIOA compliant State WDB as outlined in WIOA sec. 101(a) through (c) and § 679.110. The Department considers changes to the alternative entity membership or structure that are contrary to the requirements of WIOA sec. 101(a) through (c) and § 679.110 or those that make the alternative entity less aligned with WIOA State WDB compliance to result in an alternative entity that is not substantially similar to a compliant WIOA State WDB. PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 56095 Comments: Commenters requested that the Department require a business majority for alternative entities. Department Response: WIOA sec. 101(e) and § 679.150(b)(3) require alternative entities to have representatives of businesses in the State, however lacks a requirement for a business majority. The Department strongly encourages alternative entities to seek a majority business participation in State WDB activities and decisions. No change to the regulatory text was made in response to these comments. 2. Subpart B—Workforce Innovation and Opportunity Act Local Governance (Workforce Development Areas) This subpart provides the requirements for identification of regions and designation of local areas under WIOA. WIOA envisions a workforce development system that is customer focused on both the job seeker and business, and is able to anticipate and respond to the needs of regional economies. It requires Workforce Development Boards and CEOs to design and govern the system regionally, aligning workforce policies and services with regional economies and supporting service delivery strategies tailored to these needs. To support this regional approach, this subpart requires States to identify intrastate or interstate regions. When the region contains more than one local area, the local areas are required to plan regionally. WIOA envisions a regional system where public workforce system leaders partner and provide leadership as part of a comprehensive, regional workforce and economic strategy. The majority of comments in this section pertained to the structure of regions, and initial and subsequent designation of workforce development areas. Section 679.200 What is the purpose of requiring States to identify regions? Title 20 CFR 679.200 implements requirements found at both WIOA sec. 101(d)(3)(E), and WIOA sec. 106(a), which require the Governor to identify regions with consultation from the CEOs and Local WDBs in the affected region. The development of comprehensive regional partnerships facilitates alignment of workforce development activities with regional economic development activities, and better supports the execution and implementation of sector strategies and career pathways. Regional cooperation may also lower costs and increase the effectiveness of service delivery to businesses that span more than one local area within a region and to job seekers through coordination of shared E:\FR\FM\19AUR6.SGM 19AUR6 56096 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 services, processes, and operations. The Department encourages States to ensure that local and regional planning areas are aligned to support improved service delivery, improved training and employment outcomes, better meet employer needs, and greater effectiveness and efficiency in achieving these outcomes. Comments: A commenter expressed concern that defining boundaries of a region at the State level could result in a lack of coordination among locals in different regions. A different commenter suggested that the Department require cooperation between core partners to align existing services into the appropriate regions and ‘‘to reject plans where Governors have not effectively assigned local areas to regions.’’ Department Response: State WDBs are required to identify regions in consultation with local chief elected officials and Local WDBs. The State WDB is also tasked with ensuring the overall alignment of the public workforce system. The function of identifying regions should not limit coordination among Local WDBs outside of the identified region; in fact, the State WDB function is to ensure that the system becomes more, rather than less, cohesive. No change to the regulatory text was made in response to these comments. Comments: One commenter said that the market of a local area may lend itself to more than one region and in instances such as this they could exist as a singular local region and partner with the neighboring areas. Department Response: The Department agrees that the State WDB could reach such a conclusion. No change to the regulatory text was made in response to these comments. Section 679.210 What are the requirements for identifying a region? Title 20 CFR 679.210 addresses the requirements for identifying a region and requires a process that includes consultation with Local WDBs and CEOs. Comments: Commenters suggested additional clarification regarding how consultation will take place including requiring memorandums of agreement, and a detailed policy of the process. Department Response: The term consultation is used in § 679.210 as a requirement for identifying a region; the Department added a definition of consultation to part 675. This clarifies that consultation constitutes a robust conversation in which all parties are given opportunity to share their thoughts and opinions. The Department declines to add additional requirements. VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Comments: The Department requested comment on additional data that may be considered other than that laid out in § 679.210(c)(1) through (8). Commenters provided suggestions for new data points as well as adjustments to those in paragraphs (c)(1) through (8), such as including public transportation when considering commuting patterns, adding the workforce participation rate of people with barriers to employment, especially individuals with disabilities and out of school youth with disabilities, administrative efficiencies, and existing regional capacity and a history of local areas working together. Department Response: The data points in § 679.210(c)(1) through (8) are for illustrative purposes and should not limit the State’s decision-making when identifying regions. The Department will review the suggestions when determining and issuing guidance on any additional factors as outlined in § 679.210(c)(8). No change to the regulatory text was made in response to these comments. Comments: WIOA sec. 102(b)(2)(D)(i)(II) and § 679.210 require the Governor to develop a policy and processes for identifying regions. Commenters suggested that local areas designated under WIA be able to join one or more region or have the opportunity to remain a single region. Another commenter suggested that any current local areas that incorporate multiple jurisdictions should automatically be considered a region. A commenter requested clarification regarding the difference between the identification of regions and the designation of local areas. Department Response: Local area designation is addressed in §§ 679.220 and 679.230; the purpose of a local area is to administer workforce development activities. The purpose of a region is addressed in §§ 679.200 and 679.210; the purpose of a regional area is to align workforce development activities and resources with larger regional economic development areas and resources. The regional plan should describe the Governor’s processes for ensuring the requirements outlined in WIOA sec. 102 for the identification of regions are met. Local areas designated under WIA are not exempt from the regional identification process. No change to the regulatory text was made in response to these comments. Comments: Those regions comprised of two or more contiguous local areas are planning regions as described in WIOA sec. 3(48). Commenters have suggested that a single area could participate in multiple planning regions PO 00000 Frm 00026 Fmt 4701 Sfmt 4700 by being a member, or through a memorandum of agreement. Department Response: In accordance with WIOA sec. 106(a)(2), a single local area may not be split across two planning regions. Local areas must be contiguous in order to be a planning region and effectively align economic and workforce development activities and resources. The Department encourages States confronted with this issue to reevaluate whether the local areas in question are consistent with labor market areas and with regional economic development areas in the State. If these criteria are not met, the State should consider how best to recast local areas for the purposes of subsequent designation and regional integration. Local areas only may be part of one region, however, local areas within planning regions are not prohibited from working or coordinating with other local areas, and regions may coordinate with other planning regions. Coordination may be especially vital across States; the Department anticipates providing additional guidance regarding the creation and management of interstate planning regions. No change to the regulatory text was made in response to these comments. Comments: A commenter requested that the Governor be provided flexibility to add more criteria to § 679.210(c) for use when identifying a region. Department Response: The Department has determined that the Governor must use the criteria at § 679.210 in determining a region in order to ensure consistency among States. However, the list of factors in paragraph (c) is illustrative and additional factors may be considered. The Department will review the criteria when determining and issuing guidance on any additional factors as outlined in § 679.210(c)(8), which states that the Secretary of Labor may provide additional considerations for the development of regions according to the policy priorities of the Department. No change has been made to the regulatory text in response to this comment. Section 679.230 What are the general procedural requirements for designation of local areas? Title 20 CFR 679.230 describes a general public comment process and the general procedural requirements for designation of local areas, which include consultation with the State WDB, chief elected officials and affected Local WDBs. The Governor has the discretion to establish the process and procedures to solicit comments that it determines appropriate. However, a E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations wide-reaching, inclusive process allows sufficient time for stakeholders to provide substantive comments that will enable the Governor to receive meaningful feedback from all interested stakeholders, ensuring that the Governor is able to consider all relevant information, data, and opinions before making a decision to designate or redesignate a local area. WIOA sec. 102(b)(2)(D)(i)(II) requires the State Plan to describe the Governor’s processes for designating local areas. In addition, the State Plan must detail how the State will ensure the requirements outlined in WIOA sec. 102 regarding public comments and consultation are met. Comments: Commenters suggested that regulations require additional clarification regarding consultation. Department Response: The Department agrees with the comment and has added a definition of consultation to the regulatory definitions in part 675 of the Final Rule. The term ‘‘consultation’’ is used throughout WIOA to describe the process by which State and/or local stakeholders convene to discuss changes to the public workforce system. The Department has concluded that this definition is necessary to clarify that consultation constitutes a robust conversation in which all parties are given opportunity to share their thoughts and opinions. Written correspondence or other simple communication methods do not constitute consultation. This definition applies to all provisions that use the term unless otherwise specified. With the addition of the definition in part 675 of the Final Rule, the Department considers the requirements of § 679.230 to be clear. No changes were made to the regulatory text in response to these comments. Comments: Many commenters expressed their agreement with the general procedural language in this section and commented that pursuant to WIA sec. 189(i)(2), Texas’s workforce areas were designated before WIA took effect and therefore, they may continue to be used as local areas. One of the commenters agreed commenter, stating that for these reasons, ‘‘Texas should continue to operate pursuant to the waiver authority afforded under WIOA.’’ Department Response: Throughout the sections pertaining to Local WDBs several similar comments referenced operations in Texas as approved under WIA. The Department’s response to all comments pertaining to Texas’s operation under special rule authority in WIA is that WIOA sec. 193 continues the provisions in effect in WIA and the VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 56097 Section 679.240 What are the substantive requirements for designation of local areas that were not designated as local areas under the Workforce Investment Act of 1998? Title 20 CFR 679.240 implements WIOA sec. 101 and addresses the substantive requirements for designation of local areas that were not designated as local areas under the Workforce Investment Act of 1998 and § 679.250 addresses subsequent eligibility of local areas. Comments: One commenter supported this section as proposed. A few commenters, including a State WDB, suggested that the Department add language to the regulation that will provide Governors the flexibility to apply the factors outlined in § 679.240(a) following subsequent designation regardless of whether the area was designated previously. Department Response: WIOA sec. 106(b)(3) outlines the requirements of subsequent eligibility: ‘‘After the period for which a local area is initially designated under paragraph (2), the Governor shall approve a request for subsequent designation as a local area from such local area, if such area—(A) performed successfully; (B) sustained fiscal integrity; and (C) in the case of a local area in a planning region, met the requirements described in subsection (c)(1).’’ WIOA does not require other criteria, and this provision permits existing areas to continue so long as they meet the statutory criteria. No change to the regulatory text was made in response to these comments. discussing CEPs in the preamble discussion for § 679.250(g), and the preamble discussion for § 679.290(a), and the commenter provided detailed rationale to support the deletion of all anti-CEP language. Department Response: WIOA Technical Amendments Act, enacted on May 22, 2015, amended WIOA sec. 106(b) to allow rural concentrated employment programs to apply for initial and subsequent designation as a local workforce area. The regulations have been revised to conform with the statutory direction and paragraph (g) now reads as follows: ‘‘The Governor may approve, under paragraph (c) of this section, a request for designation as a local area from areas served by rural concentrated employment programs as described in WIOA sec. 107(c)(1)(C).’’ Comments: Many commenters requested clarification regarding the requirements of subsequent designation and the associated timelines in § 679.250. Department Response: The Department clarified § 679.250 to provide details on the duration of initial designation and the timing of the first available opportunity for local area subsequent designation to occur. The Department revised the proposed requirement to clarify that initial designation is only applicable to PY 2016 and PY 2017. Noting the commenters’ concerns regarding availability of WIOA performance data, which is required for the determination of designation, the Department added § 679.250(c) to clarify that no determination of subsequent designation may be made before the conclusion of PY 2017. Section 679.250 What are the requirements for initial and subsequent designation of workforce development areas that had been designated as local areas under the Workforce Investment Act of 1998? Comments: A couple commenters expressed their support for the language in § 679.250(a) through (c). One commenter recommended that in this section and elsewhere in the regulations any language that ‘‘prohibits a rural concentrated employment program (CEP) from applying for designation as local workforce area’’ should be deleted. Another commenter presented the same suggestion and recommended deleting language from the rule and preamble discussion that exclude rural CEPs from being eligible to apply as local workforce areas. Specifically, the commenter recommended deleting language from the regulatory text of § 679.250(g), and deleting language Section 679.260 What do the terms ‘‘performed successfully’’ and ‘‘sustained fiscal integrity’’ mean for purposes of designating local areas? Title 20 CFR 679.260 implements the WIOA sec. 106(e)(1) definition of performed successfully. Comments: Many commenters asked for guidance in applying the WIOA sec. 106(e)(1) definition. Department Response: The Department agrees that additional detail is necessary to ensure that initial and subsequent designation requirements are applied consistently. The Department has adjusted the Final Rule at § 679.260 to detail the performance indicators, and corresponding timelines, to be considered for initial and subsequent designation. For clarity and to reduce duplication the Department deleted § 679.260(a)(1) and (2) pertaining to the negotiated levels of performance. The details in paragraphs Department will continue to administer them in the same manner under WIOA. PO 00000 Frm 00027 Fmt 4701 Sfmt 4700 E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56098 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations (a)(1) and (2) were unnecessarily duplicative to the requirements covered in the introductory text of paragraph (a), which already outline the relevant performance goals. The Department added detailed timeframe information for subsequent designation in § 679.260(b)(1) and (2). Comments: Some commenters suggested that performance be measured in the aggregate based on the total outcomes for all performance indicators instead of individual performance indicators. Another commenter requested that success be based on achieving 80 percent of the negotiated goal. Department Response: Based on experiences under WIA, the Department determined that individual indicators of performance provide Governors more detailed information for making designation determinations. Title 20 CFR 679.260 clarifies that local areas must not fail any individual measure for 2 consecutive years. Title 20 CFR 679.260(a) clarifies that the local area must meet or exceed the performance levels the Governor negotiated with Local WDB and CEO. Comments: A commenter asked for clarification regarding appeal rights if a local area is deemed not to have performed successfully if there was no negotiation between a local area and the State for the previous 1 to 2 years before enactment of WIOA. Department Response: WIA sec. 136(c) and § 666.310(a) of the regulations implementing WIA required the negotiation of local area performance indicators under WIA. In accordance with WIOA sec. 106(e)(1) and § 679.260(a) and (b), the local performance must be judged in accordance with the definitions of ‘‘meets’’ and ‘‘exceeds’’ in place at the time the performance levels were negotiated. Appeals regarding local area designation must adhere to the requirements in §§ 683.630(a), 683.640, and 679.290. Comments: Paragraph (c) of § 679.260 implements WIOA sec. 106(e)(2), which defines the term ‘‘sustained fiscal integrity.’’ Commenters requested clarification of fiscal integrity, and one commenter expressed concern that the three criteria used for determining ‘‘sustained fiscal integrity’’ would limit the Governor’s ability to designate local areas and suggested that the Department clarify that only the first criterion requires a formal determination by the Secretary of Labor. Department Response: In WIOA sec. 106(e), ‘‘sustained fiscal integrity’’ means ‘‘that the Secretary has not made a formal determination, during either of VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 the last 2 consecutive years preceding the determination regarding such integrity, that either the grant recipient or the administrative entity of the area misexpended funds . . . due to willful disregard of the requirements of the provision involved, gross negligence, or failure to comply with accepted standards of administration.’’ Section 679.260(c) implements the requirements outlined in WIOA sec. 106(e). No changes were made to the regulatory text in response to these comments. To the extent that additional clarification may be needed, the Department will issue separate guidance. of local interests but may do so in a manner that reduces unnecessary burden and duplication of processes. The Department will issue guidance regarding how single-area States must carry out the duties of State and Local WDBs. The Department encourages the Governor to ensure that State WDB members represent the diversity of job seekers and employers across the State, which includes ensuring adequate local elected official representation on the State WDB. Single-area States have the additional burden of representing local level interests and stakeholders. Section 679.270 What are the special designation provisions for single-area States? Title 20 CFR 679.270 implements WIOA secs. 106(d) and 107(c)(4)(A), which allow for single-area States so designated under WIA to continue, and requires the State WDB to carry out the functions of the Local WDB in a singlearea State. Comments: Commenters requested additional clarification on the roles of the State WDB in single-area States. Several commenters indicate that singlearea States tend to be small or substantially rural areas and fulfilling the mandates of both the State and Local WDBs would be both unduly burdensome for single-area States as well as impractical. Others objected to single-area State WDBs taking on the role of the Local WDB and expressed concern that such situations are nonresponsive to local needs and to local stakeholders. Commenters suggested varying solutions which include allowing waivers or exceptions for single-area States of certain Board functions; mandating local representation to a broader extent on the single-area State WDB; creating a specific section regulating exemptions for single-area State WDB functions; and offering non regulatory technical assistance and guidance. Department Response: WIOA sec. 107(c)(4)(A) requires that single-area States’ State WDB carry out the function of the Local WDB with an exemption only for meeting and reporting on local performance indicators, so the requirements of § 679.270(c) cannot be reduced. However, the Department does not intend for single-area States to conduct the required Board functions in such a way as to be inefficient or duplicative. To that end, the Department has amended the regulatory text at § 679.270 by adding paragraph (d), which clarifies that single-area States must conduct the functions of the Local WDB to achieve the incorporation 3. Subpart C—Local Workforce Development Boards Title 20 CFR 679.300 explains the purpose of the Local WDB. The Local WDB represents a wide variety of individuals, businesses, and organizations throughout the local area. The Local WDB serves as a strategic convener to promote and broker effective relationships between the CEOs and economic, education, and workforce partners. The Local WDB must develop a strategy to continuously improve and strengthen the workforce development system through innovation in, and alignment and improvement of, employment, training, and education programs to promote economic growth. Local WDB members must establish a platform in which all members actively participate and collaborate closely with the required and other partners of the workforce development system, including public and private organizations. This is crucial to the Local WDB’s role to integrate and align a more effective, job-driven workforce investment system. In this part the Department addresses comments on the roles of the Local WDBs, Local WDB memberships, and the role of local elected officials. PO 00000 Frm 00028 Fmt 4701 Sfmt 4700 Section 679.300 What is the vision and purpose of the Local Workforce Development Board? Title 20 CFR 679.300 establishes the vision for and explains the purpose of the Local WDB. Comments: Commenters suggested the Department clarify that Local WDBs are responsible for organizing the key partners to develop a vision for the system collectively, implementing that system, and monitoring performance. Department Response: These responsibilities are already laid out in the regulations under § 679.300(b)(1). One of the purposes of the Local WDB is to provide strategic and operational oversight in collaboration with required and other partners to help the workforce E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 development system achieve the purposes outlined in WIOA sec. 2, and assist in the achievement of the State’s strategic and operational vision and goals outlined in the State Plan. Paragraphs (b)(2) and (3) of § 679.300 require the Local WDB to assist in the achievement of the State’s strategic and operational vision and goals as outlined in the Unified State Plan or Combined State Plan, and to maximize and continue to improve the quality of services, customer satisfaction, and effectiveness of the services provided. No change to the regulatory text was made in response to these comments. Section 679.310 What is the Local Workforce Development Board? Title 20 CFR 679.310 implements WIOA sec. 107 by defining the Local WDB and its functions. Comments: Commenters suggested changes regarding the function of establishing by-laws covered in § 679.310(g) including suggesting that the criteria that apply to the selection of Local WDB members also should apply to by-laws of the Board, and that Board members should not be required to actively participate in convening system stakeholders. Department Response: WIOA sec. 107(b)(1) and § 679.320 describe the Local WDB membership requirements as enumerated in WIOA. The WIOA statute does not indicate that by-laws restrict membership. The Department declines to make the suggested regulatory change. No change to the regulatory text was made in response to these comments. Comments: Some commenters stated that § 679.310(g)(7) should refer to membership on the Local WDB, rather than the State WDB. One commenter suggested that the authority should fall to Local WDBs and not CEOs and recommended that the Department reword § 679.310(g)(7) as follows: ‘‘A description of any other conditions governing appointment or membership on the Local Board as deemed appropriate by both the Local Board Chair and the CEO. The rest of these conditions should be under the authority of the [Local Board] and be included as requirements in the [Local Board] developed by-laws.’’ Department Response: The Department agrees and will make that technical change to § 679.310(g)(7) to replace State WDB with Local WDB. The regulatory text has been revised with this change to § 679.310(g)(7). Comments: A commenter requested clarification regarding the financial liability for local areas with multiple chief elected officials. VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Department Response: Paragraph (e) of § 679.310 says that if a local area includes more than one unit of general local government the chief elected officials may execute an agreement to describe their responsibilities for carrying out the roles and responsibilities. This agreement may include the assignment of liabilities among the units of local government. The chief elected officials should address financial roles in this agreement. In addition there is authority under WIOA sec. 107(d)(12)(B)(i)(I) that the Governor may agree to take on the liability of the chief elected official. Comments: A commenter stated that the term ‘‘elect’’ in the nomination process should be changed to ‘‘appoint.’’ Department Response: The Department agrees and has changed the term ‘‘elect’’ in § 679.310(g)(1) to ‘‘select.’’ Comments: Regarding the nomination process, a commenter asked the Department to clarify whether the Board chair will be nominated by a vote of the Local WDB members and not by the chief elected official. Department Response: The Local WDB is required to elect the chairperson as outlined in § 679.330 in accordance with WIOA sec. 170(b)(3). Comments: The proposed regulations in § 679.310(g) would require the CEO to establish by-laws for Local WDBs. A few commenters suggested that the Department revise the language in proposed paragraph (g) to require that CEOs, ‘‘in consultation with the Local Board,’’ must establish by-laws consistent with State policy for Local WDB membership. Department Response: Paragraph (g) of § 679.310 requires the local elected official to establish by-laws that include the process to ensure Local WDB members actively participate in convening system stakeholders, brokering relationships with a diverse range of employers, and leveraging support for workforce development activities. The by-laws will outline the process and roles for Local WDB members. An effective Local WDB establishes clear roles, responsibilities, procedures, and expectations through its by-laws, and that these requirements will help Local WDBs to be more agile and proactive in reacting to board turnover, increase board participation when board members are not able to physically attend board meetings, improve board functionality, and help ensure that the public is informed about the operation of the board. No changes to the regulatory text have been made in response to these comments. PO 00000 Frm 00029 Fmt 4701 Sfmt 4700 56099 Comments: A commenter requested that the Department revise the section so that the Local WDBs must draft bylaws ‘‘after consultation with and approval by the chief elected official.’’ Department Response: WIOA sec. 107 delegates the establishment of by-laws to the chief elected official. The chief elected official must establish the bylaws in order to constitute a Local WDB. Paragraph (c) of § 679.310 allows the Local WDB and the chief elected official(s) to enter into an agreement that describes the respective roles and responsibilities of the parties which does not prohibit the Local WDB’s role in the development of future by-laws. The suggested change is not necessary and no change to the regulatory text was made in response to this comment. Section 679.320 Who are the required members of the Local Workforce Development Board? Title 20 CFR 679.320 addresses the required members on the Local WDB in accordance with WIOA sec. 107. Comments: The Department received comments of support for this section but one commenter suggested that it may cause political tension to allow a Chief Elected Official to appoint Local WDB members. Department Response: WIOA clearly contemplates that Chief Elected Officials will use the State established criteria to appoint Local WDB membership that meets the requirements in WIOA sec. 107(b)(2). Section 679.320(g) requires the Chief Elected Official establish a formal nomination and appointment process. No change has been made to the regulatory text in response to this comment. Overarching Comments on the Required Members of Local WDBs Comments: Commenters requested guidance on documenting the inability to find a certain member type. Department Response: Local WDBs should follow State guidelines for documenting the lack of member types in the area. Adult Education Representation Comments: The Department received several comments suggesting that a specific entity be named to represent adult education programs at the local level. Department Response: WIOA sec. 107(b)(1) and § 679.320(a) require that the chief elected official use the criteria set by the Governor, in partnership with the State WDB, to appoint members of the Local WDBs. The Department concludes that the Governor, in E:\FR\FM\19AUR6.SGM 19AUR6 56100 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 partnership with the State WDBs, has authority for creating a policy regarding the criteria for the membership of the Local WDB, which includes criteria for selecting the representative of a title II eligible provider of adult education and literacy activities. No change has been made to the regulatory text in response to this comment. Comments: Commenters also recommended that a process be implemented for selecting a Local WDB representative in the event there are multiple providers in the area. Department Response: In accordance with WIOA sec. 107(b)(2)(C)(i), § 679.320(d)(1) requires that the Local WDB include at least one eligible provider administering adult education and literacy activities under title II. Nominations are solicited when multiple entities are in a local area as described in § 679.320(g)(3) and WIOA sec. 107(b)(6). No change to the regulatory text was made in response to these comments. Comments: One commenter asked for clarification between the terms ‘‘education and training activities’’ and ‘‘education and training services,’’ stating that they seem to mean the same thing in many instances. Department Response: In order to avoid confusion, the Department eliminated the term ‘‘education and training services’’ from the regulatory text. Dual Representation Title 20 CFR 679.320(h) allows an individual to be appointed as a representative on the Local WDB for more than one entity if the individual meets all of the criteria for representation. Comments: Several commenters expressed concern with this approach because it differs from State WDB requirements; commenters recommended allowing for all core programs to have separate representation on Local WDBs. One commenter supported the flexibility in permitting a Local WDB member to represent multiple entities. Another commenter recommended that the Department should strongly discourage a Local WDB member from representing two interests, reasoning that a Board member serving the interests of two separate functions would not be true to the intent of WIOA. This commenter also expressed concern that it would create a conflict of interest under the Sarbanes-Oxley Act and a Board member’s heightened fiduciary responsibilities. Department Response: The Department recognizes that the structure VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 of core programs may differ across the country and separate representation may not be possible or practical in all local areas. The Department offers Governors and Local Chief Elected Officials the flexibility for an individual to be appointed as a representative on the Local WDB for more than one entity if the individual meets all of the criteria for representation. However, there is no requirement that this be the case. In accordance with WIOA sec. 107(b)(1) and § 679.320(a) the CEO must follow the process established by the Governor, in partnership with the State WDB, for appointing members of the Local WDB. With regard to concerns about conflicts of interest under the Public Company Accounting Reform and Investor Protection Act (Sarbanes-Oxley Act) or other applicable laws, neither WIOA nor these regulations exempt an official serving in a dual representation capacity from any applicable ethical rules. In fact, § 683.200(c)(5) imposes specific conflict of interest requirements on WIOA recipients in addition to those applicable under the uniform administrative requirements. For these reasons, the Department has determined that the flexibility for Local WDB membership is appropriate and no change to the regulatory text was made in response to these comments. Labor Union, Small Business, and Registered Apprenticeship Representation Paragraph (c) of § 679.320 requires that at least 20 percent of Local WDB membership must be workforce representatives to include representatives of labor organizations, and a joint labor-management registered apprenticeship program, or (if no such program exists in the area) a representative of a registered apprenticeship program in the area if such program exists. Comments: Commenters requested clarification of the total number of labor representatives required on the Local WDB, and suggested labor representatives include employee representatives for non-unionized employees. Department Response: Paragraph (c) of § 679.320 clarified that, at minimum, three labor representatives must be included in the Local WDB: Two or more representatives of labor organizations, where such organizations exist in the local area, and one joint labor-management representative of a registered apprenticeship program where such program exists in the local area. In the event that these organizations are not present in the local area, representatives must be PO 00000 Frm 00030 Fmt 4701 Sfmt 4700 selected from other employee representatives. For local areas with no union-affiliated registered apprenticeship program, a representative of a non-union registered apprenticeship in the area must be appointed if one exists. The Local WDB may include other individuals or representatives as outlined in paragraph (e). The Department has determined that no change is required to the proposed language to allow for additional representation of the labor force as appropriate. Regarding the number of small business representation, paragraph (b) of § 679.320 implements WIOA sec. 107(b)(2)(A)(ii), which describes Local WDB membership criteria and calls for members that ‘‘represent businesses, including small businesses.’’ The Department interprets WIOA’s use of the word ‘‘businesses’’ to indicate that the Local WDB is required to have more than one member representing a small business. Comments: One commenter requested a definition of the word ‘‘business’’ and asked if it ‘‘may include large non-profit organizations.’’ Another commenter requested a definition of ‘‘business organization,’’ suggesting it ‘‘include trade associations and chambers of commerce,’’ and another commenter also requested clarity that ‘‘business organizations can be a local chamber of commerce or a regional entity.’’ One commenter asked if sector representatives had to come from an established sector or if they also could represent ‘‘aspirational industries.’’ Department Response: WIOA sec. 3 contains definitions of terms used in the law. This section does not specifically define a business or a business organization. The groups suggested by the commenters may be included as long as they meet the membership criteria outlined in § 679.320. Title 20 CFR 679.320 implements WIOA sec. 107(b)(2) by describing the required members of a Local WDB. Paragraph (b) requires that a majority of the members of the Local WDB be representatives of businesses in the local area and paragraphs (b)(1) and (2) outline the required criteria. The Chief Elected Official (CEO) has the authority in WIOA sec. 107 and § 679.320(e)(4) to appoint other members as he/she deems appropriate. Regarding the comment on ‘‘aspirational industries,’’ many organizations can meet the criteria outlined in § 679.320(b) and the CEO has the authority to appoint additional members that meet the needs of the local area employers and job seekers. The Department concludes that no further definition is required and has E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations made no changes to the regulatory text in response to this comment. Comments: Multiple commenters stated that the Department cites WIOA sec. 3(25) regarding business representative requirements in § 679.320(b)(2) and it should reference sec. 3(23) instead. A commenter asked if trained members who have experience with eligible youth, as referenced in proposed § 679.320(c)(4), would include representatives from local government funded programs such as 4–H. Department Response: The Department agrees that the reference to WIOA sec. 3(25) in § 679.320(b)(2) is incorrect. WIOA sec. 3(23) defines indemand industry sector or occupation. WIOA sec. 3(25) defines an individual with a disability which is not relevant to § 679.320(b)(2). The Department has made the correction in § 679.320(b)(2). Regarding the question of whether representatives from 4–H programs would qualify as members having experience with eligible youth, § 679.320 implements WIOA sec. 107(b) which outlines membership criteria for Local WDBs. As outlined in § 679.320(a), for each local area in the State, the members of the Local WDB must be selected by the CEO consistent with the criteria established under statute and criteria established by the Governor, and must meet the requirements of WIOA sec. 107(c)(2). CEOs are required to establish a formal nomination and appointment process (§ 679.320(g)), which should answer specific questions about local area membership requirements. Due to the number of factors involved, the Department is not able to comment on if a specific entity would meet the requirements set forth by the Governor as well as all of the statutory requirements but advises interested parties to review the CEO’s process in their area. Comments: Paragraph (b)(2) of § 679.320 implements WIOA sec. 107(b)(1)(C)(i)(II), which provides that Local WDB business representatives represent businesses that provide ‘‘employment opportunities that, at a minimum, include high-quality, workrelevant training and development in indemand industry sectors.’’ Some commenters asked the Department to clarify the definition of ‘‘work-relevant training’’ in proposed § 679.110(b)(3)(i)(B). In particular, some of these commenters asked whether it pertains to for-profit training providers. Another commenter stated while the definition of ‘‘in-demand’’ is located at WIOA sec. 3(23), there is no definitions for the terms ‘‘high-quality’’ and ‘‘workrelevant.’’ This commenter VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 recommended that the Department allow these terms to be defined at the State or local level. Department Response: WIOA sec. 3 provides definitions of terms used in the law. The terms ‘‘work-relevant’’ training and ‘‘high-quality’’ are not defined in WIOA or in the regulations. The Local WDB’s functions under WIOA sec. 107(d) and § 679.370 include employer engagement, career pathways development, and identifying and disseminating promising practices. It is incumbent upon the Local WDB to apply the above terms so that it includes the members it determines best support its functions. No change to the regulatory text was made in response to these comments. Nominations WIOA sec. 107 and § 679.320 of this part outline the requirements for Local WDB membership. Comments: Commenters requested that a nomination process not be required in communities where there are multiple adult education providers. Department Response: WIOA sec. 107(b)(6) requires a nomination process if there are multiple eligible providers of title II adult education and literacy activities serving the local area (a similar process is required for multiple institutions of higher education in a local area). Section 679.320(g)(3) conforms with WIOA sec. 107(b)(6) and the Department made no changes to the regulatory text in response to these comments. Comments: Another commenter suggested that Local WDB members must be nominated by an appropriate body, and if no such body is clear, then the opportunity to present nominations should be required to be widely publicized. Department Response: WIOA does not require that the Local WDB nominations be from particular bodies, except that in instances of multiple adult education providers in a local area nominations will be accepted from those institutions in accordance with WIOA sec. 107(b)(6) and § 679.320(g)(3). In accordance with WIOA sec. 107(b)(1) and § 679.320(a) the CEO must follow the process established by the Governor, in partnership with the State WDB, for appointing members of the Local WDB which may include processes for soliciting nominations. No change to the regulatory text was made in response to these comments. PO 00000 Frm 00031 Fmt 4701 Sfmt 4700 56101 Individuals With Disabilities and Other Barriers to Employment Section 679.320 implements WIOA sec. 107(b) describing the required Local WDB membership. Comments: As with the State WDBs, many commenters from stakeholders with mandated representation under WIA, requested that they again be mandated members of the Local WDB, or that they be referenced in regulation. Department Response: WIOA reduced required Local WDB membership in an effort to streamline the Boards and provide Chief Elected Officials the flexibility to establish Local WDBs that best reflect the diversity of job seeker and employer communities. The Department recognizes that many important system partners with experience with specific job seeker populations, such as required one-stop partner programs, tribal organizations, other Department program grantees, and those serving the disadvantaged and disabled populations are no longer required members of the Board. However, § 679.320(c) and (d) require the Board be comprised of workforce representatives that can include one or more representatives of communitybased organizations that have demonstrated experience and expertise in addressing the employment, training, or education needs of individuals with barriers to employment. Paragraph (e)(4) of § 679.320 says the CEO has the flexibility to appoint ‘‘other appropriate individuals as determined by the chief elected official’’ which does not preclude any organization as the CEO deems appropriate. The Department encourages the CEO to ensure that Local WDB members represent the diversity of job seekers and employers in their local areas, which includes ensuring adequate representation on the Local WDB and ensuring appropriate expertise to address needs of individuals with barriers to employment. No change to the regulatory text was made in response to these comments. Voting Rights Title 20 CFR 679.320 implements WIOA sec. 107 (b) which outlines Local WDB membership. Comments: Some commenters recommended that Board members from each core program must be individuals working specifically with core programming and they must get a vote on the Local WDB, including grandfathered Boards. Department Response: Title 20 CFR 679.320(e)(4) says the CEO has the flexibility to appoint ‘‘other appropriate individuals as determined by the chief E:\FR\FM\19AUR6.SGM 19AUR6 56102 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations elected official’’ which does not preclude any organization as the CEO deems appropriate. The Department encourages the CEO to ensure that Local WDB members represent the diversity of job seekers, employers, and one-stop partner programs in the local area which includes ensuring adequate representation on the Local WDB. Title 20 CFR 679.320(i), which requires all required Local WDB members to have voting rights, also gives the CEO flexibility to convey voting rights to non-required members. No change to the regulatory text was made in response to this comment. Comments: One commenter asked how adult education programs that are not funded by the State and do not have voting rights can still contribute. Department Response: Title 20 CFR 679.360(a) permits the use of standing committees on the Local WDB. Standing committees may be established to provide information and assist the Local WDB in carrying out its responsibilities under WIOA 107. Standing committee members must include individuals who are not members of the Local WDB and who have demonstrated experience and expertise in accordance with § 679.340(b) and as determined by the Local WDB. Stakeholders with expertise may wish to contribute as members of standing committees, if the Local WDB establishes such committees. No change to the regulatory text was made in response to these comments. Section 679.330 Who must chair a Local Workforce Development Board? mstockstill on DSK3G9T082PROD with RULES6 Section 679.340 What is meant by the terms ‘‘optimum policy-making authority’’ and ‘‘demonstrated experience and expertise’’? Comments: One commenter strongly supported both proposed definitions. Another commenter expressed concern regarding the language used to define ‘‘optimum policy-making authority’’ because TANF is administered at the State level and local leadership does not have ‘‘optimum policy-making authority’’ for the agency. For this reason, the commenter requested that the Department clarify what ‘‘optimum policy-making authority’’ is at the local level. One commenter asked the Department if it thinks local administrators of State agencies meet the criteria for optimum policy-making authority or if it expects this regulation will require the nomination and appointment of State capital-based agency executives. Regarding demonstrated experience and expertise, one commenter recommended that all staff working VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 with job seekers and business customers should receive certification through programs like Certified Workforce Development Professional (CWDP) by the National Association of Workforce Development Professionals (NAWDP) to ensure they are qualified in their role. Department Response: 20 CFR 679.340 clarifies the term ‘‘optimum policy-making authority’’ as an individual who can reasonably be expected to speak affirmatively on behalf of the entity he or she represents and to commit that entity to a chosen course of action. The section also defines ‘‘demonstrated experience and expertise’’ at the local level, which includes a workplace learning advisor as defined in WIOA sec. 3(70); an individual who contributes to the field of workforce development, human resources, training and development, or a core program function; or someone the Local WDB recognizes for valuable contributions in education or workforce development related fields. The Department concludes that the Local WDB has flexibility to make the determinations of optimum policymaking authority and demonstrated experience and expertise within the outlined criteria. No change to the regulatory text was made in response to these comments. Section 679.350 What criteria will be used to establish the membership of the Local Workforce Development Board? Comments: Title 20 CFR 679.350 affirms that the chief elected official appoints the Local WDB in accordance with the criteria in WIOA sec. 107(b) and applicable State criteria. Commenters sought additional detail on which industries can be represented, specifically asking about the healthcare industry and educational institutions. Commenters also requested that 501(c)(3) corporations be defined as businesses. Department Response: WIOA sec. 3 contains definitions of terms used in the law. This section does not specifically define a business or a business organization. The entities identified by the commenters may be included as long as they meet the membership criteria. No change to the regulatory text was made in response to these comments. Section 679.360 What is a standing committee, and what is its relationship to the Local Workforce Development Board? Comments: 20 CFR 679.360 implements WIOA sec. 107(b)(4) and establishes the roles and responsibilities of standing committees within the Local PO 00000 Frm 00032 Fmt 4701 Sfmt 4700 WDB structure. Commenters supported the text, as well as suggested that the Department require or recommend particular groups, such as Job Corps, to be members of standing committees. Department Response: Standing committees were not legislated under WIA and are optional under WIOA as clarified in § 679.360(b). The Department declines to mandate a specific entity be represented on a standing committee, but nothing would prevent Job Corps representatives from being appointed to standing committees under § 679.360(b). Standing committees may be used to assist the Local WDB in carrying out its responsibilities as outlined in WIOA sec. 107. Comments: One commenter suggested changing the word ‘‘must’’ to ‘‘may’’ regarding the requirement in § 679.360(a) to include those appointed by the Local WDB in standing committees but who are not Board members. Department Response: The Department encourages the use of standing committees to expand opportunities for stakeholders to participate in Local WDB decisionmaking, particularly for representatives of organizations that may no longer sit on the Local WDB but continue to have a stake in the success of Local WDB decisions. Such committees also expand the capacity of the Local WDB in meeting required functions and expand opportunities for stakeholders to participate in Local WDB decisionmaking. For this reason, it is important to require the appointment of non-Board members. No change to the regulatory text was made in response to these comments. Section 679.370 What are the functions of the Local Workforce Development Board? Role and Function of the Local WDB Title 20 CFR 679.370 lists the functions of the Local WDBs as enumerated in WIOA sec. 107(d). Under WIOA, the Local WDB, in partnership with the CEO, must perform a variety of functions to support the local workforce system. Comments: Commenters recommended the addition of a variety of Local WDB functions. Department Response: In order to preserve Local WDB flexibility, the Department declines to enumerate additional functions. No change to § 679.370 was made in response to these comments. Comments: Paragraph (b) of § 679.370 discusses a new role for Local WDBs E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 that are part of a planning region that includes multiple local areas. This provision repeats the WIOA requirement that Local WDBs that are part of a planning region must develop and submit a regional plan in collaboration with the other Local WDBs in the region. Regarding § 679.370(b), a commenter recommended the Department include language allowing any local area that includes multiple jurisdictions and partners to have an automatic designation as a region and to consider that area’s local plan to be a regional plan. Department Response: WIOA sec. 106(a)(2) clearly assigns the State the responsibility of identifying regions after consultation with Local WDBs and chief elected officials. As required in WIOA sec. 106(c)(2), the local plan is incorporated into the regional plan, where required, in accordance with § 679.540. No change to the regulatory text was made in response to this comment. Career Pathways (§ 679.370(f)) WIOA sec. 3(7)(A) through (G) defines career pathways as a combination of rigorous and high-quality education, training, and other services that meet specified guidelines. WIOA sec. 101(d)(3)(B) enumerates ‘‘the development of strategies to support the use of career pathways for the purpose of providing individuals, including lowskilled adults, youth, and individuals with barriers to employment (including individuals with disabilities), with workforce investment activities, education’’ as a function of the State WDB and is described in § 679.130(c)(2). WIOA sec. 107(d) and § 679.300 extends the requirement to Local WDBs. Comments: Commenters requested that the Department provide more comprehensive guidance on the implementation of career pathways. Several commenters provided recommended changes to the regulatory text that included adding criteria, including a section specific to Local WDB implementation of career pathways, requiring the State and Local WDBs to define the roles and responsibilities of WIOA programs related to career pathways, listing required partners (such as Job Corps, and public television), and developing strategies to include job seekers with specific barriers to employment. Department Response: The Department acknowledges the interest in implementing successful career pathway strategies. The ideas and suggestions provided by the commenters support that career VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 pathways is a dynamic topic that involves input of multiple partners and stakeholders across the public workforce system. The Department agrees that further guidance and technical assistance is needed and will be issued. However, the statutory language provides general criteria for both State and Local WDBs to use in developing career pathway strategies meeting their needs. More prescriptive language may limit State and Local WDBs’ ability to be proactive and innovative in developing career pathways to support individuals to retain and enter employment. No change to the regulatory text was made in response to these comments. Strategies for Technological Improvements To Improve One-Stop Services (§ 679.370(h)) Comments: Proposed § 679.370(h)(1) requires that Local WDBs facilitate connections among the intake and case management information systems of the one-stop partner programs; a commenter asserted that connecting intake and case management information systems will raise significant issues in terms of staffing, technology, and confidentiality. Department Response: Title 20 CFR 679.370(h) does not outline specific technology requirements expectations, but rather the Board is responsible for developing strategies for aligning technology and data systems across onestop partner programs. The Local WDB may connect intake and case management systems, but neither WIOA nor the regulations require a single case management system among one-stop partners. The regulation provides Local WDBs with flexibility to develop systems that best fit their needs and budgets. No change to the regulatory text was made in response to these comments. Review of Adult Education Provider Applications (§ 679.370(n)) Paragraph (n) of § 679.370 reflects a number of new functions for the Local WDB related to coordination with adult education and literacy providers in the local area. This provision requires the Local WDB to review applications to provide adult education and literacy activities under title II to determine whether such applications are consistent with the local plan; the eligible agency retains approval authority. It also requires the Local WDB to make recommendations to the eligible agency to promote alignment with the local plan. Comments: Commenters requested clarification regarding the application review process. Further information PO 00000 Frm 00033 Fmt 4701 Sfmt 4700 56103 regarding Local WDB coordination with adult education and literacy providers is provided at 34 CFR part 463, which requires the eligible agency to establish in its competition a processes by which applicants must submit an application to the Local WDB for review prior to its submission to the eligible agency. This part also includes a role for the Local WDB in replicating and implementing cooperative agreements in accordance with subparagraph (B) of sec. 101(a)(11) of the Rehabilitation Act of 1973 (29 U.S.C. 721(a)(11)), and implementing cooperative agreements in accordance with that section with the local agencies administering plans under title I of that Act (29 U.S.C. 720 et seq.) other than sec. 112 or part C of that title (29 U.S.C. 732, 741) to enhance the provision of services to individuals with disabilities and other individuals. Commenters expressed concerns that Local WDBs will not have the appropriate amount of time to review all adult education provider applications in a timely manner, particularly in large cities with many programs or for education programs serving jurisdictions with multiple Local WDBs. One commenter also expressed concern about the title II adult education provider application review process because Local WDBs do not understand enough about education programs and recommended that the regulations contain a clear conflict of interest policy as well as a process where the adult education stakeholders have the ability to help shape the local plan. One commenter suggested that the review and approval process outlined in § 679.370(n) for adult education providers should be applied to all core partner plans. Department Response: The Department of Education provides additional information about the review of local applications for grants or contracts to provide title I adult education and literacy services at 20 CFR 463.20 which reiterates that the purpose of the review is to ensure that the application is consistent with the local plan. The section also advises that the review is taken into consideration when making funding decisions. The Department of Education advises that only appointed local WDB members who do not have a conflict of interest as defined in sec. 107(h) of WIOA are allowed to participate in the review of an eligible training provider application. Boards may arrange to offer training to local WDB members by adult education experts prior to participating in the review process. No change to the regulatory text was made in response to these comments. E:\FR\FM\19AUR6.SGM 19AUR6 56104 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations Ensuring Appropriate Use and Management of WIOA Funds Comments: Under paragraph (h), a commenter asked if the State can limit a Local WDB’s authority to increase the on-the-job training reimbursement rate if all factors required in regulation and policy are met. Department Response: Paragraph (h)(4)(i)(2) of § 679.370 requires Local WDBs, in partnership with the chief elected official for the local area, to ensure the appropriate use and management of funds. Therefore, local areas should establish policies, interpretations, guidelines, and definitions to implement provisions of title I of WIOA to the extent that such policies, interpretations, guidelines, and definitions are not inconsistent with WIOA and the regulations issued under WIOA, Federal statutes and regulations governing one-stop partner programs, and with State policies. States also should establish policies, interpretations, guidelines, and definitions to implement provisions of title I of WIOA to the extent that such policies, interpretations, guidelines, and definitions are not inconsistent with WIOA and the regulations issued under WIOA, as well as Federal statutes and regulations governing one-stop partner programs. Local WDBs, therefore, can set policies but those policies must not conflict with State policy, or WIOA. No change to the regulatory text was made in response to these comments. Negotiation of Local Performance Indicators (§ 679.370(j)) Comments: Under paragraph (j), a commenter stated that the regulations need to indicate that local areas have the final decision regarding performance negotiations. Department Response: WIOA sec. 107(d)(9) requires that locals negotiate performance and § 679.510(a)(1)(viii) requires an agreement between Local WDBs and chief elected officials for how a planning region will collectively negotiate and reach agreement with the Governor on local levels of performance. No change to the regulatory text was made in response to these comments. mstockstill on DSK3G9T082PROD with RULES6 Negotiating Methods for Funding OneStop Infrastructure Costs (§ 679.370(k)) Title 20 CFR 679.370(k) requires that the Local WDB negotiate with the CEO and required partners on the methods for funding the infrastructure costs of one-stop centers. Comments: Comments asked for clarification on the role of CEO. Department Response: The CEO is not required to provide infrastructure costs, VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 nor is the CEO required to negotiate the infrastructure costs, but rather the Local WDB and the CEO must agree upon the methods that will be applied to determine the infrastructure funding. Section 678.500 (see Joint WIOA Final Rule) describes what must be included in the Memorandum of Understanding executed between the Local WDB, with the agreement of the CEO, and the onestop partners relating to the operation of the one-stop delivery system in the local area, and provides for additional details regarding infrastructure costs. No change to the regulatory text was made in response to these comments. Selection of Youth Services, Training, and Career Services Providers (§ 679.370(l)) Comments: Under paragraph (l), a couple of commenters requested clarification that Local WDBs only can determine eligibility of training providers for their local areas and that eligibility is contingent on the providers being approved on the State eligible training provider list (ETPL). Department Response: WIOA sec. 122 and 20 CFR part 677 of the Joint WIOA Final Rule describe the process for determining the eligibility of training providers. Providers must be approved via the Governor’s process, however, Local WDBs may set additional criteria for providers on the local list. No change to the regulatory text was made in response to these comments. Section 679.400 Who are the staff to the Local Workforce Development Board and what is their role? Title 20 CFR 679.400 describes the Local WDB’s authority to hire staff and the appropriate roles for Board staff as outlined in WIOA sec. 107(f). Comments: Commenters suggested that any prior agreements between Local WDBs and chief elected officials regarding staffing roles and responsibilities be recognized; that the regulations clarify that the State agency is to take responsibility for hiring; and that the regulations should reiterate that the hiring of a director is optional. Department Response: WIOA sec. 107(f) describes the authority of the Local WDB to hire a director. There is no mandate that Local WDBs hire staff. The authority to hire staff to support the Local WDB is granted under WIOA sec. 107(f) to the Local WDB, not the State agency. Prior agreements are not automatically recognized. It is in the best interest of the public workforce system to ensure the director of the Local WDB is competent and experienced with workforce programs PO 00000 Frm 00034 Fmt 4701 Sfmt 4700 and service delivery. Paragraph (b) of § 679.400 requires the Local WDB to apply objective qualifications to the Board director, paragraph (d) limits the Local WDB staff’s role to assisting the Board fulfill the functions at WIOA sec. 107(d) unless the entity selected to staff the Board enters into a written agreement with the Board and CEO as noted in § 679.400(e). Title 20 CFR 679.400 aligns with WIOA sec. 107(f) and no change to the regulatory text was made in response to these comments. Section 679.410 Under what conditions may a Local Workforce Development Board directly be a provider of career services, or training services, or act as a one-stop operator? Selection as a One-Stop Operator (§ 679.410(a)) Title 20 CFR 679.410 implements WIOA sec. 107(g) and explains the situations in which the Local WDB may directly act as a one-stop operator, a provider of career services, or training services provider. Comments: The Department received many comments supporting the requirement that one-stop operators be competitively procured. However, other commenters recommended waivers or exceptions to the requirement that onestop operators be competitively procured. Some commenters recommended waivers for performance, direct designation of the Local WDB as the one-stop operator with the agreement of the CEO and Governor, and allowing Governors to designate the selection of one-stop operators in singlearea States. Several commenters disagreed with the Department’s interpretation that WIOA sec. 107(g), which allows for the selection of the one-stop operator with the agreement of the CEO and Governor, is an additional requirement under WIOA sec. 121(d)(2)(A) and not a separate path to designation. Department Response: A more detailed discussion of this issue is contained in 20 CFR part 678 of the Joint WIOA Final Rule. The Department maintains the interpretation, consistent with 20 CFR 678.605 (see Joint WIOA Final Rule) and WIOA sec. 121(d)(2)(A), that the Local WDB must select the onestop operator through a competitive process. In instances in which a State is conducting the competitive process, the State must follow the same policies and procedures it uses for procurement with non-Federal funds. State, Local, and non-Federal entities should follow the applicable procurement guidelines in the Uniform Guidance at 2 CFR part 200. Neither WIOA nor § 679.410 E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations prohibit Local WDBs from competing to become a one-stop operator if they could do so in accordance with the Uniform Guidance. The provision requires the competitive procurement of all one-stop operators. No change to the regulatory text was made in response to these comments. mstockstill on DSK3G9T082PROD with RULES6 Career Services Provider (§ 679.410(b)) The Department specified in § 679.410(b) that a Local WDB may act as a provider of career services only with the agreement of the CEO in the local area and the Governor. Comments: Commenters requested clarification regarding the circumstances under which a Local WDB may provide career services. Department Response: Although WIOA sec. 107(g) requires that one-stop operators be competitively procured, there is no similarly clear statutory requirement for provision of career services and therefore Local WDBs do not have to undertake a competitive process to offer career services. Comments: Some commenters suggested that Local WDBs only be permitted to offer career services if the CEO and Governor agree that there are insufficient providers of career services in an area. Another commenter responded that many Local WDBs are currently delivering high quality career services and should not be forced to procure them. Department Response: The Department has interpreted WIOA sec. 107(g)(2), which states that a Local WDB may provide career services described in WIOA sec. 134(c)(2) through a onestop delivery system or be designated or certified as a one-stop operator only with the agreement of the CEO and the Governor, to mean that the Local WDB’s delivery of career services is at the discretion of the CEO and Governor. Section 679.410(b) offers the CEO and Governor flexibility in deciding whether to pursue a competitive award of career services. However, the Department supports competition and maintains the opinion that Local WDBs acting as direct providers of these services is not optimal. No change to the regulatory text was made in response to these comments. Comments: Commenters also requested clarity regarding the role of Local WDB members in delivering training and career services but offered no suggested language changes. Department Response: Paragraph (d) of § 679.410 provides language that extends the Local WDB limitations outlined in § 679.410(c) to Local WDB staff. No change to the regulatory text VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 was made in response to these comments. Training Services Provider (§ 679.410(c)) WIOA sec. 107(g)(B) outlines a waiver process for Local WDBs to offer training services. Local WDBs wanting to offer training services, such as GED, are required to apply to the Governor for a waiver and meet the waiver restrictions outlined in WIOA sec. 107(g)(1) and § 679.410(c). Comments: Commenters asked for clarification regarding the penalties for violating this provision. Department Response: WIOA sec. 183 requires the Governor to monitor all locals and lays out the course of action for any deficiencies that are not corrected such as corrective action, sanctions, and reorganizing the Local WDB. Entities that do not comply are subject to appropriate administrative and fiscal actions, which may include revocation of the waiver as described in WIOA sec. 107. No change to the regulatory text was made in response to these comments. Section 679.420 What are the functions of the local fiscal agent? Comments: The Department requested comment on § 679.420 which addresses the roles of the local fiscal agent. Many commenters agreed with the regulation as proposed while others provided recommendations for expanding the role and suggested changes to the regulatory text to include requiring the permissible functions in § 679.420(c). Other commenters requested additional guidance on specific concerns such as fees, policy development, clarification on entities that may act as a fiscal agent, and the role of the CEO. Noting that most commenters agreed with the fiscal agent role set forth in the proposed regulatory text, the Department made no changes to the fiscal agent functions under § 679.420. One commenter said that that the definition of fiscal agent conflicts with § 681.400. Department Response: The Department disagrees that the two regulatory sections are in conflict. Paragraph (b) of § 679.420 provides a list of the key functions of a fiscal agent. The appropriate role of fiscal agent is limited to accounting and funds management functions rather than policy or service delivery. Section 681.400 provides that the local grant recipient may directly provide youth services. Entities serving multiple roles must adhere to WIOA title I, subtitle E (Administration) and § 679.430 to ensure appropriate firewalls within a PO 00000 Frm 00035 Fmt 4701 Sfmt 4700 56105 single entity performing multiple functions, including when a fiscal agent also functions as a direct provider of services. No change to the regulatory text was made in response to these comments. Section 679.430 How do entities performing multiple functions in a local area demonstrate internal controls and prevent conflict of interest? Proposed 20 CFR 679.430 specified that a written agreement with the Local WDB and CEO is required when a single entity operates in more than one of the following roles: Local fiscal agent, Local WDB staff, one-stop operator, or direct provider of career services or training services. Comments: Several commenters requested clarification regarding how various entities should function in multiple roles. Department Response: This section requires a written agreement with the Local WDB and chief elected official when a single entity operates in more than one of the specified roles, but does not dictate the specific contents of the agreement, because the regulation cannot account for each individual Local WDB situation. However, the agreement must demonstrate how the organization will carry out its responsibilities while in compliance with WIOA and corresponding regulations, relevant Office of Management and Budget (OMB) circulars, the Uniform Guidance, and the State’s conflict of interest policy. While it may be appropriate in some instances for a single organization to fulfill multiple roles, a written agreement between the Local WDB, chief elected official, and the organization fulfilling multiple roles is the best method to limit conflicts of interest or the appearance of conflicts of interest, minimize fiscal risk, and develop appropriate firewalls within a single entity performing multiple functions. Because the regulation must be adaptable to a variety of potential situations, the Department has determined that no regulatory change is appropriate in this section and no change to the regulatory text was made in response to these comments. However, to clarify the multiple roles this section is addressing, the regulatory text was revised to refer to ‘‘the direct provider of services’’ instead of ‘‘the direct provider of career and training services’’ in order to include cases where the entity may be directly providing youth services under WIOA. E:\FR\FM\19AUR6.SGM 19AUR6 56106 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations Other Comments on Local Workforce Development Boards Comments: A commenter expressed its support for all of the proposed part 679, subpart C, regulations. Multiple commenters said that Local WDBs should have more flexibility in the time allowable to become compliant with Federal and State laws during the program year 2015–2016. Department Response: Regarding timelines, the Department agrees that clarification of the expectation for the process is needed and will add § 679.500(c), which requires the Governor to establish and disseminate a policy for the submission of local and regional plans. Comments: One commenter asserted that the regulations are missing the vital role of a ‘‘system coordinator’’ that is truly necessary in complex areas like large metropolitan cities. The commenter described three options for designating a ‘‘system coordinator’’ that it asserted would maintain the Local WDB’s authority to establish a vision for the local workforce development system, recognize the diversity in models for implementing WIOA, and maintain a competition to ensure the highest quality providers are selected to operate one-stop centers. These options were described as (1) the Local WDB taking on the role of system coordinator (provided it competitively selected onestop operators per WIOA sec. 121(d)); (2) the Local WDB could, with agreement of the CEO, designate a local public agency or non-profit organization as the system coordinator (provided it competitively selected one-stop operators); or (3) a single one-stop operator could still play this role. Department Response: WIOA does not define or otherwise reference a role for a system coordinator. WIOA secs. 101 and 107 allow Boards to hire staff for the purposes of assisting in carrying out the Board required functions. The local option to create a role of a system coordinator is already covered in the Boards’ authority to hire staff. No change to the regulatory text was made in response to these comments. mstockstill on DSK3G9T082PROD with RULES6 4. Subpart D—Regional and Local Plan Title 20 CFR 679.500 describes the purpose of the regional and local plans; WIOA provides designated regions and local workforce areas the responsibility and opportunity to develop employment and training systems tailored specifically to regional economies. These systems must meet the needs of the full range of learners and workers, including those with barriers to employment. The system must also VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 address the specific needs of regional employers and the skills they require. WIOA requires the Local WDB, in partnership with the CEO, to submit a local plan to the Governor. If the local area is part of a planning region, the Local WDB will submit its local plan as part of the regional plan and will not submit a separate local plan. The local or regional plan provides the framework for local areas to define how their workforce development systems will achieve the purposes of WIOA. The regional or local plans serve as 4-year action plans to develop, align, and integrate the region and local area’s job driven workforce development systems, and provides the platform to achieve the local area’s visions and strategic and operational goals. Since the local plan is only as effective as the partnerships that operationalize it, it must represent a collaborative process among local elected officials, boards, and required and other partners (including economic development, education, and private sector partners) to create a shared understanding of the local area’s workforce investment needs, a shared vision of how the workforce development system can be designed to meet those needs, and agreement on the key strategies to realize this vision. The Department received comments on the purpose, the content, and the structure of regional and local plans. In this subpart the Department addresses comments regarding how regions can be aligned. Section 679.500 What is the purpose of the regional and local plan? WIOA sec. 106(c) addresses regional coordination and regional plans are addressed in WIOA sec. 106(c)(2). In accordance with WIOA sec. 106(c), § 679.500 describes the purpose of the regional and local plans. Comments: Commenters provided feedback for the content of the regional plan, expressed concern about the challenges of coordination, requested additional guidance on plan development, and asked for clarity regarding plan development and submission. Department Response: The Department has issued some guidance on planning and anticipates issuing additional guidance on planning to the public workforce system. Regarding timelines, the Department agrees that clarification of the expectation for the process is needed and has added § 679.500(c), which requires the Governor to establish and disseminate a policy for the submission of local and regional plans. PO 00000 Frm 00036 Fmt 4701 Sfmt 4700 Section 679.510 What are the requirements for regional planning? Participation in a Regional Planning Process (§ 679.510(a)(1)) WIOA sec. 106(c) governs regional coordination and regional planning requirements, which are clarified in § 679.510. Comments: A commenter asked which local area within a region would be responsible for the performance negotiation process. Department Response: The representatives of each local area in the region are collectively responsible for the process. Establishing an agreement among the Local WDBs and local CEOs in the region concerning how the planning region will collectively negotiate and reach agreement with the Governor on local levels of performance for, and report on, the performance accountability measures is required by WIOA sec. 116(c)(1)(H) and § 679.510(a)(1)(viii). No change to the regulatory text was made in response to these comments. Preparation, Submittal, and Approval of Regional Plans (§ 679.510(a)(2)) Comments: Commenters have suggested that a single local area could elect to participate in multiple planning regions through a memorandum of agreement. Department Response: In accordance with WIOA sec. 106, a single local area may not be split across two planning regions. Local areas must align with planning regions to align economic and workforce development activities and resources effectively. Local areas may be part of only one region. However, local areas are not prohibited from working or coordinating with other local areas, and regions may coordinate with other planning regions. Similarly, where a single local area is identified as a region, such a local area could reasonably coordinate with other local areas or planning regions. Coordination may be especially vital across States; the Department anticipates providing additional guidance regarding the creation and management of interstate planning regions. As the regulation aligns with WIOA and does not prohibit coordination, no change to the regulatory text was made in response to these comments. Comments: A commenter asked how the plans are to be submitted. Department Response: The plans must be submitted to the Governor as outlined in § 679.510(a)(2) and any guidance issued by the Department (§ 679.510(a)(1)(i)). E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations Other Requirements for Regional Planning (§ 679.510(b), (c), and (d)) Comments: Commenters suggested specific content for the regional plan including how the region coordinates core program services, economic development strategies, education attainment, credentialing of workforce skills to meet employer skill needs, and data regarding participants with disabilities. Department Response: WIOA sec. 106(c)(2) and § 679.510 describe the requirements for regional planning, which already address the region’s service strategies, regional labor market data, coordination efforts, etc. The Department plans to issue further guidance. Section 679.520 What are the requirements for approval of a regional plan? Section 679.520 describes the regional plan approval process. Comments: The Department received comments regarding the timelines, including suggestions that the timeline for approval in § 679.520 of ‘‘90 days after submission’’ is inconsistent with WIOA sec. 108(e), which says the plan ‘‘shall be considered to be approved by the Governor at the end of the 90-day period beginning on the day the Governor receives the plan.’’ Department Response: The Department agrees that 90-day period should be revised to track WIOA and has amended both §§ 679.520 and 679.570 to reflect the statutory language of 90 days after receipt of the local plan. mstockstill on DSK3G9T082PROD with RULES6 Section 679.530 When must the regional plan be modified? Title 20 CFR 679.530 describes when a regional plan must be modified and § 679.580 requires the Governor to establish procedures governing local plan review and modification to ensure that the biennial review and modification of local plans is conducted consistently throughout the State. The circumstances identified in § 679.530(b)(1) and (2) identify the significant changes that require modification but the Governor may require other factors. While sec. 106(c) of WIOA clearly describes the required contents of the regional plan, it provides less detail about the approval and modification process, saying only that officials in the planning region must ‘‘prepare, submit, and obtain approval’’ of the plan. Comments: Commenters requested that the language in this section and of § 679.580 be narrowed to specify that modifications are required only in VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 response to ‘‘changes to local economic conditions, and any changes in the financing available’’ to allow regions more flexibility. Department Response: Because the local plan is a component of the regional plan, the Department decided to apply the approval and modification requirements to the regional plan, which are reflected in § 679.530(b)(2), and which require modification based on ‘‘other factors affecting the implementation of the local plan, including but not limited to changes in the financing available to support WIOA title I and partner-provided WIOA services.’’ In the Department’s view, ensuring that regional and local plans remain up-to-date and relevant, and ensuring consistency between regional and local plan requirements, will improve the effectiveness of the public workforce system. No change to the regulatory text was made in response to these comments. Section 679.540 How are local planning requirements reflected in a regional plan? Title 20 CFR 679.540 outlines how local planning requirements are reflected in a regional plan. WIOA is silent on the coordination of the regional and local plan, noting only that the regional plan must ‘‘incorporate local plans for each of the local areas in the planning region.’’ The Department has determined that the most appropriate and least burdensome approach to implementing this provision is to include a copy of each local plan within the regional plan to accompany the plan’s discussion of regional strategies. In this arrangement, the regional plan is completed in cooperation with the Local WDBs and CEOs in a planning region, per § 679.510(a). Each individual Local WDB and CEO will respond to the local planning requirements at § 679.560(b) through (e) individually. The Local WDBs and CEOs in a planning region must cooperate to develop a common response to the local planning requirements that discuss regional labor market information, as required by § 679.540(a), and any other appropriate requirements permitted by the Governor per § 679.540(b). When these activities are completed, the planning region submits one regional plan to the Governor that includes the common discussion of regional labor market information and other requirements as required by the Governor, as well as each local plan in a single document. Comments: A commenter asked the Department to clarify if regions had to submit all of the separate local plans PO 00000 Frm 00037 Fmt 4701 Sfmt 4700 56107 that are encompassed in the regional plan. Department Response: WIOA sec. 106(c)(2) requires the regional plan to incorporate local plans for each of the local areas in the planning region. As described above, the Department has determined that the most appropriate and least burdensome approach to implementing this provision is to include a copy of each local plan within the regional plan to accompany the plan’s discussion of regional strategies. No change to the regulatory text was made in response to these comments. Section 679.550 What are the requirements for the development of the local plan? Title 20 CFR 679.550 explains the requirements for the development of the local plan. This section emphasizes the importance of collaboration and transparency in the development and submission of the local plan and subsequent modifications. Comments: A commenter requested clarification regarding when it was necessary for a local area to submit a local plan. Department Response: Paragraph (a) of § 679.550 implements sec. 108(a) of WIOA and describes the general requirements for the preparation and content of the local plan. If the local area is part of a planning region, the Local WDB must comply with WIOA sec. 106(c) and §§ 679.510 through 679.540 in the preparation and submission of a regional plan. The local plan is considered submitted when it is incorporated in the regional plan. Comments: Other commenters asked if the terms plan, the local plan, or the local workforce investment plan are synonymous and recommended consistency be used throughout the regulation. Department Response: The Department used all terms to refer to the local plan required in WIOA sec. 108 and refers to the local plan in the regulations. Section 679.560 What are the contents of the local plan? Contents of a Local Plan Title 20 CFR 679.560 is consistent with sec. 108(b) of WIOA and outlines the information that must be included in the local plan. These requirements set the foundation for WIOA principles, by fostering strategic alignment, improving service integration, and ensuring that the public workforce system is industryrelevant, responding to the economic needs of the local area and matching employers with skilled workers. E:\FR\FM\19AUR6.SGM 19AUR6 56108 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 Comments: The Department received comments supporting the proposed section, and some recommending changes to the content of the local plan, as well as comments requesting additional guidance. Department Response: The Department has determined it is appropriate for § 679.560 to track closely with WIOA sec. 108(b), which outlines the content requirements of the local plan. No changes were made to the regulatory text in response to these comments. The Department recognizes the need for technical assistance in developing local plans and will issue guidance for State and Local WDBs to assist in developing compliant plans. Local Levels of Performance Title 20 CFR 679.560(b)(4) explains that the Local WDB must describe how it will coordinate local workforce investment activities with regional economic development activities that are carried out in the local area and promote entrepreneurial skills training and microenterprise services. Comments: Commenters requested additional information on performance criteria for the ETPL and ‘‘microenterprise development.’’ Department Response: Alignment between the public workforce system and local economic development activities is critical in order to identify and fulfill industry talent needs by training customers for emerging and in demand job skills. Furthermore, microenterprise development refers to training for the purposes of selfemployment. This training strategy may be appropriate for individuals or participants with multiple barriers to employment, including persons with disabilities. Title 20 CFR 679.560(b)(5) focuses on the delivery of services through the onestop delivery system in the local area and requires descriptions regarding how the Local WDB will ensure the continuous improvement of eligible providers of services—see part 680, subpart D, for additional information on the requirements of the eligible training provider list. Comments: Other commenters suggested that regulations detail the timeline for performance negotiations related to local plan submission. Department Response: The Department agrees that clarification is needed and has added § 679.500(c), which requires the Governor to establish and disseminate a policy for the submission of local, and regional plans. This policy must account for the requirement that local areas in a region reach agreement on how they will VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 negotiate performance indicators with the Governor, as provided in § 679.510(a)(1)(viii). Priority of Service (§ 679.560(b)(21)) Comments: Commenters requested additional clarification on the implementation of priority of service, and recommended methods to ensure consistent implementation. Department Response: Title 20 CFR 679.560(b)(21) requires that the plan include description of the process by which priority of service must be applied by the one-stop operator, but also clarifies that such priority is for adult career and training services and must be given to recipients of public assistance, other low-income individuals, and individuals who are basic skills deficient. Including the priority service policy in the local plan will help ensure a more uniform application of the policy throughout the local area. The Department has issued some guidance on planning and anticipates issuing additional guidance for State and Local WDBs to assist in developing compliant plans; no change to the regulatory text was made in response to these comments. Comments: A commenter suggested that the WIOA system should provide program participants with access to curriculum-aligned industry-recognized certificates verifying attainment of the critical skills that employers are looking for, so that when opportunities open up, the match between job seeker and employment can be accelerated and career pathways can be illuminated. Department Response: Title 20 CFR 679.560(b)(2) requires that the Local WDB describe how such alignment will improve access to services and to activities that lead to a recognized postsecondary credential. The Local WDBs have the flexibility to consider many options; the Department declines to require a specific approach. However, the Department recognizes the need for technical assistance in developing local plans and will issue planning guidance for State and Local WDBs to assist in developing compliant plans. No change to the regulatory text was made in response to these comments. Other Comments on Local Plans Comments: A commenter suggested deleting § 679.560(b)(17) regarding becoming or remaining a highperforming Board. Department Response: The Department has determined that the requirement is consistent with WIOA sec. 108(b)(18) and has made no changes to the regulatory text in response to this comment. PO 00000 Frm 00038 Fmt 4701 Sfmt 4700 Comments: The Department received several comments regarding § 679.560(b)(20) regarding the requirement that a local plan include a description of how one-stop centers are implementing and transitioning to an integrated, technology-enabled intake and case management information system for programs carried out under WIOA and by one-stop operators. Commenters had specific questions regarding how such a system is to be implemented. Department Response: Paragraph (b)(20) of § 679.560 reflects WIOA sec. 108(b)(21). There is a requirement that the plan detail the actions that will be taken but there is no mandate in this section of a particular approach. No change to the regulatory text was made in response to these comments. Section 679.570 What are the requirements for approval of a local plan? Overarching Comments on the Approval of a Local Plan Timeline for Approval and Implementation The Department recognizes that the development of the local plan is dependent on several other essential State and local WIOA implementation activities and that local areas may not be able to respond fully to each of the required elements of the local plan in the timeframe provided. The Department sought comment on the scope of the challenges local areas may face regarding regional and local planning and potential actions that the Department can take to help local areas address these challenges. Comments: Several commenters requested that the amount of time be extended for both existing local plans that are already compliant with the initial designation criteria and local plans for new areas or regions. Commenters suggested that local plans be due 6 to 9 months after the State Plans are approved. Many commenters expressed concerns about the timeline in developing and submitting all plans. Several suggested timelines that should be regulated. Other commenters suggested that regulations detail the timeline for performance negotiations related to plan submission. Department Response: Title 20 CFR 679.570 implements WIOA sec. 108(e). Paragraph (a) of § 679.570 requires that the Governor review completed plans and stipulates that unless the Governor determines that the plan is deficient according to paragraphs (a)(1) through (3), the plan will be considered approved 90 days after the Governor receives the plan. The Department made a clarifying edit to paragraph (a) so that E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations it is clear the 90-day time period begins when the Governor receives the plan, rather than at submission. The Department also edited paragraph (a)(2) to update the citation to the regulation that implements WIOA sec. 188. Regarding timelines, the Department agrees that clarification of the expectation for the process is needed and, as described above, has added paragraph (c) to § 679.500, which requires the Governor to establish and disseminate a policy for the submission of local and regional plans. With Training and Employment Guidance Letter No. 14–15, ‘‘Workforce Innovation and Opportunity Act (WIOA) Requirements for Unified and Combined State Plans,’’ dated March 4, 2016, and the WIOA State Plan ICR, published under OMB control number 1205–0522, the Department issued guidance on and requirements for Unified and Combined State Plans. The Department also intends to issue guidance or technical assistance on local and regional planning. Section 679.570 aligns with WIOA sec. 108, and the changes described above address the commenters’ concerns. No additional change to the regulatory text was made in response to these comments. Paragraph (b) of § 679.570 outlines the processes, roles, and responsibilities in the local plan process for situations in which the State is a single local area. Paragraph (b)(1) clarifies the State must incorporate the local plan in the State’s Unified or Combined State Plan submitted to the Department. Paragraph (b)(2) states that the Secretary of Labor will perform the roles assigned to the Governor as they relate to local planning activities and § 679.570(b)(3) indicates the Secretary of Labor will issue planning guidance for single-area States. Comments: Commenters asked why the Secretary of Labor would be performing the Governor’s role, what those planning activities are, and if the Secretary of Labor should be limited to approving local plans. Department Response: Single-area States are required to submit the plan to the Secretary of Labor under WIOA sec. 108. The Secretary will perform the Governor’s role in local planning as outlined in WIOA sec. 108(a) and (e) regarding plan submission and approval. Section 679.570 aligns with WIOA sec. 108 and the Final Rule makes no change to § 679.570(b) in response to these comments. Section 679.580 When must the local plan be modified? Title 20 CFR 679.580 is consistent with WIOA sec. 108(a), which requires the Governor to establish procedures VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 governing local plan review and modification to ensure that the biennial review and modification of local plans is conducted consistently throughout the State. Paragraph (b) of § 679.580 explains that the Local WDB and appropriate CEOs must review the local plan every 2 years and submit a modification as needed, based on significant changes in labor market and economic conditions and other factors including changes to local economic conditions, changes in the financing available to support WIOA title I and partner-provided WIOA services, changes to the Local WDB structure, or a need to revise strategies to meet performance goals. Comments: A commenter recommended that modifications be limited to only substantive changes or as required by the State WDB. Other commenters requested guidance that included examples of changes warranting a local plan modification. Department Response: As outlined in § 679.580, the Governor is required to establish procedures governing local plan review and modification. The Governor has the flexibility to further define the criteria under § 679.580(b) that require a modification to the local plan. The Department does not agree that additional language is needed to require additional modification requirements. Moreover, as described in the discussion of regional plan modification in § 679.530, in the Department’s view, ensuring that local and regional plans remain up-to-date and relevant, and ensuring consistency between local and regional plan requirements, will improve the effectiveness of the public workforce system. The Department declines to change the modification requirements and has made no changes to the regulatory text in response to these comments. 5. Subpart E—Waivers/WorkFlex (Workforce Flexibility Plan) This subpart describes the statutory and regulatory waiver authority provided by WIOA sec. 189(i), and the requirements for submitting a Workforce Flexibility Plan under WIOA sec. 190. The Department addresses comments regarding the purpose of the waiver authority in WIOA, and the circumstances under which a waiver may apply. WIOA provides States the flexibility to request a waiver of program requirements in order to implement new strategic goals for the improvement of the statewide workforce development system and to provide better customer service in exchange for accountability PO 00000 Frm 00039 Fmt 4701 Sfmt 4700 56109 for expected programmatic outcomes. A Workforce Flexibility plan provides additional flexibility to the State. In general, a State with an approved Workforce Flexibility plan is given the authority to identify local level provisions to waive without further approval from the Secretary of Labor to achieve outcomes specified in the plan. A description of what provisions of WIOA and the Wagner-Peyser Act may and may not be waived is included, along with an explanation of the procedures for requesting a waiver. The subpart also describes what may and may not be waived under a Workforce Flexibility Plan, and the procedures for obtaining approval of a plan. The WIOA requirements for obtaining approval for a waiver or Workforce Flexibility Plan are similar to those in WIA secs. 189(i) and 192, respectively; therefore, many of the proposed regulations are the same as the regulations implementing WIA. No changes have been made to regulatory text in response to these comments. Section 679.610 What provisions of the Workforce Innovation and Opportunity Act and the Wagner-Peyser Act may be waived, and what provisions may not be waived? WIOA sec. 189(i)(3)(A)(i) establishes the limitations of the Secretary’s general waiver authority for WIOA title I, subtitles A, B, and E. As described in the regulation, the Secretary is statutorily prohibited from waiving any provisions related to the following: • Wage and labor standards; • Non-displacement protections; • Worker rights; • Participation and protection of workers and participants; • Grievance procedures and judicial review; • Nondiscrimination; • Allocation of funds to local areas; • Eligibility of providers or participants; • The establishment and functions of local areas and Local WDBs; • Procedures for review and approval of State and local plans; • The funding of infrastructure costs for one-stop centers; and • Other requirements relating to the basic purposes of title I of WIOA described in § 675.100 of this chapter. Comments: A commenter suggested that the Department consider waivers of some of these provisions to the extent that they enhance wage and labor standards and non-displacement protections. Department Response: The Department does not have the authority to approve waivers that are prohibited E:\FR\FM\19AUR6.SGM 19AUR6 56110 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 by statute and no change to the regulatory text was made in response to this comment. Section 679.620 Under what conditions may a Governor request, and the Secretary approve, a general waiver of statutory or regulatory requirements under the Workforce Innovation and Opportunity Act? Title 20 CFR 679.620(a) through (f) implements WIOA sec. 189(i)(3) and describes the conditions under which a Governor may request, and the Secretary may approve a waiver of statutory or regulatory requirements. Title 20 CFR 679.620(a) explains that the Secretary will issue guidelines on waiving WIOA and Wagner-Peyser requirements. States will be required to follow the Secretary’s guidelines, which supplement the requirements listed in 20 CFR 679.600 through 679.620. Comments: A commenter asked for more clarification regarding what the most recent data are that would be required to grant a waiver renewal, as required by proposed § 679.620(d)(7). Department Response: In general, the Department has not required specific data sources when requesting a waiver under WIA or WIOA. The Governor has the discretion to use the data source or sources that most effectively demonstrates the need and/or benefit of the requested waiver. The Department has made no changes to the regulatory text in response to this comment. Comments: A commenter asked if existing WIA waivers that are approved to run past 2015 will be applicable under WIOA, and suggested that they remain in effect through the original period for which they were approved. With regard to the WIOA transition period, one commenter supported the current continuation of waivers as granted. Other commenters recommended the continuation of existing waivers until the WIOA State Plan is approved. Regarding States with existing WIA waivers, one commenter recommended that the Department allow such States to keep this flexibility until either the Federal government provides additional time or resources necessary for implementation of WIOA’s new requirements, or the States provide evidence that they are prepared to implement the additional requirements. Department Response: The Department issued TEGL No. 01–15 (‘‘Guidance Regarding the Impact of Workforce Innovation and Opportunity Act Implementation on Waivers Under the Workforce Investment Act’’), which addresses the status of waivers during program year 2015 and communicates the Department’s position on waivers VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 under WIOA. This guidance includes an attachment that discusses whether each waiver type will be continued into WIOA, as well as those that expired effective July 1, 2015. No change to the regulatory text was made in response to these comments. Section 679.630 Under what conditions may the Governor submit a Workforce Flexibility Plan? Comments: One commenter expressed support for the language in this section that prohibits the waiver of certain requirements related to labor standards and worker protections. Department Response: WIOA sec. 189(i)(3)(A)(i) and (ii) describe the statutory limitations to the Secretary’s WIOA title I and Wagner-Peyser waiver authority. These prohibitions include any statutory provisions related to labor standards or worker rights. No change to the regulatory text was made in response to this comment. Other Comments on Waivers/Work-Flex Comments: One commenter expressed support for the proposed language in part 679 subpart E regarding waivers and Work-Flex. To assist employers and job seekers best, one commenter requested that the Department offer waivers whenever possible. A State agency suggested that the Department add waiver provisions to the Final Rule regarding the application for continued eligibility of ETPs and to the internal control policy requirement provided that a written agreement pursuant to proposed § 679.430 is in place. Department Response: Specific waiver requests must be requested through the waiver process. The Department declines to make changes to identify specific waivers in the regulatory text. 6. Other Comments on Statewide and Local WIOA Governance Comments: With regard to the alignment of title I and title II services to improve services for immigrant and LEP individuals, multiple commenters recommended that the Department provide additional guidance to States and localities (whether through regulations or policy directive) that allows for differing eligibility criteria across the titles and encourages States and localities to align services without precluding participation by individuals who may be eligible for services under one title but not another. Another commenter stressed the importance of aiding immigrant and refugee communities and asked that the Department include reference to the PO 00000 Frm 00040 Fmt 4701 Sfmt 4700 need for expertise in serving linguistically and culturally diverse populations in its discussion of part 679. One commenter expressed its concern about the challenge of meeting all WIOA requirements by July 1, 2015, particularly considering the late issuance of the WIOA regulations. Department Response: While the Department acknowledges the need to be sensitive to the employment and training needs of immigrant and LEP individuals, WIOA sec. 189(i)(3)(A)(i) prohibits the Department from waiving or otherwise altering eligibility criteria. No change to the regulatory text was made in response to these comments. The Department acknowledges the challenges inherent in implementing WIOA in the absence of a Final Rule. The Department issued Operating Guidance documents to inform the public workforce system how to comply with WIOA statutory requirements. The Operating Guidance provided a framework for program activities while regulations were finalized. Comments: Explaining that its local areas have utilized funding to serve customers in their jurisdiction only, one commenter asked whether the State can set policy to allow a broader use of funds under WIOA. In addition, this commenter asked whether, if State agencies grant adult education programs to local areas, the infrastructure costs should come from the local vendor or the State. Department Response: States have authority to set policy that is consistent with WIOA. The Department has determined that the State is in the best position to develop policy regarding allocating scarce Federal funds; the Department has not made changes to the regulatory text in response to this comment. Further, all funds must expended in accordance with the Uniform Guidance regulations and WIOA subtitle E (Administration). TEGL No. 15–14 (‘‘Implementation of the New Uniform Guidance Regulations’’) provides additional information on implementing the Uniform Guidance. Comments: One commenter suggested that Local WDBs should remain responsible for operation of local/ regional workforce programs representing business sectors in their communities and that it is a conflict of interest for State governments to receive funding, develop and operate programs, and monitor and evaluate programs. This commenter asserted that Stateoperated workforce programs are primarily budget-driven, rather than customer-driven, with primarily digital service structures that leave individuals E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations in rural communities lacking internet, transportation, and skills without access to services. Department Response: Section 679.100 implements WIOA sec. 101 and outlines the vision and purpose of the State WDB. Section 679.130 implements WIOA sec. 101(d) and describes the roles and functions of the State WDB. The State WDB’s purpose, as outlined in WIOA sec. 101 and § 679.100, is to convene State, regional, and local workforce system, and partners to align and improve the outcomes and effectiveness of Federally funded and other workforce programs and investments. Section 679.300 implements WIOA sec. 107 and explains the purpose of the Local WDB. In accordance with the functions of the Local WDB outlined in WIOA sec. 107(d), § 679.300(b)(1) includes the function of providing strategic and operational oversight in collaboration with required and other partners to help the workforce development system achieve the purposes outlined in WIOA sec. 2, and assist in the achievement of the State’s strategic and operational vision and goals outlined in the State Plan. Paragraphs (b)(2) and (3) of § 679.300 require the Local WDB to assist in the achievement of the State’s strategic and operational vision and goals as outlined in the Unified State Plan or Combined State Plan, and to maximize and continue to improve the quality of services, customer satisfaction, and effectiveness of the services provided. mstockstill on DSK3G9T082PROD with RULES6 D. Part 680—Adult and Dislocated Worker Activities Under Title I of the Workforce Innovation and Opportunity Act 1. Introduction In this part of the Final Rule, the Department describes requirements relating to the services that are available for adults and dislocated workers under WIOA. Adult services are provided to help job seekers who are at least 18 years old succeed in the labor market. WIOA establishes a priority in the adult program for serving low-income individuals, recipients of public assistance, and individuals lacking basic work skills. Dislocated worker services are provided to workers who have lost their job, through no fault of their own. The goal of dislocated workers services is to help these individuals obtain quality employment in in-demand industries. Under WIOA, adults and dislocated workers may access career services and training services. WIOA provides for a public workforce system that is VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 universally accessible, customer centered, and training that is job-driven. In this part, the Department also discusses supportive services and needs-related payments that can be provided, based on customer needs, to enable them to participate in WIOA career and training services. The Department generally received comments that were supportive about the delivery of career and training services. It also received comments about the implementation of the statutory priority for the WIOA adult program, and how various populations, including individuals with disabilities, are able to access WIOA title I adult and dislocated worker services, which the Department has sought to clarify. In addition, the Department received comments about some of the new workbased experience and training opportunities under WIOA, including how registered apprenticeship can be utilized by the one-stop delivery system, and clarifications on transitional jobs, on-the-job training, and incumbent worker training. These comments are discussed below, in the sections corresponding to subparts A–D and F–G. The Department also received a number of comments on the Eligible Training Provider (ETP) eligibility requirements, which are discussed below under subpart D. For the comments received that pertain to the WIOA sec. 116(d)(4) ETP annual performance reports, those comments are discussed in the preamble discussion accompanying 20 CFR 677.230 (see Joint WIOA Final Rule published elsewhere in this issue of the Federal Register). The analyses that follows provides the Department’s response to public comments received on the proposed part 680 regulations. If a section is not addressed in the discussion below, it is because the public comments submitted in response to the NPRM did not substantively address that specific section and no changes have been made to the regulatory text. Further, the Department received a number of comments on this part that were outside the scope of the regulation and the Department offers no response. Lastly, the Department has made a number of non-substantive changes to correct grammatical and typographical errors to improve the readability and conform the document stylistically that are not discussed in the analysis below. PO 00000 Frm 00041 Fmt 4701 Sfmt 4700 56111 2. Subpart A—Delivery of Adult and Dislocated Worker Activities Introduction This subpart discusses the role of WIOA adult and dislocated worker services delivered through the one-stop delivery system. The one-stop delivery system provides universal access to career services to meet the diverse needs of adults and dislocated workers. Adult and dislocated worker programs are required partners in the one-stop delivery system and as such, grant recipients are subject to the required partner responsibilities set forth in 20 CFR 678.415 (see Joint WIOA Final Rule). Career and training services, tailored to the individual needs of job seekers, form the backbone of the one-stop delivery system. While some job seekers may only need self-service or other basic career services like job listings, labor market information, labor exchange services or information about other services, some job seekers will need services that are more comprehensive and tailored to their individual career needs. These services may include comprehensive skills assessments, career planning, and development of an individual employment plan that outlines the needs and goal of successful employment. Under WIA, career services were identified as core and intensive services and participants generally would follow through each level of service to receive training eventually. WIOA provides an individual receiving services in onestop centers the opportunity to receive the service needed to help him/her meet his/her employment and career goals. WIOA clarifies that an individual does not need to follow a fixed sequence of services that may not be necessary to meet his or her needs. Under WIOA, the Department classifies career services into two categories: Basic and individualized career services. This grouping is not designed to create barriers to training, but rather identifies the importance that these two types of career services can have in helping individuals obtain employment. Basic career services must be made available to all job seekers and include services such as labor exchange services, labor market information, job listings, and information on partner programs. Individualized career services identified in WIOA and described in these proposed regulations are to be provided by local areas as appropriate to help individuals to obtain or retain employment. Career and training E:\FR\FM\19AUR6.SGM 19AUR6 56112 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations services are more fully discussed in subparts A and B of this part. mstockstill on DSK3G9T082PROD with RULES6 Section 680.100 What is the role of the adult and dislocated worker programs in the one-stop delivery system? Comments: A commenter expressed support for § 680.100 as proposed. In contrast, another commented that CEOs should not be considered one-stop partners. The commenter stated that CEOs are involved in the governance and oversight of the one-stop delivery system through the Board members that they appoint and so neither CEOs nor Board members should be involved in the operation of a one-stop delivery system. Department Response: WIOA sec. 107 states that the CEO for the local area is the local grant recipient. WIOA sec. 107(c) provides for how CEOs are to be determined in the event that there are multiple units of local government in a workforce area. As the grant recipient for the adult and dislocated worker programs, the CEO or his/her designee is a required one-stop partner in the governance and delivery of services in the one-stop delivery system consistent with sec. 121(b)(1) of WIOA and 20 CFR part 678 (see Joint WIOA Final Rule). No changes have been made to the regulatory text in response to the comments. Section 680.110 When must adults and dislocated workers be registered and considered a participant? Comments: A one-stop center requested clarification on how registration can occur through an electronic submission. Specifically, this commenter asked whether eligibility can be determined based solely on an electronic submission. The commenter also requested clarification of the language in the preamble explaining that ‘‘minimal’’ assistance would trigger the need to register. Department Response: State and local areas have the discretion to determine appropriate intake methods, which may include electronic and virtual means. Additionally, a service being provided to an individual electronically or virtually can be sufficient for the individual to be considered a ‘‘participant,’’ provided it meets the standards of the definition provided at 20 CFR 677.150(a) (see Joint WIOA Final Rule). Comments: A few commenters agreed with the way in which the NPRM described participation for adult and dislocated worker involvement with WIOA services. Specifically, several commenter suggested that self-service and information service should be VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 included as participation for the purposes of registering a person to measure performance. In contrast, several commenters disagreed with the proposed approach to describing participant or participation. A few commenters said that ‘‘participant’’ was described too narrowly, cautioning that the NPRM could lead to denial of services for individuals in need of assistance. Some commenters recommended revisions to § 680.110(a) to describe a ‘‘participant’’ by referencing 20 CFR 677.150 rather than limiting it to those individuals who receive staff-assisted services (see Joint WIOA Final Rule). One commenter expressed support for this revision, explaining that removal of minimally assisted customers from metrics would potentially reduce investments in resource rooms, a self-service facility that provides job seekers internet-based job search opportunities that are required by today’s employer. Additionally, several commenters recommended revisions to § 680.110(b) to allow for the provision of WIOA services to individuals who are not participants. In contrast, one commenter recommended that paragraph (b) more broadly define those individuals who are not required to register and be designated as participants to include individuals receiving referral services. Another commenter requested clarification on the distinction between a ‘‘staff assisted WIOA service’’ and ‘‘self service and informational activities.’’ This commenter stated that WIA regulations with similar language had caused analogous confusion. A onestop center asked whether a basic workshop would be considered ‘‘informational services’’ or a career service for purposes of performance accountability. A commenter asked if there was a distinction between basic and individual career services as it relates to participation. Noting that the NPRM explicitly specifies the activities that will not count towards participation but does not specify the activities that will count, a commenter asked whether it is up to the State to determine which career services will place the individual into participation or performance calculations. Expressing confusion over the meaning of participant, a commenter requested a definition of participant, including a clear indication of whether registration or utilization of services was necessary to be considered a participant, and asked the Department to identify the term for clients that are not registered and not participants. Several commenters stated that clarification is needed on where and PO 00000 Frm 00042 Fmt 4701 Sfmt 4700 when assessments and information collection efforts relevant to identify self-service individuals, reportable individuals, and participants will occur. Some commenters recommended that the Department provide a framework for how the designation of enrollment intertwines with career and training services, allowing maximum flexibility for States to design their approaches for both in-person and online services. In contrast, a commenter encouraged the Department to create a clear system that ensures a consistent approach across the States. Similarly, another commenter encouraged the Department to provide more details on the level/type of information required to be collected by individual and by required program titles to ensure data system integrity for reporting purposes. A commenter encouraged the Department to require enrollment in WIOA title I programs to occur when an individual employment plan (IEP) is developed. A commenter recommended the point at which funds must be dedicated to the client for their employment or training needs as the appropriate trigger for enrollment. Department Response: The Department made some non-substantive changes to align the definition of performance with 20 CFR 677.150(a)(3) (see Joint WIOA Final Rule). It also changed the text of § 680.110(a) to clarify when an individual is considered a ‘‘participant.’’ The Department is providing additional clarity in guidance on what services count as self-services or information-only services and activities. Further guidance may be provided to explain which services cause an individual to be considered a ‘‘participant.’’ The distinction between reportable individual and participant is used for the purposes of reporting on performance, and does not have any impact on eligibility or service provision. Further information on performance is discussed in 20 CFR part 677 (see Joint WIOA Final Rule published in this issue of the Federal Register), and information on the collection and data systems is being provided through the Department’s ICRs and guidance. The Department notes that while an IEP will cause an individual to be considered a participant, there are other ways to qualify for participation because there is no sequence of services requirement in WIOA. An IEP is an individualized career service and can be provided under either title I of WIOA or under the Wagner-Peyser Act Employment Service (ES) (as amended by title III of WIOA). Individualized E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations career services (of which an IEP is one) may be provided with Wagner-Peyser Act funds. Comments: A few commenters recommended that § 680.110(c) be revised to require the collection of data from only those individuals actually receiving aid, benefits, services, or training. Department Response: The Department made a technical correction at § 680.110(c), changing ‘‘Employment Opportunity’’ data to ‘‘EO’’ data because that is the data referred to in this section as defined in 20 CFR 675.300. The collection of Equal Opportunity (EO) data on every individual who is interested in being considered for WIOA title I financially assisted aid, benefits, services, or training is necessary to ensure compliance with WIOA sec. 188. The regulations governing WIOA sec. 188 can be found at 29 CFR part 38. The point at which an individual has indicated ‘‘interest’’ in WIOA title I services is within the grant recipient’s discretion; however, the recipient’s request for and receipt of information triggers the accompanying responsibility to collect EO data at the same time. The EO data must be maintained in a manner that allows the individuals from whom the data was collected to be identified, and that ensures confidentiality. This responsibility is separate from, and might not arise at the same point in the process as, the registration responsibility. mstockstill on DSK3G9T082PROD with RULES6 Section 680.120 What are the eligibility criteria for career services for adults in the adult and dislocated worker programs? Comments: A commenter stated that there is a discrepancy between the preamble and the proposed regulation creating confusion whether individuals who are basic skills deficient also have to be low-income. Similarly, a few commenters stated that priority should be given to low-income adults and public assistance recipients and individuals who are basic skills deficient, in accordance with WIOA sec. 134(c)(3)(E). One commenter recommended that priority should also be given to adults who lack a regionally accredited secondary education diploma or high school equivalent (HSE). A commenter stated that the change from core and intensive services to career services as in proposed § 680.120 would place a burden on States and local areas to revise policy and procedures. This commenter also requested that the Department define ‘‘basic career services’’ and ‘‘individualized career services’’ and VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 describe when participants get placed into training. Department Response: WIOA sec. 134(c)(3)(E) provides a statutory priority for public assistance recipients, other low-income individuals, and individuals who are basic skills deficient. The priority for these populations is not a criterion for eligibility for services under this program; rather, it is a statutory emphasis on providing individualized career services and training services to these populations under this program. The Department refers readers to § 680.600, which governs the priority provisions of the adult program. No changes have been made to the regulatory text in response to the comments. Individuals who are basic skills deficient are to be provided priority with funds for these adult services. Basic skills deficient is defined in WIOA sec. 3(5), and an individual who lacks a secondary education diploma or HSE may qualify based on this standard. Additionally, § 680.600 provides Governors and Local WDBs with the authority to designate other priority populations. Individuals who lack a secondary education diploma or HSE could be designated by a Governor or Local WDB under that authority. Under WIA, priority with adult funds was to be provided in the event that funding was limited; that provision was removed from WIOA. Thus, priority and the policies and procedures for determining priority are statutory requirements for the WIOA title I adult program. The Department refers a commenter to 20 CFR 678.430 for definitions of ‘‘basic career services’’ and ‘‘individualized career services’’ (see Joint WIOA Final Rule). In addition, when participants are to be placed into training is a decision that must be made consistent with WIOA sec. 134(c)(3) and § 680.210. Section 680.130 What are the eligibility criteria for career services for dislocated workers in the adult and dislocated worker programs? Comments: Commenters requested clarification on the meaning of ‘‘unlikely to return to a previous industry or occupation,’’ and what is meant by ‘‘unemployed as a result of general economic conditions in the community in which the individual resides or because of natural disasters.’’ One commenter encouraged the removal of the ‘‘unlikely to return’’ to their previous industry/occupation criteria from the definition of dislocated worker, because it hinders the ability to PO 00000 Frm 00043 Fmt 4701 Sfmt 4700 56113 serve individuals that have been laid off or terminated. Further, a commenter stated that the process for determining eligibility as a dislocated worker through receipt of unemployment insurance or exhaustion of unemployment insurance currently is a cumbersome process. This commenter recommended that one-stop or the ES staff have real time access to the unemployment insurance database for verification of eligibility of dislocated workers. Department Response: WIOA defines ‘‘dislocated worker’’ under WIOA sec. 3(15), and requires the individual be ‘‘unlikely to return to a previous industry or occupation’’ under WIOA 3(15)(A)(iii). The regulation maintains this statutory definition. The Department has added regulatory text at § 680.130(b)(3) allowing for Governors and Local WDBs to establish policies and procedures for one-stop centers to use in determining when an individual is unlikely to return to his or her previous industry or occupation. Any policy or procedure must be consistent with § 680.660, which provides that separating service members meet this criterion. The Department may utilize guidance and technical assistance to assist States and local areas in determining when an individual is ‘‘unlikely to return to a previous industry or occupation’’ or when an individual is ‘‘unemployed as a result of general economic conditions in the community in which the individual resides or because of natural disasters.’’ No other changes have been made to the regulatory text in response to the comments. Section 680.140 What Workforce Innovation and Opportunity Act title I adult and dislocated worker services are Local Workforce Development Boards required and permitted to provide? Comments: A commenter requested a definition of how Local WDBs are allowed flexibility when providing services with adult and dislocated worker funds. This commenter also stated that there would be a burden on States to track local flexibility of funds. Another commenter asked whether subgrantees would need to report expenditures for job seeker services, employer services, or coordination activities, as listed in proposed § 680.140(b)(1) through (3). Department Response: Section 680.140 describes the required and permissible employment and training activities with WIOA title I adult and dislocated worker funds. Paragraph (a) of § 680.140 describes the required activities a Local WDB must provide, E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56114 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations which includes career and training services. These services are required under WIOA sec. 134(c)(2) and (3). Paragraph (b) lists the permissible activities a Local WDB may provide. Local WDBs have discretion in what permissible activities and services they provide. All expenditures must be tracked and documented by the State and Local WDB to ensure the proper administration of these funds. No changes have been made to the regulatory text in response to the comments. Section 680.140(b) is further discussed below. Comments: A few commenters expressed support for the various provisions within proposed § 680.140 covering services for individuals with disabilities and recommended additional language be added to the regulation to urge Local WDBs to focus their optional services on this population because these services are permissive and not mandatory. Two commenters also encouraged the Department to reference veterans’ priority of service in § 680.140(a). A couple of commenters encouraged the Department to mention bridge programs explicitly, which are programs that prepare individuals with limited academic or English skills to succeed in postsecondary education and training programs, as an acceptable activity under WIOA, and to encourage their use in the Final Rule. Another commenter recommended that referrals by one-stop centers to regionally accredited secondary-level educational programs providing entry-level workforce preparation and/or postsecondary education and training activities be included as a basic service and counseling service. Department Response: The commenters above refer to the permissible local employment and training activities under WIOA sec. 134(d) and § 680.140(b). Paragraph (b)(1) of § 680.140 describes the permissible ‘‘job seeker services’’ that may be provided. The one-stop delivery system plays a vital role in providing career and training services to individuals with disabilities, as well as the customer supports that may be provided to help individuals with disabilities to navigate multiple services. The Department understands the commenters’ desire to make these services to individuals with disabilities mandatory; however, WIOA states that these are permissible activities under WIOA sec. 134(d). The Department does encourage Local WDBs to provide these services for individuals with disabilities, veterans, and other individuals with barriers to employment. No changes have been VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 made to the regulatory text in response to the comments for § 680.140(b)(1)(i) through (iv). The citation to transitional jobs at § 680.190 has been moved from § 680.830 to reflect the Department’s position that transitional jobs are a type of work experience, and thus a career service. Regarding the reference to veterans’ priority of service, the regulation at § 680.650 ensures priority of service for veterans in all Department-funded employment and training programs. The Department notes bridge programs may be an appropriate activity for individuals to obtain meaningful employment; however, bridge programs are not discussed in WIOA and are not included in the regulatory text. Comments: A commenter recommended that career services for self-employed adults and dislocated workers be defined to include industry sector and/or entrepreneurship training for individuals who wish to remain selfemployed. Department Response: The Department does not propose to mandate any particular career services for self-employed adults and dislocated workers; these decisions are best made locally based on individual need. Decision-making about career and other services and training should be informed by information about indemand industry sectors and occupations. The Department notes that entrepreneurship training is allowed for adults and dislocated workers under WIOA sec. 134(c)(3)(D). Comments: A commenter requested clarification regarding employer services and the relationship to career services provided to job seekers versus employer services provided to businesses. This commenter explained that services provided to employers do not appear to be considered a career service because there would be no specific job seeker to register. Furthermore, the commenter stated that delivery of employer services does not need to be procured for a one-stop center, but can be designated by the local elected officials. Several commenters recommended that to serve both job seekers and employers effectively, the role of business services outreach staff should, in addition to supporting the priorities of the Local WDB, be focused on the goals of the individual WIOA titles. One commenter sought clarification on whether custom training, on-the-job training (OJT), and incumbent worker training were acceptable services to be offered under the business services function. This commenter also urged the Department to clarify the regulations to PO 00000 Frm 00044 Fmt 4701 Sfmt 4700 make clear that the operation of business services by the Local WDB itself and its staff are acceptable. A commenter encouraged the Department to define ‘‘employment generating activities,’’ which are prohibited by the proposed regulation. Department Response: Business and employer services are a permissible local activity under § 680.140(b)(2); services to employers are not considered a career service that is a required activity under § 680.140(a). No changes have been made to the regulatory text in response to the comments at § 680.140(b)(2). The Department acknowledges the comments about defining ‘‘employment generating activities,’’ and has addressed them in § 683.245 of the preamble and regulations. The Department notes that employer services described in § 680.140(b)(2) must not be used to encourage business relocation to the local area from another State or local area. Comments: One commenter stated that it would be very difficult, if not impossible, to determine accurately when implementing a pay-forperformance training contract the amount of administrative funds that were spent on this specific activity because administrative funds may be pooled and that pooling includes the youth program. This commenter asserted a similar concern for percentage limitations associated with incumbent worker training (§ 680.800), transitional jobs (§ 680.820 in the NPRM; § 680.195 in this Final Rule), and work experience activities in the youth program (§ 681.590). Department Response: WIOA allows Local WDBs to set aside and use up to 10 percent of their adult and dislocated worker funds on WIOA Pay-forPerformance contract strategies (see WIOA sec. 134(d)(1)(A)(iii) and § 683.500), up to 20 percent on incumbent worker training (see WIOA sec. 134(d)(4)), and up to 10 percent on transitional jobs (see WIOA sec. 134(d)(5)). See also § 680.140(b)(1)(v), (b)(4), and (b)(8). Administrative activities necessary to initiate or procure Pay-for-Performance contract strategies, incumbent worker training, and transitional jobs must be consistent with § 683.215, which discusses how to determine whether an activity is administrative or programmatic for purposes of WIOA. If the activity would be considered programmatic under § 683.215, then the cost would be subject to the caps discussed above. If the activity would be considered administrative under § 683.215, it may be paid for out of the Boards’ usual E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 administrative funds, and it is not subject to the caps. Therefore, the Board would not need to specifically account how much of the administrative funds are spent on these particular programs. Section 680.150 What career services must be provided to adults and dislocated workers? Comments: A commenter stated that the definition of career services should be clarified to include pre-screening, application assistance, and colocation of application assistance services for the programs for which career services onestop centers must provide information and referrals. Another commenter recommended that referrals to regionally accredited secondary-level educational programs providing entry-level workforce preparation and/or postsecondary education and training activities be included as part of basic services and counseling services. A commenter requested clarification regarding whether alternative secondary school (formerly General Education Diploma [GED]) preparation is considered a career service or a training service. One commenter recommended that § 680.150(c) be revised to refer to activities provided for a ‘‘participant’’ and not a ‘‘registered participant’’ to avoid confusion resulting from ‘‘registrants’’ and ‘‘participants’’ being two separately defined terms. Another suggested that the Department revise the regulations to allow participants to opt out of follow-up services, as was allowed under the WIA regulations. A few commenters requested clarification on the meaning of ‘‘follow up services as appropriate.’’ A commenter recommended that supportive services such as tools, uniforms, bus passes, or childcare, be allowed for up to 1 year after the exit date of adults or dislocated workers, saying some individuals may need a little additional help to keep a job that may not have been known when the individual initially took the job. A commenter association recommended the addition of new paragraphs within § 680.150 to (1) specify that career services can be provided by any of the one-stop partners, as opposed to having to be provided by a WIOA title I partner; and (2) create a framework by which prior interviews, evaluations, and assessments of participants can be used for purposes of evaluating eligibility for career services. Department Response: The Department has added ‘‘basic’’ before ‘‘career services’’ to ensure consistency with 20 CFR 678.430(a) in how these VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 services are described (see Joint WIOA Final Rule). No changes have been made to the regulatory text in response to the comments at § 680.150(b). Career services are defined in 20 CFR 678.430 (see Joint WIOA Final Rule) and WIOA sec. 134(c)(2). Pre-screening, application assistance, referrals, and other information all would qualify as basic career services under 20 CFR 678.430(a). Basic career services under § 680.150(a) must be made available and are key to ensuring high quality services throughout the one-stop delivery system. The Department considers adult education and literacy activities (see WIOA sec. 3(3)) that lead to a secondary school diploma to be a training service. An entity that offers a program that leads to a secondary school diploma or its equivalent can be eligible as a State eligible training provider (ETP), see § 680.420. The Department notes, however, that if title I adult and dislocated worker funds are used for these activities, they must be done concurrently or in coordination with any training activities in WIOA sec. 134(c)(3)(D)(i)–(vii). The Department has added regulatory text to clarify this point at § 680.350. The Department agrees with the suggestion that ‘‘registered participant’’ be changed to ‘‘participant’’ and has made this change in the regulatory text. The Department has added ‘‘as determined appropriate by the Local WDB’’ to proposed § 680.150(c) to clarify how the determination is made to provide follow-up services. This addition is consistent with the statutory text at section 134(c)(2)(xiii), which states that follow-up services are provided ‘‘as appropriate.’’ The Department declines to make any change in regulatory text to allow the provision of supportive services for adult and dislocated workers for up to a year after exit; section 134(d)(2)(A) of WIOA requires that adults and dislocated workers must be participants to receive supportive services. The Department also declines to modify the regulatory text about the provision of career services. Career services are defined in 20 CFR 678.430, which is the one-stop section of the joint regulation, and they may be provided by any partner program. The Department has decided that the use of prior interviews, evaluations, and assessments of participants for the purpose of eligibility is to be determined by State and local policies. PO 00000 Frm 00045 Fmt 4701 Sfmt 4700 56115 Section 680.160 How are career services delivered? Comments: A few commenters expressed opposition to a requirement that Local WDBs obtain a waiver before providing career services. One of these commenters stated that the NPRM requirement that Local WDBs receive a waiver before being allowed to deliver career services would be a major change and a significant burden because getting a waiver is not an easy process. This commenter recommended that the Department provide States with an easier, quicker process for requesting waivers. A commenter recommended that, at a minimum, a waiver request should address: (1) Why the waiver is necessary, (2) how granting the waiver would provide service to the affected area superior to that which would have been provided as the result of a competitive process; (3) why the prospective designee is the best choice as the local one-stop operator or provider of career services; and (4) what process was used in making the determination (including the specific data that supports it). Department Response: For a Local WDB to provide career services, it must meet the requirements in WIOA sec. 107(g)(2), which allows for Local WDBs to be providers of career services of title I career services for adult and dislocated workers with the agreement of the CEO in the local area and the Governor. Although there is a waiver requirement for Local WDBs to provide training services under WIOA sec. 107(g)(1)(B) and § 679.410(c), which documents how Local WDBs may apply for a waiver with the State, there are no waiver requirements for Local WDBs to provide career services. No change is made in the regulatory text in response to these comments. Section 680.170 What is the individual employment plan? The Department has moved the proposed § 680.180 to § 680.170, so that the work experience regulation that was proposed as § 680.170 can be renumbered as § 680.180, closer to the transitional jobs provision at § 680.190. In § 680.170, the regulation also replaces the words ‘‘case manager’’ with ‘‘career planner’’ to be more consistent with the nomenclature used in WIOA. Comments: A few commenters requested clarification on the role of IEPs for all services categories of individuals and programs and urged the Department to ensure consistency at the program enrollment level, including when an IEP is required to be started/ E:\FR\FM\19AUR6.SGM 19AUR6 56116 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 completed and some flexibility in serving the general public job seeker. Another commenter asked whether: (1) The development of an IEP requires participation under WIOA title I, (2) this service can be delivered by ES staff, or (3) this determination can be made at the local level. Department Response: The Department strongly encourages the use of IEPs as a tool in the career planning process. However, there is no sequence of service requirement in WIOA and determining when an IEP is appropriate for individuals is a local decision. The Department encourages Local WDBs to develop policies and procedures for the appropriate use of IEPs. An IEP is an individualized career service and can be provided under either WIOA title I or the ES (as amended by WIOA title III and as described in § 652.206), which is decided locally and is a part of the Memorandum of Understanding (MOU) governing the role of the ES in the onestop delivery system. Section 680.180 What is an internship or work experience for adults and dislocated workers? The Department has moved this proposed § 680.170 to § 680.180, so that this work experience regulation is renumbered to be closer to the transitional jobs provision at § 680.190. Comments: A commenter stated that it is important that WIOA participants who are placed in work experience or internships are fully protected by the nation’s wage and hour laws and regulations. This commenter recommended that the Department revise proposed § 680.170 by deleting the language allowing for paid and unpaid work experiences and adding a cross reference to the U.S. Department of Labor Wage and Hour Division (WHD) regulations and guidance concerning unpaid internships. Similarly, a commenter requested clarification on when work experience can be unpaid, including assessment of the implications of unpaid work as a potential violation of the Fair Labor Standards Act. Department Response: The Department notes the comments and has added language to the regulatory text stating that internships and work experiences under WIOA may be paid or unpaid, as consistent with other laws, including the Fair Labor Standards Act. The Department will continue to use guidance and technical assistance to assist grantees in determining how WIOA intersects with other laws. Comments: A commenter encouraged the Department to maintain a broad VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 definition of work experience that is applicable to all core programs, reasoning that work experience is an invaluable tool to engage businesses and to support job seekers in overcoming barriers by gaining experience that leads to unsubsidized employment. Department Response: The Department agrees with the commenter’s suggestion and makes no change in the regulatory text. Comments: A commenter asked whether there were limitations on the percentage of funds to be utilized for paid work experience. Department Response: Work experiences may be paid or unpaid, consistent with the Fair Labor Standards Act and other applicable laws. Transitional jobs is a type of paid work experience described in §§ 680.190 and 680.195. A Local WDB may use up to 10 percent of funds allocated to the local area under section 133(b) of WIOA to provide transitional jobs. (Sec. 134(d)(5) of WIOA.) Transitional jobs also are subject to certain eligibility criteria along with comprehensive career and supportive services requirements. In addition to transitional jobs, other work experiences may be paid; to be eligible for these work experiences an individual must meet adult and dislocated worker program eligibility and there is no requirement for comprehensive career and supportive services. These other types of paid work experiences are not subject to a statutory funding cap. Comments: Another commenter encouraged the Department to allow Local WDBs to determine the appropriate timeframe for internships and/or work experience based upon multiple factors, including industry standard and/or practice and the sectorbased accepted length of time needed to acquire one or more relevant skills and/ or industry-recognized credentials. Department Response: The Department has set no minimum or maximum duration requirements for work experiences. These factors may be used by Governors and Local WDBs in making such determinations. Section 680.190 What is a transitional job? Comments: Many commenters asked for clarification of ‘‘transitional jobs’’ versus ‘‘work experience;’’ including exceptions to the 10 percent cap on transitional jobs, the similarities between transitional jobs and work experiences, and distinctions from OJT. Another commenter expressed concern that the distinctions between transitional jobs and OJT contracts in the NPRM are not clear enough and PO 00000 Frm 00046 Fmt 4701 Sfmt 4700 recommended that the Department expand on the differences in the Final Rule several ways: (1) Unlike OJT, the program provider should act as employer of record and assume all responsibilities of the employeremployee relationship; (2) transitional jobs require a 100 percent wage subsidy, while OJT subsidize up to 75 percent of wages; (3) funds for transitional jobs support all components of the service strategy; (4) transitional jobs should be targeted at those job seekers most in need of intervention; and (5) transitional jobs may be structured as offsite placements with private-sector, publicsector, or nonprofit employers or as inhouse social enterprise or work crew placements. Department Response: The Department agrees with the recommendation of some commenters and has added language to § 680.180, which defines what an internship or work experience is for adults and dislocated workers and clarifies that transitional jobs are considered to be a type of work experience. The Department also has moved proposed §§ 680.830 and 680.840 to §§ 680.190 and 680.195 respectively. The Department agrees with the comments made about the OJT contracts, i.e., that in transitional jobs programs the program provider may act as the employer of record; however, there may be a joint employment relationship between the worker, the firm in which the worker is placed, and the program provider. The Department has added regulatory text defining transitional jobs as providing an individual with work experience that takes place within the context of an employee-employer relationship, in which the program provider may act as the employer, and with an opportunity to develop important workplace skills. The Department will provide further guidance and technical assistance on transitional jobs programs, including best practices. Comments: Some commenters asked the Department to define ‘‘inconsistent work history.’’ One of these commenters also requested a substantive quantifiable definition of the term ‘‘chronic unemployment.’’ One commenter requested that the Department define ‘‘transitional jobs’’ and asked for clarification of the required funds for career services and supportive services that must be provided with transitional jobs. A couple of commenters recommended that the Department strengthen the definition of ‘‘transitional jobs’’ with further guidance and technical support to States and localities. These commenters also E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations recommended that the Final Rule reiterate that the term means ‘‘wagepaid’’ subsidized employment consistent with other definitions in Federal law and agency guidance. Similarly, another commenter recommended that the Department define ‘‘transitional jobs’’ as ‘‘timelimited wage-paid experiences that are subsidized for individuals with barriers to employment who are chronically unemployed or have an inconsistent work history.’’ Department Response: The Department has decided that the definitions of ‘‘inconsistent work history’’ and ‘‘chronic unemployment’’ should be left to the Local WDBs and has added language to the regulatory text in § 680.190 to reflect this. The Department encourages Local WDBs to utilize information such as an individual’s labor market history, unemployment status, durations of unemployment, long-term unemployment, and other factors that the Local WDB may determine appropriate for defining these terms. The Department has added language to better define transitional jobs, including adding the terms ‘‘time-limited’’ and ‘‘wage-paid’’ in § 680.190. WIOA requires transitional jobs to include both comprehensive and supportive services. Local WDBs determine which comprehensive and supportive services are appropriate for each individual. Comments: One commenter recommended that the Department and the Internal Revenue Service (IRS) identify an acceptable means of paying a training stipend that does not trigger the Patient Protection and Affordable Care Act (PPACA) regulations. Another commenter recommended specific language to amend proposed § 680.830 (as explained above, renumbered in the Final Rule to § 680.190) to articulate that people who participate in transitional jobs are not counted toward labor participation rates, that is, not counted as ‘‘employed persons’’ by the BLS. Further, this commenter and others asserted that workers in transitional jobs should be classified as employees rather than contractors or trainees and should be subject to protections such as wage and hour laws, minimum wage laws, unemployment insurance, and workers compensation. Department Response: The ACA employer responsibility provisions are governed by the IRS and any training and employment agreements the grantees make may be subject to those provisions. The Department encourages grantees to utilize IRS resources and guidance when determining those VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 responsibilities. The Department will issue subsequent guidance and technical assistance to help identify appropriate IRS resources and guidance. Transitional jobs and other work-based training often establish an employeremployee relationship that must follow applicable laws and regulations that govern such relationships, including: Wage and hour laws, minimum wage laws, unemployment insurance, and workers’ compensation. The suggestion that transitional jobs not count in the labor force participation rate that is captured by the Current Population Survey that the BLS administers is not germane to WIOA or these regulations. Comments: A couple of commenters recommended that transitional jobs programs be targeted at populations with multiple employment barriers and people with sporadic, problematic and inconsistent work histories within the 2 years prior to engaging in the program. These commenters recommended targeting people experiencing homelessness; opportunity youth; people reentering communities from prison and those with criminal records; long-term recipients of TANF, SNAP and other public benefits; low-income noncustodial parents; and other chronically unemployed people. Some commenters recommended that allowable use of funds should include: Wages paid to transitional jobs program participants during their subsidized job placement; funding for employmentrelated case management and support such as transportation vouchers and clothing allowances; funding for job retention services for no fewer than 6 months after placement in a subsidized job; supporting integration of literacy, adult basic education, training, and career advancement resources; and supporting program capacity-building needs, such as adding additional staff and/or infrastructure improvements as appropriate. Department Response: The Department considers these recommended criteria to be appropriate factors that a Local WDB may use when determining who is eligible for a transitional job and which groups to target. Thus, no change is made in the regulatory text. The Department will provide further guidance and technical assistance as appropriate. Allowable uses of transitional jobs funds include wages to the participant and supportive services such as transportation vouchers. The Department encourages local staff to align services and provide the appropriate mix of services to meet individuals’ needs. Staff and PO 00000 Frm 00047 Fmt 4701 Sfmt 4700 56117 infrastructure improvements are not allowable uses of transitional jobs funds. Comments: Commenters asserted that transitional jobs are typically 3 to 9 months and seldom longer than 1 year. They recommended that transitional job arrangements include the following in order to avoid displacement of incumbent workers: Strong prohibitions against substitution and displacement; protections for recently laid-off employees, workers on leave, and striking workers; and preservation of recall rights under collective bargaining agreements for union employees of transitional job employer partners. Department Response: The regulations at § 683.270 contain safeguards against displacement of employees that are applicable to WIOA title I employment and training activities, including transitional jobs. The Department also added § 680.840, which clarifies that funds for workbased training and work experiences may not be used to fill openings that resulted from a labor dispute. Comments: Commenters recommended several ways to maximize the likelihood that workers are retained in unsubsidized employment after a transitional job program: (1) Monitoring participants and providing retention services for at least 6 months following unsubsidized job placement; (2) regular, frequent follow-up contacts by retention specialists; (3) ongoing retentionfocused activities such as workshops, peer learning groups and support groups; (4) retention incentives in the form of monetary bonuses or nonmonetary incentives such as child care services; and (5) reemployment services for workers who are terminated from unsubsidized employment. The commenters also recommended several specific structure elements and polices that they asserted are essential: (1) A flexible length of time in subsidized employment based on the skill development needs of the individual; (2) subsidized employment offered should be no fewer than 20 hours per week and workers should be allowed to remain in the subsidized employment until unsubsidized employment slots are available for transition; (3) employers should support participant development and skill building; and (4) personal contact and consistent followup should be provided among program staff, participants, and employment supervisors, as well as opportunities to work with a case manager for the participant to address serious issues if they arise. Department Response: The Department declines to propose a E:\FR\FM\19AUR6.SGM 19AUR6 56118 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations minimum or maximum duration for transitional jobs that could create unnecessary restrictions that may prevent an individual from obtaining unsubsidized employment. The Department also declines to create a one-size-fits-all approach to transitional jobs, and considers these decisions are best made by the Local WDB and the individual’s career planner. No changes have been made to the regulatory text in response to these comments. The Department will address these issues further through guidance and technical assistance. Comments: A commenter recommended that proposed § 680.830 (as explained above, renumbered in the Final Rule to § 680.190) be amended to refer to ‘‘time-limited work experience’’ to be consistent with the language and intent of WIOA sec. 134(d)(5). Department Response: The Department agrees with this comment and has amended the language in § 680.190 to include the phrase ‘‘timelimited work experience.’’ Comments: Another commenter asked what is the employer reimbursement rate and contract length? Department Response: The employer reimbursement rate is to be determined by the Local WDB and can be up to 100 percent. The Department encourages Local WDBs to work with employers that are willing to provide a certain percentage of the cost of the transitional job. mstockstill on DSK3G9T082PROD with RULES6 Section 680.195 What funds may be used for transitional jobs? Comments: Some commenters requested clarification on the 10 percent limit on use of funds. In particular, some commenters asked if the 10 percent limit would apply to work experience as an activity. A State WDB asked whether all adult and dislocated workers transitional job work experience is subject to the 10 percent cap. Department Response: The Department considers transitional jobs to be a targeted service that includes comprehensive career and supportive services. Non-transitional job work experiences have no requirement that they must be paid or unpaid, and they do not have the same requirements for comprehensive career and supportive services. They also are not subject to the 10 percent funding cap that transitional jobs are. The Department has added text to the regulatory text to further clarify the 10 percent cap and that transitional jobs, defining them as a certain type of work experience which is targeted to a specific population that is: ‘‘chronically VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 unemployed’’ or has an ‘‘inconsistent work history.’’ Comments: A commenter asked for clarification on what ‘‘comprehensive career services’’ means when required to be part of transitional jobs, and asked if it includes basic career services, individualized career services, or both, and if there is a sequence of services before service can be provided. Department Response: Comprehensive career services may include both basic and individualized career services and are based on the needs of the participant. Comprehensive career services and supportive services, which are required to be provided as part of any transitional jobs strategy, are not subject to the 10 percent cap described at § 680.195. However, the Department is providing flexibility to allow for these services to be provided with the funds set-aside for transitional jobs. Local areas determine which comprehensive and supportive services are appropriate for each individual. There is no sequence of service required. 3. Subpart B—Training Services Training services are discussed at §§ 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, preapprenticeship 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 selfsufficiency or higher wages than previous employment through career services alone. The participant must be determined to be in need of training services and possess the skills and qualifications to participate successfully in the selected program. It also must be determined that they are unlikely or unable to retain employment that leads to self-sufficiency or higher wages. Some participants may need additional services to assist their vocational training, such as job readiness training, literacy activities including English language training, and customized training. PO 00000 Frm 00048 Fmt 4701 Sfmt 4700 Comments: Comments generally were supportive of the Department’s flexible approach to the delivery of training services for the WIOA title I adult and dislocated worker programs. Department Response: The Department has updated and clarified language regarding how registered apprenticeship and other apprenticeships may be utilized as a training solution for adult and dislocated worker customers. Section 680.200 What are training services for adults and dislocated workers? Comments: Two commenters strongly recommended that local flexibility be preserved as it relates to determining the appropriate availability, structure, and mix of training services that are offered locally to individuals and employers. Another commenter encouraged the Department to avoid restrictive standards and allow customization of varying training practices because there is slower adoption among small businesses of newer best practices. This commenter stated that this flexibility is particularly important when considering the effectiveness of competency-based training versus number of hours trained. Department Response: The Department agrees that it is important to maintain local flexibility to make decisions about the appropriate mix of career and training services and has provided local flexibility in making those determinations. Comments: A few commenters provided input on pre-apprenticeships and non-registered apprenticeships. One commenter encouraged the Department to add more flexibility into the regulations as they relate to preapprenticeships and non-registered apprenticeships so that manufacturers can develop and use programs that best meet their unique needs. Another commenter cautioned the Department not to discriminate against nonregistered apprenticeships because many smaller employers rely on these types of programs. One commenter recommended that employer-sponsored craft training programs that are not registered, but that lead to an industryrecognized credential, should have an automatic initial ETP determination and then, be required to satisfy continued eligibility requirements after 1 year. Department Response: WIOA sec. 122(a)(2)(B) provides automatic qualification for registered apprenticeship programs on eligible training provider lists (ETPLs) and WIOA in general provides an overall emphasis on registered apprenticeship E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations programs throughout the one-stop delivery system. The Department has used this emphasis to highlight the unique flexibilities the one-stop delivery system has in making use of registered apprenticeship programs to provide training services, including Individual Training Accounts (ITAs) and OJT. This in no way restricts preapprenticeship programs and nonregistered apprenticeship programs from being an ETP according to the criteria in WIOA sec. 122(a). These training providers, in order to receive ITA payments, must go through the same eligibility criteria as other training providers on the ETPL. The Department considers programs that lead to an industry-recognized credential as valuable providers of training, and these programs are welcome to apply to become ETPs. The Department declines to make changes to the regulatory text in response to these comments. Comments: One commenter encouraged the Department to allow adult education providers to provide workforce preparation rather than training in sector work. The commenter stated that if community-based adult education providers were required to offer sector training, most of these providers would have to be completely transformed, would require significant capacity boosts, would be less likely to reach the hard-to-serve, and would have drastically reduced enrollment. One commenter requested clarification on the role of adult basic education. Department Response: Under WIOA sec 134(c)(3)(D)(x), title I adult and dislocated worker funds may be used to support adult education and literacy activities, provided concurrently or in combination with other training services. The Department has added regulatory text clarifying this use of WIOA title I adult and dislocated worker funds in § 680.350. This regulation involving appropriate uses of adult education and literacy activities only applies to WIOA title I adult and dislocated worker funds. Comments: A commenter expressed support for having both OJT and classroom training available to adult and dislocated workers. Two commenters supported the inclusion of integrated English literacy/civics education programs in WIOA. These commenters recommended that the Departments of Labor and Education provide diverse examples of how such programs may be designed, including ways in which they may represent components of sector partnerships and/ or career pathways initiatives, and how they may facilitate the economic, VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 linguistic, and civic integration of participants. Department Response: The Department of Labor will work with the Department of Education to provide additional guidance and technical assistance on sector partnership and career pathways initiatives under WIOA, including how to integrate programs such as those the commenters highlighted. Comments: One commenter described the benefits of entrepreneurship training and encouraged the Department to revise performance indicators that would create a barrier to the inclusion of entrepreneurship training in the WIOA public workforce system. A few commenters requested clarification on what constitutes entrepreneurial training as cited at sec. 134(c)(3)(D)(vii) of WIOA. Department Response: Entrepreneurial training is an allowable training activity, and the Department will issue guidance and technical assistance to support its use and to address performance accountability. Additionally, the Department has addressed instances where quarterly wage records are not traditionally available for performance accountability purposes, as may be the case where participants have received entrepreneurial training, in 20 CFR 677.175 (see Joint WIOA Final Rule). Comments: Two commenters recommended that the regulations explicitly recognize the need for direct support professionals to address the growing ‘‘direct support worker crisis’’. Department Response: WIOA sec. 108(b), which lists the required contents of local plans, states that the plans must include an analysis of existing and emerging in-demand industry sectors and occupations including the employment needs of employers in those sectors and occupations. Training programs for WIOA title I adult and dislocated worker programs are to be linked to in-demand industries and occupations in the local plan. The Final Rule does not explicitly recognize any specific industry or occupation needed to meet current workforce needs because these needs may change and often are based on State and local labor markets. Comments: One commenter suggested that the regulations should better articulate the important role for digital literacy instructions, reasoning that these skills are critical to job advancement as well as educational credentials, including high school equivalency diplomas. Additionally, this commenter urged the Department to adopt a flexible framework as it relates PO 00000 Frm 00049 Fmt 4701 Sfmt 4700 56119 to the integration of occupational skills training, which the commenter stated should include a student-centered approach in which co-enrollment in workforce education programs be optional rather than required. Department Response: The Department considers digital literacy to be a pre-vocational service or a workforce preparation activity, both of which are considered to be individualized career services and not training services. The Department agrees that digital literacy is an important skill to succeed in the 21st century workforce, but considers it to be a service that may be made available based on individual need as determined by the local area. While WIOA encourages program alignment, and coenrollment is one way to align service delivery, the Department does not require co-enrollment across programs. Comments: A commenter suggested that the Department provide the list of training services found in WIOA in the regulations rather than simply referencing the statutory citation. Department Response: The Department agrees with the recommendation and has adjusted the regulatory text of § 680.200 to include the list of training services provided in WIOA sec.134(c)(3)(D). Comments: Commenters requested clarification on whether alternative secondary school (formerly GED) preparation is considered a career service or a training service. Department Response: The Department considers a program that leads to a secondary school diploma to be a training service. A program that leads to a secondary school diploma or its equivalent can be eligible as a State ETP, see § 680.420. Section 680.210 Who may receive training services? Comments: A commenter asked who would be responsible for determining what constitutes self-sufficiency when determining who may receive training services under proposed § 680.210(a)(1). Department Response: Under WIOA sec. 134(a)(3)(A)(xii), States may use statewide funds reserved by the Governor for adopting, calculating, or commissioning for approval an economic self-sufficiency standard for the State that specifies the income needs of families, by family size, the number and ages of children in the family, and sub-State geographical considerations. Under WIOA sec. 134(d)(1)(A)(x), local areas may use employment and training funds to adjust the State standard for local considerations, or can adopt, calculate, or commission for approval a E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56120 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations self-sufficiency standard for the local area that specifies the same factors required of the State standard. Under WIOA sec. 134(c)(3)(A)(i) individuals who receive training must be unlikely or unable to obtain or retain employment that leads to economic self-sufficiency or wages comparable to or higher than wages from previous employment through career services. Additionally, they must be in need of training services to obtain or retain employment that leads to economic self-sufficiency or wages comparable to or higher than wages from previous employment. The one-stop center is responsible for determining if an individual meets the self-sufficiency standard set by this process. Comments: A commenter requested clarification about the division of responsibilities between one-stop centers and local service providers, including clarification on who is responsible for determining who can receive training services. Department Response: The Department considers the ultimate responsibility for determining who can receive training services to rest with the Local WDB. However, through the service procurement process and other arrangements established through the local MOU, the board may delegate those responsibilities to the one-stop center or local service providers. Comments: A commenter disagreed with the language in proposed § 680.210(a) that indicates that a determination needs to be made that the training will result in receipt of wages higher than wages from previous employment, reasoning that economic conditions can make this difficult. Department Response: The Department notes that § 680.210(a) mirrors the requirements for title I adult and dislocated worker services found in WIOA sec. 134(c)(3)(A), and that training that leads to a ‘‘comparable wage’’ also is allowed for individuals to receive training services. No changes have been made to the regulatory text in response to the comments. Comments: A commenter recommended that the Department make efforts to inform employers of the availability of training services to assist workers on short-term or long-term disability programs. Department Response: The Department considers this to be an example of an appropriate business or employer service that may be provided through the one-stop delivery system. While the Department will not add language to the regulatory text mandating specific employer services, the Department does recognize the VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 importance of ensuring quality services for individuals with disabilities and will utilize guidance and technical assistance to ensure best practices in serving businesses and individuals with disabilities. Comments: A commenter suggested that the regulations should direct onestop centers to take into account older workers’ different training needs and lesser access to financial aid, and make sure that older workers are not discriminated against in access to WIOA-funded ITAs. Department Response: Older workers are identified as a target population for WIOA services, based on their inclusion in the definition of individuals with a barrier to employment in WIOA sec. 3(24). The Department will issue guidance and technical assistance on best practices in providing career and training services to older workers. Section 680.220 Are there particular career services an individual must receive before receiving training services under the Workforce Innovation and Opportunity Act? Comments: One commenter stated that there should be no required sequence of services prior to providing training services to allow more flexibility in meeting the needs of customers. Another commenter asked whether there is a frequency rate permitted to bypass career services and whether bypassing career services before training was considered to be an exception. One commenter requested further guidance and direction on how Local WDBs should document the circumstances that justify determinations that training services should be provided. Department Response: There is no sequence of service requirement and therefore, no requirement that career services must be provided before training services. Section 680.220(b) states, if training services are provided without career services, the Local WDB must document the circumstances that justified its determination to provide training without career services. Eligibility for training must be determined by an interview, evaluation, or assessment, and career planning or any other method through which the one-stop partner or partners can obtain enough information to make an eligibility determination for training services. Paragraph (b) of § 680.220 requires a case file that includes a determination of need for training services, based on the criteria discussed in § 680.220(a). There is no frequency requirement; the need for training PO 00000 Frm 00050 Fmt 4701 Sfmt 4700 services should be determined prior to their provision. There have been no changes to the regulatory text in response to these comments. Comments: Several commenters requested clarification as to how far back an assessment could have been conducted to satisfy the prerequisite for training services. Department Response: The Department does not mandate a certain length of time that previous assessments may go back; however, the Department expects that the previous assessments must be recent. The Department recommends that Governors and Local WDBs develop policies for the use of recent assessments that are appropriate for the individual and the one-stop center. The recent assessment must have sufficient information to make an eligibility determination for training services. Comments: A commenter recommended replacing the references to ‘‘eligibility’’ and ‘‘eligible’’ in proposed § 680.220(a) with ‘‘determined appropriate,’’ ‘‘suitable,’’ or ‘‘ability to benefit’’ to make it clear that this is not an additional eligibility determination beyond the eligibility determination conducted in § 680.110. Department Response: WIOA sec. 134(c)(3)(A) refers to ‘‘eligibility’’ for training services and this language is incorporated in the regulatory text. The Department recognizes that there are two types of eligibility—eligibility for program services and eligibility for training services. An individual must meet program service eligibility to be considered for training service eligibility. Comments: A commenter stated that the proposed steps required before a participant can receive training are appropriate for a customer who is in career transition, but questioned the appropriateness of the path where an employed worker is in need of skills upgrade to achieve economic selfsufficiency. Another commenter encouraged the addition of a provision that training for jobs that fall below economic selfsufficiency standards also must include ongoing training post-hire for career ladders within the industry and take into consideration other factors including benefits, retirement, vacation, and education that can mitigate and improve lower wage jobs. Department Response: The steps before a participant can be determined eligible for training services in the regulatory text are the minimum required by WIOA sec 134(c)(3)(A). The Department allows flexibility for local areas to develop methods to provide E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations services for individuals in need of a skills upgrade to achieve economic selfsufficiency. As part of the training eligibility, training services provided must be determined to lead to economic self-sufficiency or wages comparable to or higher than previous employment. mstockstill on DSK3G9T082PROD with RULES6 Section 680.230 What are the requirements for coordination of Workforce Innovation and Opportunity Act training funds and other grant assistance? Comments: A commenter suggested that the Department revise the regulations to require, rather than recommend, that one-stop centers and partners take into account the full cost of training, including the cost of supportive services, when coordinating grant assistance. Department Response: The Department considers the full cost of training services to be an important factor when coordinating assistance from other grants or resources. The Department strongly encourages this coordination and consideration be taken into account. WIOA allows for one-stop centers or partners to make this a consideration and does not require it. Therefore, the Department has changed ‘‘should’’ to ‘‘may’’ in § 680.230(a). Comments: Some commenters recommended revisions to the proposed regulations as they relate to reimbursement of WIOA funds for participants who eventually receive Pell Grants. Specifically, because of the difficulties associated with implementing the proposed framework, these commenters recommended that WIOA funds not be reimbursed in situations where a Pell Grant is subsequently awarded after a one-stop center has paid for training. A commenter asked whether required educational fees are considered part of the training expenses or educationrelated expenses. This commenter sought clarification on this issue, but recommended that they be considered training expenses and not educationrelated expenses. Department Response: The Department maintained the requirements of Pell Grant reimbursement, as described in § 680.230(c). WIOA sec 134(c)(3)(B)(ii) requires reimbursements to local areas from Federal Pell Grants to an individual who received WIOA title I training services while his or her Pell Grant was pending. The Department agrees with the commenters’ suggestion that educational fees be considered part of the training expenses that should be reimbursed to the local area and has VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 added language in § 680.230(c) to require this reimbursement. Comments: A commenter stated that WIOA funds should be directed toward Temporary Assistance for Needy Families (TANF) recipients to enhance the work and training needs of the public assistance population without a requirement that TANF funds first be considered. Furthermore, the commenter stated that when resources in a local area are limited, local areas are best suited to determine which funds are dedicated to provide training and WIOA should be a primary funding source. Department Response: The Department declines to make a change in the regulatory text at § 680.230(b). WIOA funds supplement other sources of training grants and do not supplant them. Comments: To ensure consistency with previous Federal guidance, a commenter suggested that the Department add language to § 680.230 to clarify that education and training benefits earned by veterans are not required to be coordinated with training funds available under WIOA title I. Department Response: While the Department declines to make a change in the regulatory text, it notes that the Department of Veterans Affairs benefits for education and training services are not included in the category of ‘‘other sources of training grants’’ listed in § 680.230(b). Therefore, veterans and spouses are not required to first use any available benefit entitlements associated with their military service before being considered eligible for WIOA funded training, and one-stop centers are not required to consider the availability of those funds. Comments: Some commenters recommended that the Department clarify that WIOA title I funds can support title II adult education programs, as the WIOA sec. 134(c)(3) definition of training includes ‘‘adult education and literacy activities, including activities of English language acquisition and integrated education and training programs’’ at sec. 134(c)(3)(x). Commenters asserted that this clarification was needed as expeditiously as possible so that the planning processes in the States can proceed efficiently. Department Response: Under WIOA sec. 134(c)(3)(D)(x), title I adult and dislocated worker funds may be used to support adult education and literacy activities, provided concurrently or in combination with other training services. The Department has added regulatory text clarifying this use of WIOA title I adult and dislocated PO 00000 Frm 00051 Fmt 4701 Sfmt 4700 56121 worker funds in § 680.350. This regulation involving appropriate uses of adult education and literacy activities only applies to WIOA title I adult and dislocated worker funds. Comments: Because availability of training assistance depends on whether participants have access to other sources to pay for training, a commenter strongly encouraged the Department to stress to Local WDBs the importance of the optional services outlined in § 680.140 for individuals with disabilities. Department Response: The Department identifies in § 680.140 all of the required and permissible WIOA title I adult and dislocated worker services that Local WDBs may provide. The Department considers the permissible activities described in § 680.140(b) that may help individuals with disabilities to navigate among multiple services and activities to be important. The Department also has listed ‘‘reasonable accommodations for individuals with disabilities’’ to be an allowable supportive service in § 680.900. 4. Subpart C—Individual Training Accounts Individual Training Accounts (ITAs) are key tools used in the delivery of many training services. The Department seeks to provide maximum flexibility to State and local programs in managing ITAs. These regulations do not establish the procedures for making payments, restrictions on the duration or amounts of the ITA, or policies regarding exceptions to the limits. The authority to make those decisions resides with the State or Local WDBs. The authority that States or Local WDBs may use to restrict the duration of ITAs or restrict funding amounts must not be used to establish limits that arbitrarily exclude eligible training providers. Through the one-stop center, individuals will be provided with quality and performance information on providers of training and, with effective career services, case management, and career planning with the ITA as the payment mechanism. ITAs allow participants the opportunity to choose the training provider that best meets their needs. Under WIOA, ITAs can more easily support placing participants into registered apprenticeship programs. Section 680.300 How are training services provided? Comments: A commenter expressed support for the ability to pay an ITA at the beginning of the training program rather than on an incremental basis, because it would allow Local WDBs to budget and manage their ITAs much E:\FR\FM\19AUR6.SGM 19AUR6 56122 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 more easily, eliminates the concern about putting customers into training that straddles 2 program years, and simplifies the determination of how much carry over funding to include in the next program year’s budget. Department Response: The Department considers it important to maintain flexibility in how ITA payments are made to support Local WDBs to use the most effective payment mechanisms. There have been no changes to the regulatory text in response to these comments. Section 680.320 Under what circumstances may mechanisms other than Individual Training Accounts be used to provide training services? Comments: A few commenters expressed support for the approach proposed in § 680.320. One commenter expressed support for the opportunity to contract for services rather than rely solely on ITAs, potentially support streamlining and more effective administration and planning for training providers. Another commenter expressed support for the training of cohorts, allowing States and local areas to contract with providers to assist groups of participants through one contract for services with defined goals and outcomes, rather than the administratively burdensome process of having each individual participant request services from providers through an ITA. Another commenter supported the Department’s detailed list of circumstances under which a mechanism other than an ITA may be used to provide training services. Several commenters provided input on funding mechanisms for training for individuals with barriers to employment. One commenter expressed support for allowing local areas to contract directly with training providers to supply training that will effectively service individuals with barriers to employment, expanding innovative and effective models for helping participants obtain industry-recognized credentials. Another commenter recommended that the Department recognize the need for coordination with vocational rehabilitation programs when addressing services for individuals with disabilities to avoid duplication of effort. Department Response: The Department generally received supportive comments about the use of alternative methods to ITAs. The Department encourages coordination with Vocational Rehabilitation programs when serving individuals with disabilities to ensure effective service delivery. No changes have been made to VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 the regulatory text in response to the comments, but the Department is adding, ‘‘and the local area has fulfilled the consumer choice requirements of § 680.340’’ to § 680.320(a), to ensure that the statutory requirement at WIOA sec. 134(c)(3)(G)(ii)(I) is included. This provision requires that a local area have a full ITA system in place even if it decides to provide training through contracts because one or more of the situations in § 680.320(a)(1) through (5) applies. Section 680.320(c) provides that the local plan describe the process to be used in all cases to select training under a contract to be consistent with WIOA sec. 108(b)(16). Comments: A few commenters recommended that the Department clarify which individuals are considered to have a barrier to employment as a result of being an English language learner. Specifically, these commenters asserted that the preamble and the regulatory text differ in that one requires that three elements be met ((1) English language learners, (2) individuals who have low levels of literacy, (3) individuals facing substantial cultural barriers) while the other allows any one element as triggering categorization of having a barrier to employment. One commenter asked that the Department add a definition of ‘‘ex-offender’’ and encouraged the Department to include individuals with deferred sentences to be included within the definition because these individuals encounter similar barriers to employment as those individuals who actually spend time incarcerated. Another commenter asserted that the regulation should include employer incentives to encourage the hiring of ex-offenders. Department Response: WIOA sec. 3(24) defines ‘‘individuals with barriers to employment,’’ and WIOA sec. 3(24)(I) includes the following groups that qualify for this definition: ‘‘Individuals who are English language learners, individuals who have low levels of literacy, and individuals facing substantial cultural barriers.’’ The Department clarifies that if an individual meets any one of the three criteria in WIOA sec. 3(24)(I), that individual may be considered to have a barrier to employment. WIOA defines ‘‘English language learner’’ in WIOA sec. 203(7) and is one of the criteria that may be met to be considered an individual with a barrier to employment. The Department also considers the definition of ‘‘literacy’’ provided in WIOA sec. 203(13) as the standard to be used for determining if an individual is considered to have low literacy, and therefore a barrier to employment. The Department will use PO 00000 Frm 00052 Fmt 4701 Sfmt 4700 guidance and technical assistance to States and Local WDBs to aid in determining when these elements are met. The term ‘‘offender’’ is defined in WIOA sec. 3(38) and the Department considers this to be the basis by which an individual is determined to be an ‘‘ex-offender.’’ The Department declines to alter the regulatory text to include employer incentives for hiring of specific groups. Comments: One commenter expressed support for the inclusion of ‘‘older individuals’’ in the list of barriers to employment, reasoning that the aging community has more challenges than younger workers in regaining employment once it has been lost and are more likely to be among the long term unemployed. Two commenters requested that the Department define the duration of unemployment that must be reached for an individual to be considered a long term unemployed individual. Department Response: The Department generally defers to the Bureau of Labor Statistics (BLS) definition and will provide additional guidance to States and local areas on long-term unemployed. Comments: Another commenter urged the Department to provide flexibility and guidance to use ITA funds concurrently or successively with paid work experience or OJT, reasoning that this combined use of ITA/OJT or ITA/ paid work experience would provide additional benefits to the participants. Department Response: The Department notes that there is no prohibition on the combined use of ITAs and OJT as well as any other contracted training services under WIOA sec. 134(c)(3)(G)(iv). These decisions must be based on individual need and they must be paying for separate program elements. There also is no prohibition on using career services, such as work experience, in combination with ITAs. Comments: A commenter asked how the Department defines ‘‘institution of higher education’’ as the term relates to funding mechanisms for training services in proposed § 680.320. Department Response: The term ‘‘institution of higher education’’ is defined in WIOA sec. 3(28); the Department has added this citation into the regulatory text in § 680.320(a)(4). Comments: One commenter recommended a minor technical correction to proposed § 680.320(a)(4) to replace the phrase ‘‘will facilitate’’ with ‘‘in order to facilitate.’’ Department Response: The Department agrees with the commenter’s suggestion and has made E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 this nonsubstantive correction in the regulatory text in § 680.320(a)(4). Section 680.330 How can Individual Training Accounts, supportive services, and needs-related payment be used to support placing participating adults and dislocated workers into a registered apprenticeship program and support participants once they are in a registered apprenticeship program? In this section, a new paragraph (a) was created, and proposed paragraph (a) is now (a)(1). Similarly, proposed paragraph (b) is now (a)(2). Proposed paragraph (c) has been renumbered to (b), and the following proposed paragraphs (d) and (e) are now (c) and (d). Comments: A few commenters expressed support for allowing ITA funding to be used to pay for supportive services and needs-related payments to support the placement of a participant into a registered apprenticeship program. A commenter asked whether supportive services would be provided throughout a multi-year apprenticeship and whether supportive services would be provided to an employed individual participating in an apprenticeship. Additionally, the commenter asked how WIOA would assist an already employed worker who moves up the career ladder and is put into an apprenticeship either through OJT, ITA, or support services. Another commenter stated that one-stop centers should provide career services and supportive services during the final year of an apprenticeship because this is a crucial time that can directly lead to employment. Some commenters stated that there should be no limitations placed on program service funding, including incumbent worker funding, which these commenters described as possibly the most appropriate funding to serve apprentices. In regard to incumbent worker funding, these commenters said that some companies may select current employees to upskill in a registered apprenticeship program given the length of the investment and the increased likelihood of the individual remaining engaged. Department Response: The Department refers to the regulatory text in §§ 680.900 through 680.920, the general requirements for supportive services. Supportive services may be used for both employed and unemployed individuals to support their participation in career and/or training services. Decisions about the provision of supportive services, including the duration, timing, and type, are to be made by the Local WDB. VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 The Department refers to the regulatory text in §§ 680.700 through 680.750 and in particular § 680.710, which discusses the requirements for OJT contracts for employed workers. Incumbent worker training may be an appropriate service that would help an individual move up a career ladder within an apprenticeship program. Comments: A commenter recommended that the Department revise proposed § 680.330(b) (renumbered in regulatory text as § 680.320(a)(2)) to allow for payments from ITAs to non-profit, joint labormanagement training to defray the cost of providing apprenticeship or preapprenticeship training for programs that do not charge ‘‘tuition.’’ This commenter suggested that these payments should include not only the pro-rata cost of delivering direct training to enrollees, but also should cover costs incurred to retain third-party providers. Two commenters stated that ITAs could be used to pay for pre-requisites for apprenticeship such as math courses, required education courses, and/or certifications as part of the work-based experience. Another commenter encouraged the Department to support the use of ITAs for competency-based apprenticeship models. Department Response: The Department agrees with the comment that the term ‘‘tuition’’ does not reflect the funding arrangements of registered apprenticeship programs and has changed the text in § 680.330(a)(2) to change it to ‘‘Training services provided under a registered apprenticeship program’’ to address this and be consistent with the way the Department refers to other types of training. The other suggestions from commenters about allowable uses for ITA funds are acceptable as long as the providers of those services are on the ETPL. No other changes have been made to the regulatory text in response to the comments. Comments: A commenter recommended that the regulations should allow for contracted apprenticeship programs as well as the placement of trainees into these programs solely through the ITA system, which the commenter described as not allowing for the easy organization of cohort-based programs. This commenter asserted that cohort-based apprenticeships and preapprenticeships can work with students recruited through the one-stop delivery system as well as those recruited from outside the system but would require a threshold number of trainees to be cost effective. The commenter concluded that the availability of trainee cohort PO 00000 Frm 00053 Fmt 4701 Sfmt 4700 56123 classes in apprenticeship and preapprenticeship programs is a costeffective approach to training. Department Response: The Department considers that these types of training cohorts are allowable provided that the individuals meet the training eligibility requirements and the training providers are on the ETPL. Comments: A commenter expressed the desire to be able to use ITAs to pay for apprenticeship programs that are not on the ETPL and that can last for many years to ensure that participants receive the training needed and that the local area is able to capture all applicable credentials received for performance purposes. Similarly, a commenter asked how long WIOA enrollment lasts past the 6 months of OJT if an apprenticeship lasts multiple years. This commenter also asked how a credential is documented if a WIOA participant exits the system prior to completion of the apprenticeship. Department Response: To receive funds from an ITA, the training provider must be on the ETPL. The Department encourages interested providers to apply to be ETPs. The Department is issuing guidance about the credential measures in performance. WIOA enrollment is governed by the definitions of ‘‘participant’’ and ‘‘exit’’ in 20 CFR 677.150 (see Joint WIOA Final Rule). Local areas can develop ITA contracts within the framework of these definitions and the requirements for ITAs. Training services should be provided based on the needs of the individual and ITAs should be structured to address those needs. Comments: To expand preapprenticeships and apprenticeships, some commenters recommended that the one-stop centers be given authority to initiate the application for registered apprenticeships. A commenter recommended that one-stop centers build and maintain relationships with apprenticeship programs that operate within their region to provide a point of contact for individuals that would like to enroll. To serve individuals enrolled in pre-apprenticeship or registered apprenticeship programs best, a commenter suggested including a regulatory requirement that the one-stop delivery system receive technical assistance to help expand one-stop center capacity to serve women entering these training programs. Department Response: There is no prohibition in WIOA on one-stop centers initiating applications for registered apprenticeships. The Department encourages Local WDBs to partner with registered apprenticeships, work to align service delivery, and make E:\FR\FM\19AUR6.SGM 19AUR6 56124 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 appropriate arrangements to build on these partnerships. The Department encourages the one-stop delivery system to help populations access training in nontraditional employment and will provide technical assistance to share best practices on this subject. Comments: Two commenters listed the following ways in which a one-stop delivery system could serve the preapprenticeship programs, including, marketing, referrals, training costs, direct placements in registered apprenticeships, and use of OJT funds. Department Response: The Department considers these recommendations to be examples of best practices to be shared through guidance and technical assistance. Comments: A commenter requested clarification on several issues related to pre-apprenticeships: (1) With preapprenticeship programs moving to ITAs and therefore onto the ETPL, is the expectation that all other intensive service providers also will be included in the ITAs and ETPL; (2) the treatment of pre-apprenticeship programs that are not linked to a registered apprenticeship under WIOA; and (3) whether an out-ofschool youth under 18 or an in-school youth be approved for an ITA for a preapprenticeship program? Department Response: Preapprenticeship programs may be eligible for an ITA if they are on the ETPL. The Department encourages preapprenticeship programs that provide training services under an ITA to apply to be an ETP. The Department considers pre-apprenticeship programs to be directly partnered with at least one registered apprenticeship program; programs that do not meet this criterion are not considered a pre-apprenticeship program for the purposes of WIOA. In order to receive an ITA under WIOA title I adult and dislocated worker programs, an individual must meet program eligibility criteria as well as the training eligibility criteria. Section 680.340 What are the requirements for consumer choice? Comments: A commenter indicated that proposed § 680.340 does not speak effectively to the concept of ‘‘consumer choice.’’ This commenter stated that it would take serious efforts by the Department to develop more extensive information regarding the learning providers to inform individuals seeking training opportunities properly. Furthermore, the commenter asserted that posting information about eligible trainers has not proven to assist the learner. Department Response: The regulations on consumer choice are VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 consistent with the language in WIOA sec 134(c)(3)(F). The Department emphasizes the importance of performance information on training providers to ensure consumers may make an informed assessment of their training options. The Department considers the role of the career planner as critical to support individuals to make well-informed training decisions. Career planners are responsible for making training eligibility determinations, and these determinations require that States and local make available high quality performance information to participants to make informed training choices. Comments: One commenter suggested that the Department rewrite proposed § 680.340(b) so that it is clear that there is no requirement for the employer to report outcomes when using OJT and customized training other than in those circumstances required by the Local WDB. Department Response: The Department agrees with the commenter and has changed the regulatory text in § 680.340(b) to emphasize that the ETPL is a separate list from the list that the Governor may require for work-based training providers. Comments: A commenter recommended that proposed § 680.340 be revised to make it clear that training funds are not an entitlement and that criteria in addition to eligibility are assessed prior to referral to a provider and program. Two other commenters requested clarification as to the reasons that training could be refused. Department Response: WIOA is not an entitlement program. Determinations for training are made consistent with the law, including WIOA sec. 134(c)(3)(A), State and local policies, funding availability, and other appropriate considerations. There have been no changes to the regulatory text in response to these comments. One commenter requested that the Department provide a definition for the term ‘‘cost of referral’’ as used in proposed § 680.340(d). Department Response: The Department declines to define the term ‘‘cost of referral’’ in the regulatory text. Comments: A commenter expressed support for the prioritization of funding for training programs that result in a recognized postsecondary credential. Department Response: The Department acknowledges the comment and has added language to the regulatory text in § 680.340(f) referencing the citation for WIOA sec. 3(52), which defines a recognized postsecondary credential. PO 00000 Frm 00054 Fmt 4701 Sfmt 4700 Comments: A commenter recommended a technical correction to proposed § 680.340(b) to reference paragraph (d) in WIOA sec. 122 rather than paragraph (e). Department Response: The Department agrees and has made this nonsubstantive correction in the regulatory text in § 680.340(b). Section 680.350 May title I adult and dislocated worker funds be used to directly support adult education and literacy activities? Comments: Some commenters recommended that the Department clarify that WIOA title I funds can support title II adult education programs, as the WIOA sec. 134(c)(3) definition of training includes ‘‘adult education and literacy activities, including activities of English language acquisition and integrated education and training programs’’ at sec. 134(c)(3)(D)(x). A commenter recommended that referrals to regionally accredited secondary-level educational programs providing entrylevel workforce preparation and/or postsecondary education and training activities be included as part of basic services and counseling services. A commenter requested clarification regarding whether alternative secondary school (formerly General Education Diploma [GED]) preparation is considered a career service or a training service. Department Response: Under WIOA sec. 134(c)(3)(D)(x), title I adult and dislocated worker funds may be used to support adult education and literacy activities, provided concurrently or in combination with other training services. The Department has added regulatory text clarifying this use of WIOA title I adult and dislocated worker funds in § 680.350. The Department notes that these activities for title I adult and dislocated worker funds must be done in coordination with other training activities in WIOA sec. 134(c)(3)(D)(x). 5. Subpart D—Eligible Training Providers This subpart describes the process by which organizations qualify as eligible training providers of training services under WIOA. It also describes the roles and responsibilities of the State and Local WDBs in managing this process and disseminating the State Eligible Training Providers and Programs List (ETPL). Throughout the preamble, the Department refers to the State Eligible Training Providers and Programs List as the ‘‘State List,’’ the List, and the ETPL. The State ETPL and the related E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations eligibility procedures ensure the accountability, quality, and labor market relevance of programs of training services that receive funds through WIOA title I, subtitle B. The regulations emphasize that the List and accompanying information must be easily understood and disseminated widely in order to maximize informed consumer choice and serve members of the public. The State plays a leadership role in ensuring the success of the eligible training provider system in partnership with Local WDBs, the one-stop delivery system, and the one-stop’s partners. The Governor, in consultation with the State WDB, must establish eligibility criteria and procedures for initial and continued eligibility for training providers and programs to receive funds under WIOA title I, subtitle B. In doing so, the Governor may establish minimum performance levels for initial and continued eligibility and the Department encourages Governors to do so. In establishing minimum performance levels for eligibility, the Governor should take into consideration the need to serve targeted populations. Except for with respect to registered apprenticeship programs, the Local WDB may establish higher performance levels or require additional information from State eligible training providers to receive funds through the local area Individual Training Accounts (ITAs). The regulations in this subpart implement WIOA sec. 122 and refer to WIOA secs. 107, 116, and 134 where those sections affect program and provider eligibility, the ETPL, the use of ITAs, and the inclusion of registered apprenticeship programs on the ETPL. In § 680.410, the regulations clarify what entities can be eligible training providers. Section 680.470 provides that registered apprenticeship programs, which WIOA treats differently than other eligible training providers in some respects, are automatically eligible to be included on the ETPL. Finally, § 680.500 requires the Governor or State Workforce Agency (SWA) to disseminate the State ETPL with accompanying performance and cost information to Local WDBs in the State and to members of the public through specified means. The performance information must be presented in a way that is easily understood, in order to maximize informed consumer choice and serve all individuals seeking information on training outcomes, including WIOA participants and individuals with disabilities. Separately, 20 CFR 677.230 (see Joint WIOA Final Rule) addresses the ETP annual performance reports mandated at WIOA VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 sec. 116(d)(4), which require providers to report on, among other things, the levels of performance for the WIOA primary indicators of performance for all individuals enrolled in the program of study. In response to concerns expressed by stakeholders that some providers of training would face difficulties in participating in this WIOA-revised system, the Department has clarified the interrelated eligibility requirements and explained that while WIOA places an emphasis on quality training as measured by performance criteria, State and Local WDBs and training providers must work together in achieving this goal. The regulations emphasize the Governor’s role in offering financial or technical assistance to training providers where the information requirements of this section result in undue cost or burden. Making a wide variety of high-quality programs of training available to participants will increase customer choice and training providers may find performance information useful to improve their programs of study, which in turn will provide a direct benefit to participants. The Department also encourages the Governor to work with eligible training providers to return aggregate performance information to the providers in ways that will help the providers improve their program performance. The State and Local WDBs must work together to ensure sufficient numbers and types of training providers and programs to maximize customer choice while maintaining the quality and integrity of training services. In addition, the regulations explain that community-based organizations (CBOs) can be eligible training providers, provided they meet the requirements to become eligible training providers in WIOA sec. 122 and this subpart. Because of WIOA’s emphasis on ensuring the provision of quality training, and the importance of using performance criteria to obtain such quality, the Department does not intend to waive the requirement to submit performance information at this time. Throughout this subpart, the Department has changed references from the Eligible Training Provider List to the list of eligible training providers and programs to convey that the list is a compilation of the programs of training services for which ITAs can be used. The Department has also made revisions throughout this subpart for consistency in the use of the term ‘‘program of training services’’ and to incorporate the use of youth funds for ITAs for out-of-school youth (OSY) aged 16–24. PO 00000 Frm 00055 Fmt 4701 Sfmt 4700 56125 The Department received a number of comments that pertain to the WIOA sec. 116(d)(4) ETP annual performance reports. The Department notes that submission of the ETP annual performance reports is required by WIOA sec. 116(d)(4) and comments and responses relating to this report are addressed in the Joint WIOA Final Rule preamble section for 20 CFR 677.230. This subpart D of part 680 addresses the ETP eligibility requirements. Section 680.400 What is the purpose of this subpart? Proposed § 680.400 explained the purpose of this subpart. It stated that the list must be accompanied by relevant performance and cost information and made publicly available online through Web sites and searchable databases as well as any other means the States use to disseminate information to consumers. The Department has made non-substantive corrections for consistency in how the Department uses terms throughout this section. Additionally, the Department has made substantive changes to paragraphs (a) and (b) of this section which are described in detail below. Comments: A commenter requested that Local WDBs ensure the availability of training providers that understand the unique needs of individuals with disabilities. Another commenter cited the challenges faced by older workers and recommended that the regulations direct one-stop centers to take into account older workers’ different training needs and lesser access to financial aid, and make sure that older workers are not discriminated against in access to WIOA-funded ITAs. Department Response: The unique needs of individuals with disabilities require a minor revision to § 680.400 to emphasize the importance of disseminating the State ETPL to individuals with disabilities. One of WIOA’s stated purposes is to increase access to employment and training for individuals with barriers to employment, which is defined in WIOA to include individuals with disabilities as well as older individuals. Individuals with disabilities (e.g., those who are blind or hearing-impaired) may have unique needs that prohibit access to information through the Internet or other common databases. To fulfill the statutory purpose of WIOA, the Department has added language to § 680.400(b) that requires States to disseminate information to consumers in formats accessible to individuals with disabilities. In response to the comment that the regulations direct one-stop centers to take into account older E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56126 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations workers’ different training needs, the Department notes that the ability to provide services to individuals with barriers to employment is a factor that must be taken into account in the Governor’s eligibility procedures under § 680.460(f)(9) and that WIOA sec. 3(24)(D) and (E) define ‘‘individual with a barrier to employment’’ to include individuals with disabilities and older individuals. Because this is a required factor in the eligibility procedures, the Department has decided not to address this in the purpose section of the regulation. No changes were made to the regulatory text in response to these comments. Comments: Another commenter requested that the Department explain whether programs other than those authorized by WIOA title I must use the eligible training provider list. A few commenters recommended that § 680.410 specify that the requirements apply to entities providing training to participants paid for with WIOA title I adult or dislocated worker funding only and are not more generally applicable to all entities providing training to adult and dislocated workers. Department Response: WIOA’s requirements regarding the State list of eligible training providers pertains to WIOA title I, subtitle B funds only. Core programs and partners other than the title I programs are not required to use the list of eligible training providers and programs, although States may choose to employ their ETP list for other activities. No changes were made to the regulatory text in response to this comment. Comments: The Department received a number of comments regarding whether youth may use ITAs in response to proposed § 681.550 (Are Individual Training Accounts permitted for youth participants?). Department Response: In § 680.400, the Department has added that this subpart describes the process for determining eligible training providers and programs for the adult, dislocated worker, and youth programs. More information about this is provided in the preamble corresponding to § 681.550. The Department has updated §§ 680.400(a), 680.430, and 680.490 to clarify which requirements of this subpart apply to the eligible training providers and programs that serve OSY aged 16 through 24 with ITAs. Section 680.410 What is an eligible training provider? The Department made nonsubstantive edits for consistency in how the Department uses terms throughout this section. Additionally, the VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Department has made significant substantive revisions to this section that are explained below. The Department significantly revised this section to more clearly define the term ‘‘eligible training provider’’ (ETP) and changed the section’s title to reflect this change. The Department made these changes to clarify which entities are considered ETPs, as many of the requirements of WIOA sec. 122 apply only to those entities that are considered ETPs under WIOA. This clarification responds to commenters’ requests for clarification on which requirements of WIOA sec. 122 apply to which entities. Section 680.410(a) through (c) lays out the defining characteristics of ETPs. Specifically, revised § 680.410(a) provides that ETPs are the only types of entities that can receive funding for training services through an ITA. This means that if an entity is not on the State ETPL, the entity may not receive ITA funds to pay for training services. Section 680.410(b) was revised to make clear that ETPs must be included on the State ETPL. The Department added new § 680.410(c) to provide that ETPs must provide a program of training services as that term is defined at § 680.420. The Department also added new § 680.410(d) to describe the kinds of entities that can be ETPs. Eligible training providers can be institutions of higher education that provide a program which leads to a recognized postsecondary credential, entities that carry out programs registered under the National Apprenticeship Act (29 U.S.C. 50 et seq.), and other public or private providers of training services, which may include community-based organizations (§ 680.410(d)(3)(i)), joint labor-management organizations (§ 680.410(d)(3)(ii)), and eligible training providers of adult education and literacy activities under WIOA title II if such activities are provided in combination with the training services described at § 680.350 (§ 680.410(d)(3)(iii)). The Department deleted proposed paragraph (b) of § 680.410 to clarify that this subpart is focused on ETPs and the State list of ETPs. The requirements for individuals receiving training from entities other than ETPs are addressed in §§ 680.320 and 680.530. Further description of the training that can be provided to individuals through entities other than ETPs can be found in § 680.530. Part of the reason for this revision to this section is to make it clear that only entities that have gone through the Governor’s ETP eligibility procedures and registered apprenticeship programs are considered ETPs, are able to be on PO 00000 Frm 00056 Fmt 4701 Sfmt 4700 the State ETPL, and can receive funding through ITAs. Additionally, because only these entities are on the State ETPL, only these entities, except for registered apprenticeship programs, are required to provide information for the ETP annual eligible training provider performance report required by WIOA sec. 116(d)(4). Comments: Many commenters provided input on specific categories of training providers. A few commenters supported allowing Local WDBs to provide training services as long as the Local WDB is licensed, registered, or otherwise exempt by the State office of education. Some commenters requested guidance on approval of distance learning providers requesting to be put on the ETPL. One commenter requested that the Department define and add a distance learning category as a potential ETP. Another commenter encouraged the Department to expand the definition of eligibility for training providers to include platforms that work with accredited institutions of higher education to provide Massive Open Online Courses (MOOCs). Several commenters encouraged the Department to revise § 680.410(a) to identify public television stations explicitly as an ETP with demonstrated expertise in developing and implementing evidencebased training services. Another commenter recommended that § 680.410 explicitly identify public libraries as potential providers, and particularly for enhanced digital literacy training and services. One commenter recommended that industry-based multi-employer training programs with a minimum of 50 percent employer representatives be eligible for inclusion on the ETPL to allow for training funds to be included as providers who would then be eligible for WIOA support. Another commenter urged the Department to consider integrating microenterprise development organizations, entities that help people in the very earliest stages of creating their own businesses, into the WIOA system. In addition, one commenter suggested a revision to paragraphs (a)(1) through (3) of § 680.410 to include, as examples of eligible training providers of training services with WIOA adult funds under title I, public or private organizations that have demonstrated effectiveness in providing regionally accredited secondary-level educational programs that include entry-level workforce preparation and/or postsecondary education and training activities. Department Response: The Department has determined it is not appropriate in the regulation to specify E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 types of public and private entities that are appropriate to be ETPs, as many of these entities could be ETPs if they meet the requirements for initial and continued eligibility under § 680.410(d)(3). Instead, the Department has defined broadly the kinds of entities which are eligible to be ETPs based on WIOA sec. 122(a)(2). The public and private entities commenters encouraged for inclusion on the ETPL are within the parameters of entities under § 680.410(d) that can be ETPs, provided they meet all other applicable requirements, such as the Governor’s eligibility requirements. In addition, the Department has not regulated to require training to be delivered in a specific format; programs may be delivered inperson, online, or in a blended approach. Nothing in the regulation precludes any of these approaches to training; therefore, it is unnecessary to regulate specifically that these are permissible types of training. In addition, the Department is clarifying that Local WDBs may provide training services, if they meet the conditions of WIOA sec. 107(g)(1), which includes the information required in a written waiver request to the Governor. This provision is addressed in § 679.410. In response to the commenter that suggested Local WDBs can provide training as long as the Local WDB is licensed, registered, or otherwise exempt by the State office of education, the Department notes that WIOA sec. 107(g)(1) establishes the requirements that must be met if a Local WDB wishes to provide training. Therefore, the Department has not included this in this section. Section 680.420 What is a ‘‘program of training services’’? This section defines the term ‘‘program of training services’’ that is used throughout the regulations. The Department proposed to define the term as one or more courses or classes, or a structured regimen that leads to specified outcomes, including recognized postsecondary credentials, secondary school diplomas or their equivalent, employment, or measurable skill gains toward such credentials or employment. The Department made non-substantive edits for consistency in how the Department uses terms throughout this section. The Department also made substantive revisions to paragraphs (a) and (b) which are described in detail below. In the NPRM preamble, the Department explained that the definition of a WIOA ‘‘program of training services’’ includes a structured regimen that leads to an industryrecognized credential. The NPRM VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 preamble indicated that the outcomes in the definition of program of training services aligned with performance requirements in WIOA sec. 116(b)(2)(A). Comments: Many commenters requested that the definition of ‘‘program of training services’’ be clarified with options to recognize ‘‘non-credentialed training, such as incumbent worker training, work-based learning opportunities, or single courses that fall within a career pathway for employment.’’ These commenters also requested clarification of ‘‘industryrecognized credentials’’ to avoid confusion over which programs should qualify as eligible for WIOA funding. Several commenters requested clarification regarding how or when a program of training services leads to ‘‘a recognized postsecondary credential, secondary school diploma or its equivalent.’’ A few commenters recommended that § 680.420 include training programs that lead to a ‘‘recognized postsecondary degree or industry recognized credential’’ to avoid a potential debate over what constitutes a ‘‘postsecondary credential.’’ Other commenters suggested that a definition of ‘‘recognized industry credential’’ include a degree, diploma, or certification provided by an educational institution, third-party industry association, or industry accreditation body if it is not widely recognized by multiple employers in a region or industry. One commenter recommended that the term ‘‘industry-recognized credentials’’ as used in the preamble to the NPRM be added to the regulatory text. Another commenter asked whether having a group of five employers state the certificate of completion from a training provider is ‘‘industry recognized’’ would meet the definition of industry-recognized credential. One commenter recommended a change to § 680.420(a) through (c), to include, as outcomes of programs of training services, regionally accredited secondary education diplomas and career certification for entry-level work force preparation earned as a part of a secondary education program. Department Response: The Department has revised the regulatory text of § 680.420 to further clarify which programs qualify as WIOA ‘‘programs of training services.’’ The introductory text of § 680.420 was modified to clarify that a ‘‘program of training services’’ is one that provides the services in § 680.200 and leads to any of the outcomes listed in paragraphs (a) through (d) of this section, making clear the relationship between the definition of ‘‘program of training services’’ in this section and the PO 00000 Frm 00057 Fmt 4701 Sfmt 4700 56127 definition of ‘‘training services’’ in § 680.200. Section 3(52) of WIOA defines the term ‘‘recognized postsecondary credential,’’ which was used in the Department’s proposed definition of a ‘‘program of training services.’’ The Department has revised § 680.420(a) to include all of the credentials, certificates, licenses, and degrees included in the WIOA definition of ‘‘recognized postsecondary credential.’’ However, the Department removed the term ‘‘recognized postsecondary credential’’ from the definition of ‘‘program of training services’’ in response to comments that this may be read as too limiting if it is interpreted to mean that these credentials can only be obtained by individuals who have a secondary degree, or a high school diploma or its recognized equivalent. The new definition of ‘‘program of training services’’ remains consistent with the program outcomes described in WIOA sec. 116(b)(2)(A) and 20 CFR part 677 (see Joint WIOA Final Rule). The Department chose not to define the term ‘‘industry-recognized credential’’ in the subpart and used the term ‘‘industry-recognized certificate or certification’’ in the definition of ‘‘program of training services’’ in order to mirror the definition of ‘‘recognized postsecondary credential’’ under WIOA. The term ‘‘industry-recognized credential’’ is an evolving term and the Department determined that defining it in the regulation may limit future innovation around industry-relevant training. The Department agrees that programs of training services should be inclusive of non-credentialed training, such as incumbent worker training, work-based learning opportunities, or single courses that fall within a career pathway. The introduction to § 680.420 emphasizes that training services that ‘‘lead to’’ any of the outcomes listed at § 680.420, which includes employment, is a program of training services. Therefore, programs that are components of such a regimen may be eligible programs. In addition, as explained in §§ 680.410 and 680.350 and associated sections of the preamble, WIOA title I adult and dislocated worker funds may be used for programs of training services that provide adult education and literacy activities if they are provided concurrently or in combination with occupational skills training and training services specified in § 680.350. For example, English as a second language may be part of a program of training services that leads to measurable skill gains toward postsecondary credentials, industry-recognized credentials, or E:\FR\FM\19AUR6.SGM 19AUR6 56128 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 employment. The Department has added a cross reference to § 680.350 in § 680.420(b) to clarify that a participant may utilize a program offering a secondary school diploma or its equivalent only when that program is offered in conjunction with occupational skills training and other training options listed at § 680.350. The revised definition of program of training services and the acceptable outcomes to which a structured regimen may lead align with the definitions within WIOA sec. 116(b)(2)(A) and in 20 CFR part 677 (see Joint WIOA Final Rule). Section 680.420(d) provides that a program of training services is one that leads to measurable skill gains towards a credential described in paragraph (a) or (b) of this section. In this context, the term ‘‘measurable skill gains’’ is used similarly to its use in 20 CFR part 677 and the accompanying ICR. For clarification, the Department notes that the ETP annual performance report layout required under WIOA sec. 116(d)(4) uses the term ‘‘training program,’’ which is synonymous with ‘‘program of training services.’’ Section 680.430 Who is responsible for managing the training provider eligibility process? Section 680.430 outlines the roles and responsibilities of the Governor, the State WDB, any designated State agencies, and Local WDBs in establishing and implementing criteria and procedures for determining the eligibility of training providers. The Department received several comments addressing § 680.430. The Department made non-substantive edits for consistency in how the Department uses terms throughout this section and to this section’s title. The Department also made substantive changes to paragraphs (a), (c)(3), and (d), and these changes are described in detail below. The title to this section of the NPRM was ‘‘Who is responsible for managing the eligible provider process.’’ The Department is making a non-substantive edit and inserting the word ‘‘training’’ between ‘‘eligible’’ and ‘‘provider’’ for consistency. The Department modified § 680.430(a) to clarify that the Governor, in consultation with the State WDB, establishes the criteria, information requirements, and procedures, including procedures identifying the roles of the State and local areas, governing eligibility of providers and programs of training services to receive funds for out-of-school youth as described in § 681.550. The Department renumbered and rearranged paragraph (d) and added VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 paragraph (e) for consistency with other portions of this subpart, including §§ 680.450, 680.460, and 680.470, in regard to what is required for registered apprenticeship programs to be an eligible training provider. These provisions of the subpart make it clear that registered apprenticeship programs are not required to follow the Governor’s eligibility procedures (initial or continued) in order to be eligible training providers. This is consistent with WIOA sec. 122(a)(3), which provides that registered apprenticeship programs are maintained on the State List for so long as the program is registered under the National Apprenticeship Act. Therefore, the Department modified this section to ensure that the registered apprenticeship programs are not subject to the additional standards that may be established by a local area. Because registered apprenticeship programs are not subject to the Governor’s criteria and information requirements or required to report on their levels of performance for eligibility, Local WDBs cannot establish additional criteria and information requirements or establish higher levels of performance for these entities to receive training services in the local area. Moreover, permitting the Local WDBs to establish additional criteria and performance standards for registered apprenticeship programs would be in tension with what the Department has determined is a key purpose of sec. 122(a)(3): Encouraging the integration of the registered apprenticeship program into the WIOA system. Section 680.430(d) provides that the Local WDB can make recommendations to the Governor on the procedure used in determining the eligibility of providers and programs. This is not a change from the NPRM. The Department has added new § 680.430(e), which contains the provisions from proposed § 680.430(d)(2) and (3), but clarifies that the provisions do not apply with respect to registered apprenticeship programs. Except for registered apprenticeship programs, the Local WDB may establish higher performance levels or require additional information from State eligible training providers to receive funds through local area ITAs. Paragraph (e)(1) provides that the Local WDB can, except with respect to registered apprenticeship programs, require additional criteria and information from local programs to become or remain eligible, and paragraph (e)(2) states that the Local WDB can set higher levels of performance, except with respect to PO 00000 Frm 00058 Fmt 4701 Sfmt 4700 registered apprenticeship programs, than those required by the State for local programs to become or remain eligible. In paragraph (e)(2), the Department made a non-substantive edit changing the phrase ‘‘local providers’’ to ‘‘local programs’’ to clarify that eligibility is determined on a program-by-program basis and removed the word ‘‘particular’’ from this paragraph as unnecessary. Comments: One commenter commended the Department for outlining the responsibilities of State and Local WDBs to ensure adequate availability of training services for individuals with disabilities and recommended that § 680.430(c)(3) similarly remind Local WDBs to disseminate and maintain lists of providers in formats accessible to individuals with disabilities. Department Response: As noted above under § 680.400, the State List must be made publicly available in a format this is accessible to individuals with disabilities. One of WIOA’s stated purposes is to increase access to employment and training for individuals with barriers to employment, which WIOA defines as including individuals with disabilities as well as older individuals. Individuals with disabilities (e.g., those who are blind or hearing-impaired) may have unique needs that prohibit them from accessing information through the Internet or other common databases. To fulfill one of the statutory purposes of WIOA articulated in WIOA sec. 2(1), the Department has added language to § 680.430(c)(3) requiring that Local WDBs ensure that the State list of eligible training providers and programs is disseminated through the one-stop delivery system in formats accessible to individuals with disabilities. Comments: A commenter asked the Department to revise § 680.430(d)(1) to require the Governor to engage with the Local WDB and to require an equal exchange of information that allows for mutual consent in the management of the ETP process. Department Response: The Department considered this comment; however, WIOA sec. 122 explicitly states that the Governor, in consultation with the State WDB, is to establish the criteria, information requirements, and procedures governing the eligibility of providers and programs and the Department will not create an additional requirement that the Governor obtain mutual consent of the Local WDBs. Moreover, § 680.430(d) already provides a role for the Local WDB in this process: It allows Local WDBs to make recommendations to the Governor on E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations the procedures used to determine eligibility of providers and programs. The Department encourages Local WDBs to make such suggestions and strongly encourages the Governor to carefully consider and incorporate the Local WDBs’ suggestions, as they are most familiar with the training needs of their specific area. No changes were made to the regulatory text in response to this comment. Comments: One commenter recommended that the regulation explicitly require a Governor to make the process for becoming an ETP transparent and ensure adequate access for CBOs to become ETPs. The commenter stated that a transparent and accessible process is necessary in order to expand access to a variety of highquality providers and programs for individuals seeking employment and a way out of poverty. Department Response: The Department notes that § 680.410 was modified to include paragraph (d)(3)(i), which explicitly acknowledges that CBOs may be eligible training providers. Moreover, CBOs can provide training through training contracts with the Local WDB under § 680.320. The Department agrees that a transparent process is important. Section 680.450(c) requires the Governor to solicit and take into consideration recommendations from Local WDBs and providers, provide an opportunity for interested members of the public to comment, and designate a specific time for doing these things. Additionally, § 680.460(e) requires that the Governor’s procedures be described in the State Plan, which is subject to the public comment requirements for State Plans. Because the Department concludes the process will already be transparent as public comment is required in the development of the procedures and in the development of the State Plan, no changes were made to the regulatory text in response to this comment. Comments: Another commenter recommended that ‘‘may’’ be changed to ‘‘must’’ in § 680.430(c)(2), to ensure that States with large Indian, Alaska Native and Native Hawaiian populations focus attention on the special circumstances of these populations. Department Response: The Department notes that § 680.430(c) requires the Local WDB to carry out the activities in § 680.430(c)(2) and already uses the term ‘‘must.’’ This section of the regulation implements WIOA sec. 107(d)(10)(E), which requires the Local WDB to work with the State to ‘‘ensure there are sufficient numbers and types of providers of career services and training services (including eligible VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 training providers with expertise in assisting individuals with disabilities and eligible training providers with expertise in assisting adults in need of adult education and literacy activities) serving the local area and providing the services involved in a manner that maximizes consumer choice, as well as providing opportunities that lead to competitive integrated employment for individuals with disabilities.’’ This section is focused on ensuring consumer choice for individuals with disabilities and adults in need of adult education and literacy activities. However, the Department interprets § 680.430(c)(2) to ensure that there are sufficient numbers and types of providers of career services and training services, to include ensuring that such services are available to assist specific populations such as the Indian, Alaska Native, and Native Hawaiian populations. No changes to the regulatory text were made in response to these comments. Section 680.440 [Reserved] The NPRM included a proposed § 680.440 implementing WIOA sec. 122(c), which allowed the Governor to establish a transition procedure for training providers eligible under WIA to maintain their eligibility and the eligibility of their programs under WIOA until December 31, 2015. In this Final Rule, the Department has removed § 680.440 in its entirety because the time during which providers could retain their eligibility under WIA into WIOA has elapsed. Therefore, this provision is no longer necessary. Although this provision is not in the Final Rule, the Department received several comments on the proposed rule and is addressing them below. Comments: Commenters addressed the Department’s proposed timeline and transition procedures for implementation of the continued eligibility provisions for ETPs eligible under WIA. A handful of commenters expressed support for exempting ETPs eligible under WIA from initial eligibility procedures and for providing these ETPs a transition period before requiring compliance with the application procedures to establish continued eligibility. A number of commenters requested that the Department allow States more time to implement the continued eligibility procedures. One commenter recommended that the Department extend the time allowed for transition of ETPs to meet the new requirements under WIOA until June 30, 2016. Another commenter recommended that the Department allow all ETPs to receive initial and/or subsequent PO 00000 Frm 00059 Fmt 4701 Sfmt 4700 56129 eligibility under WIA regulations until the State publishes and implements its new eligibility procedures, no later than June 30, 2016, reasoning that this approach would be consistent with the Department’s transition authority in sec. 503 of WIOA. One commenter cautioned that the procedures for initial and continued eligibility are lengthy and that there would not be enough time for implementation, then urged the Department to adopt more flexible procedures for easier implementation. A few commenters recommended that a waiver provision be added in the WIOA Final Rule relating to the application for continued eligibility of ETPs. Another commenter recommended a longer period of transition (i.e., more than 12 months) because of the additional information required from applicants to become an ETP under WIOA as well as the additional programming needed to electronically capture this information. One commenter recommended that States be allowed to use existing procedures for new providers and develop and implement new procedures by July 1, 2016, consistent with the start date of Unified State Plans. The commenter reasoned that this timeframe would allow States to identify best procedures and update software programming and user training and communicate these to potential providers. Other commenters recommended that the timeframe relevant in § 680.440 be determined by each individual State policy as determined by the Governor, without providing additional detail about the specific activities of concern. One commenter requested that continued eligibility be implemented as a phased transition. Department Response: In order to facilitate the transition from WIA to WIOA and give the states sufficient time to create robust eligibility policies and procedures for ETPs, the Department exercised its transition authority and issued guidance (Training and Employment Guidance Letter (TEGL) 41–14, Change 1) that extended the timeline for implementation of continued eligibility requirements for training providers eligible under WIA by 6 months through June 30, 2016, unless the Governor determined that an earlier date was possible. While this is not the 12-month extension requested by a commenter, the Department concluded this was sufficient time for States to implement the continued eligibility procedures. The Department has chosen not to regulate waiver policy in the Final Rule. E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56130 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations WIOA sec. 122(b)(4)(B) requires providers not previously approved under WIA to complete the initial eligibility procedure. WIOA sec. 122(i) requires that the Governor and Local WDBs implement these requirements no later than 12 months after the date of enactment. Although States are required to implement new procedures for initial eligibility and continued eligibility, rather than using existing procedures, the regulation at § 680.460(f)(1)(v) allows the Governor to use alternate factors for performance until performance information is available to establish continued eligibility. The Department notes that the Governor has discretion to determine what the alternate factors for performance are; thus the Governor’s procedure may take into account existing performance information. Moreover, the regulation at § 680.450(e)(2) requires the initial eligibility procedures to take into account ‘‘a factor related to’’ the indicators of performance which may take into account existing performance information. It is unclear what the commenter is suggesting by a ‘‘phased transition.’’ The Department notes that the Governor’s transition procedures could have been implemented in phases if the Governor chose to conduct the transition this way, as long as the continued eligibility procedures were implemented in a timely way to ensure that continued eligibility was established prior to the end of the transition period in that State, which, consistent with ETA guidance, could have extended no later than June 30, 2016. The Department notes that it also received comments on this section related to the eligible training provider annual performance report required under WIOA sec. 116(d)(4). The Department addresses these comments and provides responses in the preamble to 20 CFR 677.230 (see Joint WIOA Final Rule). Comments: Several commenters expressed confusion about how providers designated under WIA between WIOA’s enactment on July 22, 2014, and implementation of WIOA’s ETP provisions on July 22, 2015, were to be treated. One commenter requested that the Department clarify the date at which States are no longer allowed to use their old eligibility-determination process. Another commenter recommended either grandfathering or offering States the discretion to allow training providers that become eligible under WIA between July 22, 2014, and June 30, 2015, to remain eligible training providers until December 31, VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 2015, or to an earlier date according to the Governor’s transition procedures. Department Response: The Department is clarifying that WIOA sec. 122(i) covers all providers and programs that were previously eligible under WIA. Thus, any provider that was previously eligible under WIA procedures, regardless of whether this was before or after the date of WIOA’s enactment on July 22, 2014, is subject to the continued eligibility procedures under WIOA. This reading is consistent with WIOA and with the Department’s intention stated in the NPRM to grandfather all WIA providers through the duration of the Governor’s transition period. The Department modified § 680.460(a)(1) to make the treatment of providers and programs eligible under WIA consistent, regardless of whether they became eligible before, on, or after July 21, 2014. This interpretation is in accord with WIOA secs. 122(b)(4)(B) and 122(i) because all WIA providers determined eligible through June 30, 2015, were deemed eligible under the version of WIA sec. 122 requirements in effect on July 21, 2014 (the day before enactment of WIOA). Section 680.450 What is the initial eligibility process for new providers and programs? Section 680.450 establishes the requirements for the initial eligibility procedures for new providers and programs. The Department made nonsubstantive edits for consistency in how the Department uses terms throughout this section. The Department also made substantive edits to paragraph (b), which are discussed in detail below. Comments: The Department received comments addressing various issues relating to § 680.450. Several commenters expressed support for the proposed initial eligibility process. Other commenters suggested that provisions for waivers be included in §§ 680.450 (initial eligibility) and 680.460 (continued eligibility) of the Final Rule, and that WDBs be given authority to waive eligibility requirements on a case-by-case basis where it is in the best interest of those receiving training services. Some commenters recommended that Governors be given authority to approve public higher education schools automatically, similar to the proposed approach for registered apprenticeship programs, including eliminating the need for these institutions to be subject to initial or continued eligibility. These commenters stated that this was a duplicative burden on these institutions that are already required to report on programs to their primary funding PO 00000 Frm 00060 Fmt 4701 Sfmt 4700 sources. Several commenters recommended that National Farmworker Jobs Program (NFJP) grantees be presumed to be ETPs and be included on their States’ ETPLs automatically to encourage and streamline the ability of WIOA adult and dislocated worker programs to coenroll participants who also qualify for NFJP. In addition, one commenter expressed concern that its State would be unable to implement a new process that includes creating a technical system to track provider performance and other new WIOA requirements, as well as have public comment and implement by July 22, 2015, the date by which initial eligibility procedures are required to be implemented. Another commenter stated that even though local areas may set more stringent standards for performance for eligible training providers, because providers can apply to any Local WDB for approval to the statewide list, these more stringent standards are ineffective in ensuring provider quality. This commenter suggested that local areas should have full control over their Eligible Training Provider List, provided minimum standards are met. Department Response: The Department is clarifying in this preamble that States and local areas are the only entities authorized to determine new provider or program eligibility under WIOA. WIOA sec. 122(a) requires the Governor to determine eligibility procedures. State and Local WDBs do not have authority under WIOA to waive initial or continued eligibility requirements. The Department is therefore not including such waiver authority in this subpart. However, the eligibility requirements in the regulations are quite flexible because although they require the Governor to take certain factors into account, they do not proscribe what weight is given to any one factor. Additionally, Local WDBs may use contractual arrangements under §§ 680.320 and 680.530 to ensure that training is available. Automatic approval of higher education institutions or NFJP grantees as eligible training providers is not permitted under WIOA; these institutions and grantees will need to apply for initial eligibility in the same manner as all other training providers. In response to comments about duplicative burden, the Department acknowledges that there may be some duplication of requirements. However, the Department encourages these institutions to examine where there is overlap in the reporting requirements to minimize duplicative E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations work in complying with all of the institution’s reporting requirements. Therefore, no change was made in response to this comment. The Department has made no change to the timeline for implementing initial eligibility procedures in order for new training providers and programs to be included on the State Eligible Training Provider and Programs List. The States must implement initial eligibility procedures within 1 year of WIOA’s enactment as is required under WIOA sec. 122(c). The Department corrected the reference to paragraph (d) in § 680.450(c) to paragraph (e). Comments: Several commenters provided input on the specific performance information that the Governor of each State is required to request from potential training providers under § 680.450(e). Department Response: The Department considered commenters’ suggestions on what kinds of information could be considered a ‘‘factor related to the indicators of performance’’ to meet § 680.450(e)’s requirement. However, with regard to the comments on the performance information requirements in § 680.450(e), no substantive changes were made to the regulatory text in response to these comments. In part, because the factors related to performance that a Governor must take into account to establish initial eligibility are set forth in WIOA sec. 122, the regulations are consistent with the statutory requirements. Moreover, WIOA sec. 122 gives the Governor the discretion to determine the procedures for initial eligibility and establish minimum performance standards and the Department wants to allow the Governor the flexibility to establish procedures that are most relevant and applicable to the Governor’s State. Section 680.450(e)(2) requires the initial eligibility procedures to take into account ‘‘a factor related to the indicators of performance . . . .’’ This does not mandate a specific factor and it is at the Governor’s discretion to determine what information to require for the applicant to meet this requirement. The Department has listed below the comments and responses received on the requirement at § 680.450(e)(2). Finally, the Department notes that it revised § 680.450(e)(4) to clarify its implementation of WIOA sec. 122(b)(4)(E)(iii). This provision of WIOA permits the Governor to require other factors that indicate high-quality training services, including the factor described at WIOA sec. 122(b)(1)(H). VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 WIOA sec. 122(b)(1)(H) requires an analysis of the quality of a program of training services, including programs of training services that lead to recognized postsecondary credentials. Therefore, the Department has made a minor revision to § 680.450(e)(4) to reflect that the Governor’s criteria may require applicants to provide information demonstrating the program is a high quality program, which can include information related to training services that lead to recognized postsecondary credentials. Comments: A few commenters described the burden associated with the proposed performance information requirements and cautioned that they may limit the options available to training customers. Similarly, one commenter stated that the performance information requirements under both §§ 680.450 and 680.460 were too burdensome for small training providers, who are generally not equipped for tracking employment outcomes. Department Response: The Department considered commenters’ concerns about the burden of providing performance information under §§ 680.450 and 680.460. However, the information required for submission is set out in WIOA sec. 122 and the sections implement WIOA’s requirements for initial and continued ETP eligibility. The Department encourages States and providers to consider the benefit to the programs of training of having robust performance outcome data that can be used to evaluate and advertise the effectiveness of their programs of training. No changes were made to the regulatory text in response to these comments. Comments: A commenter cautioned against requiring past performance information for new training providers that do not have past performance information to evaluate. Another commenter recommended requiring applicant training providers to present average earning rates after exit rather than median earnings. Department Response: The Department considered the commenter’s recommendation, but determined that the Governor’s flexibility to determine what factors related to the performance indicators will be selected as part of the initial eligibility criteria is sufficient. This includes determining what factor related to performance may be used for new training providers. The Department notes that while the Governor has discretion to determine the factor related to performance that may be used for initial eligibility, once eligibility is established, WIOA sec. PO 00000 Frm 00061 Fmt 4701 Sfmt 4700 56131 116(b)(2)(A)(i)(III) requires approved ETP programs to report on median earnings. However, this does not prohibit the Governor from also requiring ETP programs to report on average earnings. No changes were made to the regulatory text in response to these comments. Comments: One commenter requested changes in training provider eligibility criteria for providers that are different from WIA occupational skill providers (e.g., pre-apprenticeships, entrepreneurial training, customized and incumbent worker training, and youth services). Department Response: As explained above, the provider eligibility criteria are left to the Governor’s discretion. No changes have been made to the regulatory text in response to this comment. However, the Department notes that it is within the Governor’s discretion to have specific eligibility criteria for providers that provide training that is distinct from traditional WIA-occupational skill providers, as long as the criteria also comply with §§ 680.450 and 680.460 and are included in the State’s policies. Section 680.530 and its preamble provide additional information on how States may provide customized and incumbent worker training. Comments: One commenter asked whether each State is required to specify which elements from § 680.450(e)(2) training providers need to provide information on or whether the training provider can submit information on any of the factors listed. Department Response: The State procedure must specify which elements from § 680.450(e)(2) training providers need to provide information on and what verifiable information will satisfy this requirement. Comments: Another commenter sought clarification of the definition of ‘‘partnership with a business’’ as used in NPRM § 680.450(e)(3), and asked how this would impact the eligibility of a training provider. Department Response: The Department is clarifying that information about whether a provider is ‘‘in a partnership with a business’’ under § 680.450(e)(3) could include information about the quality and quantity of employer partnerships. However, the Department did not include this example, or others in the regulation text, as States may have other methods for determining whether the provider is in a partnership with a business and including one example may be seen as limiting State options. The impact of this factor on the eligibility of the training provider is E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56132 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations determined by the Governor’s initial eligibility procedure. Comments: One commenter requested flexibility in initial eligibility requirements for training providers in rural areas and those serving the hardest to serve populations. Department Response: The Governor may require additional information in order to ensure that the needs of the State are being met, including in rural areas and in serving hard-to-serve populations. The Governor’s procedure determines how these additional factors may impact initial eligibility. In addition, the Local WDB must work with the State to ensure there are sufficient numbers and types of providers of training services, including eligible training providers with expertise in assisting individuals with disabilities and eligible training providers with expertise in assisting adults in need of adult education and literacy activities described under WIOA sec. 107(d)(10)(E), serving the local area. No changes were made to the regulatory text in response to this comment. Comments: Another commenter urged the Department to require new applicants to be subject to the same antidiscrimination provisions as registered apprenticeship programs under 29 CFR part 30. This commenter suggested that new applicants provide the following: A plan for recruitment to ensure underrepresented populations have access to nontraditional opportunities; capacity to deliver equitable training practices and classroom and OJT training environments that support underrepresented populations’ success and retention in the training program; and support services, case management, mentorship, and other strategies necessary for underrepresented populations’ success in training and employment. Department Response: Title 29 CFR part 30 governs the policies and procedures to promote equality of opportunity in apprenticeship programs registered with the U.S. Department of Labor and State apprenticeship programs registered with recognized State apprenticeship agencies. Therefore, the Department will not apply 29 CFR part 30 to all eligible training providers. However, for all other programs, the Department notes that the Governor has discretion to consider a wide range of factors when determining initial and continuing eligibility under §§ 680.450 and 680.460. Therefore, if the Governor wishes to consider factors such as an eligible training provider’s treatment of underrepresented populations, this is VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 within the Governor’s discretion. The Department has determined that applying criteria developed for one type of program of training to all types of training programs may unnecessarily limit the types of programs of training available to participants in WIOA programs. No changes were made to the regulatory text in response to this comment. Comments: The Department also received responses to the specific solicitation in the NPRM requesting comments about the types of verifiable program-specific information the Governor must require from providers seeking initial eligibility as ETPs under § 680.450(e). Department Response: The Department has carefully analyzed the comments regarding verifiable program specific performance information, including the suggestions of specific factors and methods of providing verifiable information in the least costly manner. The Department has determined that no substantive changes to regulatory text are necessary in response to these comments. Instead, the Department is clarifying that the Governor and the States have discretion when developing their initial eligibility criteria and requirements to decide what constitutes verifiable program specific performance information and the factors related to indicators of performance. This flexibility will enable States to meet the individual needs of each State and allow each State to establish requirements that the ETPs and the State are able to manage given their current levels of technology. Examples of potential criteria include average earnings rates, average cost of training, and criteria based on information available in UI wage records. However, these examples are not intended to be an exhaustive list and States are not limited to the Department’s suggestions. In meeting the requirement that the factor be ‘‘related’’ to the WIOA sec. 116 reporting requirements in § 680.450(e)(2), this factor need not be limited to WIOA participants, even though under sec. 116 the primary indicators of performance require reporting on WIOA participants. This is because programs of training applying for initial eligibility will be applying to serve WIOA participants for the first time and will not have results available for WIOA participants. Comments: One commenter stated that the easiest-to-verify information that providers could furnish would be customer-level data that States can match to unemployment insurance (UI) wage records to determine employment outcomes. The commenter stated that PO 00000 Frm 00062 Fmt 4701 Sfmt 4700 providers would be expected to submit that information if they are placed on the ETPL because this information would be required for the ETP annual performance report. The commenter asserted that requiring information for an eligibility determination that matches information required for the ETP annual performance report would reduce costs for both providers and States and increase data integrity. A few commenters stated that the most valid, reliable, and efficient way to measure training providers’ performance is for the State to first collect a small set of seed records from each provider for each student (e.g., social security number, program of study, start date, end date, credential, and demographic characteristics) and then link the records with UI wage records and other administrative records used to determine outcomes. Department Response: The Department notes that these are potential options for States and the Governor may choose to utilize these approaches. However, the Department has chosen not to require States to implement these approaches for initial eligibility to give States the flexibility to determine the most effective method for obtaining verifiable program specific performance information for determining initial eligibility. As explained earlier, the Department recognizes that there is overlap between what is required for eligibility and the WIOA sec. 116(d)(4) ETP annual performance report. The Department strongly encourages States and ETPs to work together to find efficiencies in how information can be reported in the performance report and for eligibility purposes. No changes were made to the regulatory text in response to these comments. Comments: Another commenter stated that the regulations should encourage ETPs to focus their follow-up efforts on participants who do not appear in the UI wage records, relieving data collection burdens on the individual participants and the non-public training providers. Department Response: The Department recognizes that social security numbers will not be available for each participant and has determined that supplemental follow-up methods will be allowable. The use of supplemental information in performance reporting is further discussed in 20 CFR part 677 (see Joint WIOA Final Rule) and the associated ICR. Comments: Another commenter requested that the system used to gather ETP data should be accurate by nature E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations so that Local WDBs are not required to monitor or ensure accuracy of information. Department Response: The Governor or the Governor’s designated SWA (or appropriate State entity) is responsible for ensuring that programs meet eligibility criteria and performance levels established by the State, including verifying the accuracy of the information. The Local WDB must carry out the procedures assigned to the Local WDB by the State, including monitoring and ensuring accuracy of the information. No changes were made to the regulatory text in response to this comment. Comments: One commenter recommended specific performance information to be collected, including average cost of training to include tuition, supplies, and supportive service needs; loan default rates; employer partners; and the completion rates of all students rather than the exit rates. Department Response: The Departments have included in the subpart only the performance information required by WIOA secs. 122 and 116. However, as described in § 680.490(c), the Department notes that the Governor may require additional specific performance information that the Governor determines to be appropriate to determine or maintain eligibility. No changes were made to the regulatory text in response to this comment. Comments: One commenter stated that wages and retention should be verified using the employment base wage. Department Response: The Department is unclear what the commenter intends by ‘‘employment base wage.’’ However, the Department has chosen not to require States to implement these approaches for initial eligibility. States have the flexibility to determine the most efficient method for obtaining and verifying program specific performance information for determining initial eligibility. Comments: A few commenters suggested that States should be allowed to use supplemental/existing data because most schools are already required to report on programs to their primary funding sources, making the ETP reporting requirement a duplicative effort. These commenters asserted that the local area should determine if a training provider’s performance is acceptable and whether the training provider should continue to be listed on the ETPL. Department Response: The Department recognizes that some of the information ETPs are currently VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 reporting might overlap with the information required for reporting for initial eligibility. The Department encourages States to examine closely WIOA reporting requirements and the other requirements ETPs are subject to, to find overlap and reporting efficiencies. Regarding the commenter’s suggestion that the local area determine if a training provider’s performance is acceptable, the Department notes that WIOA sec. 122(b)(3) and § 680.430(e) provide that Local WDBs can establish criteria and information requirements, in addition to the Governor’s, and require higher levels of performance than the Governor for purposes of determining the continuing eligibility of providers to receive funds to provide training services in the Local WDB’s area. No changes to the regulatory text have been made in response to this comment. Comments: Some commenters recommended that the Department allow States to determine the definition of verifiable information. Another commenter requested clarification regarding the ‘‘program specific’’ indicators required by the Department and recommended that States be allowed the flexibility to define what those mandated indicators will be through their ETP State policy. Department Response: As explained above, this subpart leaves the Governor the flexibility to determine what constitutes ‘‘verifiable program-specific information.’’ No changes were made to the regulatory text in response to this comment. Comments: One commenter suggested that providers report data on (and States determine eligibility for) all similar degree programs as one. For example, all bachelor’s degree programs at that provider are reporting as one bachelor’s degree program, rather than breaking them out into bachelor’s in education, bachelor’s in biology, bachelor’s in math, etc. This commenter also suggested that providers report data on (and States determine eligibility for) the main program of study, rather than all of the individual courses that make up the program. Further, this commenter recommended that providers do not need to report on (and States determine eligibility for) courses that are prevocational intensive service or skills upgrade courses, or courses that cross industry sectors and occupations or which are less than 3 days in duration. Department Response: In response to the recommendation that eligibility be determined generally at the degree level, the Department is clarifying that eligibility is determined at the level of ‘‘program of training’’ as described in PO 00000 Frm 00063 Fmt 4701 Sfmt 4700 56133 § 680.420, rather than at the class, course or general degree level. A program of training may involve one course or a course of fewer than 3 days in duration, if the course leads to one of the outcomes as described in the definition of a program of training services at § 680.420. In order for such a program of training to receive WIOA title I adult, dislocated worker, or youth training funds through an ITA, the program must be determined eligible and is therefore subject to reporting requirements. Registered apprenticeship programs are an exception to the eligibility requirements. Work-based training options do not receive training funds through an ITA, and are described at § 680.530. No changes were made to the regulatory text in response to this comment. Comments: One commenter recommended that States be given an additional 2 years to implement the performance information requirements in §§ 680.450(e) and 680.460(f). After stating that the Department does not anticipate complete performance data derived from wages until PY 2018, a few commenters suggested allowing eligibility to be based on completion rates and credentials until complete employment and wage performance data can be collected. Department Response: The Department has determined that a regulation change is not necessary given the flexibility in the regulation at §§ 680.460(f)(1) and 680.450(e)(2). Under § 680.460(f)(1), the State may use alternate factors for performance until data from the conclusion of each performance indicator’s first data cycle is available. Under § 680.450(e)(2), the Governor’s procedure must require applicant providers to provide information addressing a factor related to performance indicators, meaning that the Governor’s initial eligibility procedure may not require the provision of the results for each of the indicators of performance. The required factors for initial and continued eligibility allow the Governor’s procedure to determine whether to set minimum performance standards and how much emphasis to put on any one factor that is taken into account. Although the Department determined no change to the regulation was necessary in response to those comments, the Department has made a revision to § 680.450(f) by inserting the word ‘‘performance’’ between ‘‘minimum standards’’ to clarify that the minimum standards a Governor may set refer to minimum performance standards. Additionally, in response to commenters who requested that initial E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56134 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations eligibility last for longer than a year because more time is needed to generate enough exiters to provide a meaningful outcome measurement given the data lag for performance indicators, the Department is clarifying that § 680.460(f)(1)(v) allows the Governor to take into account alternate factors related to the performance indicators described in § 680.460(f)(1) until performance information is available. Similarly, for initial eligibility, the Governor may use a factor related to performance in determining eligibility. Thus, the Governor’s ability to establish continued eligibility procedures and to take other factors into account enable the State to build in consideration of the limits of initially eligible training providers to supply performance information after only 1 year. The Department notes that it also plans to launch an intensive technical assistance effort. Comments: A commenter requested that initial eligibility under § 680.450(g) last longer than 1 year because more time is needed to generate enough exiters to provide a meaningful outcome measurement given the data lag for performance indicators, such as earnings in the fourth quarter after program exit. Department Response: The Department has determined that initial eligibility will be maintained at 1 year. WIOA sec. 122(b)(4)(B) provides that initial eligibility is ‘‘for only 1 fiscal year.’’ However, because program eligibility is not aligned with a fiscal year, the Department has removed the word ‘‘fiscal’’ from paragraph (g) in this section. Since initial eligibility may be determined at any time during a calendar year or program year, requiring initial eligibility to be for 1 year, rather than 1 fiscal year enables the State to establish a 12-month initial eligibility period for each program. Comments: One commenter recommended that the Department launch an intensive technical assistance effort for States to develop the IT infrastructure needed to meet these requirements. Another commenter requested that the regulation allow States and localities to waive the reporting requirements for libraries when developing lists of ETPs in the first year, on the grounds that libraries would be prevented from providing training with WIOA funding without such a waiver. A few commenters stated that reductions in overall funding and limited funding for the Governor’s setaside will make performance reporting requirements, including the need to modify data reporting systems, difficult. As a solution to this concern, VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 commenters recommended that the full Governor’s set-aside be reinstated. One commenter encouraged the Department to pay particular attention to the impact that the requirements would have upon students that have expressed a desire to reengage back into the educational system and obtain their accredited high school diploma. The commenter made several specific recommendations about programs that would be helpful for this particular population, including making State WIOA program eligibility to be dictated by regional accreditation. Department Response: The Department has already deployed technical assistance for ETP requirements, including webinars and a Quick Start Action Planner and plans to engage in a technical assistance effort to assist with ensuring adequate information technology infrastructure to implement the new WIOA requirements. The Department has chosen not to regulate waiver policy in the Final Rule. The Department does not have authority under WIOA to provide States and local areas the ability to grant waivers. Therefore, the Department has not included such waiver provisions in the Final Rule for libraries. However, the Department notes that small CBOs, such as libraries, can provide programs of training services under contracts with local areas as described at §§ 680.530 and 680.320. Programs of training services provided under such contracts are not eligible training providers and are not included on the State ETPL. Thus, they are not required to comply with the requirements to be on and stay on the list. The Department additionally notes that because CBOs providing training services through a contract are not on the State ETPL, they are also not required to submit the WIOA sec. 116(d)(4) ETP annual performance report. The set-aside amount is determined by Congress as part of the annual appropriations process and is therefore outside the scope of this regulation. The Governor’s procedure for initial eligibility may require other information in order to demonstrate high quality training services and such information may include regional accreditation and the ability to serve students who wish to reengage the educational system. As described under § 680.420, a program of training services may lead to a secondary diploma or its equivalent, as long as this is consistent with § 680.350. No changes to the regulatory text were made in response to this comment. However, the Department has made a change to the regulatory text at § 680.450(b) to align with changes made PO 00000 Frm 00064 Fmt 4701 Sfmt 4700 to § 680.470, providing that apprenticeship programs registered under the National Apprenticeship Act are exempt from initial eligibility procedures and must be included and maintained on the State ETPL unless the program is removed from the list for the reasons in § 680.470. This change was made to conform with changes made to § 680.470, which are discussed in the preamble corresponding to that section. Although this is discussed more fully in the preamble to 20 CFR 677.230 (see Joint WIOA Final Rule), the Department notes that registered apprenticeship programs are not required to submit the WIOA sec. 116(d)(4) ETP annual performance report. Outcomes for WIOA participants in WIOA-funded registered apprenticeship programs must still be included in the State’s annual performance report under WIOA sec. 116(d)(2). The Department also made a non-substantive change to this provision by removing the word ‘‘corresponding’’ from the phrase ‘‘corresponding program’’ as the word ‘‘corresponding’’ did not provide needed clarification and therefore was unnecessary. Section 680.460 What is the application procedure for continued eligibility? Section 680.460 sets out the requirements for the application procedure for continued eligibility. The Department has made non-substantive edits to this section for consistency with how the Department uses terms throughout the regulation. The Department has also made substantive revisions to paragraphs (c), (f)(1) and (10), and (j). The Department made edits to (i) to clarify the requirements for biennial review of eligibility information. These changes are discussed in further detail below. Comments: Several commenters supported requiring public comment during the development of continued ETP eligibility procedures as well as allowing the Governor discretion to set the timetable for consultation and public comment. One commenter recommended that the regulations be revised to provide assurance that the biennial review is transparent and that it allows for adequate input from employers, as well as to provide guidance on specific ways in which Governors may hold providers accountable for meeting the needs of local employers. Another commenter suggested that the Department provide more structure for the process of including education programs on the ETPL and include specific examples for E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations gauging program quality by demanding standards of effective practice. Department Response: The Department has determined that no changes to the regulatory text are necessary to address the concerns raised by commenters as the section already achieves the commenters’ suggestions. The Governor’s procedure for biennial review may take into consideration factors to ensure that the State will meet the needs of local employers. The Governor establishes the procedure after taking into consideration recommendations from Local WDBs and training providers and providing an opportunity for comment from interested members of the public, including representatives of business and labor organizations as required by § 680.460(b)(1) through (3). In addition, States must describe the eligibility procedures in their State Plans, which are subject to public comment requirements that include allowing for input from key stakeholders such as employers. This is further discussed in 20 CFR part 676 (see Joint WIOA Final Rule) and the WIOA State Plan ICR. Therefore, commenters’ concerns about public comment during the development of the policies are already addressed. In response to commenters’ concerns about the Governor setting up a timetable for consultation with the public, the Department notes that § 680.460(b)(3) requires the Governor to set up a time period for soliciting and considering recommendations from Local WDBs and providers and giving the public an opportunity for comment. However, this section of the regulation does not prescribe a specific time period. Therefore, the Governor has discretion to set up a timetable for considering recommendations and public comment. Per § 680.460(f)(4), the Governor must take into account the degree to which programs of training relate to in-demand industry sectors and occupations in the State. Further, as described in § 680.460(f)(11), the Governor may take into account other factors such as ensuring that one-stop centers are meeting the needs of local employers and participants. It is unclear what additional structure the commenter is recommending in order to gauge program quality by demanding standards of effective practice. WIOA performance accountability requirements, as addressed in the ETP performance reports in 20 CFR 677.230 (see Joint WIOA Final Rule), are highly structured. Through technical assistance, States will have opportunities to share effective practices to gauge program quality. VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 The Department modified proposed § 680.460(c). In the NPRM, this paragraph required programs registered under the National Apprenticeship Act (NAA) to be included and maintained on the list for as long as the program was registered and required the Governor’s eligibility procedures to include a mechanism for registered apprenticeship programs to indicate interest in being on the list as described in § 680.470. The Department reorganized this paragraph for clarity, moving the sentence that procedures for including registered apprenticeship programs on the list are found in § 680.470 to the beginning of the paragraph, instead of the end of the paragraph, and made a substantive revision for consistency with § 680.470. This section now provides that programs registered under the NAA are automatically eligible to be on the State’s list and must remain on the State’s list unless they are removed from the list for the reasons set forth in § 680.470. This is a conforming edit to changes made in § 680.470 and more can be read about that change below. The Department also made a nonsubstantive edit to this section removing the word ‘‘corresponding’’ as it was unnecessary. Comments: Many commenters responded to our request for comment under proposed § 680.460(f)(1) on the alternate factors that may be used until performance data are available. The Department revised § 680.460(f), breaking the requirements into separate subsections for clarity and consistency with WIOA sec. 122(b)(1)(A)(i) and (ii). The flexibility for the Governor to use alternate factors until performance data are available is now located at § 680.460(f)(1)(v). The regulation at § 680.460(f)(1)(v) allows the Governor to use alternate factors for performance until performance information is available to establish continued eligibility. Several commenters suggested that alternate factors for performance be left to the Governor and Local WDBs to decide, while others offered a variety of specific alternate factors that the Governor could take into account. These suggestions included: WIA criteria; use of other information already supplied for State and Federal accountability measures, such as Carl D. Perkins Act performance indicators; three letters from local employers; completion rates; credentials; gainful employment measure; and graduation rates. Department Response: The Department acknowledges that the suggestions provided by commenters offer appropriate options for the PO 00000 Frm 00065 Fmt 4701 Sfmt 4700 56135 Governor’s procedure, but has chosen not to include these in the regulation text to give Governors flexibility in choosing what performance information to use. In this way, the Governor’s procedure can be tailored to the best performance data available among applicant training providers in that State. Comments: A few commenters recommended a separate, lower set of performance standards for training providers who serve hard to serve participants, such as tribal colleges and programs specifically designed to provide combined workplace language and workplace skills to new Americans needing English literacy instructions. A few commenters recommended allowing States and local areas to grant waivers to CBOs for the reporting of data to ensure that these entities have the capacity to qualify as ETPs. However, a few other commenters stated that CBOs, including those serving hard to serve participants, must be held to the same standards as any other provider on the list. Department Response: The regulatory language authorizes the Governor to take into account such factors as meeting the needs of hard-to-serve participants and programs specifically designed to provide combined workplace language and workplace skills to new Americans needing English literacy instruction when developing the State’s continued eligibility procedures. Section 680.460(f)(9) specifically requires the Governor to take into account the ability of providers to provide training services to individuals who are employed and individuals with barriers to employment. In addition, local areas may enter into contracts to provide training services under specific circumstances, including with CBOs. Because CBOs which are providing programs of training through contracts are not considered ETPs, they do not need to meet the initial and continuing eligibility requirements of this subpart. However, CBOs that are included in the State List of Eligible Training Providers and receive payment for the training services through ITAs, rather than contracts, are subject to the eligibility and reporting requirements of the State list. No changes to the regulatory text were made in response to these comments. Comments: Commenters addressed the performance information under § 680.460(g) that the Governor must require for continued eligibility for the State list of ETPs. One commenter questioned whether 20 CFR 677.230, which requires reporting performance E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56136 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations information on all participants, is in conflict with § 680.460(g) which requires reporting on WIOA-participants only. Department Response: The Department does not consider these provisions as being in conflict as they are derived from different statutory provisions and serve different purposes under WIOA. The ETP annual performance report is required by WIOA sec. 116(d)(4) and explicitly requires information on the levels of performance for all individuals in a program of study. As explained above, more information about this requirement can be found in 20 CFR 677.230 and its corresponding preamble (see Joint WIOA Final Rule). Separately, the requirements for a training provider to continue to be on the State List of Eligible Training Providers and programs are found in WIOA sec. 122, and sec. 122(b)(2)(A) explicitly identifies the performance information the ETP must provide for this purpose. Thus, the WIOA sec. 116(d)(4) annual report is for reporting on performance, while the requirements in § 680.460 are for staying on the State List of Eligible Providers and Programs. In order to continue to be eligible, the ETP must provide information on the performance accountability measures in sec. 116 of WIOA for ‘‘participants’’ whose training is funded under title I, subtitle B. However, the Department notes that both the Governor, under WIOA sec. 122(b)(1)(J), and the Local WDB, under WIOA sec. 122(b)(3), have authority to require additional data from ETPs, which might include data on all students. In addition, WIOA sec. 122(b)(1)(A)(ii) explicitly permits the Governor to require reporting on all individuals enrolled in the programs in which WIOA-funded participants studied. Comments: Several commenters cited the potential problem of a small number of participants (‘‘small in size’’) when providing WIOA-participant-only data. These commenters stated that the resulting data would be too small to yield useful outcome information and would risk revealing personally identifiable information (PII). Other commenters suggested that § 680.460(g) specifically include instructions similar to those found in WIOA sec. 116(d)(6)(C), which states that the disaggregation of data for the State performance reports is not required when the number of participants is too small to yield statistically reliable information or when results would reveal PII about an individual participant. One commenter said that an alternative approach is needed for using VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 performance results for management, provider selection, and public/ consumer information, but did not specify what the alternative approach would be. Some commenters suggested that the State List require reporting on all students in order to yield a larger data set. One commenter urged the Department to require biannual reporting of all completers and placement numbers for the previous year utilizing a standardized template to collect data to ensure an educated training program selection process. Several commenters recommended that the materials to be considered when determining ETP continued eligibility include information reported to State agencies on Federal and State training programs other than WIOA title I, subtitle B, and asked for submission of performance results for all students and not just those who received training subsidized by WIOA title I adult or dislocated worker funds. However, several commenters supported a requirement that performance reports include only WIOA-funded students. One commenter cautioned that the cost for reporting all students and not just WIOA-funded students by program could result in training providers not accepting WIOAfunded students to avoid the reporting burden. One commenter stated that in order to avoid revealing data on any individual, it would normally not be required to disclose performance information on any program with a small number of participants and that performance data would be relatively meaningless if too few individuals are in the performance cohort. This commenter recommended that the regulations specifically recognize that this information shouldn’t be revealed for those programs with low participant numbers. Department Response: With respect to the privacy concerns that arise from the small numbers in participant data, the Department notes that the regulation already addresses this issue. Paragraph (e) of § 680.500 addresses privacy concerns for the dissemination of the ETPL by requiring that the State List and accompanying information be made available in a manner that does not reveal personally identifiable information about an individual participant and that, in developing the information to accompany the State List of Eligible Training Providers and Programs, disclosure of personally identifiable information from an education record must be carried out in accordance with the Family Educational Rights and Privacy Act, including the circumstances relating to prior written PO 00000 Frm 00066 Fmt 4701 Sfmt 4700 consent. Accordingly, additional regulatory text for § 680.460 is not needed. While the Governor must take into account all of the information listed in WIOA sec. 122(b)(1) in setting the criteria for eligibility on the State ETPL, the Department interprets WIOA sec. 122(b)(1)(A)(ii) to provide discretion to the Governor to determine whether reporting on all students is an ‘‘appropriate’’ measure of performance outcomes under that paragraph. The Department is not regulating State eligibility procedures to require reporting on all students in order to yield a larger data set; however, the Governor may choose to do so as part of the State’s eligibility procedures. With respect to the minimum size of a data set that would ensure participant confidentiality and the reliability of outcomes data, the Department has determined that States will maintain confidentiality and reliability of data by complying with relevant State law and with WIOA itself. WIOA sec. 122(d)(3) states that the State List and accompanying information must be made available to such participants and to members of the public through the one-stop delivery system in the State in a manner that does not reveal PII about an individual participant. WIOA sec. 122 does not require that the performance information that accompanies the State List be statistically reliable in the same way that WIOA sec. 116(d)(6)(C) does for the annual performance reports. Therefore, the Department has not regulated this as a requirement. In response to commenters suggesting that the Department require biannual reporting of all completers and placement numbers for the previous year utilizing a standardized template, the Department has chosen not to require a template for the State List of Eligible Training Providers. While a standardized template is required for the reporting of information in the ETP Performance Reports, as described in 20 CFR 677.230 (see Joint WIOA Final Rule), the Department has concluded that WIOA intends the development of the State List to be at the State’s discretion in order to meet the needs of individuals seeking training in that State. In addition, the flexibility to determine the format and presentation of the State List enables the State to accommodate additional information that the Governor may choose to require as part of the State’s eligibility procedures. In response to commenters that suggested that eligibility information include materials submitted to State agencies on Federal and State training E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations programs other than programs within WIOA title I, subtitle B, this is already reflected in the factors that the Governor’s continued eligibility must take into account under § 680.460(f)(3). The Department again wishes to clarify that reporting on all participants is a requirement of the ETP performance reports described in 20 CFR 677.230. Suggestions that the ETP performance reports include WIOA-funded students only, and related comments citing potential concerns by training providers, are addressed in that section. Comments: Several commenters requested that the Department add waiver provisions to ease the transition to WIOA or to adjust reporting requirements for providers applying for continued eligibility for the ETPL. Other commenters disagreed with the proposed continued eligibility procedures for ETPs eligible under WIA and described them as a timeconsuming burden for State and Local WDBs. Department Response: Because of WIOA’s emphasis on ensuring the provision of quality training, and the importance of using performance criteria to obtain such quality, the Department is not including waivers in the regulation. In transitioning to collection of WIOA data, § 680.460(f)(1) already provides sufficient flexibility by allowing the Governor to use alternate factors for performance until WIOA performance information is available for an ETP. No changes were made to the regulatory text in response to these comments. Comments: The Department received comments in response to the request for ideas on how to reduce the burden and avoid duplication of effort to meet reporting requirements under WIOA secs. 122 (provider eligibility) and 116 (performance accountability). A few commenters responded to the requirement that the State criteria for continued eligibility take into account the timely and accurate submission of ETP performance reports. Several commenters commented on the ETP annual performance report requirements under WIOA sec. 116(d)(4). Comments related to this report are more fully addressed in the preamble to 20 CFR 677.230 (see Joint WIOA Final Rule). A commenter cautioned that requiring training providers to submit appropriate, accurate, and timely information to the States to create the ETPL under § 680.460(f)(10) is an unnecessary burden because most case management systems already capture and validate this information as part of case management, and that collecting this information from training providers VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 would compromise the accuracy, validity, and consistency of the information. This commenter recommended that States be granted flexibility to capture this information in the manner that best balances the validity of data and efficiency of progress, rather than strictly from training providers. Another commenter stated that the Governor and local WDBs should have the discretion to utilize alternative data sources in the interim to determine ETPs’ performance outcomes and that these data outcomes should not be prescribed by the Department because local case managers have realtime participant outcomes not subject to the lag time associated with DOL performance indicators. One commenter disagreed with the proposed WIOA continued eligibility requirements and recommended that the Department continue to use the WIA requirements. One commenter, referring to § 680.460(l), questioned what qualifies as an ‘‘undue cost or burden’’ to remove a training provider from the performance requirement. Department Response: The information required under § 680.460 to maintain continued eligibility is separate from the ETP annual performance reports required under 20 CFR 677.230 (see Joint WIOA Final Rule). Paragraph (e)(3) of 20 CFR 677.230 addresses coordination and dissemination of the ETP performance reports and the State list of eligible training providers as described at § 680.500. With respect to the commenter’s recommendation that the requirement to consider whether a provider timely and accurately submits information for the WIOA sec. 116(d)(4) ETP annual report to the State, the Department acknowledges that there will be some overlap in what is required for inclusion in the WIOA sec. 116(d)(4) report and the information the State already has in its case management files. The Department recommends that States work with training providers to minimize the reporting burden and utilize integrated systems as much as possible. No change in the regulation text was made in response to this comment. Additionally, the Department notes that the provision at § 680.460(l) does not allow a State to remove a training provider from this performance requirement based on undue cost or burden. Rather, this provision allows the Governor to establish procedures and timeframes for providing technical assistance to training providers that are failing to meet the criteria and information requirements due to undue cost or burden. The Governor’s PO 00000 Frm 00067 Fmt 4701 Sfmt 4700 56137 procedures determine what constitutes undue cost or burden. The Department has chosen not to regulate what constitutes ‘‘undue cost or burden’’ in order to provide Governors the flexibility needed to best address the particular needs of the ETPs in each State. WIOA, not WIA, dictates the continued eligibility requirements and the Department declines to substitute WIA requirements for WIOA requirements. WIOA sets forth factors and the Governor’s continued eligibility procedures determine how these WIOArequired factors are taken into account. WIOA and the regulations further provide that the Governor’s criteria for eligibility and information requirements may include any appropriate additional information that the Governor may require. In addition, WIOA allows for WIA-eligible providers to remain eligible through December 31, 2015. Comments: One commenter requested clarification on the timeline for initial eligibility compared to the beginning of the biennial review and renewal period. Department Response: States have discretion in how they implement eligibility procedures and timelines for biennial review. Some States may find it efficient to review the entire State list every 2 years, while others may have a system for reviewing each provider on the second anniversary of when that provider established continued eligibility under WIOA. The timeline for how initially eligible training providers are deemed continued eligible training providers and thereby incorporated into the review system will vary from State to State. The Department made minor edits to § 680.460(i) for clarity regarding the requirement for biennial review of eligibility information by inserting the word biennial before the word ‘‘review.’’ The Department modified § 680.460(j) on the biennial review to provide that, in addition to the verification of the registration status of registered apprenticeship programs, the biennial review also must include removal of any registered apprenticeship programs that are removed from the list under § 680.470. This change was made to conform with changes to § 680.470. More can be read about the Department’s changes to proposed § 680.470 below. Paragraph (f)(10) of § 680.460 proposed to require the Governor, in establishing the eligibility criteria for continued eligibility, to take into account whether providers timely and accurately submitted the information needed for the WIOA sec. 116(d)(4) ETP report. The Department also revised this E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56138 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations provision to require the Governor to take into account whether the provider timely and accurately submitted the information required for initial and continued eligibility. Additionally, the Department revised this provision to require that the Governor consider whether the provider submitted ‘‘all of the’’ information for the report and eligibility procedures, which means the Governor must take into account whether the information the provider submitted is complete. In response to comments and to ensure that providers comply with the requirement to timely and accurately submit all of this information, the Department added § 680.460(l) to require that the Governor’s procedure include what the Governor considers to be a substantial violation of § 680.460(f)(10). And § 680.460(l)(2) requires those providers that substantially violate this requirement be removed from the State list of eligible training providers and programs consistent with § 680.480(b). These modifications were made for consistency with WIOA sec. 122(f)(1)(B), which requires programs be removed from the State list of eligible programs and providers when a provider substantially violates any of the requirements of title I of WIOA. Given WIOA’s focus on performance accountability in WIOA sec. 116 and informed consumer choice in WIOA sec. 122, the Department has concluded that failure to timely and accurately submit the information required for the WIOA sec. 116(d)(4) ETP report and the initial and continued eligibility constitutes a substantial violation of WIOA title I requirements. Because WIOA sec. 122(f)(1)(B) requires the determination of a substantial violation to be made by an individual or entity specified in the Governor’s procedures, § 680.460(l) gives the Governor the discretion to determine what constitutes a substantial violation of the requirement to timely and accurately submit all of the required information. Therefore, the Governor has the flexibility to take into account the specific circumstances in the State that affect a provider’s ability to submit the required information. Moreover, the Department notes that paragraph (l)(1) requires the Governor’s determination of what constitutes a substantial violation of the requirement to timely and accurately submit all of this information to take into account exceptional circumstances beyond the provider’s control, such as natural disasters, unexpected personnel transitions, and unexpected technology-related issues. The Department included this provision VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 specifically to address instances in which, through no fault of its own, a provider may not be able to timely or accurately submit all of the information required. In those instances, the Governor may not determine that a substantial violation has occurred. Additionally, the Department notes that the list of the exceptional circumstances in this regulatory provision is not exhaustive and the Department encourages Governors to consider the particular needs of providers in the State in creating the policy and determining what constitutes exceptional circumstances beyond the provider’s control. The Department also has made a clarifying change to § 680.460(f)(10) adding the words ‘‘information required for completion of’’ between ‘‘submitted’’ and ‘‘eligible’’ to clarify that while the ETPs are required to provide accurate and timely information for purposes of completion of the ETP performance report required by WIOA sec. 116, an ETP will not have all of the information to complete that report. Finally, the Department removed paragraph (k) because the authority for the Local WDBs to require higher levels of performance for local programs is already referenced in § 680.430(e). Therefore, this provision was unnecessary. The Department renumbered what was previously proposed paragraph (l) to paragraph (k) to conform to this change. Section 680.470 What are the procedures for including and removing registered apprenticeship programs on a State list of eligible training providers and programs? Section 680.470 described the process for including and maintaining registered apprenticeship programs on the ETPL. The Department made non-substantive edits for consistency in how the Department uses terms throughout this section. The Department also made substantive changes to § 680.470(a) and (b), and added new paragraphs (c) and (f). The Department received comments regarding § 680.470(d), which is now renumbered as (e). Proposed § 680.470(a) provided that all registered apprenticeship programs would be automatically eligible to be included on a State Eligible Training Providers and Programs List and required the Governor to establish a mechanism by which registered apprenticeship programs may indicate whether they wish to be included on the State Eligible Training Providers and Programs List. The NPRM required registered apprenticeship programs to indicate interest to be included in the PO 00000 Frm 00068 Fmt 4701 Sfmt 4700 State Eligible Training Providers and Programs List. Due to concern that some registered apprenticeship programs may not wish to be on the State ETPL, proposed § 680.470(b) provided that registered apprenticeship programs will remain on the List until they are deregistered or have notified the State that they no longer wish to be included on the List. The proposed section was silent on whether a registered apprenticeship program could be subject to the provisions for removal from the ETPL under § 680.480, and § 680.480 did not provide an express exclusion from those procedures for registered apprenticeship programs. Proposed § 680.470(d) encouraged Governors to consult with State and Local WDBs and other entities to establish voluntary reporting of performance information for registered apprenticeship programs, because WIOA sec. 122(a)(3) specifically exempts registered apprenticeship programs from the criteria and information requirements and Governorestablished procedures required for inclusion on the State ETPL, and therefore the NPRM did not require registered apprenticeship programs to provide performance information in order to be included on the ETPL. In addition, 20 CFR 677.230(b) of the Joint WIOA NPRM (regarding information required for the ETP performance report) exempted registered apprenticeship programs from reporting information for purposes of the ETP performance report required by WIOA sec. 116(d)(4) but specified that any such information submitted voluntarily to a State must be included by the State in the ETP annual performance report required by 20 CFR 677.230. A number of changes were made to this § 680.470 in response to comments received and for purposes of clarity. Comments: Several commenters expressed support for automatic qualification of registered apprenticeship programs for the State ETPL. In addition, several commenters offered suggestions on how registered apprenticeship programs are added to and removed from a State List of Eligible Training Providers and Programs. One commenter urged the Department to create a uniform standard for all Governors to follow when developing a mechanism by which registered apprenticeship programs request inclusion on the List. The commenter warned that nationally registered apprenticeship programs that offer training in various States would need to assess each State’s process, which could prove overly burdensome E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations if States have different mechanisms. Another commenter objected to placing the burden on registered apprenticeship training programs to ensure inclusion on the ETPL, in part because of the statutory mandate that registered apprenticeship programs be eligible to be included on the List. The commenter expressed concern that the added requirement to indicate interest would create confusion and cause delay in getting registered apprenticeship programs on the State List. A few commenters were concerned that States with a history of being unfriendly or hostile to unions or of having significant bureaucratic inertia may use the requirement as an excuse to disfavor registered apprenticeship programs. Another commenter recommended revising the regulations to create an optout framework rather than an opt-in framework, such that registered apprenticeship programs would be included on the ETPL unless the program took steps to be excluded. This commenter stated that an opt-out system would allow program sponsors that may not wish to be on the State List to remove themselves while avoiding illdesigned opt-in procedures that could preclude or delay, intentionally or accidentally, the sponsors of registered joint labor-management apprenticeship programs from appearing on the State ETPL. Other commenters supported the proposal to require registered apprenticeship programs to opt in. Some commenters suggested revising the regulation to clarify when registered apprenticeship programs may be removed from the State List of Eligible Training Providers and Programs and whether registered apprenticeship programs are exempt from the enforcement provisions of WIOA sec. 122(f) that were set forth in proposed § 680.480. One commenter asked how States should monitor registered apprenticeship programs for compliance and what the criteria are to qualify as a registered apprenticeship program. One commenter stated that proposed § 680.480 was inconsistent with WIOA to the extent that it allows registered apprenticeship programs to be removed from the List for any reason other than deregistration because, in this commenter’s view, the requirement in WIOA sec. 122(a)(3) that registered apprenticeship programs shall be included and maintained on the State ETPL for so long as the program is registered precludes removal for any reason other than deregistration. According to the commenter, the standards for deregistration under the National Apprenticeship Act are VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 sufficient to trigger removal from the ETPL where appropriate, and application of the enforcement provisions in WIOA sec. 122(f) is inappropriate and unnecessary. The commenter states that regulations implementing the National Apprenticeship Act already include clearly-defined, qualitative standards governing when such a program can be deregistered. The commenter suggested a change to the enforcement section of the ETP requirements at proposed § 680.480 to affirm that registered apprenticeship programs are not subject to these enforcement provisions. The commenter suggested adding language to § 680.480(a) that states: ‘‘Except for a provider described in section 122(a)(3) of WIOA, a training provider may lose its eligibility pursuant to this section.’’ Department Response: The Department has made revisions to § 680.470(a) to clarify the process for including registered apprenticeship programs on the State List of Eligible Training Providers and Programs. Through a mechanism established by the Governor, registered apprenticeship programs must be informed of their automatic eligibility and must be provided an opportunity to consent to their inclusion before being placed on the State Eligible Training Providers and Programs List. The Department chose this approach in order to ensure that the States include registered apprenticeship programs that are interested in accepting WIOA participants while at the same time ensuring that all registered apprenticeship programs are readily included with minimal burden. The Department chose to allow Governors to develop such a process, rather than create a uniform standard for all States, in keeping with the Governor’s discretion to implement procedures regarding the State List of Eligible Training Providers. This approach will also allow each Governor to establish a procedure that works best for the registered apprenticeship programs in that specific State. While the NPRM provided that the Governor’s mechanism ‘‘should’’ be developed based on guidance from the U.S. Department of Labor Office of Apprenticeship representative in the State or the assistance of the recognized State apprenticeship agency, § 680.470(a) now requires the procedures to be developed based on such guidance. This guidance includes how to ensure that national registered apprenticeship programs are included as eligible training providers. Finally, this paragraph has been amended to add a requirement that the Governor develop a process to impose only minimum PO 00000 Frm 00069 Fmt 4701 Sfmt 4700 56139 burden on registered apprenticeship programs. In response to commenters’ concerns that States with a history of being unfriendly or hostile to unions or of having significant bureaucratic inertia may use the requirement as an excuse to disfavor registered apprenticeship programs, these changes together with Departmental technical assistance and guidance ensures that States are inclusive of registered apprenticeship programs. These revisions will provide registered apprenticeship programs the opportunity to consent to being included on the State List of Eligible Training Providers and Programs while minimizing the affirmative burden placed on them to do so. The Department has concluded that this type of process will increase the participation rate of registered apprenticeship programs on the ETPL and further the aims of the registered apprenticeship program by having such programs included on the State List as soon and as easily as possible. The Department chose not to revise the regulation to require registered apprenticeship programs be included on this List unless they choose to opt out, in order to reduce the potential confusion for participants utilizing the List. Allowing for registered apprenticeship programs to consent allows States to ensure that only providers that are willing to accept WIOA participants are included on the State List of ETPs. The Department has also revised the regulation at § 680.470(b) and added a new § 680.470(c) to clarify that registered apprenticeship programs may be removed from the State List of Eligible Training Providers and Programs for violations of WIOA and that enforcement provisions may apply in such cases. The regulation now includes § 680.470(b)(3), which provides that a registered apprenticeship program may be removed from the State List of Eligible Training Providers and Programs for having intentionally supplied inaccurate information or substantially violated any provision of WIOA title I (e.g., civil rights or discrimination violations) or WIOA regulations. Section 680.470(c) provides that removal from the List for reasons under § 680.470(b)(3) will result in a termination of eligibility for the ETPL for not less than 2 years and liability to repay all training funds received during the period of noncompliance, consistent with the requirements under § 680.480 for all other ETPs. Section § 680.470(c) further provides that the Governor must specify in enforcement procedures E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56140 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations established under § 680.480 the process for and the entity making the determination of ineligibility, and must provide an opportunity for hearing. The Department has concluded that the process used for all non-compliant eligible training providers must be applied to noncompliant registered apprenticeship programs, including removal from the State ETPL. This is needed to maintain the integrity and quality of the State ETPL. Application of the WIOA enforcement provisions to registered apprenticeship programs enables the State to take action to remove a registered apprenticeship program from the State List, if that program is in significant violation of WIOA. The Department wishes to avoid a scenario where a registered apprenticeship program that is in significant violation of WIOA could remain on the State List of ETPs until that program’s registered status is reviewed under the National Apprenticeship Act. In addition, the Department disagrees that WIOA requires the Department to exclude registered apprenticeship programs from the enforcement provisions of WIOA sec. 122(f). WIOA sec. 122 contains express statutory exceptions for registered apprenticeship programs from providing performance information as a requirement for inclusion and maintenance on the State ETPL but WIOA sec. 122 contains no similar exception for registered apprenticeship programs from the enforcement provisions. In fact, WIOA sec. 122(h) contains express exemptions from the enforcement provisions for several types of providers, but does not include registered apprenticeship programs on that list of exempted entities. The Department interprets this silence to mean that the regular WIOA enforcement provisions apply to registered apprenticeship programs. Accordingly, the Final Rule now allows the State to take action as appropriate, in addition to the enforcement and deregistration process under the National Apprenticeship Act. The Department has also revised the wording in the title of § 680.470 to reflect that this section addresses both inclusion and removal of registered apprenticeship programs from the State List of Eligible Training Providers and Programs. Comments: A few commenters encouraged mandatory reporting of performance information for all training programs, including registered apprenticeship programs, that seek to be included on a State’s List of Eligible Training Providers and Programs. Several commenters stated that VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 registered apprenticeship programs should not be exempt from reporting ETP performance data, reasoning that this information is valuable in determining the effectiveness of registered apprenticeship programs in leading individuals to unsubsidized employment. One commenter supported exempting registered apprenticeship programs from the application procedures, information requirements, and performance reporting requirements of other training providers in light of the rigorous process for registering apprenticeship programs with the Department. Several commenters opposed any additional reporting for registered apprenticeship programs and requested that the regulation clearly describe applicable reporting requirements for registered apprenticeship programs. One commenter pointed out that States and local areas will have to determine and establish data collection for tracking for performance and asked whether the Department will define the measures for registered apprenticeship program performance. Department Response: The Department has decided to maintain the wording of proposed § 680.470(d) in the Final Rule, renumbered to § 680.470(e), because of the addition of new § 680.470(c). The exception for registered apprenticeship programs from providing performance information to be included or maintained on the State ETPL is required by WIOA sec. 122(a)(3). However, the Department is clarifying that voluntary reporting of performance information by registered apprenticeship programs is encouraged under the regulation. More information can be read on this in the preamble to 20 CFR 677.230 (see Joint WIOA Final Rule). In addition, the Department is maintaining the exception for registered apprenticeship programs from providing performance information for the ETP performance report required under 20 CFR 677.230 for the reasons discussed in the preamble to that section, but notes that outcomes for WIOA participants in WIOA-funded registered apprenticeship programs must still be included in the State’s annual performance report under WIOA sec. 116(d)(2). Comments: A few commenters recommended that apprenticeship programs be required to demonstrate recruitment of underrepresented populations. One commenter suggested that a key qualification for apprenticeship programs’ integration into the use of ITAs be adherence to existing requirements under 29 CFR part 30, which prohibits discrimination PO 00000 Frm 00070 Fmt 4701 Sfmt 4700 based on race, color, religion, national origin, or sex in apprenticeship programs. Another commenter suggested that the WIOA regulations should ensure that older workers are not discriminated against in apprenticeship programs. Department Response: The Department has concluded that putting additional requirements on registered apprenticeship programs in order to participate in the State List of ETPs or to use ITAs is outside the scope of this regulation because WIOA designates registered apprenticeship programs as eligible to serve as ETPs. In addition, registered apprenticeship programs are already required to comply with 20 CFR part 30 anti-discrimination provisions. Comments: Other commenters recommended that pre-apprenticeship programs be included on the State ETPL but with a performance measurement model that is more appropriate for the activity, for example, enrollment in an apprenticeship program or a community college program would both be positive outcomes. Department Response: The commenter did not specify whether it meant that pre-apprenticeship programs should be included under the exception for registered apprenticeship programs or included through the Governor’s eligibility procedures for eligible training providers. However, the Department acknowledges the need to clarify how pre-apprenticeship programs are treated for inclusion on the State ETPL. The Department has added a § 680.470(f) to clarify that because pre-apprenticeship programs are not registered under the National Apprenticeship Act and are not included in the exceptions for registered apprenticeship programs under WIOA sec. 122(a)(3), they must follow the Governor’s procedure for eligibility in this subpart. Pre-apprenticeship providers that wish to use WIOA funds to provide training services may go through the normal training provider program application procedure to be included on the State List of Eligible Training Providers and Programs. Therefore, such pre-apprenticeship programs would be subject to the eligibility and information reporting requirements of the State ETPs. Comments: One commenter expressed concern throughout the regulation that in defining how individual training accounts may be used, and defining the use of on-the-job training funds, preference is given to registered apprenticeship programs. The commenter urged the Department to revise the regulation to reflect the E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 importance of other OJT programs. The commenter emphasized the robust and valuable non-registered apprenticeship programs embraced by many manufacturers, and that training for indemand skills is available in multiple venues and that these programs should be considered based on the value of their training, rather than their registration status with a government entity. However, the commenter did not provide suggestions on how the Department could address the commenter’s concerns. Department Response: The Department has determined that no changes to the regulatory text are needed in response to this comment. Both the requirement that registered apprenticeship programs shall be included on the State ETPL and the exemption for registered apprenticeship programs from the requirement to submit performance information for inclusion on the State List are specifically limited to registered apprenticeship programs by WIOA sec. 122(a)(3). Regarding the commenter suggesting a revision to the regulatory text to emphasize OJT, it is unclear what revisions to the regulation the commenter is suggesting. The Department has made revisions to § 680.530 to clarify how exceptions to the eligible training provider List, which may provide training through contracts with the Local WDB, including OJT, are to be treated; more about this change can be read in the preamble to § 680.530. The Department agrees with the commenter that non-registered apprenticeship programs and workbased training are important training options. Section 680.480 May an eligible training provider lose its eligibility? Section 680.480 describes the enforcement provisions available to apply to training providers who are not in compliance with WIOA and WIOA regulations. The Department made nonsubstantive edits for consistency in how the Department uses terms throughout this section. The Department also made substantive changes to paragraphs (b) and (c) which are further described below. The Department made a clarifying edit to § 680.480(a). The Department is deleting the phrase ‘‘deliver results’’ and replacing it with language to clarify that this provision requires that training programs meet the Governor’s eligibility requirements and that training providers provide accurate information. The Department also made a clarifying edit to § 680.480(e) to clarify that if a training program is removed VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 from the eligible training providers in a local area because the training program failed to meet the local area’s higher performance standards, the training provider may appeal this eligibility denial under § 683.630(b). This provision no longer requires Local WDBs to create an appeals procedure for these purposes. Proposed § 680.480(b) provided that providers whose eligibility is terminated under this section are liable to repay all adult and dislocated worker funds received during the period of noncompliance. The Department revised this paragraph for consistency with § 681.550 that permits youth funds to pay for training for out-of-school youth aged 16–24 and such funds are also subject to the requirement to repay funds received during noncompliance. Comments: The Department received only a handful of comments addressing proposed § 680.480. As discussed above, one commenter stated that proposed § 680.480 was inconsistent with WIOA to the extent that it allows registered apprenticeship programs to be removed from the List for any reason other than deregistration. Department Response: The Department revised § 680.480(c) by adding language stating that registered apprenticeship programs may only be removed from the List for reasons set forth in § 680.470. The regulation includes registered apprenticeship programs within the enforcement provisions in WIOA sec. 122(f) for the reasons set forth in the preamble to § 680.470. WIOA sec. 122 does not require registered apprenticeship programs to supply performance information in order to be determined eligible training providers, in light of the extensive vetting process that registered apprenticeship programs undergo in order to become registered. Therefore, the Department is not regulating that registered apprenticeship programs be removed from the State List of Eligible Training Providers for reasons related to performance. Comments: Another commenter stated that training providers should be considered to be noncompliant when less than 50 percent of those enrolled complete the program in the allotted training period or when less than 50 percent of completers fail to find employment within 180 days of completion. The commenter stated that these statistics should be based on all enrolled students, not just WIOAfunded individuals. In addition, a commenter suggested that ETPs that do not provide performance information as required under WIOA should be PO 00000 Frm 00071 Fmt 4701 Sfmt 4700 56141 removed from the State ETPL, as those that are non-compliant or intentionally provide inaccurate information. The commenter said that such providers should also be liable for repayment of adult and dislocated worker funds. Another commenter asked how monitoring of training providers will be conducted and who has ultimate responsibility for this task. Department Response: The Governor’s procedures for establishing eligibility may establish minimum performance standards for all providers other than registered apprenticeship programs. Under § 680.480(c), the Governor may remove provider programs from the State List during its biennial renewal procedure for failure to meet State eligibility criteria, including any minimum performance levels established. The Department has not regulated specific threshold amounts for compliance because it is within the Governor’s authority under WIOA to establish appropriate minimum standards through its procedure. Under § 680.430(e), the Local WDB may establish higher levels of performance than those required by the Governor for a provider to be eligible to receive training funds from that local area. The Department made a minor revision to § 680.480(e) for consistency with § 680.430(e) to clarify that if the Local WDB has established higher performance standards pursuant to § 680.430(e), the Local WDB can remove a program of training services from the eligible programs in that local area for failure to meet those higher performance standards. In response to the comment suggesting that ETPs who do not provide performance information should be removed from the State ETPL, the Department refers readers to § 680.460 and its accompanying preamble. Regarding comments on which entity is responsible for monitoring ETPs, the Department notes that under WIOA sec. 122, States and local areas are responsible for monitoring eligible training providers and for determining how such monitoring is conducted. Per § 680.430(b)(2) and (c), the Governor or the Governor’s designated SWA (or appropriate State entity) is responsible for ensuring that programs meet eligibility criteria and performance levels established by the State, including verifying the accuracy of the information, and the Local WDB must carry out procedures assigned to the Local WDB by the State. E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56142 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations Section 680.490 What kind of performance and cost information must eligible training providers other than registered apprenticeship programs provide for each program of training services? Section 680.490 describes the information that training providers must submit to the State to meet initial and continued eligibility criteria for inclusion on the State List of Eligible Training Providers and Programs under § 680.460(h). Proposed § 680.490(d) required the Governor to establish a procedure and methods to assist training providers who demonstrate that providing the required information is unduly burdensome or costly. This section has been adopted as proposed, with revisions for clarity and consistency of terms and one substantive change at paragraph (c). The Department revised proposed § 680.490(a) for clarity. Proposed § 680.490(a) provided that, in accordance with § 680.460(h), every 2 years training providers are required to submit appropriate, timely, and accurate performance and cost information. However, the Department changed the reference to § 680.460(h) in this paragraph to § 680.460(i) to clarify that eligible training providers, except registered apprenticeship programs, must submit this information at least every 2 years in accordance with the State’s continued eligibility policy. The Department also modified § 680.490(c) by adding that the Governor may require additional performance information if the Governor determines it is appropriate to better inform consumers. This paragraph originally provided that the Governor could add this information if the Governor determined it was appropriate for determining or maintaining eligibility. However, WIOA sec. 122(b)(1)(J)(iii) provides that the Governor’s criteria and information requirements can include other factors the Governor determines are appropriate to ensure informed choice of participants among training service providers, and the modification to this section reflects this authority. Comments: Several commenters agreed with the Department’s message that the Governor must assist providers in supplying the information required of them under WIOA and the NPRM. These commenters urged that the State ETPL coordinators at the State level be required to maintain a list of available technical assistance for training providers and that a probationary period be included for all those who may miss eligibility. One commenter encouraged the Department to ensure that the VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 regulations provide maximum flexibility for the State to work with training providers to report on the primary indicators of performance. Department Response: The Department cannot require States to provide a probationary period or maintain technical assistance lists. However, the Governor has significant flexibility under § 680.490(d). For example, if a provider demonstrates that providing additional information required under this section would be unduly burdensome or costly, the Governor may provide additional resources from funds for State workforce investment activities reserved under WIOA secs. 128(a) and 133(a)(1) as provided in § 680.490(d)(2) to assist providers in the information collection. Further, in addition to the required factors, the regulations allow the Governor to take any appropriate additional factors into account when developing procedures for providers to be included and maintained on the State List of Eligible Training Providers and Programs. No changes to regulatory text were made as a result of these comments. Comments: Several commenters supported the § 680.490(d) requirement that Governors have a procedure in place to address the costs and burden of any increased reporting requirements. One commenter expressed appreciation for the Department’s recognition of the potential cost and burden of WIOA’s requirements for ETPs in meeting their performance reports and urged the Department to issue guidance to the States on how to streamline performance reporting for training providers and minimize the burden associated with reporting on multiple programs through the ETP performance reports required by WIOA sec. 116 and the performance information required by WIOA sec. 122 for inclusion and maintenance on the State ETPL. A number of comments appear to reflect confusion between these two types of performance information. A few commenters stated that many of the requested reporting elements are not valuable to the consumer and asserted that local areas should determine if a provider should continue to be listed on the ETPL because local areas’ performance is directly related to the quality of the training programs. One commenter suggested that for each program of study, the following information be collected: Number enrolled, number completed, number of completers employed at 90 and 180 days after exit, and wage at placement of those employed. PO 00000 Frm 00072 Fmt 4701 Sfmt 4700 Department Response: WIOA sec. 122 requires specific information that must accompany the State List of Eligible Training Providers and Programs. The Departments of Education and Labor are issuing joint guidance on data sharing. Submission of ETP performance reports is required by WIOA sec. 116(d)(4) and addressed in 20 CFR 677.230 of the regulations (see Joint WIOA Final Rule). This section of the preamble addresses § 680.460 and is focused on the requirements for ETP eligibility and maintenance of the State ETPL. Comments related to the ETP annual performance reports required under WIOA sec. 116(d)(4) and other issues related to specific performance indicators are addressed in the Joint WIOA Final Rule preamble section relating to 20 CFR part 677. In addition, the Governor’s procedure for continued eligibility and for publishing the State List may include the specific information suggested by the commenter. No changes were made to the regulatory text in response to these comments. Comments: Several commenters stated that flexibility is needed in the performance reporting requirements for inclusion on the State ETPL to allow Local WDBs to assess providers at the course, program, or institutional level because the proposed ETP performance reporting requirements could raise data privacy concerns where PII is provided. One commenter suggested that performance information be maintained at the participant level and not across programs. Department Response: The Department has determined that reporting requirements for inclusion and maintenance of the State ETPL must be established at the program level only. WIOA clearly establishes initial and continued eligibility requirements for provider programs. Eligibility and performance reporting is thus determined on a program-by-program basis for each provider under the regulations. Therefore, reporting is done through the program of study, rather than the individual courses that make up the program. All performance reporting requirements must be carried out consistent with all applicable Federal and State privacy laws and the Department is issuing guidance to assist States in complying with these laws. In addition, the Department made a revision to the title of § 680.490 to clarify that registered apprenticeship programs are not subject to these performance reporting requirements. As the Department explained in the preamble addressing § 680.470, WIOA exempts registered apprenticeship E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 programs from ETP performance reporting requirements for inclusion on the ETP list. However, voluntary reporting of performance information by registered apprenticeship programs is encouraged under the regulation. The Department also modified § 680.490(a) to clarify, consistent with the decision that registered apprenticeship programs are exempt from the performance reporting requirements, that registered apprenticeship programs are not required to submit the performance and cost information required by this section. Finally, as noted in the preamble to § 680.400, § 680.490(b) has been revised to require performance reporting on all WIOA participants enrolled in a program of training services and receiving funding through an ITA for the performance information on WIOA participants required by § 680.490(b). This includes OSY aged 16–24. As the Department is permitting youth program funds for OSY aged 16–24 to use ITAs, it is important that the performance information required encompass these WIOA participants. However, the ETPs will report based on the adult primary indicators of performance for these youth to provide comparability and to eliminate the burden that would be imposed if ETPs were required to report on separate performance indicators for adults and dislocated workers and for the subset of youth who may receive training through ITAs. Section 680.500 How is the State list of eligible training providers and programs disseminated? Section 680.500 describes the requirements for distributing the State List of Eligible Training Providers and Programs and accompanying cost and performance information to Local WDBs and to the general public. Other than non-substantive changes for consistency of terms, the Department has adopted this section as proposed. Comments: One commenter supported making the ETPL publicly accessible in a consumer friendly format. Another commenter stated that only one List per State should be permitted to be published because multiple publications within a State would be confusing for participants and ETPs. One commenter recommended that States be required to identify and list credentialing organizations and helpful information about key or high growth sectors on the homepages of the State Lists of Eligible Training Providers and Programs, including providing a list of high growth industries. This commenter stated that when a nationally-recognized, industry-driven VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 credential has been discovered by a State or local entity, or the Federal government, this information should be shared publicly to raise the bar on training programs and help ensure that tasks are performed to the highest standards available, while maintaining and improving American competitiveness. Department Response: WIOA requires the State to generate and disseminate its List of ETPs that contains, at a minimum, the information required by WIOA sec. 122(d) and § 680.500. However, as provided at § 680.430(e), Local WDBs may establish higher performance standards or additional information and criteria, except with respect to registered apprenticeship programs. In addition, the Department notes that States have the discretion to identify credentialing organizations or to restrict the types of providers included on the State List. It is up to the State to determine what providers meet its initial and continued eligibility criteria in order to be included on the State List. Some of this information, including whether a provider organization provides an industryrecognized credential may be noted on the State List. No changes were made to the regulatory text in response to these comments. Comments: Several commenters responded to the Department’s request for comments on the value of a summary sheet to accompany the ETPL. A few commenters stated that a summary sheet was not necessary because applicants only need the following key data to make an informed choice: Completion rate, placement rate, credential, and wages. In contrast, another commenter encouraged the use of a uniform summary sheet to help prospective students compare information across all participating programs. This commenter recommended that the summary sheet include detailed information about the programs, including many data points that are part of the ETP performance reports, such as comparative information about costs, program completion, and job placement rates, average starting salaries, and debt upon completion. Other commenters recommended that each State be allowed to design its own accompanying information. One commenter suggested that the information required for the ETP be detailed in a simple chart format with cohort information for completion and placement information, and that the public site should include information that is pertinent to the customer. One commenter urged the Department to PO 00000 Frm 00073 Fmt 4701 Sfmt 4700 56143 consider the work of Local WDBs that already have scorecards. Another commenter encouraged developing ‘‘ease of use reports’’ that meet the needs of training seekers while minimizing the reporting burden on providers and States. Another commenter recommended allowing States to design their own display. Department Response: The Department has determined that no revisions to the regulatory text are needed in response to these comments. The list of ETPs and accompanying cost and performance information must be disseminated in coordination with the ETP annual performance reports in accordance with 20 CFR 677.230(e)(3) (see Joint WIOA Final Rule). The ETP annual performance report must include the information required under WIOA sec. 116(d)(4) and must be provided using a template created by the Department. In contrast, WIOA sec. 122(d) does not require that the State List of Eligible Training Providers and Programs and accompanying information comport with a Federal template or format. The Department, therefore, has decided that the statutory mandate is best met by leaving it to the States’ discretion to determine: (1) What information should accompany the State ETPL provided that the accompanying information meets statutory requirements (including the requirement in WIOA sec. 122(d)(1) that the accompanying information identify the recognized postsecondary credential); (2) the best format to provide that information to users; and (3) how to coordinate its distribution with the ETP performance reports. The Department plans to issue further guidance to States regarding the relationship between ETP performance reports and the State List of Eligible Training Providers and Programs. Comments: One commenter stated that some State laws include additional restrictions on data sharing beyond the Federal law requirements and encouraged the Department to consider how regulations and guidance can help States interpret or revise their own laws to allow greater access to data for strategic planning and evaluation purposes. One commenter urged the Department to issue guidance and technical assistance on how data shared for WIOA performance reporting may be incorporated into Statewide Longitudinal Data Systems (SLDS) in compliance with both UI confidentiality provisions and the Family Educational Rights and Privacy Act (FERPA). The commenter stated that the data collected would be useful for a variety of stakeholders, including for longitudinal E:\FR\FM\19AUR6.SGM 19AUR6 56144 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations research and evaluation to improve the mix and targeting of program services. Department Response: Privacy concerns in regard to how the State List and accompanying information are made available are addressed under the regulations in § 680.500(e). In developing the information to accompany the State List described in § 680.490(b), disclosure of personally identifiable information from an education record must be carried out in accordance with the Family Educational Rights and Privacy Act, including the circumstances relating to prior written consent. No changes were made to the regulatory text in response to these comments. Instead, the Department intends to provide additional guidance on this issue and will also provide technical assistance to States who face legal barriers in complying with performance reporting requirements. mstockstill on DSK3G9T082PROD with RULES6 Section 680.510 In what ways can a Local Workforce Development Board supplement the information available from the State list of eligible training providers and programs? The Department did not receive any comments addressing § 680.510 other than a general statement of support for the provision as drafted. The Department made non-substantive edits to the title of this section for uniformity in use of the term ‘‘State list.’’ The Department also modified § 680.510 to clarify that, as explained above, the Local WDB cannot supplement the criteria and information requirements established by the Governor for registered apprenticeship programs. Section 680.520 May individuals choose training providers and programs located outside of the local area or outside of the State? Section 680.520 governs when an individual can choose to attend a training program located outside of the local area or State. The Department has made non-substantive revisions to this section for consistency in the use of terms, and made revisions for clarity to this section. Section 680.520(a) provides that individuals may choose training providers and programs outside of the local area provided that the training program is on the State List and it is consistent with local policies and procedures. For State ETPs that are outside of the local area or that do not meet the local area’s criteria for eligibility, local policies and procedures determine whether participants in the local area may utilize ITAs for training. However, the local area may choose to make exceptions to its local eligibility VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 criteria. The local policies and procedures must be consistent with State policies and procedures in order for the program to receive funds through an ITA. Section 680.520(b) provides that individuals may choose eligible training providers and programs outside of the State consistent with State and local policies and procedures and that State policies and procedures may provide for reciprocal or other agreements established with another State to permit eligible training providers in a State to accept ITAs provided by the other State. The State policies and procedures may allow training providers or programs located outside of that State to receive funds through a participant’s ITA within specific circumstances, or a State may enter into a broader agreement with another State to establish that ETPs in the other State are eligible in the ‘‘home’’ State. State policies may determine whether the training providers and programs in another State must meet any or all of the ‘‘home’’ State’s eligibility criteria order to receive the ITA funds provided by the State. In either case, the local policies and procedures can have more stringent standards than the State policy, and therefore any use of ITAs for training providers and programs outside of the State must be consistent with both State and local policies and procedures. Comments: The Department received a handful of comments addressing proposed § 680.520. One commenter supported allowing participants to choose training located outside the local area or in other States. Another commenter agreed with allowing individuals to choose training providers located outside of the local area as long as the training providers meet the performance criteria set by the Local WDB in the local area where the person resides. One commenter urged the Department to work with inter-governmental organizations to develop guidance for the active inclusion of out-of-area and eLearning options into the training approaches of Local WDBs. This commenter stated that guidance would be preferable to reciprocity agreements to reduce the time required to understand and implement the specifics of interstate agreements. Department Response: The Department has concluded that reciprocity agreements will be maintained in § 680.520 because they are specifically authorized under WIOA sec. 122(g) and they further the goals of WIOA. Reciprocity agreements reduce the burden on States and providers by eliminating duplicative procedures. PO 00000 Frm 00074 Fmt 4701 Sfmt 4700 They also expand the array of training options available to individuals seeking training. The Department recommends that States consider how best to establish and implement reciprocity agreements, and how these agreements may be used to expand distance and online training options. The Department notes that its revisions to this section, in § 680.520(b), permit the States to develop other agreements that permit ETPs in a State to accept ITAs provided by another State. This provides additional flexibility to the States as the agreement does not have to be reciprocal. The Department will consider whether there is a need for additional guidance on this issue in the future. Section 680.530 What eligibility requirements apply to providers of onthe-job training, customized training, incumbent worker training, and other training exceptions? Section 680.530 explains that providers of OJT, customized training, incumbent worker training, internships, paid or unpaid work experience, or transitional jobs are not subject to the same WIOA eligibility requirements of sec. 122(a) through (f) that are established for providers listed on the State List of Eligible Training Providers and Programs. Section 680.530 requires local one-stop operators to collect any separate performance information required by the Governor and determine whether these providers meet the Governor’s performance criteria. The Department made non-substantive edits for consistency in how the Department uses terms throughout this section and made substantive edits to the provision which are further explained below. The Department reorganized this section for clarity by breaking what was one paragraph into several paragraphs. Paragraph (a) now provides that providers of OJT, customized training, incumbent worker training, internships, paid or unpaid work experience, or transitional jobs are not subject to the requirements applicable to providers and programs which are included on the State ETPL. Paragraph (b) now provides that the Governor may establish performance criteria those providers must meet to receive funds through the adult or dislocated worker programs pursuant to a contract consistent with § 680.320. Thus, while these kinds of programs cannot be paid for with ITAs, Local WDBs may enter into a contract with these entities to provide these training services. More information can be read about this in § 680.320 and its accompanying preamble. Paragraph (c) provides that one-stop operators must E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations collect any performance information required by the Governor and determine if the provider meets these performance standards. For those that meet the Governor’s standards, paragraph (d) requires the one-stop operator to distribute information about those programs, with the relevant performance information, throughout the system. Comments: Several comments requested clarification of whether these other training providers are exempted from the State eligibility process required by WIOA sec. 122 and/or from the ETP performance reporting process required by WIOA sec. 116, if they are not included on the State List of Eligible Training Providers and Programs. Other commenters supported allowing local areas to contract with providers not on the State List of Eligible Training Providers for customized training, incumbent worker training, internships, paid or unpaid work experience, and transitional employment. One commenter expressed support for exempting OJT, customized, and incumbent worker training from the ETP process but recommended that these training programs be subject to performance reporting. Another commenter recommended revising § 680.530 to provide that OJT, customized training, incumbent working training, and other training exceptions are not exempt from rigorous performance standards even though they are exempt from the general performance metrics in WIOA sec. 122 and must be subjected to rigorous performance standards suited to the type of program. This commenter recommended that § 680.530 be revised to emphasize that local one-stop operators must collect the performance information that the Governor shall require and to emphasize that local onestop operators must disseminate this list of training exceptions. This commenter recommends requiring inclusion of the Governor’s performance criteria for OJT, customized training, and incumbent worker training in the State Plan and annual reports and that the monitoring of these programs be referenced in § 680.530. Further, this commenter recommended that performance of these programs be detailed by industry, company, and occupation at the quarterly meetings of Local and State WDBs Another commenter suggested the Local WDB must concur with the Governor that such information is worth collecting and that the Local WDB should determine how best to collect the information. This commenter felt that requiring the operator to collect VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 such information is likely to be less efficient that obtaining the information directly from the service provider or UI wage records, and that local areas should decide if it is worth collecting data on every work-based, customized, incumbent worker training, internship, or work experience arrangement. One commenter recommended that work experience programs be excluded from reporting. Another commenter suggested that the Department require the Governor’s performance standards for these exceptions to be described in the State Plan. Some commenters recommended that these exceptions be subject to the same accountability, transparency, and monitoring standards that apply to all programs regulated by WIOA. One commenter recommended that where a Local WDB is using shortterm and/or eLearning assisted ‘‘training,’’ these training services should be regarded as being provided by the Local WDB, and these approaches should be exempted from the ETP process. This commenter stated that these training programs should be subject to performance reporting. One commenter stated that OJT and customized training providers should not be included on the State ETPL because these should be matters of negotiation between Local WDBs and affected business entities. Finally, one commenter said that customized training, registered apprenticeship, or OJT are all work-relevant, but the section-by-section discussion in the regulation should clarify that these are examples and not an exhaustive list of the types of training that would have to be provided by a business. Such limitation could deem ineligible representatives of the business community who may successfully offer alternative types of training such as a non-registered apprenticeship. Department Response: The Department has made changes to the regulatory text of § 680.530 to clarify that the training providers listed in this section are not included on the State ETPL. The Department is including among these exceptions the types of work-based training included at WIOA section 122(h), which does not specifically identify non-registered apprenticeship programs but does include on-the-job training, customized training, incumbent worker training, internships, paid or unpaid work experience, and transitional jobs. There is no Federal restriction on States and Local WDBs including non-registered apprenticeship programs on the ETPL; however, these programs must apply through the Governor’s eligibility PO 00000 Frm 00075 Fmt 4701 Sfmt 4700 56145 procedure to become an eligible training provider, just as any other potential eligible training provider would. Additionally, there is no restriction on non-registered apprenticeship programs participating in on-the-job training or customized training through contracts as described in § 680.530, if it is determined appropriate by the State and Local WDB. This decision is based on the exception in WIOA sec. 122(h) exempting these providers from the requirements for inclusion on the List, maintenance on the List, and removal from the List. Notwithstanding this exclusion, that exemption in WIOA sec. 122(h) further authorizes the Governor to require the local area to collect performance information on these providers. That information can be the same as that required for ETPs or may be different information. Local WDBs may provide training services, including short-term and/or eLearning assisted training, if the Local WDB meets the conditions of WIOA sec. 107(g)(1), which includes the information required in a written waiver request to the Governor. The revised regulatory text at § 680.530(d) clarifies that one-stop operators must disseminate information identifying providers and programs that have met the Governor’s performance criteria and the relevant performance information as required by the Governor throughout the one-stop delivery system. Local WDBs are not required to concur with the Governor regarding the value of the performance information that the Governor chooses to require. While States are not required in their State Plans to describe the State’s performance standards for on-the-job training, incumbent worker training, transitional jobs, and customized training, the State is required to describe the State’s strategies for how these exceptions ensure high quality training for both the participant and the employer. State Plan requirements are fully described in the WIOA State Plan ICR and 20 CFR part 676 (see Joint WIOA Final Rule). The Department does not have the authority to require State or Local WDBs to review performance information by industry at quarterly meetings. Further, the regulatory text has been modified to clarify that these other training providers are eligible to receive WIOA funding through a contract for services rather than through ITAs. The regulatory text was also edited to remove the statement that approved providers under this section are considered eligible training providers services, which could inappropriately suggest that these entities may serve as E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56146 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations ETPs and receive funding through ITAs without going through the Governor’s eligibility procedures. As explained, this is not the case. The regulation text was also revised to clarify that these providers are not subject to the other requirements that training providers and programs which are on the State ETPL must fulfill. However, these providers are still subject to other requirements of WIOA outside of this subpart. The Department has also made a change to the terminology used in reference to transitional employment. For consistency with other areas of the WIOA Final Rule, the Department is using the term transitional jobs. Comments: One commenter recommended that § 680.530 be revised to ensure that non-credit training and education be included on the ETP, and that performance-related elements are consistent across all ETPs, including community colleges, to ensure better program outcomes and a level playing field for all ETPs. Two commenters suggested that work experience should be excluded from any reporting required of these training exceptions. Department Response: Section 680.530 describes programs that are not included on the State ETPL. The programs listed in this section may or may not offer credit, and the eligible training providers included in the State List of Eligible Training Providers and Programs may or may not offer credit. For performance reporting, the performance-related elements required by WIOA are consistent across all eligible training providers, except for registered apprenticeship programs. For eligibility procedures, the performancerelated elements in the Governor’s procedure should be consistent across all programs in the State. However, the Governor’s performance criteria for the work-based training exceptions described at § 680.530 may be quite different and these programs are not a part of the State List of Eligible Training Providers. No changes were made to the regulatory text in response to these comments. Comments: Several commenters requested clarification of how the Governor may treat providers who fall within the exceptions to ITAs described at §§ 680.320 and 680.530 as to whether these excepted providers may use ITAs or only contracts, and what is required if they are to be on the State ETPL. Department Response: As described above, local areas may contract for these work-based training exceptions and these programs of training services do not need to be on the State List nor are they subject to the ETP eligibility procedures. However, these providers VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 also could have programs of training that are not excepted under § 680.530 and that the provider wishes to be eligible to use ITAs. As explained above, only ETPs on the State List are able to use ITAs. Therefore, when a provider that provides a program of training services through contract to a local area wishes to be eligible to receive students using ITA funding, the training provider would need to complete the ETP eligibility process described in this subpart. These programs would be subject to the Governor’s eligibility procedure. An example of such a case would be a company that provides OJT through a contract with a local area and also offers classroom training or credentialing; the classroom training could be a regular ETP while the company could have a contract for the OJT. More information about the ETP exceptions can be found in § 680.320. No changes were made to the regulatory text in response to these comments. 6. Subpart E—Priority and Special Populations Introduction The services provided with adult funds can be a pathway to the middle class for low-income adults, public assistance recipients, and individuals who are basic skills deficient. The regulations implement the statutorilyrequired priority for the use of adult funds, and ensure any other priorities or designations are consistent with the statutory priority. This subpart contains regulations about how participants from certain populations are able to access adult and dislocated worker services, and regulations establishing priority access to these services. WIOA sec. 134(c)(3)(E) provides that priority for adult training services and certain career services must be given to recipients of public assistance, other low-income individuals, and individuals who are basic skills deficient. Under WIOA, priority access to services by members of this group is always in effect regardless of funding levels. Nonetheless, WIOA allows onestop centers to provide individualized career services to individuals who are not members of these groups, if determined appropriate by the one-stop center. The Department encourages close cooperation between WIOA-funded programs and other Federal and State sources of assistance for job seekers. Coordination between WIOA-funded programs and the TANF program is a crucial element in serving individuals who are on public assistance. TANF is PO 00000 Frm 00076 Fmt 4701 Sfmt 4700 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 selfsufficiency than if they relied only on the services available under a single program. In this subpart, the Department explains how displaced homemakers may be served with both adult and dislocated worker funds. Under WIOA, a displaced homemaker qualifies as an ‘‘individual with a barrier to employment’’ (see WIOA sec. 3(24)(A) and § 680.320(b)). Additionally, displaced homemakers meet the definition of a ‘‘dislocated worker,’’ as defined in WIOA sec. 3(15)(D). Displaced homemakers, whose work, albeit without a formal connection to the workforce, is recognized for its value, may need WIOA services to develop further work skills. WIOA also expands the definition of displaced homemakers to include dependent spouses of the Armed Forces on active duty to ensure they have access to WIOA title I services. This subpart ensures that veterans and certain service members have access to adult and dislocated worker programs. Under WIOA, as was the case under WIA, veterans receive priority of service in all Department-funded employment and training programs. The regulations in this subpart describe what is meant by ‘‘priority of service.’’ The regulation is consistent with guidance it issued in TEGL No. 22–04 (‘‘Serving Military Service Members and Military Spouses under the Workforce Investment Act Dislocated Worker Formula Grant’’), dated March 22, 2005 (http://wdr.doleta.gov/directives/ attach/TEGL22-04.pdf) and expanded in TEGL No. 3–15 (‘‘Guidance on Services Provided through the Adult and Dislocated Worker Program under the Workforce Innovation and Opportunity Act (WIOA or Opportunity Act) and Wagner Peyser, as Amended by WIOA, and Guidance for the Transition to WIOA Services’’), dated July 1, 2015 (http://wdr.doleta.gov/directives/attach/ TEGL/TEGL_03-15.pdf) that separating service members meet the eligibility requirements for dislocated worker activities. This regulation will ensure that service members will have access to the full array of services available through the one-stop delivery system. E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations Section 680.600 What priority must be given to low-income adults and public assistance recipients and individuals who are basic skills deficient served with adult funds under title I? Comments: Several commenters expressed general support for giving priority for service to recipients of public assistance, other low-income individuals, and individuals who are basic skills deficient. In contrast, a few commenters expressed disagreement with the priority of service provisions, reasoning that the regulations fail to address employer needs and focus instead solely on the needs of the employee. Two commenter recognized the need to be responsive to both the employers and the employees. Department Response: The Department notes that WIOA sec. 134(c)(3)(E) requires priority be given to individuals who are public assistance recipients, low income, or basic skills deficient, with regard to the provision of individualized career services and training services. This priority applies to funds allocated to a local area for the WIOA title I adult program, It is not an eligibility criterion for the program, but it is the means to ensure an emphasis on providing services to these populations. This priority is not required for the WIOA title I dislocated worker program. The Department recognizes the need to serve not only low-skilled individuals but also those with more advanced skills and training who also need assistance. The Department also recognizes the importance of the onestop delivery system’s employer customer, assisting them to find, hire, train, or upskill their workforces. The one-stop delivery system connects the provision of career services and training to help individuals get good jobs and build careers and the development of the skilled workers employers need and their match to employers. Work-based training focuses on employer workforce needs, particularly incumbent worker training, where the employer is the primary customer. Comments: A few commenters supported the removal of the WIA ‘‘limited funding’’ exception. Two commenters strongly urged the Department to clarify in the Final Rule that the priority is in effect regardless of funding. Two commenters stated that it was preferential to apply the proposed priority of service provisions when funds are limited. One commenter questioned whether the regulations presuppose that limited funding exists and expressed support for the development of criteria that would give local areas the authority to set priority of service VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 thresholds that would take effect only during times of limited funding. Department Response: The application of priority under the title I adult program applies at all times as required in WIOA sec. 134(c)(3)(E). Comments: A commenter recommended that the regulation allow for local definition of low income rather than the Federally defined Lower Living Standard Income Level (LLSIL), reasoning that an individual might not be below the low-income level as defined by the LLSIL, but still be far below the level of self-sufficiency in the local area. Another commenter asked what the definition of ‘‘family’’ would be when determining whether someone is considered low income in regard to priority of service. One commenter recommended incorporating the definition of family from WIA sec. 101(15) into the regulations to clarify the meaning of low income. One commenter questioned how the priority groups included in the regulation relate to Equal Employment Opportunity (EEO) considerations and requested clarification within the regulation that EEO applies within the priority groups rather than before prioritization is considered. A few commenters asserted that insufficient detail was provided in the regulations (e.g., family income calculations) and expressed concern with an approach that provided these details through guidance, reasoning that guidance allows for requirements to change over time. Department Response: The term ‘‘lowincome individual’’ is statutorily defined in WIOA sec. 3(36); it includes language that the LLSIL is determined by the Secretary. The Department agrees with the commenters requesting a definition of ‘‘family’’ and has added language to the definitions in part 675 of this Rule. Discussion of the added definition is provided in the preamble accompanying part 675. The non-discrimination provisions of WIOA sec. 188 do not provide for preference for services. They protect against discrimination in the provision of services and prevent individuals from being otherwise adversely affected because of their membership in a protected class. Therefore, the Department has declined to make changes in the regulatory text in response to this comment. Comments: Several commenters recommended a revision to proposed § 680.600(c) to clarify that any designation of priority for other eligible individuals must be subject to both the veterans priority of service requirements at § 680.650 and the WIOA statutory PO 00000 Frm 00077 Fmt 4701 Sfmt 4700 56147 priority of service requirements in sec. 134(c)(3)(E). A commenter suggested that any guidance in this area, including guidance on expectations for State and local implementation, should support flexibility to allow States and localities to serve their unique and diverse populations best. One commenter questioned the relative priority that should be applied to other groups of individuals designated by the Local WDB or Governor as receiving priority of service compared to those explicitly listed in WIOA. Department Response: The Department agrees with the commenters’ suggestion that any additional priority populations identified by the Governor must be consistent with the statutory priority as well as the veteran’s priority of service. The Department has made changes to the regulatory text at § 680.600(c) to reflect this suggestion. The Department will issue guidance and technical assistance about the implementation of these priority requirements. Comments: Several commenters stated that the Department must revise proposed § 680.600(a) to align with WIOA and allow for priority to be given to ‘‘recipients of public assistance, other low-income individuals, and individuals who are basic skills deficient,’’ not ‘‘recipients of public assistance, other low-income individuals, who are basic skills deficient,’’ as was proposed. A commenter requested clarification as to whether being basic skills deficient alone would quality an individual for priority of service. Department Response: The Department agrees with the commenters and has modified the regulatory text in § 680.600(a) to make clear that individuals who are basic skills deficient is its own category to be eligible for priority of service in the WIOA title I adult program. Basic Skills Deficient Comments: A commenter provided several recommendations about priority of service for individuals who are basic skills deficient: (1) Basic skills deficient should include computer literacy skills as a skill necessary to function on the job; (2) the process for identifying basic skills deficient should allow selfattestation and observation by one-stop staff; (3) a standard tool for measuring basic skills deficient should be developed and should include consideration of career-oriented employability skills; and (4) any individual who meets the definition of basic skills deficient should be eligible for services. E:\FR\FM\19AUR6.SGM 19AUR6 56148 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 A few commenters cautioned against using a definition of basic skills deficient that considered how the individual’s skill set would allow them to ‘‘function on the job.’’ These commenters reasoned that such a definition could create a loophole that might diminish the priority of service requirement by permitting services to otherwise non-low- income individuals who simply lack some skill needed to do a specific job. A few commenters recommended that the methodology for determining basic skills deficiency should be identified in State or local policy, rather than in regulation or Department policy. Department Response: The term ‘‘basic skills deficient’’ is defined in WIOA sec 3(5). States and Local WDBs have flexibility in determining when an individual meets this definition. Comments: A commenter stated that proposed paragraphs (a) and (c) of § 680.600 included inconsistent language when describing individuals who are basic skills deficient, one paragraph using the term ‘‘basic skills deficient’’ and the other using the term ‘‘individuals without basic work skills.’’ The commenter asserted that consistent terminology is important. Department Response: The Department agrees with these comments and has modified the regulatory text to incorporate this suggestion. Implementation of Priority of Service Requirements Comments: Several commenters requested guidance on the implementation of the priority of service requirements. A few commenters stated that guidance should include an explanation of how States and localities will be monitored to ensure that an appropriate process or protocol is established and details on what the protocols should include. Because the priority groups could be seen as a threat to successful performance tracking, one commenter stated that reporting and incentives should be put into place to ensure these participants are actually served and supported. Several commenters provided additional input on how to implement the priority of service requirements, including the following recommendations, building on the Department’s use of veterans’ priority of service, utilizing technical assistance and best practices, developing performance metrics and benchmarks, and coordination with immigration and refugee organizations and State Refugee Coordinators. A few commenters described how U.S. Census data could be used to VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 implement or verify the priority of service requirements. To verify that the priority of service has been properly implemented, two commenters recommended that the Department require that State and local planning efforts utilize the most current Census and administrative data available to develop estimates of each priority service population in their planning efforts and update these data year to year. Additionally, these commenters recommended that this data be used in Federal reviews of State Plans to ensure that system designs and projected investments are equitably targeted to service priority populations. The commenters also stated that this data should be used to benchmark system performance in actual implementation of the priority of service from year to year. Department Response: The Department will provide further guidance to clarify how priority of service should be implemented and monitored. Section 680.610 Does the statutory priority for use of adult funds also apply to dislocated worker funds? Comments: A commenter sought clarification as to whether the same priority given to adult funds applied to dislocated worker funds that were transferred to the adult program. Department Response: The Department considers funds transferred from the dislocated worker program to the adult program to be adult program funds and fall under the priority requirements of the adult program. Likewise, any transfer of funds from the adult program to the dislocated worker program will fall under the requirements of the dislocated worker program. Comments: Commenting that older workers are more likely to show up in the dislocated worker program than in the adult program, one commenter recommended that priorities and protections should be established within the dislocated workers program. Department Response: There is no priority in the dislocated worker program, other than veteran’s priority of service. Participants must meet the dislocated worker eligibility criteria in order to participate in this program. No changes have been made to the regulatory text in response to the comments. PO 00000 Frm 00078 Fmt 4701 Sfmt 4700 Section 680.620 How does the Temporary Assistance for Needy Families program relate to the one-stop delivery system? Comments: A commenter suggested that the statement in the NPRM introduction to subpart E that the ‘‘Department strongly encourages close cooperation’’ between WIOA-funded programs and other Federal and State sources of assistance for job seekers does not convey the strength needed to have full coordination between WIOAfunded programs and the TANF program. This commenter recommended changing the wording to ‘‘mandates close coordination with funding tied to coordinated partnerships.’’ One commenter recommended that the Department seek out opportunities for increased alignment between WIOA common performance indicators and TANF. This commenter stated that one challenge is that TANF programs are not measured by the same accountability measures as the other core WIOA programs. Department Response: WIOA delegated the authority to Governors and Local WDBs, to decide how closely to align and coordinate their plans with WIOA programs and other sources of public assistance like TANF. The Department encourages strong partnership and close alignment with TANF at the State and local level. Comments: A commenter requested clarification on whether TANF funding had to be used, rather than WIOA funds, if available, and how TANF organizations should document that TANF funds are not available. Department Response: Under § 680.230(b) and WIOA sec. 134(c)(3)(B), one-stop centers are required to consider the availability of other sources of grants to pay for training costs, which includes TANF funds. The Department will provide additional guidance and technical assistance to one-stop centers to answer questions about how to document whether funds from other sources such as TANF are available. Comments: Several commenters recommended that the Department ensure that Local WDBs or their standing youth committees identify how connections will be made with TANF partners at one-stop centers to ensure policy and programmatic alignment for the young adult population under 25, who may receive a different set of services if they are not served though WIOA title I youth programs. These commenters asserted that WIOA and TANF differ greatly from each other, requiring specific policy and E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations programmatic alignment by the State and Local WDBs to service TANF recipients in a WIOA program. Department Response: Coordination between TANF and WIOA services must take place at the State and local level and therefore, States and local areas are responsible for establishing policies and MOUs, and aligning plans wherever they deem to be appropriate to serve participants best. The Department recognizes that there are challenges associated with such planning and coordination and will continue to provide guidance and technical assistance to assist with these processes. No change is made in the regulatory text. Section 680.630 How does a displaced homemaker qualify for services under title I? Comments: A commenter expressed support for the inclusion of spouses of members of the Armed Forces on active duty as a displaced homemaker. Two commenters encouraged the Department to urge States to highlight the displaced military spouse homemakers in dissemination of information about services to this population. Department Response: The Department agrees with the commenters’ suggestion and encourages States and Local WDBs to highlight the eligibility for displaced military spouse homemakers in the information they disseminate about this program. No changes have been made to the regulatory text in response to the comments. mstockstill on DSK3G9T082PROD with RULES6 Section 680.640 May an individual with a disability whose family does not meet income eligibility criteria under the Workforce Innovation and Opportunity Act be eligible for priority as a low-income adult? Comments: A few commenters expressed support for the provisions in § 680.640 as proposed. One comment also expressed support for the provisions in proposed § 680.640 to keep a family’s income separate from the adult with a disability’s income to that services are provided to all individuals who need it and that another eligibility barrier is not created to ensuring access to these services. One commenter requested clarification on whether the provisions specifying the circumstances under which an individual with a disability may still qualify as a priority lowincome adult, even when family income does not meet the low-income eligibility criteria, also apply to persons receiving Social Security Disability Insurance. VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Another commenter recommended the Department clearly identify receipt of Social Security disability benefits as a barrier to employment. Department Response: The circumstances that allow these individuals to qualify still as a lowincome adult, regardless of family income, do not apply to persons receiving Social Security Disability Insurance (SSDI). The Department considers WIOA to be very specific about what does count and what does not with regard to income-based eligibility in its definition of ‘‘lowincome individual’’ in WIOA sec. 3(36). This definition allows individuals on Supplemental Security Income (SSI) to be considered low-income, but does not consider individuals on SSDI to be considered low-income of the basis of that status alone. Also, SSDI payment cannot be excluded when making income-based eligibility determinations. However, individuals receiving SSDI meets the definition of an individual with a disability, which means the individual meets the criteria of an individual with a barrier to employment under WIOA sec. 3(24) and § 680.320(b). The Department encourages individuals receiving SSDI who are seeking to return to employment to access services through the one-stop delivery system. WIOA is subject to 38 U.S.C. 4213, and therefore military benefits are excluded from income-based eligibility determinations under WIOA. 7. Subpart F—Work-Based Training Sections 680.700 through 680.850 are regulations for work-based training under WIOA. The regulations apply to (OJT) training, customized training, incumbent worker training, and transitional jobs. The regulations include specific information about general, contract, and employer payment requirements. Work-based training is employer-driven with the goal of unsubsidized employment after participation. Generally, work-based training involves a commitment by an employer or employers to employ successful participants fully after they have completed the program. Registered apprenticeship training is a type of work-based training that can be funded in the adult and dislocated worker programs; additionally preapprenticeships 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 PO 00000 Frm 00079 Fmt 4701 Sfmt 4700 56149 finding high quality work and in developing a highly skilled workforce. Each of these work-based models can be effectively used to meet a variety of job seeker and employer needs. OJT is primarily designed to first hire the participant and provide them with the knowledge and skills necessary for the full performance of the job. Incumbent worker training is designed to ensure that employees of a company are able to acquire the skills necessary to retain employment and advance within the company or to provide the skills necessary to avert a layoff. Customized training is designed to provide local areas with flexibility to ensure that training meets the unique needs of the job seekers and employers or groups of employers. Both training providers and employers providing OJT opportunities must be providing the highest quality training to participants. OJT contracts must be continually monitored so that WIOA funds provided through OJT contracts are providing participants the training to retain employment successfully. It is important that OJTs provide participants with relevant skills and opportunities for career advancement and provides employers with a skilled workforce. Under WIOA, the statute enables a Governor or Local WDB to increase the reimbursement rate for OJT from 50 to 75 percent. This is designed to give States and Local WDBs additional flexibility in developing OJT opportunities that work best with the participating employers and in the local economy. WIOA also explicitly allows for incumbent worker training at the local level. WIOA introduces incumbent worker training as an allowable type of training for a local area to provide. Incumbent worker training is designed to either assist workers in obtaining the skills necessary to retain employment or to avert layoffs and must increase both a participant’s and a company’s competitiveness. Local areas may use up to 20 percent of their local adult and dislocated worker funds for incumbent worker training. The Department seeks to ensure that incumbent worker training is targeted to improving the skills and competitiveness of the participant and increasing the competitiveness of the employer. The training should, wherever possible, allow the participant to gain industryrecognized training experience and ultimately should lead to an increase in wages. To receive incumbent worker funding under WIOA, an incumbent worker must have an employeremployee relationship, and an E:\FR\FM\19AUR6.SGM 19AUR6 56150 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 established employment history, with the employer. Incumbent workers are employed at the time of their participation, and the contract funds are paid to the employer for training provided to the incumbent worker either to avert a lay-off or otherwise retain employment. A ‘‘model’’ incumbent worker training would be one where a participant acquires new skills allowing him or her to move into a higher skilled and higher paid job within the company, thus permitting the company to hire a job seeker to backfill the incumbent worker’s pre-training position. Comments: A commenter recommended that the regulations clarify that OJT, customized, and incumbent worker training are exempt from the ETP process. Department Response: Work-based training and work experiences are subject to the dissemination requirements of WIOA sec. 134 (a)(2)(B)(v) and the requirements of WIOA sec. 122(h) as the Governor may require. These requirements are separate from the ETP section of WIOA sec. 122(a) through (f). The Department has modified the language of the regulatory text in § 680.340(b), which requires Local WDBs to disseminate the list of ETPs, to make clear that the work-based training provider information requirements are separate from the requirements governing the ETPL. These provisions of WIOA sec. 122(h) apply to providers of work-based training. On-the-Job Training Comments: A commenter expressed support for the proposed requirements regarding OJT. Another asked the Department to earmark funding either on the national or State level for employer education as to the benefits of hiring after training is received. Department Response: The Department considers employer engagement to be critical to the success of these programs. It plans to provide additional guidance and technical assistance for this purpose. Comments: A commenter expressed concern that the different ‘‘employer match’’ requirements for OJT, customized training, and incumbent worker training would present a challenge to explain to employers, and recommended that the Department simplify the match requirements and lower them for small businesses to encourage their participation in the programs. Specifically, this commenter recommended that the match requirement be the same across all three types of training and be differentiated based on business size. VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Department Response: The matching requirements training for these three types of training are specified in WIOA, and are provided, consistent with WIOA, at: § 680.700 for OJT, § 680.760 for customized training, and § 680.820 for incumbent worker training. Each type of training emphasizes a different need of employers and individuals, and the employment match is designed to reflect the differences in those training types. No change is made in the regulatory text. Section 680.700 What are the requirements for on-the-job training? Comments: Two commenters asked if it would be permissible to enter into an OJT contract with a public non-profit agency such as a local fire department or board of education. Department Response: Yes, as long as the requirements of §§ 680.700 through 680.730 are met, this type of OJT contract would be allowable. Comments: Regarding the circumstances under which adult and dislocated worker funding may not be used to enter into an OJT contract, two commenters recommended adding to § 680.700(b) that OJT training contracts may not be entered into with employers that have unpaid unemployment insurance and workers compensation taxes. Department Response: The Department considers this to be at the discretion of State and Local WDBs and declines to modify the regulatory text to include this requirement. Comments: Two commenters recommended adding language to § 680.700 requiring OJT contracts that cover ‘‘apprenticeable occupations’’ and pre-apprenticeship programs to be attached to registered apprenticeship programs. These commenters also recommended adding an additional condition to the list of factors that the Governor or Local WDB must take into account when exercising discretion to increase the reimbursement rate for OJT contracts in § 680.730(a). Specifically, these commenters recommended that the Department add a new subparagraph that would prohibit reimbursements for OJT programs for apprenticeable occupations unless they are part of a registered apprenticeship program. This commenter also suggested that this new regulatory provision require the Governor to consider whether the OJT contracts are harmonized with registered apprenticeship programs such that no OJT contract operates to train in an apprenticeable occupation unless it is part of a registered apprenticeship program (or comparable program determined by the Secretary not to PO 00000 Frm 00080 Fmt 4701 Sfmt 4700 undermine registered apprenticeship programs) and that any contract for preapprenticeship is articulated with at least one registered apprenticeship programs. Department Response: Section 680.740 specifies how registered apprenticeship program sponsors or participating employers in registered apprenticeship programs may be contracted to provide OJT. The Department declines to add language that restricts the OJT portion of nonregistered apprenticeships from receiving OJT funds providing that they meet the requirements of §§ 680.700 through 680.730 and any criteria established by the Local WDB. Comments: One commenter requested that the Department amend § 680.700 to include work-based learning activities that are identified and linked to training provided by ETPs. Department Response: There are no prohibitions to ETPs providing workbased learning activities, provided that those activities meet the conditions of §§ 680.700 through 680.730. Comments: To prevent hiring workers for the duration of the OJT with no job continuity afterwards, a commenter recommended there be a minimum standard to address performance relating to both employment and career pathways to which all Governors would be required to adhere. Department Response: OJT participants are part of the performance accountability system under WIOA which includes employment related outcomes, and performance information will be collected on all participants in OJT. This approach will help to ensure that States and local areas are utilizing high quality training providers for both ITAs and work-based training. In addition to the required performance information, Governors may set additional performance criteria for work-based training under WIOA sec. 122(h). The Department will continue to support collaboration across all WIOA title I programs. Comments: Regarding the duration of an OJT contract, a commenter recommended that OJT be used for 6 to 12 months with discretion resting with the Local WDB. Department Response: The Department is not requiring specific OJT duration limitations. The Department agrees with the comment that the discretion should be left to the Local WDBs and declines to make changes to the regulatory text at § 680.700(c). Comment: Two commenters requested that § 680.700 include a reference to agreements with registered apprenticeship programs under E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations § 680.740(a), to make clear OJT can be provided by registered apprenticeship programs. Department Response: The Department has added language to § 680.700 to be clear that OJT contracts may be written with registered apprenticeship program sponsors. mstockstill on DSK3G9T082PROD with RULES6 Section 680.710 What are the requirements for on-the-job training contracts for employed workers? Comments: A commenter stated that the determination of a ‘‘self-sufficient wage’’ should be left to the State and local areas and driven by local circumstances. Department Response: The Department maintains the selfsufficiency standard. States may develop a State self sufficiency standard, and local areas may adjust the standard, within the set parameters of WIOA sec. 134(c)(3) and (d)(1)(a). Comments: A commenter recommended insertion of a reference to ‘‘workers with barriers to employment, including people with disabilities’’ in § 680.710(a) and broadening OJT contracts to include introduction of accessible technology and other workplace accommodations for workers with emerging disabilities in need to training to stay on the job. Department Response: Title I adult and dislocated worker funds are to be used to target services to individuals with barriers to employment as defined in WIOA sec. 3(24). Individuals with disabilities are a part of this definition. The Department has added ‘‘reasonable accommodations for individuals with disabilities’’ as an allowable supportive service in § 680.900, which can be used to help enable an individual to participate in OJT training. Section 680.720 What conditions govern on-the-job training payments to employers? Comments: Several commenters concurred with the Department’s decision not to define ‘‘extraordinary costs’’ through the regulation, allowing for flexibility. One commenter would leave the definition up to the States, while another recommended that it be left to local discretion to ensure their OJT arrangements are applicable to local market conditions. One commenter recommended that ‘‘extraordinary costs’’ be defined according to the Association for Talent Development Guidelines, which divide expenses according to whether they are direct or indirect. The commenter suggested that at a minimum that the regulations provide explicit coverage of unrecoverable material expenses (i.e., VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 materials and articles nonproductively expended in training that do not create a usable product) and of participant trainees and trainers lost from productive work. Two commenters recommended deleting proposed § 680.720(c), which specified that employers are not required to document the extraordinary costs associated with training OJT participants and replace it with a requirement that the Governor collect performance data regarding OJT to ensure that OJT contracts are fulfilling the purposes of WIOA. Department Response: The Department declines to require additional cost or other documentation from employers to avoid creating an unnecessary burden. States and local areas may further define what constitutes an ‘‘extraordinary cost’’ at their discretion. Section 680.730 Under what conditions may a Governor or Local Workforce Development Board raise the on-the-job training reimbursement rate up to 75 percent of the wage rate? Comments: A commenter requested clarification about when a Local WDB may increase the rate for OJT contracts up to 75 percent, and specifically asked if a Governor may limit the Local WDB’s authority to increase the reimbursement rate if all factors required in the regulation and under local policy are met. Department Response: The Governor may not limit the Local WDB’s authority to increase the reimbursement rate for OJT contracts provided with funds allocated to the local area. The difference between the Governor and the Local WDB with respect to OJT reimbursement rates is what funding source each is allowed to raise the reimbursement rate for. The Governor may increase the reimbursement rate for OJT contracts provided with Governor’s Reserve funds or NDWG funds. Local WDBs may increase the reimbursement rate for OJT contracts provided with funds allocated to the local area. Comments: A commenter suggested that employers paying above the median wage for the occupation should be eligible for increased reimbursement as follows: ‘‘Entry Level’’ at 50 percent, ‘‘Median’’ at 60 percent, and ‘‘Experienced’’ at 75 percent. Another commenter described its current waiver that allows for a graduated rate of OJT reimbursements based on the size of the company, which it asserted has helped small businesses gain funding and skilled employees. Department Response: The Department declines to add these factors PO 00000 Frm 00081 Fmt 4701 Sfmt 4700 56151 into the regulatory text. They may be determined appropriate by the Governors or Local WDBs under § 680.730(a)(4). Comments: One commenter asked if a State needs to seek a waiver to reimburse employers more than 75 percent of the OJT wage, and if the waiver could be obtained before July 1, 2015. This commenter described its current waiver to provide up to a 90 percent employer reimbursement rate. Department Response: The Department is not considering waiver requests as part of this rule making. All WIOA title I adult and dislocated worker OJT projects going forward are expected to adhere to the reimbursement rates set forth in WIOA. Comments: A commenter urged the Department to provide guidance to State and Local WDBs on coordinating the increased reimbursement criteria with high-road economic development strategies that improve wages, benefits, and other job quality factors for frontline employment in a State and region. Department Response: The Department will issue guidance and technical assistance on work-based learning, including OJT, sector strategies, and industry partnerships. Comments: A commenter recommended that the Department include a reference to individuals with disabilities in § 680.730(a)(1) to provide an incentive to State and Local WDBs to focus on this population. Department Response: Paragraph (a)(1) of § 680.730 states that Governors may take the characteristics of the participants into consideration when raising the reimbursement rate, emphasizing ‘‘individuals with barriers to employment’’ as defined in WIOA sec. 3(24). Individuals with disabilities are included in this definition. No change is made to the regulatory text. Comments: Some commenters stated that the factors to be considered regarding the relation of training to the competitiveness of the participant should be the size of the employer or the characteristics of the participant as determined by the Governor or Local WDB. A commenter agreed that employer size should be a factor related to increasing an OJT reimbursements rate, stating that smaller employers often need additional support. Two commenters requested that the Department numerically clarify or define ‘‘small businesses’’ as it applies to the employer size factor under § 680.730(a)(2). Similarly, two commenters recommended that the Department clarify the meaning of ‘‘with an emphasis on small businesses’’ in § 680.730(a)(2). One commenter E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56152 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations recommended that the Department rely upon the Small Business Administration’s (SBA’s) definition of ‘‘small business.’’ Another commenter requested that ‘‘size of the employer, with an emphasis on small businesses’’ be removed from § 680.730(a)(2), or at least clarified to ensure that it does not negatively impact medium and large employers seeking a higher OJT reimbursement rate. Department Response: The Department included ‘‘the size of the employer’’ as a factor that Governors and Local WDBs may take into account when deciding to raise the reimbursement rate for a particular OJT project. The Department recognizes that providing these services to small businesses, which may need additional support in providing OJT, is an important factor in determining the reimbursement rate for OJT. However, there is not requirement that only small businesses may receive a higher reimbursement rate. The Department recommends that Governors and Local WDBs refer to SBA’s definition of ‘‘small business’’ as a guide which varies by industry; it can be found at https://www.sba.gov/content/summarysize-standards-industry-sector. Comments: A commenter stated that before entering training, all individuals should be thoroughly assessed to determine appropriateness of training— including demand of an occupation, post-training wages, and other individualized customer-level criteria— to be as efficient as possible with limited training resources. Several commenters specifically addressed the ‘‘competitiveness of the participant’’ factor (proposed § 680.730(a)(4)); including, its use in the provision of incumbent worker training, a measure used in determining wages for eligibility purposes, job retention, and credential attainment. Department Response: In order for an individual to receive training, he or she must meet the criteria in WIOA sec 134(c)(3)(A). The Department notes that there is no sequence of service requirement; however, the eligibility for training must be established by the Local WDB. An assessment is one appropriate ways of determining training eligibility. The Department considers the ‘‘competitiveness of a participant’’ to be an appropriate factor that Governors or Local WDBs may use when determining the OJT reimbursement rate, under § 680.730(a)(4). The Department agrees with the commenters’ recommendation and declines to define ‘‘competitiveness of a participant’’ through regulation. Governors and Local WDBs may VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 develop a policy or criteria to be used in determining ‘‘competitiveness of a participant.’’ Section 680.740 How can on-the-job training funds be used to support placing participants into a registered apprenticeship program? Comments: Many commenters addressed the issue of maximum amount of time for OJT funds to be used to support registered apprenticeships; including, what entity decides the duration, flexibilities in determining duration, and tailoring to the needs of the participant. Department Response: The Department has considered these comments and declines to make changes to the regulatory text that would limit the flexibility of States and local areas to determine the appropriate duration for OJT funds used to support placing apprentices into a registered apprenticeship program. These decisions to be best made on a case-bycase basis at the State and local level based on individual need. Comments: One commenter stated that WIOA funding for apprenticeship is useful only if it: (1) Could support a preapprenticeship class of 15 to 20 students for a 90-day training class; and (2) provide additional funding for Stateapproved apprenticeship training, and if funding could go directly to the program and not an intermediary like the State WDB. The commenter warned that most registered apprenticeship programs are multi-employer, which makes it difficult to offer OJT contracts to employers as a hiring incentive; instead, the commenter suggested that it would be more productive to use OJT contracts as an incentive to enroll OJT contracteligible individuals in their apprenticeship programs. Two commenters requested clarification regarding management of reimbursement to employers by the registered apprenticeship training program when relationships with multiple employers exist; for example, when registered apprenticeship participants work for multiple employers during an OJT to maintain full-time employment. A commenter urged the Department to revise § 680.740 to provide that OJT contracts may be written with a registered apprenticeship program, an employer participating in a registered apprenticeship program, or both. This commenter stated that having registered apprenticeship programs as signatories to OJT contracts guards against OJT becoming an employer subsidy without advancing the worker’s progress. Further, the commenter recommended PO 00000 Frm 00082 Fmt 4701 Sfmt 4700 that OJT funds initially be received by the apprenticeship program, then reimbursed to the participating employer for the ‘‘extraordinary costs.’’ Several commenters said that States would benefit from guidance and technical assistance on facilitation and implementation of apprenticeships. Department Response: The Department recognizes the value of preapprenticeships and encourages preapprenticeship programs to become ETPs through WIOA sec. 122(d). Preapprenticeship programs do not automatically qualify to be on the ETPL like RA programs do; however, if they meet the requirements under the provisions of sec. 122(a-f) to become ETPs, they can be funded using ITAs. To provide information and new technical assistance resources for starting and enhancing registered apprenticeship programs, the Department issued Training and Employment Notice No. 20–15, dated January 11, 2016 (http://wdr.doleta.gov/ directives/attach/TEN/TEN_20-15.pdf). The Department plans on issuing additional guidance and technical assistance clarifying pre-apprenticeship and registered apprenticeship use in the one-stop delivery system. The Department has changed the regulatory text in § 680.740(a) to make it clear that OJT contracts may be entered into with registered apprenticeship program sponsors or participating employers in a registered apprenticeship program for the OJT portion of the registered apprenticeship program. Comments: Commenters urged the Department to revise the regulation to allow OJT funding to be used for nonregistered apprenticeship programs. Similarly, two different commenters stated that § 680.740 should not limit OJT funds to registered apprenticeship programs. Department Response: WIOA sec. 122(a)(2)(B) provides automatic qualification for registered apprenticeship programs on ETPLs and provides an overall emphasis on registered apprenticeship programs throughout the one-stop delivery system. The Department has used this emphasis to highlight the unique flexibilities the one-stop delivery system has in making use of registered apprenticeship programs to provide training services, including ITAs and OJT. The regulatory text in § 680.740 is designed to highlight those flexibilities for OJT. This in no way restricts other appropriate uses of OJT, including for use with non-registered apprenticeships. The Department declines to make a regulatory text change include all allowable training E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 types; however, because of WIOA’s emphasis on registered apprenticeship, the Department has determined it appropriate to highlight. Comments: A commenter expressed support for combining funds to support registered apprenticeship training under §§ 680.740 and 680.750. Department Response: This allows for the combined use of OJT and ITAs to support placing participants in a registered apprenticeship program. The Department notes that there is no prohibition on the combined use of ITAs and OJT as well as any other contracted training services under WIOA sec. 134(c)(3)(G)(iv). However these decisions must be based on individual need, and they must be paying for separate program elements. No changes have been made to the regulatory text in response to the comment. Section 680.760 What is customized training? Comments: A commenter requested clarification of the ‘‘commitment’’ by the employer to employ all individuals upon successful completion of customized training; specifically, whether it must be by written letter or verbal, and whether an employer may use a temporary agency for the first 90 days of employment. Similarly, another commenter urged that the regulations address an employer’s expectation to commit to hire. Department Response: The ‘‘commitment’’ is a statutory requirement in WIOA sec. 3(14) and 134(c)(3)(g)(1) requires a contract between the employer and the Local WDB for customized training. Local WDBs have flexibility in determining what constitutes an appropriate commitment to hire the individuals on behalf of the employer. Comments: One commenter requested that the Department include language in § 680.760 that would exempt the requirement that ‘‘the employer pays a significant cost of the training’’ when the Local WDB determines that the workers are ‘‘at-risk’’ for layoff. This commenter reasoned that customized training seems the most appropriate support to provide when workers are determined to be vulnerable to layoff or closure and have basic skills but may lack a preferred credential and/or industry-recognized certification. Department Response: WIOA sec. 3(14) states that for customized training, employers must pay for a significant cost of the training, which is to be determined by the Local WDB. Customized training is generally for hiring new or recent employees and not VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 for retraining existing employees. Incumbent worker training may be used to provide training for current employees as a layoff aversion strategy. No changes have been made to the regulatory text in response to the comments. Comments: Two commenters asked if the § 680.760(c) requirement that an employer pay a ‘‘significant cost of the training’’ means the employer must pay for more than 50 percent of the cost of training. One commenter recommended that ‘‘significant cost of the training’’ should be eliminated as a criterion for customized training under § 680.760 because it is vague and arbitrary. Department Response: WIOA sec. 3(14)(C) requires that employers pay a ‘‘significant cost of the training’’ of WIOA. Local WDBs have the discretion to define the term ‘‘significant cost of the training’’ as is appropriate for their local areas. No change is made in the regulatory text. Comments: A commenter proposed adding a paragraph (d) to the definition of customized training in § 680.760 stating, ‘‘For which the training results in a degree, certificate, or industryrecognized credential.’’ Department Response: The requirements for customized training are defined in WIOA sec. 3(14). No change is made to the regulatory text. The Department encourages the use of customized training that leads to credentials, but this is not a requirement of customized training. Section 680.770 What are the requirements for customized training for employed workers? Comments: Two commenters recommended that the Department remove the requirement for employed workers to be under the self-sufficient wage to participate in customized training because it is a deterrent for many companies and does not provide an optimal situation for new hires. Other commenters asserted that the provision would prevent dislocated workers reemployed at a lower wage but still above the self-sufficiency wage from participating in customized training that could help them reach their prior wage levels. One commenter recommended that the Department eliminate ‘‘self-sufficient wage’’ as a criterion or standard for use by Local WDBs in determining work-based training arrangements under § 680.770 because it is arbitrary and holds different meanings in different communities. This commenter asserted that wage gain is a more objective measure. PO 00000 Frm 00083 Fmt 4701 Sfmt 4700 56153 One commenter expressed concern that the self-sufficient wage requirement and the requirement for training to incorporate new technologies, processes, or procedures are too restrictive. Department Response: The Department is maintaining the selfsufficiency standard for employed workers to be eligible for customized training, consistent with eligibility for training services under WIOA sec. 134(c)(3)(A). The Department considers wage gain an important measure that a Local WDB may consider when determining if customized training would be appropriate. Comments: A commenter recommended adding a criterion to the regulation that would allow customized training for individuals making more than self-sufficient wage if it would prevent them from being unemployed as a result of a layoff. Department Response: The Department considers incumbent worker training to be the most appropriate type of training for layoff aversion. Customized training is generally for hiring new or recent employees and not for retaining existing employees, although there may be instances where customized training is appropriate in that circumstance. In those instances customized training may be used for individuals making more than self-sufficient wages if all appropriate criteria are met. Lastly, customized employment can be used for individuals making more than selfsufficient wages as long as it leads to comparable to or higher than previous employment. Comments: A commenter cautioned that if customized training and incumbent worker training are differentiated for low-skilled workers below the self-sufficiency wage, the regulations should add language that requires local areas to fund and promote both options to employers. Department Response: Under WIOA, both incumbent worker training and customized training are permissible activities, each with specific eligibility, funding, and allowable criteria. Local WDBs have the flexibility to provide the appropriate types of training and services needed by their local area. Comments: One commenter recommended that small businesses and Local WDBs be given maximum flexibility to develop customized training programs tailored for their individual needs. This commenter stated that customized training should definitely include OJT. Expressing concern that proposed § 680.770 is overly burdensome and would erect a E:\FR\FM\19AUR6.SGM 19AUR6 56154 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 significant barrier for access to training funds, another commenter stated that, by definition, if a manufacturer is providing the training then it is indemand and valuable in the workplace. Department Response: Customized training and OJT are two distinct types of allowable training. OJT participants learn on the job, while customized training is generally designed so that participants are trained by a third party for the employer. The regulatory text at § 680.770 is consistent with WIOA sec. 134(c)(3)(A) about how individuals may qualify to receive training services. Local WDBs determine training service investments based upon an analysis of the employment needs of the employers in current and emerging in-demand industry sectors and occupations and the needs of the area’s labor force. Comments: A commenter stated that for customized training involving multiple employers, opportunities must be offered to contract directly with a training provider without triggering procurement requirements. Department Response: Grant recipients and subrecipients must adhere to the procurement standards set forth by the Uniform Guidance at 2 CFR 200.317 through 200.326. When procuring property and services under a Federal award, States must follow the same policies and procedures used for procurements from its non-Federal funds [2 CFR 200.317]. All entities that are not States must ensure that procurements are conducted in a manner that is consistent with 2 CFR 200.318 through 200.326. Comments: Several commenters addressed the distinction between OJT and customized training; including, customization, use of classroom training, and needs of the participant and employer. Department Response: WIOA defines both customized training and OJT at WIOA sec. 3(14) for customized training and sec. 3(44) for OJT and provides the differentiation, which is primarily OJT is focused on learning on the job, while customized training is generally classroom based and is often provided by a third party for the employer. There have been no changes to the regulatory text in response to this comment. Section 680.780 Who is an ‘‘incumbent worker’’ for purposes of statewide and local employment and training activities? Comments: One commenter expressed concern that the definition of ‘‘incumbent worker’’ was unclear and stated that if the definition of incumbent worker is to be refined by Governors, factors such as hours worked and skill VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 level should be considered. Another commenter stated that there was confusion under WIA about the distinctions between ‘‘employed’’ and ‘‘incumbent’’ workers. Department Response: While the Department agrees that hours worked and skill level are appropriate considerations that may be used by Governors and the Local WDBs when deciding when an employer is eligible to receive incumbent worker training under § 680.810. Any further definition may occur outside of the regulation, including by Governors and Local WDBs. Incumbent worker training is designed to meet the workforce needs of an employer or group of employers. The employer must meet the eligibility criteria established in § 680.810. The incumbent worker must meet the requirements established in § 680.780 and the incumbent worker training requirements described in § 680.790, which discuss the requirements for incumbent worker training for individuals receiving training and the standard by which incumbent worker training should be provided. An incumbent worker does not have to meet the eligibility criteria for WIOA title I adult and dislocated worker programs. An employed worker must meet title I eligibility criteria for adult and dislocated worker programs in order to receive career services, and/or must meet the wage requirements of WIOA sec. 134(c)(3)(A)(i) and § 680.210(a)(1) and (2) to receive training services while also being employed at the beginning of participation in career and training services. No changes have been made to the regulatory text in response to these comments. Comments: Many commenters addressed the issue of the appropriate amount of time an employee must have worked for an employer before being eligible for incumbent worker training. There was a range of timeframes recommended, ranging from 3 months to 1 year, and some commenters recommending no minimum timeframe. Some commenters stated that it should be when an employee is off of probationary status or once the employer-employee relationship is established. One commenter discussed that new employees are often the most in need of training. One commenter wanted Local WDBs to develop policies on employee tenure with a company. A commenter recommended that the Department utilize a standard that is based on the company’s tenure in a community as the standard not to incentivize business relocation. Lastly, a PO 00000 Frm 00084 Fmt 4701 Sfmt 4700 commenter wanted the Department to ensure there was no maximum duration of time an employee could work for a company and not be eligible for incumbent worker training. Department Response: Incumbent worker training is intended for workers with an established work history with the current employer, and who have the knowledge, skills, and abilities needed by their current employer but because of changes in the necessary skills to remain in their position, to advance in the company, or to avoid a layoff, the employees now need additional training. Thus, the Department has decided to retain the 6-month requirement for incumbent workers. The Department does not consider incumbent worker training to be part of the occupational training for the position in which the new employee was hired. This type of training is most appropriate for an OJT or customized training. However, given that some incumbent worker training may be provided for a cohort of employees, the Department recognizes the concern about excluding certain members of a cohort based on this criterion and has added language into the regulatory text in § 680.780 to create an exception for cohort training, stating that a majority of the cohort must meet the 6-month requirement. Comments: Many commenters recommended adding specific language to § 680.780 recognizing the need for incumbent training services to assist long-term workers who were hired when skill level requirements were much lower. Department Response: While the Department has established a 6-month rule for the minimum duration of employment for incumbent worker training eligibility, it has not set a maximum duration of employment. Long-term workers who are looking to gain new skills may benefit from incumbent worker training. Comments: The Department received a number of comments on the requirement incumbent worker training ‘‘must satisfy the requirements in WIOA sec. 134(d)(4) and § 680.790 and increase the competitiveness of the employee or employer.’’ Because this sentence is more properly included in § 680.790, which discusses what incumbent worker training is, the Department removed the text from § 680.780 and instead included it in § 680.790. The comments received about this text are discussed below, in the discussion of § 680.790. The Department made one final clarifying change at the end of § 680.780. The NPRM stated that an E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 incumbent worker does not necessarily have to meet the eligibility requirements for career and training services for adults and dislocated workers under WIOA. The Department has added language to make clear that if the worker is receiving other services in addition to incumbent worker training, the individual must meet the eligibility requirements like all other adult or dislocated worker participants. Section 680.790 What is incumbent worker training? Comments: Two commenters urged the Department to define how incumbent worker training should ‘‘increase the competitiveness of the employee or employer’’ and recommended that such training be designed to retain a skilled workforce or avert the need to lay off employees. Another commenter urged the Department to define ‘‘improving the skills and competitiveness of the participant’’ and ‘‘increasing the competiveness of the employer’’ and to stipulate how competitiveness will be initially assessed and continuously measured. One commenter recommended that ‘‘increasing the competitiveness of the employee or employer’’ be defined in State policy to allow for flexibility or, alternatively, be defined as training that retains and advances a skilled workforce. Department Response: The Department agrees that the phrase ‘‘increase the competitiveness of the employee or employer’’ may be defined under State and Local WDB policy, as consistent with the discussion below, and with any future guidance provided by the Department. No change is made to the regulatory text. Comments: A commenter stated that incumbent worker training should be ‘‘employer driven’’ and ‘‘competitiveness of the participant’’ should be a factor only for determining if incumbent worker training is appropriate. Another commenter recommended that States be allowed to develop incumbent worker training policies while the Department provides technical assistance and guidance. This commenter urged against relying on layoff aversion and recommended using available labor market data and sector strategies to target occupations for training. Some commenters urged the Department to omit layoff aversion as a criterion for incumbent worker training, asserting that it would have a chilling effect and would not be offered during healthy economic times. One commenter asserted that proposed VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 § 680.790 is too restrictive in focusing only on averting layoffs or retaining employment. This commenter recommended that the Department add specific language allowing incumbent training ‘‘to promote the competitiveness of both the participant and the employer’’ and ‘‘to ensure an employee’s skill set is advanced.’’ One commenter stated that incumbent worker training should be used for individuals who are at a self-sufficient wage and require training that helps the employer stay competitive and retain a skilled workforce or avert a layoff. Department Response: WIOA sec. 134(d)(4)(B) states that incumbent worker training is to assist workers in obtaining the skills necessary to retain employment or avert layoffs. The Department considers these to be two distinct, although not mutually exclusive, types of requirements for the training, and the regulatory text retains the requirements at § 680.790. Further definition of these terms may be articulated in State and local policies. There have been no changes to the regulatory text in response to this comment. Comments: Some commenters recommended using earnings growth in the 6 months following incumbent worker training to measure increased competitiveness of the employee. One commenter recommended measuring increased competitiveness by higher wages 1 year after training, portability, layoff aversion, and progress toward self-sufficiency. Another commenter recommended measuring ‘‘competiveness of the employee’’ by documented wage increases; access to other documented benefits, bonuses, or commissions; obtaining industry-recognized certificates or credentials; or ascension of the worker into an advanced job classification or pay grade. This commenter stated that identifying opportunities for increased competitiveness of employers might require access to confidential business information. One commenter recommended that the Department require the following to ‘‘increase the competitiveness of the employee and employer’’: (1) Training takes place on company time and trainees are compensated at no less than their normal rate of pay while attending training; (2) training is short-term and ideally 6 months or less; (3) training focuses on occupational skills; and (4) businesses must demonstrate that the costs of training are reasonable. Department Response: Section 680.810 outlines the factors that a Local WDB must consider when determining PO 00000 Frm 00085 Fmt 4701 Sfmt 4700 56155 eligibility for an employer to receive incumbent worker funds and provides flexibility to the Local WDB to establish other factors in making such a determination. The Department notes that some ideas commenters provided about how to provide incumbent worker training have merit, and the Department will include them in guidance and technical assistance. No changes have been made to the regulatory text in response to these comments. Comments: One commenter recommended the following metrics for evaluating the effectiveness of incumbent worker training: Revenue increase, contracts awarded, sales data, geographic expansion, wage increase, increased education attainment, and increased credential attainment. Another commenter stated that incumbent worker training arrangement should be flexible, with success measured by metrics such as earnings gains, new skills and competencies gained, new certifications received and/ or number of employees migrating into new employment, especially in the case of layoff aversion. One commenter recommended that an employer should demonstrate where incumbent worker training would increase revenue and lead to an increase in wage level within 90 days of training completion. Department Response: With respect to eligibility for incumbent worker training, many of these metrics are what the Department considers to be possible factors for a State or local area in determining incumbent worker training eligibility for training providers, employers, and employees, as included under §§ 680.780 and 680.810. The Department may issue further guidance on this subject. The Department clarifies that, because of the unique nature of the Incumbent Worker Training Program, where the Local WDB only evaluates the employers for eligibility consistent with § 680.810, individuals receiving Incumbent Worker Training are not subject to the eligibility criteria that apply to participants in the adult or dislocated worker programs, unless they are also receiving other services under those programs. Therefore, individuals who only receive incumbent worker training and no other WIOA title I service do not fall within the definition of ‘‘participant’’ in 20 CFR 677.150(a) (see Joint WIOA Final Rule). As such, they are not included in calculations for the State Primary Indicators of Performance. The Department is making a change to be consistent with this in § 680.810(a) and (b) by removing the word ‘‘participant’’ and inserting ‘‘individual’’ to reflect that incumbent E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56156 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations worker training eligibility is decided at the employer level. States and Local WDBs are, however, required to report on individuals who receive incumbent worker training, including employment status after training, wages after training, and credential attainment, the details of which are provided through the Department’s ICR process and subsequent guidance. As part of future collections and guidance, the Department may seek to collect additional employer data, such as employer size, industry, and other information that may be used to evaluate the effectiveness of Incumbent Worker Training programs for both the employer and employee. Regarding the development and provision of Incumbent Worker Training by States and local areas, the Department encourages States and local areas to cultivate opportunities and develop policies that can appropriately support employers in their efforts to develop a more competitive workforce or avert potential layoffs and that provide incumbent workers with opportunities for advancement and wage gains within their company. Incumbent Worker Training policies must be aligned with State and Local Plans, as well as with sector strategy approaches for in-demand occupations. In addition to the required performance indicators, WIOA sec. 122(h)(2) says that the Governor may require and use performance information relating to incumbent worker training and other work-based training to determine whether providers meet such performance criteria as required by the Governor. More detailed information on performance definitions and metrics are in 20 CFR part 677 (see Joint WIOA Final Rule). Comments: Several commenters said that it is unrealistic to expect incumbent worker training to result in the employee being promoted; instead, local areas need flexibility on timing of training and hiring new workers that coincides with the needs of business. In response to the NPRM preamble statement that ideal incumbent worker training would result in promotion and hiring to backfill the incumbent worker’s position, two commenters asked if it is realistic to expect a company, through a round of training to retain workers, to also be able to add new employees. One of these commenters stated that this is an ideal structure that would be better served under customized training for employed workers. However, one commenter agreed with the Department’s goal of using incumbent worker training to VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 ‘‘advance-and-backfill’’ to benefit two employees. Department Response: The Department clarifies that the ideal incumbent worker training strategy of upskilling and backfilling employee positions is meant as an illustrative example of an ideal incumbent worker opportunity and not as the only type of successful incumbent worker training strategy. In a situation where incumbent worker training is needed to avert a layoff, the alternative of upskilling and backfilling positions would be unlikely. The Department is committed to ensuring that the regulations maintain flexibility for States and local areas to develop incumbent worker training strategies that best fit the needs of their State and community. Comments: One commenter asked if the definition of incumbent worker training would allow for contracted training through business and industry, adult education, etc. Department Response: The Department declines to specify all of the incumbent worker training contracting options in regulatory text. However, to secure incumbent worker training, grant recipients and subrecipients must adhere to the procurement standards set forth by the Uniform Guidance at 2 CFR 200.317 through 200.26. When procuring property and services under a Federal award, States must follow the same policies and procedures it uses for procurements from its non-Federal funds [2 CFR 200.317]. All entities that are not States must ensure that procurements are conducted in a manner that is consistent with 2 CFR 200.318 through 200.326. Comments: A commenter recommended that incumbent worker training be structured to incorporate the biggest return on investment for Local WDBs, workers, and businesses by using economies of scale to upskill many workers at a time. Department Response: The Department agrees with this concern and has added language to § 680.780 to clarify that cohort training is an acceptable use of incumbent worker training funds. Comments: A commenter stated that apprenticeship should be an approved expense for incumbent worker training if it would lead to a higher paid, higher skilled job. Department Response: The Department considers apprenticeship training to be an allowable incumbent worker training expense, provided the requirements for incumbent worker training in §§ 680.780 and 680.790 are met. PO 00000 Frm 00086 Fmt 4701 Sfmt 4700 Comments: A commenter recommended that cost reimbursement be limited to: Costs of outside vendors or in-house trainers; costs of textbooks and training materials; distance learning fees; and credentialing exam fees. This commenter stated that trainees should be full-time or part-time employees with a permanent, year-round attachment to the business, so that temporary employees, seasonal employees, public employees, and volunteers would not be eligible. Department Response: Allowable costs of incumbent worker training are consistent with the allowable costs rules for all types of training. The allowability regulations are explained in Departmental guidance. To be eligible, the incumbent worker must be employed, meet the Fair Labor Standards Act requirements for an employer-employee relationship, and have an established employment history for more than 6 months. The Department may utilize guidance to clarify specific types of employment relationships that are eligible for employers to receive incumbent worker training funds. Section 680.800 What funds may be used for incumbent worker training? Comments: A commenter asked the Department to clarify if the 20 percent in proposed § 680.800(a) refers to total dollars or program dollars and does not include administrative funds. Another commenter recommended that the regulations clearly indicate the difference between employed workers and incumbent workers and that the 20 percent limitation on training for incumbent workers would not apply to employed workers. Department Response: WIOA sec. 134(d)(4) allows Local WDBs to set aside up to 20 percent of their total allocation of title I adult and dislocated worker funds on incumbent worker training, this includes administrative funds. The Department agrees with the commenter about the 20 percent restriction only applying to incumbent workers and not employed workers. Comments: A commenter asked for clarification to distinguish customized from incumbent worker training, and commented that §§ 680.800, 680.810, and 680.820 seem to apply to customized training for employed workers rather than incumbent worker training. Department Response: Customized training, as defined in WIOA sec. 3(14), is used to train individuals who are not employed with the participating employer at the start of participation. Incumbent worker training, as defined E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 in WIOA sec. 134(d)(4), is used to enhance the competitiveness of the employee/employer and/or avert a layoff. Incumbent workers are employed with the participating company when the training begins consistent with § 680.780. The Department will provide further clarification through guidance and technical assistance. Comments: A commenter stated that it may be difficult, if not impossible, to determine accurately the amount of administrative funds that were spent on incumbent working training and transitional jobs. Department Response: WIOA allows Local WDBs to set aside up to 10 percent of their adult and dislocated worker funds on Pay-for-Performance contract strategies (see WIOA sec. 134(d)(1)(A)(iii)), Up to 20 percent on incumbent worker training (see WIOA sec. 134(d)(4)), and up to 10 percent on transitional jobs (see WIOA sec. 134(d)(5)). These provisions are discussed in § 680.140(b)(1)(v), (b)(4), and (b)(8). Administrative activities necessary to initiate or procure a Payfor-Performance contract strategies, incumbent worker training, and transitional jobs must be consistent with § 683.215, which also discusses how to determine whether an activity is administrative or programmatic for purposes of WIOA. If the activity would be considered programmatic under § 683.215, then the cost would be subject to the caps discussed above. If the activity would be considered administrative under § 683.215, it may be paid for out of the Local WDBs’ usual administrative funds, and it is not subject to the caps. Therefore, the Local WDB would not need to specifically account how much of the administrative funds are spent on these particular programs. Section 680.810 What criteria must be taken into account for an employer to be eligible to receive local incumbent worker funds? Comments: A commenter asserted that proposed § 680.810 would impose a burden on States to write a policy for use of funds for incumbent worker training and asked what is the requirement for performance. Department Response: The Department acknowledges that State and local policy must be developed to govern the use of funds for incumbent worker training; however, since this activity was required to properly perform incumbent worker training under WIA, it is not an increase in burden. Incumbent worker training is a permissible activity; if a State or Local WDB decide to utilize incumbent VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 worker training as a workforce strategy for local businesses then they need to have clear State and local policies on its use. The Department declines to add specific language to the regulatory text addressing the concern about performance requirements. Specific definitions of metrics that will be used to evaluate performance are defined through the WIOA Joint Performance ICR. More detailed information on performance definitions and metrics are at 20 CFR part 677 (see Joint WIOA Final Rule). The Department plans to issue guidance on incumbent worker training, including how it is impacted by performance. The Department notes, as explained above, that it made a clarifying change to § 680.810 to replace the word ‘‘participant’’ with ‘‘individual’’ to reflect that incumbent worker training eligibility is decided at the employer level; individual workers participating in incumbent worker training are not considered ‘‘participants’’ under 20 CFR 677.150(a), unless they receive other adult or dislocated worker services (see Joint WIOA Final Rule). Comments: Two commenters requested that the Department add a paragraph (d) directing that incumbent worker training contracts may not be entered into with employers that have unpaid unemployment insurance and workers compensation taxes. Department Response: The Department declines to add specific language to the regulatory text addressing this concern. The Department considers the suggested factor to be an allowable consideration under § 680.810(c). 56157 funds, excluding the Federal contribution. Department Response: Under WIOA sec. 134(d)(4) employers participating in incumbent worker training are responsible for paying the non-Federal share of the cost of providing training to their incumbent workers. Employers have flexibility in how they arrange to pay for these costs; however, the payments must not come out of any other Federal funds. Section 680.830 May funds provided to employers for work-based training be used to assist, promote, or deter union organizing? Comments: The Department received comments in support of § 680.850 (renumbered as § 680.830) as proposed, regarding the relationship between work-based training funds and union organizing. Section 680.820 Are there cost sharing requirements for local area incumbent worker training? Section 680.840 May funds provided to employers for work-based training and other work experiences be used to fill job openings as a result of a labor dispute? Comments: A commenter suggested that for transitional jobs there should be protections around the displacement of workers. Department Response: The Department has added a new section to the regulatory text at § 680.840 entitled ‘‘May funds provided to employers for work-based training and other work experiences be used to fill job openings as a result of a labor dispute?’’ This section clarifies that funds for workbased training may not be used for this purpose. It is consistent with WIOA and with the Wagner-Peyser Act regulatory text in § 652.9 to remain neutral in matters relating to union organizing and activities that would promote or deter organization. Comments: A commenter suggested that the required non-Federal share for incumbent training be waived for companies that are close to a layoff. Department Response: The nonFederal share for incumbent worker training is required under WIOA sec. 134(d)(4). The Department expects Local WDBs to adhere to the requirements for non-Federal share contributions as set forth in WIOA. Thus, the Department declines to discuss waivers of this provision and makes no change to the regulatory text. Comments: A commenter asked if § 680.820 is meant to ensure that no other funding source is contributing to the cost of the incumbent worker training or that the employer is paying 100 percent of the cost from its own 8. Subpart G—Supportive Services This section defines the scope and purpose of supportive services and the requirements governing their disbursement. A key principle in WIOA is to provide local areas with the authority to make policy and administrative decisions and the flexibility to tailor the public workforce system to the needs of the local community. To ensure maximum flexibility, the regulations provide local areas the discretion to provide the supportive services they deem appropriate subject to the limited conditions prescribed by WIOA. Local WDBs must develop policies and procedures to ensure coordination with other entities to ensure non-duplication of resources and services and to PO 00000 Frm 00087 Fmt 4701 Sfmt 4700 E:\FR\FM\19AUR6.SGM 19AUR6 56158 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 establish limits on the amount and duration of such services. Local WDBs are encouraged to develop policies and procedures that ensure that supportive services are WIOA-funded only when these services are not available through other agencies and that the services are necessary for the individual to participate in title I activities. Supportive services may be made available to anyone participating in WIOA title I activities. A commenter expressed support for the proposed regulations in subpart G. Section 680.900 What are supportive services for adults and dislocated workers? Comments: A commenter recommended that § 680.900 include an exhaustive list of available support services consistent with the approach in the section on support services for youth. Another commenter strongly supported the inclusion of legal aid services in the Department’s list of examples of supportive services, noting that legal aid can uniquely address certain barriers to employment, including access to driver’s licenses, expunging criminal records, and resolving issues with debt, credit, and housing. One commenter recommended that supportive services involving WIOA funding be available to cover all steps/aspects of the licensing process (e.g., testing and transcripts). Because access to many supportive services is an impediment to individuals with disabilities in entering or re-entering the workforce, one commenter recommended specific reference to this population in subpart G. Department Response: The Department agrees with the commenter that supportive services for adults and dislocated workers under WIOA title I programs be aligned with the supportive services available under the title I youth program. The Department has modified the regulatory text to include a list of supportive services that may be made available at § 680.900(a) through (l). This list is not intended to be exhaustive, but rather to illustrate the types of supportive services that may be made available. The changes to the regulatory text also include a couple of suggestions that commenters provided regarding the addition of providing assistance with books, fees, school supplies, and other necessary items for students enrolled in postsecondary education classes. The Department concurs that legal aid can uniquely address certain barriers to employment, as enumerated by the commenter. Therefore, the Department has included VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 legal aid services under § 680.900 and made a corresponding change to the list of supportive services allowable in the youth program in § 681.570. Additionally, the Department added that payments and fees for employment and training-related applications, test, and certifications be covered, because these costs may be a barrier to entry for individuals looking for unsubsidized employment. The Department also has added ‘‘Reasonable accommodations for individuals with disabilities’’ as § 680.900(g). Comments: Citing the requirement that participants first obtain supportive services through other programs before relying on WIOA title I funding, a commenter stated that it is vital that the programs covered by WIOA work closely together to ensure that job seekers receive all the benefits to which they are entitled under all aspects of the law. Department Response: The Department agrees with this comment and encourages that programs work closely together in order to align programs better and leverage resources as WIOA is intended to do to serve job seekers better. management include ongoing, extended services as participants proceed through training and employment. Department Response: Supportive services under WIOA sec. 134(d)(2) are provided to allow an individual to participate in career and training services. The commenter was interested in extending supportive services after the period of exit from the WIOA title I adult and dislocated worker programs; however, this is outside of the authority of WIOA. Supportive services are provided to enable participation in career and training services. No changes have been made to the regulatory text in response to the comment. Comments: Two commenters raised a similar concern about the authority related to the one-stop center determining what supportive services may be provided if the one-stop center is not the WIOA service provider in a local area. Department Response: To guide supportive service determinations, the Local WDB ultimately is responsible for developing a supportive service policy for the area, including eligibility, types of supportive services to provide, and the methods of service delivery. Section 680.910 When may supportive services be provided to participants? Comments: The Department received a comment regarding the importance of coordinating across programs allowed in § 680.140, because § 680.910 states that supportive services must be provided through non-WIOA programs first. The commenter particularly emphasized the need for coordinating services with vocational rehabilitation programs so individuals with disabilities receive the supportive services they need. Department Response: The Department agrees with the commenter that coordinating services across the WIOA core programs, as well as noncore programs is vital to help individuals with barriers to employment, including individuals with disabilities, obtain the support they need to successfully participate in and complete WIOA career and training services and ultimately, obtain unsubsidized employment. Local WDBs are responsible for developing supportive service policies, and the Department considers how these services are coordinated to be a key part of those policies. Section 680.930 What are needsrelated payments? Comments: A few commenters provided input on needs-related payments. One commenter suggested that the Department consider whether the underemployed should be considered for needs-related payments. One commenter stated that funding levels are not adequate to support needs-related payments, which the commenter stated will result in these services being provided on a very limited basis. Some commenter focused on funding levels for needs-related payments. Department Response: To receive needs-related payments, individuals must be unemployed and must not qualify for (or have ceased to quality for) unemployment compensation. While underemployed individuals are not eligible for needs-related payments under WIOA sec. 134(d)(3), there is no prohibition on providing supportive services to the underemployed, other than needs-related payments. Additionally, WIOA sec. 134(d)(1)(B) allows for work support activities for low-wage workers. The Department may provide additional guidance on how to ensure quality services to individuals who are underemployed. No changes have been made to the regulatory text in response to the comments. The Department notes that needs-related payment levels are permissible and Section 680.920 Are there limits on the amount or duration of funds for supportive services? Comments: A commenter recommended that the definition of supportive services and extended case PO 00000 Frm 00088 Fmt 4701 Sfmt 4700 E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations thus, are left to the discretion of the Local WDB. Section 680.970 How is the level of needs-related payments determined? Comments: Two commenters recommended that States be allowed to determine the amount for needs-related payments for State funded projects. Department Response: The Department agrees with the suggestion that States be allowed to make determinations for needs-related payments for State funded projects and has added language to the regulatory text at § 680.970(a) to reflect this change. No other changes have been made to the regulatory text in response to the comments. Other Comments on Adult and Dislocated Worker Activities Under WIOA Title I mstockstill on DSK3G9T082PROD with RULES6 Limited English Proficiency Individuals Comments: A commenter encouraged the Department to provide additional guidance, whether through regulation or other types of policy directives, to States and localities regarding the alignment of WIOA title I and title II services to improve services to immigrant and limited English proficiency (LEP) individuals. This commenter recommended that the guidance acknowledge and allow for differences in eligibility criteria across the titles, encouraging States and localities to align services without precluding participation by individuals who may be eligible for services under one title but not another. Department Response: The Department agrees with the commenter on the importance of aligning services among titles to ensure that individuals receive the services they need. The Department will provide guidance and technical assistance on this issue. Industry or Sector Partnerships Comments: A few commenters recommended the establishment of a new subpart H covering industry or sector partnerships. These commenters discussed at length the topics they believed should be addressed in this proposed new subpart, including, the purpose of industry and sector partnerships, permissible partners, who may lead partnerships, evaluating effective partnerships, and ensuring minimum standards. Department Response: The Department recognizes the importance of the industry and sector partnerships as an important strategy for economic and workforce development. Due to the constantly changing nature of business and industry, these partnership VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 strategies continue to be most appropriately addressed through guidance and technical assistance issued by the Department. E. Part 681—Youth Activities Under Title I of the Workforce Innovation and Opportunity Act 1. Introduction WIOA affirms the Department’s commitment to providing high quality services for youth and young adults beginning with career exploration and guidance; continuing support for educational attainment, opportunities for skills training in in-demand industries and occupations; and culminating with a good job along a career pathway or enrollment in postsecondary education. All of the Department’s youth-serving programs continue to promote evidence-based strategies that also meet the highest levels of performance, accountability, and quality in preparing young people for the workforce. WIOA maintains WIA’s focus on outof-school youth (OSY) in Job Corps and YouthBuild, while greatly increasing the focus on OSY in the WIOA youth formula-funded program. The shift in policy to focus on those youth most in need is based on the current state of youth employment. In 2015, an estimated 5.5 million or 13.8 percent of 16 to 24 year olds in our country were not employed or in school. WIOA youth programs provide a continuum of services to help these young people acquire skills and pursue careers. The Department, working with its Department of Education and Health and Human Services partners, plan to provide intensive technical assistance around meeting the needs of this population. WIOA calls for customer-focused services based on the needs of the individual participant. This includes the creation of career pathways for youth in all title I youth programs, including a connection to career pathways as part of a youth’s individual service strategy (ISS) in the youth formula-funded program. The ISS must directly link to one or more of the performance indicators. WIOA also calls for participants to be intimately involved in the design and implementation of services so the youth voice is represented and their needs are being met. This integrated vision also applies to the public workforce system’s other shared customer—employers. Employers have the opportunity to build a pipeline of skilled workers: They are critical partners that provide PO 00000 Frm 00089 Fmt 4701 Sfmt 4700 56159 meaningful growth opportunities for young people through work experiences that give them the opportunity to learn and apply skills in real-world settings and ultimately jobs. WIOA includes a number of significant changes for the youth formula-funded program. WIOA shifts to focus resources primarily on OSY, increasing the minimum percentage of funds required to be spent on OSY from 30 to 75 percent. The Department recognized the transition to serve more OSY would take time to implement, and, as explained in WIOA operating guidance TEGL No. 23–14 (‘‘Workforce Innovation and Opportunity Act (WIOA) Youth Program Transition’’), found at http://wdr.doleta.gov/directives/All_ WIOA_Related_Advisories.cfm, the Department has provided States and local areas a year to show progress towards meeting the 75 percent minimum OSY expenditure rate requirement. In addition, WIOA increases the focus on providing youth with work experience opportunities, with a requirement that local areas must spend a minimum of 20 percent of local area funds on work experience. Under WIOA, work experience becomes the most critical of the program elements. WIOA also introduces 5 new program elements: Financial literacy; entrepreneurial skills training; services that provide labor market and employment information about indemand industry sectors or occupations available in the local areas; activities that help youth prepare for and transition to postsecondary education and training; and education offered concurrently with and in the same context as workforce preparation activities and training for a specific occupation or occupational cluster. During the 60-day comment period for the NPRM, the Department received hundreds of comments that expressed general support for the proposed youth program regulations as well as some constructive feedback that made the Final Rule clearer. The most significant change between the NPRM and the Final Rule occurs in § 681.400. This section clarifies that youth activities may be conducted by the local grant recipient and that only when the Local WDB chooses to award grants or contracts to youth service providers, such awards must be made using a competitive procurement process in accordance with WIOA sec. 123. While this revision represents a significant change in that it provides Local WBDs with flexibility in determining which WIOA youth services to procure, the Department expects Local WDBs to continue to E:\FR\FM\19AUR6.SGM 19AUR6 56160 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations contract with youth service providers to provide the program elements that youth service providers are best positioned to offer participants based on prior success in serving youth. The analyses that follows provides the Department’s response to public comments received on the proposed part 681 regulations. If a section is not addressed in the discussion below, it is because the public comments submitted in response to the NPRM did not substantively address that specific section and no changes have been made to the regulatory text. Further, the Department received a number of comments on this part that were outside the scope of the regulation and the Department offers no response. Lastly, the Department has made a number of non-substantive changes to correct grammatical and typographical errors to improve the readability and conform the document stylistically that are not discussed in the analysis below. 2. Subpart A—Standing Youth Committees mstockstill on DSK3G9T082PROD with RULES6 Section 681.100 What is a standing youth committee? This section describes a standing youth committee. WIOA does not require Local WDBs to establish a youth council; however, the Local WDBs are encouraged to establish a standing youth committee to provide information and to assist with planning, operational, and other issues relating to the provision of services to youth (WIOA sec. 107(b)(4)(A)(ii)). The Department received many comments on standing youth committees and in response to the comments made a small addition to the regulation text as explained here. Comments: One commenter expressed support for all of the proposed regulations regarding standing youth committees. Several commenters also supported the proposed language that would allow Local WBDs to maintain existing effective youth councils as standing youth committees. Several commenters recommended that the proposed language allow Local WDBs the flexibility to maintain existing effective youth councils, have the Local WDB secure the role of the standing youth committee, or create a new standing youth committee. Department Response: The Department notes the comments received about standing youth committees. The language in §§ 681.100 and 681.110 provides Local WDBs with the flexibility to maintain existing effective youth councils; have the Local WDB take on the role of the standing VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 youth committee; or create a new standing youth committee. Comments: One commenter expressed disappointment with the removal of mandated youth councils and stated that the Department should strongly encourage Local WDBs to establish standing youth committees. Department Response: The Department recognizes the challenges some local areas experienced in finding and retaining the required youth council members. In the final regulations, the Department accepted the suggestion to ‘‘encourage’’ Local WDBs to establish standing youth committees rather than the proposed language, ‘‘a Local WDB may choose to establish a standing committee.’’ This change recognizes that Local WDB have a choice as to whether or not they have a standing youth committee while at the same time reflects the Department’s support of such entities. Comments: A couple of respondents stated that because the proposed regulations did not mandate the implementation of a standing youth committee or any other youth organization, a Local Workforce Development Board (WDB) should be able to assemble a group to oversee youth activities without having to formally create a standing youth committee that would be subject to regulations. Department Response: As discussed above, the Department recognizes the challenge of bringing together required partners and understands the local area’s interest in taking advantage of the flexibility under WIOA to form an ad hoc group that would informally advise the Local WDB on youth matters. The Department supports Local WDBs seeking outside youth expertise to inform the programs. If such groups do not have the required members as outlined in § 681.110, however, they may not call themselves standing youth committees. Comments: Second, a commenter raised the concern over how a Local WDB could efficiently oversee youth activities without the expertise of a standing youth committee with prior experience in handling the youth activities. This commenter requested additional clarification as to how the Local WDB would provide efficient oversight. The commenter further asked if the Department would provide recommended models in order to ensure that they were implementing youth activities effectively and if the Department will provide recommended approaches in future technical assistance activities. PO 00000 Frm 00090 Fmt 4701 Sfmt 4700 Department Response: If a Local WDB chooses not to delegate this function to a standing youth committee, it is still responsible under WIOA sec. 107(d)(8)(A)(i) for conducting oversight in partnership with the CEO for the local area of youth workforce investment activities under WIOA sec. 129(c). The Department notes the commenter’s concern and recognizes that without youth experts it may be hard for a local area to oversee its youth program properly. The Department will address this commenter’s concerns through technical assistance. Section 681.110 Who is included on a standing youth committee? This section describes the members of a standing youth committee. Comments: Two commenters recommended that Local WDBs be given the maximum flexibility possible when determining membership requirements for their standing youth committee, stating that the Local WDBs would have the best understanding of their local area’s needs. One of these commenters reasoned that there should be no rigid membership requirements for standing youth committees because the committees would be optional under the proposed language. Similarly, another commenter remarked that Local WDBs should be able to define the appropriate level of experience needed for members of the standing youth committee. This commenter stated that Local WDBs also should have the ability to establish the standards for what a community-based organization’s (CBO’s) ‘‘demonstrated record of success’’ must be. One respondent suggested that the Department provide more specific guidance on committee membership requirements. This commenter further recommended that the committee should include individuals from CBOs who serve youth with disabilities, as well as individuals from the local education system. Department Response: The Department concurs with the commenters that said the Local WDBs need the maximum flexibility possible when establishing membership requirements for their standing youth committee. The NPRM and Final Rule reflect the WIOA requirements found in sec. 107(b)(4)(A)(ii). The Department does not define a CBO’s demonstrated record of success in the proposed regulation or Final Rule. The Department did accept the suggestion to add disability organizations and local education entities to the list of possible standing youth committee members. E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations Section 681.120 What does a standing youth committee do? This section describes the duties of a standing youth committee. Commenters expressed support for the proposed roles of standing youth committees. Comments: Several commenters suggested that the Department include a list of suggested tasks in the final regulation that a standing youth committee could be charged with. These commenters recommended that the Department reemphasize that if the Local WDB chooses not to establish a youth council or standing youth committee, oversight of the suggested activities listed in the regulations will fall under the jurisdiction of the Local WDB, which will then be responsible for overseeing the activities and providing opportunity for stakeholder comment. These commenters also suggested that the Department should require that Local WDBs and/or their standing youth committees state how they will: • Facilitate co-enrollment of individuals across core programs, especially for those individuals between the ages of 18 and 24 who could be served under WIOA titles I, II, and IV. • Implement specific provisions related to career pathways requirements. • Adapt the procurement and request for proposal processes, in order to encourage longer-term and more thorough services for OSY. • Align Temporary Assistance for Needy Families (TANF) with WIOA youth programs, so that TANF recipients who are under 25 can benefit from OSY programs when appropriate. Department Response: The Department concluded that standing youth committees need as much flexibility as possible to reflect the needs of their local area. The Department will provide technical assistance to local areas and plans to incorporate many of the commenters’ ideas. No change to the regulatory text was made in response to these comments. mstockstill on DSK3G9T082PROD with RULES6 3. Subpart B—Eligibility for Youth Services Section 681.210 Who is an ‘‘out-ofschool youth’’? This section describes how one meets the eligibility for an OSY for purposes of the title I WIOA youth program. OSY youth must not attend any school, be between the ages of 16 and 24 at time of enrollment, and meet one or more of a list of nine criteria. The section clarifies that age is based on time of enrollment and as long as the individual meets the age eligibility at time of VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 enrollment he or she can continue to receive WIOA youth services beyond the age of 24. Low income is not a requirement to meet eligibility for most categories of OSY under WIOA. Low income is, however, a part of the criteria for youth who need additional assistance to enter or complete an educational program or to secure or hold employment. Also, WIOA has made youth with a disability a separate eligibility criterion. Comments: A few commenters expressed their support of the expansion of the age requirements from 21 to 24. One commenter stated that this increase would be a positive change as it continues to see greater numbers of older young adults who are seeking employment and training services. Another commenter expressed support of the proposed regulations’ focus on the needs of OSY. The Department recognizes that many youth service providers moved to serving more OSY under WIA. In Program Years 2011 and 2012, the national OSY expenditure rate was 57 percent. On the other hand, a number of commenters noted that the proposed regulations mark a substantial change in the delivery of services to youth, specifically shifting service priorities from ISY to OSY. These commenters stated that because of this significant change, Governors and Local WDBs should have jurisdiction over defining the eligibility requirements for OSY. Department Response: The Department acknowledges that WIOA’s focus on OSY represents a significant change in the focus of the youth formula program. The Department also acknowledges the important role State and local leaders play in implementing the law. Nonetheless, WIOA clearly defines the eligibility requirements for OSY. No change was made in the regulatory text in response to these comments. Comments: Several commenters proposed additions to the OSY definition. A few commenters offered that any individual who does not pass the high school exit exam should automatically be considered an OSY as well. Department Response: The impact of high school exit exams on individual youth represents only one reason why the Department has concluded that under WIOA, local areas will need to work closer than ever with the local education providers to ensure the success of their participants. In-school or out-of-school eligibility status is determined at the time of enrollment. Therefore, a student enrolled in high PO 00000 Frm 00091 Fmt 4701 Sfmt 4700 56161 school when taking high school exit exam, would count as an ISY. Comments: Another commenter recommended that the definition of OSY be broadened to include ‘‘youth ages 16–24 who may be enrolled in school, but in fact are spending less than 10 hours per week at that school or adult education center,’’ noting that often students are technically enrolled in school but in reality hardly ever attend. Similarly, a commenter expressed concern that ‘‘if compulsory school attendance is defined by State law as 16, what happens to 14 and 15 year olds who are out-of-school?’’ Department Response: The Department understands that many students attend high school irregularly and are at great risk of becoming disconnected. In the cases where compulsory-age students do not attend school on a regular basis, under WIOA they count as ISY. WIOA clearly defines the eligibility requirements for OSY. No changes were made to the regulatory text in response to these comments. Measuring Attendance by School Year Quarters WIOA includes a new criterion for determining OSY eligibility: A youth who is within the age of compulsory school attendance, but has not attended school for at least the most recent school year calendar quarter. The school year quarter is based on how a local school district defines its school year quarters. Comments: One commenter asked the Department to include an alternative definition for OSY requirements for schools that do not utilize school year quarters. This commenter suggested that the Department could use calendar year quarters as an alternative benchmark. Another commenter expressed a concern over the proposed language’s reliance on school year quarters as a benchmark to measure OSY eligibility because it would require local areas to have an understanding of the local school district’s school year quarters. Department Response: In Final Rule text, the Department added language clarifying that when schools do not use a quarter system, schools must use calendar year quarters. The Department encourages local areas to know their local school system’s leaders as a strategy to ensuring that all youth know about the public workforce system and maximizing the limited resources available in an area. Conversations around school year calendars may serve as an entry point for future collaboration. Both commenters requested further clarification from the Department as to the measurement of length of attendance by school year E:\FR\FM\19AUR6.SGM 19AUR6 56162 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations quarters. The Department will issue additional guidance on school year quarters. mstockstill on DSK3G9T082PROD with RULES6 Definition of Attending Comments: A number of commenters recommended that the Department define what ‘‘attending’’ means when determining the eligibility of an individual. These commenters asked the Department for clarification as to whether taking one course at a community college would count as ‘‘attending’’ and thus, render an individual ineligible for OSY services. These commenters also asked the Department whether or not being enrolled in a non-credit granting course or continuing education class would be classified as attending school, making those individuals ineligible for OSY services. Another commenter requested clarification around the definition of OSY and a concern that youth with disabilities who are involved in remedial, non-credit coursework would be excluded from title I youth programs under WIOA. The commenter noted that non-credit education and remedial coursework often provide a vital opportunity to strengthen basic skills needed in order to enroll in credentialing programs and to maximize independence. The commenter suggested the Department include language creating an exception to ensure that students with disabilities in need of remedial coursework will remain eligible for title I youth programs under WIOA. Another commenter noted that the OSY definition language includes ‘‘an individual that is not attending any school as defined under State law’’ and it creates inconsistency in the application of State regulations resulting in a different treatment of youth from one State to the next. The commenter proposed clarification to the regulation to include attendance at an alternative high school for eligibility in the OSY component, for all States. Department Response: The Department will provide further guidance around ‘‘attending’’ and noncredit granting courses, continuing education classes, and one community college course. General Education Development (GED) & Dropout Prevention/Recovery Program Eligibility Comments: A few commenters expressed support for the proposed language that would classify individuals enrolled in a GED class as OSY. These commenters further recommended that youth in GED programs be classified as VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 ‘‘high school drop-outs’’ in the proposed regulations so that they would not be subjected to compliance with the lowincome eligibility requirements, and suggested that because they did not complete their high school education, it would be illogical to define them as ISY. Two commenters recommended that individuals enrolled in GED or high school equivalency programs be considered OSY. Two other commenters suggested that individuals enrolled in a dropout reengagement program also be classified as OSY under the proposed regulations. Specifically, a commenter recommended adding the following language, ‘‘. . . for purposes of WIOA, the Department does not consider providers of dropout re-engagement programs or providers of adult education . . . to be schools.’’ This commenter stated that this language would provide clarification that after an individual has dropped out of school, he or she can continue his or her education in an alternative form without being considered an ISY. Another commenter suggested that youth in these programs are not participating in traditional schools and therefore should not be classified as ISY. Department Response: Based on the recommendation of commenters, the Department has added high school equivalency programs and dropout reengagement programs as additional types of programs in § 681.230 that are not considered ‘‘schools’’ for the purposes of determining school status. Comments: Other commenters asked for clarification from the Department as to whether an individual recruited and persuaded to return to school through a dropout recovery program would be considered an OSY under the proposed regulations, even if he or she had not missed an entire semester of school. One commenter also asked for clarification from the Department regarding why an individual would be required to wait an entire semester to be classified as an OSY. Department Response: As a point of clarification, WIOA does not require a person to miss an entire semester; rather, the law considers school year quarters. Further, the Department reminds service providers that ISY or OSY status determination occurs when a youth enrolls into the WIOA Youth Formula Program and does not change as the youth moves though the program. Therefore, an OSY who returns to school through a dropout recovery program remains classified as an OSY for WIOA purposes. PO 00000 Frm 00092 Fmt 4701 Sfmt 4700 Foster Care Individuals/Individuals in the Justice System Comments: Regarding the eligibility requirements for individuals in the foster care or justice systems, one respondent commented that the proposed regulation’s definition of OSY would not efficiently serve individuals in the foster care or juvenile justice systems, stating that the proposed language would require individuals in the juvenile justice system or foster care system to drop out of school in order to be eligible to receive WIOA youth services, which the commenter suggested would put them at an even greater risk. Another commenter recommended that the Department amend the OSY eligibility criteria regarding youth in foster care to include youth who were formerly in foster care, but may have returned to their biological families before turning 18, sharing that although these individuals are no longer in foster care and did not technically ‘‘age out’’ of the system, they are still disadvantaged and in need of assistance. Two commenters recommended that any incarcerated youth be automatically considered an OSY. Department Response: Although the Department recognizes that a few Statelevel foster care policies may result in this practice occurring, the Department does not interpret WIOA to require individuals in the juvenile justice system or foster care system to drop out of school in order to be eligible to receive WIOA youth services. Nor is it the Department’s intent to have youth leave school in order to receive WIOA youth program services. Relating to the comment that individuals who stay in foster care until late adolescence may not technically ‘‘age out’’ of the system but remain disadvantaged, the Department agrees. The Department consulted with the Department of Health and Human Services John H. Chafee Foster Care Independence Program and added ‘‘or an individual who has attained 16 years of age and left foster care for kinship guardianship or adoption,’’ to the final regulation for §§ 681.210 and 681.220 to encompass this fragile population. Further, to make the regulation easier to understand, the Department separated foster care youth and homeless and runaway youth into two separate eligibility categories. In addressing the comments around individuals involved in the juvenile justice system, WIOA uses slightly different wording between ISY and OSY eligibility criteria. For OSY eligibility WIOA at sec. 129(a)(1)(B)(iii)(IV) states, E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 ‘‘An individual who is subject to the juvenile or adult justice system,’’ while for ISY, sec. 129(a)(1)(C)(iv)(III) says, ‘‘offender.’’ WIOA sec. 3(38) defines ‘‘offender’’ as ‘‘an adult or juvenile— (A) who is or has been subject to any stage of the criminal justice process, and for whom services under this Act may be beneficial; or (B) who requires assistance in overcoming artificial barriers to employment resulting from a record of arrest or conviction.’’ The Department changed the wording in the Final Rule to use ‘‘offender’’ for the eligibility criteria for both ISY and OSY, to clarify that the OSY eligibility criterion at § 681.210(c)(4) includes all individuals who fit the definition of ‘‘offender’’ under sec. 3(38). The Department concluded that the intent of the OSY eligibility criterion is not to treat youth who were subject to the juvenile or adult system differently from those who are currently subject, but rather to call attention to the fact that both the juvenile and adult justice systems may include OSY. Homeless Individuals Comments: A commenter expressed support for the inclusion of homeless individuals as one of the possible eligibility criteria for OSY in the proposed regulations. This commenter further recommended that the definition of homeless individual in § 681.210(c)(5) be derived from the Runaway and Homeless Youth Act (42 U.S.C. 5601 et seq.) and read ‘‘. . . a homeless child or youth (as defined in sec. 725(2) of the McKinney Vento Homeless Assistance Act (42 U.S.C. 11434a(2))), a runaway or homeless youth (as defined by 42 U.S.C. 5601 et seq.) who is referred to the labor board by an RHY provider . . . .’’ This commenter also suggested that homeless status of an individual should be determined by referral from a runaway or homeless youth (RHY) or other homeless youth provider, but that pure self-attestation by the individual should also count as sufficient evidence of homelessness. Department Response: Runaway and Homeless Youth programs serve individuals as young as 12 years old, which is younger than permitted by WIOA youth formula program statute. Therefore, no changes were made in the regulatory text in response to these comments. The Department will provide future guidance and technical assistance around provider referrals and selfattestation when determining program eligibility. The Department did add language to clarify that for the OSY category, all homeless individuals qualify up to the age of 24. VerDate Sep<11>2014 22:00 Aug 18, 2016 Jkt 238001 Individual Who Is Pregnant or Parenting Comments: A commenter asked the Department to clarify that an ‘‘individual who is pregnant or parenting’’ includes noncustodial parents, such as fathers. Suggesting that re-engagement of fathers and noncustodial parents is critical to supporting children, this commenter pointed out that because youth served by its members often are parenting a child whose paternity has never been determined, these partners are in fact parenting, even if not legally custodial. Department Response: The Department recognizes the role all parents, custodial and non-custodial, play in the lives of their children and plans to provide future technical assistance on this subpopulation. Disability Comments: Another respondent noted that the NPRM defines OSY as an individual who meets criteria in paragraphs (a) and (b) in this section, as well as one or more of the criteria identified in paragraph (c). Two of the criteria described in this part are: (8) An individual with a disability; (6) a lowincome individual who requires additional assistance to enter or complete an educational program or to secure or hold employment. The commenter further described that low income is a part of the criteria for youth who need additional assistance to enter or complete an educational program or to secure or hold employment, and WIOA has made youth with a disability a separate eligibility criterion. The commenter asked the Department to state specifically that low income is not an eligibility requirement for serving youth with a disability. Department Response: The commenter’s observation does not necessitate a change to the Final Rule. For OSY, low income is not an eligibility requirement for serving youth with a disability. For ISY with disabilities, low-income eligibility requirements exist. However, for ISY with disabilities, WIOA sec. 3(36)(A)(vi) provides that the income level for eligibility purposes is based on the individual’s own income rather than his/her family’s income. The Department plans to provide additional technical assistance around serving youth with disabilities. Section 681.220 youth’’? Who is an ‘‘in-school This section describes how one meets the eligibility for an ISY for purposes of the WIOA title I youth program. ISY youth must be attending school, PO 00000 Frm 00093 Fmt 4701 Sfmt 4700 56163 including secondary or postsecondary school, be between the ages of 14 and 21 at time of enrollment, be low-income, and meet one or more of a list of eight criteria. These are essentially the same criteria as under WIA but the disability criterion has been separated from the ‘‘needs additional assistance’’ criterion. The section clarifies that age is based on time of enrollment and as long as the individual meets the age eligibility at time of enrollment, he or she can continue to receive WIOA youth services beyond the age of 21. WIOA includes a youth as low-income if he or she receives or is eligible to receive a free or reduced-price lunch under the Richard B. Russell National School Lunch Act (42 U.S.C. 1751, et seq.). Foster Care Individuals Comments: A commenter recommended that the Department amend the OSY eligibility criteria regarding youth in foster care to include youth who were formerly in foster care, but may have returned to their biological families before turning 18 because although these individuals are no longer in foster care and did not technically ‘‘age out’’ of the system, they are still disadvantaged and in need of assistance. Department Response: The Department concluded that same logic applies to § 681.220: Individuals who leave foster care after remaining there until late adolescence may not technically ‘‘age out’’ of the system and yet remain disadvantaged. The Department, in consultation with the Department of Health and Human Services John H. Chafee Foster Care Independence Program, added ‘‘or who has attained 16 years of age and left foster care for kinship guardianship or adoption,’’ to the final regulation for §§ 681.210 and 681.220 to encompass this fragile population. Homeless Individuals Comments: A commenter expressed support for the inclusion of homeless individuals as one of the possible eligibility criteria for OSY in the proposed regulations. This commenter further recommended that the definition of homeless individual in § 681.210(c)(5) be derived from the Runaway and Homeless Youth Act (RHYA) (42 U.S.C. 5601 et seq.) and would read ‘‘. . . a homeless child or youth (as defined in sec. 725(2) of the McKinney Vento Homeless Assistance Act (42 U.S.C. 11434a(2))), a runaway or homeless youth (as defined by 42 U.S.C. 5601 et seq.) who is referred to the labor board by an RHY provider. . . .’’ This commenter also suggested that homeless E:\FR\FM\19AUR6.SGM 19AUR6 56164 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations status of an individual should be determined by referral from an RHY or other homeless youth provider, but that pure self-attestation by the individual should also count as sufficient evidence of homelessness. Department Response: The Department consulted with the Department of Health and Human Service’s Administration for Children and Families when considering this comment. The Department learned that the Runaway and Homeless Youth programs serve individuals as young as 12 years old which is younger than permitted by WIOA youth formula program statute. No changes were made to the regulatory text in response to this comment. The Department will provide future guidance and technical assistance around provider referrals and selfattestation when determining program eligibility. Similar to the OSY criteria, the Department added language to clarify that for the ISY category, homeless individuals aged 14–21 qualify. Also similar to the OSY criteria, to make the regulation easier to understand, the Department separated foster care youth and homeless and runaway youth into two separate eligibility categories. This more accurately distinguishes between the types of barriers youth may experience. mstockstill on DSK3G9T082PROD with RULES6 Individual Who Is Pregnant or Parenting Comments: A commenter asked the Department to clarify that an ‘‘individual who is pregnant or parenting’’ includes noncustodial parents, such as fathers. Suggesting that re-engagement of fathers and noncustodial parents is critical to supporting children, this commenter pointed out that because youth served by its members often are parenting a child whose paternity has never been determined, these partners are in fact parenting, even if not legally custodial. Department Response: An individual who is pregnant or parenting does include noncustodial parents, such as fathers. The Department recognizes the role all parents, custodial and noncustodial play in the lives of their children and plans to provide future technical assistance on this subpopulation. Section 681.230 What does ‘‘school’’ refer to in the ‘‘not attending or attending any school’’ in the out-ofschool and in-school eligibility criteria? The eligibility criteria for the WIOA title I youth program for out-of-school youth at WIOA sec. 129(a)(1)(B)(i) requires that the individual is ‘‘not attending any school (as defined in State VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 law),’’ and for in-school youth, sec. 129(a)(1)(C)(i) requires that the individual is ‘‘attending school (as defined in State law).’’ The Department has changed the title of § 681.230 to clarify that the terms the section uses are from those eligibility criteria. The term ‘‘school’’ refers to both secondary and postsecondary school as defined by the applicable State law for secondary and postsecondary institutions. Section 681.230 provides that for purposes of title I of WIOA, the Department does not consider providers of adult education under title II of WIOA, YouthBuild programs, or Job Corps programs as schools. Therefore, if the only ‘‘school’’ the youth attends is adult education provided under title II of WIOA, YouthBuild, or Job Corps, the Department will consider the individual an OSY youth for purposes of title I of WIOA youth program eligibility. Comments: The Department received comments on several provisions within this section. Some commenters expressed concern over the proposed allowance of State law to determine the definition of ‘‘school.’’ Discussing the fact that their particular State’s laws only apply to grades K–12 and do not include postsecondary school, these commenters suggested that the definition of ‘‘school’’ should be clarified, and amended to address potential inconsistencies that would arise due to varying State laws. One commenter recommended that each State WDB should be given the flexibility to determine whether to include postsecondary education as inschool or out-of-school, if the State does not specify it in its statutes. A number of commenters suggested that the definition of OSY be expanded to include individuals who are enrolled in postsecondary education. Similarly, a commenter stated that States do not support the definition in the proposed regulations that would classify youth engaged in postsecondary programs as ISY because the proposed language would lead to fewer youth in postsecondary education being served due to the 75 percent OSY expenditure requirement. Another commenter suggested that youth enrolled in postsecondary developmental education courses be considered OSY. Department Response: WIOA’s increased OSY expenditure rate is designed to increase focus on disconnected youth. All State education agencies recognize 2- and 4-year colleges as ‘‘schools,’’ and the Department has determined that both secondary and postsecondary institutions are considered ‘‘schools’’ for the purpose of determining school PO 00000 Frm 00094 Fmt 4701 Sfmt 4700 status for WIOA youth program eligibility. Comments: A number of commenters recommended that the definition of OSY include individuals attending alternative schools. One of these commenters stated that an individual who attends an alternative school is at as great a risk as those who are attending no school. Some of these commenters suggested that an individual’s enrollment at an alternative school is an implicit indicator of need for WIOA youth services because of the low graduation and high dropout rates associated with alternative schools. A commenter recommended that the Department enhance the definition of school to include: Individuals in courtmandated programs, alternative schools, community schools, incarcerated youth, those who have not passed the high school exit exam, and individuals who attend independent studies programs. Department Response: The Department did not incorporate the term ‘‘alternative school’’ into the definition of an OSY because alternative school is a general term that may encompass many different types of programs. Rather, the Department has incorporated into the Final Rule additional types of programs that it does not consider schools, such as high school equivalency programs and dropout reengagement programs. Comments: A number of commenters recommended that youth participating in a dropout re-engagement program be considered out of school for the purposes of WIOA and suggested clarifying that in § 681.230. Another commenter encouraged the Department to clarify further that youth in high school equivalency programs, such as GED programs, also are considered dropouts. Department Response: Based on the recommendation of commenters, the Department has added high school equivalency programs and dropout reengagement programs as additional types of programs that are not considered ‘‘schools’’ for the purposes of determining school status. Comments: With regard to the eligibility of individuals who are enrolled in adult education programs, a number of commenters expressed support for these individuals’ eligibility as OSY. Several of these commenters stated that the potential for coenrollment would be very beneficial to youth in need of these services. Citing data from a survey that found low rates of co-enrollment, two commenters stated that because of this past evidence of low percentages of co-enrollment, they supported the proposed E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations regulations, which would not define adult education programs as schools. Another commenter recommended that the Department expand the provision to include those individuals who are officially enrolled in school, but who in actuality only are receiving an education at an adult education center. A number of commenters requested that individuals who are enrolled in an adult education program would be considered OSY under WIOA title I, regardless of how the adult education services are funded. Several commenters suggested that many individuals attend adult education programs that are not funded by title II of WIOA, and that limiting eligibility for OSY services solely to those who attend programs funded by title II would limit the number of youth who would be eligible for coenrollment. Department Response: The Department agrees that the determination of whether an adult education program is considered a ‘‘school’’ should not be based on funding source. Providers of adult education under title II of WIOA do not need to be wholly funded by title II in order to meet the provision described in § 681.230. Comments: Regarding the school status of individuals participating in YouthBuild programs not funded by the Department of Labor, a few commenters recommended that the Department revise the proposed regulation to apply to all YouthBuild programs regardless of how they are funded. Another commenter also stated that the exception of not classifying YouthBuild programs as schools should be applied to all YouthBuild programs, suggesting that many YouthBuild programs have a variety of funding sources outside of Department grants and that the individuals enrolled in those programs should not be penalized because of how their program is funded. Department Response: The Department agrees that the determination of whether a YouthBuild program is considered a ‘‘school’’ should not be based on funding source. All YouthBuild programs, whether funded by the Department of Labor wholly, partially, or not at all meet the provision described in § 681.230 and are not considered schools for purposes of WIOA youth program eligibility determination. Comments: One commenter stated that all individuals enrolled in Job Corps programs should be considered OSY for WIOA youth services. A number of commenters requested clarification from the Department as to whether individuals involved in all Job VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Corps programs would be considered OSY, since Job Corps students may finish accredited high school diploma program or complete a high school equivalency certificate or diploma. Department Response: The Department does not consider any Job Corps program to be a ‘‘school’’ for purposes of determining WIOA youth program eligibility regardless of whether students in the Job Corps program are pursuing a high school diploma a high school equivalency certificate. Section 681.240 When do local youth programs verify dropout status? This section provides that dropout status is determined at the time of enrollment for eligibility as an OSY and that once a youth is enrolled as an OSY, that status continues, for purposes of the minimum 75 percent OSY expenditure requirement, for the duration of the youth’s enrollment, even if the youth later returns to a school. Comments: Several commenters expressed their support for the proposed language. A number of these commenters specifically expressed their support for the allowance of youth who are determined eligible to receive services at the time of their enrollment to continue to receive services and maintain eligibility even if they are placed later in an alternative school. These commenters recommend that an individual’s status be portable when moving across other WIOA funding streams as long as that movement is part of the individual career plan and part of an articulated agreement among the partners. One commenter recommended changing an individual’s school status from ISY to OSY when a youth graduates from high school as this would assist States with achieving the required minimum 75 percent OSY expenditure rate and will accurately reflect the status of youth with WIOA expenditures. Department Response: The Department has concluded that the most straightforward and least burdensome approach is for school status to remain the same throughout the program. In addition, this policy will encourage local programs to assist OSY re-engage in school without concern that reengaging them in school would negatively impact their minimum OSY expenditure rate. Comments: A number of commenters expressed concerns over the provision that would allow States to define the term ‘‘alternative school.’’ Some of those commenters suggested that States with broad definitions of schools could end up preventing youth who have dropped out of school and are attending PO 00000 Frm 00095 Fmt 4701 Sfmt 4700 56165 alternative schools from receiving WIOA OSY services. One of the commenters recommended that the Department not leave the definition of alternative schools up to States, saying that there should be a consistent definition across States. Another commenter recommended that, consistent with the State’s definition of alternative education, any youth that attends an alternative school also be considered an OSY. Department Response: The Department agrees on the importance of consistent definitions across States. Because the term ‘‘alternative school’’ is a general term that may encompass many different types of programs, the Department deleted all references to the term ‘‘alternative school’’ in § 681.240, and it is no longer required to be defined in State Plans. Rather, as discussed in § 681.230 above, the Department has added high school equivalency programs and dropout reengagement programs as additional types of programs that are not considered ‘‘schools’’ for the purposes of determining school status. Section 681.250 Who does the lowincome eligibility requirement apply to? This section discusses the low-income eligibility criteria for OSY and ISY. All ISY must be low-income with the exception that up to 5 percent of ISY youth who meet all the other eligibility requirements need not be low-income. The up to 5 percent is calculated based on all newly enrolled youth who would ordinarily be required to meet the lowincome criteria in a given program year. For OSY, only those youth who are the recipient of a secondary school diploma or its recognized equivalent and are either basic skills deficient or an English language learner and youth who require additional assistance to enter or complete an educational program or to secure or hold employment must be low-income. Comments: Commenters expressed support for the amended low-income eligibility requirements, and their streamlined documentation and process requirements, with one commenter remarking the change would be beneficial to youth. Another commenter stated that the OSY low-income eligibility criteria would be confusing. Department Response: The Department concurs with these commenters that the new low-income eligibility requirements will lead to streamlined documentation and process requirements. Comments: A commenter expressed concern over needing to document lowincome status for ISY, fearing it may E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56166 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations create a challenge in working with schools on career pathway activities. The commenter noted that schools prefer to provide all students with the same experience regardless of family income. Department Response: The Department notes the concern expressed about the compatibility between how schools and workforce partners approach youth. The Department cannot change the ISY income level requirements as WIOA defines them. The Department plans to provide tools on approaches to implementing career pathways. Comments: A commenter recommended that all OSY be exempt from having to meet low-income eligibility requirements, stating that there is a high correlation between being disconnected from school and work and the likelihood of entering poverty, especially at a young age. Similarly, a commenter recommended that the lowincome requirement be removed from the OSY eligibility criteria for individuals who need additional assistance to complete an educational program or to secure or hold employment, and for recipients of a secondary school diploma who are basic skills deficient or an English language learner, asserting that the OSY requirements would be more effective if the low-income criteria were removed from these two categories of individuals. Department Response: The Department recognizes the high correlation between being disconnected from school and work and the likelihood of entering poverty. It also understands that removing low-income criteria from all of the OSY eligibility criteria would simplify the program. Nonetheless, these eligibility requirements are statutory comments in WIOA, and therefore the Department cannot change them in regulation. Comments: Another commenter requested that the Department revise the proposed regulations so that OSY may be considered low-income if they receive or are eligible to receive free or reduced lunches, asserting that currently the proposed regulations are written so that only ISY who are eligible for free or reduced price lunches are considered to be low-income. Department Response: The Department considered the commenter’s suggestion that OSY may be considered low-income if they receive or are eligible to receive free or reduced lunches. The Department decided not to change the Final Rule because youth must be enrolled in school to be eligible for the Richard B. Russell National School Lunch Act. VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Comments: A commenter requested clarification from the Department concerning the criteria that would be used to determine if an individual is an English language learner for the purposes of the low-income eligibility requirement. Department Response: The Department understands the need for criteria for determining if an individual is an English language learner for the purposes of the low-income eligibility requirement. There will be guidance and technical assistance provided on this topic in the future. No regulatory change was made in response to this comment. Comments: A person commented that the proposed regulations would make youth with a disability a separate eligibility requirement from low-income requirements. This commenter and another commenter suggested that the Department specifically clarify that for youth with a disability, low income would not be an eligibility requirement under the proposed regulations for OSY with a disability. Department Response: Upon analyzing these comments the Department discovered a technical error in the NPRM. The Final Rule clarifies that OSY with disabilities do not need to meet low-income eligibility requirements and the Department has changed the regulatory text to read as follows: ‘‘All other OSY meeting OSY eligibility under § 681.210(c)(1), (2), (4), (5), (6), (7) and (8) are not required to be low-income. Additionally, the Department clarified in § 681.280 that OSY with disabilities are not required to be low income. For ISY with a disability, the youth’s own income rather than his or her family’s income must meet the low-income definition and not exceed the higher of the poverty line or 70 percent of the lower living standard income level. Comments: A commenter suggested that any youth who attends a school that is considered by the U.S. Department of Education to be a ‘‘designated lowincome school’’ should be considered a low-income youth for the purpose of WIOA services. Similarly, another commenter requested that the Department add to the regulations that any youth who attend a title I school would automatically be considered lowincome for eligibility purposes for WIOA youth services. Department Response: The Department analyzed these two similar suggestions and did not modify the regulation text. The Department reviewed the Department of Education’s title I designation and concluded that the WIOA high poverty threshold PO 00000 Frm 00096 Fmt 4701 Sfmt 4700 represents a more impoverished area than the Department of Education’s title I school status. Comments: A commenter asked for clarification as to whether this 5 percent of youth means new youth enrollees in a given program year or 5 percent of all youth enrolled. Another commenter asked whether the 5 percent who do not have to be low income includes youth that are eligible because of non-income applicable criteria such as being homeless, a member of the juvenile justice system, or having dropped out of high school. Department Response: The Department clarified in the regulation text that for the 5 percent low-income exception, the 5 percent of youth means new youth in a given program year. In addition, the Department has clarified in regulatory text that the calculation for the 5 percent exception is based on only those youth who would ordinarily need to be low income. It is not based on all youth since many of the OSY categories do not require low-income status. In fact, all nine categories at § 681.210(c) except for paragraphs (c)(3) and (9) do not require low-income status. Because not all OSY are required to be lowincome, the 5 percent low-income exception under WIOA is calculated based on the 5 percent of youth enrolled in a given program year who would ordinarily be required to meet the lowincome criteria. For example, a local area enrolled 200 youth and 100 of those youth were OSY who were not required to meet the low-income criteria, 50 were OSY who were required to meet the low-income criteria (i.e., either § 681.210(c)(3) or (9)), and 50 were ISY. In this example the 50 OSY required to be low income and the 50 ISY are the only youth factored into the 5 percent low-income exception calculation. Therefore, in this example, 5 of the 100 youth who ordinarily would be required to be low-income do not have to meet the low-income criteria based on the low-income exception. This percent is calculated at the end of a program year based on new enrollees in that program year. Comments: A few commenters were concerned that setting a limit on the percent of youth that may be deemed eligible based on needing additional assistance limits who can be served when there is not an abundance of youth that have one of the other eligibility characteristics. A number of commenters requested that the Department consider recommending that the 5 percent limitation be removed at such time that WIOA is amended that states that 5 percent of youth who meet all other WIOA youth services eligibility E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 requirements do not have to be low income. Department Response: While the Department did not include language in the NPRM relating to the 5 percent limitation on the ‘‘requires additional assistance’’ criterion for ISY, that was an unintentional omission. The Department has added § 681.310(b), which describes the 5 percent ISY limitation for the ‘‘requires additional assistance’’ criterion. The Department will take the concerns about the 5 percent limitation into consideration when providing any technical assistance to Congress on WIOA reauthorization. Comments: A few commenters asked for clarification regarding a definition for ‘‘family’’ for the purposes of determining low-income eligibility for WIOA title I youth program. Another commenter recommended that the Department incorporate the definition of ‘‘family’’ from WIA sec. 101(15) into the WIOA regulations. A request was made that the Department provide an updated version of the WIA definition that is more inclusive of all family types, including same-sex marriages and domestic partnerships. Department Response: In response to the comments seeking clarification of ‘‘family’’ in WIOA, the Department added a definition of family in 20 CFR part 675, and it is further discussed in the preamble that applies to that part. Comments: Some commenters asked what items would be included for determining if an individual is in a family with total family income that does not exceed the poverty line. In particular, these commenters asked the Department if sources of funding such as pensions, foster care child payments, or unemployment compensation would be included when determining a family’s low-income status. A commenter asked the Department what the definition of a dependent child would be for purposes of determining income eligibility and up to what age could an OSY be considered a dependent child of the parent or guardian. Department Response: When determining up to what age an OSY could be considered a dependent child of the parent or guardian use the IRS definition of dependent. The Department will provide additional guidance on eligibility. Section 681.260 How does the Department define ‘‘high poverty area’’ for the purposes of the special rule for low-income youth in the Workforce Innovation and Opportunity Act? WIOA contains a new provision that allows for youth living in a high poverty VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 area to meet automatically the lowincome criterion that is one of the eligibility criteria for ISY and for some OSY. Comments: The Department received many comments on how to define ‘‘high poverty area.’’ A number of the commenters focused on the 30 percent rate as set every 5 years using American Community Survey 5-Year data and if that was the appropriate threshold. For example, a few commenters expressed their support for the proposed language in this section, suggesting that the 30 percent threshold for defining a high poverty area would be an accurate measure. In particular, an entity commented that the proposed regulation would help to relieve some of the burden of meeting income eligibility requirements on youth. However, another commenter wrote that the proposed 30 percent threshold would be unreasonable, and requested additional clarification regarding the calculation methods of contiguous tracts in determining high poverty areas. Specifically, this commenter asked the Department whether it would measure high poverty thresholds for a contiguous tract using an average of the contiguous tracts, or just whether a contiguous tract meets the threshold. Citing data from the American Community Survey, another commenter suggested that there are actually few census tracts that would meet the 30 percent poverty threshold. This commenter further stated that census data, particularly for low-income neighborhoods, often includes a large margin of error. This commenter recommended that the Department modify the definition of high poverty area to reflect actual geographic concentrations of OSY better. A few commenters suggested that the definition of high poverty area should not be higher than 20 percent of the population meeting the low-income threshold. Other commenters recommended that the proposed high poverty area definition be lowered from 30 percent of the population to 25 percent. Citing statistics a commenter said that in Maine, there are no areas in which the 30 percent poverty threshold would be met, one commenter recommended that the Department lower the lowincome threshold from 30 percent in order to accommodate more rural and less densely populated States. One commenter recommended that the regulations be modified to state that if any measure of poverty in a census tract exceeds 30 percent, the census tract should be considered a high poverty census tract, stating that in PO 00000 Frm 00097 Fmt 4701 Sfmt 4700 56167 some cases the overall high poverty may be under 30 percent but certain measures within the overall tract could be over 30 percent. Two commenters recommended that the Department allow States to define their own poverty area thresholds between 20 and 40 percent that is consistent with the State’s demographics. Another commenter recommended that the Department allow Local WDBs to determine the thresholds for poverty in their local areas. Another commenter recommended that Local WDBs submit documentation to the Department concerning extenuating circumstances in their area that would cause them to need to lower their low-income threshold. Department Response: After analyzing the many comments received on the proposed regulation, the Department concluded that a poverty rate of at least 30 percent as set every 5 years using American Community Survey 5-Year data was too high. The regulation text was changed to reflect a poverty rate of at least 25 percent as set every 5 years using American Community Survey 5Year data. Local areas must decide how to combine census tracts into larger contiguous areas and the weighted average of the poverty rates of the census tracts in each contiguous area to meet the threshold. The Census Bureau defines a ‘‘poverty area’’ as a census tract where at least 20 percent of the residents are poor. Therefore, the term ‘‘high poverty’’ must be greater than 20 percent; the Department concluded that 25 percent was the most appropriate threshold. Because allowing States to define their own poverty threshold would lead to inconsistencies in eligible youth across the country, the Department did not include that recommendation in the Final Rule. Comments: Citing statistics regarding the high poverty rates in Merced County and all of San Joaquin valley, a commenter recommended that the ‘‘area’’ measured when determining whether an area is high poverty, be amended from using counties to cities. A different commenter recommended that the Department modify the proposed regulations to include ‘‘city’’ as an additional geographical division that could be used when determining low-income status of an area. Another commenter recommended that any city with more than 20 percent of its census tracts considered ‘‘high poverty’’ should be considered a high poverty area, expressing that poverty areas are not always contiguous and can be separated by land occupied by government buildings, shopping malls, and colleges. E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56168 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations Department Response: Because most cities include multiple neighborhoods and census tracts that can vary greatly in their levels of poverty, the Department decided that using city as the geographical area is too large of an area to use. Comments: A commenter recommended that the Department should use zip codes to determine lowincome levels instead of census tracts, asserting that there are often sub-areas of high poverty within a census tract and that census tracts often do not reflect these concentrated area of high poverty. Department Response: The Department analyzed the effect of adding city and zip code as an additional geographic division and decided to stay with the proposed set of contiguous census tracts as the Census Bureau defines poverty areas using census tracts. The conclusion will result in a more consistent implementation of the regulation. Comments: A few commenters suggested that the Department revise the proposed regulations so that the 30 percent poverty threshold is defined using the numbers from the population in an area who are eligible to participate in the program (ages 16 through 24), and not using the percentage from the general population. Two commenters also recommended that high poverty areas be defined by the youth poverty rate of an area, stating that census tract data are minimally useful for the purpose of determining the level of poverty in an area. Similarly, one commenter asserted that using the American Community Survey 5-Year data for all ages in an area could be limited in its usefulness. This commenter suggested that the data be limited to individuals who are under 18 living in an area. This commenter recommended that the Department clarify whether the American Community Survey data should be limited to youth in an area or whether States have discretion to decide which data to use. Department Response: While the Department acknowledges the value behind using poverty data that reflect the population the program serves, it concluded that because this measure applies to ISY (14–21) and OSY (16–24), and these age ranges are not currently easily accessible with the American Community Survey, it would not specify that the data need to reflect a specific subpopulation as a requirement in the regulatory text. Comments: Another respondent sought clarification from the Department regarding the proposed VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 method of defining high poverty areas. Similarly, one commenter stated that the Final Rule would need to be clearer as to how a local area can determine whether or not they are considered a high poverty area. Another commenter asked the Department to clarify how a service provider would document that an individual has met the income eligibility requirements for WIOA youth services by living in a high poverty area. One commenter asked if Local WDBs could use the U.S. Department of Housing and Urban Development (HUD) Web site to determine if an area is high poverty. Department Response: The Department recognizes that several commenters want directions and tools on how a local area could determine whether they are considered a high poverty area. The Department will provide technical assistance to youth service providers, making it easier to calculate if an area qualifies as a high poverty area for WIOA purposes. Comments: Several commenters recommended that the regulations include a variety of measures to determine whether an area is ‘‘high poverty.’’ Specifically, some of these commenters recommended that the Department revise the NPRM to include additional high poverty area proxies to capture low-income youth such as living in areas contiguous to high poverty areas, living in public housing, or living in an area where over a certain percent of the student population is eligible for free or reduced price lunches. An entity recommended using additional low-income proxies for high poverty area, sharing that the current proposed language would exclude individuals from participation in these services based on their zip code. One commenter suggested that school district borders be used to define areas of high poverty instead of State or county borders, asserting that this would decrease economic disparity between communities. Another commenter recommended that the Department use the most current data available to determine high poverty areas. This commenter suggested using data from other sources instead of solely relying on data from the American Community Survey, and recommended also using data from Empowerment Zones and other partner agency information systems. Department Response: The Department considered all of the alternative measures suggested and decided to use the proposed calculation method, with a slight adjustment to 25 percent from 30 percent poverty rate in order to keep the calculation relatively PO 00000 Frm 00098 Fmt 4701 Sfmt 4700 straightforward, easy to understand, and not burdensome to document or implement. Comments: Another commenter stated that the proposed method of classifying high poverty areas is not consistent with WIOA’s intent of serving the neediest youth, asserting that eligibility should be based on individual needs instead. Department Response: The Department appreciates the concern regarding serving the neediest youth. WIOA sec. 129(a)(2) includes the phrase ‘‘high poverty area,’’ which the Department interpreted to mean a geographic area and not an individual determination. Comments: Finally, a commenter suggested that the Department revise proposed § 681.260 to make it more precise and eliminate ambiguity in the term ‘‘tribal area.’’ Department Response: The Department accepted the commenter’s suggestion and replaced, ‘‘Indian Reservation, tribal land, or Native Alaskan Village’’ with ‘‘an American Indian Reservation, Oklahoma Tribal Statistical Area (as defined by the U.S. Census Bureau), Alaska Native Village Statistical Area or Alaska Native Regional Corporation Area, Native Hawaiian Homeland Area, or other tribal land as defined by the Secretary in guidance’’ in the Final Rule. Section 681.270 May a local program use eligibility for free or reduced price lunches under the National School Lunch Program as a substitute for the income eligibility criteria under title I of the Workforce Innovation and Opportunity Act? This section explains that WIOA sec. 3(36) defines a low-income individual to include an individual who receives (or is eligible to receive) a free or reduced price lunch under the Richard B. Russell National School Lunch Act. Comments: A number of commenters expressed support for the proposed language’s acceptance of eligibility for free or reduced price lunch as a substitute for WIOA youth income eligibility requirements criteria. One commenter asked the Department whether an OSY with a sibling receiving free or reduced lunches would be considered eligible under the proposed regulations. Similarly, another commenter requested clarification from the Department regarding whether an OSY high school graduate could use their family’s participation in the National School Lunch Program as fulfillment of their low-income requirements. Yet another commenter recommended that a youth who lives in a household where his or her family E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 member(s) receive or are eligible to receive free or reduced price lunch should automatically also be eligible for WIOA youth services. Department Response: The Department analyzed the requests to use family member’s eligibility to receive free or reduced price lunch as a proxy allowing a youth not enrolled in school to automatically meet low-income eligibility criteria for WIOA youth services. The Department did not change the Final Rule because WIOA states ‘‘an individual must receive or is eligible to receive a free or reducepriced lunch’’ and youth must be enrolled in school to be eligible for Richard B. Russell National School Lunch Act. Furthermore, low-income is not an eligibility requirement for significant portions of the OSY program. Comments: A few commenters requested clarification from the Department as to whether in a city or a town in which 100 percent of students are eligible for free or reduced lunches, any student who lives in the area would be considered low-income automatically and therefore, eligible for WIOA youth services, and only would need to prove his or her residency. Further, these commenters requested clarification from the Department regarding whether an individual who attends a school that qualifies for a Community Eligibility Provision (CEP) under the Healthy, Hunger-Free Kids Act of 2010 would be considered low-income for WIOA youth program eligibility purposes. Another commenter also discussed the requirements of the CEP and asked how a school district’s participation in a CEP would affect the low-income eligibility of youth for WIOA services. Department Response: The Healthy, Hunger-Free Kids Act of 2010 (Pub. L. 111–296, December 13, 2010, 124 Stat. 3183) amends the Richard B. Russell National School Lunch Act which includes the CEP, but does not replace it. The Department found that many cities, towns, and schools that participate in the CEP have relatively low poverty rates as compared to the WIOA determined high poverty area. As a result of this research, the Department decided not to change the Final Rule to include the CEP. Section 681.280 Is a youth with a disability eligible for youth services under the Workforce Innovation and Opportunity Act if his or her family income exceeds the income eligibility criteria? This section reiterates the WIOA provision that, for an ISY with a disability, income level for eligibility purposes is based on his/her own VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 income rather than his/her family’s income. For OSY with a disability, income is not an eligibility criterion. Comments: Two commenters expressed support for this provision, noting that it would eliminate barriers for individuals with disabilities for accessing necessary support services. Another commenter stated that there was an inconsistency between proposed §§ 681.250 and 681.280. Specifically, the commenter said that § 681.250 indicates that the low-income requirement would not apply to OSY with disabilities. However, § 681.280 states that for an individual with a disability, the income level for eligibility purposes would be based on the person’s individual income as opposed to his or her family’s income. This commenter recommended that the regulatory text be rewritten to clarify that the low-income requirement for individuals with disabilities would be applicable only to ISY and not OSY. Department Response: The Department concurs that the proposed regulation did not factor in the OSY eligibility criteria. To address the commenter’s concern, the final regulation includes the following line, ‘‘Furthermore, only ISY with a disability must be low income. OSY with a disability are not required to be low income.’’ Section 681.290 How does the Department define the ‘‘basic skills deficient’’ criterion in this part? This section reiterates the basic skills deficient criterion that is part of the eligibility criteria for both OSY and ISY, for purposes of title I of WIOA. The section also provides that local programs must use valid and reliable assessment instruments and provide reasonable accommodations to youth with disabilities in the assessment process in making this determination. Comments: A commenter recommended that the Department revise the phrase provided in § 681.290(a)(2), ‘‘(2) Are unable to compute or solve problems, or read, write, or speak English at a level necessary to function on the job, in the individual’s family, or in society. (WIOA sec. 3(5)).’’ Department Response: The Department declines to revise this language because it comes directly from the statutory language of WIOA. Comments: A commenter recommended that the Department include language in § 681.290(b), which governs the State WDBs’ policies to determine if a youth is basic skills deficient, to require the use of age and/ or developmentally appropriate criteria. PO 00000 Frm 00099 Fmt 4701 Sfmt 4700 56169 Another commenter recommended that the Department clarify that local areas must state in the local plan how they will assess individuals, and that States should establish State policies for how to define basic skills deficient. Department Response: The Department addressed these comments in State planning guidance, TEGL No. 14–15 (‘‘Workforce Innovation and Opportunity Act (WIOA) Requirements for Unified and Combined State Plan’’), which can be found at http:// wdr.doleta.gov/directives/All_WIOA_ Related_Advisories.cfm. Comments: One commenter requested clarification regarding the § 681.290(c) requirement that in assessing basic skills, local programs must use assessment instruments that are valid and appropriate for the target population. One commenter expressed its support for the explicit inclusion of ‘‘valid and reliable assessment instruments’’ and ‘‘reasonable accommodations’’ for individuals with disabilities, saying that this language would create the opportunity for State and Local WDBs to put metrics-driven services and supports into place. This commenter recommended, however, that the § 681.290 language be further modified to provide State and Local WDBs with guidance on how to connect youth with disabilities with the resources they need if they are deemed skills deficient. A number of commenters asked about the types of basic skills assessments that are allowable. Department Response: The Department will provide guidance or technical assistance on ways to help youth with disabilities access the resources they need. Comments: A commenter recommended that the Department revise § 681.290(c) to include assessment instruments that are valid and appropriate for the target population and must provide reasonable accommodation in the assessment process, if necessary, for people with disabilities. Department Response: The Department concluded that local programs need flexibility to use assessments they choose as long as they are valid and appropriate. Requiring assessments only approved by the Department of Education’s National Reporting System would be overly burdensome for local youth programs. No change has been made to the regulatory text in response to the comment. Comments: A commenter suggested that the language of this section be amended to provide further guidance if E:\FR\FM\19AUR6.SGM 19AUR6 56170 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations a youth with a disability is unable to demonstrate basic skills, and that language should be included that will guide State and Local WDBs as they work to meet the needs of youth who are basic skills deficient. The commenter suggested specific procedures should be put into place to connect skills deficient youth with disabilities with the training and resources they need in order to succeed. Department Response: The Department acknowledges the concerns about serving basic skills deficient youth, including those with disabilities, and will provide guidance and technical assistance to address these concerns. No change is made to the regulatory text in response to this comment. Comments: Another commenter suggested that local programs should be able to use the Individual Education Program (IEP) to determine individuals’ basic skills, because it is a summary of their reading, writing, and math skills. Finally, a commenter recommended that the Department remove the basic skills deficient criteria for the time being, noting that all other program requirements are beginning in July 2015. Department Response: Regarding the use of an IEP, the Department will issue further guidance describing the use of previously conducted assessments. In addition, the Department cannot remove the basic skills deficient criteria because the criteria are set forth in the statutory language of WIOA. No changes were made to the regulatory text in response to these comments. mstockstill on DSK3G9T082PROD with RULES6 Section 681.300 How does the Department define the ‘‘requires additional assistance to enter or complete an educational program, or to secure and hold employment’’ criterion in this part for OSY? The Department added this section in the Final Rule to be more clearly consistent with the ‘‘requires additional assistance’’ eligibility criteria in WIOA secs. 129(a)(1)(B)(iv)(VIII) (for OSY) and 129(a)(1)(C)(iv)(VII) (for ISY). The criterion is slightly different for ISY and OSY, in that the OSY section contains the phrase ‘‘to enter or complete an educational program’’ while the ISY language states ‘‘to complete an educational program.’’ Therefore, the Final Rule includes two separate sections for the ISY and OSY ‘‘requires additional assistance’’ criteria. The new § 681.300 is the OSY section, while proposed § 681.300 is now § 681.310, the ISY section. Proposed § 681.310 has also been renumbered to § 681.320. VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Section 681.310 How does the Department define the ‘‘requires additional assistance to complete an educational program, or to secure and hold employment’’ criterion in this part for ISY? This section allows States and/or local areas to define the ‘‘requires additional assistance . . .’’ criterion that is part of the ISY eligibility. It clarifies that if this criterion is not defined at the State level and a local area uses this criterion in its ISY eligibility, the local area must define this criterion in its local plan. The Department received comments on this section as discussed below. Comments: A number of commenters recommended that the Department provide additional guidance, such as including an acceptable list of possible ‘‘additional assistance’’ in order to set national standards for what ‘‘additional assistance’’ means. Many of these commenters expressed concern about the proposed language being overly broad, with the potential to expand services beyond the high-risk populations envisioned by WIOA. For this reason, these commenters recommended that the educational program that the individual needs should be geared to the achievement of basic skills at the secondary level and that ‘‘requiring additional assistance to secure or hold employment’’ should mean that there are deficits in basic academic skills (not technical skills, or advanced academic skills) that are needed to secure employment or succeed on the job. Another commenter recommended that States and/or local areas should have an established definition for an ‘‘individual requiring additional assistance to complete an education program or to secure or hold employment’’ and include a student who is significantly over-aged and under-credited, (i.e., 2 or more years below grade level or off track from high school graduation). One commenter recommended that the Department require State and Local WDBs to establish policy using age and/or developmentally appropriate criteria to determine when a youth requires additional assistance to complete an educational program or to secure and hold employment. Department Response: The Department understands the need for more specific language to define the ‘‘requires additional assistance’’ criterion and plans, and further guidance on the need for more specific definitions at the State and local level will be issued. No change to the PO 00000 Frm 00100 Fmt 4701 Sfmt 4700 regulatory text, however, was made in response to these comments. Comments: A few commenters asked about the 5 percent limitation on ISY using the ‘‘requires additional assistance’’ provision. Department Response: It was an oversight that the Department did not include this new limitation in the NPRM. Therefore, the Final Rule includes § 681.310(b) that describes the 5 percent ISY limitation on the use of the ‘‘requires additional assistance’’ criterion. Section 681.320 Must youth participants enroll to participate in the youth program? This section clarifies that there is no self-service concept for the WIOA youth program and every individual receiving services under WIOA youth must meet ISY or OSY eligibility criteria and formally enroll in the program. It defines participation as an eligibility determination, the provision of an objective assessment, development of an individual service strategy, and participation in any 1 of the 14 program elements. Comments: The Department received a number of comments, as discussed below, recommending the Department clarify the point of participation for a WIOA title I youth program participant. Department Response: The Department has added § 681.320(b)(2) to clarify that the point of program participation does not begin until after the youth is determined eligible, the youth receives an objective assessment, and the youth participates in 1 of the 14 program elements. In addition, the Department made a minor language change in § 681.320(b) in order to be consistent with language in the performance section of the Final Rule. Comments: A number of commenters expressed their support for the NPRM’s specification that there would be no self-service for WIOA youth and that every individual must enroll formally in the program. These commenters also stated that they support the proposed language’s definition of enrollment as the collection of information. Several commenters expressed concern regarding the burden placed on individuals who have to demonstrate their eligibility through documentation. Some of these commenters requested that the Department clarify and make explicit that the ‘‘collection of information’’ associated with enrollment can be supported with selfattestation, in order to ensure upfront eligibility, especially for high-risk individuals. Although acknowledging the improvements in burden associated E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations with certification of income eligibility brought about by WIOA, many commenters suggested that requiring individuals who are at high risk to prove their status before they receive services that they rely on would be detrimental to those in need. These commenters suggested that the Department use the guidance for selfattestation that was included in the ‘‘Advisory Training and Employment Guidance Letter No. 6–14 Program Year (PY) 2013/Fiscal Year (FY) 2014 Data Validation and Performance Requirements and Associated Timelines.’’ Discussing how selfattestation is defined in this document, these commenters recommended that the Department amend the proposed language to state that the collection of information that triggers enrollment could include self-attestation, and that self-attestation is even preferable to other methods of information collection. Department Response: The Department does allow self-attestation for the collection of a number of data elements. The Department will provide further guidance on documentation requirements for data elements in the Department’s forthcoming data validation guidance. Comments: Commenters also recommended that the Department modify the proposed regulations to state that an individual is not enrolled in WIOA title I programs with the collection of information, and that local areas are allowed to begin assessment activities and other efforts through the one-stop delivery system. These commenters also recommended the Department apply a consistent definition of point of enrollment across all WIOA titles and recommended that the point of enrollment should be activated with the individual’s participation in a program activity, not just their involvement in initial assessment activities. A commenter recommended that the Department clarify that staff assisted activities such as assisting youth postexit in transition, navigation, and support are encouraged and do not trigger enrollment for individuals in WIOA youth programs. Another commenter stated that the point at which the Department defines when an individual is enrolled is critical to data collection and validation. This commenter suggested that collecting an individual’s data at the time of eligibility verification and at enrollment would be redundant and provide increased opportunity for inconsistent data reporting. Another commented that the time of enrollment needs to be clarified, as they VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 were concerned that the proposed regulations as they stand would allow the process of taking a WIOA application and determining its eligibility to be categorized as a ‘‘basic career service’’, therefore, counting the individual as enrolled. This commenter recommended that the regulations be amended so that enrollment into WIOA title I services would be the first service provided, after eligibility has already been determined. Department Response: The Department has clarified in § 681.320(b) of this DOL WIOA Final Rule that the point of participation is after an eligibility determination, and added in § 681.320(b) that the point of participation occurs after the provision of an objective assessment, development of an individual service strategy, and participation in any of the 14 WIOA youth program elements. In addition, the Department will ensure consistency in the point of participation across all WIOA titles through the performance section in 20 CFR 677.150(a)(2) (see Joint WIOA Final Rule). Other Eligibility Issues Comments: A commenter recommended that the Department explicitly clarify that youth who are eligible to work under Deferred Action for Childhood Arrivals (DACA) also would be eligible for WIOA programs. Department Response: The Department declines to address DACA in the WIOA Final Rule (due to pending court decisions). The Department issued guidance on DACA in TEGL No. 02–14 (‘‘Eligibility of Deferred Action for Childhood Arrivals Participants for Workforce Investment Act and WagnerPeyser Act Programs’’), which can be found at https://wdr.doleta.gov/ directives/attach/TEGL/TEGL_2-14.pdf. Comments: Two commenters noted that WIOA sec. 132 (b)(1)(B)(v)(I) defines an adult to mean an individual who is not less than age 22 and not more than age 72. The commenters identified that in other instances (title I sec. 3, title II), adults are defined as being 18 and not 22. These commenters requested further clarification from the Department as to whether this age difference was an oversight on the part of the Department. Department Response: WIOA sec. 132 discusses the allotment formula for States and outlying areas used each program year and refers to the adult age range used in the statutory formula to determine the amount of funds a State or outlying area receives in a given program year. The other references to WIOA titles I and II the commenters cite relate to eligibility age for specific PO 00000 Frm 00101 Fmt 4701 Sfmt 4700 56171 services and is not a Department oversight. No changes have been made to regulatory text in response to these comments. 4. Subpart C—Youth Program Design, Elements, and Parameters Section 681.400 What is the process used to select eligible youth service providers? This section clarifies that youth activities may be conducted by the local grant recipient and that when the Local WDB chooses to award grants or contracts to youth service providers, such awards must be made using a competitive procurement process in accordance with WIOA sec. 123. The Final Rule clarifies that the grant recipient/fiscal agent has the option to provide some or all of the youth workforce investment activities directly themselves rather than entering into a grant or contract to provide the activities. The competitive procurement provision discussed in WIOA sec. 123 is only applicable if the Local WDB chooses to award grants or contracts to youth service providers. The Department encourages Local WDBs to continue to award contracts to youth service providers when local areas have access to experienced and effective youth service providers. The revision also uses the terminology ‘‘youth service providers’’ consistently to refer to these providers. While this revision represents a significant change in that it provides Local WDBs with flexibility in determining which WIOA youth services to procure, the Department expects Local WDBs to continue to contract with youth service providers to provide the program elements which youth service providers are best positioned to offer. The intent of this flexibility is to allow for Local WDBs to directly provide the WIOA youth program elements that they can most efficiently and cost-effectively provide, such as labor market and employment information and framework services including assessment, intake, supportive services and follow-up services. The Department received a number of comments on this section as discussed below. Based on these comments, the Department has made a significant revision to this section in the Final Rule. Comments: A number of commenters asked the Department to provide specific guidance as to which WIOA youth services must be competitively procured and when this regulation would take effect. One commenter requested additional clarification from the Department regarding the E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56172 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations competitive selection requirement, specifically inquiring as to what the framework required by local areas would be. In addition, since the proposed regulation stated at § 681.400(b) that competitive selection requirements do not apply to ‘‘the design framework services when these services are more appropriately provided by the grant recipient/fiscal agent,’’ a couple of commenters asked the Department to clarify framework services. One of these commenters stated that framework services are described differently in the NPRM preamble discussion and the proposed regulatory text at §§ 681.400(b) and 681.420(a). One commenter asked the Department for clarification as to whether a county within a local area that is not a fiscal agent could perform framework activities, suggesting that disallowing this would not be cost effective. Department Response: The Department determined a need for greater clarity about the specific youth services that must be competitively procured. In addition, the concept of framework services in the NPRM was overly complex. The Final Rule clarifies that the competitive procurement requirements in sec. 123 of WIOA apply only if the Local WDB chooses to award grants or contracts to youth service providers to provide some or all of the youth program elements. For example, a Local WDB could choose to procure competitively all youth program elements or it could choose to competitively procure a few of the youth program elements, and provide the remaining program elements themselves. This simplification in the Final Rule eliminates the need for the discussion of framework services in § 681.400(b). Comments: With regard to proposed § 681.400(a)(3), which would allow a Local WDB to sole source awards if it determines there is an insufficient number of eligible training providers of youth activities in the local area, a commenter asked the Department how a Local WDB would determine that there is an insufficient number of youth providers. Further, this commenter asked if a determination that a local area is ‘‘rural’’—for example, by using the Census Bureau, Office of Rural Health Policy, or Office of Management and Budget definition—alone provides justification for sole sourcing. Some commenters recommended that the Department expand the proposed § 681.400(a)(3) language to allow for the Local WDB to allow the grant recipient/ fiscal agent to deliver the elements when there are no eligible training VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 providers available, as this would be most useful in rural areas. Department Response: The Final Rule in § 681.400(b)(4) does not address how to determine an insufficient number of eligible youth providers. Rather, the Local WDB should have a policy that defines what would constitute an insufficient number of eligible youth providers. Based on the changes made in the Final Rule, the grant recipient/ fiscal agent will have the flexibility to deliver youth program elements as recommended by the commenter. Comments: A number of commenters recommended that the Department expand the § 681.400 language to encourage Local WDBs to ensure that the competitive process does not discourage or limit co-enrollment of youth participants in other core or partner programs. One commenter recommended that the youth provider selection process should include suggested quality criteria for Local WDBs and/or States to use when selecting eligible training providers. This commenter also suggested that the Department provide in the regulation examples of public or private entities that have demonstrated effectiveness in providing regionally accredited secondary level educational programs providing entry-level workforce preparation and/or leading to recognized postsecondary education and training activities. Department Response: The Department agrees that it is important not to discourage co-enrollment and to incorporate quality criteria. The Department concluded that this type of language is more appropriate in guidance. The Department also agrees with the importance of competitively selecting high quality youth service providers, as appropriate, and will address this issue in future guidance. Comments: A commenter asked whether waivers for providing intake, assessment, development of ISS, case management, and follow-up services are still recognized under the regulation. Finally, one commenter observed that the term ‘‘local program’’ is used throughout subpart C without a clear definition, and recommended that the Department add a definition of ‘‘local program’’ to § 681.400. Department Response: Because of the revisions to the Final Rule that provide additional flexibility in delivering youth program elements, waivers related to WIOA sec. 123 are no longer necessary. In addition, the Department declines to add a new definition of ‘‘local program’’; the term ‘‘local program’’ refers to a local workforce area’s WIOA title I youth formula-funded program. PO 00000 Frm 00102 Fmt 4701 Sfmt 4700 No changes were made to the final regulation in response to these comments. Section 681.410 Does the requirement that a State and local area expend at least 75 percent of youth funds to provide services to out-of-school youth apply to all youth funds? This section describes the new requirement under WIOA that States and local areas must expend a minimum of 75 percent of youth funds on OSY. This section also clarifies the guidelines by which a State that receives a minimum allotment under WIOA sec. 127(b)(1) or under WIOA sec. 132(b)(1) may request an exception to decrease the minimum expenditure percentage to not less than 50 percent. Comments: Numerous commenters expressed their support for the increase in mandatory minimum OSY expenditure from 30 to 75 percent, asserting that this change along with others would lead to improved outcomes for OSY. One commenter expressed its support for the proposed regulations, but further encouraged the Department to provide guidance as to how programs can transition to help the OSY population now that they are a priority. This commenter cautioned that without such guidance, providers with experience meeting Federal requirements and/or with expertise in hybridized ‘‘earn and learn’’ models could be excluded from the system. In addition to supporting the proposed regulations regarding the 75 percent funding requirement, one commenter expressed support for the Department’s attempts to limit opportunities for waivers that would reduce this funding requirement. A few commenters expressed their support of the language that would allow organizations a transition period before they have to reach the 75 percent OSY funding goal. One of these commenters suggested that allowing for this gradual transition would help public workforce systems to decrease their expenditures on ISY slowly. Another commenter was concerned about the 75 percent requirement because for its State and others with low-dropout rates, reaching the requirement would be unrealistic and would fail to serve many at-risk ISY. This commenter recommended that the requirement be reduced to 40 percent for the first year after implementation and increased to 60 percent at the third year and thereafter. Department Response: While the Department notes the commenters’ concerns about the shift to spending more funds on OSY, the Department issued TEGL No. 23–14 (‘‘WIOA Youth E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations Program Transition Guidance’’), which can be found at http://wdr.doleta.gov/ directives/All_WIOA_Related_ Advisories.cfm, on March 26, 2015. This guidance discusses transitioning to the minimum 75 percent OSY expenditure requirement that allows a gradual transition in the first WIOA program year. The Department plans to issue additional guidance and technical assistance to help programs serve more OSY. Comments: A commenter expressed concern that transitioning to the 75 percent OSY requirement would decrease performance outcomes throughout the youth services system because the OSY population is often difficult to retain contact with, especially after they have exited the program. Therefore, this commenter predicted that local areas would enroll a limited number of youth, except that those youth have a relatively high prospect for success, and devote significant resources to tracking and reporting on that limited population. This commenter requested confirmation that the Department would prefer that local areas forgo volume considerations and do everything possible for the few OSY that could meet these expectations. Department Response: The Department recognizes that OSY may require additional resources for services and expects local programs to provide the necessary resources to ensure the success of OSY. There is no specific expectation on the number of OSY programs must serve, only on the percentage of funds spent on OSY. States and local areas will have the opportunity to set performance targets based on the population they serve. Comments: Commenting that many ISY are at risk regardless of the fact that they are attending school, a commenter stated that the proposed regulations would not give enough support to areas who want to continue to help serve ISY. Further, this commenter was concerned that some ISY may end up dropping out in order to be eligible for OSY services and assistance and, therefore, suggested that local areas should be able to determine the needs of their own areas and serve those individuals as such. Department Response: The Department recognizes the concerns about serving fewer ISY. However, the focus in WIOA is on expending additional resources on OSY. Local WDBs do not have the authority under WIOA to determine ISY and OSY expenditure rates based on the needs of their own area. Local areas must spend a minimum of 75 percent of youth funds on OSY, with the exception that local area administrative expenditures are not VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 a part of the 75 percent OSY minimum expenditure calculation. Comments: Describing the impact the 75 percent OSY minimum expenditure requirement would have on its summer transition program, one commenter opposed the OSY minimum expenditure requirement, stating that it would prevent 15 ISY who have been identified as high-risk from participating in its program due to a lack of funding for ISY. Department Response: The Department recognizes concerns regarding continuing to serve ISY and issued TEGL No. 23–14 (‘‘WIOA Youth Program Transition Guidance’’) on March 26, 2015, which can be found at http://wdr.doleta.gov/directives/All_ WIOA_Related_Advisories.cfm, which addresses transitioning ISY and ensures they can successfully complete the program and are not exited from the program prematurely. Comments: A number of commenters recommended that the Department provide additional detail about what is required in the analysis of ISY and OSY populations in a local area that would be required as part of the waiver process to reduce the OSY minimum expenditure percentage for States that receive the small State minimum allotment (proposed § 681.410(b)(1)). Department Response: The Department will provide guidance on what is required when submitting waivers to reduce the required OSY minimum expenditure rate for States that receive the small State minimum allotment. Section 681.420 How must Local Workforce Development Boards design Workforce Innovation and Opportunity Act youth programs? This section describes the framework for the WIOA youth program design. This section also describes the requirement that Local WDBs must link to youth-serving agencies and adds local human services agencies to the list that WIA required. Objective Assessment Comments: One commenter recommended that the Department clarify that the proposed § 681.420(a)(1) requirement that the youth program design framework services must provide for an individual objective assessment does not require testing to determine an individual’s Grade Level Equivalent or Educational Functioning Level unless needed to determine that the participant is basic skills deficient or to document a measurable skill gains for purposes of measuring performance. Another commenter recommended that the PO 00000 Frm 00103 Fmt 4701 Sfmt 4700 56173 objective assessments and individual services planning process be completed using ‘‘strength-based’’ approaches that focus on the strengths of the individuals instead of their faults. Department Response: The Department has incorporated language into § 681.420(a)(1) to review youth strengths as part of the assessment process. It is also the intention of the Department to clarify the requirements around the youth program design framework in system guidance. Individual Service Strategy Comments: A commenter recommended that a participant’s ISS be developed with the individual’s needs in mind and not on the time constraints or structure of the provider. Department Response: The Department has incorporated language into § 681.420(a)(2) to develop the ISS based on the needs of the participant. Career Pathways Comments: Several commenters recommended that the Department clarify that the Local WDB may require that youth services be aligned with specific career pathways identified by the Local WDB. Further, these commenters suggested that the regulations should clarify that the requirement under WIOA sec. 3(7)(F) that a career pathway must enable an individual to attain a secondary school diploma or its equivalent, and at least one recognized postsecondary credential, does not limit the ability of local areas to serve youth who have already attained a secondary school diploma or its equivalent. A number of commenters requested clarification from the Department about the activities that States and Local WDBs must carry out regarding career pathways, and whether they have to establish specific processes and policies concerning career pathways. Additionally, many of these commenters requested that the Department clarify whether Local WDBs must implement each element outlined in the WIOA definition and stated that WIOA does not indicate whether the identification of career pathways as part of the assessment and individual service strategy would create any additional requirements for local areas or youth service providers. Some of these commenters also recommended that the regulation clarify that the WIOA sec. 3(7)(C) requirement relating to counseling does not create an affirmative requirement for Local WDBs or youth service providers to provide counseling to every individual, but only to the extent that such counseling E:\FR\FM\19AUR6.SGM 19AUR6 56174 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations would be consistent with the objective assessment and the ISS. One commenter agreed that Local WDBs should foster relationships with secondary and postsecondary education providers regarding the implementation of local career pathway strategies, stating that because of the shift in focus to OSY, Local WDBs should consult with experts that understand youth needs to design effective career pathway strategies. Department Response: The Department agrees that additional guidance is necessary to describe WIOA requirements for incorporating career pathways into the WIOA title I youth program, although the Department has determined that additional regulatory text on career pathways is not necessary. The Departments of Labor, Education, Health and Human Services in coordination with nine other Federal agencies plan to provide additional guidance and technical assistance on the implementation of career pathways in WIOA. Follow-Up Services Comments: A couple of commenters expressed concern that proposed § 681.420(a) listed follow-up services as part of the design framework services and proposed § 681.460(a)(9) listed follow-up services as 1 of the 14 program elements because design framework services do not have to be procured, while program elements do. These commenters requested that the Department clarify that youth program operators have the flexibility to include follow-up services in the design framework or as a youth program element. Department Response: The Department clarified the procurement requirements for all program elements, including follow-up services, in § 681.400. mstockstill on DSK3G9T082PROD with RULES6 Involvement of the Community Comments: One commenter requested that the Department clarify the term ‘‘actively involved’’ in the proposed § 681.420(g) requirement that Local WDBs ensure ‘‘that parents, youth participants, and other members of the community with experience relating to youth programs are actively involved in both the design and implementation of its youth programs.’’ Another commenter stated that requiring those individuals be ‘‘actively involved’’ is overly prescriptive and not required in legislation. The commenter expressed concern that public meetings allow open access and it would be impossible to ensure engaged participation. VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Department Response: The Department agrees with this comment and has deleted the word ‘‘actively’’ from the Final Rule. Comments: Another commenter recommended that the Department amend § 681.420 to better reflect the diverse range of stakeholders and perspectives of youth with disabilities. Specifically, this commenter recommended that the requirement that specific members of the community be involved with the establishment of program design should include youth with disabilities. Department Response: The Department has not added additional language based on this comment as § 681.420(c)(6) already specifically names local disability-serving agencies. Pay-for-Performance Comments: One commenter asked about the performance and reporting requirements of the pay-for-performance provision, specifically whether the Department will change how States report. Department Response: The Department plans to issue further guidance about the Pay-for-Performance contract strategies provision of WIOA and the requirements of subpart E of part 683. Section 681.430 May youth participate in both the Workforce Innovation and Opportunity Act (WIOA) youth and adult programs concurrently, and how do local program operators track concurrent enrollment in the WIOA youth and adult programs? This section provides that youth may participate in both the WIOA youth program and the adult program at the same time if they are eligible for both and it is appropriate. The section also provides that youth who are eligible under both programs may enroll concurrently in WIOA title I and II programs. Comments: Several commenters expressed support for the proposed language that clarifies that youth may be co-enrolled in WIOA title I and II programs. However, many of these commenters also recommended that the Department strengthen the language to encourage Local WDBs to incorporate co-enrollment with other core programs as part of the overall youth program design. One of these commenters also stated that co-enrollment would create difficulties in terms of data collection and capacity. Specifically, this commenter said that to move successfully between systems without significant disruption, data collection, and storage must track the individual PO 00000 Frm 00104 Fmt 4701 Sfmt 4700 youth themselves, instead of just the programs they are in. This commenter suggested that additional funding and technical support may be necessary to assist States and local areas in developing comprehensive data systems. Some commenters also expressed their support of the proposed regulations’ encouragement of coenrollment, especially because of how it could extend more services to OSY. However, these commenters expressed concerns that potential disincentives for co-enrollment exist related to inconsistencies across funding streams in how enrollment, exit, and participation in activities are defined and how performance is measured in programs across the different titles. Department Response: The Department acknowledges the concerns regarding disincentives for coenrollment due to data tracking issues and performance measure implications. However, the Department intends to provide additional guidance and technical assistance to support coenrollment across core programs. No changes were made to the regulatory text to reflect these comments. Comments: One commenter expressed its support for the proposed regulation’s allowance of dual eligibility in WIOA title I and II programs, but recommended that the Department issue additional guidance to Local WDBs about how to coordinate their resources effectively for individuals who could co-enroll in both title I and title II services. Further, this commenter asked the Department for clarification as to whether co-enrolled individuals would need Individual Training Accounts (ITAs) and whether States should have to maintain documentation of providers who have expertise in services under both titles I and II. A few commenters expressed their support for the option of co-enrollment in WIOA title I and II programs, stating that this allowance would be particularly beneficial for youth under the Deferred Action for Childhood Arrivals policy who have not yet received their high school equivalency certificate because their participation in youth services under title I could further instill in them a greater educational work ethic. Further, these commenters recommended that the Department search for potential methods for how State and Local WDBs could recruit and ensure that they are providing services to eligible immigrants. Department Response: On November 17, 2015, the Department provided preliminary guidance regarding partnering between WIOA titles I, II, E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations and IV in TEGL No. 08–15 (‘‘Second Title I WIOA Youth Program Transition Guidance’’), which can be found at http://wdr.doleta.gov/directives/All_ WIOA_Related_Advisories.cfm. The Department will provide additional technical assistance regarding partnering across the WIOA programs on an on-going basis, including services to eligible immigrants. No changes were made to the regulatory text in response to these comments. Comments: Another commenter recommended tracking expenditures individually by each program. Department Response: The Department already does require tracking expenditures by each program, and no changes were made to the regulatory text in response to this comment. mstockstill on DSK3G9T082PROD with RULES6 Section 681.440 How does a local youth program determine if an 18 to 24 year old is enrolled in the Workforce Innovation and Opportunity Act (WIOA) youth program or the WIOA adult program? Individuals aged 18 to 24 are eligible for the WIOA adult and youth programs. This section provides that local youth program needs to determine whether to enroll an 18 to 24 year old in the youth program or adult program based on the individual’s career readiness as determined through an assessment of his or her occupational skills, prior work experience, employability, and participant needs. Comments: A commenter recommended that, given the intent of WIOA, individuals should be able to determine the programs in which they will participate. However, this commenter further recommended that the Department modify the proposed language to give guidance to States in terms of how to present materials on program choice to individuals and ensure that the materials presented would be understood by a wide variety of individuals, including those with disabilities. Another comment stated that determining in which program an 18 to 24 year old should enroll would impose a burden on local areas to establish processes to ensure that services are provided to an individual in the appropriate program. A commenter suggested that, in cases of eligibility for co-enrollment in WIOA title I and II activities, it would not be suitable for an 18 to 24 year-old youth to be enrolled in the adult program without first undergoing an assessment to determine whether the adult program VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 would be appropriate for meeting his or her needs. Department Response: The Department does not intend to require local WDBs to establish specific processes to ensure that individuals are served in the appropriate program. Rather the Department wants to emphasize that youth may be served by either program depending on the young adult’s individual needs, knowledge, skills, and interests. Local WDBs need a process in place to assist in determining the appropriate program for participants between the ages of 18 and 24. Based upon the comments received, the Department updated the Final Rule and removed the word ‘‘objective’’ from in front of assessment to indicate that a formal evaluation is not needed and the Department removed the reference to WIOA sec. 129(c)(1)(A). Section 681.450 For how long must a local Workforce Innovation and Opportunity Act youth program serve a participant? The Department has continually provided guidance and direction that youth programs serve participants for the amount of time necessary to ensure they are successfully prepared to enter postsecondary education and/or unsubsidized employment. While there is no minimum or maximum time a youth can participate in the WIOA youth program, programs must link program participation to a participant’s ISS and not the timing of youth service provider contracts or program years. Comments: Some commenters expressed their support for the proposed regulations’ allowance to serve youth until their needs have been met, stating that this would alleviate stress on participants from having to deal with time constraints. A few of these commenters also stated, however, concerns about the use of the word ‘‘must.’’ These commenters recommended that the language be amended to say, ‘‘Local youth programs must provide service to a youth participating in their individual service strategy in good faith for the amount of time necessary to ensure successful preparation to enter postsecondary education, registered apprenticeships, and/or unsubsidized employment.’’ In addition to allowing an individual to remain enrolled in WIOA youth services until he or she completes his or her plan of service, a commenter recommended that youth may remain enrolled in their services regardless of whether they are experiencing a period of inactivity in a program, as long as they are active in their career counseling services. PO 00000 Frm 00105 Fmt 4701 Sfmt 4700 56175 Another commenter stated that the proposed regulations would not allow individuals who do not abide by the rules of their program to discontinue services and re-enroll in the program as long as they were within the age requirement. This commenter recommended that the Department revise this regulation to focus on the needs of individuals who must temporarily suspend their services for legitimate reasons. Department Response: The Department recognizes that at times youth face obstacles that make it hard for them to commit to a program, however the services that all youth receive should still align with their ISS. The program should review the ISS with the youth and determine if the program has the appropriate services available for the young adult. Additionally a youth may remain in the program for as long as he or she is receiving at least one program element, other than follow-up services. Therefore, because WIOA sec. 129(c)(2)(M) includes career counseling services, the scenario described above with a youth only participating in career counseling would be acceptable under the Final Rule. No change has been made in the regulatory text in response to these comments. Comments: Two commenters requested additional clarification from the Department about how they would measure and explicitly define ‘‘successful preparation to enter postsecondary education and/or unsubsidized employment.’’ One of these commenters further recommended that they not measure successful preparation by an individual’s actual entry into either postsecondary education or unsubsidized employment, stating that there may be outside, uncontrollable factors that are preventing them from engaging in those activities, other than their level of readiness. Department Response: The required reported outcomes for individuals entering postsecondary education and/ or unsubsidized employment do not differ from the other WIOA youth program performance indicators. Additional information on required performance indicators is found in 20 CFR part 677 (see Joint WIOA Final Rule). Section 681.460 What services must local programs offer to youth participants? This section lists the 14 program elements, including 5 new youth program elements in WIOA sec. 129(c)(2) that were not included under WIA. These new elements are (1) E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56176 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations 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 indemand industry sectors or occupations available in the local area, such as career awareness, career counseling, and career exploration services; and (5) activities that help youth prepare for and transition to postsecondary education and training. In addition, WIOA revised some of the WIA program elements. For example, the element on tutoring, study skills training, and instruction leading to the completion of secondary school, including dropout prevention strategies, has been revised to provide that the dropout prevention (and recovery) strategies must be evidence-based and to make clear that the completion of secondary school can be accomplished by attainment of a secondary school diploma or its recognized equivalent, including a certificate of attendance or similar document for individuals with disabilities. WIOA also combines the two WIA elements of summer youth employment programs and work experiences so that summer youth employment programs become one item in a list of work experiences and adds preapprenticeship programs to the list of work experiences. Finally, WIOA expands the description of the occupational skill training element to provide for priority consideration for training programs that lead to recognized postsecondary credentials that are aligned with in-demand industry sectors or occupations if the programs meet WIOA’s quality criteria. This change is consistent with WIOA’s increased emphasis on credential attainment. The section clarifies that while local WIOA youth programs must make all 14 program elements available to WIOA youth participants, local programs have the discretion to determine which elements to provide to a participant based on the participant’s assessment and ISS. The Department received many comments, which are discussed below, on provisions within § 681.460. Comments: A commenter asked for clarification from the Department regarding the reasons for WIOA’s increase in the number of required program elements that a local area must be able to provide. Another entity commented that not all of the 14 proposed program elements are available in every local area, citing VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 mentorship programs as a primary example. Another commenter stated that local areas should be allowed to choose which of the 14 program elements to provide, reasoning that local areas will have the best insight into what is needed for the individuals in their particular area. Department Response: The Department understands that in some local areas it takes effort to identify quality providers for all program elements; however, WIOA explicitly requires these 14 elements for youth programs. While all 14 program elements must be available in a local area, every youth does not have to receive every element. For instance, only youth that have mentoring included on their ISS need to receive the program element. The Department acknowledges that in some areas mentoring is particularly challenging and has changed § 681.490 to allow case managers to serve as adult mentors. Comments: Another commenter recommended that the Department clarify that youth programs may bring in multiple public/private partners and evidence-based programs that support the attainment of a secondary school diploma or its recognized equivalent, entry into postsecondary education, and career readiness for participants. Department Response: The Department agrees that partnering with other organizations to provide some program elements can be valuable and has added § 681.460(c), that reads, ‘‘When available, the Department encourages local programs to partner with existing local, State, or national entities that can provide program element(s) at no cost to the local youth program.’’ Comments: One commenter said that services offered to an individual must be in the area where the youth live because too often programs’ inability to relieve transportation challenges has resulted in program non-completion. The commenter suggested that the Department include language regarding the need for State and Local WDBs to support investments in transportation services and program operations beyond non-traditional hours of operation. Department Response: The Department recognizes the need for program operation during nontraditional hours as well as the challenge transportation presents across the country. As described in § 681.570(b) supportive services may include transportation costs. The Department did not change the proposed regulation, though through PO 00000 Frm 00106 Fmt 4701 Sfmt 4700 technical assistance it will emphasize the possibility of using WIOA funds to cover transportation needs. Comments: Another commenter recommended that the Department clarify that providers must incorporate a number of items in their dropout recovery services (proposed § 681.460(a)(2)), such as credit recovery opportunities leading to postsecondary education; flexible scheduling; various learning models; performance-based assessments; mentoring; and ‘‘comprehensive’’ support service. Department Response: The Department recognizes the value of dropout recovery services for youth and its success in reconnecting disconnected youth. Because many of the items suggested by the commenter are either WIOA program elements or allowable under other program activities, the Department decided not to change the regulatory text about alternative secondary school services. The Department plans to provide technical assistance on the program elements, including those that contain dropout recovery services. Comments: One commenter recommended that, in order to clarify that neither the Governor nor the State WDB should impose policies that require a sequence of services, the Department should revise proposed § 681.460(a)(3) to clarify that ‘‘academic and occupational education as a component of work experience’’ may be provided on a concurrent or sequential basis based upon a participant’s ISS, stating that local areas should have the flexibility to meet participants’ individual needs. Department Response: The Department concurs that youth may receive academic and occupational education as a component of work experience on a concurrent or sequential basis based upon the ISS. The Department included new language in the Final Rule text of § 681.600(b) that clarifies that the academic and occupational education of work experience may occur on a concurrent or sequential basis. Section 681.470 Does the Department require local programs to use Workforce Innovation and Opportunity Act funds for each of the 14 program elements? This section clarifies that local WIOA youth programs must make all 14 program elements available to youth participants, but not all services must be funded with WIOA youth funds. Local programs may leverage partner resources to provide program elements that are available in the local area. If a local program does not fund an activity E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations with WIOA title I youth funds, the local area must have an agreement in place with the partner to offer the program element and ensure that the activity is connected and coordinated with the WIOA youth program if enrolled youth participate in the program element. Comments: A few commenters suggested the proposed language would require that local programs that are not using WIOA funds to fund an activity establish agreements with the partner with which they are engaging in the activity. These commenters stated that a referral should be sufficient in this case, adding that if services outside of WIOA funding streams are present in the community, an agreement would be unnecessary and is overly regulative. Department Response: While the Department does not require a local youth service provider to pay for all program elements, the Department does require the program elements provided to a youth to align with the goals the youth set forth in the ISS. Case managers must update the ISS on an ongoing basis and document, among other items, the services provided and participant’s progress, activities completed, benchmarks reached, and any other accomplishments. Case managers must document this information regardless of who provides the element. Therefore, the Department did not change the proposed regulation; the information needed for the ISS necessitates an agreement between the partner organization and the program. Comments: A couple of commenters asked for clarification regarding the proposed regulations’ requirement for the creation of agreements between youth services providers and partner organizations outside of WIOA funding. Specifically, these commenters asked for clarification from the Department about what ‘‘monitor’’ means in this language, and when this requirement would be necessary. Department Response: The Department notes that the term ‘‘monitor’’ came from the NPRM preamble and was not a proposed requirement. It appeared in the following context, ‘‘By closely connected and coordinated, the Department means that case managers must contact and monitor the provider of the non-WIOA-funded activity to ensure the activity is of high quality and beneficial to the youth participant.’’ The case manager must check on the provider of the non-WIOA-funded activity and make sure the youth participant gets quality services that match the program, element requirements. VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Comments: A commenter recommended that the Department issue guidance on performance requirements and a reporting process for each of the required youth program elements to help local areas and States in the creation of their plans. Department Response: The Department is including guidance and specifics on the performance requirements and reporting through the ICR process, which was done for 20 CFR part 677 (see Joint WIOA Final Rule). The Department is providing additional information regarding the required reporting of data elements, including each of the 14 youth program elements through that process. More information is also available in the Joint WIOA Final Rule discussion of 20 CFR part 677. Section 681.480 What is a preapprenticeship program? A pre-apprenticeship is a program or set of strategies designed to prepare individuals to enter and succeed in a registered apprenticeship program and has a documented partnership with at least one, if not more, registered apprenticeship program(s). Comments: A couple of commenters requested clarification regarding what constitutes a partnership for the purposes of this section, asking further whether it is direct entry into a partnership or whether a form of collaboration would be sufficient for these purposes. Other commenters sought clarification regarding preapprenticeship and performance indicators. Department Response: The Department further edited the preapprenticeship regulation to provide a more detailed and consistent explanation of the components of preapprenticeship programs as described throughout this Final Rule. The type of required reported outcomes for individuals engaging in preapprenticeship programs do not differ from the other WIOA youth program performance indicators. Additional information on required performance indicators is found in 20 CFR part 677 (see Joint WIOA Final Rule). Section 681.490 What is adult mentoring? This section describes the adult mentoring program element. The Department received many comments on proposed § 681.490 and made changes to the Final Rule as discussed below. Comments: A number of commenters recommended that the Department provide flexibility for States in how the mentoring programs are arranged and PO 00000 Frm 00107 Fmt 4701 Sfmt 4700 56177 length of time participants receive mentoring. Some of these commenters reasoned that adult mentoring is difficult for small States to establish because mentoring services with which to partner are not widely available and because of limited funds. With regard to the language that would require the inclusion of a mentor other than the individual’s case manager (proposed § 681.490(a)(3)), a commenter suggested that a case manager should be suitable for consideration as an individual’s mentor if he or she is providing the guidance and support that would be required of a mentor. This commenter explained that in rural areas, mentoring programs are rare and oversubscribed if they exist, so the WIOA case manager is, in fact, the chief adult mentor for the youth. In addition, several commenters did not like the proposed minimum 12month requirement for adult mentoring (proposed § 681.490(a)(1)), recommending that the length of mentoring should instead be evaluated and defined on a case-by-case basis and determined by the individual, his or her mentor, and his or her case manager. One commenter said that the timeframe for adult mentoring is better suited for local control to allow for direct assessment of participant needs. Another commenter stated that the language in this section should be no more prescriptive than the WIOA statute. Department Response: Under WIA, most local areas were able to secure qualified mentors, other than case managers, for youth participants. Nonetheless, the Department acknowledges that in a few areas of the country finding mentors may present a burden to a program. While the Department strongly prefers that case managers not serve as mentors, it changed the final regulation deleting proposed § 681.490(a)(3), ‘‘include a mentor who is an adult other than the assigned youth case manager’’. The Final Rule allows case managers to serve as mentors in areas where adult mentors are sparse. Because WIOA defines the length of time required for mentoring as not less than 12 months, no changes were made in the regulatory text. Comments: Another commenter suggested that local areas study evidence-based models that they may implement when designing their mentorship programs. Suggesting that the purpose of adult mentoring should be clarified to indicate expected results of the mentor relationship and guide the types of activities and engagement that should result. A commenter E:\FR\FM\19AUR6.SGM 19AUR6 56178 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 recommended that the Department revise § 681.490 to clarify that adult mentoring should result in effectively engaging students in high-quality, career relevant instructions and establishing clear connections between work-based learning and classroom experiences. Department Response: The Department supports the use of evidence-based models. The Department anticipates that the expected outcomes of a mentoring relationship will connect to the goals set forth in the individual participant’s ISS. Therefore, mentoring results will vary by participant. Citing their use of ‘‘advocates’’ in lieu of mentorship programs to engage with youth, one commenter recommended that the Department amend proposed § 681.490 to include that mentorship services may include activities such as providing transportation or transportation assistance, aid in attaining work experience opportunities, court advocacy, foster care support, tutoring help, fostering of community relationships, and engagement with family. Department Response: The Department affirms activities such as providing transportation, aid in attaining work experience opportunities, court advocacy, foster care support, tutoring help, fostering of community relationships, and engagement with family care. However, other WIOA youth program elements cover several of these activities. While mentors may help participants attain their goals, the additional suggested activities above go beyond the basic WIOA adult mentoring requirements. No changes were made in the regulatory text in response these comments. Section 681.500 What is financial literacy education? This section describes the financial literacy program element, new under WIOA. The Department received many comments on the new program element. Several of the comments described below resulted in changes to the Final Rule text. Comments: A few commenters expressed their support for the proposed regulations’ description of the elements of financial literacy education. In particular, one expressed its support particularly for the inclusion of identity theft education. Some commenters stated that as the proposed language as written, it appears as though all of the elements listed are requirements that must be present within the financial literacy program element itself. These commenters recommended that the § 681.500 introductory language be amended to VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 State, ‘‘The financial literacy education program element may include activities which. . . .’’ Similarly, another commenter asked the Department to clarify that the list of activities for financial literacy education (proposed § 681.500) and entrepreneurial skills training (proposed § 681.560) are illustrative and that each individual topic is not required for every participant. Other commenters expressed their support for the proposed language’s flexibility regarding the activities related to financial literacy education, and that the list included in the proposed regulations is not required, but provides guidance. Alternatively, one commenter recommended that the Department eliminate the requirements of proposed § 681.500(g) and (h), stating that these proposed requirements are overly prescriptive and limit flexibility. Department Response: The Department understands the commenters’ concern that providing all of the financial literacy sub-elements to every participant that receives this program element may be overly prescriptive. The Department anticipates each item will be available in locations implementing a robust financial literacy program. However, the Department did not intend for every youth to receive each sub-element. Instead, every youth, based on his/her individual needs, would receive many of the items included in this regulation. The actual services delivered may vary by program participant. As a result, the Department accepts the proposed language change and replaced ‘‘must’’ with ‘‘may’’ in the Final Rule. Comments: One commenter recommended the addition of an element to the list in proposed § 681.500 to assist individuals about the impact that employment has on their receipt of public benefits. This commenter reasoned that educating individuals of this impact may lessen the fear they may have of losing their Medicaid or other public benefits if they are competitively employed. Another commenter recommended that § 681.500 should specifically state that for youth who are receiving disability Social Security benefits, their financial literacy education must include benefits planning and work incentives counseling from a qualified provider. Department Response: The Department concurs with the suggested addition and added § 681.500(g), ‘‘Support activities that address the particular financial literacy needs of youth with disabilities, including connecting them to benefits planning and work incentives counseling;’’ to the Final Rule text. PO 00000 Frm 00108 Fmt 4701 Sfmt 4700 Comments: One commenter shared that this proposed program element requirement would place a burden on local areas related to identifying a financial literacy program that includes an identity theft component. Department Response: By changing ‘‘must’’ to ‘‘may’’ at the beginning of § 681.500, the Department addresses this commenter’s concern about finding a local entity that addresses identity theft. Comments: Several commenters provided suggestions on how to implement the element. In response to the Department’s request for comments on how to achieve the goal of equipping workers with the knowledge and skills they need to achieve long-term financial stability, one commenter recommended that the Department survey programs that have been funded and implemented by companies and their foundations in the financial services sector. Another commenter responded that many banks have an effective financial literary curriculum and recommended that the Department foster partnerships with banks that would be willing to provide the curriculum for free to local organizations. Another commenter recommended that financial literacy education be implemented in an online or in-person classroom setting where retirement requirements, banking, debt, lease, and mortgage information are covered. This commenter also suggested that these programs must result in the issuance of certification of completion and should be developed by a recognized financial planning authority, but not an entity with investment products on the market. Department Response: The Department has found that a number of local and national entities want to help make this element relevant to youth and a success. Many financial literacy tools and curriculums are readily available for use and include formats that engage youth. The Department has begun to provide technical assistance on financial literacy element and has engaged with many Federal financial agencies about supporting the public workforce system in implementing this program element. Comments: Citing a 2014 Consumer Financial Protection Bureau report that described the components necessary for successful youth employment programs, one commenter recommended that the Department amend the language in this section from referring to ‘‘financial literacy education’’ to using the term ‘‘financial capability services,’’ reasoning that the latter term would align more closely with the WIOA E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations requirement because it focuses on knowledge, skills, and access. Further, this commenter recommended that the Department use the definition provided by the President’s Council on Financial Capability to define financial capability services (‘‘the capacity based on knowledge, skills and access, to manage financial resources effectively’’). This commenter also recommended that the Department ensure it is connecting youth employment programs with resources that highlight best practices and financial institutions that could be key partners. Regarding the measuring of financial capability outcomes for youth programs, this commenter suggested that the Departments of Labor and Education provide youth programs with resources and guidance to ensure they are able to effectively track clients’ progress and outcomes and that workforce organizations also may need additional tools and resources to improve the financial education services they offer. Given the varied outcomes associated with the § 681.500 list of allowable financial literacy education activities, the commenter encouraged States and localities to collect outcome data as related to their provided service. Department Response: The Department decided that a name change from ‘‘financial literacy education’’ to the term ‘‘financial capability services’’ will confuse youth programs and did not change the regulatory text. The Department continues to work with the Consumer Financial Protection Bureau to help local areas implement this new WIOA requirement with the goal of connecting youth employment programs with resources, best practices, and financial institutions that can become workforce partners. The Department captures information about youth participating in this program element as described in WIOA State Plan ICR and uses the same youth WIOA performance indicators discussed in 20 CFR part 677 (see Joint WIOA Final Rule). The Departments note that the Governor also has the authority to identify, in their Unified or Combined State Plan, additional performance accountability indicators. Comments: A few commenters recommended that the Department grant local areas the role of determining the necessary elements for financial literacy education programs. Similarly, a commenter recommended that the Department grant States the jurisdiction to create their own policies regarding financial literacy education. Department Response: With the change in the final regulation from ‘‘must’’ to ‘‘may’’ at § 681.500, local areas may determine the necessary VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 elements for financial literacy education programs. The Department analyzed the suggestion to give States the jurisdiction to create their own policies regarding financial literacy education and concluded that with the above regulation text change, it was not needed. Comments: Finally, a commenter requested clarification from the Department concerning the difference between personal financial literacy and entrepreneurial financial literacy. Further, this commenter suggested that youth would be best served by learning financial literacy through practice rather than pure instruction. Department Response: The Department concurs that a hands-on approach to financial literacy is best and entrepreneurial financial literacy is one way to provide a practical financial literacy application. The Department, along with other Federal partners, will provide further technical assistance around this element. Section 681.510 What is comprehensive guidance and counseling? Comprehensive guidance and counseling provides individualized counseling to participants. This includes drug and alcohol abuse counseling, mental health counseling, and referral to partner programs, as appropriate. (WIOA sec. 129(c)(2)(J).) When referring participants to necessary counseling that cannot be provided by the local youth program or its service providers, the local youth program must coordinate with the organization it refers to in order to ensure continuity of service. Comments: Citing the activities that YouthBuild offers about counseling services, a commenter stated the importance of counseling and its beneficial impact on youth’s success. Another commenter requested clarification from the Department as to the credentials and training that would be required for guidance counselors under the proposed regulations. Department Response: The Department acknowledges that accessing counseling services impacts the success of many youth who receive program services. The Department understands that counselors’ education and experience will vary depending on the type of guidance and counseling offered and did not address it in the final regulation. Comments: Citing the proposed language that would require that local youth programs ‘‘when referring participants to necessary counseling that cannot be provided by the local PO 00000 Frm 00109 Fmt 4701 Sfmt 4700 56179 youth program or its service providers, the local youth program must coordinate with the organization it refers to in order to ensure continuity of service,’’ a commenter said that coordination with multiple organizations would be unnecessary and that a referral should be sufficient in and of itself. Along the same line, a commenter asked for clarification concerning the requirement that youth service providers collaborate with the outside services they use for counseling in order to ensure the continuity of service for individuals. This commenter requested that the Department provide additional guidance for how service providers should interpret these requirements. Department Response: The Department views a referral as one part of the comprehensive guidance and counseling element; the local service provider must coordinate with the organization to which the referral was made in order to ensure youth receive comprehensive services. The Department plans to provide additional technical assistance on comprehensive guidance and counseling. No changes were made to the regulatory text in response to this comment. Comments: A commenter asked for guidance from the Department about whether comprehensive guidance and counseling encompasses academic counseling as is stated in § 681.510, suggesting that it is not included in the language in § 681.460. Department Response: The Department considered this input and agreed with the commenter that the proposed regulation duplicated counseling types found in other program elements. As a result, the Department removed ‘‘career and academic counseling’’ from the comprehensive guidance and counseling element. Section 681.530 What are positive social and civic behaviors? While WIA included positive social behaviors as part of the description of leadership development opportunities, WIOA adds ‘‘civic behaviors’’ to the description of the leadership development program element. This section provides examples of positive social and civic behaviors. Comments: Citing the list of positive social and civic behaviors that YouthBuild programs are based on, a commenter expressed their support over the proposed list of behaviors and recommend that WIOA youth services programs incorporate their list into the proposed regulations. On the other hand, citing the language listing some of E:\FR\FM\19AUR6.SGM 19AUR6 56180 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 the indicators of positive social and civic behaviors, a commenter stated that only paragraph (i), ‘‘positive job attitudes and work skills,’’ is measurable and relevant to the goal of workforce training. This commenter suggested that the other listed potential indicators of these behaviors are irrelevant, and that paragraphs (h) and (j) could be considered inappropriate. Department Response: Comprehensive in nature, the WIOA youth program provides a wide array of supports and services. The Department finds the sub-elements in positive social and civic behaviors relevant and connected to the workplace traits employers seek. It recognizes that the list is not all-inclusive and other personal attributes contribute to positive social and civic behavior. The Department did not add additional items to the final regulation. Noting the strong objection to proposed paragraphs (h) and (j), the Department did delete proposed paragraphs (h) (‘‘Postponing parenting and responsible parenting, including child support education’’) and (j) (‘‘Keeping informed in community affairs and current events’’) from the final regulation text. Comments: A commenter suggested that the behaviors in this section would be difficult to measure, which may result in the measurement through default indicators such as the individual didn’t get arrested or isn’t a youth parent. Department Response: The Department appreciates the commenters concerns about the difficulty of measuring positive social and civic behaviors. From the Department’s perspective these behaviors contribute to characteristics that businesses seek in their employees. No change is made in the regulatory text in response to this comment. Section 681.540 What is occupational skills training? This section provides a definition for the occupational skills training program element. WIOA sec. 129(c)(2)(D) further sharpens the focus on occupational skills training by requiring local areas to give priority consideration for training programs that lead to recognized postsecondary credentials that align with in-demand industries or occupations in the local area. Comments: Commenters expressed concern that the regulations in the section are too prescriptive, stating that the attainment of postsecondary credentials or other credential training would be inappropriate for some individuals. Further, this commenter suggested that as they are written, the VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 proposed regulations would not allow for training that would be a step towards a postsecondary degree but does not in and of itself result in one. Similarly, a couple of commenters expressed their support for the proposed regulations’ emphasis on occupational skills training, but stated their concern with the language that requires that all occupational skills training result in a postsecondary level education. The commenters suggested that requiring postsecondary education would not be appropriate for everyone, and recommended that instead, the regulations allow for individuals to result in one of the three options instead of all three. This commenter further recommended that the language, ‘‘. . . result in the opportunity to obtain a recognized postsecondary credential, or a certificate of job readiness, or an industry credential,’’ be added to the section. Department Response: The Department notes the concerns around occupational skills training needing to result in attainment of a recognized postsecondary credential. The Department has changed this language in the Final Rule to state that occupational skills training must lead to the attainment of a recognized postsecondary credential. Comments: One commenter recommended that the Department clarify that service providers should put into effect activities that include work experience to prepare for employment that leads to self-sufficiency, a sequenced series of work-based learning opportunities, a college and career ready curriculum, dual enrollment, and supplemental instruction. This commenter also recommended that the implementation of these activities should result in collaboration between WIOA youth service providers, Local WDBs, and educational institutions. Department Response: The Department concluded that these recommendations are more appropriate for technical assistance; as such, no changes were made in the regulatory text in response to these comments. The Department will provide guidance and technical assistance on all program elements, including occupational skills training. Comments: A commenter recommended that the Department modify the proposed text to state, ‘‘. . . and result in attainment of a recognized postsecondary credential, job readiness certificate, or industry credential,’’ suggesting that this language would still encourage individuals to participate in experiences that will help them to gain PO 00000 Frm 00110 Fmt 4701 Sfmt 4700 certifications and credentials, but gives them flexibility they may need to demonstrate success, depending on their choice of field. Department Response: The Department modified Final Rule text, as discussed above, regarding the attainment of a recognized postsecondary credential. An ‘‘industry credential’’ is encompassed in the term ‘‘recognized postsecondary credential.’’ A job readiness certificate relates to foundational work readiness skills and does not result from occupational skills training. Therefore, the Department did not incorporate language referring to a job readiness certificate in the regulatory text. Comments: Another commenter requested that the Department include entry-level career preparation training services that are taught or led by regionally accredited secondary-level education programs. Department Response: The Department determined that career preparation services are not a type of occupational skills training and did not make a change in the regulatory text in response to this comment. Section 681.550 Are Individual Training Accounts permitted for youth participants? This section allows ITAs for OSY aged 16 to 24. The Department received a number of comments about ITAs that resulted in a final regulation change discussed below. Comments: A number of commenters expressed their support for the allowance of OSY aged 18–24 to use ITAs in the proposed regulations. Many commenters suggested that the allowance of these ITAs is important for youth aged 18–24, as they may be receiving services from multiple WIOA title funding streams. A few commenters expressed their support for the use of ITAs for both ISY and OSY. Further, stating that it would reduce the burden of duplicative administrative work, a few commenters recommended that the proposed regulations be amended to allow ITAs for youth aged 18–24. A commenter offered that ITAs be expanded to include OSY 16–24 instead of 18–24. This commenter said that individuals who drop out of high school at 16 and have received their high school equivalency, are left dislocated until they reach the age of 18 and can then pursue an ITA, on-the-job training, or a career; therefore this commenter said that lowering the age limit to 16 would allow these youth to remain engaged. A commenter requested clarification from the Department regarding whether E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations or not OSY with ITAs would have to use the State permitted Eligible Training Provider List (ETPL) under these proposed regulations. Two commenters requested clarification from the Department regarding ITAs for OSY. A commenter stated that the proposed regulations indicate that only OSY would be allowed to use ITAs, but that the regulations also include occupational skills training as one of the 14 required youth program elements. This commenter asked the Department to explain what the difference would be in using an ITA or occupational skills services for an ISY who has graduated from high school and wants to pursue a postsecondary education. This commenter further requested guidance from the Department concerning how providers could provide occupational skills training service to all WIOA eligible youth, regardless of whether they are ISY or OSY. Stating that ITAs can help to close the gap between Federal contracting requirements and individuals with disabilities, a commenter recommended that this section be modified to encourage State and Local WDBs to connect Federal contracts with youth with disabilities and use ITAs for meeting employer requirements. Department Response: The Department analyzed the comments received and expanded the ITA language to allow all OSY, ages 16–24, access to ITAs. Upon reflection of the above comments, the Department concluded the final regulation change made policy and administrative sense by expanding training options, increasing program flexibility, enhancing customer choice, and reducing paperwork for all OSY. When using youth funds for ITAs, the Eligible Training Provider List (ETPL) must be used. Accessing the ETPL allows the program to avoid further procurement processes. The Department did not expand ITAs to ISY. However, ISY ages 18 or older may access ITAs through the adult program. Finally, the Department did not change the regulatory text to encourage State and Local WDBs to connect Federal contracts with youth with disabilities because the request is outside the scope of ITAs. The Department will provide further guidance on youth ITAs and related topics. VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Section 681.560 What is entrepreneurial skills training and how is it taught? This section discusses entrepreneurial skills training, a new program element under WIOA. The Department received a number of comments on the proposed entrepreneurial skills training regulation which resulted in a minor word change in the final regulation as explained below. Comments: Two commenters expressed their support over the proposed examples of entrepreneurial skills training activity options. In contrast, a number of commenters stated that the Department should not be dogmatic in determining specific methods and processes for how entrepreneurial skills would be taught under the proposed regulations. Department Response: The Department did not intend to be limiting in the list of ways to develop entrepreneurial skills. To emphasize that this list is not all-inclusive, the Department added the word ‘‘may’’ to the final regulation at § 681.560(a). Comments: Several commenters provided thoughts on other skills to develop under this program element as discussed in the next several paragraphs. One commenter shared its support of the inclusion of entrepreneurial skills training, citing the programs it has created in its State and programs that engage with small business centers, suggesting that the Department should use such services and programs for teaching these skills. Another commenter recommended that the Department use Junior Achievement and other organizations in their entrepreneurial skills training services, and stated that the Department also should include presentations and training sessions from local entrepreneurs in their skills training programs. Similarly, a commenter expressed their support of the inclusion of entrepreneurial skills training in the proposed regulations. This commenter further cited: Experiences that provide individuals with the knowledge of how to start their own business, the creation of a business plan, education on applying for loans and grants for business operations, and experiences related to running a business day-today, as potential activities used to teach individuals entrepreneurial skills. A commenter recommended that healthy relationship skills classes be included in the entrepreneurial training program, stating that building strong and healthy relationships are a key PO 00000 Frm 00111 Fmt 4701 Sfmt 4700 56181 component to being a successful entrepreneur. In addition, a commenter recommended that Local WDBs use experiential learning programs to teach individuals entrepreneurial skills, stating that using hands-on experiences is most effective for training individuals. Further, this commenter specifically recommended that entrepreneurial skills training include the following: Education assessment and pathway identification; leadership development activities; and soft skills training based on industry demand. A commenter expressed its support over the inclusion of these skills training, and recommended that it include the development of business plans and lessons on the various ways an entrepreneur can obtain start-up funding. Department Response: The Department acknowledges the many suggestions about how to local area may provide entrepreneurial skills training in a meaningful, relevant way to youth. The Department will provide technical assistance on this new element. Comments: A commenter recommended that the Department amend the proposed language so that ‘‘enterprise development’’ is removed as a skill that would be included in this entrepreneurial training, and be replaced with ‘‘crowd-funding,’’ sharing that crowd sourced funding would be a more viable option if a youth individual were trying to build a business as he or she would be unlikely to secure a loan. Department Response: While the Department did not change the regulatory text, the Department agrees with suggestion to include skills such as ‘‘crowd-funding’’ that may be more relevant for the youth population and will address them in future technical assistance. Comments: A commenter wondered about the reliability of wages for participants in these programs as well as how participants’ wages would be tracked, and requested clarification from the Department regarding these issues. Department Response: The Department notes that the performance indicators for youth engaged in this program element remain the same as the youth performance indicators explained in the joint regulation at 20 CFR part 677 (see Joint WIOA Final Rule). Comments: A commenter requested clarification from the Department about the definition of entrepreneurial skills training and what the requirements are around certification at the program’s completion. Similarly, a commenter recommended that the skills and techniques involved with E:\FR\FM\19AUR6.SGM 19AUR6 56182 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 entrepreneurial skills training should be in line with local postsecondary school curriculums and standards. Department Response: Postsecondary institutions and other training providers that develop entrepreneurial programs are best positioned to identify standards upon which certificates could be awarded. No changes were made in the regulatory text in response to this comment. Comments: Another commenter asked the Department if entrepreneurial skills training would only be provided to older youth. Department Response: Entrepreneurial skills training, similar to the other youth program elements, is available to youth regardless of age and must align with their ISS goals. Section 681.570 What are supportive services for youth? This section lists examples of supportive services for youth. The Department received a few comments on proposed §§ 681.570 and 680.900, which discusses supportive services in the context of adult programs. The Department chose to align these regulations which resulted in the addition of ‘‘Assistance with books, fees, school supplies, and other necessary items for students enrolled in postsecondary education classes’’; and ‘‘Payments and fees for employment and training-related applications, tests, and certifications,’’ to the regulation at § 681.570(k) through (l). Comments: One commenter recommended that the Department include groceries, on-site meals, hygiene products, clothing, and items for postsecondary education courses in the definition of supportive services. Another commenter recommended that transportation be provided to individuals in these programs, and that the transportation services available should include transportation to onestop centers. This commenter stated that in some areas the one-stop center may be miles away from where the youth providers are located, and reaching these one-stop centers to receive necessary services may be difficult for disengaged or homeless youth. This commenter also recommended that food services (other than food banks and soup kitchens) and subsidized services for document attainment be provided as support services for youth. One commenter recommended that healthy relationship skills should be included in the workforce development training programs for disconnected youth, including supportive services. This commenter reasoned that relationship skills help participants VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 build crucial interpersonal skills that are valued by employers and specifically mentioned skills including communications, problem solving, conflict resolution, reliability, and teamwork. The commenter also stated that learning healthy relationship skills can help participants prevent unplanned pregnancy and therefore avoid dropping out of school due to pregnancy. A commenter recommended that the Department align supportive services across the youth, adult, and dislocated worker programs. Another commenter strongly supported the inclusion of legal aid services in the Department’s list of examples of supportive services in § 680.900, noting that legal aid can uniquely address certain barriers to employment, including access to driver’s licenses, expunging criminal records, and resolving issues with debt, credit, and housing. Department Response: The Department analyzed the suggested additions to supportive services and decided, as noted above, to add three new paragraphs (h), (k), and (l) to the Final Rule. The Department determined that some suggested items such as tutoring, apprenticeship programs, work-place interpersonal skills, workrelated hygiene products and clothing attire, and addiction may be encompassed by other program elements. Assistance with transportation is allowable under supportive service. As discussed above, the Department has included legal aid services under the list of supportive services in § 680.900 for the adult and dislocated worker programs; we made a corresponding change to the list of supportive services allowable for the youth program in § 681.570 for the same reason as for the addition to § 680.900 and to align the list of supportive services across programs. Groceries and on-site meals for program participants are beyond the scope of WIOA. Comments: Citing the language about supportive services in this section, a commenter requested clarification from the Department concerning whether needs related payments are allowed for youth aged 18–24 in WIOA youth services. Department Response: Yes, the Department affirms that needs related payments are allowed for youth ages 18–24 enrolled in WIOA youth services. Section 681.580 What are follow-up services for youth? This proposed section discusses the importance of follow-up services and lists examples of follow-up services for youth. PO 00000 Frm 00112 Fmt 4701 Sfmt 4700 The Department received a number of comments on this section as discussed below. Comments: A commenter expressed its support of the proposed regulations in this section and another commenter expressed support citing all of the benefits of follow-up services. Citing the benefits and purposes behind follow-up services, another commenter agreed that follow-up services can be extremely beneficial to youth and help to ensure that they focus on and accomplish their long-term goals. Another commenter expressed their support of the follow-up requirements, but recommended that the Department create and distribute guidance to States regarding how they should document an individual who is unresponsive under the proposed regulations. A couple of commenters expressed concern over the requirements for follow-up services, suggesting that often when youth no longer access services, they no longer communicate with their providers, regardless of the efforts of the case manager. Therefore, these commenters recommended that States’ youth follow-up activities be evaluated on the quality of follow up services provided to engaged youth and not be viewed negatively when follow up does not happen. Further, these commenters recommended that States be allowed to establish policies that when a provider has exhausted all options in an attempt to engage a youth individual in followup services with no results, he or she may end follow-up activities. Likewise, one commenter recommended that in instances where the service provider attempts to reach the individual with no contact made for 90 days, he or she should be able to receive an exemption or waiver for needing to provide followup services for that individual. A number of commenters expressed concern with the proposed regulations, suggesting that the language concerning follow-up services should give more flexibility and account for those individuals who have moved and provided no contact information. These commenters recommended that in situations such as those stated above, follow-up contact attempts should end, and the attempts to make contact should be documented. One of these commenters also suggested that if multiple attempts at contact are made with no response, the provider should not be punished for being unable to contact the individual. Further, some of these commenters recommended that the regulations be modified to reduce the 12-month minimum to 6 months. Another commenter stated that followup services should allow for decreasing E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations concentration for follow-up contact with individuals after 6 months after end of enrollment in the program. Further, this commenter stated that text messaging and contact through social media should be considered contact for the purposed of follow-up services. Another commenter recommended the Department not be overly prescriptive with its follow-up services requirements. Department Response: The Department recognizes the concerns that some youth may not be responsive to attempted contacts for follow-up, and other youth may be difficult to locate making it impossible to provide followup services for such individuals. Based on the comments received, the Department has added language to the regulatory text to § 681.580(c) clarifying that follow-up services must be provided to all participants for a minimum of 12 months unless the participant declines to receive follow-up services or the participant cannot be located or contacted. This alleviates the concern expressed by many commenters about youth who are not able to be located or who refuse follow-up. Local programs should have policies in place to establish when a participant cannot be located or contacted. The Department did not incorporate the recommendation to reduce follow-up to 6 months as WIOA sec. 129(c)(2)(I) requires followup services for not less than 12 months. The Department will issue further guidance on follow-up services. Comments: One commenter recommended that the Department create guidance that would allow local areas to establish orientations for youth participants that would inform them of the follow-up services and recommended that the Department provide incentives for an individual’s participation in follow-up services. Stating that WIOA does not list all of the youth services offerings as being available for follow-up services, one commenter recommended that all WIOA program services be available for any individual in their follow-up services. Another commenter recommended that follow-up services should begin while an individual is still enrolled in the program, suggesting that follow-up services include supportive and other services that could ensure a participant’s success after the program. One commenter noted that the followup services listed in this section are significantly more intensive than under WIA and more closely resemble active programming and recommended guidance on managing the transition from active programming to follow-up services, particularly under the VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 proposed definition of ‘‘exit’’ in 20 CFR 677.150 (see Joint WIOA Final Rule). Department Response: At § 681.580(b), the Department clarified which specific program elements may be provided during follow-up. The Department plans to issue further guidance on follow-up services; it will clarify that follow-up services do not trigger re-enrollment in the WIOA youth program. Comments: Another commenter recommended that the follow-up services provided be concentrated on individuals gaining employment or postsecondary education. A couple of commenters also recommended that the Department clarify that incentive payments and supportive services would be allowed to be provided to youth during the period of follow-up services. Further, a commenter stated that in order to complete follow-up services as they are currently written, youth providers would need to be given additional funding. Department Response: The Department clarifies in the regulatory text that supportive services are allowed to be provided during follow-up. Incentive payments are covered in § 681.640. Comments: One commenter recommended adding the following language to this section, ‘‘Follow-up plans should be set by youth and their case manager allowing the youth to have an active voice in setting such plans. Follow-up plans for youth should be reassessed and flexible and may include . . . ,’’ saying that this language would encourage case managers to educate the youth they are responsible for as to the benefit of follow-up services and allow youth to become more engaged with his or her services. This commenter also recommended that youth be able to opt out of their follow-up services due to relocation without negatively impacting the performance scores of their provider. One commenter recommended that the language that states that follow-up services must be ‘‘provided’’ by youth programs should be amended to say that they must be ‘‘offered.’’ Finally, one commenter recommended that during the required 12-month follow-up period, multiple employees be allowed to administer follow-up services. Department Response: As discussed above, the Department has amended regulatory text to state that follow-up services must be offered to all participants and added language to address participant relocation. PO 00000 Frm 00113 Fmt 4701 Sfmt 4700 56183 Section 681.590 What is the work experience priority and how will local youth programs track the work experience priority? The section discusses the 20 percent minimum expenditure requirement on the work experience program element in WIOA sec. 129(c)(4) and how local WIOA youth programs track program funds spent on work experiences and report such expenditures as part of the local WIOA youth financial reporting. The Department received a few comments on this section as discussed below. Comments: Multiple commenters expressed their support for this section. One commenter requested that the Department clarify in the proposed regulations that career pathways must lead to a postsecondary credential, and that the requirements for these credentials will be aligned with the current State college and workplace readiness standards in place for each specific State. Another commenter expressed their support for the proposed regulations’ emphasis on work experiences; however, this commenter further recommended that the Department clarify in the regulations that youth service providers are strongly encouraged to ‘‘coordinate work experiences with employers participating in industry or sector partnerships developed and implemented in the local area.’’ Department Response: The Department agrees that career pathways in coordination with employers are important. The Department will continue to emphasize employer engagement in career pathways in future guidance or technical assistance. Please see TEN 17–15, building upon its ‘‘Career Pathways Toolkit: A Guide for System Development’’ (2015) found at https://wdr.doleta.gov/directives/attach/ TEN/TEN_17-15_Attachment_Acc.pdf. Comments: A number of commenters expressed their concerns regarding whether the proposed 20 percent work experience expenditure requirement would include leveraged resources. These commenters stated the requirement would negatively impact the support they receive from nonWIOA funding streams and the proposed language would require them to spend their WIOA funds first on work-based experience programs, which could be detrimental to their ability to attract private funds. Thus, the commenters recommended that the proposed regulations be amended to allow waivers that would allow Local WDBs to count non-WIOA funds towards the 20 percent work experience E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56184 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations expenditure requirement. Similarly, a few commenters recommended that the 20 percent work experience requirement be extended to include other funding sources, instead of relying only on WIOA funds to meet this requirement. Some of these commenters further stated that staff who are engaged in creating these strategies, as well as implementing them, should also be included in the minimum 20 percent expenditure requirement, while another commenters asked the Department to clarify if staffing or administrative costs count toward the expenditure requirement. Likewise, one commenter recommended that the academic component of the work experience requirements can be included in the 20 percent expenditure requirement. Another commenter recommended that the proposed regulations be amended so that the minimum 20 percent work experience expenditure requirement also includes the administrative and recruitment costs spent in order to place an individual in his or her work experience. Conversely, a commenter suggested that staffing costs should not be an allowable expenditure in the minimum 20 percent work experience expenditure requirement; rather, funds should be focused on direct participant costs. Similarly, the Department received very few comments on § 681.610. One commenter noted that § 681.610 clearly states to not include administration in this calculation which should be made consistent with § 681.590 instead of in a separate section of the regulations. Another commenter recommended that the term ‘‘incentives payments’’ be added to this section in order to ensure consistency. Stating that in many cases local areas utilize funding from a variety of funding sources, a few commenters recommended that Local WDBs should be able to use these funds for the purpose of the costs included in work experiences such as wages for individuals and training, and that these funds should be included in the work experience minimum expenditure requirement. Department Response: The Department recognizes that it is important to clarify further the types of expenditures that count toward the work experience expenditure rate. The Department issued TEGL No. 08–15 (‘‘Second Title I WIOA Youth Program Transition Guidance’’) in November 2015, which can be downloaded at http://wdr.doleta.gov/directives/All_ WIOA_Related_Advisories.cfm. The TEGL discussed the types of costs that count toward the work experience expenditure requirement. The VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Department has added § 681.590(b) that describes the types of expenditures that count toward the work experience minimum expenditure requirement and how to calculate the minimum expenditure requirement. Leveraged resources cannot count toward the expenditure requirement; WIOA sec. 129(c)(4) clearly states that the expenditure requirement is based on WIOA youth funds allocated to the local area. Because the Department has incorporated the language from proposed § 681.610 into § 681.590, the Department deleted proposed § 681.610 and has renumbered proposed §§ 681.620 through 681.660 as §§ 681.610 through 681.650. Comments: A commenter recommended that the Department allow a transition period for local areas to move funding to comply with the minimum 20 percent expenditure requirement. Another commenter expressed their support of the proposed emphasis on work experience, but recommended that the language be strengthened to emphasize the importance of connecting youth with disabilities to work experiences. Department Response: The Department did not provide for a transition period for the minimum expenditure requirement as part of its guidance. The Department agrees on the importance of connecting youth with disabilities to work experience opportunities and will emphasize it in future guidance or technical assistance. Section 681.600 What are work experiences? The section defines the work experience program element and includes the four work experience categories listed in WIOA sec. 129(c)(2)(C). The Department received a few comments on this section as discussed below. Comments: A commenter expressed its support for this section, especially due to its inclusion of on-the-job training eservices. Another commenter expressed its support for the proposed language in this section, especially that the inclusion of both academic work experience and occupation training are important for an individual’s success. A commenter expressed its support of the inclusion of a variety of activities that could be included as work experience in the proposed regulations, and one commenter expressed its support over the allowance of on-the-job training as an appropriate work experience. A number of commenters requested clarification from the Department concerning the requirement that work experiences have to include academic PO 00000 Frm 00114 Fmt 4701 Sfmt 4700 and occupational education experiences, whether those education experiences can be provided by the individual’s employer, and whether the education experience has to be provided in the individual’s workplace. One of these commenters further recommended that these experiences be allowed to take place outside of the traditional workplace and could be provided by an educational provider other than the employer. A few commenters recommended that the language stating, ‘‘Work experience must include academic and occupational education’’ be amended to state, ‘‘work experiences must not deter from a participant’s academic and occupational education goals. Ensuring all youth receive academic and occupational education is at the forefront of the goals of WIOA,’’ suggesting that the current language’s use of the words ‘‘and’’ and ‘‘must’’ may dissuade individuals from participating as they are at high risk and are concerned about feeding their families. A commenter requested clarification from the Department as to whom the occupational and academic training experiences must be provided by and recommended that the regulations allow for the employer to provide these training experiences. Further, this commenter recommended that if these training and educational experiences incur any costs, that they be included in the minimum 20 percent work experience expenditure requirement. Department Response: Based on comments requesting clarification on the academic and occupational education component of work experiences, the Department has added language to the Final Rule at § 681.600(b) clarifying that the educational component may occur concurrently or sequentially with the work experience, and that the academic and occupational education may occur inside or outside the work site. The Department does not have any requirement about who provides the academic and occupational education, and such education may be provided by the employer. States and local areas have the flexibility to decide who provides the education. Because WIOA states this program element as ‘‘paid and unpaid work experiences that have as a component academic and occupational education,’’ the Department does not have the flexibility to amend the regulatory text to the suggested ‘‘work experiences must not deter from a participant’s academic and occupational education.’’ Comments: A commenter recommended that the Department remove the following language from the E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations section, ‘‘work experience may be paid or unpaid, as appropriate.’’ The commenter further recommended that the Department should clarify that youth will be protected under the Fair Labor Standards Act and wage and hour laws. Department Response: WIOA sec. 129(c)(2)(C) states that work experiences may be paid or unpaid. The Final Rule contains language regarding the Fair Labor Standards Act at § 680.180. Comments: One commenter recommended that the Department clarify skills needs and how to assess skill mismatches. This commenter recommended more updates to the O*NET system and State/local work on job vacancies, analysis of ‘‘real time’’ labor market information, better projections data, new/emerging occupations, and wage record research on use of occupational title enhancements. Department Response: The Department agrees with the importance of using labor market information to plan work experiences and will continue to encourage its use in future guidance and technical assistance. Section 681.610 Does the Workforce Innovation and Opportunity Act require Local Workforce Development Boards to offer summer employment opportunities in the local youth program? This section discusses that while summer employment opportunities are an allowable activity and a type of work experience that counts toward the work experience priority, they are not a required program element as they previously were under WIA. Note that this provision was proposed as § 681.620. However, as noted above, because the Department has incorporated the language from proposed § 681.610 into § 681.590, the Department deleted proposed § 681.610 and has renumbered proposed §§ 681.620 through 681.660 as §§ 681.610 through 681.650. The Department did not receive any comments on this section. No changes were made to the regulatory text. mstockstill on DSK3G9T082PROD with RULES6 Section 681.620 How are summer employment opportunities administered? This section discusses how summer employment opportunities are administered. Note that this provision was proposed as § 681.630. However, as noted above, because the Department has incorporated the language from proposed § 681.610 into § 681.590, the Department deleted proposed § 681.610 and has renumbered proposed VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 §§ 681.620 through 681.660 as §§ 681.610 through 681.650. The Department received only one comment on this section. The commenter stated that in rural areas it would be more cost effective for a case manager to arrange work experiences for youth than for the provider to arrange a work experience through the procurement process. This commenter asked for further clarification from the Department regarding whether or not a case manager would arrange a work experience during the school year. Department Response: As discussed in § 681.400, the Final Rule clarifies that Local WDBs have the option of competitively procuring youth service providers or providing services directly. This additional flexibility will allow case managers to arrange work experiences directly. This section includes language changes to be consistent with the changes in § 681.400, and to make it clearer that the requirements of § 681.400 apply to the selection of youth service providers who administer the work experience program element in a local area. Section 681.630 What does education offered concurrently with and in the same context as workforce preparation activities and training for a specific occupation or occupational cluster mean? This section describes the new program element at WIOA sec. 129(c)(2)(E): ‘‘education offered concurrently and in the same context as workforce preparation activities and training for a specific occupation or occupational cluster.’’ The Department notes that this provision was proposed as § 681.640. However, because the Department has incorporated the language from proposed § 681.610 into § 681.590, the Department deleted proposed § 681.610 and has renumbered proposed §§ 681.620 through 681.660 as §§ 681.610 through 681.650. The Department received a few comments on this section as discussed below. Comments: A few commenters expressed their support for the proposed language, particularly that the simultaneous offering of education service and workforce training can help individuals to gain skills at a much faster pace than if they were engaged in these activities separately. One commenter expressed its support with this proposed language and recommended that the Departments collaborate to ensure that the language in the WIOA title II regulation in 34 CFR 463.37 is aligned with the title I regulation in § 681.630. PO 00000 Frm 00115 Fmt 4701 Sfmt 4700 56185 One commenter requested clarification from the Department regarding the definitional language in this section. This commenter further stated that the definitions for this program element and the work experience program element need to be amended to provide more distinction between the two if they are meant to be separate. Another commenter recommended that the Department provide specific examples of ‘‘a high-quality, integrated education and training model that requires integrated education and training to occur concurrently and contextually with workforce preparation activities and workforce training.’’ This commenter further recommended a number of such examples. This commenter also suggested that the involvement of youth providers in these activities should help to create relationships between the providers and CBOs. A commenter suggested the Department include a statement that these educational programs include entry-level workforce preparation and/ or preparation for recognized postsecondary education and training activities. Department Response: The Department plans to provide future guidance on all of the WIOA youth program elements, including the education program element defined in this section. The Department will incorporate in the guidance some examples of high-quality integrated education and training models and ensure consistency with the language in 34 CFR 463.37. While the Department did not incorporate any suggested additions to the regulatory text, it has made minor language changes to this section to make the section clearer. Section 681.640 Are incentive payments to youth participants permitted? This section clarifies that incentives under the WIOA youth program are permitted. The Department has included the reference to the Uniform Guidance at 2 CFR part 200 to emphasize that while incentive payments are allowable under WIOA, the incentives must be in compliance with the requirements in 2 CFR part 200. For example, Federal funds may not be spent on entertainment costs. Therefore, incentives may not include entertainment, such as movie or sporting event tickets or gift cards to movie theaters or other venues whose sole purpose is entertainment. Additionally, there are requirements related to internal controls to safeguard E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56186 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations cash, which also apply to safeguarding of gift cards, which are essentially cash. As noted above, because the Department has incorporated the language from proposed § 681.610 into § 681.590, the Department deleted proposed § 681.610 and has renumbered proposed §§ 681.620 through 681.660 as §§ 681.610 through 681.650. Comments: A couple of commenters expressed support for the allowance of incentive payments for youth, citing the effect they can have on low-income and homeless individuals in WIOA youth services programs as well as the positive effect incentive payments have on YouthBuild programs. One commenter requested clarification about whether incentive payments would be allowed for activities other than just training and work experiences, and for short-term youth programs. Further, this commenter recommended that the Department give local areas flexibility in the creation of their own policies for providing incentives to youth. Another commenter recommended that the Department allow incentive payments for youth engaging in the literacy and numeracy post-tests for Program Year 2015. A commenter expressed support of the inclusion of incentive programs and support services for individuals in the WIOA youth program, stating that the eligibility determination process is often difficult for youth as they sometimes struggle to obtain documentation, especially those who have experienced loss or abuse of their identity documentation in the past. Therefore, this commenter recommended providing incentives to youth for maintaining their documentation or attempting to obtain their documentation. Further, this commenter suggested that the Department should provide incentives to youth for providing word-of-mouth marketing to their peers about the WIOA youth services available, as incentives for referrals and recruitments could be very beneficial to the Department’s efforts to reach youth. One commenter expressed concern with this section due to its allowance for incentive payments only under the circumstances of work experience and training activities. This commenter suggested that incentive payments should be granted for achievements such as employment placement and retention, or improvements marked by testing. This commenter recommended that the incentive payments should be granted in those circumstances and not on the basis of engaging in training activities and work experiences. VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Similarly, a couple of commenters expressed concern with the proposed regulation’s allowance of incentives for activities only related to training and work experiences, and recommended that the language regarding incentive payments not be amended from its original form in WIA and suggesting that incentives are needed to reach and engage youth. Department Response: While the Department recognizes the importance of incentives as motivators for various activities such as recruitment, submitting eligibility documentation, and participation in the program, the Department concluded that incentives must be connected to recognition of achievement of milestones in the program tied to work experience or training. Such incentives for achievement could include improvements marked by testing or other successful outcomes. While WIOA funds cannot be used for incentives for recruitment and eligibility documentation, local areas may leverage private funds for such incentives. Comments: Another commenter recommended that the Department amend the proposed regulations to allow for incentive payment for ISY who graduate from a regular high school, suggesting the current language is inconsistent in its provision of incentives to students who receive their high school equivalency or GED certificates, but not to those who receive a traditional high school diploma. Further, this commenter recommended allowing for the provision of incentive payment for youth who participate or complete leadership activities, suggesting that not offering incentives for leadership activities will infringe upon the provider’s ability to engage youth. Department Response: There is no specific language in the regulatory text limiting incentive payments to students who receive their high school equivalency. Incentive payments may be provided to both ISY and OSY as long as they comply with the regulations stated in this section. Comments: One commenter recommended that the Department amend the language at the start of this section in order to make it more encouraging. Specifically, this commenter recommended that the section read, ‘‘Incentive programs are crucial to keeping homeless and disconnected youth engaged in programs and should be provided to youth participants for recognition.’’ Department Response: The Department agrees that incentives can be a critical tool to keep youth PO 00000 Frm 00116 Fmt 4701 Sfmt 4700 participants engaged in the program. However, no changes were made to the regulatory text in response to this comment. Comments: Another commenter recommended that a definition of incentive payments should be added to this section to retain consistency throughout the proposed regulations. Department Response: The Department concluded that the existing regulatory text adequately defines incentive payments. No further definition is necessary in the Final Rule. The Department did make minor edits to the first paragraph of the regulatory text to clarify this section. Section 681.650 How can parents, youth, and other members of the community get involved in the design and implementation of local youth programs? This section discusses the requirement in WIOA sec. 129(c)(3)(C) for the involvement of parents, participants, and community members in the design and implementation of the WIOA youth program and provides examples of the type of involvement that would be beneficial. The Department also has included in this proposed section the requirement in WIOA sec. 129(c)(8) that Local WDBs also must make opportunities available to successful participants to volunteer to help other participants as mentors or tutors, or in other activities. The Department notes that this provision was proposed as § 681.660. However, as noted above, because the Department has incorporated the language from proposed § 681.610 into § 681.590, the Department deleted proposed § 681.610 and has renumbered proposed §§ 681.620 through 681.660 as §§ 681.610 through 681.650. Comments: The Department received a few comments on the proposed regulation. One commenter suggested that the language in this section be strengthened to show the importance of including individuals with disabilities in the design and implementation of these programs, stating that their involvement is vital. One commenter suggested that making opportunities available to youth peer volunteers be removed, and be replaced with language that would make the service an option for Local WDBs to choose to make, suggesting that the supervision and background investigation needed for volunteers to provide services to youth would be potentially too costly for WDBs and therefore shouldn’t be a requirement. Another commenter requested clarification from the Department E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations concerning the extent to which the population and community of an area must be involved in the creation of these programs and services and the type of involvement that is required of them, suggesting that requiring the community to be involved is contradictory to the intent of WIOA, which abolished the requirement of youth councils. Department Response: No changes were made in the regulatory text in response to these comments. The Department values the input of individuals with disabilities. Nothing in the proposed regulation precludes them from getting involved in the design and implementation of a local youth program. The populations identified in the regulation (parents, youth, and other members of the community) come directly from WIOA sec. 129(c)(3)(C), which clearly states the intent to have them involved in the design and implementation of the programs. The Department understands that this might seem to contradict the law’s approach to youth councils; however, this requirement does not have the time commitment and obligatory structures that were required of WIA’s youth councils. The Department will provide additional guidance and technical assistance on involvement in youth program design and implementation. 5. Subpart D—One-Stop Center Services to Youth mstockstill on DSK3G9T082PROD with RULES6 Section 681.700 What is the connection between the youth program and the one-stop delivery system? This section describes the WIOA youth program’s required role in the one-stop delivery system, and includes examples of the connections between the youth program and the one-stop delivery system. Comments: Several commenters expressed their support for these provisions and their focus on collaboration across programs and the requirement of WIOA youth programs to serve as a one-stop partner. A number of commenters expressed their support for the regulations’ encouragement of partnerships between WIOA youth programs and one-stop centers, suggesting that under WIA the one-stop delivery system was not encouraging of youth engagement. These commenters further recommended that the Department encourage training of onestop operator staff for effectively serving youth. Similarly, one commenter suggested that this proposed language would require either equipping and training staff at one-stop centers with information on serving youth, or VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 colocation of WIOA youth service providers at one-stop centers. Department Response: The Department does encourage training of one-stop operator staff and added language to the Final Rule at § 681.700(c) encouraging one-stop center staff be trained to build their capacity in serving youth. Section 681.710 Do Local Workforce Development Boards have the flexibility to offer services to area youth who are not eligible under the youth program through the one-stop centers? This section clarifies that Local WDBs may provide services to youth through one-stop centers even if the youth are not eligible for the WIOA youth program. The Department received a few comments on this section as discussed below. Comments: One commenter expressed their support of the proposed regulation’s requirement that one-stop centers provide services for individuals who are ineligible for WIOA youth programs, suggesting that providing these services would allow for youth to receive services they need while still working to obtain documentation that would make them eligible for WIOA youth services. A few commenters requested clarification regarding whether WIOA youth program funding would be allowed to support these services at onestop centers without enrollment and whether Local WDBs would provide youth services if they are ineligible for WIOA title I youth services, and if so, which program would be funded through the provision of those services. These commenters further recommended that the Department give States the authority to use WIOA funding for the purposes of supporting workforce market information and career awareness education to ISY, as is indicated in this section under the proposed regulations. Similarly, one commenter requested clarification from the Department about whether WIOA youth funds could be used to provide support for services if the support is for materials, general information, or relationships with local businesses. This commenter further recommended that the Department allow States to use WIOA youth funds to support general labor market information to promote career awareness for ISY, reasoning that providing this information would help to prepare these ISY for their transition out of school and into their career and/ or postsecondary school. Department Response: While providing labor market information and PO 00000 Frm 00117 Fmt 4701 Sfmt 4700 56187 career awareness are allowable uses of WIOA youth funds, WIOA youth funds may be used to provide services only to eligible youth enrolled in the WIOA youth program. As described in this section, one-stop centers may provide basic labor exchange services such as the ones suggested under the WagnerPeyser Act to any youth. Comments: Suggesting that often times individuals who are not eligible for WIOA youth services fall within the eligibility of WIOA adult services, a number of commenters recommended that Local WDBs be required to ensure that youth aged 18–24 have access to one-stop center services and are not simply referred to WIOA youth services instead. Department Response: The Department agrees that youth aged 18– 24 should have access to one-stop center services. The Department has concluded that this recommendation does not necessitate any changes to the Final Rule language and instead, will incorporate this recommendation in future guidance or technical assistance. The Final Rule adopts the provision as proposed. F. Part 682—Statewide Activities Under Title I of the Workforce Innovation and Opportunity Act 1. Introduction WIOA provides a reservation of funds from the adult, dislocated worker and youth programs to be undertaken by States, for statewide activities. States have both required and allowable activities to be undertaken on a statewide basis for adults, dislocated workers and youth. These funds support States to innovate, continually improve their comprehensive workforce programs, oversee a public workforce system that meets the needs of job seekers, workers and employers, and contribute to building a body of evidence to improve the effectiveness of services under WIOA. WIOA designates the percentage of funds that may be devoted to these activities from annual allotments to the States—up to 15 percent must be reserved from youth, adult, and dislocated worker funding streams, and up to an additional 25 percent of dislocated worker funds must be reserved for statewide rapid response activities. The up to 15 percent funds from the 3 funding streams may be expended on employment and training activities without regard to the source of the funding. For example, funds reserved from the adult funding stream may be used to carry out statewide youth activities and vice versa. E:\FR\FM\19AUR6.SGM 19AUR6 56188 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations 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. mstockstill on DSK3G9T082PROD with RULES6 Section 682.110 How are statewide employment and training activities funded? The Governor has authority to use up to 15 percent of the adult, dislocated worker, and youth funds allocated to the State for statewide activities. The regulation provides that the adult, dislocated worker and youth 15 percent funds may be combined for use on required or allowed statewide activities regardless of the funding source. These activities are funded in the same manner as they were under WIA. Comments: Several commenters expressed concern regarding the appropriation-based restriction of 10 percent availability for the required and allowable statewide activities. These commenters recommended that funding be increased to a level that covers the costs of the required activities and, at a minimum, that statewide funds be fully funded at the 15 percent level. In addition, the commenters recommended that the Department provide a waiver process for States on required activities if the full appropriation is not made available. Several of these commenters also suggested that the required State activities would necessitate resources in excess of Federal funding, and the program therefore could be considered an unfunded mandate. Lastly, one commenter expressed confusion about whether subrecipients may incur costs for administrative functions, as set forth in § 683.215, with statewide activities funds. Department Response: The allowable percentage of funding for statewide activities is governed by the authorizations and appropriations established by Congress, not by the Department. Furthermore, the regulation contains no unfunded mandates as defined in 2 U.S.C. 658(b). Waivers are covered at §§ 679.600 through 679.620, for waivers to States or local areas in a State, and at §§ 684.900 through 684.920, for waivers relating to Indian and Native American programs. Waivers are considered on an individual basis and granted as appropriate, with such conditions as the Department may require. Subrecipients may incur costs VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 for administrative functions consistent with the administrative cost limitation provisions at §§ 683.205 and 683.215. No changes have been made to the regulatory text as a result of these comments. 3. Subpart B—Required and Allowable Statewide Employment and Training Activities This subpart first discusses required statewide activities. WIOA continues the activities that were required under WIA, but adds several additional required activities, such as assistance to State entities and agencies described in the State Plan, alignment of data systems, regional planning, and implementation of industry or sector partnerships. Required statewide activities under WIA and continued under WIOA include: Dissemination of information regarding outreach to businesses, dissemination of information on the performance and cost of attendance for programs offered by ETPs, and conducting evaluations. This subpart also discusses allowable statewide activities. The Department provides States with a significant amount of flexibility in how these funds may be used for statewide activities. States can test and develop promising strategies. The regulation at § 682.210 is not designed to be an exhaustive list, but more illustrative of the types of allowable statewide activities that may be provided with these funds. Section 682.200 What are required statewide employment and training activities? Comments: One commenter asked for a definition of ‘‘non-traditional training’’ services and for the statutory basis for the requirement that the ETPL include providers of nontraditional training services. This commenter further stated that § 682.200(b)(5) would require collection and dissemination of cost of attendance information for youth and for on-the-job and other training programs that is exempted from the ETP requirements (WIOA sec. 122(h)), and asked what the statutory authorization was for this requirement. Finally, this commenter asserted that there was a conflict over proposed requirements for these WIOA sec. 122(h) programs/data between proposed §§ 682.200 and 680.340. Department Response: Nontraditional training is defined as training activities leading to employment in occupations or fields of work in which individuals of one gender comprise less than 25 percent of the individuals so employed. The statutory basis for this definition is found in the definition of nontraditional PO 00000 Frm 00118 Fmt 4701 Sfmt 4700 employment at WIOA sec. 3(37). The statutory requirement for disseminating information regarding the State list of eligible training providers of training services (including those providing nontraditional training services) is found at WIOA sec. 134(a)(2)(B)(v)(I). The Department has revised § 682.200(b)(5) for consistency with §§ 680.490 and 680.530, which specify the reporting requirements for certain providers of training services, such as providers of OJT. Comments: The commenter stated that there might be a conflict between proposed §§ 682.200 and 680.350 and referred to the title of § 680.350 as ‘‘What is meant by ‘provision of additional assistance’ in the Workforce Innovation and Opportunity Act?’’ Department Response: There was no section numbered § 680.350 in the NPRM, and there is no conflict between the requirements of §§ 682.200 and 682.350. However, the commenter may have been referring to the requirement of § 680.340, specifically paragraph (b), which states that the Local WDBs must make available to customers the State list of eligible training providers required in WIOA sec. 122(e), including local area information on work based training providers under WIOA sec. 122(h). This could be read to conflict with § 682.200(b), which includes disseminating the list of ETPs and information identifying other eligible training providers of training as a required statewide activity. There are two sections of WIOA that cover the dissemination of the list of ETPs, secs. 134(a)(2)(B)(v) and 134(c)(3)(F)(ii). The first requires the State to disseminate the list. The latter requires that Local WDBs make the list available through the one-stop centers. Operationally, States are tasked with maintaining the list and disseminating it to the Local WDBs. The task of the Local WDBs is to make sure that this information is readily available through the one-stop delivery system. No changes have been made to the regulatory text as a result of these comments. Comments: Two commenters also questioned the proposed § 682.200(b)(2) requirement to disseminate information identifying eligible training providers of work-based training, reasoning that disclosing information about employers could negatively impact the working relationships that case managers and business specialists have developed. Further, these commenters stated that if the Governor does not require collection of performance information from these training providers, it is not necessary to provide information about such providers to the public. A separate E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations commenter expressed concern that the performance reporting requirements could result in disclosure of personallyidentifiable information. Department Response: WIOA sec. 122(h) exempts providers of on-the-job training and other employer-based training from the requirements at WIOA sec. 122(a)–(f). However, the identity of employers that access WIOA funds for employer-based training, as well as any performance information required by the State under WIOA sec. 122(h)(2), may not be kept from the public and is disclosable. This statutory disclosure requirement under WIOA sec. 122(h)(2), which applies to recipients of funds to provide training services, promotes full transparency, reduces instances of conflict of interest, and ensures compliance with the sunshine provisions of WIOA. Performance report made available to the pubic requirements do not include any information that could be considered personally identifiable. There are no names, addresses, dates of birth or Social Security numbers. WIOA sec. 122(d)(4) prohibits disclosure of personally identifiable information without prior written consent of the parent or student. All other comments and responses involving eligible training providers are found at subpart D, §§ 680.400 through 680.530. No changes have been made to the regulatory text as a result of these comments. Comments: A commenter recommended that § 682.200(b) specify that information about physical and programmatic accessibility for individuals with disabilities (proposed § 682.200(b)(7)) be made available in accessible formats. Department Response: The requirement to make this information available in accessible formats is already required under the Americans with Disabilities Act and other provisions of WIOA. Therefore, no changes were made as a result of this comment. Comments: Regarding proposed § 682.200(d), commenters asserted that conducting evaluations is not the best use of limited State funds and recommended that it be an allowable statewide activity or reserved for the Federal government. Department Response: WIOA provides that evaluation is a required activity. Evaluation as a statewide activity is further discussed under § 682.220. The Department notes that there was a small edit to § 682.200(d) moving the statutory reference to the end of the regulatory text. However, no changes have been made to the VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 regulatory text as a result of this comment. Comments: One commenter recommended that the Department require that the one-stop delivery system receive technical assistance to help women entering apprenticeship and pre-apprenticeship programs, and recommended that § 682.200(f) be expanded to require technical assistance delivery to all front line and managerial staff at one-stop centers and to provide information on the economic benefits of nontraditional careers to one-stop participants. Department Response: The Department has determined that there are sufficient references and requirements throughout WIOA and this Rule that provide an improved linkage to apprenticeship and preapprenticeship programs and that this specific requirement is not needed. Furthermore, § 682.210(e) already allows for the implementation of programs to increase the number of individuals training for and placed in nontraditional employment. No changes have been made to the regulatory text as a result of these comments. Comments: A commenter recommended that § 682.200(f) specifically include individuals with disabilities in its statement of the requirement that States assist in local staff training to provide opportunities for individuals with barriers to employment. Also with regard to § 682.200(f), this commenter recommended that States should examine Federal contractors doing business in their States, as doing so is particularly important for job seekers with disabilities because of the regulations implementing sec. 503 of the Rehabilitation Act of 1973, as amended, at 41 CFR part 60–741. Department Response: Individuals with disabilities are a target population of WIOA. The Department has determined that the reference to barriers to employment sufficiently includes individuals with disabilities based on the statutory definition contained in WIOA sec. 3(24)(D). With regard to States examining Federal contractors doing business in their area, they must follow the regulations governing the Rehabilitation Act of 1973, as amended. No changes have been made to the regulatory text as a result of these comments. Comments: Regarding proposed § 682.200(g), several commenters recommended that the Department clarify how States are required to ‘‘assist’’ local areas. One commenter requested clarification of what it means to assist local areas in regional planning PO 00000 Frm 00119 Fmt 4701 Sfmt 4700 56189 and service delivery, and whether this includes financial assistance. Department Response: States must ‘‘assist’’ local areas through a variety of methods. This will include the provision of technical assistance, compliance assistance, strategic planning initiatives, or other activities designed to improve or enhance the workforce development system at the local level. The Department declines to define explicitly ‘‘assist’’ further. Doing so might limit the types of technical assistance and other efforts that a State may seek to provide. With regard to the provision of financial assistance, yes, an allowable use of statewide activities funds under § 682.200 could include financial assistance related to regional planning efforts. Comments: Regarding proposed § 682.200(h), a commenter recommended that the Departments issue additional guidance on implementation of the industry or sector partnerships that are a required activity at the State and local levels. This commenter also expressed concerns that the NPRMs provided little guidance on how States and local areas can meet their statutory requirements with respect to industry or sector partnerships. This commenter predicted that limited instruction may lead to confusion and delayed implementation among stakeholders. A separate commenter recommended an emphasis on the needs of and opportunities for immigrant and Limited English Proficient workers and business owners. Department Response: The Department is committed to the successful implementation of industry and sector partnerships throughout the nation’s workforce development system. To accomplish this, significant technical assistance activities will occur in this area. The Department has strategically chosen not to further define the requirements around industry and sector partnerships in regulations as effective models and solutions are likely will evolve over time. Instead, the Department’s efforts will be focused on the collection and dissemination of promising practices from States and local areas that have already developed successful models. The Department has determined that rather than a lack of instruction leading to confusion or delay, a lack of a more rigid definition will provide for the highest level of innovation possible. Additional guidance may be issued on this topic in the future. In addition, the Department will support various technical assistance efforts focusing on industry and sector partnerships based on successful models from around the E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56190 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations nation. Furthermore, there is no need to place additional emphasis on immigrant and Limited English Proficient populations since these individuals would generally be included in the definition of those with barriers to employment, whose needs are already emphasized throughout WIOA. No changes have been made to the regulatory text as a result of these comments. Comments: A commenter recommended that § 682.200(k) clarify that providing ‘‘additional assistance’’ to local areas with a high concentration of eligible youth may include creation of a central coordinating body or use of a ‘‘qualified intermediary’’ defined as an entity with a demonstrated expertise in building partnerships. The commenter stated that qualified intermediaries serve an important role by streamlining services and filling gaps in support and services. Further, this commenter recommended that the Department clarify that ‘‘additional assistance’’ includes supporting development of credit transfers and articulation agreements between local education agencies (LEAs) and institutions of higher education within the State. The commenter reasoned that these programs bridge the connection between academics and career preparation, as well as between secondary and postsecondary school education. Department Response: WIOA allows States to engage in any of the activities described by the commenter, as the provision of additional assistance under § 682.200(k). The regulation requires States to assist local areas with high concentrations of eligible youth. The assistance needed is likely to vary from local to local. This assistance might be provided in the areas of program design, partnering, resource sharing, and other areas. Providing a definitive list of assistance or specific examples might be limiting. Instead, the Department will continue its focus on technical assistance and regular guidance in the area of youth services. No changes have been made to the regulatory text as a result of these comments. Comments: One commenter requested that the Department develop a common intake at the Federal level that covers all required partners and test it for customer satisfaction. Similarly, another commenter asked if States would be developing and disseminating common intake procedures and related items, including registration processes, across core and partner programs. Department Response: Given the variety of State and local workforce development systems, a single, Federally mandated common intake VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 process is not feasible. However, the Department remains committed to working with the Federal partners to limit the duplication of effort among and between core and partner programs relative to service design and eligibility requirements. The States are best positioned to develop common intake procedures through the State WDB. No changes have been made to the regulatory text as a result of these comments. Section 682.210 What are allowable statewide employment and training activities? In addition to the required statewide activities, States are provided with significant flexibility to innovate within the public workforce system with various allowable statewide employment and training activities. These allowable activities are vital to ensuring a high quality public workforce system, and can be used to ensure continuous improvement throughout the system. This regulation is not designed to be an exhaustive list, but more illustrative of the types of allowable statewide activities that may be provided with these funds. The Department has made a clarifying edit at the beginning of § 682.210. Comments: A commenter expressed support for proposed § 682.210(c) because it emphasizes the State’s role in developing and implementing strategies for serving individuals with barriers to employment and encourages States to partner with other agencies to coordinate services among one-stop partners. This commenter asserted that Governors have a vital role in coordinating different funding sources for training to enable effective service delivery. Another commenter supported the flexibility in § 682.210 for the types of statewide activities that States can implement using the Governor’s Reserve. However, this commenter recommended that the Department amend this section or provide additional guidance to encourage States to consider programs that will help align core WIOA title I programs with one another and with title II programs (e.g., career pathway programs and technology access programs). A separate commenter also expressed support for the Departments to issue guidance on the alignment of WIOA title I and title II services directed to immigrant and Limited English Proficiency individuals, and additionally in support of formal guidance affirming that all individuals with work authorization, including immigrant youth with Deferred Action for Childhood Arrivals (DACA) status, PO 00000 Frm 00120 Fmt 4701 Sfmt 4700 are eligible to participate in title I programs. Department Response: The Department agrees that the Governors have a vital role in coordinating the different funding sources for training available in their State. Furthermore, the Department has concluded that this role extends well beyond WIOA and should include the coordination of all funding sources (Federal, State, foundations, etc.) available within the State. Additional guidance will be issued by the Department, outside of the regulations, to help Governors strengthen alignment of all programs contained under WIOA and all those related to workforce development. Based on the planning requirements at the State, regional and local level already contained in this regulation, the Department has determined that a change to this section is not warranted. Nothing in this statute or regulations prohibits States from acting independently to align the programs covered under WIOA or outside of it. WIOA and the implementing regulations provide only the minimum of what States must do to be compliant. WIOA and regulations should be seen as a starting point for further alignment of the workforce development, economic development, and educational systems within a State. With regard to youth with DACA status, the Department will consider issuing guidance as necessary. No changes have been made to the regulatory text as a result of these comments. Comments: A commenter recommended that § 682.210 specify how activities can target individuals with disabilities wherever possible (e.g., in paragraphs (c), (k), (m), and (n)(2)). Further, this commenter recommended that the Final Rule specifically identify State programs relating to intellectual and developmental disabilities, Statewide Independent Living Councils, and centers for independent living so that they are not overlooked in program coordination. In regard to developing strategies to serve individuals with barriers to employment as permitted by proposed § 682.210(c), this commenter detailed several core areas for States to focus their partnership building efforts, including supporting businesses in their efforts to employ individuals with disabilities, building capacity of front line staff to implement evidence-based practices in serving employees with disabilities and the employers who hire them, and preparing youth with disabilities for careers that use their full potential. Department Response: The Department agrees that coordination E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations between and among the organizations listed by the commenter and the State and local workforce development systems are essential to improving services to individuals with disabilities. However, the Department has concluded that there is no need to list these organizations specifically in the regulatory text, and that each State and local area is uniquely positioned to determine which of these organizations and programs are included in their planning processes and service delivery models. However, the Department notes that WIOA sec. 3(24) defines ‘‘individual with a barrier to employment’’ to include ‘‘individuals with disabilities,’’ and reminds the public that the emphasis throughout WIOA and this regulation on including, and tailoring services to meet the needs of, individuals with barriers to employment encompasses an emphasis on including, and tailoring services to meet the needs of, individuals with disabilities and other barriers to employment. By extension: the regulatory text at § 682.210(c), (k), and (m) should be understood to include programs carried out by local areas for individuals with disabilities. The Department also agrees that WIOA requires training for front-line staff and the identification and dissemination of promising practices on all areas of workforce development, including the provision of services to individuals with disabilities, including youth. [WIOA secs. 107(d)(11)(B), 108(b)(6)(C), and 134(a)(2)(B)(i)(IV).] No changes have been made to the regulatory text as a result of these comments. Comments: Regarding the NPRM preamble discussion of § 682.210(d) and (e), a commenter requested that the Department clarify the term ‘‘real-time labor market analysis,’’ commenting that real-time LMI is a commonly used term that often refers to current data but that the term has a lot of associations that are not well-defined in terms of data items, levels, and area of detail. Department Response: Traditional labor market information (LMI) is based on data gathered through Federal and State surveys and administrative data. These surveys typically utilize rigorous sampling criteria and careful sampling frames. Traditional LMI provides significant insight into labor market trends and indicators, but the process of gathering the data is time-consuming and results in unavoidable lag-time for publication. Real-time labor market analysis, also referred to as real-time LMI, utilizes online job postings that are aggregated daily. Given the everincreasing use of technology in the LMI field, the Department has determined VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 not to define the term ‘‘real-time labor market analysis.’’ The Department has supported previous evaluations and research products on real-time labor market analysis all of which are available online through the Web site of the Employment and Training Administration at www.doleta.gov and through the Workforce GPS platform at www.workforcegps.org. No changes have been made to the regulatory text as a result of these comments. Comments: Two commenters supported including NFJP grantees among entities with access to Governors’ 15 percent set-aside funds for statewide activities. Department Response: NFJP grantees are awarded funds through various grant programs. Furthermore, there is no restriction on additional partnerships that States can make with NFJP grantees under the statewide activities section. The Department has concluded that a special reference to NFJP grantees is not warranted and no changes have been made as a result of these comments. Comments: A commenter suggested that statewide activities funds should be accessible to a labor/management training fund of which the employer is a contributing member, and that apprenticeships should be an approved expense for incumbent worker training. Department Response: The regulation does not restrict the States from engaging in the activities described by the commenter related to labor/ management training funds and apprenticeship. The types of programs and partnerships that a State chooses to enter into are best left to the individual State WDBs to meet the specific workforce needs in their State. No changes have been made to the regulatory text as a result of these comments. Comments: A commenter recommended that Governors be authorized to approve automatically public higher education schools as eligible training providers under WIOA, in a similar manner to the authority for automatic approval of apprenticeship programs. The commenter further urged that such approval should cover all programs of study and that the school not be subject to initial or subsequent designation. Department Response: WIOA does not provide the authority for this type of automatic designation, so no changes have been made as a result of this comment. Section 682.220 What are States’ responsibilities in regard to evaluations? Comments: The Department received a number of comments on the proposed PO 00000 Frm 00121 Fmt 4701 Sfmt 4700 56191 regulations in § 682.220, concerning State responsibilities on evaluations under WIOA sec. 116(e) and the required use of State set-aside funds under WIOA sec. 129(b)(1)(A) and sec. 134(a)(2)(B)(vi) to conduct evaluations. Several commenters were supportive of provisions in this section, with one commenter expressing optimism about the possibility of States conducting longer-term impact studies of Vocational Rehabilitation. Another commenter supported the development of evaluations ‘‘to explore innovations surrounding integrated systems, coordinated services, career pathways, and multiple forms of engagement with businesses.’’ However, many comments were critical of the requirements that States conduct evaluations using the State set-aside funds and provide data for Federal evaluations. Regarding States’ conducting their own evaluations, commenters cited a lack of sufficient funds from the Governors’ set-aside as well as a lack of staff capacity. One commenter stated that the requirement ‘‘ignores the funding reality’’ and, along with other commenters, emphasized the many competing requirements for which setaside funds must be used—a problem noted to be particularly acute in States with a small amount of set-aside funds. The commenters also noted that many States lack staff with requisite knowledge and skills to conduct an evaluation and cannot afford to use consultants. Three commenters noted that, with the exception of evaluations conducted and published by a few States, there is no ‘‘established broadbased record of State knowledge of research principles sufficient to effectively manage an evaluation agenda under WIOA.’’ To remedy this situation, commenters suggested that States receive dedicated funding and Federal support to build their evaluation infrastructure and that the Department waive or suspend the requirement to conduct evaluations until States have sufficient funding and skills, and that the Department should assume primary responsibility for conducting evaluations. Another commenter suggested that conducting evaluations should be an allowable not a required statewide activity. Department Response: The Department acknowledges that States must balance many priorities in their use of the set-aside, including multiple required activities. The lack of sufficient funds (in the set-aside or from a dedicated funding stream of some kind) to conduct evaluations, as well as lack of staff capacity or, in some cases, lack of available or reliable data, will E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56192 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations constrain many States’ ability to conduct evaluations. However, WIOA sec. 129(b)(1)(A) and sec. 134(a)(2)(B)(vi) require States to use funds reserved by the Governor for statewide activities to conduct evaluations. Further, the Department has determined that State-conducted evaluations have the potential to be of great practical value to States, including informing service delivery strategies, improving performance, and meeting other requirements under WIOA. For example, evaluation could be used to assist State WDBs in systematically identify promising or proven practices, as required under § 679.130(e), or for analyzing data on the quality, effectiveness, and/or assist the State to prepare its strategic planning process under 20 CFR 676.105 (see Joint WIOA Final Rule). It could further be used for exploring, with other State agencies, how well integration and coordination of services and data systems is proceeding. Therefore, the regulations retain the requirement that States conduct evaluations. Given the problems identified by commenters, the Department sees the development of States’ capacity to conduct evaluation projects as a longrange and iterative process, which the Department intends to aid through various forms of technical assistance and guidance. An initial, primary goal is to enhance capacity by building knowledge among State staff regarding various methodologies, approaches for enlisting expertise, and the potential role of evaluations and research in meeting State goals and priorities. Further, the regulations at § 682.220(e) and (f) identify areas for State discretion in the methodology, duration and funding of evaluations, all of which may assist States to target their investment in a manner appropriate to the funding available to the State. The paragraphs describe flexibilities that States may use to leverage other funding, and to conduct such evaluation over multiple program years. Despite flexibilities as to the types of evaluation, methodologies, phases, duration, and funding sources, some States may still be unable to fulfill the requirement to conduct evaluations and seek a waiver. Such a waiver request, like others submitted to the Department in regard to statutory provisions of WIOA, will be reviewed on a case-bycase basis, and will be subject to any appropriate conditions and limitations of the Secretary’s waiver authority and procedures found at WIOA sec. 189(i)(3), and consistent with §§ 679.610 and 679.620. No changes have been VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 made to the regulatory text as a result of these comments. Comments: Several commenters objected to annual submission of evaluation reports, which they felt too excessive, given the requirements for annual submission of performance reports. One commenter suggested that States should instead make available to the public and to State and Local WDBs evaluation and research reports prepared by Federal evaluators with State-specific comments, in line with suggestions that evaluation be primarily a responsibility for the Federal government. Department Response: While WIOA sec. 116(e)(3) requires the State to annually prepare, submit, and make available to the public reports containing the results of evaluations conducted using State set-aside funds, the Department recognizes that evaluations may be lengthy and not end neatly within a program year. For this reason, the regulation has been revised to clarify that the reports are to be prepared, submitted to State and Local WDBs, and made available to the public when results become available. The revision to the regulation at § 682.220(c) is described in more detail below. Also, since States retain the responsibility to disseminate reports on State-conducted evaluation, the Department declines to adopt the suggestion that States only distribute Federal evaluations with State comments. Comments: Several commenters were critical of the regulation to implement the requirements in sec. 116(e) that States cooperate to the extent practicable in evaluations conducted by the Departments of Labor and Education (under WIOA secs. 169 and 242 and relevant sections of the Rehabilitation Act of 1973) by providing data, responding to surveys, allowing timely site visits, and informing the Secretary in writing if such cooperation was not practicable. A few commenters asserted that quantitative data was already available because the data elements and narrative reports provided to the Department and the other Federal agencies should provide an ample source of statistical data for evaluators without interrupting individual States with data requests. The commenters indicated that States’ responsibilities regarding evaluations and research are only ‘‘to allow on-site observation and in limited circumstances provide supplemental qualitative data.’’ Another commenter felt that the regulations were ‘‘adversarial’’ and would result in minimum levels of cooperation from States. The commenter stated that the regulation did not define the term ‘‘to PO 00000 Frm 00122 Fmt 4701 Sfmt 4700 the extent practicable,’’ but noted that in the UI regulation, it is defined as noninterference ‘‘with the administration of State UC law.’’ The commenter also stated that the Department’s ‘‘intrusion into State evaluation activities is by its very nature ‘interference’ with non-UI State agency functions, since it is carried out pursuant to ‘‘adversarial rules’’ and for this reason, needed to be withdrawn. Department Response: The Department notes that the regulation at § 682.220(d) implements a statutory requirement under WIOA sec. 116(e)(4) requiring State cooperation, to the extent practicable, in Federal evaluations. WIOA sec. 116(e)(4) specifically identifies such cooperation as including the provision of data and survey responses, and allowing site visits in a timely manner. As noted in the preamble to the NPRM, this requirement in WIOA sec. 116(e)(4) recognizes the vital role of States in providing various forms of quantitative and qualitative data and information for Federal evaluations that are not available at the Federal level. In order to conduct evaluations, individuals need to be tracked over time periods that do not align well with quarterly performance reporting. Depending on the research questions an evaluation is addressing, data on the same individuals or cohorts of individuals may be needed for timeframes within the same quarter or across multiple quarters, neither of which is feasible to track or match within the performance reporting structure of WIOA. High quality evaluations also involve the collection of data on control or comparison groups of individuals, so supplemental data may be needed to account for this. Frequently, individual level earnings information is critical for evaluations. Data, survey responses, and site visit information are often needed to understand, for example, participant characteristics, services, systems, labor market outcomes, the role of decisionmakers, implementation issues, and the quality of the customer experience. In response to the commenters’ suggestions, the Department notes that States may, in response to data requests for a Department of Labor or a Department of Education evaluation, identify other data already provided to the Federal government and of possible use in the evaluation, and the Departments will work with the State to determine if the other data are suitable. However, no change to the regulatory text has been made in response to the comments. Further, the Department disagrees with the characterization of these E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations regulations, which implement a statutory requirement by requiring cooperation to the extent practicable, as adversarial or as interference. The Department also declines to further define ‘‘to the extent practicable’’ in the regulation. Rather, if a State determines that timely cooperation in data provision is not practicable, the State may proceed according to § 682.220(d)(3) and identify in writing the reasons it is not practicable, and cooperate with the Department to develop a plan or strategy to mitigate or overcome the problems preventing timely provision of data, survey responses and site visits, as statutorily required. The requirement at § 682.220(d)(3) was intended to afford a relatively easy method for communicating with the Department and allowing for an amicable resolution of any problems. No changes have been made to the regulatory text as a result of these comments. Comments: Several comments were received regarding promoting specific evaluation and research projects to be conducted at the State level under sec. 116(e) or at the Federal level under sec. 169 (which sets forth the Department’s role in evaluation and research and authorizes a wide array of studies). One commenter recommended that the regulations require States to focus evaluations on services to individuals with disabilities under WIOA title I and that customer feedback be developed from this population be developed to determine if programs are truly responding to their needs. Department Response: The Department notes that while these proposed specific evaluation and research projects are permissible and desirable, WIOA sec. 116(e) allows States to determine the content of any evaluation. The Department will not reduce the States’ flexibility by requiring particular evaluation or research projects. No changes have been made to the regulatory text as a result of these comments. While the Department did not promulgate regulations for WIOA sec. 169, the Department is addressing comments relating to Departmental evaluation and other research activity, since it is similar to the evaluation functions required of States under WIOA sec. 116(e). There are no changes to the regulatory text as a result of these comments. The comments and the Department’s response are as follows. Comments: Several commenters expressed support for the requirement under WIOA sec. 169(b)(4)(I) that the Department conduct a multi-State project to develop capacity for, VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 implement, and build upon career advancement models and practices for low-wage health care providers and providers of early education and child care. Department Response: The Department notes that it has conducted and is currently engaged in research and evaluation projects related to career pathways programs in health care and child care occupations. Separately, the Department notes that developing and implementing career pathways is a function of State WDBs and Local WDBs under WIOA sec. 101(d)(3)(B) and sec. 107(d)(5)and has been promoted by ETA in guidance and various forms of technical assistance to the public workforce system. Comments: Another commenter suggested that the regulations state that the Department undertake research into women’s representation in nontraditional jobs covering and the means by which barriers to women’s employment in these occupations can be removed. The commenter also suggested that guidance eventually be issued on the content of such studies and offered example of topics that could be covered in them, such one-stop capacity, training, and policies in regard to nontraditional careers for women. Department Response: The Department notes that it is currently conducting a research project, under prior legislative authority, on employment in nontraditional occupations in order to identify, and evaluate evidence-based strategies to increase opportunities for traditionally under-represented groups. For the convenience of the reader in understanding the totality of the regulation at § 682.220 and the changes made in the section, each part is discussed sequentially below. The revisions entailed reorganizing portions of the section to clarify the requirements and flexibilities for States, all in response to comments and to ensure conformity with statute. In particular, the revisions reflect the distinction between the requirement that States conduct evaluations of title I core program activities (as per WIOA secs. 129(b)(1)(A) and 134(a)(2)(B)(vi)) and the permissible ability of States to conduct research and demonstration projects as an allowable statewide activity under WIOA secs. 129(b)(2)(A) and 134(a)(3)(A)(ix) Accordingly, the title of this section has been revised as ‘‘What are States’ responsibilities in regard to evaluations?,’’ with the concluding phrase ‘‘and research’’ removed. Likewise, the phrases ‘‘evaluations and research projects’’ and ‘‘evaluations and other research’’ have PO 00000 Frm 00123 Fmt 4701 Sfmt 4700 56193 been consistently revised throughout this section to refer only to ‘‘evaluations.’’ These revisions ensure that the requirements of § 682.220, including the coordination and reporting requirements, apply only to evaluations conducted as a required statewide activity. It should be noted that these the provisions of § 682.220 do not apply to research and demonstration projects conducted as an allowable statewide activity. The Department made a number of revisions to the regulatory text to clearly identify certain options that States may, but are not required to, use in fulfilling the statutory requirement to conduct evaluations as a statewide activity. Some of these options were identified in the NPRM, while others have been developed in response to comments received. In order to distinguish between regulatory requirements and regulatory flexibilities, this section has been reorganized so that these options are now stated in revised § 682.220(e) and in the new § 682.220(f). Section 682.220(a) Section 682.220(a) describes the requirement under WIOA sec. 134(a)(2)(B)(vi) for States to use funds reserved by the Governor for statewide activities to conduct evaluations of activities under the WIOA title I core programs, according to the provisions of sec. 116(e). The paragraph has been revised to state that the purpose of evaluations is ‘‘to promote continuous improvement, research and test innovative services and strategies, and achieve high levels of performance and outcomes.’’ The first and third purposes—promoting continuous improvement, and achieving high levels of performance and outcomes—reflect the statutory requirement of WIOA sec. 116(e)(1). The second purpose, as proposed by the Department in the NPRM, was to test innovative services and strategies. It has been revised to reflect the reality that rigorous tests of such services and strategies often are preceded or accompanied by related forms of research. This section has also been renumbered from § 682.220(a)(1) to § 682.220(a). The paragraph proposed as § 682.220(a)(2) has been deleted. This paragraph was deleted to avoid any confusion about research and demonstration projects conducted as an allowable statewide activity, to which the provisions of § 682.220 do not apply. Also, § 682.220(a)(3), regarding the use of funds other than the Governor’s Reserve, has been revised and relocated to a new § 682.220(f), as discussed below. E:\FR\FM\19AUR6.SGM 19AUR6 56194 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations Section 682.220(b) The regulations under § 682.220(b) describe a number of requirements for evaluation under the State Set-aside. The language at § 682.220(b) was revised from that in the NPRM to remove the reference to ‘‘research projects’’ and thus to clarify that the requirements are statutorily required only for evaluations. In addition, the Department made a technical revision to replace the reference to evaluations ‘‘funded in whole or in part with WIOA title I funds’’ with a reference to evaluations ‘‘conducted under paragraph (a).’’ The language was revised to clarify that the requirements in paragraph (b) apply to evaluations conducted pursuant to paragraph (a). Paragraph (b)(1) of this section implements the statutory requirement for States to coordinate and design evaluations in conjunction with State and Local WDBs and with other agencies responsible for core programs, as set forth in WIOA sec. 116(e)(2). Paragraph (b)(2) implements the requirement for States to include, where appropriate, analysis of customer feedback and outcome and process measures in the statewide workforce development system, as set forth in WIOA sec. 116(e)(2). Where the Department requires specific information related to these requirements, it will do so through the ICR process. Paragraph (b)(3) implements the requirement for States, in conducting evaluations, to use designs that employ the most rigorous analytical and statistical measures such as the use of control groups, as set forth in WIOA sec. 116(e)(2). The regulation clarifies that these approaches should be used when appropriate and feasible, thus indicating they are not intended as a ‘‘one-size-fits-all’’ checklist of requirements for every evaluation project. Paragraph (b)(4) implements the statutory requirement set forth in WIOA sec. 116(e)(1) for States, to the extent feasible, to coordinate the State’s evaluations with those provided by the Secretary of Labor and the Secretary of Education under the particular statutes as cited. These paragraphs are adopted as proposed. mstockstill on DSK3G9T082PROD with RULES6 Section 682.220(c) Section 682.220(c) implements the statutory requirement for States to annually prepare, submit, and make available reports containing the results of the evaluations the States conduct, as set forth in WIOA sec. 116(e)(3). The Department has made two revisions to this section. First, as noted above, in response to comments received, the VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Departments has clarified that States must prepare, submit to the State and Local WDBs, and disseminate to the public results from these evaluations ‘‘as available.’’ The Department recognizes that when evaluations are conducted over multiple program years, as permitted in revised paragraph (e)(3), results may not be available in every program year. Evaluation reports must be made publically available during the program year the final report is finalized. In light of the options States have in terms of the components and time needed for evaluations as clarified in § 682.220(e)(3), evaluations may extend into multiple program years. Second, the Department has revised this section to remove any reference to ‘‘other research’’ to avoid any confusion with research as an allowable statewide activity, for which the reporting requirements are not statutorily required under WIOA. However, the Department, in recognition of the benefits of disseminating research, strongly encourages States to make publicly available the reports emanating from such other research that States conduct. Section 682.220(d) Section 682.220(d) implements the statutory requirement for States to cooperate, to the extent practicable, in evaluations and related research projects conducted by the Secretaries of Labor and Education. The Department has made minor revisions, for the sake of clarity, to three aspects of this section. First, the Department has removed the reference to the ‘‘agents’’ of the ‘‘Secretaries of Labor and Education’’ because a reference to the Secretaries always implicitly includes their agents, such as sub-agencies, contractors, or grantees. Second, the Department has replaced the reference to ‘‘sec. 116(e)(4) of WIOA’’ with a reference to the ‘‘laws cited in paragraph (b)(4) of this section.’’ This revision is non-substantive as the laws cited in paragraph (b)(4) of this section are those noted under sec. 116(e)(4) of WIOA, intended to simplify the language of the regulation. Paragraph (d)(1) of this section describes the particular data, information, and assistance that States must timely provide in cooperation with evaluations and related research projects conducted by the Secretary of Labor and Secretary of Education. Paragraph (d)(2) describes the requirement for the States to encourage cooperation in data provision by onestop partners at the local level. Paragraph (d)(3) describes the requirement for the Governor to provide written notification to the Secretary if it PO 00000 Frm 00124 Fmt 4701 Sfmt 4700 is not practicable for the State to timely provide the data described in paragraph (d)(1). No comments were received regarding these paragraphs. However, paragraph (d)(2) has been revised to correct an erroneous reference to paragraph (f)(1)(a)–(c) to the appropriate citation to paragraphs (d)(1)(i)–(iv). These paragraphs are adopted as proposed, with the described revision. Section 682.220(e) Section 682.220(e) has been revised to identify allowable flexibilities in the types of studies, phases, and time frames that are available to States in fulfilling their obligation to conduct evaluations, all in response to the concerns expressed in the comments about this requirement. Paragraph (e)(1) of § 682.220 clarifies that under WIOA sec. 116(e)(1) States, while required to use set-aside funds to evaluate activities under title I core programs, are permitted to conduct evaluations that jointly examine activities under title I and those under other core programs, so long as such evaluations are developed and designed in coordination with the relevant State agencies responsible for core programs under § 682.220(b)(1). Examples of evaluations of activities under multiple core programs include studies of referral processes, systems integration, or infrastructure cost sharing among the core programs. Paragraph (e)(2) provides a new flexibility to permit States to conduct evaluations similar to those authorized for, or conducted by, the Departments of Labor and Education under the laws cited in § 682.220(b)(4), and cites as examples ‘‘process and outcome studies, pilot and demonstration projects that have an evaluative component, analyses of programmatic data, impact and benefit-cost analyses, and use of rigorous designs to test the efficacy of various interventions.’’ Paragraph (e)(3) was added to clarify flexibilities for States to conduct evaluations over multiple program years, involving multiple phases ‘‘such as a literature or evidence review, feasibility study, planning, research, coordination, design, data collection, and analysis, and report preparation, clearance, and dissemination.’’ As noted above, the Department has added these flexibilities for States since, based on its own experiences in conducting evaluations, which have often entailed many such components and extended over multiple years. E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations Section 682.220(f) Section 682.220(f) describes allowable flexibilities for the States in funding evaluations in the use of funds from sources other than the State set-aside. Section 682.220(f)(1) permits States to use funds from any WIOA title I through IV core program to conduct evaluations, as determined through the coordinative processes associated with paragraph (b)(1). This paragraph was, for the sake of clarity, relocated from § 682.220(a)(3) of the NPRM. Further, consistent with the decisions discussed above, the reference to ‘‘other research’’ was removed. The Department also revised the paragraph to clarify that States may use funds from any WIOA title I through IV core program (per WIOA sec. 116(e)(1)); the NPRM had referred to only title II through IV core programs. This revision clarifies that, while States must conduct evaluations using State set-aside funds under WIOA secs. 129(b)(1)(A) and 134(a)(2)(B)(vi)), they may additionally use available funds from other core programs for such evaluations. This flexibility may be of particular interest to States planning evaluations that jointly study WIOA title I core program and other core program activities (a flexibility identified in § 682.220(e)(1) above). Section 682.220(f)(2) permits States to use or combine funds, consistent with Federal and State law, regulation and guidance, from other public or private sources, to conduct evaluations relating to activities under the WIOA title I through IV core programs. Such projects may include those funded by the Department of Labor and other Federal agencies, among other sources. This section was initially located at § 682.220(e) of the NPRM. In response to concerns expressed by commenters, the Department has revised this section slightly by adding language to clarify that these additional public or private funding sources can include Department of Labor or other Federal agencies’ grants, cooperative agreements and contracts. The Department has also revised this section, consistent with the decisions discussed above, to remove the reference to ‘‘research, and other demonstration projects.’’ mstockstill on DSK3G9T082PROD with RULES6 4. Subpart C—Rapid Response Activities Introduction This subpart discusses the important role that rapid response plays in providing customer-focused services to both dislocated workers and employers, ensuring immediate access to affected workers to help them quickly re-enter the workforce. The regulations reflect VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 the lessons learned from the innovations by, and best practices of, various rapid response programs around the country in planning for and meeting the challenges posed by events precipitating substantial increases in the number of unemployed individuals in States, regions, and local areas. The regulations provide a comprehensive framework for operating successful rapid response programs in a way that promotes innovation and maintains flexibility to enable States to manage successfully economic transitions. The Department is making a technical correction to § 682.300(a). Proposed § 682.300(a) made reference to rapid response being discussed in §§ 682.310 through 682.370. The reference to § 682.310 is corrected to reflect § 682.300. This technical correction makes it clear that the regulatory text in § 682.300 also is intended to be included in the description of rapid response. The remaining analysis that follows provides the Department’s response to public comments received on the proposed part 682 regulations. If a section is not addressed in the discussion below, it is because the public comments submitted in response to the NPRM did not substantively address that specific section and no changes have been made to the regulatory text. Further, the Department received a number of comments on this part that were outside the scope of the regulation and the Department offers no response. Lastly, the Department has made a number of non-substantive changes to correct grammatical and typographical errors to improve the readability and conform the document stylistically that are not discussed in the analysis below. Section 682.300 What is rapid response, and what is its purpose? Section 682.300 describes rapid response, which promotes economic development and vitality and delivers critically important solutions to workers and businesses in transition. Comments: The Department received comments on other areas of part 682, subpart C, relating directly to rapid response, (e.g., comments received on § 682.330(i) regarding Trade Adjustment Assistance (TAA) and a comment regarding Worker Adjustment and Retraining Notification (WARN), both discussed later in this preamble). The nature of some of these comments led the Department to conclude that clarifying information is needed regarding the circumstances under which rapid response must be delivered as well as the term ‘‘mass layoff.’’ PO 00000 Frm 00125 Fmt 4701 Sfmt 4700 56195 Department Response: In order to provide this clarification, the Department made the following revisions to § 682.300 and other sections of subpart C: (1) The Department made a correction to the regulatory text in several places by adding the word ‘‘mass’’ to the text in §§ 682.330(j) and 682.350 to align the regulatory text with the statutory language in WIOA sec. 134(a)(2)(A)(i)(II), which refers to ‘‘mass layoffs,’’ whereas the proposed regulatory text only referred to ‘‘layoffs’’; (2) The Department has added new sections to the regulatory text to clarify the circumstances under which rapid response must be delivered (§ 682.302) and to reflect the definition of the term ‘‘mass layoff’’ for purposes of rapid response (§ 682.305); and (3) The text at § 682.300(a)(1) has been revised to include a reference to new section, § 682.302. As a result of the addition of § 682.302, paragraphs (i) and (ii) of § 682.300(a)(1) were deleted and incorporated into § 682.302, since these items are more relevant to that section. The Department also notes that the text that was previously at § 682.300(a)(1)(i) and incorporated into § 682.302 at § 682.302(a) has been revised. Where the previous text referred to ‘‘announcement of a closure or a layoff,’’ the new text refers to ‘‘announcement or notification of a permanent closure, regardless of the number of workers affected.’’ The Department has determined that these revisions more clearly relay its intent that Rapid Response services are required to be delivered in the case of a permanent closure and irrespective of whether information about the layoff is received via an announcement or other notification method. The revision also makes it clear that there is no numerical threshold for delivering rapid response in these instances. Rapid Response is required, regardless of the number of workers affected by the closure. Additional information regarding the circumstances under which rapid response must be delivered, are further explained in the preamble discussion in § 682.302 below. Section 682.302 Under what circumstances must rapid response services be delivered? This section explains the circumstances that trigger the delivery of rapid response. As previously noted in the preamble discussion on § 682.300, the Department received comments that led the Department to add § 682.302 in order to clarify the circumstances under which rapid response must be delivered. Rapid Response must be provided when one or E:\FR\FM\19AUR6.SGM 19AUR6 56196 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 more of the following circumstances occur: (a) Announcement or notification of a permanent closure: An announcement or notification of a permanent closure of a facility, store, enterprise, or plant, regardless of the number of workers affected; (b) Announcement or notification of a mass layoff as defined in § 682.305 and discussed in that section of this preamble; (c) A mass job dislocation resulting from a disaster: Any natural or other disaster event, as defined by state or local emergency management policies, that results in job loss for a number of workers sufficient to meet a state’s definition for mass layoff (see the discussion under number 4 below), or causing 50 or more workers to become dislocated. The Department encourages States to consider appropriate roles and responsibilities for rapid response activities following a natural or other disaster event and establish these roles and responsibilities as part of any emergency management plans that are developed; (d) The filing of a TAA petition: This is required in accordance with the requirement in sec. 221(a)(2)(A) of the Trade Act, which requires that the Governor ensure that rapid response services are delivered to all workers who are covered by the petition for TAA. Additionally, please see the discussion below in response to comments on § 682.330(i). Although the regulatory text now reflects the circumstances that require delivery of Rapid Response and the Final Rule preamble clarifies the circumstances under which rapid response must be provided, the Department is not suggesting that these are the only instances for which States and local workforce areas may provide rapid response. Instead, the Department strongly encourages States or their designated entities to deliver rapid response services to as many workers and companies as possible and to adopt policies that maximize the opportunities for rapid response services to be provided in a manner that best supports the businesses and workers in their communities. Section 682.305 How does the Department define the term ‘‘mass layoff’’ for the purposes of rapid response? This section explains the definition of the term ‘‘mass layoff’’ for the purposes of rapid response. As previously noted in the preamble discussion on § 682.300, the Department received comments that led the VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Department to define the term ‘‘mass layoff’’ for purposes of Rapid Response. A mass layoff will have occurred for the purposes of rapid response when at least one of the following conditions have been met: • A mass layoff, as defined by the State; however, under no circumstances may a State’s definition of mass layoff exceed a minimum threshold of 50 workers. For example, in its definition, the State cannot set the minimum threshold of laid off workers at 75, but it can be set to as few as 1. The definition may be based upon factors such as the size of the company that is impacted, the percentage of workers impacted by a layoff, the income level of the employees, and other relevant factors; • Where a State has not defined a minimum threshold for mass layoff, any layoff affecting 50 or more workers; or, • Upon receipt of a WARN Act notice (see discussion in § 682.320 below in response to a comment on this subpart), regardless of the number of workers affected by the layoff announced. Additionally, the Department notes that the definition of ‘‘mass layoff’’ discussed in this subpart and included in the new regulatory text at § 682.305, differs from the definition used in part 687, National Dislocated Worker Grants, which also refers to the term ‘‘mass layoff.’’ For Rapid Response, the Department allows States more flexibility in defining mass layoffs. Rapid Response services encompass strategies and activities that States can provide to assist workers affected by layoffs and closures as described at § 682.300 (including information about available employment and training programs), and the Department encourages States to do so, regardless of the number of workers affected. In contrast, the DWG program is aimed at significant events that cannot reasonably be expected to be accommodated within the ongoing operations of the formula-funded dislocated worker program. Accordingly, for the purposes of the DWG program, the Department separately defines ‘‘mass layoff’’ as those affecting 50 or more workers from one employer in the same area. Additional details can be found in part 687. Section 682.310 Who is responsible for carrying out rapid response activities? Section 682.310 clarifies that the State or an entity designated by the State is responsible for carrying out rapid response activities. The Department would like to clarify the intent in § 682.310(a). The PO 00000 Frm 00126 Fmt 4701 Sfmt 4700 regulatory text indicates that rapid response must be carried out by the State or by another entity designated by the State. The State or entity designated by the State must coordinate, communicate, and work with Local WDBs, CEOs, and other stakeholders as appropriate. The Department included ‘‘other stakeholders’’ because it has determined that the intent of the law is to ensure coordination with all relevant parties so rapid response services can be delivered effectively. Paragraph (b) of § 682.310 reinforces the requirement that regardless of whether a State designates a non-State entity or entities to carry out rapid response, the State must establish and maintain a rapid response unit to oversee this program. Section 682.320 What is layoff aversion, and what are appropriate layoff aversion strategies and activities? This section describes a comprehensive approach to layoff aversion, designed to prevent or minimize the duration of unemployment. Comments: The Department received a few comments requesting some additional changes be made to the text of the NPRM. One commenter requested an addition to § 682.320(b)(2) to insert language that States should work with both business and labor organizations in those instances where a collective bargaining agreement is in place and consult with unions in cases where no such agreement exists. The commenter also requested that language on partnering or contracting with labor organizations be added to § 682.320(b)(7). Lastly, the commenter recommended an additional provision that included language about working with labor organizations. Department Response: Paragraph (b)(2) includes the following as an allowable layoff aversion activity: ‘‘ongoing engagement, partnership, and relationship-building activities with businesses in the community, in order to create an environment for successful layoff aversion efforts and to enable the provision of assistance to dislocated workers in obtaining reemployment as soon as possible.’’ Developing strong relationships with businesses is critical in layoff aversion, and the Department has concluded the proposed regulatory text best supports the intent of this paragraph by maintaining its sole focus on the business partnership, since businesses are often the most critical players in helping avert layoffs. However, developing relationships with unions is important as well, and language to this effect can be found at § 682.330(h) which requires that States E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations develop partnerships with a variety of organizations, including unions, as appropriate, in order to exchange information among these partners so that rapid response is provided as early as possible. Information relating to the customization of layoff aversion activities is specifically highlighted in the regulation requiring these partnerships. No changes were made to the regulatory text in response to these comments. Comments: One commenter suggested that allowable layoff aversion activities be organized into ‘‘core’’ and ‘‘complementary’’ activities. Core activities would be those that the commenter considers to be ‘‘true business disruption turn-around services,’’ and complementary would be those ‘‘that are important, but would not avert closure . . . in an emergency business disruption.’’ Department Response: The Department concluded that making distinctions between types of layoff aversion activities does not meaningfully impact the ability of States or local workforce areas to conduct layoff aversion activities, and operators of rapid response programs are best suited to determine how they organize or manage their layoff aversion activities in accordance with the requirements. As a result, the Department has determined that the proposed regulatory text permits State and local rapid response operators the flexibility to meet these requirements based on the specific needs of the companies and workers being served and the particular characteristics of each event. The categories suggested by the commenter imply that some activities listed are more important than others. The Department has concluded that any allowable activities that are designed to prevent or minimize the duration of unemployment are equally important and valuable, and encourages State and local rapid response teams to develop strategies that maximize the ability to deploy the appropriate layoff aversion solutions for the challenges they face. No changes were made to the regulatory text in response to this comment. Comments: A few commenters requested that the Department add language to § 682.320 that requires States to describe their layoff aversion strategies in their Combined State Plan or Unified State Plan. Department Response: The Department does not agree that this language should be added to the regulatory text. Instead, the joint planning guidelines issued by the Secretaries of Labor and Education in March 2016 in TEGL No. 14–15, VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 provides the overall content requirements for the WIOA Unified or Combined State Plans. The guidance is in TEGL No. 14–15, released March 2016, entitled ‘‘Workforce Innovation and Opportunity Act (WIOA) Requirements for Unified and Combined State Plans’’ and may be found at http:// wdr.doleta.gov/directives/All_WIOA_ Related_Advisories.cfm. No changes were made to the regulatory text in response to these comments. Comments: One commenter requested that language regarding the WARN Act be included in § 682.320 or § 682.330 since WARN notification is an ‘‘automatic trigger’’ to conduct rapid response. Department Response: The Department agrees that the receipt of a WARN notice is a trigger for rapid response as indicated previously and is clarifying that the issuance of a WARN notification, regardless of the number of workers affected by the layoff announced, generates the requirement to deliver rapid response. WARN Act notice is required generally for plant closures and mass layoffs as defined in the WARN Act or under State laws expanding the scope of notice requirements, and, thus, a WARN layoff meets the Department’s general requirements for mass layoffs and this is reflected in § 682.305. Because WARN notification is covered in this section, no change is being made to the text at § 682.320 or § 682.330 to include WARN notice language. In § 682.320(b)(4), incumbent worker training is identified as one of the allowable layoff aversion activities. Although no comments were received with regard to this text, the Department has determined that a correction to the regulatory text at § 682.320(b)(4) to insert the word ‘‘funding’’ is needed in order to align the regulatory text with another section of the regulations (§ 680.800(b)) and to clarify that the Department intended rapid response funds to be used to pay for this training to help ensure workers have the skills needed to conduct the work of the employer and that businesses are able to build a skilled workforce commensurate to their needs. An additional correction is made to the regulatory text to make it clear that any incumbent worker training program conducted with rapid response funding must be tied to a broader layoff aversion strategy or must be intended for the purpose of preventing workers from losing their jobs. Incumbent worker training is a critical layoff aversion approach and our intent is to allow rapid response funds to pay for these activities in order to help ensure that rapid response meets PO 00000 Frm 00127 Fmt 4701 Sfmt 4700 56197 its primary goal, which is to prevent or minimize the duration of unemployment. In order to demonstrate that the funds are being used as part of a layoff aversion strategy or activity, States must develop policies and procedures with respect to the use of rapid response funds for incumbent worker training, including the circumstances under which using rapid response funds for incumbent worker training would be applicable. As with all incumbent worker training funds, however, the use of rapid response resources to provide incumbent worker training as part of layoff aversion must be above and beyond the normal training offered by businesses to their employees. Rapid response resources must not supplant private funds in these situations. Section 682.330 What rapid response activities are required? This section describes the required rapid response activities. Comments: One commenter requested that the introductory sentence in the regulatory text at § 682.330 be changed from ‘‘Rapid response activities must include’’ to ‘‘Rapid response services that must be made available include.’’ The commenter explained that the reason for this request is due to the fact that the State cannot be compelled to deliver services if businesses refuse them. Department Response: The Department understands that businesses might not always be open to participating in the rapid response process; however, the proposed regulatory text reflects a requirement that was also in effect under WIA and shows the significant responsibility that States have to ensure that rapid response staff establish relationships and develop the skills needed to be able to work with businesses that will enable successful delivery of rapid response services. No changes in regulatory text were made in response to these comments. However, the Department recognizes that businesses are under no obligation to allow or help ensure the smooth delivery of rapid response services, and this can present a significant challenge for rapid response staff. Therefore, the Department determined that States which make all reasonable efforts to deliver services to affected workers, will be determined to have met the requirements of this section. However, the Department considers reasonable efforts to include more than just cursory attempts. For example, if a business refuses to allow services to be delivered on site or during business hours, rapid response teams E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56198 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations should make every effort to ensure worker access to rapid response services at off-site locations and during convenient hours. As previously noted, the requirement that Rapid Response services include services to businesses existed under WIA and during the administration of that law the Department never found a State who had made all reasonable efforts to deliver services to be out of compliance. Comments: One commenter remarked that the language at § 682.330(i) gives the impression that rapid response must be provided in parallel to Trade Adjustment Assistance (TAA), and this is often not the sequence. The commenter stated that these services are usually decoupled and that rapid response may occur prior to TAA application. Department Response: The provision at § 682.330(i) is consistent with the requirement in the Trade Act and is included in this regulation to help ensure that this requirement is met. The regulatory text requires that, as appropriate, rapid response services be provided to trade-impacted workers for whom petitions have been filed. Rapid response operators, of course, may assist in coordinating with State TAA staff, local one-stop staff, employers, workers, or unions in filing a petition for TAA on behalf of a worker group negatively impacted by foreign trade. Thus, a delay between petition filing and petition certification will occur, and as petitions may be filed up to 1 year after a worker separation, there may be delays between a worker separation, a petition filing, and the petition certification. The regulatory text is not meant to imply that rapid response services may only be provided once the Trade petition has been filed. Like other workers impacted by layoffs, rapid response services may be provided upon notification of layoffs consistent with State or local procedure. A worker may receive rapid response services prior to the TAA petition filing and re-delivery of rapid response services may or may not be appropriate, depending on the individual circumstances or timing of the events. Additionally, the content of information provided to the worker group through rapid response may change due to the circumstances or timing of the event, or additional information, such as a TAA Orientation, may occur after petition certification. No changes were made to the regulatory text in response to this comment. Comments: The Department received several comments on the provision at § 682.330(g)(3) regarding the tracking of information related to rapid response activities. The commenters expressed VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 that it is difficult to track rapid response activities and funds separately. One commenter opined that this level of detail should not be included as a requirement. Department Response: The Department expects that its programs must be evidence-based, whenever possible, and rapid response is no different. Capturing and tracking performance and outcome data and information is critical for continuous improvement, for identifying promising practices, and for reporting, and this tracking is required to be done for rapid response activities, as appropriate. No changes were made to the regulatory text in response to this comment. Comments: Another commenter gave an example of the difficulty involved in tracking rapid response activities. The example provided was visiting with the employer to present affected workers with services. The commenter noted that unless there is a way to track the employees’ participation, it would be difficult to determine the outcomes of that activity. Department Response: The Department does not specify what programmatic data and information States must capture and track; States are best suited to determine what they capture and track based upon the specific circumstances in each State. But, States are required to report to ETA some programmatic information (in accordance with § 682.360, further explained in the preamble) and report expenditure information, through the ETA 9130 form. Both of these requirements remain consistent from requirements under WIA. However, given the nature of some rapid response activities, the Department agrees that tracking outcome and performance data for all rapid response activities might prove difficult in some instances and the Department will provide, as necessary, guidance or technical assistance to support States with this requirement. No changes were made to the regulatory text in response to this comment. Regarding the requirement at § 682.330(j) to provide additional assistance to local areas, although no comments were received about this text, the Department wishes to clarify the connection between WIOA and the regulatory text. WIOA refers to events ‘‘that precipitate substantial increases in the number of unemployed individuals’’ as the trigger for potential additional assistance. In the regulatory text, the Department has interpreted this to mean that additional assistance may be provided ‘‘when such events exceed the capacity of the local area to respond PO 00000 Frm 00128 Fmt 4701 Sfmt 4700 with existing resources’’ to address situations such as significant increases in unemployment that have resulted in, or have the potential to cause, a significant impact on the local area’s resources. Therefore, additional assistance also may be used to support responses to major dislocation events, to provide layoff aversion efforts, and other allowable activities when these activities exceed the capacity of a local area’s formula resources. Finally, the Department is making several corrections to the regulatory text that includes an edit to § 682.330(e), to delete the reference to WIOA secs. 101(38) and 134(a)(2)(A). Because the paragraph is specifically referencing national dislocated worker grants, it now cites only to the part governing those grants, to be more clear. Also, an edit to § 682.330(h) was made by inserting the word ‘‘and’’ between § 682.330(h)(1) and (2) to reflect that both are expected benefits of developing and maintaining partnerships described at § 682.330(h). Section 682.360 What rapid response, layoff aversion, or other information will States be required to report to the Employment and Training Administration? Section 682.360 requires the reporting of rapid response information on the WIOA individual record. Comments: The Department received several comments on the issue of reporting. One commenter requested that States and locals be given the opportunity to respond to proposed data collection requirements before they are enacted. Department Response: The Department solicited feedback on proposed data collection requirements through the ICR process governed by the Paperwork Reduction Act (see 80 FR 43474 (July 22, 2015) and 80 FR 52798 (Sept. 1, 2015)) to ensure that those impacted by collection requirements would have an opportunity to comment on them. Should additional performance data reporting elements be required for rapid response, the Department will work with States and local areas to ensure that reporting burdens are minimized while still meeting program reporting goals. Any additional reporting requirements would be subject to public comment through the ICR process. No changes were made to the regulatory text in response to this comment. Comments: Another commenter requested that the services required to be captured match the WIASRD. Department Response: Much of what was collected and reported under WIA E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations will continue under WIOA. States will be required to collect and report in accordance with sec. 116 of WIOA and 20 CFR part 677 (see Joint WIOA Final Rule). In order to provide clarity on the performance data reporting expectations for rapid response, the Department has revised the text at § 682.360. The former text required States to report the receipt of rapid response services of individuals enrolled as dislocated workers on the WIOA individual record,’’ whereas the text in the Final Rule clarifies that States are required to report the receipt of rapid response services for those individuals who have an existing WIOA individual record or for whom a WIOA individual record is created under programs that report through this mechanism. The new text also clarifies the population to be reported by revising the text from ‘‘individuals enrolled as dislocated workers on the WIOA individual record’’ to ‘‘individuals served under programs reporting through the WIOA individual record.’’ These changes account for and align with the performance definitions for participant and reportable individual located at 20 CFR 677.150(a) and (b), provide consistency with the language on the reports, and also place a parameter to more clearly align with those programs that are required to fulfill reporting requirements under 20 CFR part 677 (see Joint WIOA Final Rule). The Department notes that § 682.360 does not independently require the creation of a WIOA individual record for individuals on account of their receipt of rapid response, layoff aversion, or other services under subpart C of this part; rather, § 682.360 requires that where a WIOA individual record exists for an individual served under programs reporting through the WIOA individual record, States must also report information regarding the receipt of services under subpart C. The Department has also added paragraph (b) to § 682.360, which relays that States are required to comply with these reporting requirements, as explained in the Department’s guidance. The DOL Performance ICR contains further specifications regarding the collection and reporting of receipt of services under subpart C of this part. Comments: A few commenters noted that there are difficulties involved with reporting rapid response activities through the WIOA individual record because rapid response services are not necessarily individualized. The commenters stated that the rapid response services are primarily employer and worksite based and that VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 this information is collected retroactively at best and not likely to produce an accurate report. Department Response: While the Department understands the challenges of using the individual record to report data on rapid response activities, which are often group-based rather than individualized, there are various methods by which rapid response operators may identify and report on individuals who receive rapid response services. The Department will provide States with technical assistance on this topic as needed. Additionally, the Department recognizes the challenges associated with retroactive collection of information from employers or worksites on rapid response activities and services; the importance of valid and reliable collection is an area that was established as a priority under WIA and continues to be under WIOA. The Department will continue to work across programs to identify best practices and effective means of collecting data and ensuring valid, accurate, and reliable reporting. No changes were made to the regulatory text in response to these comments. Section 682.370 What are the statewide activities for which rapid response funds remaining unobligated after the first program year for which the funds were allotted may be used by the State? Section 682.370 describes the statewide activities for which rapid response funds that are unobligated after the first program year for which the funds were allotted may be used. Comments: The Department received a few questions from a commenter regarding this section. The commenter asked whether the term ‘‘unspent’’ (used in § 682.370 of the NPRM) means unobligated or unexpended. Department Response: The Department agrees that using the term unspent was confusing and, as a result, has changed the regulatory text to use the term ‘‘unobligated’’ to reflect the provision in WIOA at sec. 134(a)(2)(A)(ii) in order to avoid confusion. The regulatory text was further changed to more closely align with the statutory text, providing a clearer explanation that the Governor may use these unobligated funds to carry out statewide activities as described in both §§ 682.200 and 682.210. For consistency with the WIOA provision, the section header has also been changed and now reads ‘‘What are the statewide activities for which rapid response funds remaining unobligated after the first program year for which the PO 00000 Frm 00129 Fmt 4701 Sfmt 4700 56199 funds were allotted may be used by the State?’’ Comments: The commenter also requested to know whether the provision at § 682.370 required governors to use unobligated rapid response funds for statewide activities, and whether statewide activities are only for ‘‘15 percent funds.’’ Department Response: To address the first question, the use of unobligated funds by the Governor for statewide activities is allowed, but is not a requirement. The Governor is not required to use the unobligated rapid response funds to carry out statewide activities, but has the option of doing so. In response to the commenter’s second comment, the Final Rule text clarifies that the statewide activities for which the funds may be used include the required statewide activities described at § 682.200 and the allowable statewide activities described at § 682.210, which are often referred to informally as the 15 percent funds. G. Part 683—Administrative Provisions Under Title I of the Workforce Innovation and Opportunity Act This part establishes the administrative provisions for the programs authorized under title I of WIOA. Some of the provisions are also applicable to grants provided under the Wagner-Peyser Act, as indicated in specific sections of this part. The remaining Wagner-Peyser Act administrative rules are located in 20 CFR part 658. The Department notes that administrative provisions for Job Corps (subtitle C of title I of WIOA) contracts are addressed separately in 20 CFR part 686. The analysis that follows provides the Department’s response to public comments received on the proposed regulations for Administrative Provisions Under Title I of WIOA. If a section is not addressed in the discussion below, it is because the public comments submitted in response to the NPRM did not substantively address that specific section and no changes have been made to the regulatory text. Further, the Department received a number of comments on this part that were outside the scope of the regulation and the Department offers no response. The Department has made a number of non-substantive changes to correct grammatical and typographical errors to improve the readability and conform the document stylistically that are not discussed in the analysis below. Lastly, the terms ‘‘performance measure’’ and ‘‘performance accountability measure’’ have been replaced throughout with ‘‘performance indicator’’ and references to the E:\FR\FM\19AUR6.SGM 19AUR6 56200 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations implementing regulations for WIOA sec. 188 at 29 CFR part 37 have been updated to refer to 29 CFR part 38 per the Department’s recent nondiscrimination rulemaking. 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? 1. Subpart A—Funding and Closeout This section recognizes the use of the three funding instruments that conform with the Uniform Guidance: Grant agreements, cooperative agreements, and contracts. Comments: A few commenters requested the Department provide clarification to paragraph (e)(3) of this part regarding the length of time allowed for each award for research, studies, or multi-State projects under WIOA sec. 169. Department Response: The Department added additional language in (e)(3) to clarify the timeline and application of competitive reevaluation. Awards made under WIOA sec. 169 that do not fall under the exceptions at paragraph (e)(3)(ii) or (iii) will require a competitive reevaluation after a 3 year period. This practice is generally consistent with the practices at other major Federal grantmaking agencies. Through this competitive reevaluation, the Department will ensure that the awardee would be competitive should the award be recompeted. The actual details of the competitive reevaluation process may vary by award. However, competitive reevaluations generally will consist of an examination of whether the awardee is meeting its performance goals and financial reporting obligations. The Department will not require competitive reevaluation for the types of awards described in paragraphs (e)(3)(ii) and (iii) because pursuant to the provisions of WIOA sec. 169(b)(6)(A), awards that meet these requirements do not need to be competitively evaluated when initially awarded. However, the regulation includes criteria that must be met for these types of awards to avoid the competitive reevaluation requirement. The Department notes that there will be a transition period while the Department puts in place the processes and procedures for competitive reevaluation described in this Final Rule. Additionally, the Department clarified where the language in § 683.105 applies to grants, contracts, and cooperative agreements. Comments: A commenter requested the Department provide clarification on whether local areas can utilize only funding to serve customers in their jurisdictions or if the State can set policy to allow a broader use of funds. Department Response: WIOA does not prohibit or require local residency for an mstockstill on DSK3G9T082PROD with RULES6 Section 683.100 When do Workforce Innovation and Opportunity Act grant funds become available for obligation? Section 683.100 describes the statutory requirements for the Department’s release of formula funds under title I of WIOA and the WagnerPeyser Act. Comments: A commenter requested clarification on whether there is consideration for agencies that are not one-stop operators to operate after June 30, 2016, because their agency received ‘‘WIA’’ (Workforce Investment Act) funds from the State and were informed that they can no longer perform direct services. Department Response: It is unclear from the comment to what agencies and what services the commenter is referring. Because the Department is unable to determine the meaning of the comment, the Department has adopted the provision as proposed. However, for additional information that may be useful, the commenter should see WIOA sec. 107(d)(10), which provides the local Workforce Development Boards’ (WDBs) responsibilities in selecting operators and providers. WIOA sec. 107(d)(10) is further discussed in 20 CFR part 679. Additionally, WIOA sec. 122 details requirements for identifying eligible training providers. This section is further addressed in 20 CFR part 680. Finally, the Department provided guidance and instructions on the transition of participants, funds, performance reports, grants, and subrecipient contracts under title I of the Workforce Investment Act of 1998 and under the Wagner-Peyser Act to WIOA. This guidance can be found at TEGL No. 38–14 (‘‘Operational Guidance to Support the Orderly Transition of Workforce Investment Act Participants, Funds, and Subrecipient Contracts to the Workforce Innovation and Opportunity Act’’) issued on June 8, 2015; www.doleta.gov/WIOA/. The Department also received comments concerning the required obligation rate of WIOA funds and the reallotment process. The Department addresses these comments in § 683.135. No changes were made to regulatory text in response to these comments. VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 PO 00000 Frm 00130 Fmt 4701 Sfmt 4700 individual to receive services from a local area. Instead, whether a local area can serve individuals living outside their local area boundaries depends on State law and policy. Because the comment does not request a change to the language, no changes were made in the regulatory text. Aside from the changes discussed above, the Final Rule adopts the remainder of the section as proposed with a technical edit to § 683.105(e)(4) to correct language that was inadvertently retained from the WIA regulations and make this regulation more reflective of the statutory language at sec. 169(b)(6)(D) of WIOA, and additional technical edits for clarity to § 683.105(f). Section 683.110 What is the period of performance of Workforce Innovation and Opportunity Act title I and WagnerPeyser Act funds? This section describes the period of performance for different types of WIOA title I and Wagner-Peyser Act grant awards. Comments: The Department received several comments requesting clarification concerning § 683.110. One commenter requested clarification regarding the period of time in which funds are available to carry out a Payfor-Performance contract strategy. Department Response: As provided in WIOA sec. 189(g)(2)(D) and discussed in § 683.530, funds used for a WIOA Payfor-Performance contract strategy are available until expended. Because WIOA sec. 189(g)(2)(D) and § 683.530 provide the period of availability for funds used for WIOA Pay-forPerformance contract strategies, no changes were made in the regulatory text. The Department expects to provide future guidance on carrying out WIOA Pay-for-Performance contract strategies. Comments: Several commenters discussed the applicability of § 683.110 to the National Farmworker Jobs Program (NFJP) grant recipients. Specifically the commenters recommended that the Department be consistent across programs when considering modifications to allow carryover of funding and not add restrictions for National Farmworker Jobs Program (NFJP) grant recipients. One commenter recommended that NFJP grant recipients have the same performance standard stringency as others and be offered in § 683.110(e) the carryover provisions that approximate available expenditure allowances by States in § 683.110(b), and that NFJP have the same flexibility as the Governor to adjust on-the-job training E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 (OJT) employer reimbursement levels from 50 to 75 percent. Department Response: The Department addresses the issues concerning the NFJP program in the preamble discussion in part 685. Comments: The Department also received comments concerning the applicability of § 683.110 for title II programs and State Adult Education and Family Literacy Act (AEFLA) agencies. Department Response: The provisions found in § 683.110 are applicable to funds authorized under title I of WIOA and the Wagner-Peyser Act. The Department refers the commenters to the Department of Education’s regulations for Programs and Activities Authorized by the Adult Education and Family Literacy Act at 34 CFR parts 462 and 463.for additional information regarding AAFLA and title II programs. Because § 683.110 only applies to WIOA title I and Wagner-Peyser Act funds, this DOL WIOA Final Rule adopts the provision as proposed. The Department received no comments on the remaining provisions of § 683.110, and the Final Rule adopts the section as proposed with technical corrections. The Department has corrected the reference in § 683.110(c)(1)(ii) so that it refers to the provision governing the availability of funds used for WIOA Pay-forPerformance contract strategies, and it clarifies that this provision is referring specifically to WIOA Pay-forPerformance contract strategies, as defined in sec. 3 of WIOA and in subpart E of this part. The Department notes that the term ‘‘used’’ in § 683.110(c)(1)(ii) refers to the reservation and use of funds mentioned in WIOA secs. 129(c)(1)(D) and 134(d)(1)(A)(ii). Additionally, the Department has corrected § 683.110(f) so that it refers to award documents instead of terms and conditions of award. Section 683.120 How are Workforce Innovation and Opportunity Act title I formula funds allocated to local areas? This section describes the timeframe and formula factors a Governor must employ when allocating fund to local areas under secs.128 and 133. It also specifies the steps a Governor must take when issuing allocations, including consulting with Local WDBs and elected official prior to issuing the allocation. Comments: The Department received a comment in support of this section. The Department also received several comments concerning the applicability of § 683.120 to title II programs and State AEFLA agencies. VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Department Response: The provisions found in § 683.120 are applicable to funds authorized under title I of WIOA and the Wagner-Peyser Act. The Department refers the commenters to 34 CFR parts 462 and 463 for additional information regarding AEFLA and title II programs. Because § 683.120 does not apply to title II and AEFLA agencies, the Final Rule adopts the provision as proposed, with a technical amendment to § 683.120(a) to correct list format and an additional technical amendment to § 683.120(b) clarifying the application of WIOA secs. 129(b) and 134(a). Section 683.125 What minimum funding provisions apply to Workforce Innovation and Opportunity Act adult, dislocated worker, and youth allocations? This section addresses the minimum funding thresholds for States funded under title I, subtitle B of WIOA. Comments: The Department received several comments regarding § 683.125. A few comments raised concerns about the application of a fiscal year basis versus a program year basis for the minimum funding provisions. Another comment raised a concern on the application of the minimum funding thresholds in local areas that have been impacted by geographical boundary changes. Two commenters stated that § 683.125(a) should take effect Oct. 1, 2015, for fiscal year (FY) 2016. These commenters stated that the proposed regulations are silent on whether § 683.125(a) refers to program year (PY) or FY, but that the Department through TEGL No. 29–14 (‘‘Workforce Innovation and Opportunity Act (WIOA) Adult, Dislocated Worker and Youth Activities Program Allotments for Program Year (PY) 2015; Final PY 2015 Allotments for the Wagner-Peyser Act Employment Service (ES) Program Allotments; and Workforce Information Grants to States Allotments for PY 2015’’) has specified that this section refers to PY 2016. Department Response: The Department’s fiscal year monies are distributed to grant recipients on a program year basis, as described in §§ 683.100 and 683.125. The youth and adult minimum funding provisions existed under WIA. The minimum funding provisions under the WIOA statute go into effect when the FY 2016 funds become available on July 1, 2016, consistent with TEGL No. 29–14 (see http://wdr.doleta.gov/directives/All_ WIOA_Related_Advisories.cfm). However, the Department agrees that the language proposed for § 683.125 was confusing and has made changes to PO 00000 Frm 00131 Fmt 4701 Sfmt 4700 56201 clarify the relationship between the fiscal year appropriations and the program year availability in relation to the minimum funding provisions. Comments: A commenter also recommended that local areas that change boundaries should still be eligible for the minimum percentage provisions for the adult, dislocated worker, and youth programs. Department Response: The Department agrees that this was a gap in the language of the proposed regulation and has added § 683.125(c) to address this issue. States may use WIOA minimum funding procedures even where the geographical boundaries of some or all local areas are different from the previous allocation. For example, this can be done for the PY 2016 WIOA allotment by (1) taking the amount allocated to WIOA local areas; (2) calculating the amount each local area would have received using the PY 2015 and PY 2015 WIA allocations (WIA proxy amounts); and (3) calculating 90 percent of the average WIA proxy amounts for each local area. Under either the permitted WIA hold harmless or the WIOA minimum funding (hold harmless) provision, the amount needed to provide the increased allocation(s) to the affected local areas is to be obtained by ratably reducing the allocations to the other local areas. Section 683.130 Does a Local Workforce Development Board have the authority to transfer funds between the adult employment and training activities allocation and the dislocated worker employment and training activities allocation? This section provides flexibility to local WDBs to provide services in the areas of greatest need by allowing fund transfers of up to 100 percent of a program year allocation between the local adult and the local dislocated worker allocations. Comments: The Department received several comments regarding § 683.130. Some commenters were concerned with the Governor’s approval of the transfer request and whether the Governor would complete the request timely or would unreasonably deny a request. Department Response: The Department agrees that additional language ensuring that requests are timely and reasonably evaluated would be beneficial. Consequently, the Department has adopted new regulatory text for § 683.130 to address the comments regarding the grounds or criteria a Governor must consider when approving or denying a request for transfer. The modified text requires the Governor to establish written policy that E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56202 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations provides the criteria the Governor will utilize for approving a request to transfer adult or dislocated worker employment and training activity funds. Comments: Another commenter expressed concern that the flexibility in § 683.130 could lead to local areas transferring 100 percent of funding away from title I adult programs and could result in drastic reduction in services to those who need them most. This commenter recommended a waiver requirement as a prerequisite to gaining funding transfer flexibility between adult and dislocated worker programs. Department Response: The Department considered the comments and determined that a transfer of 100 percent of funds out of one program to another may drastically reduce services to that program. This recommendation is inconsistent with the statutory language for two reasons. First, sec. 133(b)(4) of WIOA explicitly states that 100 percent of the allocated adult and dislocated funds can be transferred. Second, WIOA states that the Governor is responsible for approving transfers between the adult and dislocated worker funds, which makes an additional waiver requirement inappropriate. With the exception of the previous paragraph, the regulatory text is unchanged. Comments: Other commenters expressed concern regarding the performance of local areas and sought clarification whether performance indicator targets would be rescinded if 100 percent of funds were transferred from one program to the other. Department Response: As addressed in 20 CFR part 677 Performance Accountability (see Joint WIOA Final Rule), the negotiated levels of performance for the primary indicators remain in effect and a local area must consider how it will meet adjusted levels of performance for the primary indicators before requesting such transfer. If the local area transfers 100 percent of a certain type of funding, it would still be responsible for meeting the adjusted levels of performance for any participants that it is required to serve. The Department also reiterates that when funds are transferred from one program to another, the transferred funds adopt the identity of the new fund source and are bound by all of the requirements of that source. The concerns of this commenter are addressed in part 680. No change was made in the regulatory text for part 683 in response to these comments. VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Section 683.135 What reallotment procedures does the Secretary use? This section implements secs. 127(c) and 132(c) of WIOA, and explains the Department’s process for recapture and reallotment of formula funds awarded to the States under title I. Comments: The Department received several comments requesting general clarification regarding the Department’s procedure for recapturing and realloting WIOA funds. Additionally, the Department also received comments asking whether rapid response funds are considered obligated and whether the amounts allocated to the local areas must be reported as obligated on the ETA 9130 form. Department Response: Upon reviewing the proposed language, the Department concluded that the proposed language was ambiguous because it (1) implied that certain interagency transfers and amounts allocated by the States to the local areas under secs. 128(b) and 133(b) of WIOA were not obligations under 2 CFR 200.71; and (2) inaccurately stated that certain obligations needed to be reported on the DOL financial form. Consequently, the Department has revised the language at § 683.135(c). The Department has simplified the language at § 683.135(c) so that it simply states that the ‘‘term ‘obligation’ is defined at 2 CFR 200.71.’’ This change was made because comments revealed that the specific inclusion of the items in paragraphs (c)(1) and (2) of the NPRM led readers to question why other obligations were not included in this list. This change is meant to clarify that everything that qualifies as an obligation under 2 CFR 200.71, including rapid response obligations under sec. 133(a)(2) of WIOA and the transfers and allocations referenced in paragraphs (c)(1) and (2) of the proposed regulation, should be counted for the purposes of the reallotment calculation in § 683.135(a). In addition to simplifying § 683.135(c), the Department added § 683.135(d), which states that obligations must be reported on Department financial forms unless otherwise noted in guidance. Evaluation of the proposed language done in response to questions about whether amounts allocated to local areas must be included on the ETA 9130 form revealed that not all obligations for the purposes of reallotment calculation in § 683.135(a) need to be reported on the 9130 form. The Department has clarified the regulation so that it says all obligations must be reported on Department financial forms unless PO 00000 Frm 00132 Fmt 4701 Sfmt 4700 subsequent guidance from the Department includes instructions to the contrary. Section 683.140 What reallocation procedures must the Governors use? This section describes procedures for reallocating youth, adult, and dislocated worker funds among local areas in the State, in accordance with secs. 128(c) and 133(c) of WIOA. Comments: The Department received a comment requesting clarification on who makes the funding reallocation decision and what is the maximum time frame for decision-making. Department Response: WIOA secs. 128(c) and 133(c) provides that the Governor, after consultation with the State WDB, may reallocate to eligible local areas youth, adult, and dislocated worker funds. Section 683.140(a) mirrors the statutory language and provides that the Governor may reallocate local funds after consulting with the State WDB. Because WIOA identifies the reallocation decisionmaker as the Governor, no change was made in the regulatory text in response to this comment. Section 683.140(b) and (c) provide that the reallocation determination occurs for the prior program year after an evaluation of all local areas’ obligation rates has occurred. However, there is no required timeframe for a Governor to make a decision as the regulation maintains the Governor’s flexibility and responsibility to make reallocation decisions regarding the WIOA grant funds. No change was made to the regulatory text. Section 683.145 What merit review and risk assessment does the Department conduct for Federal financial assistance awards made under Workforce Innovation and Opportunity Act title I, subtitle D? This section includes requirements mandated by the Uniform Guidance. Comments: The Department received several comments requesting a clarification of ‘‘merit review.’’ Department Response: Section 683.145(a) includes the requirements mandated by the Uniform Guidance at 2 CFR 200.204 that the Department utilize a merit review process when awarding competitive awards. Title 2 CFR 200.204 states that the process for merit review will be described in the funding opportunity announcement. The Department has determined that because the process necessary for ensuring a fair merit review may vary by competition, additional description of ‘‘merit review’’ is not appropriate for this regulation. No change was made to E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations the regulatory text in response to these comments. Section 683.150 What closeout requirements apply to grants funded with Workforce Innovation and Opportunity Act title I and WagnerPeyser Act funds? This section addresses closeout, which is an important component to complete the grant lifecycle. This section paraphrases the Uniform Administrative requirement sections on closeout and post-closeout adjustments (2 CFR 200.343 through 200.344). Comments: The Department received a comment requesting clarification of the period of time that the Federal government can disallow costs and for which the grant recipient remains liable for a Federal debt after grant closeout. Department Response: Because WIOA of limitations for collection of a Federal debt depends on many variables not appropriate to regulate, no changes were made to the regulatory text in response to this comment. 2. Subpart B—Administrative Rules, Costs, and Limitations mstockstill on DSK3G9T082PROD with RULES6 Section 683.200 What general fiscal and administrative rules apply to the use of Workforce Innovation and Opportunity Act title I and WagnerPeyser Act funds? This section describes the application of Uniform Guidance and the corresponding exceptions authorized by the Department at 2 CFR part 2900 for all grant recipients and sub recipients, including for-profit organizations and foreign entities. Comments: One commenter requested that an appeal process should be required when the State (pass-through entity) implements requirements outside the Federal guidelines in 2 CFR part 200. Department Response: The Department has decided not to require an appeals process when pass-through entities implement requirements outside the Federal guidelines in the Uniform Guidance at 2 CFR part 200. This is consistent with 2 CFR part 200, which provides necessary flexibility to States by extending special considerations when administering grant funds. The Department determined that requiring an appeals process when a pass-through entity implements requirements not included in 2 CFR part 200 would be unduly burdensome and counter to the effective administration of the grants. The commenter should note that § 683.600 offers protections for subrecipients if a requirement imposed by a pass-through entity violates the VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 requirements of title I of WIOA. Consequently, because the Department has determined that the proposed appeals process would not support the effective administration of the grants and adequate protections are already in place, no change was made in the regulatory text. Comments: One commenter requested an explanation of the addition method in § 683.200(c)(6). Department Response: The Department has determined that the description in § 683.200(c)(6) and reference to 2 CFR 200.307 adequately describes the addition method for the purposes of the regulation and that any additional description of the method would be better suited to guidance and technical assistance. No change was made to the regulatory text in response to comments. Comments: One commenter requested clarification on how a State should determine compliance with the Buy American provisions. The same commenter also asked whether State oversight and monitoring responsibilities under § 683.200 include programmatic monitoring of local areas or simply financial monitoring and oversight, and if the latter, where programmatic monitoring expenses should be charged. Several commenters asked for clarification regarding the applicability of the section to title II funds, specifically to the requirement to use the addition method and the Buy American Act. Department Response: Upon reviewing the commenter’s request, the Department determined that the proposed language about ‘‘Americanmade equipment and products’’ was confusing. Consequently, the Department replaced this language with a reference to the relevant section of the Buy American Act. Additionally, the Department directs the commenter to § 683.410 of this part which addresses the issue concerning the classification of costs as either programmatic or administrative for purposes of WIOA. Section 683.200 describes the application of the Uniform Guidance and the corresponding exceptions authorized by the Department at 2 CFR part 2900 for all title I WIOA and Wagner-Peyser Act grant recipients and subrecipients, including for-profit organizations and foreign entities. The Department also directs the commenter to § 683.215(b)(2), which provides that monitoring and oversight activities related to administrative functions are defined as administrative. Because these issues are addressed elsewhere, no change was made to the regulatory text in response to this comment. PO 00000 Frm 00133 Fmt 4701 Sfmt 4700 56203 The Buy-American requirements apply to funds made available under title I, title II, or under the WagnerPeyser Act. However, § 683.200(f) only applies to funds authorized under title I of WIOA and the Wagner-Peyser Act; no change was made in the regulatory text in response to this comment. Section 683.205 What administrative cost limitations apply to Workforce Innovation and Opportunity Act title I grants? This section specifies the statutory administrative cost limitations of title I grant funds. Comments: The Department received a comment requesting clarification on whether it is allowable to combine the 10 percent administrative cost limitation in § 683.205 for all three WIOA programs into one pool as long as the administrative costs for all three combined do not exceed the pooled amount. Department Response: Section 683.205(a)(2) mirrors the language in WIOA secs. 128(b)(4) and 134(a)(3) and provides flexibility to States and local areas by allowing administrative funds from the three WIOA formula funding streams awarded under title I, subtitle B of WIOA to be pooled and used together for administrative costs for any of the three programs at the State and locals’ discretion. The statutory and regulatory language clearly state that local areas may pool funds for administrative costs. No changes were made to regulatory text in response to this comment. Section 683.215 What Workforce Innovation and Opportunity Act title I functions and activities constitute the costs of administration subject to the administrative cost limitation? This section defines the functions and activities that constitute administration in accordance with sec. 3(1) of WIOA, and therefore are subject to the administrative cost limitations discussed in § 683.205. Comments: In issuing the NPRM, the Department requested comments on whether the Department should issue the proposed administrative costs list as a regulation or as a general description or guidance, whether the list should be stable or subject to periodic review, and whether indirect costs should be programmatic or administrative. The Department received numerous and varied responses regarding its solicitation. The majority of the comments received concerned whether the regulation should use a static list to define administrative costs or whether the regulation should include a more flexible definition, with a majority of E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56204 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations the comments stating a preference to maintain a static list to define administrative costs. Department Response: The Department reviewed and analyzed the comments received and decided to maintain a list of administrative functions in a defined, succinct list instead of adopting a more flexible definition because it agreed with commenters that it ensures consistency and clarity in the treatment of the expenditures for WIOA title I grant funded activities. No change was made in the regulatory text in response these comments. Comments: Additionally, commenters also responded to the inquiry as to whether the Department should treat indirect costs as administrative or programmatic costs with many commenters suggesting that costs should be charged to administration or program depending on activity and function. Department Response: After reviewing the comments, the Department concluded that charging of direct and indirect costs as administrative or programmatic depending on the function is consistent with statute. This results in an accurate classification of costs and is consistent with the Uniform Guidance at 2 CFR part 200. Consequently, indirect costs will be charged as administrative or program costs depending on activity and function. The proposed language was consistent with this conclusion. No changes were made to the regulatory text in response to these comments. Comments: Several commenters suggested that the language in § 683.215(a) was an expansion from WIA and should not apply to one-stop operators. Department Response: Section 683.215(a) provides that administrative costs are those expenditures incurred by State and Local Development WDBs, Regions, direct grant recipients, local grant subrecipients, local fiscal agents, and one-stop operators for the overall management of the WIOA system and are listed among the functions enumerated in the list in § 683.215(b). This definition is substantially the same as it was in WIA. The entities listed in § 683.215(a) are the same entities, with the exception of Regions, that are explicitly included in the definition of administrative costs in sec. 3(1) of WIOA. WIOA clearly requires the inclusion of one-stop operators, no change was made in the regulatory text in response to these comments. Comments: Commenters suggested deleting certain language in § 683.215(b)(4) related to which travel VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 costs should be considered administrative costs. Commenters suggested that the Department delete the language referring to overall management of the WIOA system as it was vague and potentially required certain program costs to be counted as administrative costs. Department Response: Section 683.125(b)(4) defined administrative travel costs as travel costs ‘‘incurred for official business in carrying out administrative activities or the overall management of the WIOA system.’’ The Department reviewed the section and determined that it agreed with the commenters. Consequently, the Department modified the language in § 683.215(b)(4). Two changes have also been made to § 683.215(c) from the proposed language. Comments: The Department received a comment requesting a change to § 683.215(c)(2) so that grant recipients are not required to track personnel expenditures based on documented distributions of actual time worked or other equitable cost allocation methods because the language is inconsistent with the Uniform Guidance in 2 CFR part 200. Department Response: The Department agreed with the commenter and removed the language from the Final Rule. Comments: The Department received several comments concerning § 683.215(c)(4), asking for clarification as to which subgrantees are responsible for tracking administrative costs and are subject to administrative cost limitations; specifically, some commenters were inquiring about the treatment of local grant subrecipients. Department Response: The Department determined that the proposed language was ambiguous about how costs incurred for the functions and activities of local grant subrecipients, as identified in § 683.215(a), should be categorized. Consequently, the Department modified § 683.215(c)(4) and added language to clarify how the administrative costs of subrecipients listed in § 683.215(a) should be categorized. The added language states that costs of contractors and subrecipients that meet the requirements of (c)(4), other than subrecipients listed in (a), are program costs. The addition of the language in the Final Rule will ensure that the intent of WIOA for the entities responsible for the management of the public workforce system to track their administrative expenses is clear. The change also reflects that incidental administrative costs incurred by a contractor or subgrantee whose PO 00000 Frm 00134 Fmt 4701 Sfmt 4700 intended purpose is to provide identifiable program services do not have to be identified, broken out from other costs incurred under the contract or subaward, and tracked against the administrative cost limitation. Finally, this change does not alter the requirement provided in § 683.215(c)(1) that costs incurred under contracts whose intended purpose is administrative must be charged to the administrative cost category. Comments: The Department received a request to clarify the guidelines on infrastructure funding. The Department also received several comments concerning the applicability of § 683.215 to title II programs and State AEFLA agencies. Department Response: The Department notes that infrastructure funding is discussed in 20 CFR part 678 (see Joint WIOA Final Rule). Because another part governs infrastructure funding, no change was made to the regulatory text. The provisions found in § 683.215 are applicable to funds authorized under title I of WIOA. The Department refers the commenters to 34 CFR part 462 and 463 for additional information regarding AEFLA and title II programs. No changes were made to the regulatory text in response to this comment. Section 683.220 What are the internal control requirements for recipients and subrecipients of Workforce Innovation and Opportunity Act title I and WagnerPeyser Act funds? This section describes the internal controls that recipients and subrecipients must install and have in place when expending WIOA and Wagner-Peyser Act funds, and is based on 2 CFR 200.303. Comments: The Department received comments requesting clarification with regard to the internal control requirements of § 683.220. One commenter requested a clear definition of the personally identifiable information (PII) and sensitive information, including documentation allowed for financial and program data and participant-specific verification. Another commenter requested clarification of the ‘‘tools and assistance’’ for improving internal control structure under § 683.220. Department Response: The Department determined that additional guidance on the definition of PII and available tools and assistance are not appropriate regulatory text because of the detail that would be required and the flexibility that is necessary for these definitions. The Department previously issued guidance on handling Personally E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 Identifiable Information (PII) which is found in TEGL No. 39–11 (‘‘Guidance on the Handling and Protection of Personally Identifiable Information (PII)’’), issued on June 28, 2012 (see http://wdr.doleta.gov/directives/attach/ TEGL/TEGL_39_11.pdf). The Department will provide additional guidance on this issue. No change was made to the regulatory text. Section 683.230 Are there special rules that apply to veterans when income is a factor in eligibility determinations? This section addresses the laws governing the determination of eligibility for veterans and their spouses for WIOA funded services with income qualification requirements. Comments: Two commenters expressed concern about simply referring questions to the Veterans’ Employment and Training Service (VETS) without further guidance and recommended that the Department explicitly state the procedures and exceptions in regulations. These commenters also recommended specific training for one-stop operators and onestop staff. Department Response: The Department agrees with the commenters that language clarifying procedures and exceptions would be more appropriate to the regulation than the language referring questions to VETS. Consequently, the Department has struck the language referring questions regarding the applicability of 38 U.S.C. 4213 to VETS. In its place, the Department added language that states that a veteran must still meet each program’s eligibility criteria to receive services under the respective employment and training program. This same language also appears in part 680 (Adult and Dislocated Worker Activities Under Title I of the WIOA). Changing the language in part 683 compliments what is provided in the regulations for the adult and dislocated worker section and ensures that both sections are congruent with regard to the Military Pay Disregard for Eligibility Determination. The added language also clarifies that a veteran must meet all eligibility criteria to receive services. Finally, although the Department deleted the language referring questions about the applicability of 38 U.S.C. 4213 to VETS from the text of the regulation, the Department encourages interested parties to reach out to VETS if they have any questions about 38 U.S.C. 4213. The Department does not agree with the necessity of adding eligibility and income procedures to the regulation because their detailed and technical nature is better suited for guidance VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 developed with the Assistant Secretary for VETS. The Department will consider the request future for training. No change to the regulatory text was made in response to these comments. Section 683.235 May Workforce Innovation and Opportunity Act title I funds be spent for construction? This section is based on the requirements in the Uniform Guidance at 2 CFR 200.439(b)(3), and states that WIOA title I funds must not be spent on construction, purchase of facilities or buildings, or other capital expenditures for improvements to land or buildings except with prior approval of the Secretary. Comments: A few commenters requested the Department add language to this section to clarify the allowability of WIOA funds for construction. Department Response: Section 683.235 is written to allow the Secretary to approve the use of title I WIOA funds in the circumstances provided for in WIOA, including, disaster relief projects under WIOA sec. 170(d), YouthBuild programs under WIOA sec. 171(c)(2)(A)(i), grant recipients’ responsibilities in meeting obligations to provide physical and programmatic accessibility, reasonable accommodations, and the provision of repairs, renovations, alterations, and capital improvements of property, as well as for other projects that the Secretary determines necessary to carry out WIOA, as described by under sec. 189(c) of WIOA. The Department intended to provide the Secretary with the flexibility authorized under WIOA to use funds for construction in any situation where it might be necessary and has determined that it would not be prudent to limit this flexibility by imposing any requirements or exclusive lists of use of funds. No change is made in the regulatory text in response to these comments. Comments: One commenter suggested that the Department amend this section to impose a requirement that WIOA funding only be allowed if the recipient confirms that all contractors and subcontractors that support a registered apprenticeship program meet the onthe-job training contract requirements of § 680.700, and are deemed ‘‘responsible contractors’’ under E.O. 13673 and the related Federal Acquisition Regulations (FAR). Department Response: The Department will provide additional guidance on using funds for construction. Because the Department concludes that the detailed nature of the suggested addition is better suited to PO 00000 Frm 00135 Fmt 4701 Sfmt 4700 56205 guidance and technical assistance, no change was made to the regulatory text. Section 683.240 What are the instructions for using real property with Federal equity? This section provides rules on State Employment Security Act (SESA) properties, Reed Act-funded properties, and JTPA-funded properties. Comments: The Department received two comments requesting the Department to give priority to UI and WP when transferring or disposing of real property with Federal equity. Department Response: The Department does not agree with the commenters’ suggestion to establish priority upon transfer or disposition as this would undermine the language in sec. 192(a) of WIOA that allows for the portion of real property that is attributable to the Federal equity to be used to carry out UI, WP, or WIOA activities. The use of the buildings, including the proceeds related to their disposition or transfer, is intended to maximize available resources and provide flexibilities to UI, WP and WIOA programs. However, the Department recognizes that the proposed regulation language did not include guidance as to how proceeds from the disposition of property with a Reed Act equity should be treated. Consequently, the Final Rule contains language that clarifies that when there is a disposition of Reed Act property, that Reed Act equity must be returned to the State’s account in the Unemployment Trust Fund. Section 683.245 Are employment generating activities, or similar activities, allowable under title I of the Workforce Innovation and Opportunity Act? This section implements sec. 181(e) of WIOA, which restricts the use of WIOA funds for employment generating activities except where the activities are directly related to training for eligible individuals. Comments: Several commenters requested that the Department define ‘‘employment generating activities’’ to guide relationships with economic development partners that also assist with business outreach and services. Department Response: Section 683.245 identifies several examples of employer outreach and job development activities that are considered ‘‘directly related to training for eligible individuals,’’ including employer outreach and job development activities and therefore, are not prohibited employment generating activities. The list is an illustrative, but not an E:\FR\FM\19AUR6.SGM 19AUR6 56206 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES6 exhaustive list of examples because the Department does not want to be overly prescriptive, limiting the discretion of grant recipients in making decisions about what is ‘‘directly related to training for eligible individuals’’ in their areas. The Department has determined that additional definition of ‘‘employment generating activities’’ is not necessary. However, the Department will provide future guidance or technical assistance on this subject. Comments: Additionally, commenters also recommended that the Department clarify that business services are an allowable activity for WDBs and are chargeable to the program cost category. Department Response: It is unclear as to what business services activities the commenters are referring. However, the Department has determined that WIOA and regulations provide sufficient guidance about which activities are allowable and whether those activities qualify as program costs. In addition to the guidance found in this section, WIOA sec. 107(d)(4) provides that local WDBs shall conduct business engagement and lead efforts to engage with a diverse range of employers. The employer engagement activities are further defined in § 679.370(e). Furthermore, the determination of whether an activity is administrative or programmatic for purposes of WIOA is discussed in § 683.215. Because WIOA and regulation already provide sufficient clarity, no change was made in the regulatory text. Section 683.250 What other activities are prohibited under title I of the Workforce Innovation and Opportunity Act? This section describes other activities that are expressly prohibited in title I of WIOA, including foreign travel paid for by WIOA formula funds (sec. 181(e) of WIOA), payment of wages of incumbent workers participating in economic development activities (sec. 181(b) of WIOA), contracts with persons falsely labeling products as made in America (sec. 502(c) of WIOA) and others. Comments: The Department received comments requesting the Department clearly define prohibited economic development activities in § 683.250. Department Response: The language in § 683.250 mirrors the language in WIOA sec. 181(b)(1) in prohibiting WIOA funds from being used for the wages of incumbent employees during their participation in economic development activities provided through a statewide workforce development system. The Department determined that additional clarification, because of its technical and detailed VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 nature, is not appropriate for the regulatory text. However, the Department will provide additional guidance on this subject. No changes were made to the regulatory text in response to these comments. Section 683.260 What prohibitions apply to the use of Workforce Innovation and Opportunity Act title I funds to encourage business relocation? This section describes the prohibitions on the use of WIOA title I funds to encourage business relocation, including specific timeframes when entities can begin working with such businesses. This section also describes the States’ obligation to develop procedures to implement these rules. Comments: The Department received a comment recommending that the Department add language to § 683.260(b) to indicate that a State’s pre-award review criteria must be explained in their Unified or Combined State Plan, which is available for review by all stakeholders. Department Response: Section 683.260(b) requires States to complete a pre-award review to verify that WIOA funds are not used to encourage or induce a business to relocate from another area if the relocation results in any employee losing his or her job at the original location. Section 683.260(b) permits States to develop the criteria for the pre-review but also requires, in § 683.260(b)(1), that certain elements must be included. The Department has determined that it is not necessary to require that the pre-award criteria be explained in the State’s unified or combined State plan because § 683.260 already requires the State to create a standardized procedure. The Department will provide additional guidance and technical assistance on this matter. No change was made to the regulatory text. Comments: The Department also received a comment requesting clarification regarding whether a company that relocates one of its offices to another State is eligible for WIOA funds to train workers that are relocating, as long as funds are used to upgrade skills and not to induce relocation or displace workers, or if this prohibited under § 683.260. Department Response: The Department has determined that it is not appropriate to address such a detailed and fact-specific scenario in regulatory text. However, the Department will provide additional guidance on this concern. No change was made in the regulatory text in response to this comment. PO 00000 Frm 00136 Fmt 4701 Sfmt 4700 Section 683.275 What wage and labor standards apply to participants in activities under title I of the Workforce Innovation and Opportunity Act? This section describes the wage and labor standards that apply to WIOA title I participants, including the requirements under the Federal Fair Labor Standards Act (FLSA) and State and local minimum wage laws. Comments: Comments requested that the Department define and distinguish which types of work-based learning, including apprenticeship and preapprenticeship, are subject to the wage and labor standards in § 683.275. Department Response: Section 683.275(a) states that it is applicable to individuals in the work-based learning opportunities who are determined to be employed in activities under title I of WIOA. The FLSA, as amended, 29 U.S.C. 201, et seq., applies in determining whether participants are employees who are covered by the FLSA’s minimum wage and overtime provisions. The Department plans to provide detailed guidance on when participants must be considered employees protected under the FLSA. Consequently, the Department has determined that it would not be appropriate to contain additional clarification on this point in the text of the regulation. Section 683.275(c) applies to workbased learning and employment under title I of WIOA. As described above, whether a particular job triggers these requirements and protections is a factspecific enquiry. The Department has determined it would not be appropriate to analyze the application of this provision to the two types of jobs submitted by the commenter. Such analysis is better suited for guidance and technical assistance. Section 683.275(d) applies to all allowances, earnings, and payments to individuals participating in programs under title I of WIOA. Because the application of this provision does not depend on the types of jobs involved, the Department has determined that this provision does not need additional clarification. Consequently, for the reasons described above, the Department adopts the provision as proposed. The commenter should note that the Department previously issued guidance on the application of the FLSA to workbased training programs. In addition, the Department will provide additional guidance on this section. No changes were made to the regulatory text in response to these comments. E:\FR\FM\19AUR6.SGM 19AUR6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations Section 683.280 What health and safety standards apply to the working conditions of participants in activities under title I of the Workforce Innovation and Opportunity Act? This section explains what health and safety standards and workers compensation laws apply to WIOA title I participants. Comments: The Department received a comment requesting a change in the regulatory text of § 683.280 to specify that the health and safety protections in the regulation are also applicable to student workers. Department Response: Section 683.280 mirrors the language in WIOA sec. 181(b)(4). WIOA and this regulation provide that the health and safety standards established under Federal and State law otherwise applicable to working conditions of employees are equally applicable to working conditions of participants engaged in programs and activities under title I of WIOA. WIOA utilizes the word ‘‘participant’’ throughout the statute and specifically in sec. 181(b)(4). The term ‘‘participant’’ encompasses the student workers referred to by the commenter and the students are covered by health and safety laws to the extent that those laws cover students. Because whether students are covered by the protections at sec. 181(b)(4) and § 683.280 depends the applicable Federal and State laws and regulations and cannot be succinctly summarized, the Department has determined to retain the use of ‘‘participant’’ in this section. No changes were made to the regulatory text in response to this comment. mstockstill on DSK3G9T082PROD with RULES6 Section 683.285 What are a recipient’s obligations to ensure nondiscrimination and equal opportunity, and what are a recipient’s obligations with respect to religious activities? This section describes the nondiscrimination, equal opportunity, and religious activities requirements that, as defined in WIAO sec. 188 and at 29 CFR part 38, must adhere to when using WIOA title I funds. Comments: The Department received a comment in support for this provision as well as two comments requesting the Department to provide boilerplate language as technical assistance for the required provision under § 683.285 because it is useful to the States. Department Response: The Department intends to provide additional guidance and ongoing technical assistance. Additionally, the Department is not modifying the nondiscrimination provisions in the section VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 because this subject is covered in much greater detail in the WIOA sec. 188 nondiscrimination regulations at 29 CFR part 38. Finally, the grant agreements issued by the Department, as described in § 683.105, describe the terms and conditions applicable to the award of title I WIOA funds and Wagner–Peyser funds, including the non-discrimination provisions of § 683.285. No changes were made to the regulatory text in response to these comments. WIOA sec. 188(a)(5) refers to immigrants authorized by the Attorney General to work in the United States. Pursuant to the Homeland Security Act of 2002, Pub. L. 107–296, that authority has been transferred to the Department of Homeland Security. Section 1517 of the Homeland Security Act (codified at 6 U.S.C. 557) provides that reference in any other Federal law to any function transferred by the Homeland Security Act ‘‘and exercised on or after the effective date of the Act’’ shall refer to the official to whom that function is transferred. Consequently, the Final Rule contains a reference to the Secretary of Homeland Security. Section 683.295 Is earning of profit allowed under the Workforce Innovation and Opportunity Act? This section addresses earning profit under WIOA. Comments: The Department received a comment requesting confirmation that WIOA allows profit for a one-stop operator. Department Response: The Department has outlined in § 683.295(a)(2) a requirement for grants and other Federal financial assistance awarded under secs. 121(d), 122(a), and 134(b) of WIOA, which allows awardees of Federal financial assistance, such as one-stop operators, service providers, or ETPs, to earn profit. The pass through entity must follow 2 CFR 200.323 to ensure that the entities’ charges are reasonable and fair. No changes were made to the regulatory text in response to this comment. 3. Subpart C—Reporting Requirements 683.300 What are the reporting requirements for programs funded under the Workforce Innovation and Opportunity Act? Section 683.300 specifies the reporting requirements for programs funded under WIOA and the deadlines for such reports. Comments: The Department received comments regarding what data standards and performance indicators the Department should require and how to define and assess the data standards and performance indicators. PO 00000 Frm 00137 Fmt 4701 Sfmt 4700 56207 Department Response: Section 683.300 does not detail the program performance elements that a grant recipient should report to the Department; these elements are discussed in 20 CFR part 677 (see Joint WIOA Final Rule). The Department will also provide additional guidance on this section and 20 CFR part 677. No changes were made to the regulatory text in response to these comments. Comments: The Department received several comments on § 683.300 concerning the amount of data collection required under WIOA and the value of the data collected. The commenters suggested that agencies instead share the information they already have and also periodically review the reported data to ensure its value to the program and eliminate any unnecessary reporting of data. Department Response: The Department’s goal is to promote the government’s initiative to manage information as an asset to increase operational efficiencies, reduce costs, improve services, support mission needs, safeguard personal information, and increase public access. The Department intends to use data collected from the financial, performance, and annual reports to empower our public workforce system while providing transparency and accountability to our stakeholders. The Department is not seeking to burden the public workforce system by the data collection. While the Department implements its reporting requirements, it will work to ensure that the reporting is not unnecessarily duplicative while still ensuring that the interest described above is protected. However, the Department has determined that additional detail on reporting requirement implementation is not appropriate for regulation. Consequently, the Final Rule adopts the provision as proposed. Comments: A comment was received that requested that the Department explicitly clarify that reporting requirements may be waived for libraries when developing lists of ETPs during the first year of WIOA implementation. Department Response: WIOA sec. 122 details requirements for identifying eligible training providers. This section is further addressed in 20 CFR part 680. The Department did not receive any other comments on this section. The Final Rule adopts the provision as proposed with a technical amendment made to § 683.300(a), because it is unnecessary to clarify that the Department’s reporting requirements would be consistent with governing E:\FR\FM\19AUR6.SGM 19AUR6 56208 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations statutes, and a technical amendment to § 683.300(e)(2) and the addition of § 683.300(h), so as to more clearly reflect the requirements in 2 CFR part 200. 4. Subpart D—Oversight and Resolution of Findings mstockstill on DSK3G9T082PROD with RULES6 Section 683.410 What are the oversight roles and responsibilities of recipients and subrecipients of Federal financial assistance awarded under title I of the Workforce Innovation and Opportunity Act and the Wagner-Peyser Act? This section defines the roles and areas in which oversight must be conducted by the recipients and subrecipients, including ensuring compliance with relevant rules and developing a monitoring system. Comments: The Department received several comments in support of this section and explicitly in support of the Department’s requirements for recipients and subrecipients to comply with the EEO requirements of WIOA as well as the Assistive Technology Act of 1998. A comment was received recommending that the Department be notified to work with their State Assistive Technology Act Program (ATAP) with regard to physical and programmatic accessibility issues. Department Response: It is unclear from the comment what notification to the Department the commenter is requesting. No changes were made to the regulatory text in response to the comments regarding ATAP. However, the Department will consider State ATAPs as potential resources while implementing this section. Comments: A comment received requested clarification on what kind of grant monitoring is proposed under § 683.410 and whether recipients and subrecipients will have access to clear monitoring and oversight standards. Department Response: Section 683.410(a) requires that each recipient and subrecipient of title I WIOA funds and Wagner-Peyser Act funds conduct regular oversight and monitoring of its WIOA and Wagner-Peyser Act funded programs to ensure compliance with the stated requirements of title I of WIOA, the Wagner-Peyser Act, the Uniform Guidance at 2 CFR part 200, and the Department exceptions to the Uniform Administrative Requirements at 2 CFR part 2900. Section 683.410(b) further requires that Governors are responsible for developing a State monitoring system that meets the requirements set forth in § 683.410(b)(2). The Department is providing grant recipients the flexibility with designing the monitoring process and procedures VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 to meet the requirements of § 683.410 and does not want to limit this flexibility by imposing a specific monitoring process. However, the Department will continue to provide technical assistance and guidance on this subject. No changes were made to the regulatory text in response to these comments. Additionally, the Department would like to note that although § 683.410(b)(2)(iii) requires States to have a monitoring system that enables Governors to determine if subrecipients and contractors have demonstrated substantial compliance with Wagner-Peyser Act requirements, violations of Wagner-Peyser Act requirements will be handled pursuant to the authority and processes in the Wagner-Peyser Act, as amended, and the implementing regulations at 20 CFR part 658. 5. Subpart E—Pay-for-Performance Contract Strategies Section 683.500 What is a Workforce Innovation and Opportunity Act Payfor-Performance contract strategy? This section describes the components of a WIOA Pay-forPerformance contract strategy and describes WIOA Pay-for-Performance contract as a specific type of performance-based contract. Comments: The Department received several comments regarding § 683.500. Several comments requested clarification as to what was required for a WIOA Pay-for-Performance contract strategy. Some of the comments received inquired as to the meaning of ‘‘independently’’ validating in § 683.500(a)(3) and requested clarification and guidance as to the Department’s intended definition of independent. Additionally, commenters questioned the affordability of conducting the feasibility study given the 10 percent funding limitation. Finally, commenters asked the Department to allow local areas to use existing studies instead of commissioning new studies. Many of the comments received concerned the feasibility study requirements. Some comments requested the elimination of the feasibility study; some comments questioned its affordability; some comments requested the Department prescribe what is contained in the feasibility study, and other comments requested that the Department allow local areas to use existing studies instead of commissioning new studies. Department Response: The Department decided against prescribing a definition of independent validation PO 00000 Frm 00138 Fmt 4701 Sfmt 4700 in order to retain flexibility. The WIOA Pay-for-Performance contract strategy is one of several innovative strategies WIOA adopts to place a higher emphasis on performance outcomes and provider accountability, drive better results, and incorporate rigorous evaluation and evidence-based practice into the delivery of workforce services. The WIOA Pay-for-Performance contract strategy can benefit local areas, job seekers, and business customers when used to support interventions that either have a high probability of success based on prior evidence or that have potential as a promising innovation; have measurable outcomes supported with authoritative data and strong evaluation methodologies; and are overseen by experienced managers that have flexibility to adjust their approach. As authorized by WIOA, the Department intends to provide local areas with the flexibility needed to implement a WIOA Pay-for-Performance contract strategy that meets the needs and challenges in each local area. The Department will provide additional guidance on this subject to address the scope and minimum requirements of independent validation. WIOA sec. 3 provides that the WIOA Pay-for-Performance contract strategy is a procurement strategy for funds allocated to local areas for the provision of adult, dislocated worker, or youth training services. WIOA limits the amount of local allocations available for WIOA Pay-for-Performance contract strategies to 10 percent of the local area’s allocation available under secs. 128(b) and 133(b)(2)–(3) of WIOA. WIOA sec. 189(g)(2)(D) specifies that funds used for WIOA Pay-forPerformance contract strategies shall remain available until expended. The NPRM defined the WIOA Pay-forPerformance contract strategy as having four distinct characteristics, including in § 683.500(a)(2) a feasibility study to determine whether the proposed intervention is suitable for a WIOA Payfor-Performance contract strategy. The Department required the feasibility study because it determined that, prior to beginning a WIOA Pay-forPerformance contract strategy, a local area needs to conduct an analysis to determine whether a WIOA Pay-forPerformance contract strategy is the right approach. Upon reviewing the comments, the Department retains its conclusion that the feasibility study is necessary. Consequently, the regulatory text retains the feasibility study requirement. In analyzing the comments received and reviewing the proposed language, the Department concluded that the E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations definition of a WIOA Pay-forPerformance contract strategy and the requirement of a feasibility study as part of the strategy could potentially limit the availability of this innovative strategy because local areas would not have enough funds available under the 10 percent limit to do both the feasibility study and the rest of the WIOA Pay-for-Performance contract strategy. To address this issue, the Department modified that language in § 683.500(a) and removed the feasibility study requirement from the WIOA Pay-forPerformance contract strategy definition. However, because the Department has determined that a feasibility study is necessary, the Department added a new paragraph (b) in § 683.500 that requires a local area to conduct a feasibility study prior to implementing a WIOA Pay-forPerformance contract strategy. Because the feasibility study is not included in the definition of ‘‘WIOA Pay-forPerformance contract strategy’’ in the Final Rule, the feasibility study is not subject to the 10 percent limitation. In addition, the Department decided against prescribing what should be included in a feasibility study in order to retain flexibility. The Department intends to provide local areas with flexibility authorized under WIOA needed to implement a WIOA Pay-forPerformance contract strategy that meets the needs and challenges in each local area. The Department does not want to limit this flexibility by imposing any other requirements or exclusive definitions for WIOA Pay-forPerformance contract strategies. However, the Department will provide additional guidance on this subject to address the scope and minimum requirements of the feasibility study. The Department decided against prescribing whether local areas can use existing studies for the reasons described in the previous paragraph. Comments: Other commenters recommended adding a phrase to proposed § 683.500(b) to indicate that a WIOA Pay-for-Performance contract strategy must include a prohibition against a short-term training activity and placement into low-wage job strategy for harder to serve participants. Department Response: The Department decided against prescribing prohibitions or outcomes for locals who employ the use of a WIOA Pay-forPerformance contract strategy in order to retain the local areas’ flexibility authorized under WIOA. However, the Department will provide additional guidance on this subject. VerDate Sep<11>2014 19:18 Aug 18, 2016 Jkt 238001 Comments: Commenters also asked for clarification on whether NFJP providers or WIOA title II providers are included in WIOA Pay-for-Performance contracting strategy. Department Response: WIOA sec. 3(47) is clear that WIOA Pay-forPerformance contract strategies only include strategies for the provision of training services under WIOA secs. 134(c)(3) and 129(c)(2). Neither the NFJP program nor title II are located at sec. 134(c)(3) or 129(c)(2). Because WIOA is clear that NFJP and title II providers are not included in the definition of a WIOA Pay-forPerformance strategy, the Final Rule adopts the provision as proposed. However, as described in the NPRM, a WIOA Pay-for-Performance contracting strategy is only one specific type of a performance-based contract strategy. Neither WIOA nor the Final Rule is meant to foreclose NFJP providers, title II providers, or any other providers from pursuing performance-based contracts or strategies as they are generally understood, and they are encouraged to do so. The strategies are considered WIOA Pay-for-Performance contract strategies only if they fit within the strict requirements of WIOA sec. 3(47) and this subpart. No changes were made to the regulatory text in response to these comments. Section 683.510 What is a Workforce Innovation and Opportunity Act Payfor-Performance contract? This section defines the requirements associated with a WIOA Pay-forPerformance contract, which would be awarded under a WIOA Pay-forPerformance contract strategy. Comments: The Department received numerous comments regarding § 683.510 and what is an allowable WIOA Pay-for-Performance contract. Several comments either equated the WIOA Pay-for-Performance contract strategies in WIOA to a Pay for Success financing strategy (sometimes referred to as social impact bonds) or inquired as to the allowability of a Pay for Success financing model in WIOA, specifically the allowability of social impact bonds. Other comments recommended that the Department specify in greater detail the WIOA Pay-for-Performance contract requirements and that the Department issue requirements for applications. Department Response: Pay for Success financing models are an available WIOA Pay-for-Performance contract type under § 683.510 as long as the requirements of § 683.500 are met; the Department will issue future guidance. The Department intends to PO 00000 Frm 00139 Fmt 4701 Sfmt 4700 56209 provide local areas with flexibility authorized under WIOA needed to implement a WIOA Pay-for-Performance contract strategy that meets the needs and challenges in each local area. The Department does not want to limit this flexibility by imposing any other requirements or exclusive definitions for WIOA Pay-for-Performance contracts and contract strategies. However, the Department will provide additional guidance on this subject. Because § 683.510 does not prohibit the use of a Pay for Success model and the Department wants to maintain flexibility, the Department has determined that no additions to the proposed text are necessary. No changes were made to the regulatory text. Comments: A few commenters requested that the Department eliminate the requirement that organizations be eligible service providers to qualify for WIOA Pay-for-Performance contract funding. Department Response: WIOA sec. 3(47) limits the WIOA Pay-forPerformance contractors to those organizations that are eligible under WIOA secs. 122 or 123. Because this requirement is part of WIOA, the Department cannot eliminate it. No changes to the regulatory text were made in response to these comments. Comments: One comment requested clarification on what providers are eligible service providers and whether YouthBuild could form a consortium in an area to provide the services. Department Response: The requirements for Eligible Training providers are discussed in 20 CFR part 680. Because another part governs eligible training providers, the Final Rule adopts the provision as proposed. Comments: Another comment sought clarification on whether for-profits and not-for-profits are treated the same under this section. Department Response: Section 683.510(f) provides that local entities may enter into WIOA Pay-forPerformance contracts with training providers that are eligible under WIOA secs. 122 or 123. Because WIOA secs. 122 and 123 state, and § 683.295 further clarifies, that for-profit agencies are eligible to be an eligible training provider, the Department has determined that these provisions do not need additional clarification regarding the treatment of for-profits and non-forprofits agencies. No changes were made in the regulatory text in response to this comment. Comments: One commenter requested clarification on whether the § 683.510(e) requirement that the primary indicators of performance in sec. 116(b)(2)(A) of E:\FR\FM\19AUR6.SGM 19AUR6 mstockstill on DSK3G9T082PROD with RULES6 56210 Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations WIOA be used for performance outcomes means that these primary indicators of performance are the only indicators that may be ut