Apprenticeship Programs, Labor Standards for Registration, Amendment of Regulations, 29970-30020 [2019-13076]

Agencies

• DEPARTMENT OF LABOR

[Federal Register Volume 84, Number 122 (Tuesday, June 25, 2019)]
[Proposed Rules]
[Pages 29970-30020]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13076]



[[Page 29969]]

Vol. 84

Tuesday,

No. 122

June 25, 2019

Part III





 Department of Labor





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29 CFR Part 29





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

Federal Register / Vol. 84 , No. 122 / Tuesday, June 25, 2019 / 
Proposed Rules

[[Page 29970]]


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DEPARTMENT OF LABOR

29 CFR Part 29

RIN 1205-AB85


Apprenticeship Programs, Labor Standards for Registration, 
Amendment of Regulations

AGENCY: Employment and Training Administration, Labor.

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: To address America's skills gap and expand the apprenticeship 
model to new industries, the U.S. Department of Labor proposes a rule 
under the National Apprenticeship Act (NAA) to establish a process for 
recognizing Standards Recognition Entities (SREs), which will in turn 
recognize Industry-Recognized Apprenticeship Programs (Industry 
Programs). This proposed rule describes what entities may become SREs; 
outlines the responsibilities and requirements for SREs, as well as the 
hallmarks of the high-quality apprenticeship programs they will 
recognize; and sets out how the Administrator of the Office of 
Apprenticeship will interact with SREs. The proposed rule also 
describes how Industry Programs would operate in parallel with the 
existing registered apprenticeship system. The Department believes its 
industry-led, market-driven approach provides the flexibility necessary 
to scale the apprenticeship model where it is needed most and helps 
address America's skills gap.

DATES: Comments must be submitted, in writing, on or before August 26, 
2019.

ADDRESSES: You may submit comments, identified by Regulatory 
Information Number (RIN) 1205-AB85, by one of the following methods:
    Federal e-Rulemaking Portal: https://www.regulations.gov. Follow the 
website instructions for submitting comments.
    Mail and hand delivery/courier: Written comments, disk, and CD-ROM 
submissions may be mailed to Adele Gagliardi, Administrator, Office of 
Policy Development and Research, U.S. Department of Labor, 200 
Constitution Avenue NW, Room N-5641, Washington, DC 20210.
    Instructions: Label all submissions with ``RIN 1205-AB85.''
    Please submit your comments by only one method. Please be advised 
that the Department will post all comments received that relate to this 
NPRM on https://www.regulations.gov without making any change to the 
comments or redacting any information. The https://www.regulations.gov 
website is the Federal e-rulemaking portal, and all comments posted 
there are available and accessible to the public. Therefore, the 
Department recommends that commenters remove personal information such 
as Social Security Numbers, personal addresses, telephone numbers, and 
email addresses included in their comments, as such information may 
become easily available to the public via the https://www.regulations.gov website. It is the responsibility of the commenter 
to safeguard personal information.
    Also, please note that, due to security concerns, postal mail 
delivery in Washington, DC may be delayed. Therefore, the Department 
encourages the public to submit comments on https://www.regulations.gov.
    Docket: All comments on this proposed rule will be available on the 
https://www.regulations.gov website, and can be found using RIN 1205-
AB85. The Department also will make all the comments it receives 
available for public inspection by appointment during normal business 
hours at the above address. If you need assistance to review the 
comments, the Department will provide appropriate aids, such as readers 
or print magnifiers. The Department will make copies of this proposed 
rule available, upon request, in large print and electronic file on 
computer disk. To schedule an appointment to review the comments and/or 
obtain the proposed rule in an alternative format, contact the Office 
of Policy Development and Research at (202) 693-3700 (this is not a 
toll-free number). You may also contact this office at the address 
listed below.
    Comments under the Paperwork Reduction Act: In addition to filing 
comments on any aspect of this rule with the Agency, interested parties 
may file comments on the information collections contained in or 
supporting this proposed rule with the Office of Management and Budget 
(OMB). This opportunity is limited to the information collections that 
must also be approved under the Paperwork Reduction Act, and the period 
to submit comments to OMB expires 30 days after the date this proposed 
rule is published in the Federal Register. Please submit comments about 
this request by mail to the Office of Information and Regulatory 
Affairs, Attn: OMB Desk Officer for DOL-ETA, Office of Management and 
Budget, Room 10235, 725 17th Street NW, Washington, DC 20503; by Fax: 
202-395-5806 (this is not a toll-free number); or by email: 
[email protected]. Commenters are encouraged, but not 
required, to send a courtesy copy of any comments by mail or courier to 
the Agency using the same method as for any other comments on the rule.

FOR FURTHER INFORMATION CONTACT: Adele Gagliardi, Administrator, Office 
of Policy Development and Research, U.S. Department of Labor, 200 
Constitution Avenue NW, Room N-5641, Washington, DC 20210; telephone 
(202) 693-3700 (this is not a toll-free number).
    Individuals with hearing or speech impairments may access the 
telephone number above via TTY by calling the toll-free Federal 
Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

Preamble Table of Contents

I. Background
II. Section-by-Section Discussion of the Proposed Rule
    A. Subpart A--Registered Apprenticeship Programs
    B. Subpart B--Standards Recognition Entities of Industry-
Recognized Apprenticeship Programs
III. Agency Determinations
    A. Executive Orders 12866 (Regulatory Planning and Review), 
13563 (Improving Regulation and Regulatory Review), and 13771 
(Reducing Regulation and Controlling Regulatory Costs) and the 
Congressional Review Act
    B. Regulatory Flexibility Act, Small Business Regulatory 
Enforcement Fairness Act of 1996, and Executive Order 13272 (Proper 
Consideration of Small Entities in Agency Rulemaking)
    C. Paperwork Reduction Act
    D. Executive Order 13132 (Federalism)
    E. Unfunded Mandates Reform Act of 1995
    F. Executive Order 13175 (Indian Tribal Governments)

I. Background

    The National Apprenticeship Act (NAA), 29 U.S.C. 50, authorizes the 
Secretary of Labor ``to bring together employers and labor for the 
formulation of programs of apprenticeship.'' The U.S. Department of 
Labor (the Department or DOL) proposes doing so through a new program 
recognizing Standards Recognition Entities (SREs) of Industry-
Recognized Apprenticeship Programs (Industry Programs). This new 
program is intended to harness industry expertise and leadership to 
meet the United States' skills needs in the twenty-first century.
    The Department has primarily implemented the NAA by registering 
individual apprenticeship programs and apprentices. Registration occurs 
either directly or through recognized State apprenticeship agencies. 
This effort has been key to the development of apprenticeships in 
certain contexts. However, this model has failed to scale

[[Page 29971]]

in other industries or regions, even as the modern economy has required 
millions of skilled workers in new areas. One source identified nearly 
50 occupations as ripe for apprenticeship expansion.\1\ In addition, 
registered apprenticeship programs have prepared only approximately 0.3 
percent of the United States workforce.\2\
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    \1\ Joseph B. Fuller & Matthew Sigelman, ``Room to Grow: 
Identifying New Frontiers for Apprenticeships,'' Harvard Bus. Sch., 
Nov. 2017, 7-8, https://www.hbs.edu/managing-the-future-of-work/Documents/room-to-grow.pdf.
    \2\ See Task Force on Apprenticeship Expansion, ``Final Report 
to the President of the United States,'' May 10, 2018, 17.
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    Compounding this low rate of apprenticeship participation is a 
persistent and serious long-term challenge to American economic 
leadership: A significant mismatch between the occupational 
competencies that businesses need and the job skills of aspiring 
workers. There were over 7.3 million job openings in the United States 
at the end of 2018,\3\ and some openings go unfilled because there are 
not enough workers with needed skills.\4\ This pervasive skills gap has 
posed a serious impediment to job growth and productivity throughout 
the economy.
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    \3\ U.S. Dep't of Labor, Bureau of Labor Statistics, ``Job 
Openings and Labor Turnover--December 2018,'' Feb. 12, 2019, https://www.bls.gov/news.release/archives/jolts_02122019.pdf.
    \4\ See, e.g., Task Force on Apprenticeship Expansion, ``Final 
Report to the President of the United States,'' May 10, 2018, 16 
(citing 2018 report from National Federation of Independent 
Business); Business Roundtable, ``Closing the Skills Gap,'' https://www.businessroundtable.org/policy-perspectives/education-workforce/closing-the-skills-gap (last visited April 16, 2019); cf. Deloitte 
and the Manufacturing Institute, ``2018 Deloitte and The 
Manufacturing Institute Skills Gap and Future of Work Study,'' 2 
(estimating manufacturing jobs that may go unfilled due to skills 
gap), https://documents.deloitte.com/insights/2018DeloitteSkillsGapFoWManufacturing.
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    In light of these challenges, in January 2017, days after President 
Trump entered office, the President and his Administration began 
promoting apprenticeships to address this skills gap. Steps taken 
included studying how apprenticeships work overseas, and ways that 
those approaches could be suited for and scaled in the United States.
    In June 2017, President Trump signed an Executive Order on 
Expanding Apprenticeships in America, which outlined an expanded vision 
for apprenticeship.\5\ Section 8 of the Order directed the Secretary to 
establish a Task Force on Apprenticeship, bringing together industry 
and workforce leaders to consider how to promote apprenticeships 
especially in sectors where they are insufficient. The Task Force met 
formally five times, with its Subcommittees working concurrently on 
numerous aspects of apprenticeship expansion.\6\ As part of the 
proceedings, the Task Force Subcommittees developed and submitted 
formal white papers summarizing their findings.\7\ Over the course of 
several meetings, each Subcommittee presented its recommendations to 
the full Task Force, which discussed and then voted on whether to 
include those recommendations in a final report to be transmitted to 
the President.
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    \5\ Executive Order 13801, Expanding Apprenticeships in America, 
82 FR 28229 (June 15, 2017).
    \6\ See Task Force on Apprenticeship Expansion, U.S. Dep't of 
Labor, https://www.dol.gov/apprenticeship/task-force.htm (last 
visited Mar. 30, 2019).
    \7\ See Subcommittee White Papers, Task Force on Apprenticeship 
Expansion, Apr. 4, 2018, https://www.dol.gov/apprenticeship/docs/20180410-Subcommittee-White-Papers.pdf.
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    On May 10, 2018, the Task Force transmitted its final report to 
President Trump. Among other points, the report indicated that Industry 
Programs could provide a new and flexible alternative to supplement--
but not supplant--the registered apprenticeship program. The report 
explained:

    Industry-recognized apprenticeships provide a new apprenticeship 
pathway that gives industry organizations and employers more 
autonomy and authority to identify high quality apprenticeship 
programs and opportunities.\8\
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    \8\ Task Force on Apprenticeship Expansion, ``Final Report to 
the President of the United States,'' May 10, 2018, 34 (emphasis 
added); cf. id. at 36 (describing negative impact of the 
``simultaneous reform and launch'' of the registered apprenticeship 
and Industry-Recognized Apprenticeship systems).

    In July 2018, and consistent with the Task Force's recommendations 
and findings, the Department issued Training and Employment Notice 3-
18, ``Creating Industry-Recognized Apprenticeship Programs to Expand 
Opportunity in America'' (TEN). This TEN outlined the contours of the 
Industry-Recognized Apprenticeship Program and the hallmarks of high-
quality apprenticeship programs. The TEN described a system in which 
industry-leading organizations and educational institutions, and other 
third parties would recognize and oversee high-quality apprenticeship 
programs that provide workers credentials needed to obtain family-
sustaining jobs.
    On September 20, 2018, the Department published a draft form (the 
form) foreshadowed by the TEN in the Federal Register for a 60-day 
notice and comment period.\9\ This initial notice and comment period on 
the form ended on November 19, 2018. Through this process, the 
Department received the benefit of public comments. The Department 
reviewed the comments received, and subsequently revised the form.
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    \9\ See Notice, 83 FR 47643-02 (Sept. 20, 2018). Under the 
Paperwork Reduction Act, a Federal agency generally cannot conduct 
or sponsor a collection of information, even a voluntary one, unless 
the Office of Management and Budget has approved the information 
collection request. That request must display a currently valid OMB 
Control Number.
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    On December 27, 2018, the Department provided the form for OMB's 
review and approval.\10\ Through this step, the public had another 
opportunity for providing comments on the form.\11\ The comment period 
on the form ended on January 28, 2019, and resulted in several 
additional comments. The form will permit entities interested in 
applying to the upcoming program to engage with DOL about their 
standards-setting and recognition processes. The Department will use 
the form as a mechanism to enable entities to seek a favorable 
determination about whether the information provided is consistent with 
the criteria outlined in the TEN.
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    \10\ See Notice, 83 FR 66757-01 (Dec. 27, 2018) (30-day notice).
    \11\ Id.
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    The proposed permanent application form (the application) for this 
rule is discussed in the Paperwork Reduction Act section of this NPRM, 
with the application's anticipated components referenced below and 
reflected in Appendix A of this proposed rule. The application as 
proposed reflects the form associated with the TEN. To the extent the 
application approved for the final rule differs from the form 
associated with the TEN, the final rule may provide that entities that 
have received a favorable determination under the TEN should provide 
updated information to the Department.
    In this rulemaking, the Department proposes to add a new subpart to 
29 CFR part 29. Current part 29 would become subpart A and would retain 
the existing rules for registered apprenticeship, with conforming edits 
to account for the addition of subpart B. Subpart B would formally 
establish a process for organizations to apply to become DOL-recognized 
SREs of Industry Programs. Once recognized, SREs would work with 
employers and other entities to establish, recognize, and monitor high-
quality Industry Programs that provide apprentices industry-recognized 
credentials. The proposed rule includes measures and guidelines to 
facilitate the recognition of these high-quality Industry Programs. The 
Department also solicits comments regarding how the establishment of 
Industry Programs can best support the

[[Page 29972]]

adoption of apprenticeship opportunities in industries lacking such 
opportunities rather than sectors that have effective and substantially 
widespread registered apprenticeship programs.
    The Department believes this rule's industry-led, market-driven 
approach would provide the flexibility necessary to scale the 
apprenticeship model in new areas and address America's skills gap 
through high-quality apprenticeships. The following is a section-by-
section analysis of this proposed rule.

II. Section-by-Section Discussion of the Proposed Rule

A. Subpart A--Registered Apprenticeship Programs

    Proposed revisions to part 29 account for its division into two 
subparts. Each subpart would address a different type of apprenticeship 
program. Accordingly, revisions to current part 29--now proposed 
subpart A--would make conforming edits to account for subpart B, and 
for how SREs and Industry Programs establish a new, distinct pathway 
for the expansion of apprenticeships.
    The first type of conforming edit in subpart A replaces prior 
references to part 29 with references to subpart A. Second, the 
proposed rule adds the phrase ``for the purpose of this subpart'' 
before definitions provided in subpart A, Sec.  29.2. This revision 
clarifies the distinction between the current registered apprenticeship 
system and what new subpart B establishes.

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

Standards Recognition Entities, Industry Programs, Administrator, and 
Apprentices (Sec.  29.20)
    Section 29.20 explains that subpart B establishes a new 
apprenticeship pathway distinct from the registered program described 
in subpart A. This section also defines several terms used in proposed 
subpart B.
    Paragraph (a) defines an SRE as an entity that is qualified to 
recognize apprenticeship programs as Industry Programs under Sec.  
29.21, and which the Department has recognized as an SRE. Section 
29.21, explained below, describes how the Administrator will evaluate 
the qualifications of a prospective SRE.
    Paragraph (a)(1) contains an illustrative list of types of entities 
that can act as SREs. A consortium of these entities could also apply 
to become an SRE. By not limiting the types of entities that may 
receive recognition, the Department intends to encourage the creation 
of SREs over a broad range of industries and occupational areas. The 
Department seeks comment on this approach.
    Paragraph (b) defines Industry Programs as high-quality 
apprenticeship programs, wherein an individual obtains workplace-
relevant knowledge and progressively-advancing skills, that include a 
paid-work component and an educational or instructional component, and 
that result in an industry-recognized credential. These requirements 
are explained in more detail in the explanation of the requirements of 
Sec.  29.22(a)(4)(i)-(ix) (detailing hallmarks of high-quality 
programs, such as mentorship).
    Under paragraph (b), an Industry Program is developed or delivered 
by entities such as trade and industry groups, companies, non-profit 
organizations, educational institutions, unions, or joint labor-
management organizations. For example, an association of software 
developers could work to develop an Industry Program that provides a 
credential to apprentices learning to code, or equips those apprentices 
to sit for an exam as part of their participation in the program. A 
group of companies that sell or distribute pharmaceuticals could 
establish an Industry Program that equips apprentices with the 
knowledge and competencies needed to be proficient in that industry. An 
individual company could also develop Industry Program(s) to attract 
new workers and equip them with the skills necessary for proficiency in 
a particular occupational area. The Department believes that this 
approach provides flexibility needed for entities to tailor Industry 
Programs to their own needs. At the same time, paragraph (b) makes 
clear that an Industry Program is one that has been recognized as a 
high-quality program by an SRE. These hallmarks of high-quality are 
further outlined in Sec.  29.22(a)(4), explained below.
    Paragraph (c) clarifies that the Administrator is the Administrator 
of the Department of Labor's Office of Apprenticeship, or any person 
specifically designated by the Administrator. Paragraph (d) defines an 
apprentice as an individual participating in an Industry Program.
Becoming a Standards Recognition Entity (Sec.  29.21)
    Section 29.21 outlines the process and standards by which an entity 
may apply for Departmental recognition as an SRE. The Department 
proposes recognizing entities that show that they have the expertise to 
set standards for high-quality programs that result in industry-
recognized credentials and equip apprentices with competencies needed 
for proficiency in specified industries or occupational areas, as would 
be demonstrated through components of the entity's proposed application 
(described in more detail below). For example, an entity might seek to 
set standards for automobile or aircraft manufacturing, or for an 
occupational area such as information security analytics.
    Paragraph (a) states that an entity must submit an application to 
the Administrator to become an SRE. As explained below, the Department 
will use responses to specific questions in the application to 
determine whether an entity is qualified to serve as an SRE. This 
determination will depend in large part on the scope and nature of the 
Industry Programs the SRE seeks to recognize. Accordingly, the 
application would give the Department information about the 
industry(ies) and occupational area(s) for which programs would prepare 
apprentices.
    The Department anticipates that a panel of reviewers, comprised of 
staff from the Office of Apprenticeship and contractors from the 
credentialing industry, would evaluate the application based upon the 
criteria outlined in Sec.  29.21(b), as explained below. In addition to 
information about program scope, the application would require detailed 
responses concerning the applicant's capabilities and experience; its 
proposed approach to quality-control of Industry Programs; and its 
approach to ensuring the integrity of its own recognition process. 
These components of the anticipated application will provide the 
Department with information necessary to determine whether the 
prospective SRE is equipped to recognize and maintain recognition of 
high-quality Industry Programs.
    Paragraph (b) describes the criteria for qualification as an SRE. 
Paragraph (b)(1) states that an entity must demonstrate that it has the 
expertise to set standards through a consensus-based process involving 
industry experts, for the requisite training, structure, and curricula 
for apprenticeship programs in the industry(ies) or occupational 
area(s) in which it seeks to be an SRE. An SRE should demonstrate 
sufficient support and input from industry authorities to give 
confidence in the SRE's expertise, given where its Industry Programs 
will operate. This standards-setting process will, in turn, inform and 
guide the Industry Programs the SRE recognizes,

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so that those programs impart the competencies and skills apprentices 
need to operate successfully and independently in their industries and/
or occupational areas. The Department anticipates that this standards-
setting process will account for the needs of employers in the region 
or regions where Industry Programs operate, and seeks comment on 
whether additional or alternative requirements are necessary to further 
align the skills apprentices receive to the needs of employers in any 
given region.
    The Department also notes that it anticipates many or all SREs will 
set competency-based standards for training, structure, and curricula. 
This means the standards would reflect the skills and knowledge needed 
for proficiency, rather than focusing on what could be superficial 
requirements unrelated to industry-essential skills (for example, seat 
time requirements unconnected to skills development). The Department 
seeks comment on this assumption.
    To assess whether the prospective SRE is qualified under (b)(1), 
the Department would review specific components of the anticipated 
application for SREs in light of the scope of the Industry Programs the 
SRE would recognize. In particular, prospective SREs would detail their 
capability for obtaining input, support, and consensus from industry 
experts concerning the standards that the SRE would set. The Department 
anticipates that the applicant would provide information about the 
industry experts that would help set standards, as well as the process 
by which they would do so. The Department would then evaluate this 
information in light of the industry(ies) and occupation(s) relating to 
Industry Programs the SRE would recognize. For example, a prospective 
SRE that seeks to recognize programs in two industries and across 
fifteen occupational areas would need to demonstrate a breadth of 
expertise beyond the showing of an entity seeking to recognize programs 
preparing apprentices for a single occupation. Such expertise could be 
established by listing the number of experts involved, detailing 
experience those experts have in the relevant industry(ies) or 
occupational area(s), and the process by which such experts would help 
the SRE set standards. The Department expects this to be a fact-
intensive inquiry, and seeks comment on its proposed approach.
    Although the Department anticipates that most SREs will recognize 
programs developed in specific industries, some occupations within 
programs may exist across industries. Identical standards may be 
appropriate for such cross-industry occupations. In such circumstances, 
an SRE with expertise across a number of industries could appropriately 
establish standards on a cross-industry basis.
    Paragraph (b)(1)(i) clarifies that the requirements in Sec.  
29.21(b)(1) may be met by an SRE's past or current standard-setting 
activities, and need only engender new activity if necessary to comply 
with this rule. This paragraph accounts for how some prospective SREs 
already have standards-setting processes that reflect well-established, 
industry-, occupation-, and employer-specific needs and skills. Rather 
than requiring those prospective SREs to alter their approach to 
setting standards, the Department seeks to clarify its expectation that 
such entities' processes for setting standards likely meet the 
requirements of this proposed rule, and need only change if necessary 
to comply with it.
    Paragraph (b)(2) states that the entity must demonstrate that it 
has the capacity and quality assurance processes and procedures 
sufficient to comply with paragraph Sec.  29.22(a)(4). That paragraph 
authorizes SREs to recognize and maintain recognition of only high-
quality apprenticeship programs. Whether a prospective SRE has the 
capacity and quality assurance processes and procedures necessary to 
comply with Sec.  29.22(a)(4) will be a fact-intensive inquiry and will 
again depend in large part upon the scope of the apprenticeship 
programs the SRE seeks to recognize.
    The Department anticipates that information from specific 
components of prospective SREs' applications would inform its 
assessment under paragraph (b)(2). Prospective SREs would provide 
information concerning their qualifications to evaluate training, 
structure, and curricula. Prospective SREs would also detail their 
experience, if any, assessing apprenticeship programs, as well as the 
qualifications and competencies of individuals that would be directly 
involved in the recognition process. All of this would help the 
Department evaluate the prospective SRE's capacity for recognizing and 
monitoring Industry Programs. Just as the background and experience of 
industry experts involved in standards-setting should be commensurate 
with the scope of the programs to be recognized, the qualifications 
and/or experience of the SRE and individuals within it that will 
recognize and monitor Industry Programs should be commensurate with the 
nature of those programs.
    Relatedly, the anticipated application would request detailed 
information concerning the SRE's specific policies and procedures for 
evaluating and monitoring Industry Programs to ensure they reflect the 
hallmarks of high-quality, detailed in Sec.  29.22(a)(4)(i)-(ix). For 
example, an SRE would need to explain its approach to verifying that 
its Industry Programs would provide or lead to an industry-recognized 
credential (per proposed Sec.  29.22(a)(4)(iv)). These quality-
assurance policies and procedures would, again, generally need to match 
the nature of the programs to be recognized. For example, the quality-
assurance processes necessary to evaluate an Industry Program's 
classroom or related instruction for apprentices in a new and rapidly-
evolving field would likely require more frequent assessment than what 
would be needed for an established and relatively-static field.
    Paragraph (b)(3) notes that prospective SREs must demonstrate they 
meet the other requirements of the subpart, which are outlined in Sec.  
29.22. The Department anticipates that this showing would be made by 
responding to questions in the application about the applicant's policy 
and process that correspond with the relevant paragraphs in Sec.  
29.22. For example, an entity would need to explain its policies and 
processes for addressing potential conflicts of interests, pursuant to 
Sec.  29.22(e)-(f).
    Paragraph (c) indicates that the Administrator will recognize an 
entity as an SRE if the applicant is qualified, and also provides 
additional details about recognition. This paragraph is intended to 
ensure that the Administrator undertakes adequate review of SREs, both 
over time and following any significant changes that would affect the 
SRE's qualification or ability to recognize Industry Programs.
    Paragraph (c)(1) indicates that SREs will be recognized for 5 
years. An SRE must reapply if it seeks continued recognition after that 
time, using the same application form it submitted initially. The 
Department proposes a 5-year time period to be consistent with best 
practices in the credentialing industry. The Department also believes 
this period of time is appropriate for ensuring that already-recognized 
SREs continue to account for the development and evolution in 
competencies needed within the industries and occupations to which 
their standards relate. The Department seeks comment on this proposed 
period of time. Paragraph (c)(2) requires that an SRE notify the 
Administrator and provide all related

[[Page 29974]]

material information if it makes a substantive change to its 
recognition processes, or any major change that could affect the 
operations of the recognition program. Such changes would include 
involvement in lawsuits that materially affect the SRE; changes in 
legal status; or any other change that materially affects the SRE's 
ability to function in its recognition capacity.
    Likewise, the SRE must notify the Administrator and provide all 
related material information if it seeks to recognize apprenticeship 
programs in new industries or occupational areas; an SRE should notify 
the Administrator before the SRE begins to evaluate such apprenticeship 
programs for recognition under the Industry-Recognized Apprenticeship 
Program. Notice must be provided within 30 days of the circumstances 
described in paragraphs (2)(i)-(ii). In light of the information 
received, the Administrator will evaluate whether the SRE remains 
qualified for recognition under paragraph (b).
    Paragraph (d) outlines requirements for any denials of recognition 
after receipt of a prospective SRE's application. The Administrator's 
denial must be in writing and must state the reason(s) for denial. The 
notice must specify the remedies that must be undertaken prior to 
consideration of a resubmitted application. The Department anticipates 
that it would be clear from a resubmitted application whether remedies 
were undertaken. Notice must be sent by certified mail, return receipt 
requested, and must state that a request for administrative review may 
be made within 30 calendar days of receipt of the notice. The notice 
must also explain how to submit a request for administrative review.
    Given the detailed nature of the questions on the anticipated 
application form--and by requiring that the Administrator's notice of a 
denial specify the remedies needed before submission of a new 
application--the Department expects that any applicants initially 
denied will fully understand why. Entities are strongly encouraged to 
reapply after remedying the deficiencies the Department identifies.
    An applicant can request administrative review if it believes the 
Department improperly denied recognition.
Responsibilities and Requirements of Standards Recognition Entities 
(Sec.  29.22)
    Proposed Sec.  29.22 describes the responsibilities and 
requirements of SREs. Paragraph (a) describes various obligations of 
SREs, and also what characterizes high-quality apprenticeship programs.
    Paragraph (a)(1) states that SREs must recognize or reject 
apprenticeship programs seeking recognition in a timely manner. The 
Department has not proposed a specific time limit because it expects 
that the time for an apprenticeship program to earn recognition will 
vary based on the industry or occupational focus of the program, the 
complexity of the program's training, the extent of related 
instruction, or other factors. A ``timely'' manner, however, means that 
requests for recognition should be processed within a reasonable period 
of time under the circumstances.
    Paragraph (a)(2) requires an SRE to inform the Administrator within 
30 days when it has recognized a new Industry Program or terminated the 
recognition of an existing Industry Program. This information will 
assist the Administrator in fulfilling obligations under Sec.  29.24 
(Publication of SREs and Industry Programs).
    Paragraph (a)(3) requires SREs to provide any information the 
Administrator is expressly authorized to collect under this subpart. 
This provision will enable the Administrator to request information, as 
needed, to ascertain SREs' conformity to the subpart under Sec.  29.23 
(Quality Assurance).
    Paragraph (a)(4) states that SREs may only recognize and maintain 
the recognition of Industry Programs that meet certain requirements, 
which the Department believes are hallmarks of high-quality programs. 
In general, these hallmarks of quality include paid work; work-based 
learning; mentorship; education and instruction; obtaining industry-
recognized credentials; safety and supervision; and adherence to equal 
employment opportunity obligations.
    Rather than seeking to register or manage each Industry Program 
itself, the Department believes that empowering SREs to recognize 
Industry Programs that reflect these hallmarks of high quality is the 
best approach to promoting the apprenticeship model and Industry 
Programs. The Department anticipates that SREs' standards and quality 
control will also best account for and reflect industry or occupation-
specific factors. This approach provides the flexibility necessary to 
encourage more apprenticeships in new industry sectors, while at the 
same time ensuring that apprenticeships reflect the hallmarks of high 
quality.
    Paragraph (a)(4)(i) states that an Industry Program must train 
apprentices for employment in jobs that require specialized knowledge 
and experience and involve the performance of complex tasks. The 
Department seeks comment on these requirements, and on whether it 
should set a minimum skill level or competency baseline for Industry 
Programs akin to the registered apprenticeship program's requirement 
that apprentices gain ``manual, mechanical, or technical'' skills.
    On the one hand, the Department believes apprenticeships should 
expand broadly to those industries that do not have them, and the 
Department has concern that limiting apprenticeships to certain types 
of jobs or skills may limit the expansion of the apprenticeship model. 
Flexibility is vital for the apprenticeship model to expand to and 
remain useful in new industries and occupational areas. This is 
especially true given the rapid evolution of certain industries and 
occupations.
    At the same time, Industry Programs should be high-quality, not 
programs that train apprentices for roles requiring only general 
knowledge and minimal or no skill. An apprenticeship that ``provides'' 
apprentices with training about general skills and knowledge that most 
or all potential workers would already have--and could immediately 
deploy upon being hired--is not what is envisioned as a high-quality 
apprenticeship. The Department seeks to ensure that Industry Programs 
reflect the high-quality training that, traditionally, has been core to 
the apprenticeship model, and accordingly seeks comment on these 
provisions, and on whether it should further delineate the nature of 
the competencies and types of jobs that should be associated with 
Industry Programs.
    Paragraph (a)(4)(ii) states that an Industry Program must have 
structured work experiences, and appropriate classroom or related 
instruction adequate to help apprentices achieve proficiency and earn 
credential(s). The Department believes that the exact form these work 
experiences and instruction take will vary, depending on the nature of 
the industry or occupation and the means of classroom or other related 
instruction the Industry Program uses for developing progressively 
advancing skills.
    The Industry Program must involve an employment relationship and 
provide apprentices industry-essential skills. This ensures that 
apprentices earn as they learn their industry or occupation, and that 
they are equipped with the competencies necessary to operate as 
independent workers in their fields. The Department anticipates that 
SREs' standards will identify what specific knowledge and skills are 
industry-essential, based on industry

[[Page 29975]]

and occupation. The Department seeks comment on whether the phrase 
``progressively advancing'' is suitable for delineating the industry-
essential skills Industry Programs should provide.
    Paragraph (a)(4)(iii) requires Industry Programs to ensure that, 
where appropriate, apprentices receive credit for prior knowledge and 
experience relevant to the instruction of the Industry Program. Such 
credit should be reflected in progress through the program itself, or 
in any coursework, as appropriate. The Department believes that 
recognition of prior knowledge and experience will have numerous 
economic benefits for employers and workers. Workers with the 
appropriate prior knowledge and experience, and who can pass necessary 
skills assessments, certification exams or other processes required for 
credentialing, should receive appropriate credit. This approach 
bypasses what may be needless prerequisites for those workers, such as 
a certain number of hours of ``seat time'' or classes that are 
effectively perfunctory. Fast-tracking these workers allows them to 
more rapidly work and be paid fully, and directs workers to the most 
productive application of their knowledge and skill. This approach has 
the added benefit of bypassing steps that could otherwise delay 
addressing the skills gap many industries face.
    Paragraph (a)(4)(iv) requires Industry Programs provide apprentices 
with a credential(s) that is industry-recognized during participation 
in or upon completion of the program. A credential can be a 
certificate, certification, degree, electronic badge, or other 
indicator that attests to an individual's acquisition of skills or 
knowledge. An industry-recognized credential is one that is created by 
the industry that will use the credential, based on the particular 
competencies required within the specific industry. For example, such a 
credential could consist of a certificate of completion or a 
certification issued by the SRE of an Industry Program. In industries 
in which generally-accepted credentials already exist, or will be 
issued by industry organizations or personnel certification bodies, 
Industry Programs should result in receipt of one or more of these 
existing credentials, or qualify an apprentice to sit for relevant 
certification exams. Such credentials may be provided during 
participation in, or upon completion of, an Industry Program. For 
example, in order to successfully complete an Industry Program, an 
apprentice may be required to pass an exam relevant to his or her 
field.
    The Department anticipates that Industry Programs will generally 
provide credentials that are portable. Again, an Industry Program may 
require apprentices to pass a nationally-recognized exam that measures 
competencies necessary for the apprentice's occupation. That exam would 
enhance the apprentice's mobility, and enhancing workforce mobility is 
a vital part of effectively addressing the skills gap.
    At the same time, the Department recognizes that providing a 
credential that is ``portable'' in the broadest sense may not always be 
possible. For example, an Industry Program that equips apprentices to 
receive a certain type of license--one that reflects industry-essential 
skills--likely cannot ensure that the license will remain valid if the 
apprentice moves to a new State. As a general matter, though, by 
requiring that credentials reflect the specific competencies needed for 
any given occupation, the Department anticipates that Industry Programs 
will generally enhance apprentices' mobility.
    The Department also anticipates that Industry Programs will 
evaluate and adjust their programming to ensure that the credentials 
associated with the program have demonstrable consumer and labor-market 
value. The Department anticipates that how Industry Programs evaluate 
and adjust their programs will vary, depending on the nature of the 
industry or occupation, and that SREs' competency-based standards will 
provide adequate guidance to Industry Programs so that apprentices 
receive credentials with value. The Department seeks comment on this 
issue.
    Paragraph (a)(4)(v) requires that Industry Programs provide a safe 
working environment for apprentices that adheres to all applicable 
Federal, State, and local safety laws and regulations.
    Paragraph (a)(4)(vi) requires that the Industry Program provide 
structured mentorship opportunities so that apprentices have guidance 
on the progress of their training and their employability. Mentors 
support apprentices during their work-based learning experience, and 
can provide guidance on company culture, specific position functions, 
and workplace policies and procedures. Mentors can help develop 
learning objectives for apprentices, and assist in measuring their 
progress and proficiency.
    Paragraph (a)(4)(vii) requires that Industry Programs ensure 
apprentices are paid at least the applicable Federal, State, or local 
minimum wage. The Industry Program must also provide a written notice 
to apprentices of what wages apprentices will receive and under what 
circumstances apprentices' wages will increase.
    Paragraph (a)(4)(viii) requires that Industry Programs affirm their 
adherence to all applicable Federal, State, and local laws and 
regulations pertaining to Equal Employment Opportunity (EEO). The 
Department includes this provision to make it abundantly clear that 
apprentices--like other types of workers--should not be discriminated 
against. This requirement is distinct from the requirements that apply 
only to registered apprenticeships under 29 CFR 30.
    Paragraph (a)(4)(ix) requires that Industry Programs disclose, 
prior to when apprentices agree to participate in the program, any 
ancillary costs or expenses that will be charged to apprentices (such 
as costs related to tools or educational materials). Disclosure of such 
costs is necessary before apprentices agree to begin a program so that 
apprentices can accurately calculate their anticipated earnings.
    Paragraph (b) states that an SRE must validate that Industry 
Programs it recognizes comply with paragraph (a)(4). This means that 
the SRE must affirm to the Administrator that an Industry Program it 
recognizes is a high-quality program, as reflected by its conformity to 
what (a)(4)(i)-(ix) require. Validation under 29.22(b) should be 
provided to the Administrator under Sec.  29.22(a)(2), when an SRE 
informs the Administrator that it has recognized an Industry Program.
    Paragraph (c) requires SREs to disclose the credentials that 
apprentices will earn during their successful participation in or upon 
completion of an Industry Program, as is the norm in the private 
sector. An SRE could disclose these credentials on its website, for 
example.
    Paragraphs (d), (e), and (f) discuss the steps SREs must take to 
assure rigorous and fair decision-making in the recognition process.
    Paragraph (d) states that SREs must have sufficiently detailed 
policy and procedures so that programs seeking recognition will be 
assured of equitable treatment, and will be evaluated based on their 
merits. An SRE must ensure that its decisions are based on objective 
criteria, and are impartial and confidential. The Department proposes 
these requirements so that that the decisions of SREs reflect the 
quality of the program, not other factors. By requiring 
confidentiality, this provision also respects the privacy of entities 
seeking recognition, since seeking

[[Page 29976]]

recognition could entail providing confidential business information.
    Paragraph (e) prohibits SREs from recognizing their own 
apprenticeship programs unless they provide for impartiality and 
mitigate conflicts of interest via specific policies, processes, 
procedures, and/or structures. For example, a large manufacturer could 
establish Industry Programs for different functions within its plants, 
provided that the personnel developing standards for the programs are 
distinct from personnel evaluating the programs. The Department 
believes this requirement of independence between the SRE and Industry 
Program encourages fairness and guards against conflicts of interest, 
and is already a common requirement.
    Paragraph (f) requires that an SRE either not offer services, 
including consultative and educational services for example, to 
Industry Programs that would impact the impartiality of the SRE's 
recognition decisions, or it must provide for impartiality, and 
mitigate any potential conflicts of interest via specific policies, 
processes, procedures, and structures. The Department believes this 
approach is necessary because it expects many SREs will already be 
leaders in their industries. Such SREs may currently provide, or will 
provide, consultative services that entail giving expert advice or 
counsel to potential Industry Programs. Such consultative services 
could include services designed to build high-quality credentialing 
programs; assist those developing Industry Programs in articulating 
occupational competencies and determining appropriate credentials; 
assess the acquisition of competencies and learning outcomes; and 
measure the quality, effectiveness, and market value of an occupational 
credential. Though an SRE's offering such services could create a 
conflict of interest, barring SREs from providing them could likewise 
check the development of new apprenticeship programs or negatively 
impact their quality.
    Accordingly, SREs that provide these services should take steps 
necessary to mitigate conflicts of interest that may arise from them. 
For example, an SRE could establish a ``firewall'' between program 
designers and the personnel that make recognition decisions. Or the SRE 
could simply transition to working with a separate and independent 
partner, or establish other processes to create independence. These 
approaches help ensure public confidence in the integrity of Industry 
Programs, while at the same time leveraging SREs' industry expertise. 
The Department emphasizes in relation to paragraphs (e) and (f) that a 
prospective SRE's inability to demonstrate sufficiently robust 
policies, processes, procedures, and/or structures showing impartiality 
provides grounds for rejecting that application. In such an instance, 
and pursuant to 29.21(d)(1), the Department must provide notice 
specifying remedies to be undertaken, which would facilitate 
resubmission of the application. Recognizing the importance of 
maintaining the integrity of Industry Programs, the Department solicits 
comments on how best to address conflicts of interest.
    Paragraph (g) requires that SREs must not recognize Industry 
Programs for longer than five years at a time, and prohibits SREs from 
automatically renewing recognition. The Department proposes five years 
as a reasonable period of time in keeping with standard practices in 
the credentialing industry. The Department believes five years would 
also typically provide adequate time for many types of programs' 
apprentices to finish the program and obtain credentials, which would 
in turn facilitate an SRE's subsequent evaluation of that Industry 
Program. SREs may choose to recognize programs for shorter periods, 
which may be suitable for rapidly-evolving industries and occupations. 
In either case, the Department believes that requiring re-recognition 
periodically will help SREs and Industry Programs actively reevaluate 
credentials and education or related training to reflect the needs of 
apprentices and employers in the relevant industries or occupational 
areas. This will, in turn, ensure that Industry Programs equip 
apprentices with needed competencies and remain high-quality programs.
    Paragraph (h) requires that SREs and Industry Programs be in an 
ongoing quality-control relationship and provides general guidelines 
for that requirement. The specific means and nature of the relationship 
between the SRE and an Industry Program will be defined by the SRE, 
provided that the relationship: (1) Results in reasonable and effective 
quality control that includes as appropriate, consideration of 
apprentices' credential attainment, program completion, and job 
placement rates; (2) does not place barriers on receiving recognition 
from another SRE; and (3) does not conflict with this subpart or 
violate any applicable law.
    The Department believes that SREs' effective quality control of 
Industry Programs is essential to the development and maintenance of 
high-quality apprenticeships. The Department also believes that SREs 
are best situated to understand their industries and recognized 
programs, and accordingly structure their interactions in ways that 
result in high-quality apprenticeship programs that equip apprentices 
with knowledge and skills essential for operating independently in 
their fields. Because the Department expects that SREs and Industry 
Programs will enter into some form of agreement, that agreement may be 
an appropriate vehicle for outlining the nature of the quality control 
the SRE will provide. The Department seeks to ensure effective quality-
control of Industry Programs, and solicits comment on whether it should 
further delineate requirements for the quality-control relationship--
for example, by requiring SREs to assess apprentices' post-program 
earnings, which the Department believes would be a useful data point 
for evaluating programs.
    In addition, the Department seeks to ensure that Industry Programs 
have significant flexibility in customizing their programs, including 
by seeking recognition from multiple SREs if appropriate. This could 
strengthen the quality of apprentices' training, and assist with the 
offering and receipt of stackable credentials that enhance the value 
apprentices receive from Industry Programs in an increasingly dynamic 
marketplace.
    Paragraph (i) makes clear that an entity's participation as an SRE 
of an Industry Program does not make the SRE a joint employer with the 
entity(ies) that develop or deliver Industry Programs.
    Paragraph (j) requires SREs to make publicly available certain 
information the Department considers important for providing employers 
and prospective apprentices the details necessary to make informed 
decisions about Industry Programs. For example, the total number of 
apprentices that begin or complete a program each year could assist an 
employer in gauging the number of apprentices that employer could 
integrate into its workforce if it opens a plant near that program. 
Likewise, program length, and annual completion and post-apprenticeship 
employment rates--or additional measures such as earnings rates--could 
inform an apprentice's choice between Industry Programs. A program with 
a length of six months, an 85% completion rate on average over a year-
long period, and a high likelihood of employment after completing the 
apprenticeship may present a better option than a one-year program for 
the same occupation with lower annual completion and post-
apprenticeship employment rates.
    As the Department seeks to evaluate the success of SREs and 
Industry Programs, the Department seeks

[[Page 29977]]

comment on which performance measures would be most helpful in 
assessing program impact and quality assurance. In particular, the 
Department is considering setting performance measures related to post-
apprenticeship employment and wages and employer retention. The 
Department has a keen interest in minimizing burden on SREs and 
Industry Programs, and therefore also solicits comment on the most 
efficient approach to data collection.
    Paragraph (k) generally requires SREs to have policies and 
procedures that would require Industry Programs to protect apprentices 
from discrimination, as well as assist in recruiting for and maximizing 
participation in apprenticeships. The Department seeks to expand the 
apprenticeship model broadly--including to employers and workers that 
might not previously have considered participating. The Department 
anticipates that paragraph (k) would help employers more efficiently 
comply with the law and recruit apprentices, which would in turn 
increase employer participation and accelerate expansion of Industry 
Programs.
    At the same time, by requiring SREs to develop policies and 
procedures, the Department affirms that SREs are ultimately responsible 
for EEO obligations. Because this new apprenticeship system is 
industry-led, the Department believes it should empower SREs to develop 
policies and procedures appropriate for the types of employers SREs 
work with. Accordingly, the Department does not dictate exactly how the 
SREs should interact with Industry Programs. But regardless of how SREs 
choose to implement their policies and procedures, it is SREs that are 
responsible for complying with this paragraph.
    In the first place, paragraph (k) requires that an SRE must have 
policies and procedures that require Industry Programs' adherence to 
applicable Federal, State, and local laws pertaining to Equal 
Employment Opportunity. The SRE must facilitate such adherence through 
its policies and procedures regarding potential harassment, 
intimidation, and retaliation. Again, the Department proposes requiring 
SREs to have these policies and procedures. At the same time, by not 
dictating how SREs comply with paragraph (k), the Department seeks to 
ensure SREs have the flexibility to offer employers the benefit of the 
SREs' capacity and resources. For example, an SRE could assist small 
employers establishing Industry Programs by providing centralized anti-
harassment training. Likewise, the SRE could establish a uniform 
mechanism for receiving complaints from apprentices concerning 
discrimination. Ultimately, the Department seeks to maximize an SRE's 
ability to satisfy this provision in ways that best serve the types of 
Industry Programs and types of employers that SRE works with.
    This paragraph also requires that the SRE have policies and 
procedures that reflect comprehensive outreach strategies to reach 
diverse populations. The SRE's policies and procedures will help 
address the skills gap by facilitating more widespread access to the 
SREs' Industry Programs by individuals that may not have applied to 
apprenticeships previously. Again, the Department believes that SREs 
should have flexibility in how they design and execute their policies 
and procedures. For example, an SRE that works primarily with large 
corporations to establish Industry Programs could devolve requirements 
for outreach to the extent those corporations already have fulsome 
recruiting programs. An SRE working with smaller employers of more 
limited means could opt for a more centralized approach. An SRE that 
works primarily with smaller employers to establish Industry Programs 
could circulate notices about apprenticeship openings to schools, 
community- and faith-based organizations, and other groups with members 
that may not have considered apprenticeship in the past. An SRE could 
likewise assist such employers with the development and distribution of 
materials for recruiting, which could both be part of the SRE's 
comprehensive outreach strategies and would benefit Industry Programs' 
recruitment. Regardless of how the SRE seeks to implement its policies 
and procedures as it works with Industry Programs and employers, that 
SRE is responsible for ensuring its policies and procedures are 
executed. Finally, this paragraph requires that the SRE must assign 
responsibility to an individual to assist Industry Programs with 
matters relating to this paragraph. For example, an SRE could designate 
a staff member in its human resources department to address questions 
from employers participating in its Industry Programs. The Department 
believes that paragraph (k)'s straight-forward requirements--which are 
distinct from the requirements that apply to registered apprenticeships 
under subpart A and 29 CFR 30--will benefit SREs, their Industry 
Programs, and employers and apprentices alike.
Quality Assurance (Sec.  29.23)
    Section 29.23 provides that the Administrator may request and 
review materials from SREs to determine whether the SRE is in 
conformity with the requirements of the subpart. SREs should provide 
requested materials, consistent with paragraph 29.22(a)(3). The 
Department believes this provision is necessary to ensure fair and full 
review of SREs under section 29.27.
Publication of Standards Recognition Entities and Industry Programs 
(Sec.  29.24)
    Section 29.24 indicates that the Administrator will make publicly 
available a list of SREs and the Industry Programs they recognize. The 
Department anticipates that this information will help apprenticeship 
programs seeking recognition to find SREs, and will help individuals 
seeking employment find high-quality apprenticeships. The Department is 
also considering whether to use this list as a mechanism for pointing 
users to, or otherwise aggregating and displaying, the information SREs 
would make public under proposed Sec.  29.22(j), and seeks comment on 
this potential approach.
    This list would also inform the public of the status of SREs and 
Industry Programs. Consistent with the requirements of paragraph 
28.28(d)(2), the Administrator will publish an SRE's suspension on this 
list, informing the public and Industry Programs that have been 
recognized. Similarly, a derecognized SRE would no longer appear on the 
list, nor would a related Industry Program that has lost its status 
under paragraph 29.29(a).
Expedited Process for Recognizing Industry Programs as Registered 
Apprenticeship Programs (Sec.  29.25)
    Section 29.25 would establish a process for the Administrator to 
consider Industry Programs for expedited registration under subpart A's 
Registered Apprenticeship Program. It is important to note that the 
goal of establishing Industry Programs is to create an additional and 
parallel pathway to encourage expansion of apprenticeships beyond those 
industries where registered apprenticeships already are effective and 
substantially widespread. Nor does the Department anticipate that 
apprenticeship programs that have chosen not to register to date would 
now seek to do so under this section, which does not alter the 
requirements for registered apprenticeship programs. Accordingly, the 
Department does not expect many, if any, dual apprenticeship programs,

[[Page 29978]]

and seeks comment on the proposed approach to expedited registration. 
Under the proposed rule, a recognized Industry Program may request that 
the Office of Apprenticeship register it within 60 days of the 
Administrator's receiving all information necessary to make a decision. 
As noted in paragraph (a), the Department will register Industry 
Programs that demonstrate compliance with part 29, subpart A, and part 
30 of this title.
    Paragraph (b) provides the Administrator the authority to request 
additional information from an Industry Program necessary to determine 
the Industry Program's compliance with part 29, subpart A, and part 30 
of this title. The Department envisions that Industry Program would 
submit to the Office of Apprenticeship the same materials submitted to 
an SRE to obtain recognition. After reviewing that initial submission, 
the Administrator would determine what additional information, if any, 
was necessary to evaluate whether the Industry Program was in 
compliance with part 29, subpart A, and part 30. Upon receipt of all 
necessary information, the Administrator will notify the Industry 
Program that it will provide a decision on its application within 60 
days, pursuant to paragraph (c).
    The Department envisions that the Office of Apprenticeship would 
exclusively handle expedited registration of Industry Programs for 
Federal purposes. Given that Department-recognized State Apprenticeship 
Agencies may have different procedures for registration, the Department 
envisions that Federal registration is the best means of ensuring 
consistency and efficiency in registering Industry Programs that meet 
the requirements of part 29, subpart A, and part 30. Nothing in this 
section is intended to prohibit an Industry Program from separately 
applying to a recognized State Apprenticeship Agency and moving through 
the process for registering apprenticeship programs in that State.
Complaints Against Standards Recognition Entities (Sec.  29.26)
    Section 29.26 proposes the procedure for reporting complaints 
against SREs arising from SREs' compliance with the subpart. This 
section is intended to provide an avenue for the Administrator to learn 
of any needed information that might impact the SRE's continued 
qualification under Sec.  29.21(b).
    Paragraph (a) provides that a complaint arising from an SRE's 
compliance with this subpart may be submitted by an apprentice, the 
apprentice's authorized representative, a personnel certification body, 
an employer, a Registered Program representative (someone authorized to 
speak on behalf of a registered apprenticeship program), or an Industry 
Program. The Department anticipates that each of these entities may 
have information that could warrant the Administrator's review. A 
personnel certification body involved in the credentialing process--for 
example, an organization that administers exams to apprentices upon 
completion of an Industry Program and awards a credential to 
apprentices that pass the exam--may accrue data over time that reflects 
a disproportionately high failure rate on the exam for individuals from 
that particular Industry Program. Such a failure rate could establish 
that individuals from that program lack the knowledge and skills needed 
to sit for the exam. This, in turn, could reflect a deficiency in the 
SRE's quality-control relationship with the Industry Program, and may 
warrant the Administrator's review.
    Paragraph (b) describes the requirements for complaints submitted 
to the Administrator. The complaint must be in writing and must be 
submitted within 60 days of the circumstances giving rise to the 
complaint. It must set forth the specific matter(s) complained of, 
together with relevant facts and circumstances. Copies of pertinent 
documents and correspondence must accompany the complaint. These 
requirements ensure that the Administrator is promptly and fully 
informed of relevant information, and has what is needed to determine 
whether the complaint warrants review under Sec.  29.27.
    Paragraph (c) clarifies that the Department will address complaints 
submitted to the Department only through the review process outlined in 
Sec.  29.27. And paragraph (d) explains that nothing in the section 
would preclude a complainant from pursuing any remedy authorized under 
Federal, State, or local law.
Review of a Standards Recognition Entity (Sec.  29.27)
    This section outlines the process for the Administrator's review of 
SREs. This process exists to ensure that the Administrator has a 
mechanism for reviewing information necessary to determine whether an 
SRE may no longer be qualified to recognize or capable of recognizing 
Industry Programs. This section also provides an SRE with the 
opportunity to respond to the Administrator with relevant information, 
which could include information showing the SRE has acknowledged and 
taken steps to cure any deficiency, making suspension unnecessary.
    Paragraph (a) explains that an Administrator may initiate review of 
an SRE if it receives information indicating that the SRE is not in 
substantial compliance with the subpart, or that the SRE is no longer 
capable of continuing as an SRE. For example, the Administrator may 
learn of such information through an SRE's disclosure under Sec.  
29.21(c)(2). The Department proposes adopting the standard of 
substantial compliance because it anticipates that certain information 
received may reflect only inconsequential errors that do not negatively 
affect the SRE's recognition process or result in lower-quality 
Industry Programs. This provision authorizes the Administrator's 
initiating a formal review.
    Paragraph (b) describes the notice of review SREs would receive, 
and procedures the Administrator would follow in carrying out such a 
review. The Administrator would provide the SRE written notice of the 
review by certified mail, with return receipt requested. The notice 
would describe the basis for the Administrator's review, including 
potential areas of substantial noncompliance with the subpart and a 
detailed description of the information supporting review. The notice 
should provide the SRE with an opportunity to provide information for 
the Administrator's review; this will help ensure that the 
Administrator is fully and fairly informed as it seeks to evaluate the 
SRE in light of paragraph (a). This opportunity also provides the SRE 
with the option of including information showing the SRE has 
acknowledged and taken steps to cure any deficiency, making suspension 
unnecessary.
    Paragraph (c) provides that on conclusion of the Administrator's 
review, the Administrator will give written notice of its decision to 
either take no action or to suspend the SRE as provided under Sec.  
29.28.
Suspension and Derecognition of a Standards Recognition Entity (Sec.  
29.28)
    Proposed Sec.  29.28 describes the means by which the Administrator 
can suspend and, if necessary, derecognize an SRE. Such a process is 
necessary to ensure that an Administrator can address an SRE's failure 
to comply with the subpart or its inability to continue as an SRE. It 
also provides the SRE with an additional opportunity to work with the 
Administrator to address substantial noncompliance. Overall, these 
steps

[[Page 29979]]

preserve the integrity of the recognition process necessary for high-
quality Industry Programs.
    This section begins by explaining that the Administrator may 
suspend an SRE for 45 calendar days based on the Administrator's review 
and determination that any of the situations described in Sec.  
29.27(a)(1) (the SRE is not in substantial compliance with the subpart) 
or (a)(2) (the SRE is no longer capable of continuing as an SRE) exist.
    If, after the review required by Sec.  29.27, the Administrator has 
determined that suspension is appropriate, (a) requires that the 
Administrator must provide notice of suspension in accord with Sec.  
29.21(d)(2)-(3), but stating that a request for administrative review 
may be made within 45 calendar days of receipt of the notice. Paragraph 
(b) requires that the notice set forth an explanation of the 
Administrator's decision, including identified areas of substantial 
noncompliance and necessary remedial actions. It also requires that the 
notice explain that the Administrator will derecognize the SRE in 45 
calendar days unless remedial action is taken or a request for 
administrative review is made.
    Paragraph (c) outlines the various outcomes that could follow the 
notice. Each outcome depends on the SRE's response to the notice. Under 
(c)(1), if the SRE responds by specifying its proposed remedial actions 
and commits itself to remedying the identified areas of substantial 
noncompliance, the Administrator will extend the 45-day period to allow 
a reasonable time for the SRE to implement remedial actions. If at the 
end of that time the Administrator determines that the SRE has remedied 
the identified areas of substantial noncompliance, the Administrator 
must notify the SRE, and the suspension will end. In the alternative, 
if at the end of that time the Administrator determines that the SRE 
has not remedied the identified areas of substantial noncompliance, the 
Administrator will derecognize the SRE and must notify the SRE in 
writing and specify the reasons for its determination. Such notice must 
comply with Sec.  29.21(d)(2)-(3).
    Under (c)(2), if the SRE responds to the notice by making a request 
for administrative review within the 45-day period, the Administrator 
shall refer the matter to the Office of Administrative Law Judges to be 
addressed in accord with Sec.  29.30. The Department has determined 
that an appeal right is appropriate given the significant impact of 
suspension on SREs under paragraph (d), which bars the SRE from 
recognizing new programs during suspension and requires the 
Administrator to publish the SRE's suspension publicly as described in 
Sec.  29.24.
    Under (c)(3), if the SRE does not act in response to the notice 
under (c)(1) or (c)(2), the Administrator will derecognize the SRE, as 
indicated in the notice already given to the SRE under (b). Absent 
recognition, an entity is no longer and may not function as an SRE. 
This means the former SRE could neither recognize apprenticeship 
programs, nor remain listed on the Administrator's website under Sec.  
29.24.
    The Department believes that the processes in Sec. Sec.  29.27 and 
29.28 maximize the likelihood of an SRE's remedying areas of 
substantial noncompliance before or during the suspension phase. This 
is especially the case given the notices the SRE would receive under 
Sec. Sec.  29.27(b) and 29.28(b), which exist in part to help minimize 
disruption to SREs--and Industry Programs, apprentices, and the 
employers that rely on them--by providing information needed to remedy 
substantial noncompliance.
Derecognition's Effect on Industry Programs (Sec.  29.29)
    This proposed section explains the effects an SRE's derecognition 
would have on Industry Programs that it recognized. Under paragraph 
(a), an Industry Program would maintain its status until 1 year after 
the Administrator's decision derecognizing the Industry Program's SRE 
becomes final, including any appeals. At the end of that time, the 
Industry Program would lose its status unless it is already recognized 
by another SRE. The Department believes that this amount of time would 
facilitate an Industry Program's seeking recognition with another SRE. 
During that time, the Department anticipates that the Industry Program 
will continue to adhere to the SRE's rules even if the SRE no longer 
continues to exist. The Department seeks comments on its proposed 
approach.
    Also, as stated above, the Department proposes no limitations on an 
Industry Program's being recognized by multiple SREs. Where an Industry 
Program has recognition from multiple SREs, the derecognition of one of 
those SREs would not trigger the one-year period. Paragraph (b) 
clarifies that if an Industry Program is also registered under subpart 
A in the registered apprenticeship program, the derecognition of its 
SRE would not disturb its registration.
Requests for Administrative Review (Sec.  29.30)
    Proposed Sec.  29.30 describes procedures and requirements for 
requests for administrative review under this subpart. A prospective 
SRE may request review of the Administrator's denial of recognition as 
provided under Sec.  29.21(d). Likewise, an SRE may appeal the 
Administrator's decisions under Sec.  29.28. The process for requesting 
administrative review exists to ensure that prospective and recognized 
SREs receive process adequate for their positions to be heard and their 
rights to be protected. The provisions are generally modeled after the 
process outlined in current 29 CFR 29.13(g).
    Paragraph (a) provides that, within 30 calendar days of the filing 
of a request for administrative review, the Administrator should 
prepare an administrative record for submission to the Administrative 
Law Judge designated by the Chief Administrative Law Judge.
    Paragraph (b) provides that the procedural rules contained in 29 
CFR part 18 apply to the disposition of requests for administrative 
review, with two exceptions. First, the Administrative Law Judge will 
receive, and make part of the record, documentary evidence offered by 
any party and accepted at the hearing. Copies of the evidence will be 
made available by the party submitting the documentary evidence to any 
party to the hearing upon request. This exception exists to ensure that 
all evidence relevant to an SRE or prospective SRE is considered and 
weighed, even if not presented in advance of the hearing.
    Second, technical rules of evidence would not apply to hearings 
conducted, but rules or principles designed to assure production of the 
most credible evidence available and to subject testimony to test by 
cross-examination would be applied, where reasonably necessary, by the 
Administrative Law Judge conducting the hearing. The Administrative Law 
Judge would have the ability to exclude irrelevant, immaterial, or 
unduly repetitious evidence. The Department believes this exception 
will reduce the costs of hearings for SREs, the government, and any 
other interested parties.
    Paragraph (c) provides that the Administrative Law Judge should 
submit proposed findings, a recommended decision, and a certified 
record of the proceedings to the Administrative Review Board, SRE, and 
Administrator within 90 calendar days after the close of the record.

[[Page 29980]]

    Paragraph (d) provides that, within 20 days of the receipt of the 
recommended decision, any party may file exceptions to it. Any party 
may file a response to the exceptions filed by another party within 10 
days of receipt of the exceptions. All exceptions and responses must be 
filed with the Administrative Review Board with copies served on all 
parties and amici curiae.
    Paragraph (e) provides that after the close of the period for 
filing exceptions and responses, the Administrative Review Board may 
issue a briefing schedule or may decide the matter on the record before 
it. The Administrative Review Board must decide any case it accepts for 
review within 180 days of the close of the record. If the 
Administrative Review Board does not act, the Administrative Law 
Judge's decision constitutes final agency action. The decision of the 
Administrative Review Board would constitute final agency action by the 
Department.
Scope and Deconfliction Between Apprenticeship Programs Under Subpart A 
and Subpart B (Sec.  29.31)
    Apprenticeships established under subpart B should expand 
apprenticeships broadly to new industry sectors and occupations through 
a pathway that is parallel to and distinct from registered 
apprenticeship programs under subpart A. As the Department seeks to 
address the skills gap, it recognizes that in some contexts registered 
apprenticeship programs are already effective and substantially 
widespread. In these sectors, various entities have heavily invested in 
and rely on existing programs, which has led to a relatively high 
concentration of registered apprenticeship opportunities in these 
sectors. The Department intends to expand Industry Programs into 
contexts lacking such opportunities. Accordingly, the Department 
proposes that it would only recognize SREs that seek to recognize 
Industry Programs in sectors without significant registered 
apprenticeship opportunities.
    The President's Task Force on Apprenticeship Expansion recognized 
this purpose. The mission of the President's Task Force entailed 
identifying strategies and proposals to promote apprenticeships, 
``especially in sectors where apprenticeship programs are 
insufficient.'' At the outset, the Task Force's deliberations were 
framed by the acknowledgment that the registered apprenticeship program 
would continue, and that the vision was to set up a parallel 
apprenticeship program separate from registered apprenticeships.
    With that framework in mind, the Task Force developed, deliberated 
over, and voted on various recommendations, transmitting them to the 
President in a Final Report. The Final Report's Recommendation 14 
suggested that: ``The Industry-Recognized Apprenticeship program should 
begin implementation with a pilot project in an industry without well-
established Registered Apprenticeship programs.'' \12\ This 
recommendation depends on the distinction between contexts where 
registered apprenticeship programs are and are not well-established, 
and focusing at the outset on contexts where apprenticeship 
opportunities are not currently significant.
---------------------------------------------------------------------------

    \12\ Task Force on Apprenticeship Expansion, ``Final Report to 
the President of the United States,'' May 10, 2018, 34 (emphasis 
added).
---------------------------------------------------------------------------

    The Department has carefully considered the Task Force's 
recommendation that it begin with a pilot project, and its premise that 
there are contexts where registered apprenticeship opportunities are 
already well-established. On the one hand, the Department believes that 
the large skills gap requires a more immediate response than a pilot 
project would permit. Workers and employers in many sectors of the 
economy would benefit from greater use of apprenticeship programs where 
registered apprenticeship opportunities are not currently significant. 
Accordingly, the Department does not propose limiting this new program 
to one or even a handful of industries.
    At the same time, the Department agrees that apprenticeship 
expansion should not come at the cost of existing registered 
apprenticeship programs. Instead, there is significant value to 
establishing a parallel apprenticeship system that avoids undercutting 
the current registered apprenticeship system where it is widespread. 
Various entities, including State Apprenticeship Agencies \13\ and 
governors and States themselves,\14\ have invested in and rely on 
registered apprenticeship programs.\15\
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    \13\ For years, the Department has worked in conjunction with 
State Apprenticeship Agencies to administer the registered 
apprenticeship system. Id. at 14.
    \14\ Each State and/or governor, depending on state governance 
models, receives a portion of federal dollars to create State 
registered apprenticeship infrastructures. States have also 
developed approaches targeted to their particular needs that take 
advantage of the registered apprenticeship system. For example, some 
States have created positions that help align registered 
apprenticeship programs with State and local industry needs. 
Likewise, some States have chosen to offer tax credits to entities 
hiring registered apprentices, or to pay for costs associated with 
registered apprenticeship programs.
    \15\ See Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117, 2126 
(``[A]n agency must also be cognizant that longstanding policies may 
have engendered serious reliance interests that must be taken into 
account.'' (internal quotation marks omitted)).
---------------------------------------------------------------------------

    As an initial matter, the Department proposes to only recognize 
SREs that seek to recognize Industry Programs in sectors without 
significant registered apprenticeship opportunities, as outlined in its 
Training and Employment Notice, ``Creating Industry-Recognized 
Apprenticeship Programs to Expand Opportunity in America.'' The 
Department would use the number of federal registered apprentices from 
prior years to approximate where registered apprenticeship 
opportunities are already significant. To count federal registered 
apprentices from prior years by sector, the Department generally uses 
pertinent North American Industry Classification System (NAICS) codes 
that it has assigned to each registered program.\16\ With this 
information, the Department would identify sectors where registered 
apprenticeship opportunities are already significant as those that have 
had more than 25% of all federal registered apprentices per year on 
average over the prior 5-year period, or that have had more than 
100,000 federal registered apprentices per year on average over the 
prior 5-year period, or both, as reported through the prior fiscal year 
by the Office of Apprenticeship.\17\ The Department believes these 
thresholds are reasonable measures of where registered apprenticeship 
opportunities are already significant relative to other sectors. For 
example, over the prior five-year period, on average the U.S. Military 
had approximately 32% of federal registered apprentices.\18\ By 
contrast, the next highest categories were Public Administration and 
Manufacturing, which each had only 5% of federal registered 
apprentices. The Department proposes assessing data averaged over a

[[Page 29981]]

five-year period to ensure its determinations reflect long-term trends.
---------------------------------------------------------------------------

    \16\ See Employment and Training Administration, 
``Apprenticeship: Data and Statistics,'' (Mar. 6, 2019) (providing 
breakout of federal registered apprentices by sector), available at 
https://doleta.gov/oa/data_statistics.cfm. The Department accounts 
for apprentices in the United Services Military Apprenticeship 
Program (USMAP) apart from NAICS.
    \17\ Id. (reporting numbers of federal registered active 
apprentices by prior fiscal year in Construction, the U.S. Military, 
Public Administration, Manufacturing, and additional sectors). The 
Department proposes using data concerning federal registered 
apprentices due to limitations in data it receives from the States.
    \18\ The U.S. Military had approximately 94,000 registered 
apprentices each year on average during the same time.
---------------------------------------------------------------------------

    Based on the proposed thresholds, the Department expects to 
identify the U.S. Military and construction \19\ as contexts where 
registered apprenticeship opportunities are already significant. 
Accordingly, the Department would not, at least initially, accept 
applications from SREs seeking to recognize apprenticeship programs in 
the U.S. Military or in construction.\20\
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    \19\ The construction industry has had approximately 48% of all 
federal registered apprentices on average over the prior 5-year 
period, averaging approximately 144,000 federal registered 
apprentices per year.
    \20\ While categorizing apprentices by sector using NAICS codes 
is feasible retrospectively because the Department has worked with 
registered programs to assign a proper code and properly categorize 
them at the time of their registration, the Department would not 
have such an opportunity before entities submit application forms 
under this proposed regulation. Accordingly, the Department would 
require prospective SREs to affirm in their applications that they 
will not seek to recognize Industry Programs in the U.S. Military or 
in construction.
---------------------------------------------------------------------------

    The Department would define an apprenticeship program in the U.S. 
Military as one that provides a credential to members of the U.S. 
Military based on their military training and experience.\21\ An 
apprenticeship program would be in construction if it equips 
apprentices to provide labor whereby materials and constituent parts 
may be combined on a building site to form, make, or build a 
structure.\22\
---------------------------------------------------------------------------

    \21\ This definition accounts for federal registered 
apprenticeship opportunities offered through the United Services 
Military Apprenticeship Program (USMAP).
    \22\ See generally Union Asphalts & Roadoils, Inc. v. MO-KAN 
Teamsters Pension Fund, 857 F.2d 1230, 1234 (8th Cir. 1988) 
(defining building and construction industry). The Department's 
proposed approach incorporates a long-standing definition of the 
building and construction industry from case law interpreting the 
Employee Retirement Income Security Act, see 29 U.S.C. 1383(b), and 
the Labor Management Relations Act, see 29 U.S.C. 158(f). The 
Department's approach focuses on the occupations apprentices are 
actually trained for, and is the most direct method of preserving 
well-established registered apprenticeship programs in construction. 
By contrast, deciding whether an SRE seeks to recognize programs in 
construction based on an applicant-supplied NAICS code would be 
under protective because NAICS codes are a function of an entity's 
primary business activity, and some entities (or consortia of 
entities) that would train apprentices for construction work do not 
have construction as their primary activity.
---------------------------------------------------------------------------

    The Department recognizes, however, the need for flexibility over 
time, particularly as the economy and workforce needs change. The 
Department accordingly seeks comment on whether its approach is the 
best measure of where there are significant registered apprenticeship 
opportunities, and is appropriate for managing potential overlap and 
conflict between registered apprenticeship programs and Industry 
Programs; on how that approach should be described and implemented in 
the future; and on whether the Department should consider alternative 
or additional means to promote and support the expansion of Industry 
Programs in sectors that do not currently have significant registered 
apprenticeship opportunities. The Department also seeks comment on 
whether this provision should sunset after a certain period of time 
and, if so, what length of time would be appropriate.
    In the interest of maintaining distinction between Industry 
Programs and registered apprenticeship programs, the Department wishes 
to clarify that recognition as an Industry Program does not confer 
categorical eligibility for government programs which provide special 
status to programs registered under the National Apprenticeship Act.

III. Agency Determinations

A. Executive Orders 12866 (Regulatory Planning and Review), 13563 
(Improving Regulation and Regulatory Review), and 13771 (Reducing 
Regulation and Controlling Regulatory Costs) and the Congressional 
Review Act

    Under E.O. 12866, OMB's Office of Information and Regulatory 
Affairs determines whether a regulatory action is significant and, 
therefore, subject to the requirements of the E.O. and review by OMB. 
See 58 FR 51735 (Oct. 4, 1993). Section 3(f) of E.O. 12866 defines a 
``significant regulatory action'' as an action that is likely to result 
in a rule that: (1) Has an annual effect on the economy of $100 million 
or more, or adversely affects in a material way a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or communities 
(also referred to as economically significant); (2) creates serious 
inconsistency or otherwise interferes with an action taken or planned 
by another agency; (3) materially alters the budgetary impacts of 
entitlement grants, user fees, or loan programs, or the rights and 
obligations of recipients thereof; or (4) raises novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the E.O. Id. This NPRM is a significant 
regulatory action, although not an economically significant regulatory 
action under sec. 3(f) of E.O. 12866.
    E.O. 13563 directs agencies to propose or adopt a regulation only 
upon a reasoned determination that its benefits justify its costs; the 
regulation is tailored to impose the least burden on society, 
consistent with achieving the regulatory objectives; and in choosing 
among alternative regulatory approaches, the agency has selected those 
approaches that maximize net benefits. E.O. 13563 recognizes that some 
benefits are difficult to quantify and provides that, where appropriate 
and permitted by law, agencies may consider and discuss qualitatively 
values that are difficult or impossible to quantify, including equity, 
human dignity, fairness, and distributive impacts.
    E.O. 13771, titled Reducing Regulation and Controlling Regulatory 
Costs, was issued on January 30, 2017. This proposed rule is expected 
to be an E.O. 13771 regulatory action. Details on the estimated costs 
of this proposed rule can be found in the rule's economic analysis.
    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a `major rule' as defined by 5 U.S.C. 804(2).
1. Summary of the Economic Analysis
    The Department anticipates that the proposed rule would result in 
benefits and costs for employers, apprentices, and society. The 
benefits of the proposed rule are described qualitatively in section 
III.A.2 (Benefits). The estimated costs are explained in sections 
III.A.3 (Quantitative Analysis Considerations), III.A.4 (Subject-by-
Subject Analysis), and III.A.5 (Summary of Costs). The nonquantifiable 
costs are described qualitatively in section III.A.6 (Nonquantifiable 
Costs). The nonquantifiable transfer payments are described 
qualitatively in section III.A.7 (Nonquantifiable Transfer Payments). 
Finally, the regulatory alternatives are explained in section III.A.8. 
(Regulatory Alternatives).
    The costs of the proposed rule for SREs include rule 
familiarization, completing the application form, and remaining in an 
ongoing quality-control relationship with Industry Programs. The costs 
of the proposed rule for Industry Programs include rule familiarization 
and providing performance information to the SRE. The costs of the 
proposed rule for the Federal government are associated with 
development and maintenance of an online Standards Recognition Entity 
application form, reviewing applications, and development and 
maintenance of an online list of SREs and Industry Programs.
    Exhibit 1 shows the total estimated costs of the proposed rule over 
ten years at discount rates of 3 percent and 7 percent. The proposed 
rule is expected

[[Page 29982]]

to have first year costs of $9.3 million in 2017 dollars. Over the 10-
year analysis period, the annualized costs are estimated at $7.6 
million at a discount rate of 7 percent in 2017 dollars. In total, over 
the first ten years, the proposed rule is estimated to result in costs 
of $53.4 million at a discount rate of 7 percent in 2017 dollars.
[GRAPHIC] [TIFF OMITTED] TP25JN19.000

    When the Department uses a perpetual time horizon to allow for cost 
comparisons under E.O. 13771, the perpetual annualized costs are 
$7,256,096 (with a present value of $103,658,516) at a discount rate of 
7 percent in 2016 dollars.
2. Benefits
    This section provides a qualitative description of the anticipated 
benefits associated with the proposed rule. The Department expects this 
regulation to have a net benefit overall.
    Through this regulation, and as explained in the rule's Background 
section, above, the Administration seeks to address a persistent and 
serious long-term challenge to American economic leadership in the 
global marketplace: A significant mismatch between the occupational 
competencies that businesses require and the job skills that aspiring 
employees possess. While there were over 7.3 million job openings in 
the United States at the end of 2018,\23\ some openings go unfilled 
because there are not enough workers with needed skills.\24\ This 
pervasive skills gap poses a serious impediment to job growth and 
productivity throughout the economy.
---------------------------------------------------------------------------

    \23\ U.S. Dep't of Labor, Bureau of Labor Statistics, ``Job 
Openings and Labor Turnover--December 2018,'' Feb. 12, 2019, https://www.bls.gov/news.release/archives/jolts_02122019.pdf.
    \24\ See, e.g., Task Force on Apprenticeship Expansion, ``Final 
Report to the President of the United States,'' May 10, 2018, 16 
(citing 2018 report from National Federation of Independent 
Business); Business Roundtable, ``Closing the Skills Gap,'' https://www.businessroundtable.org/policy-perspectives/education-workforce/closing-the-skills-gap (last visited April 16, 2019).
---------------------------------------------------------------------------

    The promotion and expansion of quality apprenticeships can play a 
key role in alleviating the skills gap by providing individuals 
including young people, women, and other populations with relevant 
workplace skills and a recognized credential. This proven workforce 
development technique not only helps individuals to move into decent, 
family-sustaining jobs, but also assists businesses with finding the 
workers they need to maintain their competitive edge. Individuals who 
successfully complete an apprenticeship program are estimated to amass 
career-long earnings (including employee benefits) that are greater 
than the earnings of similarly-situated individuals who did not enroll 
in such programs.\25\
---------------------------------------------------------------------------

    \25\ See, e.g., Mathematica Policy Research, ``An Effectiveness 
Assessment and Cost-Benefit Analysis of Registered Apprenticeship in 
10 States: Final Report'' (July 25, 2012), https://wdr.doleta.gov/research/FullText_Documents/ETAOP_2012_10.pdf.
---------------------------------------------------------------------------

    The Final Report of the Task Force on Apprenticeship Expansion 
noted that while ``the Federal Government can establish the framework 
for a successful apprenticeship program and provide support, 
substantial change must begin with industry-led partnerships playing 
the pivotal role'' of creating, recognizing, and managing 
apprenticeship programs.\26\ Underlying this approach is the conviction 
that private industry--rather than government--is best suited to 
determine the occupational skills that workers need to acquire through 
apprenticeship programs. Such an industry-led approach would provide 
employers the flexibility they need to devise customized programs that 
serve their specialized business requirements.
---------------------------------------------------------------------------

    \26\ Task Force on Apprenticeship Expansion, ``Final Report to 
the President of the United States,'' May 10, 2018, 19.
---------------------------------------------------------------------------

    Accordingly, the Department is proposing to issue this regulation, 
which would supplement the current system of registered apprenticeships 
with a parallel system of Industry Programs, thereby enabling the rapid 
expansion of quality apprenticeships across a wide range of industries 
and occupational areas. This proposed regulation would require SREs to 
recognize and maintain recognition of only high-quality Industry 
Programs, which will benefit apprentices and encourage the expansion of 
the apprenticeship model.
    The Department invites public comment on the benefits of this NPRM 
with the goal of ensuring a thorough consideration and discussion at 
the final rule stage.
3. Quantitative Analysis Considerations
    The Department estimated the costs of the proposed rule relative to 
the existing baseline (i.e., no Industry Programs). In accordance with 
the regulatory analysis guidance articulated in OMB Circular A-4 and 
consistent with the Department's practices in previous rulemakings, 
this regulatory analysis focuses on the likely consequences of the 
proposed rule (i.e., the costs that are expected to accrue to the 
affected entities). The analysis covers 10 years to ensure it captures 
the major costs that are likely to accrue over time. The Department 
expresses the quantifiable impacts in 2017 dollars and uses discount 
rates of 3 and 7 percent, pursuant to Circular A-4. The Department 
invites comment on the analysis in this section.
a. Estimated Number of Applications and SREs
    To calculate the annual costs, the Department first needed to 
estimate the number of applications and SREs over

[[Page 29983]]

the 10-year analysis period. The Department believes a reliable 
guidepost for estimating the number of SRE applications is the number 
of entities that submitted grant applications in Fiscal Year 2016 under 
the Office of Apprenticeship's American Apprenticeship Initiative (AAI) 
grants program. The Department solicits comment on whether the AAI 
grant program is the best guidepost for estimating the number of 
applications and SREs, or whether superior alternative options exist.
    Like Industry-Recognized Apprenticeship Programs, the AAI grant 
program was designed to encourage innovative approaches to the 
development of apprenticeship programs by a wide cross-section of 
groups, including private sector employers, labor unions, educational 
institutions, and not-for-profit organizations. In the four months 
during which AAI grant applications were accepted, the Office of 
Apprenticeship received 191 applications for grants from the intended 
cross-section of program sponsors and innovators. The 191 AAI 
applicants were diverse in terms of geography, industry sector, and 
apprenticeship-program design. The Department anticipates that the 
diversity in AAI applicants would be replicated in the context of this 
proposed rule.
    Starting with 191 AAI grantee applicants as a reasonably-analogous 
baseline, the Department rounded this figure slightly upwards to 200 to 
provide for ease of estimation. The Department then reduced this number 
by 10 percent to 180 to account for how some entities in industries 
that applied for AAI grants may choose not to seek to participate in 
Industry Programs. The Department then adjusted this figure 50 percent 
higher to account for its planned efforts to promote Industry Programs 
in the private sector, resulting in an estimate of 270 SRE applications 
in Year 1 (= 180 x 1.5). The Department further estimates that it would 
recognize approximately 75 percent of applicants as SREs, either during 
their initial submission or their resubmission as permitted under 
paragraph 29.21(d)(1). Accordingly, the Department estimates that there 
would be 203 SREs (= 270 x 75%) in Year 1.
    To estimate the number of applications and SREs in Years 2-10, the 
Department began by assuming that the total number of SREs would 
increase by 5 percent per year based on historic growth in the 
registered apprenticeship program. The Department seeks comment on this 
assumption. For example, in Year 2 the total number of SREs is 
estimated to be 213 (= 203 SREs in Year 1 x 1.05). The last column in 
Exhibit 2 shows the total number of SREs each year based on the 
Department's 5 percent growth rate assumption.
    Next, the Department calculated the number of new SREs. For Years 
1-5, the estimated number of new SREs is simply the difference between 
the total number of SREs each year. For example, in Year 5 the number 
of new SREs is estimated to be 12 (= 247 total SREs in Year 5-235 total 
SREs in Year 4).\27\ But in Year 6, the calculation has an additional 
component because SREs would be recognized for 5 years, so SREs that 
wish to be recognized for another 5 years would need to undergo the 
Department's process for continued recognition. For purposes of this 
analysis, the Department estimates that 90 percent of SREs would 
undergo the Department's process for continued recognition. Thus, 183 
SREs (= 203 new SREs in Year 1 x 90%) would submit applications for 
continued recognition in Year 6. The Department estimates that there 
would be 33 new SREs in Year 6, which reflects the 5 percent growth 
between Year 5 and Year 6 (259-247 = 12),\28\ plus new SREs that would 
supplant the 10 percent of Year 1 SREs that do not submit applications 
for continued recognition in Year 6 (203-183 = 20).\29\ This same 
calculation was used for Years 7-10.
---------------------------------------------------------------------------

    \27\ Note: 12 / 235 = 5 percent, which is the estimated growth 
rate for total SREs.
    \28\ Note: 12 / 247 = 5 percent, which is the estimated growth 
rate for total SREs.
    \29\ The numbers do not sum to the total due to rounding. After 
calculating the estimated numbers of applications and SREs, the 
Department rounded the numbers to integers to use in the remaining 
calculations in this analysis.
---------------------------------------------------------------------------

    Then, the Department estimated the number of new applications in 
Years 2-10 by dividing the number of new SREs each year by 75 percent 
since 75 percent of applicants are assumed to become recognized as 
SREs. For example, in Year 6, the number of new applications is 
estimated to be 44 (= 33 new SREs / 75%).
    The number of applications for continued recognition was calculated 
by multiplying the number of new SREs five years prior by 90 percent 
since the Department assumes that 90 percent of SREs would undergo the 
Department's process for continued recognition. For example, the 
Department estimates that 183 SREs (= 203 new SREs in Year 1 x 90%) 
would submit applications for continued recognition in Year 6, and that 
9 SREs (= 10 new SREs in Year 2 x 90%) would submit applications for 
continued recognition in Year 7.
    Finally, the number of total applications each year was estimated 
by summing the estimated number of new applications and the estimated 
number of applications for continued recognition each year. For 
example, in Year 1 the total number of applications is estimated to be 
270 (= 270 new applications + 0 applications for continued 
recognition), while in Year 6 the total number of applications is 
estimated to be 226 (= 44 new applications + 183 applications for 
continued recognition).\30\
---------------------------------------------------------------------------

    \30\ The numbers do not sum to the total due to rounding.
---------------------------------------------------------------------------

    Exhibit 2 presents the projected number of applications and SREs 
for each year of the analysis period.

[[Page 29984]]

[GRAPHIC] [TIFF OMITTED] TP25JN19.001

b. Estimated Number of Industry Programs
    To estimate the number of Industry Programs, the Department looked 
at the number of programs in the registered apprenticeship system in 
relevant contexts and, based on those data and related considerations, 
estimated that each SRE would recognize approximately 32 Industry 
Programs. The recognition of all 32 Industry Programs is not likely to 
occur immediately after an SRE is recognized by the Department; rather, 
an SRE would probably recognize additional programs each year so that 
by the end of its tenth year, the SRE will have recognized 32 programs. 
For purposes of this analysis, the Department estimates that an SRE 
would recognize 10 new Industry Programs in its first year as an SRE, 8 
new Industry Programs in its second year, 5 new Industry Programs in 
its third year, 3 new Industry Programs in its fourth year, and 1 new 
Industry Program per year in its fifth through tenth years.
    Based on these assumptions, the number of new Industry Programs in 
Year 1 is estimated to be 2,030 (= 203 new SREs in Year 1 x 10 new 
Industry Programs per SRE). The number of new Industry Programs in Year 
2 is estimated to be 1,724 [= (203 new SREs in Year 1 x 8 new Industry 
Programs per SRE) + (10 new SREs in Year 2 x 10 new Industry Programs 
per SRE)]. As explained above, the Department assumes that 90 percent 
of SREs would undergo the Department's process for continued 
recognition, so in Year 6 the estimated number of new Year 1 SREs would 
shrink to 183 (= 203 new SREs in Year 1 x 90%). Accordingly, the number 
of new Industry Programs in Year 6 is estimated to be 707 [= (183 Year 
1 SREs with continued recognition x 1 new Industry Programs per SRE) + 
(10 new SREs in Year 2 x 1 new Industry Programs per SRE) + (11 new 
SREs in Year 3 x 3 new Industry Programs per SRE) + (11 new SREs in 
Year 4 x 5 new Industry Programs per SRE) + (12 new SREs in Year 5 x 8 
new Industry Programs per SRE) + (33 new SREs in Year 6 x 10 new 
Industry Programs per SRE)].
    The total number of Industry Programs per SRE equals the cumulative 
total of new Industry Programs per SRE. So, a new SRE in Year 1 is 
estimated to have recognized a total of 18 Industry Programs in Year 2 
(= 10 new Industry Programs in Year 1 + 8 new Industry Programs in Year 
2). Therefore, the total number of Industry Programs in Year 2 is 
estimated to be 3,754 [= (203 new SREs in Year 1 x 18 total Industry 
Programs per SRE) + (10 new SREs in Year 2 x 10 total Industry Programs 
per SRE)]. As explained above, the estimated number of new Year 1 SREs 
is expected to shrink to 183 in Year 6. Accordingly, the total number 
of Industry Programs in Year 6 is estimated to be 6,479 [= (183 Year 1 
SREs with continued recognition x 28 total Industry Programs per SRE) + 
(10 new SREs in Year 2 x 27 total Industry Programs per SRE) + (11 new 
SREs in Year 3 x 26 total Industry Programs per SRE) + (11 new SREs in 
Year 4 x 23 total Industry Programs per SRE) + (12 new SREs in Year 5 x 
18 total Industry Programs per SRE) + (33 new SREs in Year 6 x 10 total 
Industry Programs per SRE)].
    Exhibit 3 presents the projected number of Industry Programs over 
the 10-year analysis period.

[[Page 29985]]

[GRAPHIC] [TIFF OMITTED] TP25JN19.002

c. Compensation Rates
    The Department anticipates that the bulk of the workload for 
private sector workers would be performed by employees in occupations 
similar to the occupation titled ``Training and Development Managers'' 
in the Standard Occupational Classification System. According to the 
Department's Bureau of Labor Statistics (BLS), the mean hourly wage 
rate for Training and Development Managers in May 2017 was $56.58.\31\ 
For this analysis, the Department used a fringe benefits rate of 46 
percent \32\ and an overhead rate of 54 percent,\33\ resulting in a 
fully loaded hourly compensation rate for Training and Development 
Managers of $113.16 [= $56.58 + ($56.58 x 46%) + ($56.58 x 54%)].
---------------------------------------------------------------------------

    \31\ Source: Bureau of Labor Statistics, Occupational Employment 
Statistics, May 2017, https://www.bls.gov/oes/2017/may/oes113131.htm.
    \32\ Source: Bureau of Labor Statistics, Employer Costs for 
Employee Compensation, https://www.bls.gov/ncs/data.htm. Wages and 
salaries averaged $24.26 per hour worked in 2017, while benefit 
costs averaged $11.26, which is a benefits rate of 46 percent.
    \33\ Source: U.S. Department of Health and Human Services, 
Guidelines for Regulatory Impact Analysis (2016), https://aspe.hhs.gov/system/files/pdf/242926/HHS_RIAGuidance.pdf. In its 
guidelines, HHS states, ``as an interim default, while HHS conducts 
more research, analysts should assume overhead costs (including 
benefits) are equal to 100 percent of pre-tax wages.'' HHS explains 
that 100 percent is roughly the midpoint between 46 and 150 percent, 
with 46 percent based on ECEC data that suggest benefits average 46 
percent of wages and salaries, and 150 percent based on the private 
sector ``rule of thumb'' that fringe benefits plus overhead equal 
150 percent of wages. To isolate the overhead costs from HHS's 100 
percent assumption, the Department subtracted the 46 percent 
benefits rate that HHS references, resulting in an overhead rate of 
approximately 54 percent.
---------------------------------------------------------------------------

    The compensation rate for the Administrator of the Department's 
Office of Apprenticeship is based on the salary of a Federal employee 
at Level IV of the Senior Executive Service, which is $164,200 per 
annum; \34\ the corresponding hourly base pay for an SES at this level 
is $78.94 (= $164,200 / 2,080 hours). The Department used a fringe 
benefits rate of 69 percent \35\ and an overhead rate of 54 percent, 
resulting in a fully loaded hourly compensation rate for the 
Administrator of $176.04 [= $78.94 + ($78.94 x 69%) + ($78.94 x 54%)].
---------------------------------------------------------------------------

    \34\ Source: Office of Personnel Management, Rates of Basic Pay 
for the Executive Schedule, https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2018/EX.pdf.
    \35\ Source: Congressional Budget Office, ``Comparing the 
Compensation of Federal and Private-Sector Employees, 2011 to 
2015,'' April 2017, www.cbo.gov/publication/52637. The wages of 
Federal workers averaged $38.30 per hour over the study period, 
while the benefits averaged $26.50 per hour, which is a benefits 
rate of 69 percent.
---------------------------------------------------------------------------

    The compensation rate for a Program Analyst in the Department's 
Office of Apprenticeship was estimated using the midpoint (Step 5) for 
Grade 13 of the General Schedule, which is $52.66 in the Washington, 
DC, locality area.\36\ The Department used a fringe benefits rate of 69 
percent and an overhead rate of 54 percent, resulting in a fully loaded 
hourly compensation rate for Program Analysts of $117.44 [= $52.66 + 
($52.66 x 69%) + ($52.66 x 54%)].
---------------------------------------------------------------------------

    \36\ Source: Office of Personnel Management, General Schedule 
(GS) Locality Pay Tables, https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2018/DCB_h.pdf.
---------------------------------------------------------------------------

    The compensation rate for an Administrative Law Judge is based on 
the salary of a Federal Administrative Law Judge at AL-3 Rate F, which 
is $174,500 per annum; \37\ the corresponding hourly base pay for an 
Administrative Law Judge at this level is $83.89 (= $174,500 / 2,080 
hours). The Department used a fringe benefits rate of 69 percent and an 
overhead rate of 54 percent, resulting in a fully loaded hourly 
compensation rate for an Administrative Law Judge of $187.07 [= $83.89 
+ ($83.89 x 69%) + ($83.89 x 54%)].
---------------------------------------------------------------------------

    \37\ Source: Office of Personnel Management, Administrative Law 
Judges Locality Rates of Pay, https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2018/ALJ_LOC.pdf.
---------------------------------------------------------------------------

    The compensation rate for a Staff Attorney in the Department's 
Office of Administrative Law Judges was estimated using the highest 
level (Step 10) for Grade 15 of the General Schedule, which is $78.68 
in the Washington, DC, locality area.\38\ The Department used a fringe 
benefits rate of 69 percent and an overhead rate of 54 percent, 
resulting in a fully loaded hourly compensation rate for Staff 
Attorneys of $175.46 [= $78.68 + ($78.68 x 69%) + ($78.68 x 54%)].
---------------------------------------------------------------------------

    \38\ Source: Office of Personnel Management, General Schedule 
(GS) Locality Pay Tables, https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2018/DCB_h.pdf.
---------------------------------------------------------------------------

    The compensation rates for a Legal Assistant and Law Clerk in the 
Department's Office of Administrative Law Judges were estimated using 
the midpoint (Step 5) for Grade 11 of the General Schedule, which is 
$36.95 in the Washington, DC, locality area.\39\ The Department used a 
fringe benefits rate of 69 percent and an overhead rate of 54 percent, 
resulting in a fully loaded hourly compensation rate for Legal 
Assistants and Law Clerks of $82.40 [= $36.95 + ($36.95 x 69%) + 
($36.95 x 54%)].
---------------------------------------------------------------------------

    \39\ Id.
---------------------------------------------------------------------------

    The compensation rate for a Paralegal in the Department's Office of 
Administrative Law Judges was estimated using the midpoint (Step 5) for 
Grade 7 of the General Schedule, which is $24.96 in the Washington, DC, 
locality area.\40\ The Department used a fringe benefits rate of 69 
percent and an overhead rate of 54 percent, resulting in a fully loaded 
hourly compensation rate

[[Page 29986]]

for Paralegals of $55.66 [= $24.96 + ($24.96 x 69%) + ($24.96 x 54%)].
---------------------------------------------------------------------------

    \40\ Id.
---------------------------------------------------------------------------

    The Department used the hourly compensation rates presented in 
Exhibit 4 throughout this analysis to estimate the labor costs for each 
proposed provision.
[GRAPHIC] [TIFF OMITTED] TP25JN19.003

4. Subject-by-Subject Analysis
    The Department's subject-by-subject analysis covers the estimated 
costs of the proposed rule. The hourly time burdens and other estimates 
used to quantify the costs are largely based on the Department's 
experience with the registered apprenticeship program.
a. Costs
(1) Rule Familiarization
    When the proposed rule takes effect, prospective SREs would need to 
familiarize themselves with the new regulation, thereby incurring a 
one-time cost. To estimate the cost of rule familiarization for the 10-
year period of this analysis, the Department multiplied the projected 
number of new SRE applications in each year by the estimated time to 
review the rule (2 hours) and by the hourly compensation rate for 
Training and Development Managers ($113.16 per hour). For example, the 
projected number of new SRE applications in Year 1 is 270, so the 
estimated Year 1 cost is $61,106 (= 270 new SRE applications x 2 hours 
x $113.16 per hour). The annualized cost over the 10-year analysis 
period is estimated at $11,032 at a discount rate of 3 percent and 
$12,059 at a discount rate of 7 percent. The total cost over the 10-
year analysis period is estimated at $94,109 at a discount rate of 3 
percent and $84,698 at a discount rate of 7 percent.
    In addition, prospective Industry Programs would need to 
familiarize themselves with elements of the new rule. To estimate the 
cost of rule familiarization for Industry Programs, the Department 
multiplied the projected number of new Industry Programs in each year 
by the estimated time to review the rule (1 hour) and by the hourly 
compensation rate for Training and Development Managers ($113.16 per 
hour). For example, the projected number of new Industry Programs in 
Year 1 is 2,030, so the estimated Year 1 cost is $229,715 (= 2,030 new 
Industry Programs x 1 hour x $113.16 per hour). The annualized cost 
over the 10-year analysis period is estimated at $113,779 at a discount 
rate of 3 percent and $119,017 at a discount rate of 7 percent. The 
total cost over the 10-year analysis period is estimated at $970,559 at 
a discount rate of 3 percent and $835,928 at a discount rate of 7 
percent.
    The Department seeks comment on whether additional entities should 
be included in its cost estimates for rule familiarization.
(2) SRE Applications
    To become an SRE, an entity would need to submit an application to 
the Department, and then the Administrator would determine whether the 
entity is qualified to be an SRE. The proposed application form titled 
``Industry-Recognized Apprenticeship Programs Standards Recognition 
Entity Information'' contains six sections. The estimated costs for 
completing each section are detailed below.
i. Section I--Standards Recognition Entity Identifying Information
    The estimated average response time for a prospective SRE to 
provide the identifying information requested in Section I is 
approximately 2 hours, which includes the time to gather and attach the 
documentation for this section. To estimate the costs for completing 
Section I over the 10-year analysis period, the Department multiplied 
the projected number of SRE applications in each year by the estimated 
time to complete Section I (2 hours) and by the hourly compensation 
rate for Training and Development Managers ($113.16 per hour). For 
example, the projected number of SRE applications in Year 1 is 270, so 
the estimated Year 1 cost is $61,106 (= 270 SRE applications x 2 hours 
x $113.16 per hour). The annualized cost over the 10-year analysis 
period is estimated at $15,860 at a discount rate of 3 percent and 
$16,655 at a discount rate of 7 percent. The total cost over the 10-
year analysis period is estimated at $135,288 at a discount rate of 3 
percent and $116,981 at a discount rate of 7 percent.
ii. Section II--Capabilities and Experience of the Standards 
Recognition Entity
    The estimated average response time for a prospective SRE to 
describe its operations, capabilities, experience, and qualifications 
to be an SRE is approximately 2 hours, including the time to gather the 
necessary documentation. To estimate the costs for completing Section 
II over the 10-year analysis period, the Department multiplied the 
projected number of SRE applications in each year by the estimated time 
to complete Section II (2 hours) and by the hourly compensation rate 
for Training and Development Managers ($113.16 per hour). For example, 
the projected number of SRE applications in Year 1 is 270, so the 
estimated Year 1 cost is $61,106 (= 270 SRE applications x 2 hours x 
$113.16

[[Page 29987]]

per hour). The annualized cost over the 10-year analysis period is 
estimated at $15,860 at a discount rate of 3 percent and $16,655 at a 
discount rate of 7 percent. The total cost over the 10-year analysis 
period is estimated at $135,288 at a discount rate of 3 percent and 
$116,981 at a discount rate of 7 percent.
iii. Section III--Evaluating and Monitoring Elements of a High-Quality 
Apprenticeship Program
    The estimated average response time for a prospective SRE to 
provide information regarding the elements of the Industry Programs it 
would recognize is approximately 16 hours, including the time to gather 
the necessary documentation. To estimate the costs for completing 
Section III over the 10-year analysis period, the Department multiplied 
the projected number of SRE applications in each year by the estimated 
time to complete Section III (16 hours) and by the hourly compensation 
rate for Training and Development Managers ($113.16 per hour). For 
example, the projected number of SRE applications in Year 1 is 270, so 
the estimated Year 1 cost is $488,851 (= 270 SRE applications x 16 
hours x $113.16 per hour). The annualized cost over the 10-year 
analysis period is estimated at $126,879 at a discount rate of 3 
percent and $133,243 at a discount rate of 7 percent. The total cost 
over the 10-year analysis period is estimated at $1,082,306 at a 
discount rate of 3 percent and $935,845 at a discount rate of 7 
percent.
iv. Section IV--Policies and Procedures
    The estimated average response time for a prospective SRE to 
provide information concerning its proposed policies and procedures for 
recognizing and quality-control of Industry Programs is approximately 
13 hours, including the time to gather the necessary documentation. To 
estimate the costs for completing Section IV over the 10-year analysis 
period, the Department multiplied the projected number of SRE 
applications in each year by the estimated time to complete Section IV 
(13 hours) and by the hourly compensation rate for Training and 
Development Managers ($113.16 per hour). For example, the projected 
number of SRE applications in Year 1 is 270, so the estimated Year 1 
cost is $397,192 (= 270 SRE applications x 13 hours x $113.16 per 
hour). The annualized cost over the 10-year analysis period is 
estimated at $103,089 at a discount rate of 3 percent and $108,260 at a 
discount rate of 7 percent. The total cost over the 10-year analysis 
period is estimated at $879,374 at a discount rate of 3 percent and 
$760,374 at a discount rate of 7 percent.
v. Section V--Additional Representations of Program Quality by the 
Standards Recognition Entity
    The Department estimates that it would take five minutes for each 
prospective SRE to read and attest to additional representations of 
program quality. To estimate the costs for completing Section V over 
the 10-year analysis period, the Department multiplied the projected 
number of SRE applications in each year by the estimated time to 
complete Section V (5 minutes) and by the hourly compensation rate for 
Training and Development Managers ($113.16 per hour). For example, the 
projected number of SRE applications in Year 1 is 270, so the estimated 
Year 1 cost is $2,444 (= 270 SRE applications x 5 minutes x $113.16 per 
hour). The annualized cost over the 10-year analysis period is 
estimated at $634 at a discount rate of 3 percent and $666 at a 
discount rate of 7 percent. The total cost over the 10-year analysis 
period is estimated at $5,412 at a discount rate of 3 percent and 
$4,679 at a discount rate of 7 percent.
vi. Section VI--Attestation
    The Department estimates that it would take five minutes for each 
prospective SRE to review the application for completeness and to sign 
it. To estimate the costs for completing Section VI over the 10-year 
analysis period, the Department multiplied the projected number of SRE 
applications in each year by the estimated time to complete Section VI 
(5 minutes) and by the hourly compensation rate for Training and 
Development Managers ($113.16 per hour). For example, the projected 
number of SRE applications in Year 1 is 270, so the estimated Year 1 
cost is $2,444 (= 270 SRE applications x 5 minutes x $113.16 per hour). 
The annualized cost over the 10-year analysis period is estimated at 
$634 at a discount rate of 3 percent and $666 at a discount rate of 7 
percent. The total cost over the 10-year analysis period is estimated 
at $5,412 at a discount rate of 3 percent and $4,679 at a discount rate 
of 7 percent.
(3) Resubmitting an Application
    If a prospective SRE is denied recognition, it may resubmit its 
application after remedying any deficiencies. For purposes of this 
analysis, the Department estimates that approximately 30 percent of 
applications would be denied on the first attempt, and that 50 percent 
of the denied applications would be resubmitted after the deficiencies 
have been addressed, which means 15 percent of all applications would 
be resubmitted. The Department estimates that remedying the 
deficiencies and resubmitting the application would take approximately 
16 hours. To estimate these costs over the 10-year analysis period, the 
Department multiplied the projected number of SRE applications in each 
year by 15 percent, and then multiplied that product by the estimated 
time to resubmit the application (16 hours) and by the hourly 
compensation rate for Training and Development Managers ($113.16 per 
hour). For example, the projected number of SRE applications in Year 1 
is 270, so the estimated Year 1 cost is $73,328 (= 270 SRE applications 
x 15% x 16 hours x $113.16 per hour). The annualized cost over the 10-
year analysis period is estimated at $19,032 at a discount rate of 3 
percent and $19,986 at a discount rate of 7 percent. The total cost 
over the 10-year analysis period is estimated at $162,346 at a discount 
rate of 3 percent and $140,377 at a discount rate of 7 percent.
(4) Request for Administrative Review of Denial
    If a prospective SRE is denied recognition, it may request 
administrative review by the Department's Office of Administrative Law 
Judges. For purposes of this analysis, the Department estimates that 
approximately 1 percent of all applications would request 
administrative review and that filing a request for administrative 
review would take approximately 60 hours. To estimate these costs over 
the 10-year analysis period, the Department multiplied the projected 
number of SRE applications in each year by 1 percent, and then 
multiplied that product by the estimated time to file a request for 
administrative review (60 hours) and by the hourly compensation rate 
for Training and Development Managers ($113.16 per hour). For example, 
the projected number of SRE applications in Year 1 is 270, so the 
estimated Year 1 cost is $18,332 (= 270 SRE applications x 1% x 60 
hours x $113.16 per hour). The annualized cost over the 10-year 
analysis period is estimated at $3,593 at a discount rate of 3 percent 
and $3,895 at a discount rate of 7 percent. The total cost over the 10-
year analysis period is estimated at $30,649 at a discount rate of 3 
percent and $27,357 at a discount rate of 7 percent.

[[Page 29988]]

(5) Notification of Substantive Changes by SRE
    In accordance with Sec.  29.21(c)(2), an SRE would need to notify 
the Administrator and provide all related material if it makes a 
substantive change to its processes or seeks to recognize Industry 
Programs in additional industries or occupational areas. The Department 
estimates that approximately 50 percent of SREs would make a 
substantive change each year and that complying with this proposed 
provision would take approximately 10 hours. To estimate these costs 
over the 10-year analysis period, the Department multiplied the 
projected number of SREs in each year by 50 percent, and then 
multiplied that product by the estimated time to comply with this 
proposed provision (10 hours) and by the hourly compensation rate for 
Training and Development Managers ($113.16 per hour). For example, the 
projected number of SREs in Year 1 is 203, so the estimated Year 1 cost 
is $114,857 (= 203 SREs x 50% x 10 hours x $113.16 per hour). The 
annualized cost over the 10-year analysis period is estimated at 
$142,797 at a discount rate of 3 percent and $140,632 at a discount 
rate of 7 percent. The total cost over the 10-year analysis period is 
estimated at $1,218,091 at a discount rate of 3 percent and $987,737 at 
a discount rate of 7 percent.
(6) Recognition or Rejection of Apprenticeship Programs Seeking 
Recognition
    In accordance with paragraph 29.22(a)(1), an SRE would need to 
recognize or reject a prospective Industry Program in a timely manner. 
Moreover, in accordance with Sec.  29.22(b), an SRE would need to 
validate its Industry Programs' compliance with the requirements listed 
in Sec.  29.22(a)(4) when the SRE provides the Administrator with 
notice of recognition of an Industry Program. The Department estimates 
that complying with these two proposed provisions would take 
approximately 12 hours per program seeking recognition per year. The 
Department used the estimated number of new Industry Programs as a 
proxy for this calculation, anticipating that the vast majority of 
programs seeking recognition would be recognized. To estimate these 
costs over the 10-year analysis period, the Department multiplied the 
projected number of new Industry Programs in each year by the estimated 
time to comply with this proposed provision (12 hours) and by the 
hourly compensation rate for Training and Development Managers ($113.16 
per hour). For example, the projected number of new Industry Programs 
in Year 1 is 2,030, so the estimated Year 1 cost is $2,756,578 (= 2,030 
Industry Programs x 12 hours x $113.16 per hour). The annualized cost 
over the 10-year analysis period is estimated at $1,365,350 at a 
discount rate of 3 percent and $1,428,208 at a discount rate of 7 
percent. The total cost over the 10-year analysis period is estimated 
at $11,646,711 at a discount rate of 3 percent and $10,031,136 at a 
discount rate of 7 percent.
(7) Inform Administrator of Industry Program Recognition or Termination
    In accordance with Sec.  29.22(a)(2), an SRE would need to inform 
the Administrator when it has recognized or terminated the recognition 
of an Industry Program. The Department estimates that complying with 
this proposed provision would take approximately 30 minutes per year. 
To estimate these costs over the 10-year analysis period, the 
Department multiplied the projected number of SREs in each year by the 
estimated time to comply with this proposed provision (30 minutes) and 
by the hourly compensation rate for Training and Development Managers 
($113.16 per hour). For example, the projected number of SREs in Year 1 
is 203, so the estimated Year 1 cost is $11,486 (= 203 SREs x 30 
minutes x $113.16 per hour). The annualized cost over the 10-year 
analysis period is estimated at $14,280 at a discount rate of 3 percent 
and $14,063 at a discount rate of 7 percent. The total cost over the 
10-year analysis period is estimated at $121,809 at a discount rate of 
3 percent and $98,774 at a discount rate of 7 percent.
(8) Provision of Data or Information to the Administrator
    In accordance with Sec.  29.22(a)(3), an SRE would need to provide 
to the Administrator any data or information the Administrator is 
expressly authorized to collect. The Department estimates that 
approximately 10 percent of SREs would need to provide additional data 
or information each year and that complying with this proposed 
provision would take approximately 2 hours per year. To estimate these 
costs over the 10-year analysis period, the Department multiplied the 
projected number of SREs in each year by 10 percent, and then 
multiplied that product by the estimated time to comply with this 
proposed provision (2 hours) and by the hourly compensation rate for 
Training and Development Managers ($113.16 per hour). For example, the 
projected number of SREs in Year 1 is 203, so the estimated Year 1 cost 
is $4,594 (= 203 SREs x 10% x 2 hours x $113.16 per hour). The 
annualized cost over the 10-year analysis period is estimated at $5,712 
at a discount rate of 3 percent and $5,625 at a discount rate of 7 
percent. The total cost over the 10-year analysis period is estimated 
at $48,724 at a discount rate of 3 percent and $39,509 at a discount 
rate of 7 percent.
(9) SREs' Disclosure of Credentials That Apprentices Will Earn
    In accordance with Sec.  29.22(c), an SRE would need to disclose 
the credential(s) that apprentices will earn during their successful 
participation in or upon completion of an Industry Program. An SRE 
could disclose these credentials on its website, for example. The 
Department estimates that complying with this proposed provision would 
take approximately 30 minutes per year. To estimate these costs over 
the 10-year analysis period, the Department multiplied the projected 
number of SREs in each year by the estimated time to comply with this 
proposed provision (30 minutes) and by the hourly compensation rate for 
Training and Development Managers ($113.16 per hour). For example, the 
projected number of SREs in Year 1 is 203, so the estimated Year 1 cost 
is $11,486 (= 203 SREs x 30 minutes x $113.16 per hour). The annualized 
cost over the 10-year analysis period is estimated at $14,280 at a 
discount rate of 3 percent and $14,063 at a discount rate of 7 percent. 
The total cost over the 10-year analysis period is estimated at 
$121,809 at a discount rate of 3 percent and $98,774 at a discount rate 
of 7 percent.
(10) SREs' Quality Control of Industry Programs
    In accordance with Sec.  29.22(h), an SRE would need to remain in 
an ongoing quality-control relationship with the Industry Programs it 
has recognized. The Department estimates that complying with this 
proposed provision would take approximately 80 hours per year. To 
estimate these costs over the 10-year analysis period, the Department 
multiplied the projected number of SREs in each year by the estimated 
time to comply with this proposed provision (80 hours) and by the 
hourly compensation rate for Training and Development Managers ($113.16 
per hour). For example, the projected number of SREs in Year 1 is 203, 
so the estimated Year 1 cost is $1,837,718 (= 203 SREs x 80 hours x 
$113.16 per hour). The annualized cost over the 10-year analysis period 
is estimated at

[[Page 29989]]

$2,284,760 at a discount rate of 3 percent and $2,250,106 at a discount 
rate of 7 percent. The total cost over the 10-year analysis period is 
estimated at $19,489,464 at a discount rate of 3 percent and 
$15,803,800 at a discount rate of 7 percent.
(11) Provision of Performance Data on Industry Programs
    In accordance with Sec.  29.22(j), an SRE must make publicly 
available performance data for each Industry Program it recognizes. The 
Department estimates that complying with this proposed provision would 
take approximately 30 hours per year. To estimate these costs over the 
10-year analysis period, the Department multiplied the projected number 
of SREs in each year by the estimated time to comply with this proposed 
provision (30 hours) and by the hourly compensation rate for Training 
and Development Managers ($113.16 per hour). For example, the projected 
number of SREs in Year 1 is 203, so the estimated Year 1 cost is 
$689,144 (= 203 SREs x 30 hours x $113.16 per hour). The annualized 
cost over the 10-year analysis period is estimated at $856,785 at a 
discount rate of 3 percent and $843,790 at a discount rate of 7 
percent. The total cost over the 10-year analysis period is estimated 
at $7,308,549 at a discount rate of 3 percent and $5,926,425 at a 
discount rate of 7 percent.
    In order for an SRE to comply with these provisions, the Industry 
Programs it recognizes would need to provide the pertinent performance 
data. The Department estimates that it would take Industry Programs 
approximately 3 hours per year to collect and provide the relevant 
data. To estimate these costs over the 10-year analysis period, the 
Department multiplied the projected number of Industry Programs in each 
year by 3 hours and by the hourly compensation rate for Training and 
Development Managers ($113.16 per hour). For example, the projected 
number of Industry Programs in Year 1 is 2,030, so the estimated Year 1 
cost is $689,144 (= 2,030 Industry Programs x 3 hours x $113.16 per 
hour). The annualized cost over the 10-year analysis period is 
estimated at $2,040,383 at a discount rate of 3 percent and $1,965,718 
at a discount rate of 7 percent. The total cost over the 10-year 
analysis period is estimated at $17,404,884 at a discount rate of 3 
percent and $13,806,381 at a discount rate of 7 percent.
(12) Industry Programs' Disclosure of Wages to Apprentices
    In accordance with Sec.  29.22(a)(4)(vii), Industry Programs would 
need to provide a written notice to apprentices of what wages 
apprentices will receive and under what circumstances apprentices' 
wages will increase. The Department assumes that the vast majority of 
entities provide wage notifications to their employees as part of their 
regular business practices, so only about 10 percent of Industry 
Programs would incur this burden as an additional cost under this 
proposed rule. The Department estimates that it would take Industry 
Programs approximately 5 minutes per year to comply with this 
provision. To estimate these costs over the 10-year analysis period, 
the Department multiplied the projected number of Industry Programs in 
each year by 10 percent, and then multiplied that product by the 
estimated time to comply with this proposed provision (5 minutes) and 
by the hourly compensation rate for Training and Development Managers 
($113.16 per hour). For example, the projected number of Industry 
Programs in Year 1 is 2,030, so the estimated Year 1 cost is $1,838 (= 
2,030 Industry Programs x 10% x 5 minutes x $113.16 per hour). The 
annualized cost over the 10-year analysis period is estimated at $5,441 
at a discount rate of 3 percent and $5,242 at a discount rate of 7 
percent. The total cost over the 10-year analysis period is estimated 
at $46,413 at a discount rate of 3 percent and $36,817 at a discount 
rate of 7 percent.
(13) Industry Programs' Disclosure of Ancillary Costs to Apprentices
    In accordance with Sec.  29.22(a)(4)(ix), Industry Programs would 
need to disclose any ancillary costs or expenses that will be charged 
to apprentices. The Department assumes that the vast majority of 
entities disclose ancillary costs or expenses to their employees as 
part of their regular business practices, so only about 10 percent of 
Industry Programs would incur this burden as an additional cost under 
this proposed rule. The Department estimates that it would take 
Industry Programs approximately 5 minutes per year to comply with this 
provision. To estimate these costs over the 10-year analysis period, 
the Department multiplied the projected number of Industry Programs in 
each year by 10 percent, and then multiplied that product by the 
estimated time to comply with this proposed provision (5 minutes) and 
by the hourly compensation rate for Training and Development Managers 
($113.16 per hour). For example, the projected number of Industry 
Programs in Year 1 is 2,030, so the estimated Year 1 cost is $1,838 (= 
2,030 Industry Programs x 10% x 5 minutes x $113.16 per hour). The 
annualized cost over the 10-year analysis period is estimated at $5,441 
at a discount rate of 3 percent and $5,242 at a discount rate of 7 
percent. The total cost over the 10-year analysis period is estimated 
at $46,413 at a discount rate of 3 percent and $36,817 at a discount 
rate of 7 percent.
(14) DOL Development of Online Application Form and Internal Review 
System
    Before an entity could submit an application to become an SRE, the 
Department would first need to develop an online application form and a 
system for managing the internal review process. In addition to the 
first-year software and labor costs, the Department would also incur 
annual maintenance costs.
    The Department estimates that the first-year software and labor 
costs to develop the online system would total $608,500. Contractor 
labor for developing the program and the application form would account 
for 20 percent of the total cost, contractor labor for developing a 
public website that would accept the applications and a private system 
for managing the internal review of the applications would account for 
77 percent of the total cost, and material costs for software hosting 
and licensing would account for 3 percent of the total cost. The 
annualized cost over the 10-year analysis period is estimated at 
$69,257 at a discount rate of 3 percent and $80,969 at a discount rate 
of 7 percent. The total cost over the 10-year analysis period is 
estimated at $590,777 at a discount rate of 3 percent and $568,692 at a 
discount rate of 7 percent.
    With respect to annual maintenance, the Department estimates that 
the total for software and labor would be $125,000. Contractor labor to 
support maintenance of the online application form and case management 
system would account for 68 percent of the total cost, while material 
costs for software hosting and licensing fees would account for 32 
percent of the total cost. The total cost over the 10-year analysis 
period is estimated at $1,066,275 at a discount rate of 3 percent and 
$877,948 at a discount rate of 7 percent.

[[Page 29990]]

(15) DOL Development of Online Resource for List of SREs and Industry 
Programs
    Another online tool that would need to be developed by the 
Department would be an online resource for the list of SREs and 
Industry Programs. In addition to the first-year software and labor 
costs, the Department would also incur annual maintenance costs.
    The Department estimates that the first-year software and labor 
costs to develop the online system would total $92,000. Contractor 
labor for developing the online resource would account for 98 percent 
of the total cost, while material costs for software hosting and 
licensing would account for 2 percent of the total cost. The annualized 
cost over the 10-year analysis period is estimated at $10,471 at a 
discount rate of 3 percent and $12,242 at a discount rate of 7 percent. 
The total cost over the 10-year analysis period is estimated at $89,320 
at a discount rate of 3 percent and $85,981 at a discount rate of 7 
percent.
    With respect to annual maintenance, the Department estimates that 
the total for software and labor would be $18,000. Contractor labor to 
support maintenance of the online list of SREs and Industry Programs 
would account for 68 percent of the total cost, while material costs 
for software hosting and licensing fees would account for 32 percent of 
the total cost. The total cost over the 10-year analysis period is 
estimated at $153,544 at a discount rate of 3 percent and $126,424 at a 
discount rate of 7 percent.
(16) DOL Review of SRE Applications
    The following steps summarize the estimated costs that would be 
borne by the Department's Office of Apprenticeship in connection with 
processing and reviewing the application information provided by 
prospective SREs.
i. Step 1: Processing by Program Analysts
    The Department anticipates that the initial intake, review, and 
analysis of the information in the application form would be conducted 
by a Program Analyst in the Office of Apprenticeship. The Department 
estimates that a Program Analyst would take an average of 1 hour to 
review and analyze the information. To estimate these costs over the 
10-year analysis period, the Department multiplied the projected number 
of total SRE applications each year by the estimated time to process 
each application (1 hour) and by the hourly compensation rate for 
Program Analysts ($117.44 per hour). For example, the projected number 
of total SRE applications in Year 1 is 270, so the estimated Year 1 
cost is $31,709 (= 270 SRE applications x 1 hour x $117.44 per hour). 
The annualized cost over the 10-year analysis period is estimated at 
$8,230 at a discount rate of 3 percent and $8,643 at a discount rate of 
7 percent. The total cost over the 10-year analysis period is estimated 
at $70,203 at a discount rate of 3 percent and $60,703 at a discount 
rate of 7 percent.
ii. Step 2: Panel Review
    Applications that pass the initial review process by a Program 
Analyst would then be forwarded to a review panel consisting of one 
Program Analyst and two Federal contractors who would be Training and 
Development Managers. The three panelists would review each application 
and make a recommendation for recognition or denial to the 
Administrator. For purposes of this analysis, the Department estimates 
that 90 percent of applications would pass the initial review process 
by a Program Analyst and would be forwarded to the review panel.
    The Department estimates that the Program Analyst on the review 
panel would take 8 hours to conduct a complete review of each 
application. To estimate these costs over the 10-year analysis period, 
the Department multiplied the projected number of total SRE 
applications each year by 90 percent, and then multiplied this product 
by the estimated time to review each application (8 hours) and by the 
hourly compensation rate for Program Analysts ($117.44 per hour). For 
example, the projected number of total SRE applications in Year 1 is 
270, so the estimated Year 1 cost is $228,303 (= 270 SRE applications x 
90% x 8 hours x $117.44 per hour). The annualized cost over the 10-year 
analysis period is estimated at $59,255 at a discount rate of 3 percent 
and $62,227 at a discount rate of 7 percent. The total cost over the 
10-year analysis period is estimated at $505,459 at a discount rate of 
3 percent and $437,059 at a discount rate of 7 percent.
    The Department estimates that the two Training and Development 
Managers on the review panel would take 8 hours each to conduct a 
complete review of each application. To estimate these costs over the 
10-year analysis period, the Department multiplied the projected number 
of total SRE applications each year by 90 percent, and then multiplied 
this product by the estimated time to review each application (8 hours) 
and by the hourly compensation rate for Training and Development 
Managers ($113.16 per hour) and by 2 to account for both Federal 
contractors on the review panel. For example, the projected number of 
total SRE applications in Year 1 is 270, so the estimated Year 1 cost 
is $439,966 (= 270 SRE applications x 90% x 8 hours x $113.16 per hour 
x 2 Training and Development Managers). The annualized cost over the 
10-year analysis period is estimated at $114,191 at a discount rate of 
3 percent and $119,919 at a discount rate of 7 percent. The total cost 
over the 10-year analysis period is estimated at $974,075 at a discount 
rate of 3 percent and $842,261 at a discount rate of 7 percent.
iii. Step 3: Panel Meeting
    The Department expects that the panel members would meet on a 
consistent basis to discuss their review findings for each application. 
The Department estimates that the Program Analyst on the review panel 
would spend 1 hour per application in meetings with the other 
panelists. To estimate these costs over the 10-year analysis period, 
the Department multiplied the projected number of total SRE 
applications each year by 90 percent, and then multiplied this product 
by the estimated time for meetings (1 hour) and by the hourly 
compensation rate for Program Analysts ($117.44 per hour). For example, 
the projected number of total SRE applications in Year 1 is 270, so the 
estimated Year 1 cost is $28,538 (= 270 SRE applications x 90% x 1 hour 
x $117.44 per hour). The annualized cost over the 10-year analysis 
period is estimated at $7,407 at a discount rate of 3 percent and 
$7,778 at a discount rate of 7 percent. The total cost over the 10-year 
analysis period is estimated at $63,182 at a discount rate of 3 percent 
and $54,632 at a discount rate of 7 percent.
    The Department estimates that the two Training and Development 
Managers on the review panel would each spend 1 hour per application in 
meetings with the other panelists. To estimate these costs over the 10-
year analysis period, the Department multiplied the projected number of 
total SRE applications each year by 90 percent, and then multiplied 
this product by the estimated time for meetings (1 hour) and by the 
hourly compensation rate for Training and Development Managers ($113.16 
per hour) and by 2 to account for both Federal contractors on the 
review panel. For example, the projected number of total SRE 
applications in Year 1 is 270, so the estimated Year 1 cost is $54,996 
(= 270 SRE applications x 90% x 1 hour

[[Page 29991]]

x $113.16 per hour x 2 Training and Development Managers). The 
annualized cost over the 10-year analysis period is estimated at 
$14,274 at a discount rate of 3 percent and $14,990 at a discount rate 
of 7 percent. The total cost over the 10-year analysis period is 
estimated at $121,759 at a discount rate of 3 percent and $105,283 at a 
discount rate of 7 percent.
iv. Step 4: Review by the Administrator
    After the three panelists review the applications, the satisfactory 
applications would be forwarded to the Administrator for final review 
and approval. The Administrator would reach a final determination as to 
whether the entities should be recognized as SREs. The Department 
estimates that 70 percent of applications would be forwarded to the 
Administrator and that the Administrator would spend 15 minutes per 
application making a final decision. To estimate these costs over the 
10-year analysis period, the Department multiplied the projected number 
of total SRE applications each year by 70 percent, and then multiplied 
this product by the estimated time for review by the Administrator (15 
minutes) and by the hourly compensation rate for the Administrator 
($176.04 per hour). For example, the projected number of total SRE 
applications in Year 1 is 270, so the estimated Year 1 cost is $8,318 
(= 270 SRE applications x 70% x 15 minutes x $176.04 per hour). The 
annualized cost over the 10-year analysis period is estimated at $2,159 
at a discount rate of 3 percent and $2,267 at a discount rate of 7 
percent. The total cost over the 10-year analysis period is estimated 
at $18,416 at a discount rate of 3 percent and $15,924 at a discount 
rate of 7 percent.
v. Notification of Recognition or Denial of Recognition
    Finally, the Office of Apprenticeship would notify each applicant 
of the results of the review process. Each applicant would either be 
recognized as an SRE or be denied recognition. The Department estimates 
that a Program Analyst would spend an average of 1 hour notifying each 
applicant. To estimate these costs over the 10-year analysis period, 
the Department multiplied the projected number of total SRE 
applications each year by the estimated time for notification (1 hour) 
and by the hourly compensation rate for Program Analysts ($117.44 per 
hour). For example, the projected number of total SRE applications in 
Year 1 is 270, so the estimated Year 1 cost is $31,709 (= 270 SRE 
applications x 1 hour x $117.44 per hour). The annualized cost over the 
10-year analysis period is estimated at $8,230 at a discount rate of 3 
percent and $8,643 at a discount rate of 7 percent. The total cost over 
the 10-year analysis period is estimated at $70,203 at a discount rate 
of 3 percent and $60,703 at a discount rate of 7 percent.
(17) DOL Review of Resubmitted SRE Applications
    For purposes of this analysis, the Department estimates that 
approximately 30 percent of applications would be denied on the first 
attempt, and that 50 percent of the denied applications would be 
resubmitted after the deficiencies have been addressed, which means 15 
percent of all applications would be resubmitted. The Department would 
then follow the same five steps for reviewing the resubmitted 
applications.
i. Resubmission Step 1: Processing by Program Analysts
    The Department estimates that a Program Analyst would take 1 hour 
to process the information in a resubmitted application. To estimate 
the costs over the 10-year analysis period for Step 1 of the 
resubmission review process, the Department multiplied the projected 
number of total SRE applications each year by 15 percent, and then 
multiplied this product by the estimated time to process each 
application (1 hour) and by the hourly compensation rate for Program 
Analysts ($117.44 per hour). For example, the projected number of total 
SRE applications in Year 1 is 270, so the estimated Year 1 cost is 
$4,756 (= 270 SRE applications x 15% x 1 hour x $117.44 per hour). The 
annualized cost over the 10-year analysis period is estimated at $1,234 
at a discount rate of 3 percent and $1,296 at a discount rate of 7 
percent. The total cost over the 10-year analysis period is estimated 
at $10,530 at a discount rate of 3 percent and $9,105 at a discount 
rate of 7 percent.
ii. Resubmission Step 2: Panel Review
    The Department estimates that the Program Analyst on the review 
panel would take 8 hours to conduct a complete review of each 
resubmitted application. To estimate these costs over the 10-year 
analysis period, the Department multiplied the projected number of 
total SRE applications each year by 15 percent, and then multiplied 
this product by the estimated time to review each application (8 hours) 
and by the hourly compensation rate for Program Analysts ($117.44 per 
hour). For example, the projected number of total SRE applications in 
Year 1 is 270, so the estimated Year 1 cost is $38,051 (= 270 SRE 
applications x 15% x 8 hours x $117.44 per hour). The annualized cost 
over the 10-year analysis period is estimated at $9,876 at a discount 
rate of 3 percent and $10,371 at a discount rate of 7 percent. The 
total cost over the 10-year analysis period is estimated at $84,243 at 
a discount rate of 3 percent and $72,843 at a discount rate of 7 
percent.
    The Department estimates that the two Training and Development 
Managers on the review panel would take 8 hours each to conduct a 
complete review of each resubmitted application. To estimate these 
costs over the 10-year analysis period, the Department multiplied the 
projected number of total SRE applications each year by 15 percent, and 
then multiplied this product by the estimated time to review each 
application (8 hours) and by the hourly compensation rate for Training 
and Development Managers ($113.16 per hour) and by 2 to account for 
both Federal contractors on the review panel. For example, the 
projected number of total SRE applications in Year 1 is 270, so the 
estimated Year 1 cost is $73,328 (= 270 SRE applications x 15% x 8 
hours x $113.16 per hour x 2 Training and Development Managers). The 
annualized cost over the 10-year analysis period is estimated at 
$19,032 at a discount rate of 3 percent and $19,986 at a discount rate 
of 7 percent. The total cost over the 10-year analysis period is 
estimated at $162,346 at a discount rate of 3 percent and $140,377 at a 
discount rate of 7 percent.
iii. Resubmission Step 3: Panel Meeting
    The Department estimates that the Program Analyst on the review 
panel would spend 1 hour per resubmitted application in meetings with 
the other panelists. To estimate these costs over the 10-year analysis 
period, the Department multiplied the projected number of total SRE 
applications each year by 15 percent, and then multiplied this product 
by the estimated time for meetings (1 hour) and by the hourly 
compensation rate for Program Analysts ($117.44 per hour). For example, 
the projected number of total SRE applications in Year 1 is 270, so the 
estimated Year 1 cost is $4,756 (= 270 SRE applications x 15% x 1 hour 
x $117.44 per hour). The annualized cost over the 10-year analysis 
period is estimated at $1,234 at a discount rate of 3 percent and 
$1,296 at a discount rate of 7 percent. The total cost over the 10-year 
analysis period is estimated at $10,530 at a discount rate of 3 percent

[[Page 29992]]

and $9,105 at a discount rate of 7 percent.
    The Department estimates that the two Training and Development 
Managers on the review panel would each spend 1 hour per resubmitted 
application in meetings with the other panelists. To estimate these 
costs over the 10-year analysis period, the Department multiplied the 
projected number of total SRE applications each year by 15 percent, and 
then multiplied this product by the estimated time for meetings (1 
hour) and by the hourly compensation rate for Training and Development 
Managers ($113.16 per hour) and by 2 to account for both Federal 
contractors on the review panel. For example, the projected number of 
total SRE applications in Year 1 is 270, so the estimated Year 1 cost 
is $9,166 (= 270 SRE applications x 15% x 1 hour x $113.16 per hour x 2 
Training and Development Managers). The annualized cost over the 10-
year analysis period is estimated at $2,379 at a discount rate of 3 
percent and $2,498 at a discount rate of 7 percent. The total cost over 
the 10-year analysis period is estimated at $20,293 at a discount rate 
of 3 percent and $17,547 at a discount rate of 7 percent.
iv. Resubmission Step 4: Review by the Administrator
    For purposes of this analysis, the Department estimates that one-
third of resubmitted applications would be forwarded to the 
Administrator, which equates to 5 percent of the total number of 
applications (= 15% of all applications x \1/3\ forwarded to the 
Administrator). The Department further estimates that the Administrator 
would spend 15 minutes per resubmitted application making a final 
decision. To estimate these costs over the 10-year analysis period, the 
Department multiplied the projected number of total SRE applications 
each year by 5 percent, and then multiplied this product by the 
estimated time for review by the Administrator (15 minutes) and by the 
hourly compensation rate for the Administrator ($176.04 per hour). For 
example, the projected number of total SRE applications in Year 1 is 
270, so the estimated Year 1 cost is $594 (= 270 SRE applications x 5% 
x 15 minutes x $176.04 per hour). The annualized cost over the 10-year 
analysis period is estimated at $154 at a discount rate of 3 percent 
and $162 at a discount rate of 7 percent. The total cost over the 10-
year analysis period is estimated at $1,315 at a discount rate of 3 
percent and $1,137 at a discount rate of 7 percent.
v. Notification of Recognition or Denial of Recognition for Resubmitted 
Applications
    The Department estimates that a Program Analyst would spend an 
average of 1 hour notifying each entity that resubmitted an 
application. To estimate these costs over the 10-year analysis period, 
the Department multiplied the projected number of total SRE 
applications each year by 15 percent, and then multiplied this product 
by the estimated time for notification (1 hour) and by the hourly 
compensation rate for Program Analysts ($117.44 per hour). For example, 
the projected number of total SRE applications in Year 1 is 270, so the 
estimated Year 1 cost is $4,756 (= 270 SRE applications x 15% x 1 hour 
x $117.44 per hour). The annualized cost over the 10-year analysis 
period is estimated at $1,234 at a discount rate of 3 percent and 
$1,296 at a discount rate of 7 percent. The total cost over the 10-year 
analysis period is estimated at $10,530 at a discount rate of 3 percent 
and $9,105 at a discount rate of 7 percent.
(18) DOL Preparation of Administrative Record When a Denied Entity 
Requests Review
    As explained earlier in this section, the Department estimates that 
approximately 1 percent of all applications would request 
administrative review of a denial. Within 30 calendar days of the 
filing of the request for administrative review, the Administrator 
would have to prepare an administrative record for submission to the 
Office of Administrative Law Judges. Based on its program experience, 
the Department estimates that preparing an administrative record would 
take a Program Analyst approximately 6 hours. To estimate these costs 
over the 10-year analysis period, the Department multiplied the 
projected number of SRE applications in each year by 1 percent, and 
then multiplied that product by the estimated time to prepare an 
administrative record (6 hours) and by the hourly compensation rate for 
Program Analysts ($117.44 per hour). For example, the projected number 
of SRE applications in Year 1 is 270, so the estimated Year 1 cost is 
$1,903 (= 270 SRE applications x 1% x 6 hours x $117.44 per hour). The 
annualized cost over the 10-year analysis period is estimated at $373 
at a discount rate of 3 percent and $404 at a discount rate of 7 
percent. The total cost over the 10-year analysis period is estimated 
at $3,181 at a discount rate of 3 percent and $2,839 at a discount rate 
of 7 percent.
(19) Review of Administrator's Denial by Office of Administrative Law 
Judges
    In accordance with Sec.  29.30, a prospective SRE that is denied 
recognition may file a request for administrative review by an 
Administrative Law Judge. The Department estimates that it would take 8 
hours for an Administrative Law Judge to review the administrative 
record submitted by the Office of Apprenticeship and conduct a hearing. 
To estimate these costs over the 10-year analysis period, the 
Department multiplied the projected number of SRE applications in each 
year by 1 percent, and then multiplied that product by the estimated 
time for an Administrative Law Judge to conduct a review (8 hours) and 
by the hourly compensation rate for Administrative Law Judges ($187.07 
per hour). For example, the projected number of SRE applications in 
Year 1 is 270, so the estimated Year 1 cost is $4,041 (= 270 SRE 
applications x 1% x 8 hours x $187.07 per hour). The annualized cost 
over the 10-year analysis period is estimated at $792 at a discount 
rate of 3 percent and $859 at a discount rate of 7 percent. The total 
cost over the 10-year analysis period is estimated at $6,756 at a 
discount rate of 3 percent and $6,030 at a discount rate of 7 percent.
    Next, a Law Clerk in the Office of Administrative Law Judges would 
draft the proposed findings and the recommended decision based on the 
hearing. The Department estimates that this step of the process would 
take approximately 2 hours. To estimate these costs over the 10-year 
analysis period, the Department multiplied the projected number of SRE 
applications in each year by 1 percent, and then multiplied that 
product by the estimated time for a Law Clerk to draft the proposed 
findings and the recommended decision (2 hours) and by the hourly 
compensation rate for Law Clerks ($82.40 per hour). For example, the 
projected number of SRE applications in Year 1 is 270, so the estimated 
Year 1 cost is $445 (= 270 SRE applications x 1% x 2 hours x $82.40 per 
hour). The annualized cost over the 10-year analysis period is 
estimated at $87 at a discount rate of 3 percent and $95 at a discount 
rate of 7 percent. The total cost over the 10-year analysis period is 
estimated at $744 at a discount rate of 3 percent and $664 at a 
discount rate of 7 percent.
    In addition, a Paralegal in the Office of Administrative Law Judges 
would handle the tasks related to placing the

[[Page 29993]]

matter on the docket of cases. The Department estimates that this step 
of the process would take approximately 2 hours. To estimate these 
costs over the 10-year analysis period, the Department multiplied the 
projected number of SRE applications in each year by 1 percent, and 
then multiplied that product by the estimated time for a Paralegal to 
place the matter on the docket (2 hours) and by the hourly compensation 
rate for Paralegals ($55.66 per hour). For example, the projected 
number of SRE applications in Year 1 is 270, so the estimated Year 1 
cost is $301 (= 270 SRE applications x 1% x 2 hours x $55.66 per hour). 
The annualized cost over the 10-year analysis period is estimated at 
$59 at a discount rate of 3 percent and $64 at a discount rate of 7 
percent. The total cost over the 10-year analysis period is estimated 
at $503 at a discount rate of 3 percent and $449 at a discount rate of 
7 percent.
(20) Review of Administrator's Denial by Administrative Review Board
    In accordance with Sec.  29.30, any party may file exceptions to 
the Administrative Law Judge's recommended decision in the prior step. 
If the Administrative Review Board accepts a case for review, the 
three-judge panel of Administrative Law Judges would review the 
proposed findings and the recommended decision provided by the 
Administrative Law Judge in the prior step, and then render a final 
decision on the record. The Department estimates that the review and 
decision would take approximately 2 hours per Administrative Law Judge. 
To estimate these costs over the 10-year analysis period, the 
Department multiplied the projected number of SRE applications in each 
year by 1 percent, and then multiplied that product by the estimated 
time for each Administrative Law Judge to conduct the review (2 hours) 
and by the hourly compensation rate for Administrative Law Judges 
($187.07 per hour) and by 3 Administrative Law Judges. For example, the 
projected number of SRE applications in Year 1 is 270, so the estimated 
Year 1 cost is $3,031 (= 270 SRE applications x 1% x 2 hours x $187.07 
per hour x 3 Administrative Law Judges). The annualized cost over the 
10-year analysis period is estimated at $594 at a discount rate of 3 
percent and $644 at a discount rate of 7 percent. The total cost over 
the 10-year analysis period is estimated at $5,067 at a discount rate 
of 3 percent and $4,523 at a discount rate of 7 percent.
    Next, a Staff Attorney for the Administrative Review Board would 
draft a final decision for the Board. The Department estimates that 
this step of the process would take approximately 6 hours. To estimate 
these costs over the 10-year analysis period, the Department multiplied 
the projected number of SRE applications in each year by 1 percent, and 
then multiplied that product by the estimated time for a Staff Attorney 
to draft a final decision (6 hours) and by the hourly compensation rate 
for Staff Attorneys ($175.46 per hour). For example, the projected 
number of SRE applications in Year 1 is 270, so the estimated Year 1 
cost is $2,842 (= 270 SRE applications x 1% x 6 hours x $175.46 per 
hour). The annualized cost over the 10-year analysis period is 
estimated at $557 at a discount rate of 3 percent and $604 at a 
discount rate of 7 percent. The total cost over the 10-year analysis 
period is estimated at $4,752 at a discount rate of 3 percent and 
$4,242 at a discount rate of 7 percent.
    In addition, a Legal Assistant would perform docket filing and 
other administrative tasks associated with the issuance of the 
Administrative Review Board's final decision. The Department estimates 
that this step of the process would take approximately 2 hours. To 
estimate these costs over the 10-year analysis period, the Department 
multiplied the projected number of SRE applications in each year by 1 
percent, and then multiplied that product by the estimated time for a 
Legal Assistant to perform administrative duties (2 hours) and by the 
hourly compensation rate for Legal Assistant ($82.40 per hour). For 
example, the projected number of SRE applications in Year 1 is 270, so 
the estimated Year 1 cost is $445 (= 270 SRE applications x 1% x 2 
hours x $82.40 per hour). The annualized cost over the 10-year analysis 
period is estimated at $87 at a discount rate of 3 percent and $95 at a 
discount rate of 7 percent. The total cost over the 10-year analysis 
period is estimated at $744 at a discount rate of 3 percent and $664 at 
a discount rate of 7 percent.
b. Payments From Industry Programs to SREs
    The Department anticipates that SREs may charge a fee to the 
Industry Programs that they recognize, though such a fee is neither 
required nor prohibited under this proposed rule. Such a fee would help 
SREs offset the costs described earlier in this section.
    SREs' fees would likely vary widely, so the Department explored 
different ways to estimate those fees. The Department began by looking 
at the application and annual fees charged by entities that focus 
primarily on setting standards, thinking it would make sense to base 
its estimate on the fees currently charged by such entities. However, 
after further reflection, the Department decided that such entities are 
not representative of the full range of potential SREs, which may 
include but are not limited to trade, industry, and employer groups or 
associations; educational institutions; state and local government 
agencies or entities; non-profit organizations; unions; joint labor-
management organizations; and partnerships of multiple entities. 
Entities that focus primarily or exclusively on standards-setting are 
not representative of the variety of entities likely to apply to become 
SREs, so the fees charged by such entities would not be representative 
of the fees that may (or may not) be charged by other types of 
entities.
    Therefore, the Department decided that a better approach to 
estimating SRE fees would be to develop an estimate based on the 
quantified costs in this analysis. To approximate a break-even point 
between SRE costs and SRE fees under this proposed rule, the Department 
estimates an average initial application fee of $3,000 and an average 
annual fee of $500. The remaining difference between SRE costs and SRE 
fees reflects the unquantified costs under this proposed rule.
    Since the payment of SRE fees by Industry Programs would help SREs 
recoup their costs under this proposed rule, and since those costs have 
already been quantified in the economic analysis above, the potential 
payments from Industry Programs to SREs are not included in Exhibits 1 
or 5.
5. Summary of Costs
    Exhibit 5 presents a summary of the quantifiable costs associated 
with this proposed rule. The Department invites comment on all of the 
costs outlined above.

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[GRAPHIC] [TIFF OMITTED] TP25JN19.004

6. Nonquantifiable Costs
    This section addresses the nonquantifiable costs of the proposed 
rule. The Department invites commenters to provide feedback on the 
costs identified in this section and to provide data that would 
facilitate the calculation of these costs.
a. SRE Costs
    Under proposed Sec.  29.27, the Administrator may initiate a review 
of an SRE after receiving a complaint about the SRE or information 
indicating that the SRE is no longer capable of continuing in its role. 
If a review is initiated, the SRE would have an opportunity to provide 
information to the Department. Since this is a new program, the 
Department does not have a reasonable way to estimate the number of 
complaints it may receive or reviews it may initiate. Consequently, 
there is insufficient information to quantify the potential costs of 
this provision.
    Additionally, proposed Sec.  29.28 explains the process through 
which the Administrator may suspend an SRE. A suspended SRE would have 
an opportunity to implement remedial action or request administrative 
review. The Department does not have a reasonable way to estimate the 
number of SREs that would be suspended, nor the percentage of suspended 
SREs that would implement remedial action or make a request for 
administrative review. For these reasons, the Department is unable to 
quantity the potential costs of this provision.
b. Industry Program Costs
    A 2016 study published by the Department of Commerce found that 
apprenticeship programs vary significantly in length and cost. The 
shortest program in the study lasted one year, while the longest lasted 
more than four years. The costs of the programs in the study ranged 
from $25,000 to $250,000 per apprentice. Importantly, compensation 
costs for apprentices were the major cost of the programs. Other costs 
included program start-up, educational materials, mentors' time, and 
overhead. The authors noted that the ultimate goal of an apprenticeship 
program is for companies to fill skilled jobs, and apprenticeships are 
only one way to do so. Many of the costs of an apprenticeship program 
would still be incurred if the company filled the job through another 
method, such as hiring an already-trained worker, contracting a 
temporary worker, or increasing the hours of existing staff.\41\ In 
analyzing the costs of an apprenticeship program, it is essential to 
consider how an employer would fill the position in the absence of 
apprentices. The costs of an apprenticeship program should be assessed 
within the context of the employer's alternative hiring options. The 
Department notes that such options may be limited given the skills gap 
that this regulation seeks to help address. Yet, data are not available 
for the Department to conduct such an analysis. Consequently, the 
Department was unable to quantify the potential costs of apprenticeship 
programs that would be established under this proposed rule. The 
Department seeks comment on potential costs for Industry Programs.
---------------------------------------------------------------------------

    \41\ Susan Helper, Ryan Noonan, Jessica R. Nicholson, and David 
Langdon, ``The Benefits and Costs of Apprenticeship: A Business 
Perspective,'' Case Western Reserve University and U.S. Department 
of Commerce (November 2016), https://files.eric.ed.gov/fulltext/ED572260.pdf.
---------------------------------------------------------------------------

    Additionally, under Sec.  29.25, an Industry Program would be able 
to become a registered apprenticeship program under an expedited 
process by providing information to the Administrator that would enable 
to the Administrator to determine whether the Industry Program meets 
the requirements of a registered apprenticeship program. The Department 
does not have a reasonable way to estimate the percent of Industry 
Programs that would opt to undergo this expedited process. 
Consequently, there is insufficient information to quantify the 
potential costs of this provision to Industry Programs or the 
Department.
c. Government Costs
    In addition to the SRE and Industry Program costs that cannot be 
quantified,

[[Page 29995]]

the proposed rule is also expected to incur costs to the Department. To 
begin with, proposed Sec.  29.27 requires the Administrator to follow 
specific steps if the Administrator decides to initiate a review of an 
SRE after receiving a complaint or information indicating that the SRE 
is no longer capable of continuing in its role. Those steps include 
notifying the SRE of the review, conducting the review, and notifying 
the SRE of the decision to either take no action against the SRE or 
suspend the SRE. Since this is a new program, the Department does not 
have a reasonable way to estimate the number of complaints it may 
receive or reviews it may initiate. Hence, there is insufficient 
information to quantify the potential costs of this proposed section.
    Similarly, proposed Sec.  29.28 requires the Administrator to take 
certain actions if the Administrator decides to suspend an SRE. For 
example, the Administrator must publish the SRE's suspension on the 
Department's publicly available list of SREs and Industry Programs. If 
the SRE commits itself to remedial actions, the Administrator must 
determine whether the SRE has remedied the identified areas of 
nonconformity. If the SRE makes a request for administrative review, 
the Administrator must prepare an administrative record for submission 
to the Office of Administrative Law Judges. Finally, if the SRE does 
not commit itself to remedial action or request administrative review, 
the Administrator would derecognize the SRE. Since this is a new 
program, the Department does not have a reasonable way to estimate the 
proportion of SREs that would be suspended by the Administrator. 
Consequently, there is insufficient information to quantify the 
potential costs of this proposed provision.
    Under proposed Sec.  29.30(a), the Administrator must prepare an 
administrative record for submission to the Administrative Law Judge 
after receiving a suspended SRE's request for administrative review. 
Without a reasonable way to estimate the number of suspended SREs or 
the share of suspended SREs that would request administrative review, 
the Department is unable to quantify this cost.
    In addition to the costs borne by the Office of Apprenticeship, 
costs would also be borne by the Office of Administrative Law Judges 
and the Administrative Review Board. The Chief Administrative Law Judge 
must designate an Administrative Law Judge to review a suspended SRE's 
request for administrative review. Within 20 days of the receipt of the 
Administrative Law Judge's recommended decision, any party may file 
exceptions with the Administrative Review Board, which must decide any 
case it accepts within 180 days of the close of the record. The 
Department does not have a reasonable way to estimate the number of 
suspended SREs nor the share that would request administrative review; 
therefore, the Department is unable to quantify this cost.
7. Nonquantifiable Transfer Payments
    As mentioned above, a major cost of apprenticeship programs is the 
compensation costs of apprentices.\42\ For the purposes of a Regulatory 
Impact Analysis, an increase in wages is not considered a cost; rather, 
an increase in wages is considered a ``transfer payment.'' According to 
OMB Circular A-4, transfers occur when wealth or income is 
redistributed without any direct change in aggregate social 
welfare.\43\ Therefore, an increase in wages is categorized as a 
transfer payment from the employer to the worker rather than a cost to 
the employer or a benefit to the worker.
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    \42\ Susan Helper, Ryan Noonan, Jessica R. Nicholson, and David 
Langdon, ``The Benefits and Costs of Apprenticeship: A Business 
Perspective,'' Case Western Reserve University and U.S. Department 
of Commerce (November 2016), https://files.eric.ed.gov/fulltext/ED572260.pdf.
    \43\ Office of Management and Budget, ``Circular A-4'' 
(September 17, 2003).
---------------------------------------------------------------------------

    On aggregate, the Department does not expect a sizable transfer 
from employers to workers in the immediate context of this proposed 
rule. Some jobs filled by apprentices would likely be filled by non-
apprentices in the absence of an Industry Program. And as with other 
workers, apprentices must be paid at least the applicable Federal, 
State, or local minimum wage. Accordingly, the presence of an Industry 
Program is unlikely to produce a sizable wage increase (or decrease) 
relative to what the employer would otherwise pay for a worker in that 
position. Some apprentices may be paid more than what non-apprentices 
would be paid, while others may be paid less. Therefore, on aggregate, 
the Department does not expect a measurable transfer payment under this 
proposed rule.
8. Regulatory Alternatives
    OMB Circular A-4, which outlines best practices in regulatory 
analysis, directs agencies to analyze alternatives if such alternatives 
best satisfy the philosophy and principles of E.O. 12866. Accordingly, 
the Department considered two regulatory alternatives related to 
paragraph 29.22(j). Under the first alternative, SREs would be required 
to make performance data publicly available every five years rather 
than annually. Under the second alternative, SREs would be required to 
make performance data publicly available every quarter rather than 
annually. Both alternatives are discussed in more detail below.
    For the first alternative, the Department considered requiring SREs 
to make publicly available the performance data for each Industry 
Program it recognizes on a five year reporting cycle rather than on an 
annual reporting cycle as proposed in paragraph 29.22(j). To estimate 
the reduction in costs under this alternative, the Department adjusted 
two of the calculations described in the Subject-by-Subject Analysis. 
First, the Department decreased from 3 hours to 36 minutes (= 3 hours / 
5 years) the time burden for Industry Programs to provide performance 
information to their SREs since the information would only need to be 
provided once every five years under this alternative. Second, the 
Department decreased from 30 to 6 hours (= 30 hours / 5 years) the time 
burden for SREs to make the performance information publicly available. 
Exhibit 6 shows the estimated costs of the proposed rule under this 
alternative. Over the 10-year analysis period, the annualized costs are 
estimated at $5.4 million at a discount rate of 7 percent. In total, 
this alternative is estimated to result in costs of $37.6 million at a 
discount rate of 7 percent.

[[Page 29996]]

[GRAPHIC] [TIFF OMITTED] TP25JN19.005

    The Department decided not to pursue this alternative because a 
longer reporting cycle would be inconsistent with the annual reporting 
cycles for other workforce investment programs, such as those 
authorized by the Workforce Innovation and Opportunity Act. 
Furthermore, a longer reporting cycle would be less transparent and 
provide less accountability to the public.
    The second alternative considered by the Department would require 
SREs to make performance data publicly available on a quarterly 
reporting cycle rather than on an annual reporting cycle. To estimate 
the growth in costs under this alternative, the Department increased 
from 3 to 12 hours (= 3 hours x 4 quarters) the time burden for 
Industry Programs to provide performance information to their SREs 
since the information would need to be provided four times per year 
under this alternative. Second, the Department increased from 30 to 120 
hours (= 30 hours x 4 quarters) the time burden for SREs to make the 
performance information publicly available. Exhibit 7 shows the 
estimated costs of the proposed rule under this alternative. Over the 
10-year analysis period, the annualized costs are estimated at $16.0 
million at a discount rate of 7 percent. In total, this alternative is 
estimated to result in costs of $112.6 million at a discount rate of 7 
percent.
[GRAPHIC] [TIFF OMITTED] TP25JN19.006

    The Department decided not to pursue this alternative because it 
would be unduly burdensome for SREs and Industry Programs. Moreover, 
the additional data that would be collected would not justify the 
onerousness of the quarterly reporting requirement.
    The Department considered these two regulatory alternatives in 
accordance with the provisions of E.O. 12866 and chose to publish an 
NPRM that balances flexibility and opportunity for innovation by SREs 
and Industry Programs, while providing for reasonable reporting cycles 
that demonstrate transparency and accountability. The Department 
invites comments on these or other possible alternatives with the goal 
of ensuring a thorough consideration and discussion at the final rule 
stage.

B. Regulatory Flexibility Act, Small Business Regulatory Enforcement 
Fairness Act of 1996, and Executive Order 13272 (Proper Consideration 
of Small Entities in Agency Rulemaking)

    The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA) imposes 
certain requirements on Federal agency rules that are subject to the 
notice-and-comment requirements of the APA, 5 U.S.C. 553(b),\44\ and 
that are likely to have a significant economic impact on a substantial 
number of small entities. The RFA requires agencies promulgating 
proposed rules to prepare an Initial Regulatory Flexibility Analysis, 
and to develop alternatives whenever possible, when drafting 
regulations that would have a significant economic impact on a 
substantial number of small entities. The RFA requires the 
consideration of the impact of a proposed regulation on a wide range of 
small entities, including

[[Page 29997]]

small businesses, not-for-profit organizations, and small governmental 
jurisdictions.
---------------------------------------------------------------------------

    \44\ The Regulatory Flexibility Act, as amended, governs ``any 
rule for which [a federal] agency publishes a general notice of 
proposed rulemaking pursuant to section 553(b) of [the 
Administrative Procedure Act] or any other law.'' 5 U.S.C. 601(2) 
(defining ``rule,'' for purposes of the RFA).
---------------------------------------------------------------------------

    The Department believes that this proposed rule would have a 
significant economic impact on a substantial number of small entities 
and is therefore publishing this Initial Regulatory Flexibility 
Analysis as required. The Department invites public comment on the 
following estimates, including the number of small entities affected by 
the proposed rule and the compliance cost estimates. The Department 
also invites public comment on the average size of entities involved in 
establishing Industry Programs, average start-up costs, and whether 
alternatives exist that would reduce the burden on small entities while 
still remaining consistent with the objectives of the proposed rule.
1. Why the Department Is Considering Action
    The Department is proposing to implement regulations that would 
facilitate the establishment of Industry Programs and SREs in order to 
address the ongoing skills gap that faces our nation. Accordingly, the 
Department considers it imperative to move forward with implementing 
regulations that would assist and complement the rapid scaling of high-
quality apprenticeships in the United States. Also, implementing 
regulations will facilitate the efficient and effective operation of 
SREs of Industry Programs. Such regulations would provide stakeholders 
with information necessary to evaluate the outcomes of this new 
initiative.
2. Objectives of and Legal Basis for the Proposed Rule
    Congress enacted the National Apprenticeship Act, 29 U.S.C. 50, in 
1937, authorizing the Secretary of Labor ``to formulate and promote the 
furtherance of labor standards necessary to safeguard the welfare of 
apprentices,'' as well as to ``to bring together employers and labor 
for the formulation of programs of apprenticeship.'' In June 2017, 
President Trump issued E.O. 13801, ``Expanding Apprenticeships in 
America,'' directing the Secretary of Labor, in consultation with the 
Secretaries of Education and Commerce, to consider regulations to 
promote the establishment of apprenticeships developed by trade and 
industry groups, companies, nonprofit organizations, unions, and joint 
labor-management organizations, and to provide the framework under 
which these entities could recognize high-quality apprenticeship 
programs. Consistent with the NAA and E.O. 13801, the Department is 
issuing this proposed rule to establish Industry-Recognized 
Apprenticeship Programs, a new form of apprenticeships intended to 
harness industry expertise and leadership in order to address the 
national shortage of skilled workers, thereby implementing the 
President's vision of expanding apprenticeships in America.
3. Description and Estimate of the Small Entities Affected by the 
Proposed Rule
    This proposed rule would primarily affect two types of entities: 
SREs and Industry Programs. SREs may include industry associations, 
employer groups, labor-management organizations, educational 
organizations, and consortia of these or other organizations. Industry 
Programs may be developed by entities such as trade and industry 
groups, companies, nonprofit organizations, unions, and joint labor-
management organizations.
    As explained in the ``Payments from Industry Programs to SREs'' 
subsection above, the Department anticipates that SREs may charge an 
application fee and/or annual fee to the Industry Programs they 
recognize. Such a fee would help SREs recoup their expenses. Therefore, 
the Department did not include SREs in this Initial Regulatory 
Flexibility Analysis.
    Instead, this analysis focuses on the small entities that choose to 
develop Industry Programs. As explained in the E.O. 12866 analysis 
above, the Department anticipates that each SRE would recognize 
approximately 32 Industry Programs, beginning with 10 new Industry 
Programs in its first year as an SRE, and then 8 new Industry Programs 
in its second year, 5 new Industry Programs in its third year, 3 new 
Industry Programs in its fourth year, and 1 in its fifth through tenth 
years. Based on this assumption, the number of new Industry Programs in 
Year 1 is estimated to be 2,030 (= 203 new SREs in Year 1 x 10 new 
Industry Programs per SRE). The number of new Industry Programs in Year 
2 is estimated to be 1,724 [= (203 new SREs in Year 1 x 8 new Industry 
Programs per SRE) + (10 new SREs in Year 2 x 10 new Industry Programs 
per SRE)]. As explained in the E.O.12866 analysis above, the Department 
estimates that 90 percent of SREs will undergo the Department's process 
for continued recognition, so in Year 6 the estimated number of new 
Year 1 SREs will shrink to 183 (= 203 new SREs in Year 1 x 90%). 
Accordingly, the number of new Industry Programs in Year 6 is estimated 
to be 707 [= (183 Year 1 SREs with continued recognition x 1 new 
Industry Programs per SRE) + (10 new SREs in Year 2 x 1 new Industry 
Programs per SRE) + (11 new SREs in Year 3 x 3 new Industry Programs 
per SRE) + (11 new SREs in Year 4 x 5 new Industry Programs per SRE) + 
(12 new SREs in Year 5 x 8 new Industry Programs per SRE) + (33 new 
SREs in Year 6 x 10 new Industry Programs per SRE)].
    To estimate the total number of Industry Programs in each year of 
the analysis period, the Department first calculated the cumulative 
total of new Industry Programs per SRE. For example, a new SRE in Year 
1 is estimated to have recognized a total of 18 Industry Programs in 
Year 2 (= 10 new Industry Programs in Year 1 + 8 new Industry Programs 
in Year 2). So, the total number of Industry Programs in Year 2 is 
estimated to be 3,754 [= (203 new SREs in Year 1 x 18 total Industry 
Programs per SRE) + (10 new SREs in Year 2 x 10 total Industry Programs 
per SRE)]. As explained above, the estimated number of new Year 1 SREs 
is expected to shrink to 183 in Year 6. Accordingly, the total number 
of Industry Programs in Year 6 is estimated to be 6,479 [= (183 Year 1 
SREs with continued recognition x 28 total Industry Programs per SRE) + 
(10 new SREs in Year 2 x 27 total Industry Programs per SRE) + (11 new 
SREs in Year 3 x 26 total Industry Programs per SRE) + (11 new SREs in 
Year 4 x 23 total Industry Programs per SRE) + (12 new SREs in Year 5 x 
18 total Industry Programs per SRE) + (33 new SREs in Year 6 x 10 total 
Industry Programs per SRE)].
    Exhibit 8 presents the projected number of new and total Industry 
Programs over the 10-year analysis period.\45\
---------------------------------------------------------------------------

    \45\ These numbers are identical to the numbers in Exhibit 3.

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

[[Page 29998]]

[GRAPHIC] [TIFF OMITTED] TP25JN19.007

    Given that this is a new initiative, the Department has no way of 
knowing what size these Industry Programs would be. Therefore, the 
Department assumes that the Industry Programs would have the same size 
distribution as the firms in each of the 19 major industry sectors. 
This assumption allows the Department to conduct a robust analysis 
using data from the Census Bureau's Statistics of U.S. Businesses,\46\ 
which include the number of firms, number of employees, and annual 
revenue by industry and firm size. Using these data allows the 
Department to estimate the per-program costs of the proposed rule as a 
percent of revenue by industry and firm size.
---------------------------------------------------------------------------

    \46\ See U.S. Census Bureau, Statistics of U.S. Businesses, 
available at https://www.census.gov/programs-surveys/susb/data.html.
---------------------------------------------------------------------------

4. Compliance Requirements of the Proposed Rule
    The E.O. 12866 analysis above quantifies several types of labor 
costs that would be borne by Industry Programs: (1) Rule 
familiarization, (2) submission of performance data to the SRE, and (3) 
disclosure of wages and ancillary costs to apprentices. Additional 
costs that may be incurred but could not be quantified due to a lack of 
data include program start-up expenses, educational materials, and 
mentors' time. In addition, the proposed rule would result in transfer 
payments from Industry Programs to apprentices in the form of 
compensation, but the Department does not expect a measurable transfer 
payment on aggregate because, in the absence of an Industry Program, 
the jobs filled by apprentices would likely be filled by non-
apprentices paid a similar rate or would be addressed by other means.
    The proposed rule may also result in payments from Industry 
Programs to SREs in the form of an application fee and/or annual fee 
charged by SREs. Such fees, which are neither required nor prohibited 
under this proposed rule, would help SREs offset their costs. For the 
Regulatory Flexibility Analysis, these types of fees are considered 
costs to Industry Programs because the analysis estimates the impact on 
small entities, not on society at large. Accordingly, the SRE's fees 
are categorized as costs in this analysis.
    The Department anticipates that the bulk of the workload for the 
labor costs in this analysis would be performed by employees in 
occupations similar to the occupation titled ``Training and Development 
Managers'' in the Standard Occupational Classification System. As with 
the E.O. 12866 analysis, the Department used a fully loaded hourly 
compensation rate for Training and Development Managers of $113.16.\47\
---------------------------------------------------------------------------

    \47\ The mean hourly wage rate for Training and Development 
Managers in May 2017 was $56.58. (See https://www.bls.gov/oes/current/oes113131.htm.) For this analysis, the Department used a 
fringe benefits rate of 46 percent and an overhead rate of 54 
percent, resulting in a fully loaded hourly compensation rate for 
Training and Development Managers of $113.16 (= $56.58 + ($56.58 x 
46%) + ($56.58 x 54%)).
---------------------------------------------------------------------------

    In addition to the number of Industry Programs and the hourly 
compensation rate of Training and Development Managers, the following 
estimates were used to calculate the quantified costs:

 Rule familiarization (one-time cost): 1 hour
 Provision of performance data to the SRE (annual cost): 3 
hours
 Disclosure of wages to apprentices (annual cost): 5 minutes
 Disclosure of ancillary costs to apprentices (annual cost): 5 
minutes
 SRE's application fee (one-time cost): $3,000
 SRE's annual fee (annual cost): $500 per year

The Department welcomes comments on these estimates.
    Exhibit 9 shows the estimated cost per Industry Program for each 
year of the analysis period. The first year cost per Industry Program 
is estimated at $3,696 at a discount rate of 7 percent. The annualized 
cost per Industry Program is estimated at $1,713 at a discount rate of 
7 percent. The estimated cost per Industry Program is highest in the 
first year because all Industry Programs would be new, so the 
Department's first-year estimate includes both a $3,000 application fee 
and $500 annual fee for all Industry Programs; in later years, ongoing 
Industry Programs would only be charged a $500 annual fee under this 
analysis. These estimates are average costs, meaning that some Industry 
Programs would have higher costs while other Industry Programs would 
have lower costs, regardless of firm size.

[[Page 29999]]

[GRAPHIC] [TIFF OMITTED] TP25JN19.008

5. Estimated Impact of the Proposed Rule on Small Entities
    The Department used the following steps to estimate the cost of the 
proposed rule per Industry Program as a percentage of annual receipts. 
First, the Department used the Small Business Administration's Table of 
Small Business Size Standards to determine the size thresholds for 
small entities within each major industry.\48\ Next, the Department 
obtained data on the number of firms, number of employees, and annual 
revenue by industry and firm size category from the Census Bureau's 
Statistics of U.S. Businesses.\49\ Then, the Department divided the 
estimated first year cost and the annualized cost per Industry Program 
(discounted at a 7 percent rate) by the average annual receipts per 
firm to determine whether the proposed rule would have a significant 
economic impact on Industry Programs in each size category.\50\ 
Finally, the Department divided the number of firms in each size 
category by the total number of firms in the industry to determine 
whether the proposed rule would have a significant economic impact on a 
substantial number of small entities.\51\ The results are presented in 
the following 19 tables. In short, the first year cost and annualized 
cost per Industry Program could have a significant economic impact on a 
substantial number of small entities in 13 out of 19 industries. It 
should be noted, however, that this initiative would be voluntary for 
Industry Programs; therefore, only small entities that choose to 
participate would experience an economic impact--significant or 
otherwise.
---------------------------------------------------------------------------

    \48\ U.S. Small Business Administration, Table of Small Business 
Size Standards, https://www.sba.gov/content/small-business-size-standards. The size standards, which are expressed either in average 
annual receipts or number of employees, indicate the maximum allowed 
for a business in each subsector to be considered small.
    \49\ U.S. Census Bureau, Statistics of U.S. Businesses, https://www.census.gov/programs-surveys/susb/data.html.
    \50\ For purposes of this analysis, the Department used a 3-
percent threshold for ``significant economic impact.'' The 
Department has used a 3-percent threshold in prior rulemakings. See, 
e.g., 79 FR 60633 (October 7, 2014) (Establishing a Minimum Wage for 
Contractors).
    \51\ For purposes of this analysis, the Department used a 15-
percent threshold for ``substantial number of small entities.'' The 
Department has used a 15-percent threshold in prior rulemakings. 
See, e.g. 79 FR 60633 (October 7, 2014) (Establishing a Minimum Wage 
for Contractors).
---------------------------------------------------------------------------

    As shown in Exhibit 10, the first year and annualized costs for 
Industry Programs in the agriculture, forestry, fishing, and hunting 
industry are estimated to have a significant economic impact (3 percent 
or more) on small entities with receipts under $100,000, and those 
firms constitute a substantial number of small entities in the 
agriculture, forestry, fishing, and hunting industry (20.3 percent). 
The first year costs are estimated to be 7.3 percent of the average 
receipts per firm and the annualized costs are estimated to be 3.4 
percent of the average receipts per firm for firms with revenue below 
$100,000.

[[Page 30000]]

[GRAPHIC] [TIFF OMITTED] TP25JN19.009

    As shown in Exhibit 11, the first year and annualized costs for 
Industry Programs in the mining industry are not expected to have a 
significant economic impact (3 percent or more) on small entities of 
any size.
[GRAPHIC] [TIFF OMITTED] TP25JN19.010

    As shown in Exhibit 12, the first year and annualized costs for 
Industry Programs in the utilities industry are not expected to have a 
significant economic impact (3 percent or more) on small entities of 
any size.

[[Page 30001]]

[GRAPHIC] [TIFF OMITTED] TP25JN19.011

    As shown in Exhibit 13, the first year and annualized costs for 
Industry Programs in the manufacturing industry are not expected to 
have a significant economic impact (3 percent or more) on small 
entities of any size.
[GRAPHIC] [TIFF OMITTED] TP25JN19.012

    As shown in Exhibit 14, the first year and annualized costs for 
Industry Programs in the wholesale trade industry are not expected to 
have a significant economic impact (3 percent or more) on small 
entities of any size.
[GRAPHIC] [TIFF OMITTED] TP25JN19.013

    As shown in Exhibit 15, the first year and annualized costs for 
Industry Programs in the retail trade industry are estimated to have a 
significant economic impact (3 percent or more) on small entities with 
receipts under $100,000, but those firms do not constitute a 
substantial number of small entities in the retail trade industry (12.4 
percent). The first year costs are estimated to be 7.1 percent of the 
average receipts per firm and the annualized costs are estimated to be 
3.3 percent of the average receipts per firm for firms with revenue 
below $100,000.

[[Page 30002]]

[GRAPHIC] [TIFF OMITTED] TP25JN19.014

    As shown in Exhibit 16, the first year and annualized costs for 
Industry Programs in the transportation and warehousing industry are 
estimated to have a significant economic impact (3 percent or more) on 
small entities with receipts under $100,000, and those firms constitute 
a substantial number of small entities in the transportation and 
warehousing industry (21.0 percent). The first year costs are estimated 
to be 7.6 percent of the average receipts per firm and the annualized 
costs are estimated to be 3.5 percent of the average receipts per firm 
for firms with revenue below $100,000.
[GRAPHIC] [TIFF OMITTED] TP25JN19.015

    As shown in Exhibit 17, the first year and annualized costs for 
Industry Programs in the information industry are estimated to have a 
significant economic impact (3 percent or more) on small entities with 
receipts under $100,000, and those firms constitute a substantial 
number of small entities in the information industry (21.1 percent). 
The first year costs are estimated to be 7.6 percent of the average 
receipts per firm and the annualized costs are

[[Page 30003]]

estimated to be 3.5 percent of the average receipts per firm for firms 
with revenue below $100,000.
[GRAPHIC] [TIFF OMITTED] TP25JN19.016

    As shown in Exhibit 18, the first year and annualized costs for 
Industry Programs in the finance and insurance industry are estimated 
to have a significant economic impact (3 percent or more) on small 
entities with receipts under $100,000, and those firms constitute a 
substantial number of small entities in the finance and insurance 
industry (21.7 percent). The first year costs are estimated to be 7.5 
percent of the average receipts per firm and the annualized costs are 
estimated to be 3.5 percent of the average receipts per firm for firms 
with revenue below $100,000.
[GRAPHIC] [TIFF OMITTED] TP25JN19.017


[[Page 30004]]


    As shown in Exhibit 19, the first year and annualized costs for 
Industry Programs in the real estate and rental and leasing industry 
are estimated to have a significant economic impact (3 percent or more) 
on small entities with receipts under $100,000, and those firms 
constitute a substantial number of small entities in the real estate 
and rental and leasing industry (25.9 percent). The first year costs 
are estimated to be 7.3 percent of the average receipts per firm and 
the annualized costs are estimated to be 3.4 percent of the average 
receipts per firm for firms with revenue below $100,000.
[GRAPHIC] [TIFF OMITTED] TP25JN19.018

    As shown in Exhibit 20, the first year and annualized costs for 
Industry Programs in the professional, scientific, and technical 
services industry are estimated to have a significant economic impact 
(3 percent or more) on small entities with receipts under $100,000, and 
those firms constitute a substantial number of small entities in the 
professional, scientific, and technical services industry (25.2 
percent). The first year costs are estimated to be 7.5 percent of the 
average receipts per firm and the annualized costs are estimated to be 
3.5 percent of the average receipts per firm for firms with revenue 
below $100,000.

[[Page 30005]]

[GRAPHIC] [TIFF OMITTED] TP25JN19.019

    As shown in Exhibit 21, the first year and annualized costs for 
Industry Programs in the management of companies and enterprises 
industry are estimated to have a significant economic impact (3 percent 
or more) on small entities with receipts under $100,000, but those 
firms do not constitute a substantial number of small entities in the 
management of companies and enterprises industry (7.8 percent). The 
first year costs are estimated to be 12.1 percent of the average 
receipts per firm and the annualized costs are estimated to be 5.6 
percent of the average receipts per firm for firms with revenue below 
$100,000.
[GRAPHIC] [TIFF OMITTED] TP25JN19.020

    As shown in Exhibit 22, the first year and annualized costs for 
Industry Programs in the administrative and support, waste management 
and remediation services industry are estimated to have a significant 
economic impact (3 percent or more) on small entities with receipts 
under $100,000, and those firms constitute a substantial number of 
small entities in the administrative and support, waste management and 
remediation services industry (29.0 percent). The first year costs are 
estimated to be 7.9 percent of the average receipts per firm and the 
annualized costs are estimated to be 3.7 percent of the average 
receipts per firm for firms with revenue below $100,000.

[[Page 30006]]

[GRAPHIC] [TIFF OMITTED] TP25JN19.021

    As shown in Exhibit 23, the first year and annualized costs for 
Industry Programs in the educational services industry are estimated to 
have a significant economic impact (3 percent or more) on small 
entities with receipts under $100,000, and those firms constitute a 
substantial number of small entities in the educational services 
industry (26.8 percent). The first year costs are estimated to be 7.9 
percent of the average receipts per firm and the annualized costs are 
estimated to be 3.7 percent of the average receipts per firm for firms 
with revenue below $100,000.
[GRAPHIC] [TIFF OMITTED] TP25JN19.022

    As shown in Exhibit 24, the first year and annualized costs for 
Industry Programs in the health care and social assistance industry are 
estimated to have a significant economic impact (3 percent or more) on 
small entities with receipts under $100,000, and those firms constitute 
a substantial number of small entities in the health care and social 
assistance industry (17.3 percent). The first year costs are estimated 
to be 7.7 percent of the average receipts per firm and the annualized 
costs are estimated to be 3.6 percent of the average receipts per firm 
for firms with revenue below $100,000.

[[Page 30007]]

[GRAPHIC] [TIFF OMITTED] TP25JN19.023

    As shown in Exhibit 25, the first year and annualized costs for 
Industry Programs in the arts, entertainment, and recreation industry 
are estimated to have a significant economic impact (3 percent or more) 
on small entities with receipts under $100,000, and those firms 
constitute a substantial number of small entities in the arts, 
entertainment, and recreation industry (26.1 percent). The first year 
costs are estimated to be 7.7 percent of the average receipts per firm 
and the annualized costs are estimated to be 3.6 percent of the average 
receipts per firm for firms with revenue below $100,000.
[GRAPHIC] [TIFF OMITTED] TP25JN19.024

    As shown in Exhibit 26, the first year and annualized costs for 
Industry Programs in the accommodation and food services industry are 
estimated to have a significant economic impact (3 percent or more) on 
small entities with receipts under $100,000, and those firms constitute 
a substantial number of small entities in the accommodation and food 
services industry (16.7 percent). The first year costs are estimated to 
be 7.4 percent of the average receipts per firm and the annualized 
costs are estimated to be 3.4 percent of the average receipts per firm 
for firms with revenue below $100,000.

[[Page 30008]]

[GRAPHIC] [TIFF OMITTED] TP25JN19.025

    As shown in Exhibit 27, the first year and annualized costs for 
Industry Programs in the other services industry are estimated to have 
a significant economic impact (3 percent or more) on small entities 
with receipts under $100,000, and those firms constitute a substantial 
number of small entities in the other services industry (27.8 percent). 
The first year costs are estimated to be 7.4 percent of the average 
receipts per firm and the annualized costs are estimated to be 3.5 
percent of the average receipts per firm for firms with revenue below 
$100,000.
[GRAPHIC] [TIFF OMITTED] TP25JN19.026

    As shown in Exhibit 28, the first year and annualized costs for 
Industry Programs in the construction industry \52\ are estimated to 
have a significant economic impact (3 percent or more) on small 
entities with receipts under $100,000, and those firms constitute a 
substantial number of small entities in the construction industry (18.8 
percent). The first year costs are estimated to be

[[Page 30009]]

7.2 percent of the average receipts per firm and the annualized costs 
are estimated to be 3.3 percent of the average receipts per firm for 
firms with revenue below $100,000.
---------------------------------------------------------------------------

    \52\ The Department includes data for this sector recognizing 
that it may need to revise its calculations for any Final Regulatory 
Flexibility Analysis, pending comments received concerning proposed 
Sec.  29.31. Under that section, the construction industry already 
has significant registered apprenticeship programs, and may be 
unable to participate in this new program.
[GRAPHIC] [TIFF OMITTED] TP25JN19.027

6. Relevant Federal Rules Duplicating, Overlapping, or Conflicting With 
the Proposed Rule
    The Department has determined that there are no federal rules that 
duplicate, overlap, or conflict with this proposed rule.
7. Alternatives to the Proposed Rule
    The RFA directs agencies to assess the impacts that various 
regulatory alternatives would have on small entities and to consider 
ways to minimize those impacts. Accordingly, the Department considered 
a regulatory alternative related to the second cost component: 
Provision of performance data to the SRE. Under this alternative, 
Industry Programs would need to provide performance data once every 
five years rather than annually. To estimate the reduction in costs 
under this alternative, the Department decreased from 3 hours to 36 
minutes (= 3 hours / 5 years) the time burden for Industry Programs to 
provide performance information to their SREs.
    Exhibit 29 shows the estimated cost per Industry Program for each 
year of the analysis period. The first year cost per Industry Program 
is estimated at $3,442 at a discount rate of 7 percent. The annualized 
cost per Industry Program is estimated at $1,441 at a discount rate of 
7 percent.
[GRAPHIC] [TIFF OMITTED] TP25JN19.028

    The Department decided not to pursue this alternative because a 
longer reporting cycle would be inconsistent with the annual reporting 
cycles for other workforce investment programs, and would provide less 
useful

[[Page 30010]]

information to the public. Transparency is vital to the success of 
Industry Programs. An annual reporting cycle would provide stakeholders 
with the uniform information necessary to evaluate the outcomes of this 
new initiative. Moreover, an annual reporting cycle would provide 
Industry Programs and SREs with valuable information that would enable 
them to assess the effectiveness of their programs and make 
improvements. The Department invites public comment on these estimates 
and whether other alternatives exist that would reduce the burden on 
small entities while still remaining consistent with the objectives of 
the proposed rule.

C. Paperwork Reduction Act

    The Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., provides 
that a Federal agency generally cannot conduct or sponsor a collection 
of information, and the public is generally not required to respond to 
an information collection, unless it is approved by OMB under the PRA 
and displays a currently-valid OMB Control Number. In addition, 
notwithstanding any other provisions of law, no person shall generally 
be subject to penalty for failing to comply with a collection of 
information that does not display a valid Control Number. See 5 CFR 
1320.5 and 1320.6(a).
    As explained in the Background section, above, the Department 
submitted an information collection request to obtain OMB approval for 
the information collections foreshadowed by the TEN. The Department 
will use that form as a mechanism to enable entities to seek a 
favorable determination about whether the information provided is 
consistent with the criteria outlined in the TEN.
    Concurrent with the publication of this proposed rule, the 
Department has submitted a second ICR to request OMB approval for the 
information collections in this proposed rule and its associated 
application (the application). The application associated with this 
rule is consistent with the form used for the TEN. Information 
collections subject to OMB approval under the PRA in this proposed rule 
can be found in Sec. Sec.  29.21(a), 29.21(c)(2), 29.22(a)(1), 
29.22(a)(2), 29.22(a)(4)(vii), 29.22(a)(4)(ix), 29.22(b), 29.22(c), and 
29.22(j), and additional information about each of the requirements may 
be found in relevant portions of the Section-by-Section discussed 
earlier in this preamble.
    Prior to final adoption, the Department provides members of the 
public an opportunity to comment on proposed information collections. 
In addition to filing comments on any aspect of this rule, the 
interested parties may also file comments on the information 
collections contained in or supporting this proposed rule. The 
Department and OMB are particularly interested in comments that:
     Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
     Evaluate the accuracy of the agency's estimate of the 
burden of the proposed collection of information, including the 
validity of the methodology and assumptions used;
     Enhance the quality, utility, and clarity of the 
information to be collected; and
     Minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses.
    The information collection is summarized as follows:
    Agency: DOL-ETA.
    Title of Collection: Industry-Recognized Apprenticeship Program 
Standards Recognition Entity Regulation and Application Form.
    OMB ICR Reference Number: 201905-1205-007.
    Affected Public: State and Local Governments; Private Sector--
businesses or other for-profits and not-for-profit institutions.
    Total Estimated Number of Respondents: 3,794.
    Total Estimated Number of Responses: 6,795.
    Total Estimated Annual Time Burden: 41,592 hours.
    Total Estimated Annual Other Costs Burden: $0.

D. Executive Order 13132: Federalism

    This NPRM, if finalized, does not have federalism implications 
because it does not have substantial direct effects on the States, on 
the relationship between the national government and the States, or on 
the distribution of power and responsibilities among the various levels 
of government. Accordingly, E.O. 13132, Federalism, requires no further 
agency action or analysis.

E. Unfunded Mandates Reform Act of 1995

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

F. Executive Order 13175 (Indian Tribal Governments)

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

List of Subjects in 29 CFR Part 29

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

    For the reasons stated in the preamble, the Department proposes to 
amend 29 CFR part 29 as follows:

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

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

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


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

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

Subpart A--Registered Apprenticeship Programs

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

[[Page 30011]]

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

* * * * *
    (b) The purpose of this subpart is to set forth labor standards to 
safeguard the welfare of apprentices, promote apprenticeship 
opportunity, and to extend the application of such standards by 
prescribing policies and procedures concerning the registration, for 
certain Federal purposes, of acceptable apprenticeship programs with 
the U.S. Department of Labor, Employment and Training Administration, 
Office of Apprenticeship. These labor standards, policies and 
procedures cover the registration, cancellation and deregistration of 
apprenticeship programs and of apprenticeship agreements; the 
recognition of a State agency as an authorized agency for registering 
apprenticeship programs for certain Federal purposes; and matters 
relating thereto.
0
4. Amend Sec.  29.2 by adding introductory text and revising the 
definitions of ``Apprenticeship program,'' ``Registration agency,'' and 
``Technical assistance'' to read as follows:


Sec.  29.2  Definitions

    For the purpose of this subpart:
* * * * *
    Apprenticeship program means a plan containing all terms and 
conditions for the qualification, recruitment, selection, employment 
and training of apprentices, as required under 29 CFR part 29 subpart 
A, and part 30, including such matters as the requirement for a written 
apprenticeship agreement.
* * * * *
    Registration agency means the Office of Apprenticeship or a 
recognized State Apprenticeship Agency that has responsibility for 
registering apprenticeship programs and apprentices; providing 
technical assistance; conducting reviews for compliance with 29 CFR 
part 29 subpart A, and part 30 and quality assurance assessments.
* * * * *
    Technical assistance means guidance provided by Registration Agency 
staff in the development, revision, amendment, or processing of a 
potential or current program sponsor's Standards of Apprenticeship, 
Apprenticeship Agreements, or advice or consultation with a program 
sponsor to further compliance with this subpart or guidance from the 
Office of Apprenticeship to a State Apprenticeship Agency on how to 
remedy nonconformity with this subpart.
* * * * *
0
5. Amend Sec.  29.3 by revising paragraph (b)(1), paragraph (g) 
introductory text, and paragraph (h) to read as follows:


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

* * * * *
    (b) * * *
    (1) It is in conformity with the requirements of this subpart and 
the training is in an apprenticeable occupation having the 
characteristics set forth in Sec.  29.4; and
* * * * *
    (g) Applications for new programs that the Registration Agency 
determines meet the required standards for program registration must be 
given provisional approval for a period of 1 year. The Registration 
Agency must review all new programs for quality and for conformity with 
the requirements of this subpart at the end of the first year after 
registration. At that time:
* * * * *
    (h) The Registration Agency must review all programs for quality 
and for conformity with the requirements of this subpart at the end of 
the first full training cycle. A satisfactory review of a provisionally 
approved program will result in conversion of provisional approval to 
permanent registration. Subsequent reviews must be conducted no less 
frequently than every five years. Programs not in operation or not 
conforming to the regulations must be recommended for deregistration 
procedures.
* * * * *
0
6. Amend Sec.  29.6 by revising paragraph (b)(2) to read as follows:


Sec.  29.6  Program performance standards.

* * * * *
    (b) * * *
    (2) Any additional tools and factors used by the Registration 
Agency in evaluating program performance must adhere to the goals and 
policies of the Department articulated in this subpart and in guidance 
issued by the Office of Apprenticeship.
* * * * *
0
7. Amend Sec.  29.10 by revising paragraph (a)(2) to read as follows:


Sec.  29.10  Hearings for deregistration.

    (a) * * *
    (2) A statement of the provisions of this subpart pursuant to which 
the hearing is to be held; and
* * * * *
0
8. Amend Sec.  29.11 by revising the introductory text to read as 
follows:


Sec.  29.11  Limitations.

    Nothing in this subpart or in any apprenticeship agreement will 
operate to invalidate:
* * * * *
0
9. Amend Sec.  29.13 by revising paragraphs (a)(1), (b)(1), (c), 
paragraph (e) introductory text, and paragraph (e)(4) to read as 
follows:


Sec.  29.13  Recognition of State Apprenticeship Agencies.

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

[[Page 30012]]

with the recognition requirements of this subpart through:
* * * * *
    (4) Determination whether, based on the review performed under 
paragraphs (e)(1), (2), and (3) of this section, the State Registration 
Agency is in compliance with part 29 subpart A. Notice to the State 
Registration Agency of the determination will be given within 45 days 
of receipt of proposed modifications to legislation, regulations, 
policies, and/or operational procedures required to be submitted under 
paragraphs (a)(1), (a)(5) and (b)(9) of this section.
* * * * *
0
10. Amend Sec.  29.14 by revising the introductory text and paragraphs 
(e)(1) and (i) to read as follows:


Sec.  29.14  Derecognition of State Apprenticeship Agencies.

    The recognition for Federal purposes of a State Apprenticeship 
Agency may be withdrawn for the failure to fulfill, or operate in 
conformity with, the requirements of part 29 subpart A, and part 30. 
Derecognition proceedings for reasonable cause will be instituted in 
accordance with the following:
* * * * *
    (e) * * *
    (1) The Office of Apprenticeship may grant the request for 
registration on an interim basis. Continued recognition will be 
contingent upon its finding that the State apprenticeship program is 
operating in accordance with the requirements of this subpart and of 29 
CFR part 30.
* * * * *
    (i) A State Apprenticeship Agency whose recognition has been 
withdrawn under this subpart may have its recognition reinstated upon 
presentation of adequate evidence that it has fulfilled the 
requirements established in Sec. Sec.  29.13(i) and 29.14(g) and (h) 
and is operating in conformity with the requirements of this subpart.
* * * * *
0
 11. Add subpart B to read as follows:

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

Sec.
29.20 Standards Recognition Entities, Industry Programs, 
Administrator, Apprentices.
29.21 Becoming a Standards Recognition Entity.
29.22 Responsibilities and Requirements of Standards Recognition 
Entities.
29.23 Quality Assurance.
29.24 Publication of Standards Recognition Entities and Industry 
Programs.
29.25 Expedited Process for Recognizing Industry Programs as 
Registered Apprenticeship Programs.
29.26 Complaints against Standards Recognition Entities.
29.27 Review of a Standards Recognition Entity.
29.28 Suspension and Derecognition of a Standards Recognition 
Entity.
29.29 Derecognition's Effect on Industry Programs.
29.30 Requests for Administrative Review.
29.31 Scope and Deconfliction between Apprenticeship Programs under 
Subpart A of This Part and This Subpart B.
Appendix A to Subpart B--Industry-Recognized Apprenticeship Program 
Standards Recognition Entity Application Form


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

    For the purpose of this subpart, which establishes a new 
apprenticeship pathway distinct from the registered apprenticeship 
programs described in subpart A of this part:
    (a) A Standards Recognition Entity of Industry-Recognized 
Apprenticeship Programs is an entity that is qualified to recognize 
apprenticeship programs as Industry-Recognized Apprenticeship Programs 
under Sec.  29.21 and that has been recognized by the Department of 
Labor.
    (1) Types of entities that can become Standards Recognition 
Entities include:
    (i) Trade, industry, and employer groups or associations;
    (ii) Educational institutions, such as universities or community 
colleges;
    (iii) State and local government agencies or entities;
    (iv) Non-profit organizations;
    (v) Unions;
    (vi) Joint labor-management organizations; or
    (vii) A consortium or partnership of entities such as those above.
    (b) Industry-Recognized Apprenticeship Programs (``Industry 
Programs'') are high-quality apprenticeship programs, wherein an 
individual obtains workplace-relevant knowledge and progressively 
advancing skills, that include a paid-work component and an educational 
or instructional component, and that result in an industry-recognized 
credential. An Industry Program is developed or delivered by entities 
such as trade and industry groups, companies, non-profit organizations, 
educational institutions, unions, and joint labor-management 
organizations. An Industry Program is one that has been recognized as a 
high-quality program by a Standards Recognition Entity pursuant to 
Sec.  29.22(a)(4)(i)-(ix).
    (c) The Administrator is the Administrator of the Department of 
Labor's Office of Apprenticeship, or any person specifically designated 
by the Administrator.
    (d) An apprentice is an individual participating in an Industry 
Program.


Sec.  29.21  Becoming a Standards Recognition Entity.

    (a) To apply to be a Standards Recognition Entity, an entity (or 
consortium or partnership of entities) must complete and submit an 
application to the Administrator for recognition as an Industry-
Recognized Apprenticeship Program Standards Recognition Entity.
    (b) An entity is qualified to be a Standards Recognition Entity if 
it demonstrates in its application that:
    (1) It has the expertise to set standards, through a consensus-
based process involving industry experts, for the requisite training, 
structure, and curricula for apprenticeship programs in the 
industry(ies) or occupational area(s) in which it seeks to be a 
Standards Recognition Entity.
    (i) The requirements in Sec.  29.21(b)(1) may be met through an 
SRE's past or current standard-setting activities and need only 
engender new activity if necessary to comply with this rule.
    (ii) [Reserved]
    (2) It has the capacity and quality assurance processes and 
procedures sufficient to comply with Sec.  29.22(a)(4), given the scope 
of the Industry Programs to be recognized.
    (3) It meets the other requirements of this subpart.
    (c) The Administrator will recognize an entity as a Standards 
Recognition Entity if it is qualified under paragraph (b) of this 
section.
    (1) A Standards Recognition Entity will be recognized for 5 years, 
and must reapply on or before the date of expiration if it seeks re-
recognition.
    (2) A Standards Recognition Entity must notify the Administrator 
and provide all related material information if:
    (i) It makes a substantive change to its recognition processes, or 
any major change that could affect the operations of the program, such 
as involvement in lawsuits that materially affect the Standards 
Recognition Entity, changes in legal status, or any other change that 
materially affects the Standards Recognition Entity's ability to 
function in its recognition capacity; or
    (ii) It seeks to recognize apprenticeship programs in additional 
industries or occupational areas.
    (iii) Notice must be provided within 30 days of the circumstances 
described in paragraphs (2)(i)-(ii) of this section. In light of the 
information received, the

[[Page 30013]]

Administrator will evaluate whether the Standards Recognition Entity 
remains qualified for recognition under paragraph (b), including its 
qualification to recognize programs in the new industries or 
occupational areas identified under paragraph (c)(2)(ii) of this 
section.
    (d) Requirements for denials of recognition. (1) A denial of 
recognition must be in writing and must state the reason(s) for denial. 
The notice must specify the remedies that must be undertaken prior to 
consideration of a resubmitted application.
    (2) Notice must be sent by certified mail, return receipt 
requested, and must state that a request for administrative review may 
be made within 30 calendar days of receipt of the notice.
    (3) The notice must explain that a request for administrative 
review must be made by mail and addressed to the Chief Administrative 
Law Judge for the Department. The mailing address is Office of 
Administrative Law Judges, U.S. Department of Labor, Suite 400 North, 
800 K Street NW, Washington, DC 20001-8002.


Sec.  29.22  Responsibilities and Requirements of Standards Recognition 
Entities.

    (a) A Standards Recognition Entity must:
    (1) Recognize or reject an apprenticeship program seeking 
recognition in a timely manner;
    (2) Inform the Administrator within 30 days when it has recognized 
or terminated the recognition of an Industry Program, and include the 
name of the program;
    (3) Provide the Administrator any data or information the 
Administrator is expressly authorized to collect under this subpart; 
and
    (4) Only recognize and maintain the recognition of Industry 
Programs that meet the following requirements:
    (i) The Industry Program must train apprentices for employment in 
jobs that require specialized knowledge and experience and involve the 
performance of complex tasks.
    (ii) The Industry Program has structured work experiences, and 
appropriate classroom or related instruction adequate to help 
apprentices achieve proficiency and earn credential(s); involves an 
employment relationship; and provides apprentices progressively 
advancing industry-essential skills.
    (iii) The Industry Program ensures that, where appropriate, 
apprentices receive credit for prior knowledge and experience relevant 
to the instruction of the Industry Program.
    (iv) The Industry Program provides apprentices industry-recognized 
credential(s) during participation in or upon completion of the 
Industry Program.
    (v) The Industry Program provides a safe working environment for 
apprentices that adheres to all applicable Federal, State, and local 
safety laws and regulations.
    (vi) The Industry Program provides apprentices structured 
mentorship opportunities to ensure apprentices have additional guidance 
on the progress of their training and their employability.
    (vii) The Industry Program ensures apprentices are paid at least 
the applicable Federal, State, or local minimum wage. The Industry 
Program must provide a written notice to apprentices of what wages 
apprentices will receive and under what circumstances apprentices' 
wages will increase.
    (viii) The Industry Program affirms its adherence to all applicable 
Federal, State, and local laws pertaining to Equal Employment 
Opportunity (EEO).
    (ix) The Industry Program discloses, prior to when apprentices 
agree to participate in the program, any ancillary costs or expenses 
that will be charged to apprentices (such as costs related to tools or 
educational materials).
    (b) A Standards Recognition Entity must validate its Industry 
Programs' compliance with paragraph (a)(4) of this section when it 
provides the Administrator with notice of recognition under paragraph 
(a)(2) of this section.
    (c) A Standards Recognition Entity must disclose the credential(s) 
that apprentices will earn during their successful participation in or 
upon completion of an Industry Program.
    (d) A Standards Recognition Entity's policy and procedures for 
recognizing Industry Programs must be sufficiently detailed that 
programs will be assured of equitable treatment, and will be evaluated 
based on their merits. A Standards Recognition Entity must ensure that 
its decisions are based on objective criteria, and are impartial and 
confidential.
    (e) An entity recognized as a Standards Recognition Entity must 
either not recognize its own apprenticeship program(s), or it must 
provide for impartiality, and mitigate any potential conflicts of 
interest, via specific policies, processes, procedures, and/or 
structures, which must be described in detail in the Standards 
Recognition Entity application.
    (f) A Standards Recognition Entity must either not offer services, 
including consultative services, to Industry Programs that would impact 
the impartiality of the Standards Recognition Entity's recognition 
decisions, or it must provide for impartiality, and mitigate any 
potential conflicts of interest, via specific policies, processes, 
procedures, and/or structures, which must be described in detail in the 
Standards Recognition Entity application.
    (g) The recognition of an Industry Program may last no longer than 
5 years. A Standards Recognition Entity may not re-recognize an 
Industry Program without the Industry Program seeking re-recognition.
    (h) A Standards Recognition Entity must remain in an ongoing 
quality-control relationship with the Industry Programs it has 
recognized. The specific means and nature of the relationship between 
the Industry Program and Standards Recognition Entity will be defined 
by the Standards Recognition Entity, provided the relationship:
    (1) Does in fact result in reasonable and effective quality control 
that includes, as appropriate, consideration of apprentices' credential 
attainment, program completion, and job placement rates;
    (2) Does not place barriers on the Industry Program receiving 
recognition from another Standards Recognition Entity; and
    (3) Does not conflict with this subpart or violate any applicable 
Federal, State, or local law.
    (i) Participating as a Standards Recognition Entity under this 
subpart does not make the Standards Recognition Entity a joint employer 
with entities that develop or deliver Industry Programs.
    (j) Each year, a Standards Recognition Entity must make publicly 
available the following information on each Industry Program it 
recognizes:
    (1) Up-to-date contact information for each program;
    (2) The total number of apprentices annually enrolled in each 
program;
    (3) The total number of apprentices who successfully completed the 
program annually;
    (4) The annual completion rate for apprentices;
    (5) The median length of time for program completion; and
    (6) The post-apprenticeship employment rate of apprentices at 
completion.
    (k) A Standards Recognition Entity must have policies and 
procedures that require Industry Programs' adherence to applicable 
Federal, State, and local laws pertaining to Equal Employment 
Opportunity, and must facilitate such adherence through the Standard 
Recognition Entity's policies and procedures regarding potential

[[Page 30014]]

harassment, intimidation, and retaliation (such as the provision of 
anti-harassment training, and a process for handling equal employment 
opportunity and harassment complaints from apprentices); must have 
policies and procedures that reflect comprehensive outreach strategies 
to reach diverse populations that may participate in Industry Programs; 
and must assign responsibility to an individual to assist Industry 
Programs with matters relating to this paragraph.


Sec.  29.23  Quality Assurance.

    (a) The Administrator may request and review materials from 
Standards Recognition Entities to ascertain Standards Recognition 
Entities' conformity with the requirements of this subpart.
    (b) Standards Recognition Entities should provide requested 
materials, consistent with Sec.  29.22(a)(3).


Sec.  29.24  Publication of Standards Recognition Entities and Industry 
Programs.

    The Administrator will make publicly available a list of Standards 
Recognition Entities and the Industry Programs they recognize.


Sec.  29.25  Expedited Process for Recognizing Industry Programs as 
Registered Apprenticeship Programs.

    (a) An Industry Program may become a registered apprenticeship 
program by providing any program information the Administrator finds 
necessary to determine that the Industry Program also fully meets the 
requirements of part 29 subpart A, and part 30, of this title.
    (b) The Administrator may request additional information necessary 
to determine if the Industry Program meets those requirements.
    (c) The Administrator will make a decision within 60 days of 
receiving all necessary information.


Sec.  29.26  Complaints against Standards Recognition Entities.

    (a) A complaint arising from a Standards Recognition Entity's 
compliance with this subpart may be submitted by an apprentice, the 
apprentice's authorized representative, a personnel certification body, 
an employer, a Registered Program representative, or an Industry 
Program to the Administrator for review.
    (b) The complaint must be in writing and must be submitted within 
60 days of the circumstances giving rise to the complaint. It must set 
forth the specific matter(s) complained of, together with relevant 
facts and circumstances. Copies of pertinent documents and 
correspondence must accompany the complaint.
    (c) Complaints under this section are addressed exclusively through 
the review process outlined in Sec.  29.27.
    (d) Nothing in this section precludes a complainant from pursuing 
any remedy authorized under Federal, State, or local law.


Sec.  29.27  Review of a Standards Recognition Entity.

    (a) The Administrator may initiate review of a Standards 
Recognition Entity if it receives information indicating that:
    (1) The Standards Recognition Entity is not in substantial 
compliance with this subpart; or
    (2) The Standards Recognition Entity is no longer capable of 
continuing as a Standards Recognition Entity.
    (b) Before reaching a decision concerning its review, the 
Administrator will provide the Standards Recognition Entity written 
notice of the review, by certified mail with return receipt requested, 
and an opportunity to provide information for the review. Such notice 
must include a statement of the basis for review, including potential 
areas of substantial noncompliance and a detailed description of the 
information supporting review under paragraphs (a)(1) or (a)(2) of this 
section, or both.
    (c) Upon conclusion of the Administrator's review, the 
Administrator will give written notice to the Standards Recognition 
Entity of its decision to either take no action against the Standards 
Recognition Entity, or to suspend the Standards Recognition Entity as 
provided under Sec.  29.28.


Sec.  29.28  Suspension and Derecognition of a Standards Recognition 
Entity.

    The Administrator may suspend a Standards Recognition Entity for 45 
calendar days based on the Administrator's review and determination 
that any of the situations described in Sec.  29.27(a)(1) or (a)(2) 
exist.
    (a) The Administrator must provide notice in accord with Sec.  
29.21(d)(2)-(3), but stating that a request for administrative review 
may be made within 45 calendar days of receipt of the notice.
    (b) The notice must set forth an explanation of the Administrator's 
decision, including identified areas of substantial noncompliance and 
necessary remedial actions, and must explain that the Administrator 
will derecognize the Standards Recognition Entity in 45 calendar days 
unless remedial action is taken or a request for administrative review 
is made.
    (c) If, within the 45-day period, the Standards Recognition Entity:
    (1) Specifies its proposed remedial actions and commits itself to 
remedying the identified areas of substantial noncompliance, the 
Administrator will extend the 45-day period to allow a reasonable time 
for the Standards Recognition Entity to implement remedial actions.
    (i) If the Administrator subsequently determines that the Standards 
Recognition Entity has remedied the identified areas of substantial 
noncompliance, the Administrator must notify the Standards Recognition 
Entity, and the suspension will end.
    (ii) If the Administrator subsequently determines that the 
Standards Recognition Entity has not remedied the identified areas of 
substantial noncompliance, after the close of the 45-day period and any 
extensions previously allowed by the Administrator the Administrator 
will derecognize the Standards Recognition Entity and must notify the 
Standards Recognition Entity in writing and specify the reasons for its 
determination. Notice must comply with Sec.  29.21(d)(2)-(3).
    (2) Makes a request for administrative review, then the 
Administrator shall refer the matter to the Office of Administrative 
Law Judges to be addressed in accord with Sec.  29.30.
    (3) Does not act under paragraphs (c)(1) or (c)(2) of this section, 
the Administrator will derecognize the Standards Recognition Entity.
    (d) During the suspension:
    (1) The Standards Recognition Entity is barred from recognizing new 
programs.
    (2) The Administrator will publish the Standards Recognition 
Entity's suspension on the public list described in Sec.  29.24.


Sec.  29.29  Derecognition's Effect on Industry Programs.

    (a) Following its Standards Recognition Entity's derecognition, an 
Industry Program will maintain its status until 1 year after the 
Administrator's decision derecognizing the Industry Program's Standards 
Recognition Entity becomes final, including any appeals. At the end of 
1 year, the Industry Program will lose its status unless it is already 
recognized by another Standards Recognition Entity recognized under 
this subpart.
    (b) Losing Industry Program status has no effect on an 
apprenticeship program's registration under subpart A.


Sec.  29.30  Requests for Administrative Review.

    (a) Within 30 calendar days of the filing of a request for 
administrative

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


Sec.  29.31  Scope and Deconfliction between Apprenticeship Programs 
under Subpart A of This Part and This Subpart B

    (a) The Department will only recognize Standards Recognition 
Entities that seek to recognize Industry Programs in sectors without 
significant registered apprenticeship opportunities.
    (b) For purposes of this section, a sector with significant 
registered apprenticeship opportunities is one that has had more than 
25% of all federal registered apprentices per year on average over the 
prior 5-year period, or that has had more than 100,000 federal 
registered apprentices per year on average over the prior 5-year 
period, or both, as reported through the prior fiscal year by the 
Office of Apprenticeship.

APPENDIX A TO SUBPART B--INDUSTRY-RECOGNIZED APPRENTICESHIP PROGRAM 
STANDARDS RECOGNITION ENTITY APPLICATION FORM

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Molly E. Conway,
Acting Assistant Secretary for Employment and Training, Labor.

[FR Doc. 2019-13076 Filed 6-24-19; 8:45 am]
 BILLING CODE 4510-FR-C