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On the Job Training
Rochelle DanielsAssistant County Attorney
WorkForce One Employment Solutions
6301 NW 5th Way, Suite 3000
Fort Lauderdale, Florida 33309
On the Job Training - OJT
• The two unique features of OJT are
– The individual begins training as an employee of
the employer
– The trainee is subject to the same working
conditions as other similarly employed individuals
• The OJT Employee/Trainee receives
– Training in a productive setting
– Under appropriate supervision,
– Acquires occupational skills and knowledge in an
on-the-job training environment.
On the Job Training - OJT
• There is an obvious benefit to employers
• But the focus of OJT is the participant
– OJT provides an opportunity for eligible individuals
to receive the training necessary to acquire skills
and knowledge that will enable them to maintain
unsubsidized employment and compete for job
advancement.
• If properly administered, OJT provides the
most direct opportunity for unsubsidized
employment
OJT~ The Basics - WIA 122
Eligible Training Providers Exception
• Providers of OJT are not subject to the eligible training provider requirements– They do not need to be on the list or be pre-qualified
and approved by the local board
– Does this refer to third party providers or employers• It refers to both
• However note third party providers ( OJT providers as opposed to employers) need to be procured and approved by the local board except
– when the provider is a designated /procured one stop operator
– When the provider is a procured intensive service provider
» With OJT identified as an activity in the procurement
OJT ~ The BasicsWIA 101 (31)
• ``On-the-job training''
– Means training by an employer provided to a paid participant in a job that--
• Provides knowledge or skills essential to the full and adequate performance of the job;
• Provides reimbursement to the employer
– Of up to 50%* of the wage rate of the participant
– For the extraordinary costs of providing the training and additional supervision related to the training;
• Is limited in duration as appropriate to the occupation considering
– The content of the training
– The prior work experience of the participant, and
– The participant service strategy
• * Note some states have waivers of the 50% and NEG OJT allows for a greater reimbursement.
Change From Previous Law
• Even though it was over 10 years ago there is
a difference between JTPA and WIA
– JTPA limited OJT to six months
– WIA does not limit OJT to six months
• WIA Sec. 101(31)(C) states OJT duration is determined
based upon the occupation being trained for.
OJT Duration20 CFR Sec. 663.700 (c)
• OJT contracts are limited in duration – To the time needed
• For a participant to become proficient
• In the occupation for which training is being provided
– In determining how long the training should be consider:
• The skill requirements of the occupation
• The academic and occupational skill level of the participant,
• The prior work experience,
• The participant's individual employment plan.
(WIA sec. 101(31)(C).)
Note: NEG OJT is limited to 6 months
OJT ~ The BasicsSec. 663.700(c)
• OJT contracts must
– Identify the occupation
– The skills and competencies to be learned
– The length of time the training will be provided.
• Preamble
– States and local areas have the flexibility to
determine the information needed for inclusion in
OJT contracts.
– No mandate that contracts contain documentation
that competencies are acquired
What are the requirements for OJT?
20 CFR Sec. 663.700
• 663.700 sets out the requirement for a contract
– There must be a contract with the employer
– The Preamble – USDOL believes that written
agreements are necessary to ensure OJT
requirements are met.
– Contracts are with employers - who is an employer?
• Public sector
• Private non-profit sector
• Private sector.
• NEG OJT – No public sector contracts
Extra-Ordinary Costs20 CFR Sec. 663.700
• Through the OJT contract– Occupational training is provided
– In exchange for the reimbursement of up to 50 percent of the wage
• To compensate for the employer's extraordinary costs. (WIA sec.101(31)(B).)
– Training
– Supervision
– Reduction in production
• Employers are not required to document extraordinary costs 663.710 (c).
– Can local boards reimburse for benefits?• No – because the law says 50% of the wage
“Bad Employers”20 CFR Sec. 663.700 (b)
• Local areas should not contract with “bad
employers”– An employer with a pattern of
• Failing to retain OJT participants
• Failing to provide
– Wages, benefits, and working conditions
– Equal to those provided to regular employees
– Who have worked a similar length of time and are
doing the same type of work. (WIA sec. 195(4).)
The Preamble - Employers
• Local Boards may consider these and other factors in
selecting employers for OJT but there is no mandate
– Wages and benefits that lead to family self sufficiency;
– Ensure long term self sufficiency for their employees
– Exhibit a strong pattern of union management cooperation;
– After upgrading existing employees through OJT, agree to
backfill vacancies with public assistance recipients and other
low income persons.
OJT Requirements for Employed
Workers
Sec. 663.705
• OJT contracts may be written for eligible employed workers when– The employee is not earning a self-sufficient wage as
determined by Local Board policy
– The requirements in Sec. 663.700 are met; and
– The OJT relates to the
• Introduction of new technologies
• Introduction to new production or service procedures,
• Upgrading to new jobs that require
– Additional skills
– Workplace literacy
– Or other appropriate purposes identified by the Local Board.
Employed Worker Eligibility
• WIA 134 (d)(3)(A)(ii) and (d)(4)(A)(i),provides that one
of the eligibility criteria for intensive and training
services for employed individuals is
– They need the services to obtain or retain employment that
allows for self-sufficiency.
– These criteria enable employed adults in entry level jobs
• To receive services leading to a career or
• To obtain those skills necessary to improve their earning capacity
in another job to assist them in attaining self-sufficiency.
• This eligibility requirement does not apply to training provided as
part of Statewide workforce investment activities under 20 CFR
665.210(d)
Relocation
• OJT contracts cannot be executed with a company – Which has in whole or in part relocated from
somewhere else in the US
– dislocating employees • What if all employees are offered jobs in the new
location?
• It doesn’t matter unless they all decide to move
– until 120 days after opening up for business in the new location
– See 667.268, 667.269
NEG OJT
• 4/30/09 TEGL 19-08
– Expanded access to NEG Funds
– Established NEG eligibility for workers previously
excluded from receiving NEG services
– Clarified NEG program service coordination with
Trade Adjustment Assistance (TAA)
– Created two new types of NEGs:
• Regional Economic Impact (REI) and
• Formula Funds Replenishment.
– Funds can be spent through June 2012
NEG OJT – WIA Sec 173
• Background
– NEGs are discretionary grants awarded by DOL under section 173 of WIA
– Provides employment-related services for dislocated workers.
– Intended to temporarily expand service capacity at the state and local levels by providing time-limited funding in response to significant dislocation events.
• Plant closures and mass layoffs
• Other events per 20 CFR 671.11 0(f)).
NEG OJT
• It is expected workers will come from
– Sectors with high job losses or
– Recently dislocated workers who are
transitioning from temporary or under-
employed situations in
• Construction
• Manufacturing
• Transportation and logistics
• Administrative and support services opportunity
NEG OJT
• ARRA OJT NEGs are limited to
– dislocated workers
– Laid offs 01/01/2008 and after
– Use WIA definition of eligibility
• These individuals are considered unlikely to
return to their previous industry or occupation for
purposes of determining eligibility to participate
under these grants.
NEG OJT Eligibility
• Registered apprenticeship sponsors can
use this program for new apprentices if
the apprentice meets the definition of a
dislocated worker.
• Recently returned veterans who meet the
definition of a dislocated worker are
eligible
– Veterans receive priority of service for WIA
The Skills Gap Reimbursement
Waiver
• Skill gaps– States have flexibility to implement a sliding scale
for employer reimbursement based• On the participant’s initial skill level and
• the skill level needed to perform the job,
• within a scale to be established by state policy which incorporates the use of recognized skill assessment tools.
– The sliding scales for reimbursement willbe built into the terms and conditions of the grant award for different size employers and the skills gap
The Average Wage
Calculation
• Employers may also be reimbursed
based upon the average wage
• This is a more complicated calculation
NEG OJT Duration
• NEG OJT limited to 6 months
– This exceeds the average length of time for
current WIA OJT activities.
– Co-enrollment cannot be used to expand
the training beyond 6 months
What about the ARRA Prohibitions
• All grant requirements and limitations
applicable to ARRA funded NEGs will be
applicable to the OJT NEG
• OJT jobs are prohibited at
– Casinos or other gambling establishments
– Swimming pools
– Aquariums
– Zoos
– Golf courses
Sequential NEG OJT
• Sequential OJT is allowable
• Skill training should be an integral
component of the OJT NEG initiative.
• The Individual Development Plan should
articulate each training component.
Can start up companies be
potential OJT NEG partners?
• Yes
– They must be an established business entity
– With a verifiable Employer Id Number (EIN)
or DUNS number.
Placement agencies and
NEG OJT
• OJTs may not be entered into with staffing
companies
– OJT NEG is intended to benefit dislocated workers
by utilizing employers who are willing to
• Train participants who are in need of up-skilling and
• To permanently hire trainees at the end of the OJT
• OJT contracts can only be written with employers actually
employing participants and assuming the costs and
benefits of the OJT.
NEG OJT and Retention
• It is ETA’s intention that OJT participants
receive priority for hiring with the employer
once the training period has ended.
• OJT contracts should be developed so as to
maximize the potential of trainees to be
permanently hired once the training period has
ended.
When is OJT Right?
• The skills the participant needs are those
which can be learned from the work
environment
• Skills required for the job are better learned
through OJT than classroom training
• The job and its career ladder are a logical step
in achieving goals set forth in the participant
ISS
Marketing
• In general, OJT is an employer service
• But it is entered into for the benefit of the
participant.
– OJT positions should be developed using a
team approach
• The marketers
• The case manager/ counselor and
• The participant
Marketing
• Develop, develop, develop– Maintain an inventory of job openings
• Many may never be filled
• Disappoint employers
• A lot of work for no return
• A job is always available – but vacancies do not stay openindefinitely
• Consider– Identifying a participant and developing a position
suitable to meet the individual’s interests and skilllevels.
– Reverse referrals
– Participant self referral
MARKETING AND
PLACEMENT• Identify Key Employers
– Large Companies
– Public Agencies
– Mid Size Companies
– Major Industries
– Small Companies
– Major Training
– Health Care
– Education
– Not for Profits
• Identify Your Client
– Welfare Recipient
– Dislocated Workers
– Displaced Homemakers
– Older Workers
– Disabled
– Offenders
– Out of School Youth
– Other
Selling OJT to Employers
• WIB staff should encourage WIB members to participate
• WIB members are ambassadors for the program
– Chamber Meetings
– Rotary
– Intermediaries
– Business meetings
Selling OJT to Employers
• Divide the workforce area
– By type of business / Industry
– Geographically
– Small business, Medium, Large
– Retail v Manufacturing
• Staff should familiarize themselves with the type of business
• Make an appointment
Selling OJT to Employers• Onsite visit
– Benefit to the employer – business
– During this economy
• Helps to defray wages (most expensive cost of doing
business) while the economy returns
• For NEG OJT – displaced workers are experienced
workers generally with
– Good employability skills
– Transferable skills
– Assumed not likely to return to pervious occupation
• For Fledgling start ups – stretch the investment $
Selling to Employers
• In any economy– Support is provided to the trainees
• Soft Skills
• Transportation
• Clothes or uniforms
• Tools
– Trainees are matched based upon interests and skills
• Employer knows exactly what the trainees skills are
• Employer has an opportunity to train based upon what best meets the needs of the business
Selling to OJT Employers
• Reverse referral – Got a bad rap
• Some employers hired participants prior to contract execution
• Some employers hired previous employees into the same jobs
– Can work• Employer becomes part of the recruitment strategy
• Explain carefully what is not allowed
• Know that the employer will accept the trainee that they refer
• Make sure to check the wage records and to ask some critical questions of the participant before final approval
Selling OJT to Employers
• The contract is so long…– Maybe, but most of the requirements are not new
requirements they are the law regardless of who is hired
• Will the IRS be coming to look at my books– Not because of this program
• How about immigration– We are not the immigration police
– All participants must be “legal” to work in the United States
Selling to Employers
• There is so much paperwork– We can do it in an hour
– It only happens once – use a master contract
– Let’s break it down• Contract
• Invoices
– You can arrange for one performance based bill or monthly invoicing
– The employer is receiving significant monetary incentive
– The employer receives one stop support worth $ _______
– The OJT full package is worth $ ______
The OJT Contract
• Using a master contract– Only one agreement per employer regardless of the
number of employees
– Each employee/trainee has an OJT training plan for their position it includes the $ and is signed by the parties.
– The training plan• Skills of the job
• Skills to be acquired
• Length of time
• A measurement
• The wage – ( the reimbursement )
OJT Contract• OJT contracts must
– ensure participants are given a structured training opportunity - that is why there is a training plan
• to gain the knowledge and competencies
• to be successful in the occupation in which they receive training.
– identify the occupation
– Identify the skills and competencies to be learned
– State the length of time the training will be provided.
The OJT Contract• Participants may not begin training prior to contract
execution.
• Contract execution is complete when the contractpackage has all required signatures– For the employer
• Its the owner where the business is not incorporated
• A partner where the business is a partnership
• An officer if the business is a corporation.
Corporations may designate other signatories but you shouldhave a resolution
• The contract should be reviewed with the employer priorto execution to familiarize the employer with therequirements.
The OJT Contract
• Who Are The Parties?
– Contractor / Employer
– WIB or the Providers
• Concern is that providers change
• What About Third Party Agencies?
NEG OJT Clauses
• Prohibited placements
– Zoos, aquariums, golf courses, casinos
– Limit of average wage or skill gap
– Limit of 6 months
– Partnership requirements
– Prohibition against staffing companies
– Limited to dislocated workers
Payment Requirements
• Payroll Canceled Checks or ACH
– Make sure employers pay only by check no cash.
– Employer must maintain and make available payroll
and other records to support the reimbursement
– Time & attend records
– # Trainees - Training Plan
– Wage Reimbursement
• Start Wage
• 50% of participant reimbursement
Some Other Required Items• Relocation Certificate
• Non discrimination
• Sectarian and Labor assurances
• Drug Free
• Debarment Certificates
• Lobbying Certificates
• Records Retention - 5 Years
• Maintenance of Effort
• Modification
• Access to Records
• Participant Progress
• Covenant against contingent fees
• Reasonableness of costs – third party, high wages– NEG capped by average wage
Contract Clauses • Conditions For Participant Termination
• Necessary Equipment and Tools
• Support Services
• Coupled or Sequenced Training
• Disallowed Costs
• Non Disclosure of Confidential Information
• Length of OJT - See Employer Terms
• Retention
• Performance Based?– Retention Impacts Contractor Demonstrated Performance
• Employer’s. Notification before termination - If possible
The Contract
• Subcontracting and Assignment
• Notices
• Unilateral Amendments To Address Changes In Law/Regulations
• Conflict of Interest and Nepotism
• Assurance no one charged a fee for the placement or referral of the individual to an OJT position