[Federal Register Volume 81, Number 161 (Friday, August 19, 2016)]
[Rules and Regulations]
[Pages 56071-56469]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15975]



[[Page 56071]]

Vol. 81

Friday,

No. 161

August 19, 2016

Part VI





 Department of Labor





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Employment and Training Administration





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20 CFR Parts 603, 651, 652, et al.





Workforce Innovation and Opportunity Act; Final Rule

Federal Register / Vol. 81 , No. 161 / Friday, August 19, 2016 / 
Rules and Regulations

[[Page 56072]]


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DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Parts 603, 651, 652, 653, 654, 658, 675, 679, 680, 681, 682, 
683, 684, 685, 686, 687, and 688

[Docket No. ETA-2015-0001]
RIN 1205-AB73


Workforce Innovation and Opportunity Act

AGENCY: Employment and Training Administration (ETA), Labor.

ACTION: Final rule.

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SUMMARY: The Department of Labor (DOL or the Department) issues this 
Final Rule to implement titles I and III of the Workforce Innovation 
and Opportunity Act (WIOA). Through these regulations, the Department 
reforms and modernizes our nation's workforce development system. This 
rule provides the framework for changes for statewide and local 
workforce development systems to increase the employment, retention, 
earnings, and occupational skill attainment of U.S. workers, 
particularly those individuals with barriers to employment, so they can 
move into good jobs and careers and provide businesses with the skilled 
workforce needed to make the United States more competitive in the 21st 
Century global economy.

DATES: This Final Rule is effective October 18, 2016.

FOR FURTHER INFORMATION CONTACT: Adele Gagliardi, Administrator, Office 
of Policy Development and Research (OPDR), U.S. Department of Labor, 
Employment and Training Administration, 200 Constitution Avenue NW., 
Room N-5641, Washington, DC 20210, Telephone: (202) 693-3700 (voice) 
(this is not a toll-free number). If you use a telecommunications 
device for the deaf (TDD), call 1-800-326-2577.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
    A. Purpose of the Regulatory Action
    B. Summary of Major Provisions
    C. Costs and Benefits
II. Acronyms and Abbreviations
III. Rulemaking Authority and Background
    A. Workforce Innovation and Opportunity Act Principles
    B. Major Changes From the Workforce Investment Act of 1998
    C. Workforce Innovation and Opportunity Act Rulemaking Process
    D. Legal Basis
IV. Public Comments Received on the Notice of Proposed Rulemaking
V. Section-by-Section Discussion of the Public Comments and Final 
Regulations
    A. Part 603--Federal-State Unemployment Compensation Program
    B. Part 675--Introduction to the Regulations for the Workforce 
Development Systems Under Title I of the Workforce Innovation and 
Act
    C. Part 679--Statewide and Local Governance of the Workforce 
Development System Under Title I of the Workforce Innovation and 
Opportunity Act
    D. Part 680--Adult and Dislocated Worker Activities Under Title 
I of the Workforce Innovation and Opportunity Act
    E. Part 681--Youth Activities Under Title I of the Workforce 
Innovation and Opportunity Act
    F. Part 682--Statewide Activities Under Title I of the Workforce 
Innovation and Opportunity Act
    G. Part 683--Administrative Provisions Under Title I of the 
Workforce Innovation and Opportunity Act
    H. Part 684--Indian and Native American Programs Under Title I 
of the Workforce Innovation and Opportunity Act
    I. Part 685--National Farmworker Jobs Program Under Title I of 
the Workforce Innovation and Opportunity Act
    J. Part 686--The Job Corps Under Title I of the Workforce 
Innovation and Opportunity Act
    K. Part 687--National Dislocated Worker Grants
    L. Part 688--Provisions Governing the YouthBuild Program
    M. Part 651--General Provisions Governing the Wagner-Peyser Act 
Employment Service
    N. Part 652--Establishment and Functioning of State Employment 
Service
    O. Part 653--Services of the Wagner-Peyser Act Employment 
Service
    P. Part 654--Special Responsibilities of the Employment Service
    Q. Part 658--Administrative Provisions Governing the Wagner-
Peyser Act Employment Service
VI. Rulemaking Analyses and Notices
    A. Executive Orders 12866 and 13563: Regulatory Planning and 
Review
    B. Regulatory Flexibility Act
    C. Small Business Regulatory Enforcement Fairness Act of 1996
    D. Paperwork Reduction Act
    E. Executive Order 13132 (Federalism)
    F. Unfunded Mandates Reform Act of 1995
    G. Plain Language
    H. Assessment of Federal Regulations and Policies on Families
    I. Executive Order 13175 (Indian Tribal Governments)
    J. Executive Order 12630 (Government Actions and Interference 
With Constitutionally Protected Property Rights)
    K. Executive Order 12988 (Civil Justice Reform)
    L. Executive Order 13211 (Energy Supply)

I. Executive Summary

A. Purpose of the Regulatory Action

    On July 22, 2014, President Obama signed the Workforce Innovation 
and Opportunity Act (WIOA) (Pub. L. 113-128), comprehensive legislation 
that reforms and modernizes the public workforce system. WIOA reaffirms 
the role of the public workforce system, and brings together and 
enhances several key employment, education, and training programs. This 
new law provides resources, services, and leadership tools for the 
public workforce system to help individuals find good jobs and stay 
employed and improves employer prospects for success in the global 
marketplace. It ensures that the public workforce system operates as a 
comprehensive, integrated, and streamlined system to provide pathways 
to prosperity for those it serves and continuously improves the quality 
and performance of its services.
    The Department is publishing this Final Rule to implement those 
provisions of WIOA that affect the core programs under title I, the 
Wagner-Peyser Act Employment Service (ES) program, as amended by WIOA 
title III (ES program), and the Job Corps and national programs 
authorized under title I which will be administered by the Department. 
In addition to this DOL WIOA Final Rule, the Departments of Education 
(ED) and Labor jointly are publishing a Final Rule to implement those 
provisions of WIOA that affect all of the WIOA core programs (titles I 
through IV) and which will have to be overseen and administered jointly 
by both Departments. Readers should note that in this DOL WIOA Final 
Rule there are a number of cross-references to the Joint WIOA Final 
Rule published by ED and DOL, including those provisions in the Joint 
WIOA Final Rule regarding performance reporting. In addition to the 
Joint WIOA Final Rule, ED and DOL are issuing separate final rules to 
implement program-specific requirements of WIOA that fall under each 
Department's purview. DOL is issuing this Final Rule governing program-
specific requirements under WIOA title I and for the ES program, as 
amended by WIOA title III. ED is issuing three final rules: One 
implementing program-specific requirements of the Adult Education and 
Family Literacy Act (AEFLA), as reauthorized by title II of WIOA; and 
two final rules implementing all program-specific requirements for 
programs authorized under the Rehabilitation Act of 1973, as amended by 
title IV of WIOA. The Joint WIOA Final Rule and other Department-
specific final rules are published

[[Page 56073]]

elsewhere in this issue of the Federal Register.
    WIOA seeks to deliver a broad array of integrated services to 
customers of the public workforce system, which include both 
individuals seeking jobs and skills training and employers seeking 
skilled workers. The law improves the public workforce system by more 
closely aligning it with regional economies and strengthening the 
network of about 2,500 one-stop centers. Customers must have access to 
a seamless system of high-quality services through coordination of 
programs, services, and governance structures. The Act builds closer 
ties among key workforce partners--business leaders, State and Local 
Workforce Development Boards (WDBs), labor unions, community colleges, 
non-profit organizations, youth-serving organizations, and State and 
local officials--in striving for a more job-driven approach to training 
and skills development.
    WIOA will help job seekers and workers access employment, 
education, training, and support services to succeed in the labor 
market and match employers with the skilled workers they need to 
compete in the global economy. The purposes of WIOA described in the 
statute include:
     Increasing access to and opportunities for the employment, 
education, training, and support services that individuals need, 
particularly those with barriers to employment.
     Supporting the alignment of workforce investment, 
education, and economic development systems, in support of a 
comprehensive, accessible, and high-quality workforce development 
system.
     Improving the quality and labor market relevance of 
workforce investment, education, and economic development efforts.
     Promoting improvement in the structure and delivery of 
services.
     Increasing the prosperity of workers and employers.
     Providing workforce development activities that increase 
employment, retention, and earnings of participants and that increase 
postsecondary credential attainment and as a result, improve the 
quality of the workforce, reduce welfare dependency, increase economic 
self-sufficiency, meet skill requirements of employers, and enhance 
productivity, and the competitiveness of our nation.
    WIOA's passage and implementation builds upon the groundwork 
already laid by an Administration-wide review of employment, education, 
and training programs to ensure Federal agencies do everything possible 
to prepare ready-to-work-Americans with ready-to-be-filled jobs. That 
review identified several priorities for Federally supported training 
programs, including employer engagement; promoting work-based learning 
strategies, such as on-the job training and registered apprenticeships, 
career pathways, and regional collaboration; increasing access to 
training by breaking down barriers; and data-driven program management 
and evaluation.
    As WIOA implementation progresses, success in accomplishing the 
purposes of WIOA at the State, local, and regional levels, will be 
determined by whether:
     One-stop centers are recognized as a valuable community 
resource and are known for high quality, comprehensive services for 
customers.
     The core programs and one-stop partners provide seamless, 
integrated customer service.
     Program performance, labor market, and related data drive 
policy and strategic decisions and inform customer choice.
     Youth programs reconnect out-of-school youth (OSY) to 
education and jobs.
     Job seekers access quality career services either online 
or in a one-stop center through a ``common front door'' that connects 
them to the right services.
     One-stop centers facilitate access to high quality, 
innovative education and training.
     Services to businesses are robust and effective, meeting 
businesses' workforce needs across the business lifecycle.
    As noted throughout this Final Rule, the Department will be issuing 
guidance to help our regulated communities understand their rights and 
responsibilities under WIOA and these regulations. Consistent with the 
Administrative Procedure Act's exemption from its notice and comment 
requirement for general statements of policy, interpretations, and 
procedural instructions, this guidance will provide interpretations of 
many of the terms and provisions of these regulations and more detailed 
procedural instructions that would not be appropriate to set out in 
regulations. The Department also will be issuing guidance to provide 
information on current priorities and initiatives, suggested best 
practices, and in response to stakeholder questions.

B. Summary of Major Provisions

    To implement WIOA title I, the Department has added several new CFR 
parts to title 20, chapter V (ETA's regulations). In particular, 
because the WIA regulations will continue to be referenced in existing 
and historic documents for some time after the WIOA transition, the 
Department is creating entirely new programmatic regulations to reflect 
the requirements of WIOA, rather than amending the WIA title I 
regulations found at 20 CFR parts 660 through 672. Table 1 below 
presents a crosswalk for these new CFR parts to illustrate how they 
relate to the existing WIA regulations.
    In addition, the Department is revising in this DOL WIOA Final Rule 
certain other CFR parts in accordance with WIOA, rather than creating 
entirely new parts, where it was not necessary to retain the WIA 
version of the regulation. For example, the Department retains the 
Wagner-Peyser Act implementing regulations in 20 CFR parts 651 through 
658 and is revising in this Final Rule only those parts that are 
affected by WIOA, i.e., parts 651 through 654 and 658. Further, the 
Department is amending portions of part 603 (Federal-State Unemployment 
Compensation (UC) Program; Confidentiality and Disclosure of State UC 
Information) in accordance with WIOA. These CFR parts that are amended 
but not new in this DOL WIOA Final Rule are indicated in Table 1 by 
showing that they do not change location in the CFR from WIA to WIOA. 
The remainder of this section I.B briefly summarizes each CFR part in 
this Final Rule and any significant differences between the notice of 
proposed rulemaking (NPRM) and Final Rule.

                                 Table 1--Crosswalk of WIA and WIOA Regulations
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          Subject matter                        WIA CFR part                           WIOA CFR part
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Federal-State UC Program.........  20 CFR part 603.......................  20 CFR part 603.
Definitions/Introduction to        20 CFR part 660.......................  20 CFR part 675.
 Regulations.
State and Local WDBs, Local and    20 CFR part 661.......................  20 CFR part 679.
 Regional Plans, Waivers.
Adult and Dislocated Workers.....  20 CFR part 663.......................  20 CFR part 680.

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Youth Activities.................  20 CFR part 664.......................  20 CFR part 681.
Statewide Activities.............  20 CFR part 665.......................  20 CFR part 682.
Administrative Provisions........  20 CFR part 667.......................  20 CFR part 683.
Indian and Native American         20 CFR part 668.......................  20 CFR part 684.
 Programs.
National Farmworker Jobs Program.  20 CFR part 669.......................  20 CFR part 685.
Job Corps........................  20 CFR part 670.......................  20 CFR part 686.
National Dislocated Worker Grants  20 CFR part 671.......................  20 CFR part 687.
YouthBuild.......................  20 CFR part 662.......................  20 CFR part 688.
Wagner-Peyser Act Employment       20 CFR part 651.......................  20 CFR part 651.
 Service--Definitions.
Wagner-Peyser Act Employment       20 CFR part 652.......................  20 CFR part 652.
 Service--Establishment and
 Functioning.
Wagner-Peyser Act Employment       20 CFR part 653.......................  20 CFR part 653.
 Service--Services.
Wagner-Peyser Act Employment       20 CFR part 654.......................  20 CFR part 654.
 Service--Special
 Responsibilities.
Wagner-Peyser Act Employment       20 CFR part 658.......................  20 CFR part 658.
 Service--Administrative
 Provisions.
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1. Part 603--Federal-State Unemployment Compensation Program
    The Department is amending its regulations at 20 CFR part 603 to 
help States comply with WIOA. WIOA requires that States use ``quarterly 
wage records'' in assessing the performance of certain Federally funded 
employment and training programs. In particular, this Final Rule amends 
part 603 to clarify and expand, in a limited fashion, those public 
officials with whom the State may share certain confidential 
information to carry out requirements under WIOA, including the use of 
wage records to meet performance reporting requirements and cooperation 
with certain DOL and ED evaluations. The Department is amending part 
603 as proposed in the NPRM.
2. Part 675--Introduction to the Regulations for the Workforce 
Development System Under Title I of the Workforce Innovation and 
Opportunity Act
    Part 675 discusses the purpose of title I of the WIOA, explains the 
format of the regulations governing title I, and provides additional 
definitions for terms used in the law.
    The most notable changes to this part from the regulatory text 
proposed in the NPRM include the addition of a definition of ``family'' 
and strengthening the definition of ``consultation.'' The DOL WIOA 
Final Rule defines ``family'' in the same way as the WIA definition of 
``family,'' except that instead of using the gender-specific 
``husband'' and ``wife'' terms that were in WIA, it substitutes ``a 
married couple.'' This is intended to bring the definition into 
conformance with the recent Supreme Court decisions about marriage 
equality.
    Regarding the revised definition of ``consultation,'' in response 
to public comments expressing concern that the proposed definition was 
not specific enough, the Final Rule definition better focuses on the 
public workforce system and is necessary to clarify that consultation 
constitutes a coming together of stakeholders, robust conversation, and 
opportunity for all parties to express thoughts and opinions.
    The Department also changed the terms ``workforce innovation and 
opportunity system,'' and ``workforce investment system'' to 
``workforce development system'' throughout this rule. This was done to 
enhance consistency across parts and avoid confusion, and to be 
emphasize the role of workforce development boards in this system.
3. Part 679--Statewide and Local Governance of the Workforce 
Development System Under Title I of the Workforce Innovation and 
Opportunity Act
    Part 679 addresses the statewide and local governance provisions of 
the workforce development system under WIOA title I. This part includes 
provisions that govern the conditions under which the Governor must 
establish the State WDB (subpart A); the requirements for designation 
of regions and local areas under WIOA (subpart B); the role of Local 
WDBs, Local WDB membership, and the role of chief elected officials 
(CEOs) (subpart C); the requirements relating to regional and local 
plans (subpart D); the statutory and regulatory waiver authority 
provided by WIOA sec. 189(i), including the requirements for submitting 
a workforce flexibility plan under WIOA sec. 190 (subpart E).
    As for notable changes to this part from the NPRM regulatory text, 
to address concerns about representation of core programs on the State 
WDB was raised by many commenters, the Department has revised the final 
regulations to clarify that, for the WIOA title I and ES programs, a 
single lead State official with primary responsibility for those 
programs may represent more than one of those programs. However, WIOA 
title II programs must have a single, unique representative, and the 
Vocational Rehabilitation (VR) program administered by ED and 
authorized under title I of the Rehabilitation Act of 1973, as amended 
by WIOA title IV (VR program), must have a single, unique 
representative. See Sec.  679.110(b)(3)(iii)(A)(1)(i) through (iii).
    Further, the Department clarified the regulatory text by providing 
details on the duration of initial local area designation and the 
timing of the first available opportunity for local area subsequent 
designation to occur. The Department revised the proposed requirement 
to clarify that initial designation is applicable only to Program Year 
(PY) 2016 and PY 2017. Noting the commenters' concerns regarding 
availability of WIOA performance data, which is required for the 
determination of designation, the Department added Sec.  679.250(c) to 
clarify that no determination of subsequent designation may be made 
before the conclusion of PY 2017. The section-by-section discussion of 
part 679 below details other changes to the part 679 regulatory text, 
as well as Department responses to all substantive public comments.
4. Part 680--Adult and Dislocated Worker Activities Under Title I of 
the Workforce Innovation and Opportunity Act
    In this part of the Final Rule, the Department describes 
requirements relating to the services that are available for adults and 
dislocated workers under WIOA title I. Under WIOA, adults and 
dislocated workers may access career services and training services. 
Training is provided through a robust eligible training provider and 
program list (ETPL), comprised of entities with a demonstrated 
capability of training

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individuals to enter quality employment. WIOA also provides enhanced 
access and flexibility for work-based training options, such as on-the-
job training (OJT), customized training, and incumbent worker training. 
In this part, the Department also discusses supportive services and 
needs-related payments that can be provided, based on customer needs, 
to enable them to participate in WIOA career and training services.
    Some of the notable changes to this part from the NPRM regulatory 
text include that the Final Rule clarifies that the priority of service 
in the adult program for individuals who are public assistance 
recipients, other low-income individuals and for individuals who are 
basic skills deficient exists at all times, not just when funds are 
limited.
    Regarding the role of registered apprenticeship programs, the Final 
Rule emphasizes the key role WIOA envisions for registered 
apprenticeship programs by highlighting these programs as a training 
service for both Individual Training Accounts (ITAs) and as OJT. The 
Final Rule allows apprenticeship programs that are not registered to go 
through the eligible training provider (ETP) process if they want to be 
on the ETP list; the rule does not provide apprenticeship programs that 
are not registered special access to the ETPL. The Department also 
clarifies in this Final Rule that registered apprenticeship programs 
are automatically eligible for the ETPL and the State is required to 
notify them of their automatic eligibility and allow the registered 
apprenticeship program an opportunity to consent to be on the State 
ETPL (see Sec.  680.470). This mechanism must be minimal burden to 
registered apprenticeship programs and must comply with Federal 
guidance. The Department further clarifies in this Final Rule that 
local areas, which have the authority to set more stringent standards 
than the State for eligibility of training providers, may not do so for 
registered apprenticeship programs that are on the State ETPL. Finally, 
the Department clarifies in this Final Rule that registered 
apprenticeship programs may be removed from the State ETPL for 
enforcement reasons other than performance, such as a clear violation 
of WIOA (see Sec.  680.470). Although registered apprenticeship 
programs are not required to report in the same way as other ETPs, they 
are required to be a part of the State annual ETP performance report 
under WIOA sec. 116(d)(2).
5. Part 681--Youth Activities Under Title I of the Workforce Innovation 
and Opportunity Act
    Part 681 describes requirements relating to the services that are 
available to youth under WIOA title I, subtitle B, as part 664 did for 
youth activities funded under WIA. The most significant change to the 
youth formula program under WIOA is the shift to focus resources 
primarily on OSY. WIOA increases the minimum percentage of program 
funds required to be spent on OSY from 30 to 75 percent. The Department 
plans to release subsequent guidance and technical assistance on how 
States and local areas can incorporate strategies for recruiting and 
serving more OSY.
    In addition, WIOA includes a major focus on providing youth with 
work experience opportunities with a requirement that local areas must 
spend a minimum of 20 percent of local area funds on work experience. 
And although work experience becomes the most important of the program 
elements, WIOA also introduces 5 new program elements: Financial 
literacy; entrepreneurial skills training; services that provide labor 
market and employment information about in-demand industry sectors or 
occupations available in the local areas; activities that help youth 
prepare for and transition to postsecondary education and training; and 
education offered concurrently with and in the same context as 
workforce preparation activities and training for a specific occupation 
or occupational cluster.
    The most significant change between the NPRM and the Final Rule 
occurs in Sec.  681.400. This section clarifies that youth activities 
may be conducted by the local grant recipient and that when the Local 
WDB chooses to award grants or contracts to youth service providers, 
such awards must be made using a competitive procurement process in 
accordance with WIOA sec. 123. The section-by-section discussion of 
part 681 below details other changes to the part 681 regulatory text, 
as well as Department responses to all substantive public comments.
6. Part 682--Statewide Activities Under Title I of the Workforce 
Innovation and Opportunity Act
    WIOA provides a reservation of funds for statewide employment and 
training activities. These activities are undertaken by the States, 
rather than by Local WDBs; both the required and allowable activities 
are addressed by part 682. WIOA designates the percentage of funds that 
may be devoted to these activities from annual allotments to the 
States--up to 15 percent must be reserved from youth, adult, and 
dislocated worker funding streams, and up to an additional 25 percent 
of dislocated worker funds must be reserved for statewide rapid 
response activities.
    Some of the notable changes to this part from the NPRM regulatory 
text include the specification that layoff aversion is a required rapid 
response activity, as applicable. Layoff aversion activities may 
include employer-focused activities such as providing assistance to 
employers in managing reductions in force, funding feasibility studies 
to determine if the employer's operation may be sustained through a 
buy-out, etc. Further, the DOL WIOA Final Rule specifies that a 
successful rapid response system includes comprehensive business 
engagement. Finally, the DOL WIOA Final Rule specifies that rapid 
response funds may be used to pay for incumbent worker training as long 
as it is part of a broader layoff aversion strategy. Incumbent worker 
training is also a valuable layoff aversion tool and, under WIA, many 
States requested a waiver to allow such training with rapid response 
funds. This Final Rule change recognizes the value of incumbent worker 
training for this purpose and includes it as allowable under rapid 
response within the context of layoff aversion activities.
7. Part 683--Administrative Provisions Under Title I of the Workforce 
Innovation and Opportunity Act
    Part 683 establishes the administrative provisions for the programs 
authorized under title I of WIOA. Some of the provisions are also 
applicable to grants provided under the Wagner-Peyser Act, as indicated 
in specific sections of the part. The remaining Wagner-Peyser Act 
administrative regulations are located in part 658. Additionally, 
please note that administrative provisions for Job Corps (subtitle C of 
title I of WIOA) contracts are addressed separately in part 686.
    This DOL WIOA Final Rule adds a requirement that the Governor 
establish criteria or factors for approving Local WDB transfers of 
funds between the adult and dislocated worker programs and that these 
criteria must be in a written policy, such as the State Plan or other 
written policy.
    Regarding Pay-for-Performance contract strategies, the final 
regulations made a change from the NPRM in that the Department has 
added a new section that maintained the requirement for a feasibility 
study prior to implementing a Pay-for-Performance contract strategy

[[Page 56076]]

but removed it from the 10 percent limitation of funds.
8. Part 684--Indian and Native American Programs Under Title I of the 
Workforce Innovation and Opportunity Act
    Part 684 governs the Indian and Native American (INA) program 
authorized under WIOA sec. 166. WIOA and part 684 streamline the 
competitive process for awarding the INA program grants. Section 166 of 
WIOA requires both that grants be awarded through a competitive process 
and that grantees submit a 4-year plan (WIOA secs. 166(c) and 166(e)). 
These WIOA regulations streamline the grant award process to ease the 
administrative burdens. The Department will no longer designate 
grantees or require a notice of intent. Moreover, the part 684 WIOA 
regulations have incorporated the 4-year plan into the competitive 
grant award process. Because these changes will help streamline the 
process for awarding grants, these WIOA regulations should result in 
less of an administrative burden on both applicants and the Department.
    Other than a few technical, non-substantive edits, the Department 
has made no changes to the regulatory text in part 684.
9. Part 685--National Farmworker Jobs Program Under Title I of the 
Workforce Innovation and Opportunity Act
    The purpose of part 685 is to implement WIOA sec. 167, which 
authorizes migrant and seasonal farmworker (MSFW) programs. In drafting 
these regulations, the Department consulted with States and MSFW groups 
during stakeholder consultation sessions conducted in August and 
September 2014, as required by WIOA sec. 167(f). MSFW programs include 
career services and training, housing assistance, youth services, and 
related assistance to eligible MSFWs.
    The regulations in part 685 support strategic alignment across 
workforce development programs by: Aligning the definition of 
``farmwork'' found in this part with that used in the ES program; 
adjusting the upper and lower age ranges of eligible MSFW youth to 
conform to those established in WIOA sec. 129 for OSY and ISY; and 
requiring that grantees coordinate services, particularly outreach to 
MSFWs, with the State Workforce Agency (SWA) in their service area and 
the State Monitor Advocate. These changes are intended to support 
coordination between MSFW programs and other workforce programs such as 
the ES program, and facilitate MSFW youth co-enrollments with other 
WIOA title I programs.
    Part 685 includes language regarding training services that 
reinforces that training must be directly linked to an in-demand 
industry or occupation that leads to economic self-sufficiency and 
encourages the attainment of recognized postsecondary credentials when 
appropriate (see Sec.  685.350).
    Part 685 also establishes that grantees funded under WIOA sec. 167 
can serve eligible MSFW youth participants (see Sec. Sec.  685.320 and 
685.510). These regulations also require that a percentage of the total 
funds appropriated each year for WIOA sec. 167 activities must be used 
for housing grants, and described specific housing assistance 
activities to better articulate the types of services that can be 
delivered to eligible MSFWs (see Sec.  685.360).
    Based on the public comments received in response to the NPRM, the 
Department made the following significant changes to part 685 as 
proposed:
     The Final Rule permits a National Farmworker Jobs Program 
(NFJP) grantee some flexibility to increase the OJT reimbursement rate 
up to 75 percent of the wage rate of a participant, provided that such 
reimbursement rates are consistent with the rates set by the Governor 
in the State or Local WDB(s) in the local area(s) in which the grantee 
operates in accordance with WIOA sec. 134(c)(3)(H)(i);
     The Final Rule revises Sec.  685.360(d) to clarify that 
NFJP-funded permanent housing development activities that benefit 
eligible MSFWs do not require individual eligibility determinations;
     The Final Rule clarifies in Sec.  685.360 that development 
of on-farm housing located on property owned and operated by an 
agricultural employer is an allowable activity; and
     In response to commenters' concerns regarding the negative 
impact that would result on performance indicator calculations by 
including individuals who receive only certain minimal ``related 
assistance'' services, which do not require a significant investment of 
staff time and resources, the Department has added language to Sec.  
685.400 that puts the NFJP program in alignment with other WIOA 
authorized programs regarding performance accountability calculations.
10. Part 686--The Job Corps Under Title I of the Workforce Innovation 
and Opportunity Act
    This part establishes regulations for the Job Corps program, 
authorized in title I, subtitle C of WIOA. The regulations address the 
scope and purpose of the Job Corps program and provide requirements 
relating to site selection, protection, and maintenance of Job Corps 
facilities; funding and selection of center operators and service 
providers; recruitment, eligibility, screening, selection and 
assignment, and enrollment of Job Corps students; Job Corps program 
activities and center operations; student support; career transition 
services and graduate services; community connections; and 
administrative and management requirements. The regulations carry out 
Congressional direction on contracting and competition for centers and 
incorporate the requirements of title I, subtitle C of WIOA. 
Specifically, the regulations describe how the Job Corps program is 
operated in order to deliver relevant academic and career technical 
training (CTT) that leads to meaningful employment or postsecondary 
education and explain the requirements necessitated by the unique 
residential environment of a Job Corps center.
    Although the Department received some public comments that opposed 
the proposed provision stating that the Secretary of Labor, in 
consultation with the Secretary of Agriculture, may select an entity to 
operate a Civilian Conservation Center (CCC) or close low performing 
CCCs if the Secretary of Labor deems appropriate (Sec.  686.350(e) 
through (f)), the DOL WIOA Final Rule retains these paragraphs as 
proposed because the regulatory text mirrors the statutory requirements 
at WIOA sec. 159(f)(2). In addition, regarding concerns expressed by 
commenters that the proposed high-performing center criteria were too 
difficult to achieve, the Department is retaining Sec.  686.320 as 
proposed because the language in the regulation mirrors that of WIOA 
and the Department does not have the discretion to loosen the criteria.
11. Part 687--National Dislocated Worker Grants
    National Dislocated Worker Grants (DWGs) are discretionary awards 
that temporarily expand service capacity at the State and local levels 
through time-limited funding assistance in response to significant 
dislocation events. These grants are governed by sec. 170 of WIOA. The 
part 687 regulations set forth the key elements and requirements for 
DWGs. Additional guidance on DWGs and the application requirements for 
these grants was published separately by the Department in Training and 
Employment Guidance Letter (TEGL) No. 01-15, ``Operational Guidance for 
National Dislocated Worker Grants, pursuant to the

[[Page 56077]]

Workforce Innovation and Opportunity Act (WIOA or Opportunity Act).''
    The part 687 regulations establish a framework that will enable 
eligible applicants to apply quickly for grants to relieve the impact 
of layoffs, emergencies, and disasters on employment in the impacted 
area and to meet the training and reemployment needs of affected 
workers and to enable them to obtain new jobs as quickly as possible. 
These regulations call for early assessment of the needs and interests 
of the affected workers, through either rapid response activities or 
other means, as well as an indication of the other resources available 
to meet these needs, to aid in the creation of a customer-centered 
service proposal. The early collection of information about affected 
workers will allow applicants to have an understanding of the needs and 
interests of the impacted workers to enable a prompt application for 
the appropriate level of DWG funds. Early collection of information 
also will facilitate the receipt of DWG funds when the Secretary 
determines that there are insufficient State and local formula funds 
available. Early intervention to assist workers being dislocated is 
critical to enable them to access work-based learning opportunities and 
other types of training that lead to industry-recognized credentials, 
as appropriate, to help them find new employment in in-demand 
industries and occupations as soon as possible after their dislocation 
occurs.
    The Department has made several global changes and technical edits 
to the part 687 regulations proposed in the NPRM for clarity and 
technical accuracy. For example, ``National Dislocated Worker Grants'' 
will be referred to by the acronym ``DWGs'' in this part for 
simplicity. In addition, the Department has determined it is necessary 
to alter the labels of what the NPRM called ``Regular'' and 
``Disaster'' DWGs to describe more accurately their purpose and 
intended use. ``Regular'' DWGs have been renamed ``Employment 
Recovery'' DWGs, and ``Disaster'' DWGs have been renamed ``Disaster 
Recovery'' DWGs. Further, the terms ``career services'' and 
``employment-related assistance'' have been changed to ``employment and 
training assistance'' to clarify that the use of DWG funds is not 
limited to only career services. Training and supportive services also 
may be provided as appropriate and in accordance with the requirements 
of part 687. Finally, the term ``temporary employment'' has been 
replaced with the term ``disaster relief employment'' to better align 
the text of this part 687 with that of WIOA sec. 170. In addition, this 
DOL WIOA Final Rule clarifies that individuals who relocate to another 
State, tribal, or outlying area after a disaster may receive services 
in either the disaster area or the area to which they relocate. 
However, the Final Rule also includes a provision for the Secretary to 
allow, in certain circumstances, individuals to receive services in 
both the disaster and the relocation area. Other non-substantive 
changes and technical edits are described in detail in the section-by-
section discussion of part 687 below.
12. Part 688--Provisions Governing the YouthBuild Program
    The YouthBuild program authorizes grants for job training and 
educational activities for at-risk youth who, as part of their 
training, help construct or rehabilitate housing for homeless 
individuals and families and low-income families in their respective 
communities. Participants receive a combination of classroom training, 
job skills development, and on-site training in the construction 
trades. The Department wants to emphasize the connections across all of 
our youth-serving programs under WIOA, including the WIOA youth formula 
program and associated boards and youth committees, connections to pre-
apprenticeship and registered apprenticeship programs, and Job Corps 
centers across the country. WIOA is an opportunity to align and 
coordinate service strategies for these ETA youth training programs, as 
well as to align with our Federal partners that serve these same 
customers. WIOA also ensures that these programs are using common 
performance indicators and standard definitions, which includes 
aligning the definitions for homeless youth, basic skills deficient, 
occupational skills training, and supportive services. Additionally, 
the YouthBuild regulation adopts the six new performance indicators 
that were codified across WIOA youth-serving programs and aligns 
YouthBuild with the WIOA youth formula program performance outcomes.
    WIOA affirms the Department's commitment to providing high-quality 
education, training, and employment services for youth and young adults 
through YouthBuild grants by expanding the occupational skills training 
offered at local YouthBuild programs. YouthBuild programs can offer 
occupational skills training in in-demand occupations, such as health 
care, advanced manufacturing, and IT, as approved by the Secretary and 
based on the maturity of the program and local labor market 
information.
    Other changes include revisions to the duration of the restrictive 
covenant clause, clarifying eligibility criteria for participation, and 
describing qualifying work sites and minimum criteria for successful 
exit from the YouthBuild program. Beyond these regulations, the 
Department will continue to develop guidance and technical assistance 
to help grantees and the workforce development community operate highly 
effective YouthBuild programs.
13. Part 651--General Provisions Governing the Wagner-Peyser Act 
Employment Service
    The Wagner-Peyser Act of 1933 established the ES program, which is 
a nationwide system of public employment offices that provide public 
labor exchange services. The ES program seeks to improve the 
functioning of the nation's labor markets by bringing together 
individuals seeking employment with employers seeking workers. In 1998, 
the ES program was amended to make it part of the one-stop delivery 
system established under WIA. The ES program has now been amended again 
under title III of WIOA.
    WIOA expands upon the previous workforce reforms in the WIA and, 
among other provisions, identifies the ES as a core program in the one-
stop delivery system, embeds ES State planning requirements into a 
unified planning approach, and requires the colocation of ES offices 
into the one-stop centers. The regulations in parts 651, 652, 653, 654, 
and 658 update the language and content of the regulations to implement 
amendments made by title III of WIOA to the Wagner-Peyser Act. In some 
areas, these regulations establish entirely new responsibilities and 
procedures. In other areas, the regulations clarify and update 
requirements already established. The regulations make important 
changes to the following components of the ES program: definitions, 
data submission, and increased collaboration requirements, among 
others.
    Part 651 sets forth definitions for 20 CFR parts 652, 653, 654, and 
658. The Department received several comments regarding these 
definitions and has eliminated, revised, and added definitions, as 
needed. Some commenters suggested new terms they would like to see 
defined in part 651, and other commenters expressed concerns or 
suggestions relating to specific proposed definitions. Additionally, 
the Department has made technical and clarifying changes to some of the 
definitions.

[[Page 56078]]

14. Part 652--Establishment and Functioning of State Employment Service
    The regulations at 20 CFR part 652 set forth standards and 
procedures regarding the establishment and functioning of State ES 
operations. These regulations align part 652 with the WIOA amendments 
to the ES program, and with the WIOA reforms to the public workforce 
system that affect the ES program. The WIOA-amended Wagner-Peyser Act 
furthers longstanding goals of closer collaboration with other 
employment and training programs by mandating colocation of ES offices 
with one-stop centers; aligning service delivery in the one-stop 
delivery system; and ensuring alignment of State planning and 
performance indicators in the one-stop delivery system. Other new 
Wagner-Peyser Act provisions are consistent with long-term Departmental 
policies, including increased emphasis on reemployment services for UI 
claimants (sec. 7(a)); promoting robust Workforce Labor Market 
Information (WLMI); the development of national electronic tools for 
job seekers and businesses (sec. 3(e)); dissemination of information on 
best practices (sec. 3(c)(2)); and professional development for ES 
staff (secs. 3(c)(4) and 7(b)(3)).
    Several public comments received in response to the NPRM prompted 
the Department to make minor changes to parts of the regulations in 
this section. For example, the Department agreed with comments 
regarding ensuring comprehensive front-line staff training; and direct 
language has been added to Sec.  652.204 from sec. 3(c)(4) of the 
Wagner-Peyser Act (as amended by WIOA sec. 303(b)(4)) to indicate that 
professional development and career advancement can be supported by the 
Governor's Reserve. The Department agreed with the commenter-suggested 
benefits of aligning definitions across the core programs, and as a 
result, the terms ``reportable individual'' and ``participant'' have 
been revised to align with the performance accountability of the other 
core programs. The Department also agreed with commenters who suggested 
that career services under WIOA are not a substitute for Wagner-Peyser 
Act sec. 7(a) services; Sec.  652.3(f) has been amended to reference 
sec. 7(a) of the Wagner-Peyser Act. The Department continues to seek 
alignment of service delivery with WIOA core programs.
    The Department received several varying comments regarding 
colocation. This part clarifies the intent of colocation; how ES-only 
affiliate sites do not meet the intent of WIOA; the Department's 
decision to broaden language in 20 CFR 678.315(b) to allow multiple 
programs to meet the more than 50 percent threshold by combining the 
time their staff members are physically present (see Joint WIOA Final 
Rule); and the expectation that colocation should be completed as 
expeditiously as possible, and that the Department will issue future 
guidance on this topic. Many commenters also raised questions and 
provided comments regarding the allowable uses of Wagner-Peyser Act 
funds. The Department clarified that there are no changes in the 
activities that may be funded by Wagner-Peyser Act funds. Specifically, 
training services may not be provided with sec. 7(a) of the Wagner-
Peyser Act funding; however, appropriate career services and labor 
exchange services may be provided to individuals in training and there 
is no restriction on funding training services with sec. 7(b) funds 
under the Wagner-Peyser Act.
    In regard to WLMI, some of the clarifications identified in this 
part include: There is a need to provide extensive education and 
technical assistance with regard to accessing wage record data; the 
Workforce Information Advisory Council (WIAC) will advise on WLMI and 
may consider what kind of information is needed for planning, but it 
will not be involved in developing State Plans; and the Departments of 
Labor and Education will issue joint guidance with regard to use of 
wage data for performance in the context of the confidentiality 
requirements for the use of UI wage record data and education data 
under the Family Educational Rights and Privacy Act (FERPA). The 
Department also made other clarifying changes to part 652, as discussed 
elsewhere in this Final Rule.
15. Part 653--Services of the Wagner-Peyser Act Employment Service
    Part 653 sets forth standards and procedures for providing services 
to MSFWs and provides regulations governing the Agricultural 
Recruitment System (ARS), a system for interstate and intrastate 
agricultural job recruitment. In subparts B and F of part 653, the 
Department is implementing the WIOA title III amendments to the Wagner-
Peyser Act, as well as streamlining and updating certain sections to 
eliminate duplicative and obsolete provisions. Despite these changes, 
part 653 remains consistent with the ``Richey Order.'' NAACP v. 
Brennan, 1974 WL 229, at *7 (D.D.C. Aug. 13, 1974).
    Upon the consideration of comments suggesting that the Department 
require outreach workers to be trained on not only how to identify and 
refer possible incidents of sexual harassment, but also on similar 
issues such as sexual coercion, assault, and human trafficking, the 
Department has added such language to the regulatory text at Sec.  
653.107(b)(7). Training outreach workers in this way is key in helping 
to connect victims with appropriate resources and support networks.
16. Part 654--Special Responsibilities of the Employment Service System
    In 1980, the Department published amended regulations at 20 CFR 
part 654, subpart E, providing agricultural housing standards for 
MSFWs. In the NPRM, the Department proposed to revise these 
agricultural housing regulations (hereinafter ``ETA standards'') by 
updating outdated terminology and by establishing an expiration date 
for the ETA standards. This proposed expiration date was intended to 
transition housing currently governed by the ETA standards to the 
Occupational Safety and Health Administration (OSHA) regulations 
governing temporary labor camps for agricultural workers as set forth 
at 29 CFR 1910.142. After considering the public comments received on 
this aspect of the proposal, the Department is rescinding its proposal 
to establish an expiration date for the ETA standards in order to 
transition housing currently governed by the ETA standards to the OSHA 
standards, as explained in further detail in this Final Rule.
17. Part 658--Administrative Provisions Governing the Wagner-Peyser Act 
Employment Service
    Part 658 sets forth systems and procedures for complaints, 
monitoring for compliance assessment, enforcement, and sanctions for 
violations of the ES regulations and employment-related laws, including 
discontinuation of services to employers and decertification of SWAs. 
The Department's proposed changes to part 658 updated terminology and 
responsibilities and reorganized various regulations to increase the 
clarity and efficiency of the provisions involved. Additionally, 
headings were revised, when necessary, to reflect changes to the 
regulations, and language was added to permit, where relevant, the use 
of electronic mail and electronic signatures.
    Overall, the Department received several comments seeking 
clarification on processing complaints and apparent violations, 
attempting informal

[[Page 56079]]

resolution, and the role of MSFW complainant's representatives, among 
many others. The Department has addressed these requests for 
clarification in the responses to public comments contained in the part 
658 section-by-section discussion below (see section V.Q). 
Additionally, the Department will issue guidance on the Complaint 
System, informal resolution, referring complaints and apparent 
violations, and on part 658, subpart F (Discontinuation of Services to 
Employers by the Employment Service System).

C. Costs and Benefits

    This Final Rule has been designated an ``economically significant 
rule'' under sec. 3(f)(4) of Executive Order (E.O.) 12866. Therefore, 
the Office of Management and Budget (OMB) has reviewed the Final Rule, 
and the Department has conducted a regulatory impact analysis to 
estimate the costs, benefits, and transfers associated with the Final 
Rule, which is detailed in full in section V.A of the Final Rule below. 
In total, the Department estimates that this Final Rule will have an 
average annual net benefit of $14,806,210 and a total 10-year net 
benefit of $95,836,706 (with 7-percent discounting).
    The Department estimates that this Final Rule will have an average 
annual cost of $35,037,540 and a total 10-year cost of $278,750,652 
(with 7-percent discounting). The largest contributor to the cost is 
the requirement related to the development and continuous improvement 
of the workforce development system, followed by the career pathways 
development and the colocation of ES services.
    The Department quantified the expected incremental benefits 
associated with this Final Rule relative to the baseline of the current 
practice under the Workforce Investment Act of 1998 (WIA), where 
possible. Specifically, the Department quantified the benefits expected 
to result from required competition for all one-stop operators. 
Competition for all one-stop operators will result in cost reductions 
for Local WDBs due to increases in efficiency, which are estimated to 
amount to approximately $49,843,750 per year and $374,587,357 over the 
10-year period (with 7-percent discounting). This quantified benefit 
resulting from increased competition for all one-stop operators, 
however, does not account for several other important benefits to 
society that the Department was unable to quantify due to data 
limitations or lack of existing data or evaluation findings. Based on a 
review of empirical studies (primarily studies published in peer-
reviewed academic publications and studies sponsored by the 
Department), however, the Department identified a variety of societal 
benefits: (1) Training services increase job placement rates; (2) 
participants in occupational training experience higher reemployment 
rates; (3) training is associated with higher earnings; and (4) State 
performance accountability measures, in combination with the board 
membership provision requiring employer/business representation, can be 
expected to improve the quality of the training and, ultimately, the 
number and caliber of job placements. The Department identified several 
channels through which these benefits might be achieved: (1) Better 
information about training providers will enable workers to make better 
informed choices about programs to pursue; (2) sanctions to under-
performing States will serve as an incentive for both States and local 
entities to monitor performance more effectively and to intervene 
early; and (3) enhanced services for dislocated workers, self-employed 
individuals, and workers with disabilities will lead to the benefits 
discussed above.
    In addition, the Final Rule will result in transfer payments, i.e., 
a shift in costs or benefits from one group to another that does not 
affect total resources available to society. The Department estimates 
that this Final Rule will result in annual average transfer payments of 
$12,887,628 and a total 10-year transfer payment of $96,853,514 (with 
7-percent discounting). These transfers result from increased funding 
for targeting OSY.
    The Department has determined that the Final Rule will have no cost 
impact on small entities and will not impose an unfunded mandate on 
Federal, State, local, or tribal governments as defined by the Unfunded 
Mandates Reform Act of 1995.

II. Acronyms and Abbreviations

AEFLA Adult Education and Family Literacy Act
ALJ Administrative Law Judge
ACS American Community Survey
ADA Americans with Disabilities Act
ANRC Alaska Native Regional Corporation
ANVSA Alaska Native Village Service Area
AOP Agricultural Outreach Plan
ARC Analyst Resource Center
ARS Agricultural Recruitment System
ATAP Assistive Technology Act Program
AWPA Migrant and Seasonal Agricultural Worker Protection Act
AWOL Absent Without Official Leave
BCL Business and Community Liaison
BLS Bureau of Labor Statistics
CBO Community-based organization
CCC Civilian Conservation Center
CDBG Community Development Block Grant
CEO Chief elected official
CEP Concentrated Employment Program
CFR Code of Federal Regulations
Complaint System Employment Service and Employment-Related Law 
Complaint System
COO Chief operating officer
COSO Committee of Sponsoring Organizations of the Treadway 
Commission
CPARS Contract Performance Assessment Reports
CPP Career Preparation Period
CRIS Common Reporting Information System
CTS Career Transition Services
CTT Career Technical Training
DACA Deferred Action for Childhood Arrivals
DINAP Division of Indian and Native American Programs
DOL Department of Labor
DVOP Disabled Veterans Outreach Program
DWG Dislocated Worker Grant
EBSS Enterprise Business Support System
ED Department of Education
EEOC Equal Employment Opportunity Commission
E.O. Executive Order
EO Equal opportunity
ES Employment Service
ESA Employment Standards Administration
ESARS Employment Security Automated Reporting System
ETA Employment and Training Administration
ETP Eligible training provider
ETPL Eligible training provider list
FAR Federal Acquisition Regulations
FECA Federal Employees Compensation Act
FEIN Federal employer identification number
FEMA Federal Emergency Management Agency
FERPA Family Educational Rights and Privacy Act
FLSA Fair Labor Standards Act
FOA Funding Opportunity Announcement
FPO Federal Project Officer
FR Federal Register
FTE Full Time Equivalent
GED General Educational Development
GIS Geographic information system
GPRA Government Performance and Results Act
HEARTH Homeless Emergency Assistance and Rapid Transition to Housing 
Act of 2009
HHS Department of Health and Human Services
HOME HOME Investment Partnerships
HSD High School Diploma
HSE High School Equivalent
HUD U.S. Department of Housing and Urban Development
IC Information collection
ICR Information Collection Request
IEP Individual Employment Plan
IEVS Income and Eligibility Verification System
INA Indian and Native American
IRFA Initial Regulatory Flexibility Analysis
IRS Internal Revenue Service
ISDEAA Indian Self-Determination and Education Assistance Act

[[Page 56080]]

ISS Individual Service Strategy
ISY In-school youth
IT Information technology
ITA Individual Training Account
JIS Job Information Service
JS Job Service
JTPA Job Training Partnership Act
JVSG Jobs for Veterans State Grants
LEARS Labor Exchange Agricultural Reporting System
LEHD Longitudinal Employer-Household Dynamics
LEP Limited English proficiency
LEWIS Local Employment and Wage Information System
LLC Limited Liability Corporation
LLSIL Lower Living Standard Income Level
LMI Labor Market Information
Local WDB Local Workforce Development Board
MOU Memorandum of Understanding
MPO Management Performance Outcome
MSFW Migrant and Seasonal Farmworker
MSWR Medical Separation with Reinstatement Rights
NAA National Apprenticeship Act
NAACP National Association for the Advancement of Colored People
NAETC Native American Employment and Training Council
NAFTA North American Free Trade Agreement
NAICS North American Industry Classification System
NDWG National Dislocated Worker Grant
NEG National Emergency Grant
NFJP National Farmworker Jobs Program
NICRA Negotiated Indirect Cost Rate Agreement
NIEM National Information Exchange Model
NLX National Labor Exchange
NPRM Notice of Proposed Rulemaking
OA Outreach and Admissions
OALJ Office of Administrative Law Judges
OBS On-board strength
ODEP Office of Disability and Employment Policy
OFLC Office of Foreign Labor Certification
OIG Office of the Inspector General
OJT On-the-job training
OMB Office of Management and Budget
OMS Outcome Measurement System
OPDR Office of Policy Development and Research
OSHA Occupational Safety and Health Administration
OSY Out-of-school youth
OTSA Oklahoma Tribal Service Area
OWI Office of Workforce Investment
PART Program Assessment and Rating Tool
PBP Program Budget Plan
PEDCS Post Enrollment Data Collection System
PIA Privacy Impact Assessment
PII Personally identifiable information
PIP Performance improvement plan
PIRL Participant Individual Record Layout
PMP Projections Managing Partnership
PPACA Patient Protection and Affordable Care Act
PRA Paperwork Reduction Act of 1995
PREP Profiling Reemployment Program
PRH Policy and Requirements Handbook
Pub. L. Public Law
PY Program year
REA Reemployment and Eligibility Assessment
RESEA Reemployment Services and Eligibility
RFA Regulatory Flexibility Act
RFP Requests for proposals
RHY Runaway or Homeless Youth
Richey Order Judge Richey Court Order
RIN Regulatory Information Number
RMA Regional Monitor Advocate
RSA Rehabilitation Services Administration
SBA Small Business Administration
SBREFA Small Business Regulatory Enforcement Fairness Act of 1996
SDA Service delivery area
sec. Section of a Public Law or the United States Code
SESA State Employee Security Act
S-FTP Secure File Transfer Protocol
SMA State Monitor Advocate
SOC Standard Occupational Classification
SNAP Supplemental Nutrition Assistance Program
SSA Social Security Act
SSDI Social Security Disability Insurance
SSN Social Security Number
State WDB State Workforce Development Board
STAWRS Simplified Tax and Wage Reporting System
SWA State Workforce Agency
SWCAP Statewide Cost Allocation Plans
TAA Trade Adjustment Assistance
TANF Temporary Assistance for Needy Families
TAPR Trade Act Participant Report
TAT Technical Assistance and Training
TDD Telephone device for the deaf
TEAP Trainee Employee Assistance Program
TEGL Training and Employment Guidance Letter
TEN Training and Employment Notice
UC Unemployment Compensation
UCX Unemployment Compensation for Ex-service members
UI Unemployment insurance
U.S.C. United States Code
VA Department of Veterans Affairs
VETS Veterans' Employments and Training Service
VR Vocational rehabilitation
Wagner-Peyser Act Wagner-Peyser Act of 1933
WARN Worker Adjustment and Retraining Notification
WDB Workforce Development Board
WHD Wage and Hour Division
WIA Workforce Investment Act of 1998
WIAC Workforce Information Advisory Council
WIASRD Workforce Investment Act Standardized Record Data
WIB Workforce investment boards
WIC Workforce Information Council
WIOA Workforce Innovation and Opportunity Act
WLMI Workforce and Labor Market Information
WLMIS Workforce and Labor Market Information System
WPRS Worker Profiling and Reemployment Services
WRIS Wage Record Interchange System
YB-TAP YouthBuild Trainee Apprenticeship Program
ZT Zero Tolerance

III. Rulemaking Authority and Background

A. Workforce Innovation and Opportunity Act Principles

    On July 22, 2014, President Obama signed WIOA, the first 
legislative reform of the public workforce system in more than 15 
years, which passed Congress by a wide bipartisan majority. WIOA 
supersedes WIA and amends the Adult Education and Family Literacy Act 
(AEFLA), the Wagner-Peyser Act, and the Rehabilitation Act of 1973. 
WIOA presents an extraordinary opportunity for the public workforce 
system to accelerate its transformational efforts and demonstrate its 
ability to improve job and career options for our citizens through an 
integrated, job-driven public workforce system that links diverse 
talent to our nation's businesses. It supports the development of 
strong, vibrant regional economies where businesses thrive and people 
want to live and work.
    WIOA reaffirms the role of the customer-focused one-stop delivery 
system, a cornerstone of the public workforce development system, and 
enhances and increases coordination among several key employment, 
education, and training programs. Most provisions in WIOA took effect 
on July 1, 2015, the first full program year after enactment, although 
the new statutory State Plans and performance accountability system 
requirements take effect July 1, 2016. Title IV of WIOA, however, took 
effect upon enactment.
    WIOA is designed to help job seekers access employment, education, 
training, and support services to succeed in the labor market and to 
match employers with the skilled workers they need to compete in the 
global economy. WIOA has six main purposes: (1) Increasing access to 
and opportunities for the employment, education, training, and support 
services for individuals, particularly those with barriers to 
employment; (2) supporting the alignment of workforce investment, 
education, and economic development systems in support of a 
comprehensive, accessible, and high-quality workforce development 
system; (3) improving the quality and labor market relevance of 
workforce investment, education, and economic development efforts; (4) 
promoting improvement in the structure and delivery of services; (5) 
increasing the prosperity of workers and employers; and (6) providing 
workforce development activities that increase employment, retention, 
and earnings of participants and that increase

[[Page 56081]]

postsecondary credential attainment and as a result, improve the 
quality of the workforce, reduce welfare dependency, increase economic 
self-sufficiency, meet skill requirements of employers, and enhance 
productivity and competitiveness of the nation.
    Beyond achieving the requirements of the new law, WIOA offers an 
opportunity to continue to modernize the public workforce system, and 
achieve key hallmarks of a customer centered public workforce system, 
where the needs of business and workers drive workforce solutions, 
where one-stop centers and partners provide excellent customer service 
to job seekers and businesses, where the public workforce system 
pursues continuous improvement through evaluation and data-driven 
policy, and where the public workforce system supports strong regional 
economies.
    Regulations and guidance implementing WIOA titles I and III are 
issued by DOL, with the exception of the joint regulations issued by 
DOL and ED on the provisions in title I relating to unified and 
combined planning, performance, and the one-stop delivery system. 
Regulations and guidance on implementing titles II and IV of WIOA are 
issued by ED. The Joint WIOA Final Rule and the ED WIOA Final Rules are 
published elsewhere in this issue of the Federal Register.
    WIOA retains much of the structure of WIA, but with critical 
changes to advance greater coordination and alignment. Under title I, 
subtitle A, each State will be required to develop a single, unified 
strategic plan that is applicable to six core workforce development 
programs. The core programs consist of the adult, dislocated worker, 
and youth formula programs administered by the Department under WIOA 
title I; the Adult Education and Family Literacy program administered 
by ED under WIOA title II; the ES program administered by the 
Department and authorized by the Wagner-Peyser Act, as amended by WIOA 
title III; and the VR program administered by ED and authorized under 
title I of the Rehabilitation Act of 1973, as amended by WIOA title IV 
(VR program). In addition to core programs, WIOA provides States the 
opportunity to include other key one-stop partner programs such as the 
Supplemental Nutrition Assistance Program (SNAP), Unemployment 
Insurance (UI), Temporary Assistance for Needy Families (TANF), and 
Perkins Career Technical Education in a Combined State Plan. The law 
also includes a common performance accountability system applicable to 
all of the core programs.
    The remainder of WIOA title I authorizes the adult, dislocated 
worker, and youth formula programs; the State and local WDBs (formerly 
workforce investment boards or WIBs); the designation of regions and 
local areas; local plans; the one-stop delivery system; national 
programs, including Job Corps, YouthBuild, Indian and Native American 
(INA) programs, and Migrant and Seasonal Farmworker (MSFW) programs; 
technical assistance and evaluations; and general administrative 
provisions currently authorized under title I of WIA. Title II retains 
and amends the Adult Education and Family Literacy Program currently 
authorized under title II of WIA. Title III contains amendments to the 
Wagner-Peyser Act relating to the ES and Workforce and Labor Market 
Information System (WLMIS), and requires the Secretary to establish a 
WIAC. Title IV contains amendments to the Rehabilitation Act of 1973, 
which were also included under title IV of WIA; it also requires the 
Secretary of Labor to establish an Advisory Committee on Increasing 
Competitive Integrated Employment for Individuals with Disabilities. 
Finally, title V contains general provisions similar to the provisions 
applicable under title V of WIA as well as the effective dates and 
transition provisions.

B. Major Changes From the Workforce Investment Act of 1998

    This section contains a summary of the major changes from WIA. As 
indicated above, WIOA retains much of the structure of WIA. Major 
changes in WIOA are:
     Aligns Federal investments to support job seekers and 
employers. The Act provides for States to prepare a single Unified 
State Plan that identifies a 4-year strategy for achieving the 
strategic vision and goals of the State for preparing an educated and 
skilled workforce and for meeting the skilled workforce needs of 
employers. States govern the core programs as one system assessing 
strategic needs and aligning them with service strategies to ensure the 
public workforce system meets employment and skill needs of all workers 
and employers.
     Streamlines the governing bodies that establish State, 
regional and local workforce investment priorities. WIOA makes State 
and Local WDBs more agile and well positioned to meet local and 
regional employers' workforce needs by reducing the size of the WDBs 
and assigning them additional responsibilities to assist in the 
achievement of the State and local strategic workforce vision and 
goals. The State WDBs continue to have a majority of business 
representation and a business chair and work for all workers and job 
seekers, including low-skilled adults, youth, and individuals with 
disabilities, while they foster innovation, and ensure streamlined 
operations and service delivery excellence.
     Creates a common performance accountability system and 
information for job seekers and the public. WIOA ensures that Federal 
investments in employment, education, and training programs are 
evidence-based and data-driven, and accountable to participants and the 
public. It establishes a performance accountability system that applies 
across the core programs, by generally applying six primary indicators 
of performance: Entry into unsubsidized employment at two points in 
time, median earnings, attainment of postsecondary credentials, 
measurable skill gains, and effectiveness in serving employers.
     Fosters regional collaboration to meet the needs of 
regional economies. WIOA promotes alignment of workforce development 
programs with regional economic development strategies to meet the 
needs of local and regional employers.
     Enhances access to high quality services through the 
network of one-stop delivery system. WIOA helps job seekers and 
employers acquire the services they need in centers and online, 
clarifies the roles and responsibilities of the one-stop partner 
programs, adds the TANF program as a required one-stop partner unless 
the Governor objects, requires competitive selection of one-stop 
operators, and requires the use by the one-stop delivery system of a 
common one-stop delivery identifier or brand developed by the Secretary 
of Labor (``American Job Center,'' see Joint WIOA Final Rule).
     Improves services to individuals with disabilities. WIOA 
stresses physical and programmatic accessibility, including the use of 
accessible technology to increase individuals with disabilities' access 
to high quality workforce services.
     Makes key investments for disconnected youth. WIOA 
emphasizes services to disconnected youth to prepare them for 
successful employment by requiring that a minimum of 75 percent of 
youth formula program funds be used to help OSY, in contrast to the 30 
percent required under WIA. WIOA increases OSYs' access to WIOA 
services, including pre-apprenticeship

[[Page 56082]]

opportunities that result in registered apprenticeship. It adds a 
requirement that at least 20 percent of formula funds at the local 
level be used on work-based training activities such as summer jobs, 
OJT, and apprenticeship.
     Helps employers find workers with the necessary skills. 
WIOA contributes to economic growth and business expansion by ensuring 
the public workforce system is job-driven--matching employers with 
skilled individuals. WIOA requires Local WDBs to promote the use of 
industry and sector partnerships that include key stakeholders in an 
industry cluster or sector that work with public entities to identify 
and address the workforce needs of multiple employers.
    Additionally, successful implementation of many of the approaches 
called for within WIOA, such as career pathways and sector strategies, 
require robust relationships across programs and with businesses, 
economic development, education and training institutions, including 
community colleges and career and technical education, local entities, 
and supportive services agencies.

C. Workforce Innovation and Opportunity Act Rulemaking Process

    Since the enactment of WIOA, the Department has used a variety of 
means to coordinate with other Federal agencies that have roles and 
responsibilities under the Act. The Department works closely with staff 
at ED and the Department of Health and Human Services (HHS) on all 
shared policy and implementation matters. Key areas of collaboration 
include the Unified State Plan, performance reporting, one-stop service 
delivery, and services to disconnected youth and to individuals with 
disabilities. WIOA created an opportunity to enhance coordination and 
collaboration across other Federal programs through the Combined State 
Plan and the Department meets with the other Federal agencies regarding 
those plans.
    Before publishing the WIOA NPRM (80 FR 20690, Apr. 16, 2015), the 
Department solicited broad input through a variety of mechanisms 
including:
     Issued Training and Employment Notice (TEN) No. 05-14 to 
notify the public workforce system that WIOA was enacted, accompanied 
by a statutory implementation timeline, a fact sheet that identified 
key reforms to the public workforce system, and a list of frequently 
asked questions.
     Issued TEN No. 06-14 to announce a series of webinars to 
engage WIOA stakeholders in implementation of WIOA.
     Issued TEN No. 12-14 to provide guidance to States and 
other recipients of funds under title I of WIA on the use and reporting 
of PY 2014 funds for planning and implementation activities associated 
with the transition to WIOA.
     Established a WIOA Resource Page (www.doleta.gov/WIOA) to 
provide updated information related to WIOA implementation to the 
public workforce system and stakeholders;
     Established a dedicated email address for the public 
workforce system and stakeholders to ask questions and offer ideas 
related to WIOA ([email protected]);
     Conducted, in conjunction with ED and HHS, outreach calls, 
webinars, and stakeholder and in-person town halls in each ETA region. 
The Department and its Federal partners hosted 10 town halls across the 
country, reaching over 2,000 system leaders and staff representing core 
programs and one-stop partners, employers, and performance staff. This 
included a town hall with INA leaders and membership organizations 
serving Indians and Native Americans, Hawaiians, and Alaskan Natives as 
well as a formal consultation with members of the Native American 
Employment and Training Advisory Council to the Secretary of Labor.
     Conducted readiness assessments to implement WIOA in all 
States and 70 local workforce areas to inform technical assistance.
    Since the DOL WIOA NPRM was published, the Department has issued 
additional WIOA guidance using various mechanisms including the 
following:
     Issued numerous pieces of official guidance to the public 
workforce system on policies related to WIOA implementation (some 
jointly with ED), including ``Vision for the One-Stop Delivery System 
under WIOA'' (Aug. 13, 2015) and TEGL No. 14-15, ``Workforce Innovation 
and Opportunity Act (WIOA) Requirements for Unified and Combined State 
Plans.'' See http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm.
     Provided on-going technical assistance to the public 
workforce system in the form of Frequently Asked Questions. See https://www.doleta.gov/wioa/FAQs.cfm.
     Developed a network of peer learners titled the Innovation 
and Opportunity Network (ION) that is designed to help all levels of 
workforce development professionals, stakeholders, and partners connect 
with others throughout the public workforce system who are working to 
implement WIOA. ION's in-person collaboration is provided through the 
Department's regional Federal Project Officers, and regional meetings 
with State and local stakeholders. Regarding online collaboration, the 
ION Web site provides webinars, quick start action planners, podcasts 
from voices in the field describing their experiences in 
implementation, and other online resources.
     Conducted, in conjunction with ED and HHS, webinars for 
stakeholders on a variety of topics, including: Credentials that Count 
for Youth (Apr. 29, 2015); ION (May 13 and June 3, 2015); Firing Up 
Youth Standing Committees (May 27, 2015); Making the Shift--
Successfully Leveraging In-School Youth (ISY) and OSY Resources and 
Services (June 24, 2015); WIOA Act Now Series: Partnerships in Action 
(July 1, 2015); Webinar Series Act Now: Governance, Leadership, and 
Building a Strategic Board (July 15, 2015); Collaborative Partnerships 
Serving Youth wish Disabilities (July 29, 2015); Customer-Centered 
Design Implementation WIOA (July 29, 2015); WIOA Eligible Training 
Provider Provisions: The First Year (Aug. 5, 2015); WIOA Performance 
Accountability Reporting Requirements--Overview of Layout and Templates 
(Aug. 12 and 13, 2015); Career Pathways for Youth (Aug. 26, 2015); 
Proposed Information Collection: Required Elements for Submission of 
the Unified or Combined State Plan and Plan Modifications Under WIOA 
(Aug. 27, 2015); Implementing WIOA in Rural Areas (Sept. 30, 2015); DEI 
Lessons Learned for WIA/WIOA: How Integrated Resource Teams Achieved 
WIA Outcomes for Populations that Experience Multiple Challenges to 
Employment and Implications for WIOA (Oct. 22, 2015); ApprenticeshipUSA 
Online Toolkit: A New Tool to Advance Apprenticeship Under WIOA (Oct. 
26, 2015); Partnership Between WIOA and TANF to Serve Youth (Oct. 28, 
2015).
Workforce Innovation and Opportunity Act Information Collection 
Requests
    There are two new Information Collection Requests (ICRs) and six 
existing OMB-approved information collections that are being revised as 
part of this DOL WIOA Final Rule. Section V.B of the NPRM (Paperwork 
Reduction Act) included descriptions of the new ICRs and how the 
proposal would change each of the existing information collections. 
Section VI.D of this Final Rule (Paperwork Reduction Act) provides 
summary information about the public comments received on these

[[Page 56083]]

ICRs and details the final burden estimates for the revised information 
collections.
    Soon after publication of the DOL WIOA NPRM and the Joint WIOA 
NPRM, DOL and ED published a notice in the Federal Register announcing 
the joint ICR for the WIOA Performance Management, Information, and 
Reporting System (80 FR 43474, July 22, 2015) and requested comments on 
this ICR during a 60-day public comment period (hereinafter ``WIOA 
Joint Performance ICR'') (see https://www.regulations.gov/#!docketDetail;D=ETA-2015-0007). On September 1, 2015, DOL solicited 
comments on its own WIOA performance accountability ICR to require the 
following programs to report on a standardized set of data elements 
through the WIOA Workforce Performance Accountability, Information, and 
Reporting System: WIOA adult, dislocated worker, and youth, ES, 
National Farmworker Jobs, Trade Adjustment Assistance, YouthBuild, INA, 
and the Jobs for Veterans' State Grants (80 FR 52798) (hereinafter 
``DOL Performance ICR'') (see https://www.regulations.gov/#!docketDetail;D=ETA-2015-0008). On April 16, 2015, ED solicited 
comments on its ICR related to the VR program Case Service Report (RSA-
911) to require VR agencies to report data required under sec. 
101(a)(10) of the Rehabilitation Act of 1973, as amended by WIOA, as 
well as performance accountability data under title I of WIOA 
(hereinafter ``RSA-911''). DOL and ED received 112 public comment 
submissions in response to the WIOA Joint Performance ICR, DOL received 
public comments on the DOL Performance ICR, and ED received public 
comments on the RSA-911, respectively. The Departments address those 
comments in the final WIOA Joint Performance and DOL WIOA ICRs.
    On August 6, 2015, the U.S. Departments of Labor, Education, Health 
and Human Services, Agriculture, and Housing and Urban Development 
proposed a new information collection regarding required elements for 
submission of the Unified or Combined State Plan and Plan modifications 
under WIOA (hereinafter ``WIOA State Plan ICR'') (80 FR 47003) (see 
https://www.regulations.gov/#!docketDetail;D=ETA-2015-0006). The WIOA 
State Plan ICR received a total of 16 public comments. These public 
comment submissions informed the development of the final WIOA State 
Plan ICR, which OMB approved on February 19, 2016. See http://www.reginfo.gov/public/do/PRASearch (ICR Reference No. 201601-1205-
001).

D. Legal Basis

    On July 22, 2014, the President signed WIOA (Pub. L. 113-128) into 
law. WIOA repeals WIA (29 U.S.C. 2801 et seq.). As a result, the WIA 
regulations no longer reflect current law. Section 503(f) of WIOA 
required that the Department issue an NPRM and then a Final Rule that 
implements the changes WIOA makes to the public workforce system in 
regulations. Therefore, the Department has developed and issued this 
Final Rule that implements WIOA. The Department has issued regulations 
regarding the WIOA sec. 188 nondiscrimination and equal opportunity 
provisions through separate rulemaking. See 80 FR 43872 (July 23, 2015) 
(establishing WIOA sec. 188 implementing regulations at 29 CFR part 
38); 81 FR 4494 (Jan. 26, 2016) (proposing updates to 29 CFR part 38 
consistent with current equal opportunity law).

IV. Public Comments Received on the Notice of Proposed Rulemaking

    The Department's NPRM to implement titles I and III of WIOA was 
published on April 16, 2015 (80 FR 20690). During the 60-day public 
comment period, the Department received a total of 767 public comments 
on the WIOA NPRM. In addition to these submissions, the Department also 
considered portions of 84 public comment submissions from the Joint 
WIOA NPRM docket that the Department determined related to the DOL WIOA 
NPRM. The Joint WIOA NPRM, which proposed regulations to implement 
jointly administered activities authorized under WIOA title I, was also 
published on April 16, 2015 (80 FR 20574).
General Comments
    Comments: Several commenters expressed general support for the 
proposed regulation, commenting that the regulations would increase 
employment, make the United States more competitive, lead to higher 
wages, and produce other benefits. Some of these commenters expressed 
confidence that that the Department can deliver on this proposal, and 
that the associated expense is necessary. Several comments made general 
positive remarks about WIOA, and specifically cited an emphasis on one 
or more specific aspects of the law, such as adult education, college 
and career readiness, strengthening connections among programs and 
recognizing the role of distance learning and technology in reaching 
broader audiences. The commenters suggested that WIOA provides adequate 
flexibility to accommodate differences among States (e.g., size, 
population density and population diversity. Some commenters discussed 
workforce development-related services currently provided or cited 
statistics that they asserted illustrate the current or historical use 
of the public workforce system in terms of services and participant 
demographics. For example, one organization cited statistics regarding 
which aspects of titles I and II are being used by LEP individuals.
    Department Response: Since these comments require no response, they 
are not addressed in this DOL WIOA Final Rule. No submissions expressed 
general opposition to the proposal. Instead, many commenters discussed 
their disagreement with specific aspects of the proposal. These 
comments are addressed in the associated and appropriate sections of 
the section-by-section discussion of the Final Rule (see section V 
below).
Requests To Extend the Comment Period
    Comments: A few commenters requested a 60-day extension of the 
comment period. The commenters cited the size and complexity of the 
five proposed NPRMs implementing WIOA.
    Department Response: While the Department recognizes that the 
issues addressed in the DOL WIOA NPRM are complex and important, the 
Department concluded that the 60-day comment period was sufficient to 
provide the public a meaningful opportunity to comment, and this 
conclusion is supported by the hundreds of complex and thoughtful 
comments received. Additionally, the NPRM was available to the public 
for a preliminary review on the Federal Register Web site upon 
submission of the NPRMs to the Federal Register, which was several 
weeks prior to publication, thereby providing stakeholders additional 
time prior to the publication date.
Coordination and the WIOA Rulemaking Process
    Comments: A commenter urged the Departments of Labor and Education 
to increase collaboration, including more coordinated implementation 
guidance, providing incentives for programs within the two Departments 
to participate in a Combined Plan, and affording flexibility in use of 
funding streams and on performance accountability. Two commenters said 
that aspects of the proposed regulations suggest lesser coordination of 
WIOA

[[Page 56084]]

guidance and oversight across Departments than envisioned by WIOA. 
Further, these commenters expressed concern that the lack of 
specificity in areas of the proposed regulations could result in the 
issuance of Federal guidance on levels that should be in regulation to 
ensure that States and local areas have an opportunity to comment.
    Department Response: The Departments of Labor and Education have 
taken great care to coordinate the issuance of collaborative guidance 
regarding WIOA implementation, including TEGL No. 14-15, ``Workforce 
Innovation and Opportunity Act (WIOA) Requirements for Unified and 
Combined State Plans''; TEGL No. 04-15, ``Vision for the One-Stop 
Delivery System under the Workforce Innovation and Opportunity Act 
(WIOA).'' The Departments will continue to issue guidance 
collaboratively. As appropriate, the Department will reach out and 
consult other stakeholders as it develops guidance and technical 
assistance. As the Department implements WIOA, it anticipates lots of 
stakeholder outreach, building on our long established relationships. 
The Department will continue this robust outreach throughout 
implementation.

V. Section-by-Section Discussion of Public Comments and Final 
Regulations

    The analysis in this section provides the Department's response to 
public comments received on the DOL WIOA NPRM. If a proposed CFR 
section is not addressed in the discussion below, it is because the 
public comments submitted in response to the NPRM did not substantively 
address that specific section and no changes have been made to the 
regulatory text. Further, the Department received a number of comments 
on the NPRM that were outside the scope of the proposed regulation and 
the Department offers no response to such comments. Lastly, the 
Department has made a number of non-substantive changes to correct 
grammatical and typographical errors to improve the readability and 
conform the document stylistically that are not discussed in the 
analysis below.

A. Part 603--Federal-State Unemployment Compensation Program

Relationship Between 20 CFR part 603 and WIOA
    The disclosure of wage record data is governed by 20 CFR part 603, 
which establishes requirements for maintaining the confidentiality of 
unemployment compensation (UC) information along with standards for 
mandatory and permissive disclosure of such information. Part 603 
permits State agencies to disclose confidential unemployment 
compensation information--including ``wage information'' (referred to 
in Sec.  603.2(k))--to ``public officials'' (defined at Sec.  603.2(d)) 
under limited circumstances (under Sec.  603.5), and authorizes such 
public officials in turn to use the information to meet certain Federal 
requirements in the performance of their official duties.
    The Department has decided to amend 20 CFR part 603 as proposed in 
the NPRM. These Final Rules amend current regulations to clarify and 
expand, in a limited fashion, those public officials with whom the 
State may share certain confidential information to carry out 
requirements under WIOA. The regulations enumerate certain additional 
public officials who may access confidential State wage records for the 
State's performance reporting. Ensuring such access to these State 
records will allow State agencies to manage better the information for 
the purpose of making Federally required reports on certain program 
outcomes, and to cooperate more effectively and be more informative 
with respect to Federal program evaluations.
    WIOA sec. 116(i)(2) and 20 CFR 677.175(a) (see Joint WIOA Final 
Rule) require State workforce, training, and education programs to use 
quarterly wage records to measure the progress of the State on State 
and local performance accountability measures. The Department 
interpreted at 20 CFR 677.175(b) the reference to ``quarterly wage 
records'' in WIOA sec. 116(i)(2) to require States to use the 
confidential UC information in the employer-provided wage reports 
collected under sec. 1137 of the Social Security Act (SSA), 42 U.S.C. 
1320b-7. These are the reports that the State UC agency obtains from 
employers for determining UC tax liability, monetary eligibility, or 
for cross-matching against State UC agencies' files to determine if 
improper payments have been made.
    The regulation at 20 CFR 677.175(b) (see Joint WIOA Final Rule) 
defines ``quarterly wage record information'' to include three data 
elements or categories of data elements: (1) A program participant's 
Social Security Number (SSN); (2) information about the wages that 
program participants earn after exiting from the program; and (3) the 
name, address, State, and (when known) Federal Employer Identification 
Number (FEIN) of the employer paying those wages. The ``wage 
information'' defined in Sec.  603.2(k)--which the regulations allow 
State agencies to disclose under limited circumstances--includes the 
three data categories or elements (wages, SSN(s), employer information) 
that States must use as their data source for State and local 
performance reporting under WIOA. These terms are different but refer 
to the same information: wage records.
    As explained in greater detail below, in the NPRM the Department 
proposed to change and expand Sec.  603.2 (definition of ``public 
official'') and change Sec.  603.5 (governing disclosures to public 
officials) to help States comply with WIOA's performance requirements, 
including the performance reports of the States, local areas, and 
Eligible Training Providers (ETPs). In addition, the Department amended 
Sec.  603.6 to add a provision requiring disclosure of confidential UC 
information to a Federal official (or an agent or contractor of a 
Federal official) requesting such information to meet the new statutory 
requirement on State cooperation with certain DOL and ED evaluations. 
These changes facilitate States' obligations to report on performance 
through the use of quarterly wage records, and to cooperate in DOL and 
ED evaluations.
    The amendments to 20 CFR part 603 only relate to State agency 
disclosures necessary to comply with certain provisions of WIOA. Much 
of part 603 was left intact and was not considered for amendment in the 
NPRM, the purpose of which was to implement WIOA, not to otherwise 
impact partner programs. The Department invited comments on the 
proposed amendments to part 603, but did not consider comments on other 
portions of part 603 or other UC matters that are outside the scope of 
the proposed rulemaking.
    The Department received 22 comments in response to the proposed 
changes to part 603. While normally the Department does not discuss 
comments that are outside the scope of the amendment, the Department 
notes that only the portions of part 603 that are being amended were 
part of the NPRM and open for comment. The existing data protections 
required under other portions of part 603 will continue and will be 
enforced. These required protections, laid out in Sec. Sec.  603.8, 
603.9, 603.10, and 603.12, ensure that confidential UC data are secure. 
These portions of part 603 were not considered for amendment and so 
were excluded from the NPRM.
    The analysis that follows provides the Department's response to 
public comments received on the proposed part 603 regulations. If a 
section is not addressed in the discussion below, it is because the 
public comments submitted

[[Page 56085]]

in response to the NPRM did not substantively address that specific 
section and no changes have been made to the regulatory text. Further, 
the Department received a number of comments on this part that were 
outside the scope of the regulation and the Department offers no 
response. Lastly, the Department has made a number of non-substantive 
changes to correct grammatical and typographical errors to improve the 
readability and conform the document stylistically that are not 
discussed in the analysis below.
Section 603.2 What definitions apply to this part?
    Definition of ``public official'': The changes to this section 
amend the definition of ``public official'' as used throughout part 
603. The changes to Sec.  603.2(d), to facilitate State compliance with 
WIOA's reporting requirements, clarify and expand the definition of who 
and what entities are considered ``public officials.'' The amendments 
to Sec.  603.2(d) clearly enumerate that ``public official'' includes 
officials from public postsecondary educational organizations; State 
performance accountability and customer information agencies; the chief 
elected officials of local areas (as that term is used in WIOA sec. 
106); and a public State educational authority, agency, or institution. 
Some of these officials already would meet the definition of ``public 
official'' under current Sec.  603.2(d); however, the amendments make 
this clear.
    Comments: The Department received some comments suggesting 
clarification of the definition and application of the phrase ``chief 
elected official.''
    Department Response: No changes were made to the regulatory text in 
response to these comments. Such clarification is best accomplished 
through guidance and technical assistance as needed.
    Disclosure to public postsecondary institutions: Section 
603.2(d)(2) permits disclosure to public postsecondary educational 
institutions, regardless of how those institutions are structured or 
organized under State law. Section 603.2(d)(2) clearly delineates the 
types of postsecondary educational institutions that are allowed access 
to confidential UC information:
    (1) Public postsecondary educational institutions that are part of 
a State's executive branch, i.e., that derive their authority either 
directly from the Governor or from an entity (State WDB, commission, 
etc.) somewhere in that line of authority (see Sec.  603.2.(d)(2)(i));
    (2) Public postsecondary educational institutions that are 
independent of the State's executive branch, which means those 
institutions whose directors derive their authority either directly 
from an elected official in the State other than the Governor or from 
an entity (again, a State WDB, commission, or other entity) in that 
line of authority. This covers any public postsecondary educational 
institution established and governed under State law, for example, a 
State Board of Regents (see Sec.  603.2(d)(2)(ii));
    (3) State technical colleges and community colleges, which may also 
be covered under (1) or (2) (see Sec.  603.2(d)(2)(iii)).
    Section 603.2(d)(5) permits disclosure to a public State 
educational authority, agency, or institution; the Department considers 
the heads of public institutions deriving their authority from a State 
educational authority or agency to be ``public officials'' for purposes 
of part 603.
    These changes are designed to help States comply with WIOA's 
requirement to use wage records to measure performance (WIOA sec. 
116(i)(2)) and to facilitate the performance reporting required for 
ETPs under secs. 116(d) and 122 of WIOA. As long as the recipients of 
the data adhere to all of the requirements in 20 CFR part 603, this 
section permits States to make these disclosures to comply with WIOA 
requirements for Federal, State, or local government reporting on 
program outcomes and for other specified purposes.
    Comments: The Department received several comments requesting that 
non-public educational institutions, community-based organizations, and 
for-profit educational institutions be added to the list of entities 
included in the term ``public official.''
    Department Response: As explained in the NPRM, non-public 
educational institutions, including non-profit or for-profit 
educational institutions, community-based organizations, and eligible 
training providers that are not subject to the authority of the 
executive branch of a State or other elected official, are not 
permitted to obtain confidential UC information, including wage 
information, under this authority. In first proposing the ``public 
official'' exception to the UC confidentiality requirement in 69 FR 
50,022, 50,027 (2004), the Department explained that ``there is less 
risk of unauthorized use or disclosure of UC information if 
responsibility for safeguarding confidentiality rests within the 
executive or legislative branches of government.'' Any disclosures of 
confidential UC information to those entities for purposes of complying 
with WIOA must be authorized under an exception contained in Sec.  
603.5 other than Sec.  603.5(e). The Department is issuing guidance to 
address how non-public entities that need wage record information to 
complete reports required under WIOA will be able to obtain access to 
aggregate wage record information for this purpose. No changes were 
made to the regulatory text in response to these comments.
Section 603.6(b)(8) What disclosures are required by this subpart?
    Section 603.6(b)(8) makes the disclosure of confidential UC 
information mandatory for certain Federal evaluations when the 
disclosure does not interfere with the efficient administration of 
State UC law. The addition of Sec.  603.6(b)(8) implements the 
requirement that States cooperate in conducting evaluations under the 
authority of either the Secretary of Labor or the Secretary of 
Education under WIOA sec. 116(e)(4). This cooperation, defined in WIOA, 
must include ``the provision of data (in accordance with appropriate 
privacy protections established by the Secretary of Labor)''; this 
includes 20 CFR part 603 and any other privacy protections the 
Secretary may establish. The final regulation requires disclosure of 
confidential UC information to Federal officials or their agents or 
contractors, requesting such information in the course of an evaluation 
covered by WIOA secs. 116(e)(4) and 116(e)(1) to the extent that such 
disclosure is ``practicable.''
    The Department interprets ``to the extent practicable'' to mean 
that the disclosure would not interfere with the efficient 
administration of State UC law. This interpretation is consistent with 
the application of regulations that apply to disclosures under Sec.  
603.5. The introductory language to Sec.  603.5 provides that, in 
situations where the disclosure of confidential UC information is 
permitted, the State may make the disclosure only if doing so would not 
interfere with the efficient administration of State UC law. In effect, 
Sec.  603.6(b)(8) requires that State UC agencies make disclosures to 
DOL and ED for the purposes of the Departments' conducting evaluations, 
when the disclosures do not interfere with the efficient administration 
of the State UC law. The Department expects this cooperation and 
related disclosures to include responding to surveys and allowing site 
visits, as well as disclosing confidential UC information needed for 
evaluations.
    Comments: The Department received two comments that raised concerns 
that the adoption of Sec.  603.6(b)(8) would

[[Page 56086]]

allow the creation of a national UC database and require a State's 
``entire UI file.''
    Department Response: The information required to be disclosed for a 
given evaluation is considerably less than what may be included in a 
State's UC file. Additionally, these disclosures are required only for 
research, evaluation, and investigation purposes found in WIOA, the 
Rehabilitation Act of 1973, and the Wagner-Peyser Act, as well as 
evaluations under other laws. The information disclosed may not be used 
for purposes other than that for which it was obtained. These 
disclosures are subject to the appropriate privacy and confidentiality 
protections found throughout 20 CFR part 603. Research projects, 
evaluations, and investigations have set time frames for which data are 
being reviewed and are generally limited in scope. In general, the 
Department would not be in possession of any of the information 
requested under the disclosure provisions at Sec.  603.6(b)(8). The 
researcher, evaluator, or investigator would be in possession of the 
information and use it for their stated purposes under proper authority 
or would be subject to sanctions for breach of the agreement under 
which the data were obtained. No changes were made to the regulatory 
text in response to these comments.

B. Part 675--Introduction to the Regulations for the Workforce 
Development Systems Under Title I of the Workforce Innovation and 
Opportunity Act

    Part 675 discusses the purpose of title I of the WIOA, explains the 
format of the regulations governing title I, and provides additional 
definitions which are not found and defined in WIOA.
    Section 675.100 describes the purposes of title I of WIOA.
    Section 675.200 outlines the structure of the WIOA regulations.
    Section 675.300 provides a list of definitions that are applicable 
across the WIOA regulations.
    Included in this list of definitions, the Department includes the 
following relevant definitions from the Office of Management and 
Budget's (OMB) ``Uniform Administrative Requirements, Cost Principles 
and Audit Requirements for Federal Awards'' found at 2 CFR part 200: 
Contract, Contractor, Cooperative Agreement, Federal Award, Federal 
Financial Assistance, Grant Agreement, Non-Federal Entity, Obligations, 
Pass-Through Entity, Recipient, Subaward, Subrecipient, Unliquidated 
Obligations, and Unobligated Balance. All other definitions at 2 CFR 
part 200 apply to these regulations where relevant, but have not been 
included in this section.
    Contract. The definition for ``contract'' incorporates the 
definition established by OMB at 2 CFR 200.22. Specifically, the term 
``contract'' refers to the legal document that a non-Federal entity 
uses to purchase property or services used to carry out its duties 
under a grant authorized under WIOA. If the Department determines that 
a particular transaction entered into by the entity is a Federal award 
or subaward it will not be considered a contract.
    Contractor. The definition of ``contractor'' incorporates the 
definition contained in OMB's Uniform Guidance at 2 CFR 200.23. The 
Uniform Guidance has replaced the term ``vendor'' with the term 
``contractor.'' As used in these regulations, the term ``contractor'' 
includes entities that WIOA refers to as ``vendors.'' Additionally, it 
is important to note that contractors are not subrecipients. Additional 
guidance on distinguishing between a contractor and a subrecipient can 
be found at 2 CFR 200.330.
    Cooperative Agreement. The definition of ``cooperative agreement'' 
incorporates the definition contained in the Uniform Guidance at 2 CFR 
200.24.
    Department or DOL. This term refers to the United States Department 
of Labor, its agencies, and organizational units.
    Employment and Training Activity. As used in these regulations, the 
term ``employment and training activity'' refers to any workforce 
investment activities carried out for an adult or dislocated worker 
under sec. 134 of WIOA and 20 CFR part 678 (see Joint WIOA Final Rule).
    Equal Opportunity (EO) Data. This term refers to the data required 
by the Department's regulations at 29 CFR part 37 implementing sec. 188 
of WIOA.
    ETA. This term refers to the Employment and Training 
Administration, which is an agency of DOL, or its successor 
organization.
    Federal Award. This definition incorporates the definition in the 
Uniform Guidance at 2 CFR 200.38.
    Federal Financial Assistance. The definition of ``Federal financial 
assistance'' incorporates the definition contained in the Uniform 
Guidance at 2 CFR 200.40.
    Grant or Grant Agreement. The definition of ``grant agreement'' 
incorporates the definition contained in the Uniform Guidance at 2 CFR 
200.51. Because both WIOA and these regulations use ``grant'' and 
``grant agreement'' interchangeably, the inclusion of both terms here 
clarifies that the terms are synonymous.
    Grantee. The definition of ``grantee'' refers to a recipient of 
funds under a grant or grant agreement. Grantees are also referred to 
as recipients in these regulations.
    Individual with a Disability. This definition uses the definition 
from sec. 3 of the Americans with Disabilities Act, as amended, and is 
further defined at 29 CFR 37.4.
    Labor Federation. This definition remains unchanged from the 
definition used in the regulations under WIA at 20 CFR 660.300.
    Literacy. The definition for ``literacy'' as used in these 
regulations is a measure of an individual's ability to participate and 
successfully function both in the workplace and in society.
    Local WDB. This definition clarifies that the term ``Local WDB'' as 
used in these regulations refers to the Local Workforce Development 
Boards (WDB) established under WIOA sec. 107, to set policy for the 
local workforce development system.
    Non-Federal Entity. The definition of ``non-Federal entity'' 
incorporates the definition contained in the Department's Exceptions to 
the Uniform Guidance at 2 CFR 2900.2.
    Obligations. The definition of ``obligations'' incorporates the 
definition contained in the Uniform Guidance at 2 CFR 200.71.
    Outlying Area. The term ``outlying area'' refers to those 
Territories of the United States which are not within the definition of 
``State,'' including the U.S. Virgin Islands, Guam, American Samoa, the 
Commonwealth of the Northern Mariana Islands, and, in certain 
circumstances, the Republic of Palau.
    Pass-through entity. The definition of pass-through entity 
incorporates the definition in the Uniform Guidance at 2 CFR 200.74.
    Recipient. The definition of ``recipient,'' which is different than 
the current definition of recipient under WIA at 20 CFR 660.300, 
incorporates the definition in the Uniform Guidance at 2 CFR 200.86.
    Register. The definition of ``register'' means the point at which 
an individual seeks more than minimal assistance from staff in taking 
the next step towards self-sufficient employment. This is also when 
information that is used in performance information begins to be 
collected. At a minimum, individuals must provide identifying 
information to be registered.
    Secretary. This term refers to the Secretary of the U.S. DOL, or 
their officially delegated designees.

[[Page 56087]]

    Secretaries. This term refers to the Secretaries of the U.S. DOL 
and the U.S. ED, or their officially designated designees.
    Self-Certification. The term ``self-certification'' refers to the 
certification made by an individual that they are eligible to receive 
services under title I of WIOA.
    State. The term ``State'' refers to each of the several States of 
the United States, the District of Columbia, and the Commonwealth of 
Puerto Rico.
    State WDB. This definition clarifies that the term ``State WDB'' as 
used in these regulations refers to the State Workforce Development 
Boards (WDB) established under WIOA sec. 101.
    Subgrant or Subaward. This term incorporates the definition of 
``subaward'' in the Uniform Guidance at 2 CFR 200.92. This term 
replaces the term ``subgrant'' found in WIA at 20 CFR 660.300. Because 
both WIOA and these regulations use ``subgrant'' and ``subaward'' 
interchangeably, the inclusion of both terms here clarifies that the 
terms are synonymous.
    Subrecipient. The definition of ``subrecipient'' incorporates the 
definition in the Uniform Guidance at 2 CFR 200.93. This term is 
synonymous with the term ``subgrantee.''
    Unliquidated Obligations. The definition of ``unliquidated 
obligations'' incorporates the definition contained in the Uniform 
Guidance at 2 CFR 200.97.
    Unobligated Balance. The definition of ``unobligated balance'' 
incorporates the definition in the Uniform Guidance at 2 CFR 200.98.
    Wagner-Peyser Act. As used in these regulations, the term ``Wagner-
Peyser Act'' refers to the Wagner-Peyser Act passed on June 6, 1933, 
and codified at 29 U.S.C. 49 et seq.
    WIA Regulations. The term ``WIA Regulations'' as used in this 
regulation or subsequently by the Department refers to the regulations 
20 CFR parts 660 through 672. This definition is necessary because, as 
described in the introduction to these regulations, the Department has 
chosen to retain the WIA regulations at parts 660 through 672 of title 
20 of the CFR.
    WIOA Regulations. This term, as used in this regulation or 
generally by the Department means those regulations in 20 CFR parts 675 
through 687, the Wagner-Peyser Act regulations in 20 CFR part 652, 
subpart C, and the regulations implementing WIOA sec. 188 in 29 CFR 
part 37.
    Workforce Investment Activities. The term ``workforce investment 
activities'' is a general term that describes the broad array of 
activities and services provided to eligible adults, dislocated 
workers, and youth under secs. 129 and 134 of title I of WIOA.
    Youth Workforce Investment Activity. The term ``youth workforce 
investment activity'' refers to those activities carried out for 
eligible youth that fall within the broad definition of ``workforce 
investment activity.''
Section 675.100 What are the purposes of title I of the Workforce 
Innovation and Opportunity Act?
    Comments: An advocacy organization urged the Department to include 
in Sec.  675.100 a reminder to States and employers of their existing 
obligations under the Americans with Disabilities Act (ADA), 
notwithstanding anything else reflected in the WIOA regulations.
    Department Response: The Department takes nondiscrimination 
seriously and addresses it in the regulation at 20 CFR part 38. No 
change to the regulatory text was made in response to this comment.
Section 675.200 What do the regulations for workforce development 
systems under title I of the Workforce Innovation and Opportunity Act 
cover?
    Comments: Some commenters provided feedback on technical 
corrections for this section, while others provided comments that 
addressed specific provisions found elsewhere in this regulation.
    Department Response: Technical corrections were made to this 
section. In addition, several comments that referenced this section 
were more appropriately addressed in other parts of the regulation, and 
have been so addressed.
Section 675.300 What definitions apply to these regulations?
    Comments: Some commenters suggested that the Department should 
provide additional detail on what is involved in a requirement to 
consult. These commenters generally emphasized the importance of 
meaningful consultation. For example, referring to the proposed 
definition of consultation, a Local WDB commented that ``exchanging 
viewpoints and ideas'' is only helpful when both parties feel equally 
empowered to influence the outcome of the discussion. Two commenters 
expressed concern that the requirement to consult could be interpreted 
to mean just share information or whatever else is in the best interest 
of the entity required to consult. Another commenter suggested that 
consultation should be defined as strongly as possible to stress 
advanced notice, robust conversation, and collaborative efforts with 
local areas prior to the State's decision-making process. Some 
commenters made specific suggestions for what the Department should or 
could include in a definition of consultation, including active 
engagement, good faith discussion and decision-making agreement and 
consent from local elected officials, the Local WDB, and the State WDB, 
provision of written notice of intended changes with a cost-benefit 
analysis and a specific timeframe for public comment, process to 
contest decisions through a formal grievance process, requiring 
consultation with the largest and smallest local areas in the State, 
and requiring State WDB members to visit and engage local areas.
    Department Response: The Department agrees with the need to 
emphasize meaningful consultation and revised the definition of 
consultation in this section to emphasize convening, robust 
conversation, and an opportunity for all stakeholders to share their 
thoughts and opinions. In addition, some of the specific suggestions 
not incorporated into this definition are addressed in other parts of 
this regulation and the Joint WIOA Final Rule. For example, 20 CFR part 
676 requires public comment on Unified and Combined State Plans (see 
Joint WIOA Final Rule), and part 679 of this regulation requires 
governors to appoint only persons who have been nominated by certain 
stakeholder organizations to certain positions on the State WDB.
    Comments: A commenter recommended clearly defining ``career 
pathways'' in this regulation in such a way to ensure flexibility in 
deviation from a pathway if education and employment requirements are 
met.
    Department Response: WIOA secs. 3(7)(A) through (G) define career 
pathways as a combination of rigorous high-quality education, training, 
and other services that meet specified guidelines. The Department 
agrees that additional guidance would help State and Local WDBs 
implement career pathways. With the Department of Education, the 
Department has published a Career Pathways Toolkit, which can be found 
at www.DOLETA.gov, and continues to provide guidance and technical 
assistance on the implementation of career pathways under WIOA.
    Comments: Asserting that neither WIOA sec. 3 nor the WIOA NPRMs 
include a definition of ``family,'' some commenters suggested that the 
Department provide clarification on this term.
    Department Response: The Department agrees that ``family'' is a 
term that should be defined in this

[[Page 56088]]

regulation and has added a definition of family that is based on the 
WIA definition and has been updated to reflect the Supreme Court 
decision in United States v. Windsor, 133 S. Ct. 2675 (2013). While 
this definition applies to all parts of this regulation, the Department 
notes that part 681 of this regulation adds a reference to dependents, 
per specifications of the Internal Revenue Service, when this 
definition is considered as part of a determination of eligibility to 
participate in the WIOA youth programs described in that part.
    Comments: Several commenters recommended adding to this part 
definitions of terms not addressed above or in the NPRM. Most of them 
were related to indicators of performance of WIOA title I programs, 
which are addressed in 20 CFR part 677 of the Joint WIOA Final Rule. 
Several other comments focused on defining or revising definitions of 
terms that are used in regulations applying solely to Department of 
Education programs. The Department worked with the Department of 
Education to ensure they were addressed where they most appropriately 
fit, which was often in the Joint WIOA Final Rule and sometimes in 
specific parts of this regulation.
    Department Response: The Department considered these comments and 
addressed them in other parts of this regulation, as appropriate, and 
worked with the Department of Education to address these comments in 
the most relevant part of the most appropriate regulation. For example, 
some commenters suggested definitions of terms related to performance 
under WIOA title I programs are addressed in 20 CFR part 677 (see Joint 
WIOA Final Rule) and comments related to serving youth under WIOA title 
I programs are addressed in part 681.
    In addition, the Department realized that the NPRM contained minor 
inconsistencies in how it defined ``individual with a disability'' 
across parts. The Department therefore edited such definitions using 
the statutory definition at WIOA sec. 3(25), which uses the definition 
from the Americans with Disabilities Act (ADA), to make them consistent 
with each other. The Department interprets all references to the ADA to 
include case law and interpretive guidance. The Department also changed 
the terms ``workforce innovation and opportunity system,'' and 
``workforce investment system'' to ``workforce development system'' 
throughout this rule. This was done to enhance consistency across parts 
and avoid confusion, and to be emphasize the role of workforce 
development boards in this system.

C. Part 679--Statewide and Local Governance of the Workforce 
Development System Under Title I of the Workforce Innovation and 
Opportunity Act

    20 CFR part 679 addresses the Statewide and Local Governance 
provisions of the Workforce Development System under title I of WIOA. 
This part includes provisions on the State WDB, the Workforce 
Innovation and Opportunity Act Local Governance (Workforce Development 
Areas), Local WDBs, Regional and Local Plans, and Waivers/Workforce 
Flexibility Plans.
    The analyses that follows provides the Department's response to 
public comments received on the proposed Statewide and Local Governance 
regulations. If a section is not addressed in the discussion below, it 
is because the public comments submitted in response to the NPRM did 
not substantively address that specific section and no changes have 
been made to the regulatory text. Further, the Department received a 
number of comments on this part that were outside the scope of the 
regulation and the Department offers no response. Lastly, the 
Department has made a number of non-substantive changes to correct 
grammatical and typographical errors to improve the readability and 
conform the document stylistically that are not discussed in the 
analysis below.
1. Subpart A--State Workforce Development Board
    Subpart A sets forth the conditions under which the Governor must 
establish the State WDB. 20 CFR 679.100(a) through (e) explain the 
purpose of the State WDB. The State WDB represents a wide variety of 
individuals, businesses, and organizations throughout the State. WIOA 
is designed to help job seekers and workers access employment, 
education, training, and support services needed to succeed in the 
labor market, and match employers with the skilled workers needed to 
compete in the global economy. The State WDB has the critical role of 
leading and guiding the State's implementation of WIOA, which requires 
aligning Federal investments in job training, integrating service 
delivery across programs, and ensuring that workforce investments are 
job-driven and match employers with skilled workers. The State WDB 
serves as a convener of State, regional, and local workforce system 
partners to enhance the capacity and performance of the workforce 
development system and align and improve employment, training, and 
education programs, and through these efforts, promote economic growth. 
The State WDB's role as a strategic convening place where key 
stakeholders and partnerships come together can be accomplished only if 
each State WDB member is an active participant in the business of the 
board. State WDB members must establish a platform in which all members 
actively participate and collaborate closely with the required partners 
of the workforce development system, and other stakeholders, including 
public and private organizations. This engagement is crucial in the 
State WDB's role to help integrate and align a more effective job-
driven workforce development system that invests in the connection 
between education and career preparation.
Overarching Comments on State WDBs
    Comments: Commenters expressed concern with the WIOA implementation 
timelines for establishing compliant State WDBs. They said that States 
should have more flexibility in the time allowable to become compliant 
with new requirements, including new membership requirements and the 
new State WDB role, which could require changes by the State 
legislature.
    Department Response: WIOA called for the implementation of most of 
WIOA, including the State WDB requirements, by July 1, 2015. State WDB 
requirements are outlined in WIOA sec. 101 and Sec.  679.100. The 
Department issued operating guidance in TEGL No. 27-14 on April 15, 
2015, titled ``Workforce Innovation and Opportunity Act Transition 
Authority for Immediate Implementation of Governance Provisions.'' This 
guidance can be found at http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm.
    Comments: One commenter was concerned with potential political 
influence the Governor holds over State and Local WDBs as well as 
procurement requirements.
    Department Response: WIOA vests certain authority with the 
Governor, including State WDB appointments, and the Department has no 
authority to change it.
    WIOA sec. 107(e) requires Boards to operate in a transparent 
manner; Sec. Sec.  679.140 and 679.390 set forth the parameters for 
State and Local WDBs to conduct business in an open and transparent 
manner. Transparency in operations also assures that all parties are 
held accountable to the public and can mitigate concerns of 
inappropriate influence. Transparency promotes

[[Page 56089]]

accountability and provides valuable information to citizens on the 
Federal, State, and local government's activities. The State WDB must 
make available to the public on a regular basis, through electronic 
means and open meetings, information about State WDB activities such as 
the State Plan, modifications to the State Plan, board membership, the 
board's by-laws, and the minutes of meetings. This information must be 
easily accessed by interested parties. Ensuring that this information 
is widely available promotes transparency and provides access to the 
public on how the State WDB works to align, integrate, and continuously 
improve the workforce development system. No change to the regulatory 
text was made in response to this comment.
    Comments: Another commenter recommended that developing an 
overarching vision for the workforce development system and monitoring 
of progress toward that vision should be a function of the State WDB.
    Department Response: These actions are a function of the State WDB. 
20 CFR 679.100 implements WIOA sec. 101(d) and outlines the vision and 
purpose of the State WDB. Among other responsibilities, the State WDB 
is required to assist the Governor in the ``development, 
implementation, and modification of the State Plan'' (WIOA sec. 
101(d)(1)) and to support the function of the public workforce system 
enumerated in WIOA sec. 101(d)(2) through (12). The State Plans must 
detail the State's strategic workforce approach and vision as outlined 
in 20 CFR 676.100(a) (see Joint WIOA Final Rule) and no change to the 
regulatory text was made in response to this comment.
Section 679.100 What is the purpose of the State Workforce Development 
Board?
    20 CFR 679.100 implements WIOA sec. 101 and outlines the purpose of 
the State WDB. A key goal of Federally-funded training programs is to 
get more U.S. workers jobs and marketable skills and support businesses 
to find workers with the skills that are needed. The State WDB is 
responsible for engaging employers, education providers, economic 
development, and other stakeholders to help the workforce development 
system achieve the purpose of WIOA and the State's strategic and 
operational vision and goals outlined in the State Plan.
    The Department encourages the State to take a broad and strategic 
view when considering representatives of the State WDB, and also in 
establishing processes which it will use to include necessary 
perspectives in carrying out State WDB functions. For example, 
alignment of required one-stop partner investments is essential to 
achieving strategic and programmatic alignment at the State, regional, 
and local level. Further, States are encouraged to examine factors like 
the natural bounds of regional economies, commuting patterns, and how 
economic sectors impact the State, which may benefit from inputs either 
from formal members of the board, or through other engagement. Broad 
geographic representation as well as a reflection of diversity of 
populations within the State is critical.
    Comments: A commenter emphasized the need for Boards to remain 
connected to local and regional programs, and another requested more 
information on how employer engagement would be measured and how a 
State WDB would know if their engagement was successful. This commenter 
suggested surveys of partners (both pre-WIOA and annually) to determine 
the level of engagement.
    Department Response: There is a primary indicator of performance in 
WIOA sec. 116(b)(2)(i)(vi) to gauge the system's effectiveness in 
serving business. WIOA does not provide parameters for measuring the 
Board's effectiveness in engaging employers. However, this engagement 
is crucial in the State WDB's role to help integrate and align a more 
effective job-driven workforce development system that invests in the 
connection between education and career preparation. The Department 
will continue to provide technical assistance and guidance to Boards to 
assist their efforts to fulfill this vision. The Department envisions 
that the State WDB will serve as a convener of State, regional, and 
local workforce system partners to enhance the capacity and performance 
of the workforce development system; align and improve employment, 
training, and education programs, and through these efforts, promote 
economic growth.
    Comments: A commenter suggested that more information regarding the 
State Plan and how States will satisfy the needs of individuals with 
disabilities, and the specific performance metrics that will be used 
for systemic improvement be included in Sec.  679.100.
    Department Response: State Plan requirements as a function of the 
State WDB are addressed in Sec.  679.130. WIOA sec. 102 describes the 
requirements for the State Plan; State Plan requirements are also 
addressed in 20 CFR part 676, including requirements to address the 
needs of the State's workforce and services to individuals with 
barriers to employment (see Joint WIOA Final Rule). No change to the 
regulatory text was made in response to this comment.
Section 679.110 What is the State Workforce Development Board?
Local Elected Officials
    Comments: Commenters citing the needs of large and diverse States 
that are concerned with adequate representation of local level 
interests recommended that Governors include the chief elected official 
from the smallest and largest workforce areas on the State WDB. 
Similarly, other commenters recommended that the local elected 
officials be increased from a minimum of two representatives to a 
percentage of the Board.
    Department Response: Both WIOA and the regulations offer the 
Governor the flexibility to ``include other appropriate representatives 
and officials designated by the Governor'' as detailed in Sec.  
679.110(b)(3)(iii)(B). The Governor has the flexibility to appoint more 
local elected officials to the State WDB as he/she sees fit and a 
Governor may seek to have such officials represent the range of local 
government entities. The Department encourages the Governor to use this 
authority, which may include increasing the representation of CEOs, to 
ensure accurate representation of the interests of job seekers and 
businesses in the State. No change to the regulatory text was made in 
response to these comments.
Representation of Core Programs
    Comments: Commenters opposed the Department's interpretation of 
WIOA allowing for representation of multiple core programs by a single 
person (as proposed in Sec.  679.110(b)(3)(iii)(A)) and indicated that 
this situation fails to adequately represent adult education. Some 
commenters called for specifically mandating the State director of 
adult education on the State WDB. Others were concerned that the 
Department's interpretation does not satisfy the requirement to have a 
representative of the lead State official with primary responsibility 
for each of the core programs.
    Department Response: The Governor is responsible for ensuring 
adequate representation of the core programs, which the Department 
interprets to mean that the core program's State WDB representative has 
not only primary responsibility for the program, but also the expertise 
to actively and meaningfully contribute to the State WDB's 
understanding of the program's role in the public workforce system, 
especially with regard to the strategic

[[Page 56090]]

planning for that system, and in the development and implementation of 
the State Plan. The Department has added Sec.  
679.110(b)(3)(iii)(A)(1)(i) through (iii) to clarify that, for title I 
and Wagner-Peyser Act programs, a single lead State official with 
primary responsibility for those programs may represent more than one 
of those programs. However, the WIOA title II and VR programs must have 
a single, unique representative. When appointing a board member to 
represent multiple core programs under Sec.  679.110(b)(3)(iii), 
Governors should take into account the requirement that the 
representative has the primary responsibility for the core program 
which includes direct responsibility for, and understanding of, policy 
issues involving the core program and the public workforce system. The 
Department encourages Governors to ensure an ongoing role for all core 
programs to inform the Boards' actions. Meeting these requirements may 
be achieved in a number of ways, such as directly appointing a State's 
director for those core programs to the Board, gathering direct input 
from program administrators via a subcommittee or staffing structure, 
or frequent efforts to gather input.
    These provisions are intended to ensure that all core programs have 
meaningful input on the State WDB, but neither WIOA nor the regulation 
requires that the adult education director be appointed to the State 
WDB. The regulation is not changed to require a specific title be named 
as representative; however, representatives must meet the requirement 
of primary responsibility.
    The Department will issue guidance to support the implementation 
and maintenance of compliant State WDBs.
Labor Union, Small Business, and Registered Apprenticeship 
Representation
    Comments: Comments on the membership requirements of 
representatives of labor organizations and registered apprenticeship 
included multiple suggestions for regulatory text changes. One 
commenter suggested changing ``exists'' in Sec.  679.110(b)(3)(ii)(B) 
to ``operating,'' because ``exists'' could cause confusion. Another 
commenter suggested that the term ``registered'' precede 
apprenticeship, out of concern that the NPRM language would allow low-
quality apprenticeship programs that are not registered be considered.
    Department Response: The Department disagrees that ``exists'' will 
cause confusion in reference to registered apprenticeship programs 
available in the State. The Department agrees that the reference to 
apprenticeship should be changed to ``registered apprenticeship'' 
because references throughout WIOA are generally references to 
registered apprenticeship.
    No change to the regulatory text was made in response to these 
comments, with the exception of revising Sec.  679.110(b)(3)(ii)(B) to 
refer to apprenticeship as ``registered apprenticeship.''
    Comments: Commenters requested clarification of the total number of 
labor representatives required on the State WDB, and suggested labor 
representatives include employee representatives for non-unionized 
employees.
    Department Response: WIOA requires at least two representatives of 
labor organizations nominated by State labor federations, and a 
representative of a registered apprenticeship program. Because State 
WDB members may not serve multiple roles for the categories included in 
WIOA sec. 101(b)(1)(C)(ii) (as outlined in WIOA sec. 101(b)(3)(B)), the 
Department's proposed language clarified that, at minimum, two labor 
representatives and one joint labor-management of a registered 
apprenticeship program are required. The State WDB must include not 
less than 20 percent representation of the workforce, including at a 
minimum these three representatives.
    In addition to these representatives, WIOA sec. 
101(b)(1)(C)(iii)(II) and Sec.  679.110(b)(3)(iii)(B), give the 
Governor the flexibility to appoint ``other representatives and 
officials as the Governor may designate.'' This would allow the 
Governor to designate non-union employee organizations as additional 
members of the State WDB. No change to the regulatory text was made in 
response to these comments.
Nominations
    Comments: Two union commenters urged the Department to clarify that 
the nominations for representatives of joint labor-management 
registered apprenticeship programs on State and Local WDBs should be 
made by State and local building and construction trades councils, 
except where none exist in the State, in which case the 
representative(s) should be nominated by the local Building Trades 
Councils within the State.
    Regarding the proposed Sec.  679.110(b)(3)(i)(C) requirement that 
the Governor must appoint required representatives of businesses or 
organizations based on nominations from business organizations and 
trade associations in the State, a commenter asked what would qualify 
these organizations to submit such nominations and requested that the 
Department clarify the definition of these organizations.
    Department Response: Paragraph (b)(3)(i)(C) of Sec.  679.110 
implements WIOA sec. 101(b)(1)(C)(i)(III), which requires State WDB 
members who represent businesses or organizations representing 
businesses to be appointed from a list of potential members nominated 
by State business organizations and business trade associations. WIOA 
does not further define trade associations; restricting the nominating 
entity would not comply with WIOA sec. 101(b)(1)(C)(i)(III), but 
Governors may accept nominations of representatives to the State WDB 
from Trade Councils. Furthermore, WIOA does not require that the 
representatives of joint labor-management registered apprenticeship 
programs (under WIOA sec. 101(b)(1)(C)(ii)(II) be nominated by any 
organization. The Department declines to add the requirement that 
trades councils must nominate these members. No change to the 
regulatory text was made in response to these comments.
Single-Area States
    Comments: Relating specifically to concerns for single-area States, 
one commenter suggested that the core programs can be improved by CEOs 
on the State WDB and that the Departments of Labor and Education must 
look critically at any Unified or Combined State Plan that is submitted 
from a single-area State that does not obviously and fully represent 
the local viewpoint from a diverse set of stakeholders, as is the 
intention of this section. Another commenter stated that because local 
control is primarily with the State WDB in single-area States, the 
local community advisory groups, who are more familiar with the 
specific community needs, do not have the influence that they should. 
Multiple commenters also requested that the Department clarify the 
meaning of the proposed Sec.  679.110(b)(3)(iii)(A)(2) requirement that 
the State WDB include two or more CEOs (collectively representing both 
cities and counties ``where appropriate'') and indicate whether this 
language would exempt single-area States from requiring CEOs to serve 
on the State WDB.
    Department Response: 20 CFR 679.270 implements WIOA sec. 107(c)(4), 
which describes the requirements of Local WDBs in single-area States. 
Section 679.270 requires that the State WDB, acting as the Local

[[Page 56091]]

WDB, carry out the functions of both Boards except that the State is 
not required to meet and report on a set of local performance 
accountability measures. Section 679.110(b) requires CEO representation 
on the State WDB. There is no exemption for membership categories on 
the State WDB in single-area States. No change to the regulatory text 
was made in response to these comments.
Community-Based Organizations
    Comments: A few commenters recommended that State WDBs should be 
required to have at least one representative from community-based 
organizations (CBOs) with experience and expertise in addressing 
individuals' training, employment, and educational needs. For example, 
one commenter suggested adding Sec.  679.110(b)(3)(ii)(E) that states 
``State Boards are strongly encouraged to include organization 
representatives in (C) and (D).''
    Department Response: Many comments from stakeholders with mandated 
representation on the Board under WIA requested that they again be 
mandated Board members or that they be referenced in regulation. WIOA 
reduced mandated Board membership in an effort to streamline State WDBs 
and provide Governors the flexibility to establish Boards that best 
reflect the diversity of the State's job seeker and employer 
communities. The Department recognizes that many important system 
partners with experience with specific job seeker populations, such as 
required one-stop partner programs, tribal organizations, other 
Department program grantees, and those serving the disadvantaged and 
disabled populations are no longer required members of the Board. 
However, Sec.  679.110(b)(3)(ii) permits representatives of community-
based organizations that have demonstrated experience and expertise in 
addressing the employment, training, or education needs of individuals 
with barriers to employment to contribute to the 20 percent workforce 
threshold. Paragraph (b)(3)(iii)(B) says the Governor has the 
flexibility to appoint ``other appropriate representatives and 
officials designated by the Governor'' which does not preclude any 
organization as the Governor deems appropriate for the State. The 
Department encourages the Governor to ensure that State WDB members 
represent the diversity of job seekers, and employers across the State, 
which includes ensuring adequate representation on the State WDB. The 
Department has made no changes to the regulatory text in response to 
these comments.
Chairperson Requirements
    Paragraph (c) of Sec.  679.110 implements WIOA sec. 101(c) 
requiring the Governor to select a chairperson of the Board from among 
the business representatives on the Board who are the owner or chief 
executive officer for the business or organization, or a person who is 
an executive with the business or organization with optimum policy-
making or hiring authority.
    Comments: One commenter requested amending the statutory language 
to allow outlying areas to appoint a representative from a non-
governmental organization, a community-based organization, or a small 
business rather than a business as chair of the State WDB, expressing 
concern about finding a chairperson who would be willing to dedicate 
the time and effort to the Board.
    Department Response: A small business owner would meet the 
qualifications outlined in the statue and would not require a change to 
the regulations. However, WIOA does not delineate specific Board 
membership exemptions for outlying areas. No change to the regulatory 
text was made in response to these comments.
Individuals With Disabilities and Other Barriers to Employment
    Comments: Many commenters from stakeholders with mandated 
representation on the Board under WIA and from other interest groups 
requested that they again be mandated Board members or that they be 
referenced in regulation. Various commenters suggested that Governors 
be required to appoint individuals with disabilities, disability 
service providers, and direct support professionals, lead State 
officials from agencies with primary responsibility for providing 
services to individuals with intellectual, developmental, and other 
significant disabilities as members of the State WDB. Another commenter 
recommended that because it is not required, the Department should 
strongly urge representation of populations with disabilities on State 
and Local WDBs.
    Department Response: WIOA reduced mandated Board membership in an 
effort to streamline State WDBs and provide Governors the flexibility 
to establish Boards that best reflect the diversity of the State's job 
seeker and employer communities. The Department recognizes that many 
important system partners with experience with specific job seeker 
populations, such as required one-stop partner programs, tribal 
organizations, other Department program grantees, and those serving the 
disadvantaged and individuals with disabilities are no longer mandated 
members of the Board. However, Sec.  679.110(b)(3)(ii) requires not 
less than 20 percent of the Board be comprised of workforce 
representatives which may include one or more individuals who have 
demonstrated experience and expertise in addressing the employment, 
training, or education needs of individuals with barriers to 
employment. Paragraph (b)(3)(iii)(B) says the Governor has the 
flexibility to appoint ``other appropriate representatives and 
officials designated by the Governor,'' which does not preclude 
representatives of any required partner program, community based 
organizations or other organizations as the Governor deems appropriate 
for the State. The Department encourages the Governor to ensure that 
State WDB members represent the diversity of job seekers, and employers 
across the State, which includes ensuring adequate representation on 
the State WDB. The Department has made no changes to the regulatory 
text in response to these comments.
Work-Relevant Training
    Comments: Relating to the WIOA provision that provides that State 
WDB business representatives may represent businesses that provide 
``employment opportunities that, at a minimum, include high-quality, 
work-relevant training and development in in-demand industry sectors,'' 
some commenters asked the Department to clarify the definition of 
``work-relevant training'' in proposed Sec.  679.110(b)(3)(i)(B). In 
particular, some of these commenters asked whether it pertains to for-
profit training providers. Another commenter stated while the 
definition of ``in-demand'' is located at WIOA sec. 3(23), there are no 
definitions for the terms ``high-quality'' and ``work-relevant.'' This 
commenter recommended that the Department allow definition of these 
terms at the State or local level.
    Department Response: Paragraph (b)(3)(i)(B) of Sec.  679.110 
implements WIOA sec. 101(b)(1)(C)(i)(II), which provides that State WDB 
business representatives must represent businesses that provide 
``employment opportunities that, at a minimum, include high-quality, 
work-relevant training and development in in-demand industry sectors.'' 
WIOA sec. 3 provides definitions used in the law, however the terms 
``work-relevant'' training and ``high quality'' are not defined in 
WIOA. The State WDB, in conjunction with the Governor, is responsible 
for crafting appropriate parameters to address

[[Page 56092]]

circumstances in the State; States are therefore responsible for 
defining ``work-relevant'' and ``high-quality'' in accordance with the 
particular circumstances faced by that State. The Department has made 
no changes to the regulatory text in response to these comments.
    Comments: Other commenters said that while they agree that 
customized training, registered apprenticeship, or OJT are all work-
relevant, the Department should clarify that these are just a few 
examples and not a comprehensive list because such limitation could 
deem ineligible representatives of the business community who may 
successfully offer alternative types of training such as a non-
registered apprenticeship. Similarly, another commenter recommended 
that Sec.  679.110(b)(3)(i)(B) should clarify that ``a representative 
of a business providing an alternative form of training can serve on 
the State Board.''
    Department Response: The Department acknowledges that the training 
options mentioned in this section are illustrative, and that other 
training strategies could reasonably satisfy this requirement. The 
Department has determined that no further definition is required and 
has made no changes to the regulatory text in response to these 
comments.
Voting Rights
    Comments: Expressing concern that allowing a Governor to 
selectively grant voting rights among non-required members could skew a 
Board or lead to the appearance of discrimination against some of the 
non-required member interests, a commenter recommended that Sec.  
679.110(g) state clearly that the Governor may grant voting privileges 
to either all or none of the non-required members of the State WDB. 
Another commenter said that allowing a CEO to give voting rights to 
non-required members could lead to political tension. Some commenters 
were concerned that a Governor's authority to convey voting privileges 
to non-required members, as stated in Sec.  679.110(g), would be used 
to circumvent the requirement of a business majority on the State WDB, 
or otherwise impact the functionality of the Board.
    Department Response: WIOA sec. 101(b)(1) mandates certain State WDB 
members in order to ensure a core set of interests are represented. 
Title 20 CFR 679.110(g) requires all mandated Board members to have 
voting rights. This section also permits the Governor to grant voting 
privileges to the non-required members of the board, and the Department 
encourages the Governor to do so, if doing so would further the mission 
and goals of the board. Additionally, as described below, the Governor 
may not award voting rights in such a way that would upset the balance 
of required membership categories. Under the regulations as proposed, 
Governors cannot circumvent membership requirements by granting voting 
rights to non-mandated State WDB members because the membership 
requirements explained in paragraph (b) will always cause the majority 
of members on the Board to be mandated members. No change to the 
regulatory text was made in response to these comments.
Indian and Native American Representation
    Comments: Paragraph (b) of Sec.  679.110 implements WIOA sec. 
101(b) describing the required State WDB membership. Many comments from 
stakeholders with mandated representation on the Board under WIA and 
other interest groups requested that they again be mandated Board 
members or that they be referenced in regulation. Several commenters 
suggested that Indian and Native American representatives be required 
as Board members. As part of a Council resolution submitted as a public 
comment, the Native American Employment and Training Council (NAETC) 
proposed that each State WDB should have a representative from a tribe 
or tribal organization.
    Department Response: WIOA reduced mandated Board membership in an 
effort to streamline the State WDBs and provide Governors the 
flexibility to establish Boards that best reflect the diversity of the 
State's job seeker and employer communities. Many important system 
partners with experience with specific job seeker populations, such as 
tribal organizations, other Department program grantees, and those 
serving the disadvantaged and disabled populations are no longer 
required members of the Board. However, Sec.  679.110(b)(3)(ii) 
requires not less than 20 percent of the Board be representatives of 
the workforce, which may include representatives of community-based 
organizations that have demonstrated experience and expertise in 
addressing the employment, training, or education needs of individuals 
with barriers to employment. It also says the Governor has the 
flexibility to appoint ``other appropriate representatives and 
officials designated by the Governor'' (Sec.  679.110(b)(3)(iii)(B)); 
the Department encourages the Governor to ensure that State WDB members 
represent the diversity of job seekers and employers across the State. 
No change to the regulatory text was made in response to these 
comments.
Section 679.120 What is meant by the terms ``optimum policy-making 
authority'' and ``demonstrated experience and expertise''?
    Paragraph (a) of Sec.  679.120 defines the term ``optimum policy-
making authority'' as an individual who can reasonably be expected to 
speak affirmatively on behalf of the entity he or she represents and to 
commit that entity to a chosen course of action. This section retains 
the same requirements that were included in the WIA regulations at 20 
CFR 661.203(a). Paragraph (b) of Sec.  679.120 defines the term 
``demonstrated experience and expertise'' as an individual who has 
documented leadership in developing or implementing workforce 
development, human resources, training and development, or a core 
program function.''
    Comments: The Department sought comment on the definition of 
optimum policy-making authority, and demonstrated experience and 
expertise. Commenters recommended adding education and training 
expertise to Sec.  679.120 by indicating that documented leadership in 
any of the areas in Sec.  679.110(b)(3)(ii)(C) and (D) also would be 
considered.
    Department Response: The Department agrees with these commenters 
and changed the regulatory language in Sec.  679.120 to reference Sec.  
679.110(b)(3)(ii)(C) and (D).
    Comments: Commenters also recommended in-depth criteria including: 
A successful track record, leveraging of funds, documented service 
track record, quality partnerships, culturally competent, and a 
physical location in the area. However, the majority of commenters 
supported leaving the definition open to State and local discretion. 
Some commenters expressed concern that the definition proposed in Sec.  
679.120 was too specific and may limit the types of representatives on 
the State WDB to those with experience in human resources.
    Department Response: With the clarification that demonstrated 
experience and expertise may include individuals with experience in 
education or training of job seekers with barriers to employment as 
described in Sec.  679.110(b)(3)(ii)(C) and (D), the Department has 
determined that the definition is sufficiently clear to provide 
parameters to State WDBs.

[[Page 56093]]

    Comments: Another commenter suggested removal of the term 
``documented,'' referencing experience in the areas described in Sec.  
679.120, to avoid added administrative burdens of processing 
documentation.
    Department Response: The use of the term ``documented'' assures 
that the selected representatives meet the criteria necessary to 
contribute meaningfully to the Board's actions for job seekers but does 
not require any specific administrative burden. Processes and 
procedures related to membership are the responsibility of the elected 
official. No change to the regulatory text was made in response to 
these comments.
Section 679.130 What are the functions of the State Workforce 
Development Board?
    20 CFR 679.130 implements sec. 101(d) of WIOA and describes the 
role and functions of the State WDB. Paragraphs (a), (d) through (e), 
and (g) through (k) of Sec.  679.130 reiterate the relevant statutory 
requirements at WIOA secs. 101(d)(1), (4) and (5), and (7) through 
(11). These functions are the primary functions of the State WDB.
    Comments: A few commenters suggested text changes such as requiring 
State WDBs to partner with public television stations due to those 
stations' experience creating instructional materials on employability 
skills for job agencies and one-stop centers, providing professional 
development tools like workshops, and hosting job fairs.
    Department Response: The Department encourages State WDBs to 
partner with a wide variety of organizations, however it declines to 
require entities not identified in statute. No change to the regulatory 
text was made in response to these comments.
    Comments: One commenter suggested that Sec.  679.130(a) and (b) 
should require State WDBs to create and implement an appeal process for 
all policies, monitoring, and negotiations that take place by the 
Governor, State WDB, or State pass-through entity and the Local WDBs.
    Department Response: Section 679.130 implements WIOA sec. 101(d), 
which does not include the requirement to establish such an appeals 
process. No change to the regulatory text was made in response to these 
comments.
Clarification of Role of the State WDB
    Comments: Commenters requested clarification of the roles of the 
State WDB such as how the State WDB is to assist in reviewing 
recommendations ``on actions that should be taken by the State to align 
workforce development programs to support a comprehensive and 
streamlined workforce development system'' and whose recommendations 
the Board is to review.
    Department Response: WIOA sec. 101(d) indicates that the role of 
the State WDB is to assist the Governor in the development, 
implementation, and modification of the State Plan. To that end the 
Board is to review policies, programs, and recommendations on actions 
that should be taken by the State to align workforce development 
programs in the State. The State WDB is not limited in the types of 
recommendations that can be reviewed. The Board may consider 
recommendations from any number of areas, not limited to those 
resulting from the public comment on the State Plan, from State WDB 
meetings, or standing committees. In its role in assisting the 
Governor, the State WDB should review relevant comments regarding State 
WDB actions, as well as provide its own recommendations of actions to 
the Governor. No change to the regulatory text was made in response to 
these comments.
    Comments: Commenters requested clarification of the role of the 
State WDB when other entities perform the same functions such the 
development and oversight of the State's labor market information (LMI) 
system, which involves the State WDB and State Unemployment Insurance 
(UI) Administrator.
    Department Response: State WDBs have several roles related to the 
use of LMI in the State. Paragraph (e)(3) of Sec.  679.130 implements 
WIOA sec. 101(d)(5)(C) and requires State WDBs to develop effective 
training programs that respond to real-time data analysis of the labor 
market. WIOA sec. 101(d)(11) and Sec.  679.130(k) require the 
development of the statewide workforce and labor market information 
system described in sec. 15(e) of the Wagner-Peyser Act which refers to 
the State's responsibilities. The responsibilities are complementary 
rather than duplicative of the roles of other State agencies in these 
areas. The State WDB should coordinate with all relevant parties to 
develop and implement a plan for ensuring activities are cohesively 
leveraged rather than duplicated. No change to the regulatory text was 
made in response to these comments.
    Comments: Two commenters urged the Department to incorporate into 
Sec.  679.130 an active review of State policies that encourage 
innovation or hinder innovative strategies that are developed at the 
local level and both cautioned against over-regulation by the State.
    Department Response: Under Sec.  679.130 State WDBs are already 
required to review policies, programs, and recommendations on actions 
that should be taken by the State to align workforce development 
programs in the State. No change to the regulatory text was made in 
response to these comments.
    Comments: A commenter asked whether, for the purpose of carrying 
out sec. 101(d), WIOA authorizes the Governor to ignore or otherwise 
disregard existing State laws with regard to agency rulemaking.
    Department Response: WIOA does not provide this authority to the 
Governor. However, States are required to comply with the Final Rule as 
a condition of the WIOA grant. The Governor should follow applicable 
State laws in a manner best designed to comply with these regulations 
when implementing the functions of the State WDB.
Single-Area States
    Comments: Single-area States, which operated as such under WIA, are 
permitted under WIOA. A commenter urged the Department to mandate use 
of Local WDBs and/or regional consortia in single-area States.
    Department Response: WIOA sec. 107(c)(4) requires that State WDBs 
operating as the Local WDB carry out the same functions, except as 
noted, required of the Local WDB as detailed in Sec.  679.270. 
Therefore, State WDBs in single-area States are already required by 
statute and regulation to meet all requirements of membership and 
functions of both State and Local WDBs. No change to the regulatory 
text was made in response to these comments.
Career Pathways (Sec.  679.130(c)(2))
    WIOA sec. 101(d)(3)(B) outlines ``the development of strategies to 
support the use of career pathways for the purpose of providing 
individuals, including low-skilled adults, youth, and individuals with 
barriers to employment (including individuals with disabilities), with 
workforce investment activities, education'' as a function of the State 
WDB and is described in Sec.  679.130(c)(2). WIOA sec. 107(d) and Sec.  
679.300 extends the requirement to Local WDBs. WIOA sec. 3(7)(A) 
through (G) defines career pathways as a combination of rigorous and 
high-quality education, training, and other services that meet 
specified guidelines.
    Comments: Commenters requested that the Department provide more 
comprehensive guidance on the implementation of career pathways.

[[Page 56094]]

Several commenters provided recommended changes to the regulatory text 
that included adding criteria, including a section specific to Local 
WDB implementation of career pathways, requiring the State and Local 
WDBs to define the roles and responsibilities of WIOA programs related 
to career pathways, listing required partners (such as Job Corps, and 
public television), and developing strategies to include job seekers 
with specific barriers.
    Department Response: The ideas and suggestions provided by the 
commenters support career pathways as a dynamic topic that involves 
input of multiple partners and stakeholders throughout the system. The 
statutory language provides general criteria for both State and Local 
WDBs to reference in developing career pathway strategies. The 
Department has concluded that more prescriptive regulatory language may 
limit State WDBs' innovation in developing career pathways to support 
individuals to retain and enter employment; however, the Department 
will issue further guidance and technical assistance to help States. No 
change to the regulatory text was made in response to these comments.
Industry or Sector Partnerships (Sec.  679.130(c)(4))
    Paragraph (c)(4) of Sec.  679.130 implements WIOA sec. 101(d)(3)(D) 
states that the roles and functions of the State WDB include the 
development and expansion of strategies to meet the needs of employers, 
workers, and job seekers particularly through industry or sector 
partnerships related to in-demand industry sectors and occupations.
    Comments: A commenter suggested that the Department should revise 
Sec.  679.130(c)(4)'s requirement for State WDBs to assist with 
strategies related to industry or sector partnerships to include the 
language ``with an emphasis on attainment of recognized post-secondary 
credentials.''
    Department Response: Title 20 CFR 679.130(c)(4) states that State 
WDBs have responsibility for the development and expansion of 
strategies to meet the needs of employers, including sector strategies. 
State WDB functions already include the requirement to develop and 
update comprehensive State performance and accountability measures to 
assess core program effectiveness under WIOA sec. 116, which includes a 
credential attainment measure. Therefore, attainment of credentials, 
including postsecondary credentials, should already be a State WDB 
priority, as should sector strategies. No change to the regulatory text 
was made in response to these comments.
Best Practices (Sec.  679.130(e))
    Paragraph (e) of Sec.  679.130 requires the Board to identify and 
disseminate best practices in a number of areas (paragraphs (e)(1) 
through (3)).
    Comments: Commenters had concerns about dissemination of best 
practices surrounding assessments. One commenter urged the Department 
to explain further how States would use assessments by including how to 
report this in title-specific data. This commenter expressed concerns 
that the value of requiring these assessments could be undercut through 
a perverse incentive for programs to avoid co-enrollment if the 
assessments' use in an accountability system is not clearly defined and 
recommended that States ensure that title II providers have processes 
for sharing assessment data with title I providers and vice versa.
    Department Response: The regulation does not require the reporting 
of the use of assessments in this section. The State WDB's purpose, as 
outlined in WIOA sec. 101 and Sec.  679.100, is to convene State, 
regional, and local workforce system, and partners to align and improve 
the outcomes and effectiveness of Federally-funded and other workforce 
programs and investments. Therefore, the Board' responsibility already 
includes aligning the strategies related to best practices in 
assessments. The State Plan should address the State's strategic and 
operational vision. No change to the regulatory text was made in 
response to these comments.
State WDB One-Stop Delivery System Guidance (Sec.  679.130(f))
    Paragraph (f) of Sec.  679.130 requires the State WDB to develop 
and review statewide policies affecting the coordinated provision of 
services through the State's one-stop delivery system which is to 
include developing objective criteria and procedures for the Local 
WDBs' use in assessing the physical and programmatic accessibility of 
one-stop centers.
    Comments: A commenter suggested that the language in Sec.  
679.130(f) should be strengthened to better reflect the importance of 
including programmatic and physical accessibility in the assessment of 
one-stop centers. This commenter recommended that accessibility of one-
stop centers must include the removal of barriers as defined in the 
Americans with Disabilities Act (ADA) and 28 CFR 36.304 and should 
extend to technological accessibility, citing sec. 508 of the 
Rehabilitation Act of 1973.
    Department Response: The Department agrees that accessibility is 
paramount for all job seekers, and it is the State WDB's function to 
develop the tools to assist local areas to ensure that one-stop centers 
are both physically and programmatically accessible to all job seekers. 
As noted by the commenter, physical accessibility is already required 
under existing statute and individual State laws as well as the 
regulation implementing WIOA sec. 188 at 29 CFR part 38. WIOA sec. 
102(2)(vii) and the WIOA State Plan ICR require that the State Plan 
address how the one-stop delivery system will comply with the Americans 
with Disabilities Act of 1990. No change to the regulatory text was 
made in response to these comments.
Strategies for Technological Improvements To Improve One-Stop Services 
(Sec.  679.130(g)) and Strategies for Aligning Technology and Data 
Systems Across One-Stop Partner Programs (Sec.  679.130(h))
    Comments: A State agency expressed concern that the requirement 
that State WDBs develop strategies to ensure technology is accessible 
to individuals with disabilities and individuals residing in remote 
areas (Sec.  679.130(g)(4)) could become costly and asked the 
Department for information on if each State would create its own plan 
and for the expectations for the scope of available technology. A 
commenter expressed concern that the requirement that State WDBs 
develop strategies to for aligning technology and data systems across 
one-stop partner programs in Sec.  679.130(h) could become costly, and 
asked the Department for an explanation of why this responsibility is 
necessary and what the plan development schedule would look like.
    Department Response: Paragraph (g)(4) of Sec.  679.130 and 
paragraph (h) of Sec.  679.130 address technology improvements, and 
data system alignment across one-stop partner programs. Neither 
paragraph (g) nor (h) require the development of a plan, or outline 
specific technology expectations; rather, the Board is responsible for 
developing strategies for technological improvements. Although the 
State WDB may choose to develop a technology plan to achieve those 
requirements, neither WIOA nor the regulations require the submission 
of a formal technology plan. No change to the regulatory text was made 
in response to these comments.

[[Page 56095]]

Development of Statewide Workforce and Labor Market Information System 
(Sec.  679.130(k))
    Comments: WIOA sec. 101(d)(11) and Sec.  679.130(k) require the 
development of the statewide workforce and labor market information 
system described in sec. 15(e) of the Wagner-Peyser Act which refers to 
the State's responsibilities. A commenter requested clarification of 
the role of the State WDB in the development and oversight of the 
State's labor market information (LMI) system. State WDBs have several 
roles related to the use of LMI in the State.
    Department Response: Paragraph (e)(3) of Sec.  679.130 implements 
WIOA sec. 101(d)(5)(C) and requires State WDBs to develop effective 
training programs that respond to real-time data analysis of the labor 
market. WIOA sec. 101(d)(11) and Sec.  679.130(k) require the 
development of the statewide workforce and labor market information 
system described in sec. 15(e) of the Wagner-Peyser Act which refers to 
the State's responsibilities. The responsibilities are complementary 
rather than duplicative of the roles of other State agencies in these 
areas. The State WDB should coordinate with all relevant parties to 
develop and implement a plan for ensuring activities are cohesively 
leveraged rather than duplicated.
Section 679.140 How does the State Workforce Development Board meet its 
requirement to conduct business in an open manner under ``sunshine 
provision'' of the Workforce Innovation and Opportunity Act?
    Title 20 CFR 679.140 implements WIOA sec. 101(g) requiring the 
State WDB to conduct business in an open manner.
    Comments: A commenter recommended the Department revise Sec.  
679.140(b)(3) to require State WDBs to make available the minutes of 
meetings and any public comments, feedback, or requests for service, 
and to provide a written response to such comments or requests.
    Department Response: The Department notes that paragraph (b)(3) 
already implements the WIOA sec. 101(g) requirement that meeting 
minutes be available to the public upon request. The Department 
encourages all State WDBs to operate with transparency; State WDBs are 
free to make additional information, such as public comments and other 
information it deems appropriate, available to the public. No change to 
the regulatory text was made in response to these comments.
Section 679.150 Under what circumstances may the Governor select an 
alternative entity in place of the State Workforce Development Board?
    Title 20 CFR 679.150 implements WIOA sec. 101(e), which authorizes 
the use of alternative entities to the State WDB under the following 
conditions: The alternative entity was in existence on the day before 
the date of enactment of the Workforce Investment Act of 1998; is 
substantially similar to the WIOA State WDB; and includes 
representatives of business and labor organizations in the State. As 
outlined in Sec.  679.150(c), if the alternative entity does not 
provide representatives for each of the categories required under WIOA 
sec. 101(b), the State Plan must explain the manner in which the State 
will ensure an ongoing role for any unrepresented membership group in 
the workforce development system. The State WDB must maintain an 
ongoing and meaningful role for an unrepresented membership group, 
including entities carrying out the core programs.
    Comments: Commenters disagreed with the interpretation at Sec.  
679.150(d) that required a new State WDB if the membership of the 
alternative entity had changed significantly after August 7, 1998 and 
paragraph (e) that defined the criteria for a significant change. 
Commenters interpreted the alternate entity provisions of WIOA to mean 
that an alternative entity may add or remove membership categories and 
maintain alternative entity status unless those changes make the State 
WDB ``substantially dissimilar'' to the State WDB. Commenters requested 
the Governor be given the authority to make a determination regarding 
the definition of ``substantially similar.''
    Department Response: The Department agrees and has deleted the 
proposed text at Sec.  679.150(d) and (e) from the Final Rule. The 
Department declines to further define ``substantially similar'' in 
Sec.  679.150 but considers substantially similar to be aligned with 
the composition of the WIOA compliant State WDB as outlined in WIOA 
sec. 101(a) through (c) and Sec.  679.110. The Department considers 
changes to the alternative entity membership or structure that are 
contrary to the requirements of WIOA sec. 101(a) through (c) and Sec.  
679.110 or those that make the alternative entity less aligned with 
WIOA State WDB compliance to result in an alternative entity that is 
not substantially similar to a compliant WIOA State WDB.
    Comments: Commenters requested that the Department require a 
business majority for alternative entities.
    Department Response: WIOA sec. 101(e) and Sec.  679.150(b)(3) 
require alternative entities to have representatives of businesses in 
the State, however lacks a requirement for a business majority. The 
Department strongly encourages alternative entities to seek a majority 
business participation in State WDB activities and decisions. No change 
to the regulatory text was made in response to these comments.
2. Subpart B--Workforce Innovation and Opportunity Act Local Governance 
(Workforce Development Areas)
    This subpart provides the requirements for identification of 
regions and designation of local areas under WIOA. WIOA envisions a 
workforce development system that is customer focused on both the job 
seeker and business, and is able to anticipate and respond to the needs 
of regional economies. It requires Workforce Development Boards and 
CEOs to design and govern the system regionally, aligning workforce 
policies and services with regional economies and supporting service 
delivery strategies tailored to these needs. To support this regional 
approach, this subpart requires States to identify intrastate or 
interstate regions. When the region contains more than one local area, 
the local areas are required to plan regionally. WIOA envisions a 
regional system where public workforce system leaders partner and 
provide leadership as part of a comprehensive, regional workforce and 
economic strategy. The majority of comments in this section pertained 
to the structure of regions, and initial and subsequent designation of 
workforce development areas.
Section 679.200 What is the purpose of requiring States to identify 
regions?
    Title 20 CFR 679.200 implements requirements found at both WIOA 
sec. 101(d)(3)(E), and WIOA sec. 106(a), which require the Governor to 
identify regions with consultation from the CEOs and Local WDBs in the 
affected region. The development of comprehensive regional partnerships 
facilitates alignment of workforce development activities with regional 
economic development activities, and better supports the execution and 
implementation of sector strategies and career pathways. Regional 
cooperation may also lower costs and increase the effectiveness of 
service delivery to businesses that span more than one local area 
within a region and to job seekers through coordination of shared

[[Page 56096]]

services, processes, and operations. The Department encourages States 
to ensure that local and regional planning areas are aligned to support 
improved service delivery, improved training and employment outcomes, 
better meet employer needs, and greater effectiveness and efficiency in 
achieving these outcomes.
    Comments: A commenter expressed concern that defining boundaries of 
a region at the State level could result in a lack of coordination 
among locals in different regions. A different commenter suggested that 
the Department require cooperation between core partners to align 
existing services into the appropriate regions and ``to reject plans 
where Governors have not effectively assigned local areas to regions.''
    Department Response: State WDBs are required to identify regions in 
consultation with local chief elected officials and Local WDBs. The 
State WDB is also tasked with ensuring the overall alignment of the 
public workforce system. The function of identifying regions should not 
limit coordination among Local WDBs outside of the identified region; 
in fact, the State WDB function is to ensure that the system becomes 
more, rather than less, cohesive. No change to the regulatory text was 
made in response to these comments.
    Comments: One commenter said that the market of a local area may 
lend itself to more than one region and in instances such as this they 
could exist as a singular local region and partner with the neighboring 
areas.
    Department Response: The Department agrees that the State WDB could 
reach such a conclusion. No change to the regulatory text was made in 
response to these comments.
Section 679.210 What are the requirements for identifying a region?
    Title 20 CFR 679.210 addresses the requirements for identifying a 
region and requires a process that includes consultation with Local 
WDBs and CEOs.
    Comments: Commenters suggested additional clarification regarding 
how consultation will take place including requiring memorandums of 
agreement, and a detailed policy of the process.
    Department Response: The term consultation is used in Sec.  679.210 
as a requirement for identifying a region; the Department added a 
definition of consultation to part 675. This clarifies that 
consultation constitutes a robust conversation in which all parties are 
given opportunity to share their thoughts and opinions. The Department 
declines to add additional requirements.
    Comments: The Department requested comment on additional data that 
may be considered other than that laid out in Sec.  679.210(c)(1) 
through (8). Commenters provided suggestions for new data points as 
well as adjustments to those in paragraphs (c)(1) through (8), such as 
including public transportation when considering commuting patterns, 
adding the workforce participation rate of people with barriers to 
employment, especially individuals with disabilities and out of school 
youth with disabilities, administrative efficiencies, and existing 
regional capacity and a history of local areas working together.
    Department Response: The data points in Sec.  679.210(c)(1) through 
(8) are for illustrative purposes and should not limit the State's 
decision-making when identifying regions. The Department will review 
the suggestions when determining and issuing guidance on any additional 
factors as outlined in Sec.  679.210(c)(8). No change to the regulatory 
text was made in response to these comments.
    Comments: WIOA sec. 102(b)(2)(D)(i)(II) and Sec.  679.210 require 
the Governor to develop a policy and processes for identifying regions. 
Commenters suggested that local areas designated under WIA be able to 
join one or more region or have the opportunity to remain a single 
region. Another commenter suggested that any current local areas that 
incorporate multiple jurisdictions should automatically be considered a 
region. A commenter requested clarification regarding the difference 
between the identification of regions and the designation of local 
areas.
    Department Response: Local area designation is addressed in 
Sec. Sec.  679.220 and 679.230; the purpose of a local area is to 
administer workforce development activities. The purpose of a region is 
addressed in Sec. Sec.  679.200 and 679.210; the purpose of a regional 
area is to align workforce development activities and resources with 
larger regional economic development areas and resources. The regional 
plan should describe the Governor's processes for ensuring the 
requirements outlined in WIOA sec. 102 for the identification of 
regions are met. Local areas designated under WIA are not exempt from 
the regional identification process. No change to the regulatory text 
was made in response to these comments.
    Comments: Those regions comprised of two or more contiguous local 
areas are planning regions as described in WIOA sec. 3(48). Commenters 
have suggested that a single area could participate in multiple 
planning regions by being a member, or through a memorandum of 
agreement.
    Department Response: In accordance with WIOA sec. 106(a)(2), a 
single local area may not be split across two planning regions. Local 
areas must be contiguous in order to be a planning region and 
effectively align economic and workforce development activities and 
resources. The Department encourages States confronted with this issue 
to reevaluate whether the local areas in question are consistent with 
labor market areas and with regional economic development areas in the 
State. If these criteria are not met, the State should consider how 
best to recast local areas for the purposes of subsequent designation 
and regional integration. Local areas only may be part of one region, 
however, local areas within planning regions are not prohibited from 
working or coordinating with other local areas, and regions may 
coordinate with other planning regions. Coordination may be especially 
vital across States; the Department anticipates providing additional 
guidance regarding the creation and management of interstate planning 
regions. No change to the regulatory text was made in response to these 
comments.
    Comments: A commenter requested that the Governor be provided 
flexibility to add more criteria to Sec.  679.210(c) for use when 
identifying a region.
    Department Response: The Department has determined that the 
Governor must use the criteria at Sec.  679.210 in determining a region 
in order to ensure consistency among States. However, the list of 
factors in paragraph (c) is illustrative and additional factors may be 
considered. The Department will review the criteria when determining 
and issuing guidance on any additional factors as outlined in Sec.  
679.210(c)(8), which states that the Secretary of Labor may provide 
additional considerations for the development of regions according to 
the policy priorities of the Department. No change has been made to the 
regulatory text in response to this comment.
Section 679.230 What are the general procedural requirements for 
designation of local areas?
    Title 20 CFR 679.230 describes a general public comment process and 
the general procedural requirements for designation of local areas, 
which include consultation with the State WDB, chief elected officials 
and affected Local WDBs. The Governor has the discretion to establish 
the process and procedures to solicit comments that it determines 
appropriate. However, a

[[Page 56097]]

wide-reaching, inclusive process allows sufficient time for 
stakeholders to provide substantive comments that will enable the 
Governor to receive meaningful feedback from all interested 
stakeholders, ensuring that the Governor is able to consider all 
relevant information, data, and opinions before making a decision to 
designate or redesignate a local area. WIOA sec. 102(b)(2)(D)(i)(II) 
requires the State Plan to describe the Governor's processes for 
designating local areas. In addition, the State Plan must detail how 
the State will ensure the requirements outlined in WIOA sec. 102 
regarding public comments and consultation are met.
    Comments: Commenters suggested that regulations require additional 
clarification regarding consultation.
    Department Response: The Department agrees with the comment and has 
added a definition of consultation to the regulatory definitions in 
part 675 of the Final Rule. The term ``consultation'' is used 
throughout WIOA to describe the process by which State and/or local 
stakeholders convene to discuss changes to the public workforce system. 
The Department has concluded that this definition is necessary to 
clarify that consultation constitutes a robust conversation in which 
all parties are given opportunity to share their thoughts and opinions. 
Written correspondence or other simple communication methods do not 
constitute consultation. This definition applies to all provisions that 
use the term unless otherwise specified. With the addition of the 
definition in part 675 of the Final Rule, the Department considers the 
requirements of Sec.  679.230 to be clear. No changes were made to the 
regulatory text in response to these comments.
    Comments: Many commenters expressed their agreement with the 
general procedural language in this section and commented that pursuant 
to WIA sec. 189(i)(2), Texas's workforce areas were designated before 
WIA took effect and therefore, they may continue to be used as local 
areas. One of the commenters agreed commenter, stating that for these 
reasons, ``Texas should continue to operate pursuant to the waiver 
authority afforded under WIOA.''
    Department Response: Throughout the sections pertaining to Local 
WDBs several similar comments referenced operations in Texas as 
approved under WIA. The Department's response to all comments 
pertaining to Texas's operation under special rule authority in WIA is 
that WIOA sec. 193 continues the provisions in effect in WIA and the 
Department will continue to administer them in the same manner under 
WIOA.
Section 679.240 What are the substantive requirements for designation 
of local areas that were not designated as local areas under the 
Workforce Investment Act of 1998?
    Title 20 CFR 679.240 implements WIOA sec. 101 and addresses the 
substantive requirements for designation of local areas that were not 
designated as local areas under the Workforce Investment Act of 1998 
and Sec.  679.250 addresses subsequent eligibility of local areas.
    Comments: One commenter supported this section as proposed. A few 
commenters, including a State WDB, suggested that the Department add 
language to the regulation that will provide Governors the flexibility 
to apply the factors outlined in Sec.  679.240(a) following subsequent 
designation regardless of whether the area was designated previously.
    Department Response: WIOA sec. 106(b)(3) outlines the requirements 
of subsequent eligibility: ``After the period for which a local area is 
initially designated under paragraph (2), the Governor shall approve a 
request for subsequent designation as a local area from such local 
area, if such area--(A) performed successfully; (B) sustained fiscal 
integrity; and (C) in the case of a local area in a planning region, 
met the requirements described in subsection (c)(1).'' WIOA does not 
require other criteria, and this provision permits existing areas to 
continue so long as they meet the statutory criteria. No change to the 
regulatory text was made in response to these comments.
Section 679.250 What are the requirements for initial and subsequent 
designation of workforce development areas that had been designated as 
local areas under the Workforce Investment Act of 1998?
    Comments: A couple commenters expressed their support for the 
language in Sec.  679.250(a) through (c). One commenter recommended 
that in this section and elsewhere in the regulations any language that 
``prohibits a rural concentrated employment program (CEP) from applying 
for designation as local workforce area'' should be deleted.
    Another commenter presented the same suggestion and recommended 
deleting language from the rule and preamble discussion that exclude 
rural CEPs from being eligible to apply as local workforce areas. 
Specifically, the commenter recommended deleting language from the 
regulatory text of Sec.  679.250(g), and deleting language discussing 
CEPs in the preamble discussion for Sec.  679.250(g), and the preamble 
discussion for Sec.  679.290(a), and the commenter provided detailed 
rationale to support the deletion of all anti-CEP language.
    Department Response: WIOA Technical Amendments Act, enacted on May 
22, 2015, amended WIOA sec. 106(b) to allow rural concentrated 
employment programs to apply for initial and subsequent designation as 
a local workforce area. The regulations have been revised to conform 
with the statutory direction and paragraph (g) now reads as follows: 
``The Governor may approve, under paragraph (c) of this section, a 
request for designation as a local area from areas served by rural 
concentrated employment programs as described in WIOA sec. 
107(c)(1)(C).''
    Comments: Many commenters requested clarification regarding the 
requirements of subsequent designation and the associated timelines in 
Sec.  679.250.
    Department Response: The Department clarified Sec.  679.250 to 
provide details on the duration of initial designation and the timing 
of the first available opportunity for local area subsequent 
designation to occur. The Department revised the proposed requirement 
to clarify that initial designation is only applicable to PY 2016 and 
PY 2017. Noting the commenters' concerns regarding availability of WIOA 
performance data, which is required for the determination of 
designation, the Department added Sec.  679.250(c) to clarify that no 
determination of subsequent designation may be made before the 
conclusion of PY 2017.
Section 679.260 What do the terms ``performed successfully'' and 
``sustained fiscal integrity'' mean for purposes of designating local 
areas?
    Title 20 CFR 679.260 implements the WIOA sec. 106(e)(1) definition 
of performed successfully.
    Comments: Many commenters asked for guidance in applying the WIOA 
sec. 106(e)(1) definition.
    Department Response: The Department agrees that additional detail 
is necessary to ensure that initial and subsequent designation 
requirements are applied consistently. The Department has adjusted the 
Final Rule at Sec.  679.260 to detail the performance indicators, and 
corresponding timelines, to be considered for initial and subsequent 
designation. For clarity and to reduce duplication the Department 
deleted Sec.  679.260(a)(1) and (2) pertaining to the negotiated levels 
of performance. The details in paragraphs

[[Page 56098]]

(a)(1) and (2) were unnecessarily duplicative to the requirements 
covered in the introductory text of paragraph (a), which already 
outline the relevant performance goals. The Department added detailed 
timeframe information for subsequent designation in Sec.  679.260(b)(1) 
and (2).
    Comments: Some commenters suggested that performance be measured in 
the aggregate based on the total outcomes for all performance 
indicators instead of individual performance indicators. Another 
commenter requested that success be based on achieving 80 percent of 
the negotiated goal.
    Department Response: Based on experiences under WIA, the Department 
determined that individual indicators of performance provide Governors 
more detailed information for making designation determinations. Title 
20 CFR 679.260 clarifies that local areas must not fail any individual 
measure for 2 consecutive years. Title 20 CFR 679.260(a) clarifies that 
the local area must meet or exceed the performance levels the Governor 
negotiated with Local WDB and CEO.
    Comments: A commenter asked for clarification regarding appeal 
rights if a local area is deemed not to have performed successfully if 
there was no negotiation between a local area and the State for the 
previous 1 to 2 years before enactment of WIOA.
    Department Response: WIA sec. 136(c) and Sec.  666.310(a) of the 
regulations implementing WIA required the negotiation of local area 
performance indicators under WIA. In accordance with WIOA sec. 
106(e)(1) and Sec.  679.260(a) and (b), the local performance must be 
judged in accordance with the definitions of ``meets'' and ``exceeds'' 
in place at the time the performance levels were negotiated. Appeals 
regarding local area designation must adhere to the requirements in 
Sec. Sec.  683.630(a), 683.640, and 679.290.
    Comments: Paragraph (c) of Sec.  679.260 implements WIOA sec. 
106(e)(2), which defines the term ``sustained fiscal integrity.'' 
Commenters requested clarification of fiscal integrity, and one 
commenter expressed concern that the three criteria used for 
determining ``sustained fiscal integrity'' would limit the Governor's 
ability to designate local areas and suggested that the Department 
clarify that only the first criterion requires a formal determination 
by the Secretary of Labor.
    Department Response: In WIOA sec. 106(e), ``sustained fiscal 
integrity'' means ``that the Secretary has not made a formal 
determination, during either of the last 2 consecutive years preceding 
the determination regarding such integrity, that either the grant 
recipient or the administrative entity of the area misexpended funds . 
. . due to willful disregard of the requirements of the provision 
involved, gross negligence, or failure to comply with accepted 
standards of administration.'' Section 679.260(c) implements the 
requirements outlined in WIOA sec. 106(e). No changes were made to the 
regulatory text in response to these comments. To the extent that 
additional clarification may be needed, the Department will issue 
separate guidance.
Section 679.270 What are the special designation provisions for single-
area States?
    Title 20 CFR 679.270 implements WIOA secs. 106(d) and 107(c)(4)(A), 
which allow for single-area States so designated under WIA to continue, 
and requires the State WDB to carry out the functions of the Local WDB 
in a single-area State.
    Comments: Commenters requested additional clarification on the 
roles of the State WDB in single-area States. Several commenters 
indicate that single-area States tend to be small or substantially 
rural areas and fulfilling the mandates of both the State and Local 
WDBs would be both unduly burdensome for single-area States as well as 
impractical. Others objected to single-area State WDBs taking on the 
role of the Local WDB and expressed concern that such situations are 
non-responsive to local needs and to local stakeholders. Commenters 
suggested varying solutions which include allowing waivers or 
exceptions for single-area States of certain Board functions; mandating 
local representation to a broader extent on the single-area State WDB; 
creating a specific section regulating exemptions for single-area State 
WDB functions; and offering non regulatory technical assistance and 
guidance.
    Department Response: WIOA sec. 107(c)(4)(A) requires that single-
area States' State WDB carry out the function of the Local WDB with an 
exemption only for meeting and reporting on local performance 
indicators, so the requirements of Sec.  679.270(c) cannot be reduced. 
However, the Department does not intend for single-area States to 
conduct the required Board functions in such a way as to be inefficient 
or duplicative. To that end, the Department has amended the regulatory 
text at Sec.  679.270 by adding paragraph (d), which clarifies that 
single-area States must conduct the functions of the Local WDB to 
achieve the incorporation of local interests but may do so in a manner 
that reduces unnecessary burden and duplication of processes. The 
Department will issue guidance regarding how single-area States must 
carry out the duties of State and Local WDBs.
    The Department encourages the Governor to ensure that State WDB 
members represent the diversity of job seekers and employers across the 
State, which includes ensuring adequate local elected official 
representation on the State WDB. Single-area States have the additional 
burden of representing local level interests and stakeholders.
3. Subpart C--Local Workforce Development Boards
    Title 20 CFR 679.300 explains the purpose of the Local WDB. The 
Local WDB represents a wide variety of individuals, businesses, and 
organizations throughout the local area. The Local WDB serves as a 
strategic convener to promote and broker effective relationships 
between the CEOs and economic, education, and workforce partners. The 
Local WDB must develop a strategy to continuously improve and 
strengthen the workforce development system through innovation in, and 
alignment and improvement of, employment, training, and education 
programs to promote economic growth. Local WDB members must establish a 
platform in which all members actively participate and collaborate 
closely with the required and other partners of the workforce 
development system, including public and private organizations. This is 
crucial to the Local WDB's role to integrate and align a more 
effective, job-driven workforce investment system. In this part the 
Department addresses comments on the roles of the Local WDBs, Local WDB 
memberships, and the role of local elected officials.
Section 679.300 What is the vision and purpose of the Local Workforce 
Development Board?
    Title 20 CFR 679.300 establishes the vision for and explains the 
purpose of the Local WDB.
    Comments: Commenters suggested the Department clarify that Local 
WDBs are responsible for organizing the key partners to develop a 
vision for the system collectively, implementing that system, and 
monitoring performance.
    Department Response: These responsibilities are already laid out in 
the regulations under Sec.  679.300(b)(1). One of the purposes of the 
Local WDB is to provide strategic and operational oversight in 
collaboration with required and other partners to help the workforce

[[Page 56099]]

development system achieve the purposes outlined in WIOA sec. 2, and 
assist in the achievement of the State's strategic and operational 
vision and goals outlined in the State Plan. Paragraphs (b)(2) and (3) 
of Sec.  679.300 require the Local WDB to assist in the achievement of 
the State's strategic and operational vision and goals as outlined in 
the Unified State Plan or Combined State Plan, and to maximize and 
continue to improve the quality of services, customer satisfaction, and 
effectiveness of the services provided. No change to the regulatory 
text was made in response to these comments.
Section 679.310 What is the Local Workforce Development Board?
    Title 20 CFR 679.310 implements WIOA sec. 107 by defining the Local 
WDB and its functions.
    Comments: Commenters suggested changes regarding the function of 
establishing by-laws covered in Sec.  679.310(g) including suggesting 
that the criteria that apply to the selection of Local WDB members also 
should apply to by-laws of the Board, and that Board members should not 
be required to actively participate in convening system stakeholders.
    Department Response: WIOA sec. 107(b)(1) and Sec.  679.320 describe 
the Local WDB membership requirements as enumerated in WIOA. The WIOA 
statute does not indicate that by-laws restrict membership. The 
Department declines to make the suggested regulatory change. No change 
to the regulatory text was made in response to these comments.
    Comments: Some commenters stated that Sec.  679.310(g)(7) should 
refer to membership on the Local WDB, rather than the State WDB. One 
commenter suggested that the authority should fall to Local WDBs and 
not CEOs and recommended that the Department reword Sec.  679.310(g)(7) 
as follows: ``A description of any other conditions governing 
appointment or membership on the Local Board as deemed appropriate by 
both the Local Board Chair and the CEO. The rest of these conditions 
should be under the authority of the [Local Board] and be included as 
requirements in the [Local Board] developed by-laws.''
    Department Response: The Department agrees and will make that 
technical change to Sec.  679.310(g)(7) to replace State WDB with Local 
WDB. The regulatory text has been revised with this change to Sec.  
679.310(g)(7).
    Comments: A commenter requested clarification regarding the 
financial liability for local areas with multiple chief elected 
officials.
    Department Response: Paragraph (e) of Sec.  679.310 says that if a 
local area includes more than one unit of general local government the 
chief elected officials may execute an agreement to describe their 
responsibilities for carrying out the roles and responsibilities. This 
agreement may include the assignment of liabilities among the units of 
local government. The chief elected officials should address financial 
roles in this agreement. In addition there is authority under WIOA sec. 
107(d)(12)(B)(i)(I) that the Governor may agree to take on the 
liability of the chief elected official.
    Comments: A commenter stated that the term ``elect'' in the 
nomination process should be changed to ``appoint.''
    Department Response: The Department agrees and has changed the term 
``elect'' in Sec.  679.310(g)(1) to ``select.''
    Comments: Regarding the nomination process, a commenter asked the 
Department to clarify whether the Board chair will be nominated by a 
vote of the Local WDB members and not by the chief elected official.
    Department Response: The Local WDB is required to elect the 
chairperson as outlined in Sec.  679.330 in accordance with WIOA sec. 
170(b)(3).
    Comments: The proposed regulations in Sec.  679.310(g) would 
require the CEO to establish by-laws for Local WDBs. A few commenters 
suggested that the Department revise the language in proposed paragraph 
(g) to require that CEOs, ``in consultation with the Local Board,'' 
must establish by-laws consistent with State policy for Local WDB 
membership.
    Department Response: Paragraph (g) of Sec.  679.310 requires the 
local elected official to establish by-laws that include the process to 
ensure Local WDB members actively participate in convening system 
stakeholders, brokering relationships with a diverse range of 
employers, and leveraging support for workforce development activities. 
The by-laws will outline the process and roles for Local WDB members. 
An effective Local WDB establishes clear roles, responsibilities, 
procedures, and expectations through its by-laws, and that these 
requirements will help Local WDBs to be more agile and proactive in 
reacting to board turnover, increase board participation when board 
members are not able to physically attend board meetings, improve board 
functionality, and help ensure that the public is informed about the 
operation of the board. No changes to the regulatory text have been 
made in response to these comments.
    Comments: A commenter requested that the Department revise the 
section so that the Local WDBs must draft by-laws ``after consultation 
with and approval by the chief elected official.''
    Department Response: WIOA sec. 107 delegates the establishment of 
by-laws to the chief elected official. The chief elected official must 
establish the by-laws in order to constitute a Local WDB. Paragraph (c) 
of Sec.  679.310 allows the Local WDB and the chief elected official(s) 
to enter into an agreement that describes the respective roles and 
responsibilities of the parties which does not prohibit the Local WDB's 
role in the development of future by-laws. The suggested change is not 
necessary and no change to the regulatory text was made in response to 
this comment.
Section 679.320 Who are the required members of the Local Workforce 
Development Board?
    Title 20 CFR 679.320 addresses the required members on the Local 
WDB in accordance with WIOA sec. 107.
    Comments: The Department received comments of support for this 
section but one commenter suggested that it may cause political tension 
to allow a Chief Elected Official to appoint Local WDB members.
    Department Response: WIOA clearly contemplates that Chief Elected 
Officials will use the State established criteria to appoint Local WDB 
membership that meets the requirements in WIOA sec. 107(b)(2). Section 
679.320(g) requires the Chief Elected Official establish a formal 
nomination and appointment process. No change has been made to the 
regulatory text in response to this comment.
Overarching Comments on the Required Members of Local WDBs
    Comments: Commenters requested guidance on documenting the 
inability to find a certain member type.
    Department Response: Local WDBs should follow State guidelines for 
documenting the lack of member types in the area.
Adult Education Representation
    Comments: The Department received several comments suggesting that 
a specific entity be named to represent adult education programs at the 
local level.
    Department Response: WIOA sec. 107(b)(1) and Sec.  679.320(a) 
require that the chief elected official use the criteria set by the 
Governor, in partnership with the State WDB, to appoint members of the 
Local WDBs. The Department concludes that the Governor, in

[[Page 56100]]

partnership with the State WDBs, has authority for creating a policy 
regarding the criteria for the membership of the Local WDB, which 
includes criteria for selecting the representative of a title II 
eligible provider of adult education and literacy activities. No change 
has been made to the regulatory text in response to this comment.
    Comments: Commenters also recommended that a process be implemented 
for selecting a Local WDB representative in the event there are 
multiple providers in the area.
    Department Response: In accordance with WIOA sec. 107(b)(2)(C)(i), 
Sec.  679.320(d)(1) requires that the Local WDB include at least one 
eligible provider administering adult education and literacy activities 
under title II. Nominations are solicited when multiple entities are in 
a local area as described in Sec.  679.320(g)(3) and WIOA sec. 
107(b)(6). No change to the regulatory text was made in response to 
these comments.
    Comments: One commenter asked for clarification between the terms 
``education and training activities'' and ``education and training 
services,'' stating that they seem to mean the same thing in many 
instances.
    Department Response: In order to avoid confusion, the Department 
eliminated the term ``education and training services'' from the 
regulatory text.
Dual Representation
    Title 20 CFR 679.320(h) allows an individual to be appointed as a 
representative on the Local WDB for more than one entity if the 
individual meets all of the criteria for representation.
    Comments: Several commenters expressed concern with this approach 
because it differs from State WDB requirements; commenters recommended 
allowing for all core programs to have separate representation on Local 
WDBs. One commenter supported the flexibility in permitting a Local WDB 
member to represent multiple entities. Another commenter recommended 
that the Department should strongly discourage a Local WDB member from 
representing two interests, reasoning that a Board member serving the 
interests of two separate functions would not be true to the intent of 
WIOA. This commenter also expressed concern that it would create a 
conflict of interest under the Sarbanes-Oxley Act and a Board member's 
heightened fiduciary responsibilities.
    Department Response: The Department recognizes that the structure 
of core programs may differ across the country and separate 
representation may not be possible or practical in all local areas. The 
Department offers Governors and Local Chief Elected Officials the 
flexibility for an individual to be appointed as a representative on 
the Local WDB for more than one entity if the individual meets all of 
the criteria for representation. However, there is no requirement that 
this be the case. In accordance with WIOA sec. 107(b)(1) and Sec.  
679.320(a) the CEO must follow the process established by the Governor, 
in partnership with the State WDB, for appointing members of the Local 
WDB. With regard to concerns about conflicts of interest under the 
Public Company Accounting Reform and Investor Protection Act (Sarbanes-
Oxley Act) or other applicable laws, neither WIOA nor these regulations 
exempt an official serving in a dual representation capacity from any 
applicable ethical rules. In fact, Sec.  683.200(c)(5) imposes specific 
conflict of interest requirements on WIOA recipients in addition to 
those applicable under the uniform administrative requirements. For 
these reasons, the Department has determined that the flexibility for 
Local WDB membership is appropriate and no change to the regulatory 
text was made in response to these comments.
Labor Union, Small Business, and Registered Apprenticeship 
Representation
    Paragraph (c) of Sec.  679.320 requires that at least 20 percent of 
Local WDB membership must be workforce representatives to include 
representatives of labor organizations, and a joint labor-management 
registered apprenticeship program, or (if no such program exists in the 
area) a representative of a registered apprenticeship program in the 
area if such program exists.
    Comments: Commenters requested clarification of the total number of 
labor representatives required on the Local WDB, and suggested labor 
representatives include employee representatives for non-unionized 
employees.
    Department Response: Paragraph (c) of Sec.  679.320 clarified that, 
at minimum, three labor representatives must be included in the Local 
WDB: Two or more representatives of labor organizations, where such 
organizations exist in the local area, and one joint labor-management 
representative of a registered apprenticeship program where such 
program exists in the local area. In the event that these organizations 
are not present in the local area, representatives must be selected 
from other employee representatives. For local areas with no union-
affiliated registered apprenticeship program, a representative of a 
non-union registered apprenticeship in the area must be appointed if 
one exists. The Local WDB may include other individuals or 
representatives as outlined in paragraph (e). The Department has 
determined that no change is required to the proposed language to allow 
for additional representation of the labor force as appropriate.
    Regarding the number of small business representation, paragraph 
(b) of Sec.  679.320 implements WIOA sec. 107(b)(2)(A)(ii), which 
describes Local WDB membership criteria and calls for members that 
``represent businesses, including small businesses.'' The Department 
interprets WIOA's use of the word ``businesses'' to indicate that the 
Local WDB is required to have more than one member representing a small 
business.
    Comments: One commenter requested a definition of the word 
``business'' and asked if it ``may include large non-profit 
organizations.'' Another commenter requested a definition of ``business 
organization,'' suggesting it ``include trade associations and chambers 
of commerce,'' and another commenter also requested clarity that 
``business organizations can be a local chamber of commerce or a 
regional entity.'' One commenter asked if sector representatives had to 
come from an established sector or if they also could represent 
``aspirational industries.''
    Department Response: WIOA sec. 3 contains definitions of terms used 
in the law. This section does not specifically define a business or a 
business organization. The groups suggested by the commenters may be 
included as long as they meet the membership criteria outlined in Sec.  
679.320. Title 20 CFR 679.320 implements WIOA sec. 107(b)(2) by 
describing the required members of a Local WDB. Paragraph (b) requires 
that a majority of the members of the Local WDB be representatives of 
businesses in the local area and paragraphs (b)(1) and (2) outline the 
required criteria. The Chief Elected Official (CEO) has the authority 
in WIOA sec. 107 and Sec.  679.320(e)(4) to appoint other members as 
he/she deems appropriate. Regarding the comment on ``aspirational 
industries,'' many organizations can meet the criteria outlined in 
Sec.  679.320(b) and the CEO has the authority to appoint additional 
members that meet the needs of the local area employers and job 
seekers. The Department concludes that no further definition is 
required and has

[[Page 56101]]

made no changes to the regulatory text in response to this comment.
    Comments: Multiple commenters stated that the Department cites WIOA 
sec. 3(25) regarding business representative requirements in Sec.  
679.320(b)(2) and it should reference sec. 3(23) instead. A commenter 
asked if trained members who have experience with eligible youth, as 
referenced in proposed Sec.  679.320(c)(4), would include 
representatives from local government funded programs such as 4-H.
    Department Response: The Department agrees that the reference to 
WIOA sec. 3(25) in Sec.  679.320(b)(2) is incorrect. WIOA sec. 3(23) 
defines in-demand industry sector or occupation. WIOA sec. 3(25) 
defines an individual with a disability which is not relevant to Sec.  
679.320(b)(2). The Department has made the correction in Sec.  
679.320(b)(2).
    Regarding the question of whether representatives from 4-H programs 
would qualify as members having experience with eligible youth, Sec.  
679.320 implements WIOA sec. 107(b) which outlines membership criteria 
for Local WDBs. As outlined in Sec.  679.320(a), for each local area in 
the State, the members of the Local WDB must be selected by the CEO 
consistent with the criteria established under statute and criteria 
established by the Governor, and must meet the requirements of WIOA 
sec. 107(c)(2). CEOs are required to establish a formal nomination and 
appointment process (Sec.  679.320(g)), which should answer specific 
questions about local area membership requirements. Due to the number 
of factors involved, the Department is not able to comment on if a 
specific entity would meet the requirements set forth by the Governor 
as well as all of the statutory requirements but advises interested 
parties to review the CEO's process in their area.
    Comments: Paragraph (b)(2) of Sec.  679.320 implements WIOA sec. 
107(b)(1)(C)(i)(II), which provides that Local WDB business 
representatives represent businesses that provide ``employment 
opportunities that, at a minimum, include high-quality, work-relevant 
training and development in in-demand industry sectors.'' Some 
commenters asked the Department to clarify the definition of ``work-
relevant training'' in proposed Sec.  679.110(b)(3)(i)(B). In 
particular, some of these commenters asked whether it pertains to for-
profit training providers. Another commenter stated while the 
definition of ``in-demand'' is located at WIOA sec. 3(23), there is no 
definitions for the terms ``high-quality'' and ``work-relevant.'' This 
commenter recommended that the Department allow these terms to be 
defined at the State or local level.
    Department Response: WIOA sec. 3 provides definitions of terms used 
in the law. The terms ``work-relevant'' training and ``high-quality'' 
are not defined in WIOA or in the regulations. The Local WDB's 
functions under WIOA sec. 107(d) and Sec.  679.370 include employer 
engagement, career pathways development, and identifying and 
disseminating promising practices. It is incumbent upon the Local WDB 
to apply the above terms so that it includes the members it determines 
best support its functions. No change to the regulatory text was made 
in response to these comments.
Nominations
    WIOA sec. 107 and Sec.  679.320 of this part outline the 
requirements for Local WDB membership.
    Comments: Commenters requested that a nomination process not be 
required in communities where there are multiple adult education 
providers.
    Department Response: WIOA sec. 107(b)(6) requires a nomination 
process if there are multiple eligible providers of title II adult 
education and literacy activities serving the local area (a similar 
process is required for multiple institutions of higher education in a 
local area). Section 679.320(g)(3) conforms with WIOA sec. 107(b)(6) 
and the Department made no changes to the regulatory text in response 
to these comments.
    Comments: Another commenter suggested that Local WDB members must 
be nominated by an appropriate body, and if no such body is clear, then 
the opportunity to present nominations should be required to be widely 
publicized.
    Department Response: WIOA does not require that the Local WDB 
nominations be from particular bodies, except that in instances of 
multiple adult education providers in a local area nominations will be 
accepted from those institutions in accordance with WIOA sec. 107(b)(6) 
and Sec.  679.320(g)(3). In accordance with WIOA sec. 107(b)(1) and 
Sec.  679.320(a) the CEO must follow the process established by the 
Governor, in partnership with the State WDB, for appointing members of 
the Local WDB which may include processes for soliciting nominations. 
No change to the regulatory text was made in response to these 
comments.
Individuals With Disabilities and Other Barriers to Employment
    Section 679.320 implements WIOA sec. 107(b) describing the required 
Local WDB membership.
    Comments: As with the State WDBs, many commenters from stakeholders 
with mandated representation under WIA, requested that they again be 
mandated members of the Local WDB, or that they be referenced in 
regulation.
    Department Response: WIOA reduced required Local WDB membership in 
an effort to streamline the Boards and provide Chief Elected Officials 
the flexibility to establish Local WDBs that best reflect the diversity 
of job seeker and employer communities. The Department recognizes that 
many important system partners with experience with specific job seeker 
populations, such as required one-stop partner programs, tribal 
organizations, other Department program grantees, and those serving the 
disadvantaged and disabled populations are no longer required members 
of the Board. However, Sec.  679.320(c) and (d) require the Board be 
comprised of workforce representatives that can include one or more 
representatives of community-based organizations that have demonstrated 
experience and expertise in addressing the employment, training, or 
education needs of individuals with barriers to employment. Paragraph 
(e)(4) of Sec.  679.320 says the CEO has the flexibility to appoint 
``other appropriate individuals as determined by the chief elected 
official'' which does not preclude any organization as the CEO deems 
appropriate. The Department encourages the CEO to ensure that Local WDB 
members represent the diversity of job seekers and employers in their 
local areas, which includes ensuring adequate representation on the 
Local WDB and ensuring appropriate expertise to address needs of 
individuals with barriers to employment. No change to the regulatory 
text was made in response to these comments.
Voting Rights
    Title 20 CFR 679.320 implements WIOA sec. 107 (b) which outlines 
Local WDB membership.
    Comments: Some commenters recommended that Board members from each 
core program must be individuals working specifically with core 
programming and they must get a vote on the Local WDB, including 
grandfathered Boards.
    Department Response: Title 20 CFR 679.320(e)(4) says the CEO has 
the flexibility to appoint ``other appropriate individuals as 
determined by the chief

[[Page 56102]]

elected official'' which does not preclude any organization as the CEO 
deems appropriate. The Department encourages the CEO to ensure that 
Local WDB members represent the diversity of job seekers, employers, 
and one-stop partner programs in the local area which includes ensuring 
adequate representation on the Local WDB. Title 20 CFR 679.320(i), 
which requires all required Local WDB members to have voting rights, 
also gives the CEO flexibility to convey voting rights to non-required 
members. No change to the regulatory text was made in response to this 
comment.
    Comments: One commenter asked how adult education programs that are 
not funded by the State and do not have voting rights can still 
contribute.
    Department Response: Title 20 CFR 679.360(a) permits the use of 
standing committees on the Local WDB. Standing committees may be 
established to provide information and assist the Local WDB in carrying 
out its responsibilities under WIOA 107. Standing committee members 
must include individuals who are not members of the Local WDB and who 
have demonstrated experience and expertise in accordance with Sec.  
679.340(b) and as determined by the Local WDB. Stakeholders with 
expertise may wish to contribute as members of standing committees, if 
the Local WDB establishes such committees. No change to the regulatory 
text was made in response to these comments.
Section 679.330 Who must chair a Local Workforce Development Board?
Section 679.340 What is meant by the terms ``optimum policy-making 
authority'' and ``demonstrated experience and expertise''?
    Comments: One commenter strongly supported both proposed 
definitions. Another commenter expressed concern regarding the language 
used to define ``optimum policy-making authority'' because TANF is 
administered at the State level and local leadership does not have 
``optimum policy-making authority'' for the agency. For this reason, 
the commenter requested that the Department clarify what ``optimum 
policy-making authority'' is at the local level.
    One commenter asked the Department if it thinks local 
administrators of State agencies meet the criteria for optimum policy-
making authority or if it expects this regulation will require the 
nomination and appointment of State capital-based agency executives.
    Regarding demonstrated experience and expertise, one commenter 
recommended that all staff working with job seekers and business 
customers should receive certification through programs like Certified 
Workforce Development Professional (CWDP) by the National Association 
of Workforce Development Professionals (NAWDP) to ensure they are 
qualified in their role.
    Department Response: 20 CFR 679.340 clarifies the term ``optimum 
policy-making authority'' as an individual who can reasonably be 
expected to speak affirmatively on behalf of the entity he or she 
represents and to commit that entity to a chosen course of action. The 
section also defines ``demonstrated experience and expertise'' at the 
local level, which includes a workplace learning advisor as defined in 
WIOA sec. 3(70); an individual who contributes to the field of 
workforce development, human resources, training and development, or a 
core program function; or someone the Local WDB recognizes for valuable 
contributions in education or workforce development related fields. The 
Department concludes that the Local WDB has flexibility to make the 
determinations of optimum policy-making authority and demonstrated 
experience and expertise within the outlined criteria. No change to the 
regulatory text was made in response to these comments.
Section 679.350 What criteria will be used to establish the membership 
of the Local Workforce Development Board?
    Comments: Title 20 CFR 679.350 affirms that the chief elected 
official appoints the Local WDB in accordance with the criteria in WIOA 
sec. 107(b) and applicable State criteria. Commenters sought additional 
detail on which industries can be represented, specifically asking 
about the healthcare industry and educational institutions. Commenters 
also requested that 501(c)(3) corporations be defined as businesses.
    Department Response: WIOA sec. 3 contains definitions of terms used 
in the law. This section does not specifically define a business or a 
business organization. The entities identified by the commenters may be 
included as long as they meet the membership criteria. No change to the 
regulatory text was made in response to these comments.
Section 679.360 What is a standing committee, and what is its 
relationship to the Local Workforce Development Board?
    Comments: 20 CFR 679.360 implements WIOA sec. 107(b)(4) and 
establishes the roles and responsibilities of standing committees 
within the Local WDB structure. Commenters supported the text, as well 
as suggested that the Department require or recommend particular 
groups, such as Job Corps, to be members of standing committees.
    Department Response: Standing committees were not legislated under 
WIA and are optional under WIOA as clarified in Sec.  679.360(b). The 
Department declines to mandate a specific entity be represented on a 
standing committee, but nothing would prevent Job Corps representatives 
from being appointed to standing committees under Sec.  679.360(b).
    Standing committees may be used to assist the Local WDB in carrying 
out its responsibilities as outlined in WIOA sec. 107.
    Comments: One commenter suggested changing the word ``must'' to 
``may'' regarding the requirement in Sec.  679.360(a) to include those 
appointed by the Local WDB in standing committees but who are not Board 
members.
    Department Response: The Department encourages the use of standing 
committees to expand opportunities for stakeholders to participate in 
Local WDB decision-making, particularly for representatives of 
organizations that may no longer sit on the Local WDB but continue to 
have a stake in the success of Local WDB decisions. Such committees 
also expand the capacity of the Local WDB in meeting required functions 
and expand opportunities for stakeholders to participate in Local WDB 
decision-making. For this reason, it is important to require the 
appointment of non-Board members. No change to the regulatory text was 
made in response to these comments.
Section 679.370 What are the functions of the Local Workforce 
Development Board?
Role and Function of the Local WDB
    Title 20 CFR 679.370 lists the functions of the Local WDBs as 
enumerated in WIOA sec. 107(d). Under WIOA, the Local WDB, in 
partnership with the CEO, must perform a variety of functions to 
support the local workforce system.
    Comments: Commenters recommended the addition of a variety of Local 
WDB functions.
    Department Response: In order to preserve Local WDB flexibility, 
the Department declines to enumerate additional functions. No change to 
Sec.  679.370 was made in response to these comments.
    Comments: Paragraph (b) of Sec.  679.370 discusses a new role for 
Local WDBs

[[Page 56103]]

that are part of a planning region that includes multiple local areas. 
This provision repeats the WIOA requirement that Local WDBs that are 
part of a planning region must develop and submit a regional plan in 
collaboration with the other Local WDBs in the region. Regarding Sec.  
679.370(b), a commenter recommended the Department include language 
allowing any local area that includes multiple jurisdictions and 
partners to have an automatic designation as a region and to consider 
that area's local plan to be a regional plan.
    Department Response: WIOA sec. 106(a)(2) clearly assigns the State 
the responsibility of identifying regions after consultation with Local 
WDBs and chief elected officials. As required in WIOA sec. 106(c)(2), 
the local plan is incorporated into the regional plan, where required, 
in accordance with Sec.  679.540. No change to the regulatory text was 
made in response to this comment.
Career Pathways (Sec.  679.370(f))
    WIOA sec. 3(7)(A) through (G) defines career pathways as a 
combination of rigorous and high-quality education, training, and other 
services that meet specified guidelines. WIOA sec. 101(d)(3)(B) 
enumerates ``the development of strategies to support the use of career 
pathways for the purpose of providing individuals, including low-
skilled adults, youth, and individuals with barriers to employment 
(including individuals with disabilities), with workforce investment 
activities, education'' as a function of the State WDB and is described 
in Sec.  679.130(c)(2). WIOA sec. 107(d) and Sec.  679.300 extends the 
requirement to Local WDBs.
    Comments: Commenters requested that the Department provide more 
comprehensive guidance on the implementation of career pathways. 
Several commenters provided recommended changes to the regulatory text 
that included adding criteria, including a section specific to Local 
WDB implementation of career pathways, requiring the State and Local 
WDBs to define the roles and responsibilities of WIOA programs related 
to career pathways, listing required partners (such as Job Corps, and 
public television), and developing strategies to include job seekers 
with specific barriers to employment.
    Department Response: The Department acknowledges the interest in 
implementing successful career pathway strategies. The ideas and 
suggestions provided by the commenters support that career pathways is 
a dynamic topic that involves input of multiple partners and 
stakeholders across the public workforce system. The Department agrees 
that further guidance and technical assistance is needed and will be 
issued. However, the statutory language provides general criteria for 
both State and Local WDBs to use in developing career pathway 
strategies meeting their needs. More prescriptive language may limit 
State and Local WDBs' ability to be proactive and innovative in 
developing career pathways to support individuals to retain and enter 
employment. No change to the regulatory text was made in response to 
these comments.
Strategies for Technological Improvements To Improve One-Stop Services 
(Sec.  679.370(h))
    Comments: Proposed Sec.  679.370(h)(1) requires that Local WDBs 
facilitate connections among the intake and case management information 
systems of the one-stop partner programs; a commenter asserted that 
connecting intake and case management information systems will raise 
significant issues in terms of staffing, technology, and 
confidentiality.
    Department Response: Title 20 CFR 679.370(h) does not outline 
specific technology requirements expectations, but rather the Board is 
responsible for developing strategies for aligning technology and data 
systems across one-stop partner programs. The Local WDB may connect 
intake and case management systems, but neither WIOA nor the 
regulations require a single case management system among one-stop 
partners. The regulation provides Local WDBs with flexibility to 
develop systems that best fit their needs and budgets. No change to the 
regulatory text was made in response to these comments.
Review of Adult Education Provider Applications (Sec.  679.370(n))
    Paragraph (n) of Sec.  679.370 reflects a number of new functions 
for the Local WDB related to coordination with adult education and 
literacy providers in the local area. This provision requires the Local 
WDB to review applications to provide adult education and literacy 
activities under title II to determine whether such applications are 
consistent with the local plan; the eligible agency retains approval 
authority. It also requires the Local WDB to make recommendations to 
the eligible agency to promote alignment with the local plan.
    Comments: Commenters requested clarification regarding the 
application review process. Further information regarding Local WDB 
coordination with adult education and literacy providers is provided at 
34 CFR part 463, which requires the eligible agency to establish in its 
competition a processes by which applicants must submit an application 
to the Local WDB for review prior to its submission to the eligible 
agency. This part also includes a role for the Local WDB in replicating 
and implementing cooperative agreements in accordance with subparagraph 
(B) of sec. 101(a)(11) of the Rehabilitation Act of 1973 (29 U.S.C. 
721(a)(11)), and implementing cooperative agreements in accordance with 
that section with the local agencies administering plans under title I 
of that Act (29 U.S.C. 720 et seq.) other than sec. 112 or part C of 
that title (29 U.S.C. 732, 741) to enhance the provision of services to 
individuals with disabilities and other individuals.
    Commenters expressed concerns that Local WDBs will not have the 
appropriate amount of time to review all adult education provider 
applications in a timely manner, particularly in large cities with many 
programs or for education programs serving jurisdictions with multiple 
Local WDBs. One commenter also expressed concern about the title II 
adult education provider application review process because Local WDBs 
do not understand enough about education programs and recommended that 
the regulations contain a clear conflict of interest policy as well as 
a process where the adult education stakeholders have the ability to 
help shape the local plan. One commenter suggested that the review and 
approval process outlined in Sec.  679.370(n) for adult education 
providers should be applied to all core partner plans.
    Department Response: The Department of Education provides 
additional information about the review of local applications for 
grants or contracts to provide title I adult education and literacy 
services at 20 CFR 463.20 which reiterates that the purpose of the 
review is to ensure that the application is consistent with the local 
plan. The section also advises that the review is taken into 
consideration when making funding decisions. The Department of 
Education advises that only appointed local WDB members who do not have 
a conflict of interest as defined in sec. 107(h) of WIOA are allowed to 
participate in the review of an eligible training provider application. 
Boards may arrange to offer training to local WDB members by adult 
education experts prior to participating in the review process. No 
change to the regulatory text was made in response to these comments.

[[Page 56104]]

Ensuring Appropriate Use and Management of WIOA Funds
    Comments: Under paragraph (h), a commenter asked if the State can 
limit a Local WDB's authority to increase the on-the-job training 
reimbursement rate if all factors required in regulation and policy are 
met.
    Department Response: Paragraph (h)(4)(i)(2) of Sec.  679.370 
requires Local WDBs, in partnership with the chief elected official for 
the local area, to ensure the appropriate use and management of funds. 
Therefore, local areas should establish policies, interpretations, 
guidelines, and definitions to implement provisions of title I of WIOA 
to the extent that such policies, interpretations, guidelines, and 
definitions are not inconsistent with WIOA and the regulations issued 
under WIOA, Federal statutes and regulations governing one-stop partner 
programs, and with State policies. States also should establish 
policies, interpretations, guidelines, and definitions to implement 
provisions of title I of WIOA to the extent that such policies, 
interpretations, guidelines, and definitions are not inconsistent with 
WIOA and the regulations issued under WIOA, as well as Federal statutes 
and regulations governing one-stop partner programs. Local WDBs, 
therefore, can set policies but those policies must not conflict with 
State policy, or WIOA. No change to the regulatory text was made in 
response to these comments.
Negotiation of Local Performance Indicators (Sec.  679.370(j))
    Comments: Under paragraph (j), a commenter stated that the 
regulations need to indicate that local areas have the final decision 
regarding performance negotiations.
    Department Response: WIOA sec. 107(d)(9) requires that locals 
negotiate performance and Sec.  679.510(a)(1)(viii) requires an 
agreement between Local WDBs and chief elected officials for how a 
planning region will collectively negotiate and reach agreement with 
the Governor on local levels of performance. No change to the 
regulatory text was made in response to these comments.
Negotiating Methods for Funding One-Stop Infrastructure Costs (Sec.  
679.370(k))
    Title 20 CFR 679.370(k) requires that the Local WDB negotiate with 
the CEO and required partners on the methods for funding the 
infrastructure costs of one-stop centers.
    Comments: Comments asked for clarification on the role of CEO.
    Department Response: The CEO is not required to provide 
infrastructure costs, nor is the CEO required to negotiate the 
infrastructure costs, but rather the Local WDB and the CEO must agree 
upon the methods that will be applied to determine the infrastructure 
funding. Section 678.500 (see Joint WIOA Final Rule) describes what 
must be included in the Memorandum of Understanding executed between 
the Local WDB, with the agreement of the CEO, and the one-stop partners 
relating to the operation of the one-stop delivery system in the local 
area, and provides for additional details regarding infrastructure 
costs. No change to the regulatory text was made in response to these 
comments.
Selection of Youth Services, Training, and Career Services Providers 
(Sec.  679.370(l))
    Comments: Under paragraph (l), a couple of commenters requested 
clarification that Local WDBs only can determine eligibility of 
training providers for their local areas and that eligibility is 
contingent on the providers being approved on the State eligible 
training provider list (ETPL).
    Department Response: WIOA sec. 122 and 20 CFR part 677 of the Joint 
WIOA Final Rule describe the process for determining the eligibility of 
training providers. Providers must be approved via the Governor's 
process, however, Local WDBs may set additional criteria for providers 
on the local list. No change to the regulatory text was made in 
response to these comments.
Section 679.400 Who are the staff to the Local Workforce Development 
Board and what is their role?
    Title 20 CFR 679.400 describes the Local WDB's authority to hire 
staff and the appropriate roles for Board staff as outlined in WIOA 
sec. 107(f).
    Comments: Commenters suggested that any prior agreements between 
Local WDBs and chief elected officials regarding staffing roles and 
responsibilities be recognized; that the regulations clarify that the 
State agency is to take responsibility for hiring; and that the 
regulations should reiterate that the hiring of a director is optional.
    Department Response: WIOA sec. 107(f) describes the authority of 
the Local WDB to hire a director. There is no mandate that Local WDBs 
hire staff. The authority to hire staff to support the Local WDB is 
granted under WIOA sec. 107(f) to the Local WDB, not the State agency.
    Prior agreements are not automatically recognized. It is in the 
best interest of the public workforce system to ensure the director of 
the Local WDB is competent and experienced with workforce programs and 
service delivery. Paragraph (b) of Sec.  679.400 requires the Local WDB 
to apply objective qualifications to the Board director, paragraph (d) 
limits the Local WDB staff's role to assisting the Board fulfill the 
functions at WIOA sec. 107(d) unless the entity selected to staff the 
Board enters into a written agreement with the Board and CEO as noted 
in Sec.  679.400(e). Title 20 CFR 679.400 aligns with WIOA sec. 107(f) 
and no change to the regulatory text was made in response to these 
comments.
Section 679.410 Under what conditions may a Local Workforce Development 
Board directly be a provider of career services, or training services, 
or act as a one-stop operator?
Selection as a One-Stop Operator (Sec.  679.410(a))
    Title 20 CFR 679.410 implements WIOA sec. 107(g) and explains the 
situations in which the Local WDB may directly act as a one-stop 
operator, a provider of career services, or training services provider.
    Comments: The Department received many comments supporting the 
requirement that one-stop operators be competitively procured. However, 
other commenters recommended waivers or exceptions to the requirement 
that one-stop operators be competitively procured. Some commenters 
recommended waivers for performance, direct designation of the Local 
WDB as the one-stop operator with the agreement of the CEO and 
Governor, and allowing Governors to designate the selection of one-stop 
operators in single-area States. Several commenters disagreed with the 
Department's interpretation that WIOA sec. 107(g), which allows for the 
selection of the one-stop operator with the agreement of the CEO and 
Governor, is an additional requirement under WIOA sec. 121(d)(2)(A) and 
not a separate path to designation.
    Department Response: A more detailed discussion of this issue is 
contained in 20 CFR part 678 of the Joint WIOA Final Rule. The 
Department maintains the interpretation, consistent with 20 CFR 678.605 
(see Joint WIOA Final Rule) and WIOA sec. 121(d)(2)(A), that the Local 
WDB must select the one-stop operator through a competitive process. In 
instances in which a State is conducting the competitive process, the 
State must follow the same policies and procedures it uses for 
procurement with non-Federal funds. State, Local, and non-Federal 
entities should follow the applicable procurement guidelines in the 
Uniform Guidance at 2 CFR part 200. Neither WIOA nor Sec.  679.410

[[Page 56105]]

prohibit Local WDBs from competing to become a one-stop operator if 
they could do so in accordance with the Uniform Guidance. The provision 
requires the competitive procurement of all one-stop operators. No 
change to the regulatory text was made in response to these comments.
Career Services Provider (Sec.  679.410(b))
    The Department specified in Sec.  679.410(b) that a Local WDB may 
act as a provider of career services only with the agreement of the CEO 
in the local area and the Governor.
    Comments: Commenters requested clarification regarding the 
circumstances under which a Local WDB may provide career services.
    Department Response: Although WIOA sec. 107(g) requires that one-
stop operators be competitively procured, there is no similarly clear 
statutory requirement for provision of career services and therefore 
Local WDBs do not have to undertake a competitive process to offer 
career services.
    Comments: Some commenters suggested that Local WDBs only be 
permitted to offer career services if the CEO and Governor agree that 
there are insufficient providers of career services in an area. Another 
commenter responded that many Local WDBs are currently delivering high 
quality career services and should not be forced to procure them.
    Department Response: The Department has interpreted WIOA sec. 
107(g)(2), which states that a Local WDB may provide career services 
described in WIOA sec. 134(c)(2) through a one-stop delivery system or 
be designated or certified as a one-stop operator only with the 
agreement of the CEO and the Governor, to mean that the Local WDB's 
delivery of career services is at the discretion of the CEO and 
Governor. Section 679.410(b) offers the CEO and Governor flexibility in 
deciding whether to pursue a competitive award of career services. 
However, the Department supports competition and maintains the opinion 
that Local WDBs acting as direct providers of these services is not 
optimal. No change to the regulatory text was made in response to these 
comments.
    Comments: Commenters also requested clarity regarding the role of 
Local WDB members in delivering training and career services but 
offered no suggested language changes.
    Department Response: Paragraph (d) of Sec.  679.410 provides 
language that extends the Local WDB limitations outlined in Sec.  
679.410(c) to Local WDB staff. No change to the regulatory text was 
made in response to these comments.
Training Services Provider (Sec.  679.410(c))
    WIOA sec. 107(g)(B) outlines a waiver process for Local WDBs to 
offer training services. Local WDBs wanting to offer training services, 
such as GED, are required to apply to the Governor for a waiver and 
meet the waiver restrictions outlined in WIOA sec. 107(g)(1) and Sec.  
679.410(c).
    Comments: Commenters asked for clarification regarding the 
penalties for violating this provision.
    Department Response: WIOA sec. 183 requires the Governor to monitor 
all locals and lays out the course of action for any deficiencies that 
are not corrected such as corrective action, sanctions, and 
reorganizing the Local WDB. Entities that do not comply are subject to 
appropriate administrative and fiscal actions, which may include 
revocation of the waiver as described in WIOA sec. 107. No change to 
the regulatory text was made in response to these comments.
Section 679.420 What are the functions of the local fiscal agent?
    Comments: The Department requested comment on Sec.  679.420 which 
addresses the roles of the local fiscal agent. Many commenters agreed 
with the regulation as proposed while others provided recommendations 
for expanding the role and suggested changes to the regulatory text to 
include requiring the permissible functions in Sec.  679.420(c). Other 
commenters requested additional guidance on specific concerns such as 
fees, policy development, clarification on entities that may act as a 
fiscal agent, and the role of the CEO. Noting that most commenters 
agreed with the fiscal agent role set forth in the proposed regulatory 
text, the Department made no changes to the fiscal agent functions 
under Sec.  679.420.
    One commenter said that that the definition of fiscal agent 
conflicts with Sec.  681.400.
    Department Response: The Department disagrees that the two 
regulatory sections are in conflict. Paragraph (b) of Sec.  679.420 
provides a list of the key functions of a fiscal agent. The appropriate 
role of fiscal agent is limited to accounting and funds management 
functions rather than policy or service delivery. Section 681.400 
provides that the local grant recipient may directly provide youth 
services. Entities serving multiple roles must adhere to WIOA title I, 
subtitle E (Administration) and Sec.  679.430 to ensure appropriate 
firewalls within a single entity performing multiple functions, 
including when a fiscal agent also functions as a direct provider of 
services. No change to the regulatory text was made in response to 
these comments.
Section 679.430 How do entities performing multiple functions in a 
local area demonstrate internal controls and prevent conflict of 
interest?
    Proposed 20 CFR 679.430 specified that a written agreement with the 
Local WDB and CEO is required when a single entity operates in more 
than one of the following roles: Local fiscal agent, Local WDB staff, 
one-stop operator, or direct provider of career services or training 
services.
    Comments: Several commenters requested clarification regarding how 
various entities should function in multiple roles.
    Department Response: This section requires a written agreement with 
the Local WDB and chief elected official when a single entity operates 
in more than one of the specified roles, but does not dictate the 
specific contents of the agreement, because the regulation cannot 
account for each individual Local WDB situation. However, the agreement 
must demonstrate how the organization will carry out its 
responsibilities while in compliance with WIOA and corresponding 
regulations, relevant Office of Management and Budget (OMB) circulars, 
the Uniform Guidance, and the State's conflict of interest policy. 
While it may be appropriate in some instances for a single organization 
to fulfill multiple roles, a written agreement between the Local WDB, 
chief elected official, and the organization fulfilling multiple roles 
is the best method to limit conflicts of interest or the appearance of 
conflicts of interest, minimize fiscal risk, and develop appropriate 
firewalls within a single entity performing multiple functions. Because 
the regulation must be adaptable to a variety of potential situations, 
the Department has determined that no regulatory change is appropriate 
in this section and no change to the regulatory text was made in 
response to these comments. However, to clarify the multiple roles this 
section is addressing, the regulatory text was revised to refer to 
``the direct provider of services'' instead of ``the direct provider of 
career and training services'' in order to include cases where the 
entity may be directly providing youth services under WIOA.

[[Page 56106]]

Other Comments on Local Workforce Development Boards
    Comments: A commenter expressed its support for all of the proposed 
part 679, subpart C, regulations. Multiple commenters said that Local 
WDBs should have more flexibility in the time allowable to become 
compliant with Federal and State laws during the program year 2015-
2016.
    Department Response: Regarding timelines, the Department agrees 
that clarification of the expectation for the process is needed and 
will add Sec.  679.500(c), which requires the Governor to establish and 
disseminate a policy for the submission of local and regional plans.
    Comments: One commenter asserted that the regulations are missing 
the vital role of a ``system coordinator'' that is truly necessary in 
complex areas like large metropolitan cities. The commenter described 
three options for designating a ``system coordinator'' that it asserted 
would maintain the Local WDB's authority to establish a vision for the 
local workforce development system, recognize the diversity in models 
for implementing WIOA, and maintain a competition to ensure the highest 
quality providers are selected to operate one-stop centers. These 
options were described as (1) the Local WDB taking on the role of 
system coordinator (provided it competitively selected one-stop 
operators per WIOA sec. 121(d)); (2) the Local WDB could, with 
agreement of the CEO, designate a local public agency or non-profit 
organization as the system coordinator (provided it competitively 
selected one-stop operators); or (3) a single one-stop operator could 
still play this role.
    Department Response: WIOA does not define or otherwise reference a 
role for a system coordinator. WIOA secs. 101 and 107 allow Boards to 
hire staff for the purposes of assisting in carrying out the Board 
required functions. The local option to create a role of a system 
coordinator is already covered in the Boards' authority to hire staff. 
No change to the regulatory text was made in response to these 
comments.
4. Subpart D--Regional and Local Plan
    Title 20 CFR 679.500 describes the purpose of the regional and 
local plans; WIOA provides designated regions and local workforce areas 
the responsibility and opportunity to develop employment and training 
systems tailored specifically to regional economies. These systems must 
meet the needs of the full range of learners and workers, including 
those with barriers to employment. The system must also address the 
specific needs of regional employers and the skills they require.
    WIOA requires the Local WDB, in partnership with the CEO, to submit 
a local plan to the Governor. If the local area is part of a planning 
region, the Local WDB will submit its local plan as part of the 
regional plan and will not submit a separate local plan. The local or 
regional plan provides the framework for local areas to define how 
their workforce development systems will achieve the purposes of WIOA. 
The regional or local plans serve as 4-year action plans to develop, 
align, and integrate the region and local area's job driven workforce 
development systems, and provides the platform to achieve the local 
area's visions and strategic and operational goals. Since the local 
plan is only as effective as the partnerships that operationalize it, 
it must represent a collaborative process among local elected 
officials, boards, and required and other partners (including economic 
development, education, and private sector partners) to create a shared 
understanding of the local area's workforce investment needs, a shared 
vision of how the workforce development system can be designed to meet 
those needs, and agreement on the key strategies to realize this 
vision. The Department received comments on the purpose, the content, 
and the structure of regional and local plans. In this subpart the 
Department addresses comments regarding how regions can be aligned.
Section 679.500 What is the purpose of the regional and local plan?
    WIOA sec. 106(c) addresses regional coordination and regional plans 
are addressed in WIOA sec. 106(c)(2). In accordance with WIOA sec. 
106(c), Sec.  679.500 describes the purpose of the regional and local 
plans.
    Comments: Commenters provided feedback for the content of the 
regional plan, expressed concern about the challenges of coordination, 
requested additional guidance on plan development, and asked for 
clarity regarding plan development and submission.
    Department Response: The Department has issued some guidance on 
planning and anticipates issuing additional guidance on planning to the 
public workforce system. Regarding timelines, the Department agrees 
that clarification of the expectation for the process is needed and has 
added Sec.  679.500(c), which requires the Governor to establish and 
disseminate a policy for the submission of local and regional plans.
Section 679.510 What are the requirements for regional planning?
Participation in a Regional Planning Process (Sec.  679.510(a)(1))
    WIOA sec. 106(c) governs regional coordination and regional 
planning requirements, which are clarified in Sec.  679.510.
    Comments: A commenter asked which local area within a region would 
be responsible for the performance negotiation process.
    Department Response: The representatives of each local area in the 
region are collectively responsible for the process. Establishing an 
agreement among the Local WDBs and local CEOs in the region concerning 
how the planning region will collectively negotiate and reach agreement 
with the Governor on local levels of performance for, and report on, 
the performance accountability measures is required by WIOA sec. 
116(c)(1)(H) and Sec.  679.510(a)(1)(viii). No change to the regulatory 
text was made in response to these comments.
Preparation, Submittal, and Approval of Regional Plans (Sec.  
679.510(a)(2))
    Comments: Commenters have suggested that a single local area could 
elect to participate in multiple planning regions through a memorandum 
of agreement.
    Department Response: In accordance with WIOA sec. 106, a single 
local area may not be split across two planning regions. Local areas 
must align with planning regions to align economic and workforce 
development activities and resources effectively. Local areas may be 
part of only one region. However, local areas are not prohibited from 
working or coordinating with other local areas, and regions may 
coordinate with other planning regions. Similarly, where a single local 
area is identified as a region, such a local area could reasonably 
coordinate with other local areas or planning regions. Coordination may 
be especially vital across States; the Department anticipates providing 
additional guidance regarding the creation and management of interstate 
planning regions. As the regulation aligns with WIOA and does not 
prohibit coordination, no change to the regulatory text was made in 
response to these comments.
    Comments: A commenter asked how the plans are to be submitted.
    Department Response: The plans must be submitted to the Governor as 
outlined in Sec.  679.510(a)(2) and any guidance issued by the 
Department (Sec.  679.510(a)(1)(i)).

[[Page 56107]]

Other Requirements for Regional Planning (Sec.  679.510(b), (c), and 
(d))
    Comments: Commenters suggested specific content for the regional 
plan including how the region coordinates core program services, 
economic development strategies, education attainment, credentialing of 
workforce skills to meet employer skill needs, and data regarding 
participants with disabilities.
    Department Response: WIOA sec. 106(c)(2) and Sec.  679.510 describe 
the requirements for regional planning, which already address the 
region's service strategies, regional labor market data, coordination 
efforts, etc. The Department plans to issue further guidance.
Section 679.520 What are the requirements for approval of a regional 
plan?
    Section 679.520 describes the regional plan approval process.
    Comments: The Department received comments regarding the timelines, 
including suggestions that the timeline for approval in Sec.  679.520 
of ``90 days after submission'' is inconsistent with WIOA sec. 108(e), 
which says the plan ``shall be considered to be approved by the 
Governor at the end of the 90-day period beginning on the day the 
Governor receives the plan.''
    Department Response: The Department agrees that 90-day period 
should be revised to track WIOA and has amended both Sec. Sec.  679.520 
and 679.570 to reflect the statutory language of 90 days after receipt 
of the local plan.
Section 679.530 When must the regional plan be modified?
    Title 20 CFR 679.530 describes when a regional plan must be 
modified and Sec.  679.580 requires the Governor to establish 
procedures governing local plan review and modification to ensure that 
the biennial review and modification of local plans is conducted 
consistently throughout the State. The circumstances identified in 
Sec.  679.530(b)(1) and (2) identify the significant changes that 
require modification but the Governor may require other factors. While 
sec. 106(c) of WIOA clearly describes the required contents of the 
regional plan, it provides less detail about the approval and 
modification process, saying only that officials in the planning region 
must ``prepare, submit, and obtain approval'' of the plan.
    Comments: Commenters requested that the language in this section 
and of Sec.  679.580 be narrowed to specify that modifications are 
required only in response to ``changes to local economic conditions, 
and any changes in the financing available'' to allow regions more 
flexibility.
    Department Response: Because the local plan is a component of the 
regional plan, the Department decided to apply the approval and 
modification requirements to the regional plan, which are reflected in 
Sec.  679.530(b)(2), and which require modification based on ``other 
factors affecting the implementation of the local plan, including but 
not limited to changes in the financing available to support WIOA title 
I and partner-provided WIOA services.'' In the Department's view, 
ensuring that regional and local plans remain up-to-date and relevant, 
and ensuring consistency between regional and local plan requirements, 
will improve the effectiveness of the public workforce system. No 
change to the regulatory text was made in response to these comments.
Section 679.540 How are local planning requirements reflected in a 
regional plan?
    Title 20 CFR 679.540 outlines how local planning requirements are 
reflected in a regional plan. WIOA is silent on the coordination of the 
regional and local plan, noting only that the regional plan must 
``incorporate local plans for each of the local areas in the planning 
region.'' The Department has determined that the most appropriate and 
least burdensome approach to implementing this provision is to include 
a copy of each local plan within the regional plan to accompany the 
plan's discussion of regional strategies. In this arrangement, the 
regional plan is completed in cooperation with the Local WDBs and CEOs 
in a planning region, per Sec.  679.510(a). Each individual Local WDB 
and CEO will respond to the local planning requirements at Sec.  
679.560(b) through (e) individually. The Local WDBs and CEOs in a 
planning region must cooperate to develop a common response to the 
local planning requirements that discuss regional labor market 
information, as required by Sec.  679.540(a), and any other appropriate 
requirements permitted by the Governor per Sec.  679.540(b). When these 
activities are completed, the planning region submits one regional plan 
to the Governor that includes the common discussion of regional labor 
market information and other requirements as required by the Governor, 
as well as each local plan in a single document.
    Comments: A commenter asked the Department to clarify if regions 
had to submit all of the separate local plans that are encompassed in 
the regional plan.
    Department Response: WIOA sec. 106(c)(2) requires the regional plan 
to incorporate local plans for each of the local areas in the planning 
region. As described above, the Department has determined that the most 
appropriate and least burdensome approach to implementing this 
provision is to include a copy of each local plan within the regional 
plan to accompany the plan's discussion of regional strategies. No 
change to the regulatory text was made in response to these comments.
Section 679.550 What are the requirements for the development of the 
local plan?
    Title 20 CFR 679.550 explains the requirements for the development 
of the local plan. This section emphasizes the importance of 
collaboration and transparency in the development and submission of the 
local plan and subsequent modifications.
    Comments: A commenter requested clarification regarding when it was 
necessary for a local area to submit a local plan.
    Department Response: Paragraph (a) of Sec.  679.550 implements sec. 
108(a) of WIOA and describes the general requirements for the 
preparation and content of the local plan. If the local area is part of 
a planning region, the Local WDB must comply with WIOA sec. 106(c) and 
Sec. Sec.  679.510 through 679.540 in the preparation and submission of 
a regional plan. The local plan is considered submitted when it is 
incorporated in the regional plan.
    Comments: Other commenters asked if the terms plan, the local plan, 
or the local workforce investment plan are synonymous and recommended 
consistency be used throughout the regulation.
    Department Response: The Department used all terms to refer to the 
local plan required in WIOA sec. 108 and refers to the local plan in 
the regulations.
Section 679.560 What are the contents of the local plan?
Contents of a Local Plan
    Title 20 CFR 679.560 is consistent with sec. 108(b) of WIOA and 
outlines the information that must be included in the local plan. These 
requirements set the foundation for WIOA principles, by fostering 
strategic alignment, improving service integration, and ensuring that 
the public workforce system is industry-relevant, responding to the 
economic needs of the local area and matching employers with skilled 
workers.

[[Page 56108]]

    Comments: The Department received comments supporting the proposed 
section, and some recommending changes to the content of the local 
plan, as well as comments requesting additional guidance.
    Department Response: The Department has determined it is 
appropriate for Sec.  679.560 to track closely with WIOA sec. 108(b), 
which outlines the content requirements of the local plan. No changes 
were made to the regulatory text in response to these comments. The 
Department recognizes the need for technical assistance in developing 
local plans and will issue guidance for State and Local WDBs to assist 
in developing compliant plans.
Local Levels of Performance
    Title 20 CFR 679.560(b)(4) explains that the Local WDB must 
describe how it will coordinate local workforce investment activities 
with regional economic development activities that are carried out in 
the local area and promote entrepreneurial skills training and 
microenterprise services.
    Comments: Commenters requested additional information on 
performance criteria for the ETPL and ``microenterprise development.''
    Department Response: Alignment between the public workforce system 
and local economic development activities is critical in order to 
identify and fulfill industry talent needs by training customers for 
emerging and in demand job skills. Furthermore, microenterprise 
development refers to training for the purposes of self-employment. 
This training strategy may be appropriate for individuals or 
participants with multiple barriers to employment, including persons 
with disabilities.
    Title 20 CFR 679.560(b)(5) focuses on the delivery of services 
through the one-stop delivery system in the local area and requires 
descriptions regarding how the Local WDB will ensure the continuous 
improvement of eligible providers of services--see part 680, subpart D, 
for additional information on the requirements of the eligible training 
provider list.
    Comments: Other commenters suggested that regulations detail the 
timeline for performance negotiations related to local plan submission.
    Department Response: The Department agrees that clarification is 
needed and has added Sec.  679.500(c), which requires the Governor to 
establish and disseminate a policy for the submission of local, and 
regional plans. This policy must account for the requirement that local 
areas in a region reach agreement on how they will negotiate 
performance indicators with the Governor, as provided in Sec.  
679.510(a)(1)(viii).
Priority of Service (Sec.  679.560(b)(21))
    Comments: Commenters requested additional clarification on the 
implementation of priority of service, and recommended methods to 
ensure consistent implementation.
    Department Response: Title 20 CFR 679.560(b)(21) requires that the 
plan include description of the process by which priority of service 
must be applied by the one-stop operator, but also clarifies that such 
priority is for adult career and training services and must be given to 
recipients of public assistance, other low-income individuals, and 
individuals who are basic skills deficient. Including the priority 
service policy in the local plan will help ensure a more uniform 
application of the policy throughout the local area. The Department has 
issued some guidance on planning and anticipates issuing additional 
guidance for State and Local WDBs to assist in developing compliant 
plans; no change to the regulatory text was made in response to these 
comments.
    Comments: A commenter suggested that the WIOA system should provide 
program participants with access to curriculum-aligned industry-
recognized certificates verifying attainment of the critical skills 
that employers are looking for, so that when opportunities open up, the 
match between job seeker and employment can be accelerated and career 
pathways can be illuminated.
    Department Response: Title 20 CFR 679.560(b)(2) requires that the 
Local WDB describe how such alignment will improve access to services 
and to activities that lead to a recognized postsecondary credential. 
The Local WDBs have the flexibility to consider many options; the 
Department declines to require a specific approach. However, the 
Department recognizes the need for technical assistance in developing 
local plans and will issue planning guidance for State and Local WDBs 
to assist in developing compliant plans. No change to the regulatory 
text was made in response to these comments.
Other Comments on Local Plans
    Comments: A commenter suggested deleting Sec.  679.560(b)(17) 
regarding becoming or remaining a high-performing Board.
    Department Response: The Department has determined that the 
requirement is consistent with WIOA sec. 108(b)(18) and has made no 
changes to the regulatory text in response to this comment.
    Comments: The Department received several comments regarding Sec.  
679.560(b)(20) regarding the requirement that a local plan include a 
description of how one-stop centers are implementing and transitioning 
to an integrated, technology-enabled intake and case management 
information system for programs carried out under WIOA and by one-stop 
operators. Commenters had specific questions regarding how such a 
system is to be implemented.
    Department Response: Paragraph (b)(20) of Sec.  679.560 reflects 
WIOA sec. 108(b)(21). There is a requirement that the plan detail the 
actions that will be taken but there is no mandate in this section of a 
particular approach. No change to the regulatory text was made in 
response to these comments.
Section 679.570 What are the requirements for approval of a local plan?
    Overarching Comments on the Approval of a Local Plan Timeline for 
Approval and Implementation
    The Department recognizes that the development of the local plan is 
dependent on several other essential State and local WIOA 
implementation activities and that local areas may not be able to 
respond fully to each of the required elements of the local plan in the 
timeframe provided. The Department sought comment on the scope of the 
challenges local areas may face regarding regional and local planning 
and potential actions that the Department can take to help local areas 
address these challenges.
    Comments: Several commenters requested that the amount of time be 
extended for both existing local plans that are already compliant with 
the initial designation criteria and local plans for new areas or 
regions. Commenters suggested that local plans be due 6 to 9 months 
after the State Plans are approved. Many commenters expressed concerns 
about the timeline in developing and submitting all plans. Several 
suggested timelines that should be regulated. Other commenters 
suggested that regulations detail the timeline for performance 
negotiations related to plan submission.
    Department Response: Title 20 CFR 679.570 implements WIOA sec. 
108(e). Paragraph (a) of Sec.  679.570 requires that the Governor 
review completed plans and stipulates that unless the Governor 
determines that the plan is deficient according to paragraphs (a)(1) 
through (3), the plan will be considered approved 90 days after the 
Governor receives the plan. The Department made a clarifying edit to 
paragraph (a) so that

[[Page 56109]]

it is clear the 90-day time period begins when the Governor receives 
the plan, rather than at submission. The Department also edited 
paragraph (a)(2) to update the citation to the regulation that 
implements WIOA sec. 188. Regarding timelines, the Department agrees 
that clarification of the expectation for the process is needed and, as 
described above, has added paragraph (c) to Sec.  679.500, which 
requires the Governor to establish and disseminate a policy for the 
submission of local and regional plans.
    With Training and Employment Guidance Letter No. 14-15, ``Workforce 
Innovation and Opportunity Act (WIOA) Requirements for Unified and 
Combined State Plans,'' dated March 4, 2016, and the WIOA State Plan 
ICR, published under OMB control number 1205-0522, the Department 
issued guidance on and requirements for Unified and Combined State 
Plans. The Department also intends to issue guidance or technical 
assistance on local and regional planning. Section 679.570 aligns with 
WIOA sec. 108, and the changes described above address the commenters' 
concerns. No additional change to the regulatory text was made in 
response to these comments.
    Paragraph (b) of Sec.  679.570 outlines the processes, roles, and 
responsibilities in the local plan process for situations in which the 
State is a single local area. Paragraph (b)(1) clarifies the State must 
incorporate the local plan in the State's Unified or Combined State 
Plan submitted to the Department. Paragraph (b)(2) states that the 
Secretary of Labor will perform the roles assigned to the Governor as 
they relate to local planning activities and Sec.  679.570(b)(3) 
indicates the Secretary of Labor will issue planning guidance for 
single-area States.
    Comments: Commenters asked why the Secretary of Labor would be 
performing the Governor's role, what those planning activities are, and 
if the Secretary of Labor should be limited to approving local plans.
    Department Response: Single-area States are required to submit the 
plan to the Secretary of Labor under WIOA sec. 108. The Secretary will 
perform the Governor's role in local planning as outlined in WIOA sec. 
108(a) and (e) regarding plan submission and approval. Section 679.570 
aligns with WIOA sec. 108 and the Final Rule makes no change to Sec.  
679.570(b) in response to these comments.
Section 679.580 When must the local plan be modified?
    Title 20 CFR 679.580 is consistent with WIOA sec. 108(a), which 
requires the Governor to establish procedures governing local plan 
review and modification to ensure that the biennial review and 
modification of local plans is conducted consistently throughout the 
State. Paragraph (b) of Sec.  679.580 explains that the Local WDB and 
appropriate CEOs must review the local plan every 2 years and submit a 
modification as needed, based on significant changes in labor market 
and economic conditions and other factors including changes to local 
economic conditions, changes in the financing available to support WIOA 
title I and partner-provided WIOA services, changes to the Local WDB 
structure, or a need to revise strategies to meet performance goals.
    Comments: A commenter recommended that modifications be limited to 
only substantive changes or as required by the State WDB. Other 
commenters requested guidance that included examples of changes 
warranting a local plan modification.
    Department Response: As outlined in Sec.  679.580, the Governor is 
required to establish procedures governing local plan review and 
modification. The Governor has the flexibility to further define the 
criteria under Sec.  679.580(b) that require a modification to the 
local plan. The Department does not agree that additional language is 
needed to require additional modification requirements. Moreover, as 
described in the discussion of regional plan modification in Sec.  
679.530, in the Department's view, ensuring that local and regional 
plans remain up-to-date and relevant, and ensuring consistency between 
local and regional plan requirements, will improve the effectiveness of 
the public workforce system. The Department declines to change the 
modification requirements and has made no changes to the regulatory 
text in response to these comments.
5. Subpart E--Waivers/WorkFlex (Workforce Flexibility Plan)
    This subpart describes the statutory and regulatory waiver 
authority provided by WIOA sec. 189(i), and the requirements for 
submitting a Workforce Flexibility Plan under WIOA sec. 190. The 
Department addresses comments regarding the purpose of the waiver 
authority in WIOA, and the circumstances under which a waiver may 
apply.
    WIOA provides States the flexibility to request a waiver of program 
requirements in order to implement new strategic goals for the 
improvement of the statewide workforce development system and to 
provide better customer service in exchange for accountability for 
expected programmatic outcomes. A Workforce Flexibility plan provides 
additional flexibility to the State. In general, a State with an 
approved Workforce Flexibility plan is given the authority to identify 
local level provisions to waive without further approval from the 
Secretary of Labor to achieve outcomes specified in the plan. A 
description of what provisions of WIOA and the Wagner-Peyser Act may 
and may not be waived is included, along with an explanation of the 
procedures for requesting a waiver. The subpart also describes what may 
and may not be waived under a Workforce Flexibility Plan, and the 
procedures for obtaining approval of a plan. The WIOA requirements for 
obtaining approval for a waiver or Workforce Flexibility Plan are 
similar to those in WIA secs. 189(i) and 192, respectively; therefore, 
many of the proposed regulations are the same as the regulations 
implementing WIA. No changes have been made to regulatory text in 
response to these comments.
Section 679.610 What provisions of the Workforce Innovation and 
Opportunity Act and the Wagner-Peyser Act may be waived, and what 
provisions may not be waived?
    WIOA sec. 189(i)(3)(A)(i) establishes the limitations of the 
Secretary's general waiver authority for WIOA title I, subtitles A, B, 
and E. As described in the regulation, the Secretary is statutorily 
prohibited from waiving any provisions related to the following:

 Wage and labor standards;
 Non-displacement protections;
 Worker rights;
 Participation and protection of workers and participants;
 Grievance procedures and judicial review;
 Nondiscrimination;
 Allocation of funds to local areas;
 Eligibility of providers or participants;
 The establishment and functions of local areas and Local WDBs;
 Procedures for review and approval of State and local plans;
 The funding of infrastructure costs for one-stop centers; and
 Other requirements relating to the basic purposes of title I 
of WIOA described in Sec.  675.100 of this chapter.

    Comments: A commenter suggested that the Department consider 
waivers of some of these provisions to the extent that they enhance 
wage and labor standards and non-displacement protections.
    Department Response: The Department does not have the authority to 
approve waivers that are prohibited

[[Page 56110]]

by statute and no change to the regulatory text was made in response to 
this comment.
Section 679.620 Under what conditions may a Governor request, and the 
Secretary approve, a general waiver of statutory or regulatory 
requirements under the Workforce Innovation and Opportunity Act?
    Title 20 CFR 679.620(a) through (f) implements WIOA sec. 189(i)(3) 
and describes the conditions under which a Governor may request, and 
the Secretary may approve a waiver of statutory or regulatory 
requirements. Title 20 CFR 679.620(a) explains that the Secretary will 
issue guidelines on waiving WIOA and Wagner-Peyser requirements. States 
will be required to follow the Secretary's guidelines, which supplement 
the requirements listed in 20 CFR 679.600 through 679.620.
    Comments: A commenter asked for more clarification regarding what 
the most recent data are that would be required to grant a waiver 
renewal, as required by proposed Sec.  679.620(d)(7).
    Department Response: In general, the Department has not required 
specific data sources when requesting a waiver under WIA or WIOA. The 
Governor has the discretion to use the data source or sources that most 
effectively demonstrates the need and/or benefit of the requested 
waiver. The Department has made no changes to the regulatory text in 
response to this comment.
    Comments: A commenter asked if existing WIA waivers that are 
approved to run past 2015 will be applicable under WIOA, and suggested 
that they remain in effect through the original period for which they 
were approved. With regard to the WIOA transition period, one commenter 
supported the current continuation of waivers as granted. Other 
commenters recommended the continuation of existing waivers until the 
WIOA State Plan is approved. Regarding States with existing WIA 
waivers, one commenter recommended that the Department allow such 
States to keep this flexibility until either the Federal government 
provides additional time or resources necessary for implementation of 
WIOA's new requirements, or the States provide evidence that they are 
prepared to implement the additional requirements.
    Department Response: The Department issued TEGL No. 01-15 
(``Guidance Regarding the Impact of Workforce Innovation and 
Opportunity Act Implementation on Waivers Under the Workforce 
Investment Act''), which addresses the status of waivers during program 
year 2015 and communicates the Department's position on waivers under 
WIOA. This guidance includes an attachment that discusses whether each 
waiver type will be continued into WIOA, as well as those that expired 
effective July 1, 2015. No change to the regulatory text was made in 
response to these comments.
Section 679.630 Under what conditions may the Governor submit a 
Workforce Flexibility Plan?
    Comments: One commenter expressed support for the language in this 
section that prohibits the waiver of certain requirements related to 
labor standards and worker protections.
    Department Response: WIOA sec. 189(i)(3)(A)(i) and (ii) describe 
the statutory limitations to the Secretary's WIOA title I and Wagner-
Peyser waiver authority. These prohibitions include any statutory 
provisions related to labor standards or worker rights. No change to 
the regulatory text was made in response to this comment.
Other Comments on Waivers/Work-Flex
    Comments: One commenter expressed support for the proposed language 
in part 679 subpart E regarding waivers and Work-Flex.
    To assist employers and job seekers best, one commenter requested 
that the Department offer waivers whenever possible. A State agency 
suggested that the Department add waiver provisions to the Final Rule 
regarding the application for continued eligibility of ETPs and to the 
internal control policy requirement provided that a written agreement 
pursuant to proposed Sec.  679.430 is in place.
    Department Response: Specific waiver requests must be requested 
through the waiver process. The Department declines to make changes to 
identify specific waivers in the regulatory text.
6. Other Comments on Statewide and Local WIOA Governance
    Comments: With regard to the alignment of title I and title II 
services to improve services for immigrant and LEP individuals, 
multiple commenters recommended that the Department provide additional 
guidance to States and localities (whether through regulations or 
policy directive) that allows for differing eligibility criteria across 
the titles and encourages States and localities to align services 
without precluding participation by individuals who may be eligible for 
services under one title but not another. Another commenter stressed 
the importance of aiding immigrant and refugee communities and asked 
that the Department include reference to the need for expertise in 
serving linguistically and culturally diverse populations in its 
discussion of part 679.
    One commenter expressed its concern about the challenge of meeting 
all WIOA requirements by July 1, 2015, particularly considering the 
late issuance of the WIOA regulations.
    Department Response: While the Department acknowledges the need to 
be sensitive to the employment and training needs of immigrant and LEP 
individuals, WIOA sec. 189(i)(3)(A)(i) prohibits the Department from 
waiving or otherwise altering eligibility criteria. No change to the 
regulatory text was made in response to these comments.
    The Department acknowledges the challenges inherent in implementing 
WIOA in the absence of a Final Rule. The Department issued Operating 
Guidance documents to inform the public workforce system how to comply 
with WIOA statutory requirements. The Operating Guidance provided a 
framework for program activities while regulations were finalized.
    Comments: Explaining that its local areas have utilized funding to 
serve customers in their jurisdiction only, one commenter asked whether 
the State can set policy to allow a broader use of funds under WIOA. In 
addition, this commenter asked whether, if State agencies grant adult 
education programs to local areas, the infrastructure costs should come 
from the local vendor or the State.
    Department Response: States have authority to set policy that is 
consistent with WIOA. The Department has determined that the State is 
in the best position to develop policy regarding allocating scarce 
Federal funds; the Department has not made changes to the regulatory 
text in response to this comment. Further, all funds must expended in 
accordance with the Uniform Guidance regulations and WIOA subtitle E 
(Administration). TEGL No. 15-14 (``Implementation of the New Uniform 
Guidance Regulations'') provides additional information on implementing 
the Uniform Guidance.
    Comments: One commenter suggested that Local WDBs should remain 
responsible for operation of local/regional workforce programs 
representing business sectors in their communities and that it is a 
conflict of interest for State governments to receive funding, develop 
and operate programs, and monitor and evaluate programs. This commenter 
asserted that State-operated workforce programs are primarily budget-
driven, rather than customer-driven, with primarily digital service 
structures that leave individuals

[[Page 56111]]

in rural communities lacking internet, transportation, and skills 
without access to services.
    Department Response: Section 679.100 implements WIOA sec. 101 and 
outlines the vision and purpose of the State WDB. Section 679.130 
implements WIOA sec. 101(d) and describes the roles and functions of 
the State WDB. The State WDB's purpose, as outlined in WIOA sec. 101 
and Sec.  679.100, is to convene State, regional, and local workforce 
system, and partners to align and improve the outcomes and 
effectiveness of Federally funded and other workforce programs and 
investments. Section 679.300 implements WIOA sec. 107 and explains the 
purpose of the Local WDB. In accordance with the functions of the Local 
WDB outlined in WIOA sec. 107(d), Sec.  679.300(b)(1) includes the 
function of providing strategic and operational oversight in 
collaboration with required and other partners to help the workforce 
development system achieve the purposes outlined in WIOA sec. 2, and 
assist in the achievement of the State's strategic and operational 
vision and goals outlined in the State Plan. Paragraphs (b)(2) and (3) 
of Sec.  679.300 require the Local WDB to assist in the achievement of 
the State's strategic and operational vision and goals as outlined in 
the Unified State Plan or Combined State Plan, and to maximize and 
continue to improve the quality of services, customer satisfaction, and 
effectiveness of the services provided.

D. Part 680--Adult and Dislocated Worker Activities Under Title I of 
the Workforce Innovation and Opportunity Act

1. Introduction
    In this part of the Final Rule, the Department describes 
requirements relating to the services that are available for adults and 
dislocated workers under WIOA. Adult services are provided to help job 
seekers who are at least 18 years old succeed in the labor market. WIOA 
establishes a priority in the adult program for serving low-income 
individuals, recipients of public assistance, and individuals lacking 
basic work skills. Dislocated worker services are provided to workers 
who have lost their job, through no fault of their own. The goal of 
dislocated workers services is to help these individuals obtain quality 
employment in in-demand industries.
    Under WIOA, adults and dislocated workers may access career 
services and training services. WIOA provides for a public workforce 
system that is universally accessible, customer centered, and training 
that is job-driven. In this part, the Department also discusses 
supportive services and needs-related payments that can be provided, 
based on customer needs, to enable them to participate in WIOA career 
and training services.
    The Department generally received comments that were supportive 
about the delivery of career and training services. It also received 
comments about the implementation of the statutory priority for the 
WIOA adult program, and how various populations, including individuals 
with disabilities, are able to access WIOA title I adult and dislocated 
worker services, which the Department has sought to clarify. In 
addition, the Department received comments about some of the new work-
based experience and training opportunities under WIOA, including how 
registered apprenticeship can be utilized by the one-stop delivery 
system, and clarifications on transitional jobs, on-the-job training, 
and incumbent worker training. These comments are discussed below, in 
the sections corresponding to subparts A-D and F-G. The Department also 
received a number of comments on the Eligible Training Provider (ETP) 
eligibility requirements, which are discussed below under subpart D. 
For the comments received that pertain to the WIOA sec. 116(d)(4) ETP 
annual performance reports, those comments are discussed in the 
preamble discussion accompanying 20 CFR 677.230 (see Joint WIOA Final 
Rule published elsewhere in this issue of the Federal Register).
    The analyses that follows provides the Department's response to 
public comments received on the proposed part 680 regulations. If a 
section is not addressed in the discussion below, it is because the 
public comments submitted in response to the NPRM did not substantively 
address that specific section and no changes have been made to the 
regulatory text. Further, the Department received a number of comments 
on this part that were outside the scope of the regulation and the 
Department offers no response. Lastly, the Department has made a number 
of non-substantive changes to correct grammatical and typographical 
errors to improve the readability and conform the document 
stylistically that are not discussed in the analysis below.
2. Subpart A--Delivery of Adult and Dislocated Worker Activities
Introduction
    This subpart discusses the role of WIOA adult and dislocated worker 
services delivered through the one-stop delivery system. The one-stop 
delivery system provides universal access to career services to meet 
the diverse needs of adults and dislocated workers. Adult and 
dislocated worker programs are required partners in the one-stop 
delivery system and as such, grant recipients are subject to the 
required partner responsibilities set forth in 20 CFR 678.415 (see 
Joint WIOA Final Rule).
    Career and training services, tailored to the individual needs of 
job seekers, form the backbone of the one-stop delivery system. While 
some job seekers may only need self-service or other basic career 
services like job listings, labor market information, labor exchange 
services or information about other services, some job seekers will 
need services that are more comprehensive and tailored to their 
individual career needs. These services may include comprehensive 
skills assessments, career planning, and development of an individual 
employment plan that outlines the needs and goal of successful 
employment. Under WIA, career services were identified as core and 
intensive services and participants generally would follow through each 
level of service to receive training eventually. WIOA provides an 
individual receiving services in one-stop centers the opportunity to 
receive the service needed to help him/her meet his/her employment and 
career goals. WIOA clarifies that an individual does not need to follow 
a fixed sequence of services that may not be necessary to meet his or 
her needs.
    Under WIOA, the Department classifies career services into two 
categories: Basic and individualized career services. This grouping is 
not designed to create barriers to training, but rather identifies the 
importance that these two types of career services can have in helping 
individuals obtain employment. Basic career services must be made 
available to all job seekers and include services such as labor 
exchange services, labor market information, job listings, and 
information on partner programs. Individualized career services 
identified in WIOA and described in these proposed regulations are to 
be provided by local areas as appropriate to help individuals to obtain 
or retain employment. Career and training

[[Page 56112]]

services are more fully discussed in subparts A and B of this part.
Section 680.100 What is the role of the adult and dislocated worker 
programs in the one-stop delivery system?
    Comments: A commenter expressed support for Sec.  680.100 as 
proposed. In contrast, another commented that CEOs should not be 
considered one-stop partners. The commenter stated that CEOs are 
involved in the governance and oversight of the one-stop delivery 
system through the Board members that they appoint and so neither CEOs 
nor Board members should be involved in the operation of a one-stop 
delivery system.
    Department Response: WIOA sec. 107 states that the CEO for the 
local area is the local grant recipient. WIOA sec. 107(c) provides for 
how CEOs are to be determined in the event that there are multiple 
units of local government in a workforce area. As the grant recipient 
for the adult and dislocated worker programs, the CEO or his/her 
designee is a required one-stop partner in the governance and delivery 
of services in the one-stop delivery system consistent with sec. 
121(b)(1) of WIOA and 20 CFR part 678 (see Joint WIOA Final Rule). No 
changes have been made to the regulatory text in response to the 
comments.
Section 680.110 When must adults and dislocated workers be registered 
and considered a participant?
    Comments: A one-stop center requested clarification on how 
registration can occur through an electronic submission. Specifically, 
this commenter asked whether eligibility can be determined based solely 
on an electronic submission. The commenter also requested clarification 
of the language in the preamble explaining that ``minimal'' assistance 
would trigger the need to register.
    Department Response: State and local areas have the discretion to 
determine appropriate intake methods, which may include electronic and 
virtual means. Additionally, a service being provided to an individual 
electronically or virtually can be sufficient for the individual to be 
considered a ``participant,'' provided it meets the standards of the 
definition provided at 20 CFR 677.150(a) (see Joint WIOA Final Rule).
    Comments: A few commenters agreed with the way in which the NPRM 
described participation for adult and dislocated worker involvement 
with WIOA services. Specifically, several commenter suggested that 
self-service and information service should be included as 
participation for the purposes of registering a person to measure 
performance.
    In contrast, several commenters disagreed with the proposed 
approach to describing participant or participation. A few commenters 
said that ``participant'' was described too narrowly, cautioning that 
the NPRM could lead to denial of services for individuals in need of 
assistance. Some commenters recommended revisions to Sec.  680.110(a) 
to describe a ``participant'' by referencing 20 CFR 677.150 rather than 
limiting it to those individuals who receive staff-assisted services 
(see Joint WIOA Final Rule). One commenter expressed support for this 
revision, explaining that removal of minimally assisted customers from 
metrics would potentially reduce investments in resource rooms, a self-
service facility that provides job seekers internet-based job search 
opportunities that are required by today's employer.
    Additionally, several commenters recommended revisions to Sec.  
680.110(b) to allow for the provision of WIOA services to individuals 
who are not participants. In contrast, one commenter recommended that 
paragraph (b) more broadly define those individuals who are not 
required to register and be designated as participants to include 
individuals receiving referral services.
    Another commenter requested clarification on the distinction 
between a ``staff assisted WIOA service'' and ``self service and 
informational activities.'' This commenter stated that WIA regulations 
with similar language had caused analogous confusion. A one-stop center 
asked whether a basic workshop would be considered ``informational 
services'' or a career service for purposes of performance 
accountability. A commenter asked if there was a distinction between 
basic and individual career services as it relates to participation. 
Noting that the NPRM explicitly specifies the activities that will not 
count towards participation but does not specify the activities that 
will count, a commenter asked whether it is up to the State to 
determine which career services will place the individual into 
participation or performance calculations. Expressing confusion over 
the meaning of participant, a commenter requested a definition of 
participant, including a clear indication of whether registration or 
utilization of services was necessary to be considered a participant, 
and asked the Department to identify the term for clients that are not 
registered and not participants.
    Several commenters stated that clarification is needed on where and 
when assessments and information collection efforts relevant to 
identify self-service individuals, reportable individuals, and 
participants will occur. Some commenters recommended that the 
Department provide a framework for how the designation of enrollment 
intertwines with career and training services, allowing maximum 
flexibility for States to design their approaches for both in-person 
and online services. In contrast, a commenter encouraged the Department 
to create a clear system that ensures a consistent approach across the 
States. Similarly, another commenter encouraged the Department to 
provide more details on the level/type of information required to be 
collected by individual and by required program titles to ensure data 
system integrity for reporting purposes.
    A commenter encouraged the Department to require enrollment in WIOA 
title I programs to occur when an individual employment plan (IEP) is 
developed. A commenter recommended the point at which funds must be 
dedicated to the client for their employment or training needs as the 
appropriate trigger for enrollment.
    Department Response: The Department made some non-substantive 
changes to align the definition of performance with 20 CFR 
677.150(a)(3) (see Joint WIOA Final Rule). It also changed the text of 
Sec.  680.110(a) to clarify when an individual is considered a 
``participant.'' The Department is providing additional clarity in 
guidance on what services count as self-services or information-only 
services and activities. Further guidance may be provided to explain 
which services cause an individual to be considered a ``participant.''
    The distinction between reportable individual and participant is 
used for the purposes of reporting on performance, and does not have 
any impact on eligibility or service provision. Further information on 
performance is discussed in 20 CFR part 677 (see Joint WIOA Final Rule 
published in this issue of the Federal Register), and information on 
the collection and data systems is being provided through the 
Department's ICRs and guidance.
    The Department notes that while an IEP will cause an individual to 
be considered a participant, there are other ways to qualify for 
participation because there is no sequence of services requirement in 
WIOA. An IEP is an individualized career service and can be provided 
under either title I of WIOA or under the Wagner-Peyser Act Employment 
Service (ES) (as amended by title III of WIOA). Individualized

[[Page 56113]]

career services (of which an IEP is one) may be provided with Wagner-
Peyser Act funds.
    Comments: A few commenters recommended that Sec.  680.110(c) be 
revised to require the collection of data from only those individuals 
actually receiving aid, benefits, services, or training.
    Department Response: The Department made a technical correction at 
Sec.  680.110(c), changing ``Employment Opportunity'' data to ``EO'' 
data because that is the data referred to in this section as defined in 
20 CFR 675.300. The collection of Equal Opportunity (EO) data on every 
individual who is interested in being considered for WIOA title I 
financially assisted aid, benefits, services, or training is necessary 
to ensure compliance with WIOA sec. 188. The regulations governing WIOA 
sec. 188 can be found at 29 CFR part 38.
    The point at which an individual has indicated ``interest'' in WIOA 
title I services is within the grant recipient's discretion; however, 
the recipient's request for and receipt of information triggers the 
accompanying responsibility to collect EO data at the same time. The EO 
data must be maintained in a manner that allows the individuals from 
whom the data was collected to be identified, and that ensures 
confidentiality. This responsibility is separate from, and might not 
arise at the same point in the process as, the registration 
responsibility.
Section 680.120 What are the eligibility criteria for career services 
for adults in the adult and dislocated worker programs?
    Comments: A commenter stated that there is a discrepancy between 
the preamble and the proposed regulation creating confusion whether 
individuals who are basic skills deficient also have to be low-income. 
Similarly, a few commenters stated that priority should be given to 
low-income adults and public assistance recipients and individuals who 
are basic skills deficient, in accordance with WIOA sec. 134(c)(3)(E). 
One commenter recommended that priority should also be given to adults 
who lack a regionally accredited secondary education diploma or high 
school equivalent (HSE).
    A commenter stated that the change from core and intensive services 
to career services as in proposed Sec.  680.120 would place a burden on 
States and local areas to revise policy and procedures. This commenter 
also requested that the Department define ``basic career services'' and 
``individualized career services'' and describe when participants get 
placed into training.
    Department Response: WIOA sec. 134(c)(3)(E) provides a statutory 
priority for public assistance recipients, other low-income 
individuals, and individuals who are basic skills deficient. The 
priority for these populations is not a criterion for eligibility for 
services under this program; rather, it is a statutory emphasis on 
providing individualized career services and training services to these 
populations under this program. The Department refers readers to Sec.  
680.600, which governs the priority provisions of the adult program. No 
changes have been made to the regulatory text in response to the 
comments.
    Individuals who are basic skills deficient are to be provided 
priority with funds for these adult services. Basic skills deficient is 
defined in WIOA sec. 3(5), and an individual who lacks a secondary 
education diploma or HSE may qualify based on this standard. 
Additionally, Sec.  680.600 provides Governors and Local WDBs with the 
authority to designate other priority populations. Individuals who lack 
a secondary education diploma or HSE could be designated by a Governor 
or Local WDB under that authority.
    Under WIA, priority with adult funds was to be provided in the 
event that funding was limited; that provision was removed from WIOA. 
Thus, priority and the policies and procedures for determining priority 
are statutory requirements for the WIOA title I adult program. The 
Department refers a commenter to 20 CFR 678.430 for definitions of 
``basic career services'' and ``individualized career services'' (see 
Joint WIOA Final Rule).
    In addition, when participants are to be placed into training is a 
decision that must be made consistent with WIOA sec. 134(c)(3) and 
Sec.  680.210.
Section 680.130 What are the eligibility criteria for career services 
for dislocated workers in the adult and dislocated worker programs?
    Comments: Commenters requested clarification on the meaning of 
``unlikely to return to a previous industry or occupation,'' and what 
is meant by ``unemployed as a result of general economic conditions in 
the community in which the individual resides or because of natural 
disasters.''
    One commenter encouraged the removal of the ``unlikely to return'' 
to their previous industry/occupation criteria from the definition of 
dislocated worker, because it hinders the ability to serve individuals 
that have been laid off or terminated.
    Further, a commenter stated that the process for determining 
eligibility as a dislocated worker through receipt of unemployment 
insurance or exhaustion of unemployment insurance currently is a 
cumbersome process. This commenter recommended that one-stop or the ES 
staff have real time access to the unemployment insurance database for 
verification of eligibility of dislocated workers.
    Department Response: WIOA defines ``dislocated worker'' under WIOA 
sec. 3(15), and requires the individual be ``unlikely to return to a 
previous industry or occupation'' under WIOA 3(15)(A)(iii). The 
regulation maintains this statutory definition. The Department has 
added regulatory text at Sec.  680.130(b)(3) allowing for Governors and 
Local WDBs to establish policies and procedures for one-stop centers to 
use in determining when an individual is unlikely to return to his or 
her previous industry or occupation. Any policy or procedure must be 
consistent with Sec.  680.660, which provides that separating service 
members meet this criterion.
    The Department may utilize guidance and technical assistance to 
assist States and local areas in determining when an individual is 
``unlikely to return to a previous industry or occupation'' or when an 
individual is ``unemployed as a result of general economic conditions 
in the community in which the individual resides or because of natural 
disasters.'' No other changes have been made to the regulatory text in 
response to the comments.
Section 680.140 What Workforce Innovation and Opportunity Act title I 
adult and dislocated worker services are Local Workforce Development 
Boards required and permitted to provide?
    Comments: A commenter requested a definition of how Local WDBs are 
allowed flexibility when providing services with adult and dislocated 
worker funds. This commenter also stated that there would be a burden 
on States to track local flexibility of funds. Another commenter asked 
whether subgrantees would need to report expenditures for job seeker 
services, employer services, or coordination activities, as listed in 
proposed Sec.  680.140(b)(1) through (3).
    Department Response: Section 680.140 describes the required and 
permissible employment and training activities with WIOA title I adult 
and dislocated worker funds. Paragraph (a) of Sec.  680.140 describes 
the required activities a Local WDB must provide,

[[Page 56114]]

which includes career and training services. These services are 
required under WIOA sec. 134(c)(2) and (3). Paragraph (b) lists the 
permissible activities a Local WDB may provide. Local WDBs have 
discretion in what permissible activities and services they provide. 
All expenditures must be tracked and documented by the State and Local 
WDB to ensure the proper administration of these funds. No changes have 
been made to the regulatory text in response to the comments. Section 
680.140(b) is further discussed below.
    Comments: A few commenters expressed support for the various 
provisions within proposed Sec.  680.140 covering services for 
individuals with disabilities and recommended additional language be 
added to the regulation to urge Local WDBs to focus their optional 
services on this population because these services are permissive and 
not mandatory. Two commenters also encouraged the Department to 
reference veterans' priority of service in Sec.  680.140(a).
    A couple of commenters encouraged the Department to mention bridge 
programs explicitly, which are programs that prepare individuals with 
limited academic or English skills to succeed in postsecondary 
education and training programs, as an acceptable activity under WIOA, 
and to encourage their use in the Final Rule. Another commenter 
recommended that referrals by one-stop centers to regionally accredited 
secondary-level educational programs providing entry-level workforce 
preparation and/or postsecondary education and training activities be 
included as a basic service and counseling service.
    Department Response: The commenters above refer to the permissible 
local employment and training activities under WIOA sec. 134(d) and 
Sec.  680.140(b). Paragraph (b)(1) of Sec.  680.140 describes the 
permissible ``job seeker services'' that may be provided. The one-stop 
delivery system plays a vital role in providing career and training 
services to individuals with disabilities, as well as the customer 
supports that may be provided to help individuals with disabilities to 
navigate multiple services. The Department understands the commenters' 
desire to make these services to individuals with disabilities 
mandatory; however, WIOA states that these are permissible activities 
under WIOA sec. 134(d). The Department does encourage Local WDBs to 
provide these services for individuals with disabilities, veterans, and 
other individuals with barriers to employment. No changes have been 
made to the regulatory text in response to the comments for Sec.  
680.140(b)(1)(i) through (iv). The citation to transitional jobs at 
Sec.  680.190 has been moved from Sec.  680.830 to reflect the 
Department's position that transitional jobs are a type of work 
experience, and thus a career service.
    Regarding the reference to veterans' priority of service, the 
regulation at Sec.  680.650 ensures priority of service for veterans in 
all Department-funded employment and training programs.
    The Department notes bridge programs may be an appropriate activity 
for individuals to obtain meaningful employment; however, bridge 
programs are not discussed in WIOA and are not included in the 
regulatory text.
    Comments: A commenter recommended that career services for self-
employed adults and dislocated workers be defined to include industry 
sector and/or entrepreneurship training for individuals who wish to 
remain self-employed.
    Department Response: The Department does not propose to mandate any 
particular career services for self-employed adults and dislocated 
workers; these decisions are best made locally based on individual 
need. Decision-making about career and other services and training 
should be informed by information about in-demand industry sectors and 
occupations. The Department notes that entrepreneurship training is 
allowed for adults and dislocated workers under WIOA sec. 134(c)(3)(D).
    Comments: A commenter requested clarification regarding employer 
services and the relationship to career services provided to job 
seekers versus employer services provided to businesses. This commenter 
explained that services provided to employers do not appear to be 
considered a career service because there would be no specific job 
seeker to register. Furthermore, the commenter stated that delivery of 
employer services does not need to be procured for a one-stop center, 
but can be designated by the local elected officials.
    Several commenters recommended that to serve both job seekers and 
employers effectively, the role of business services outreach staff 
should, in addition to supporting the priorities of the Local WDB, be 
focused on the goals of the individual WIOA titles. One commenter 
sought clarification on whether custom training, on-the-job training 
(OJT), and incumbent worker training were acceptable services to be 
offered under the business services function. This commenter also urged 
the Department to clarify the regulations to make clear that the 
operation of business services by the Local WDB itself and its staff 
are acceptable.
    A commenter encouraged the Department to define ``employment 
generating activities,'' which are prohibited by the proposed 
regulation.
    Department Response: Business and employer services are a 
permissible local activity under Sec.  680.140(b)(2); services to 
employers are not considered a career service that is a required 
activity under Sec.  680.140(a). No changes have been made to the 
regulatory text in response to the comments at Sec.  680.140(b)(2).
    The Department acknowledges the comments about defining 
``employment generating activities,'' and has addressed them in Sec.  
683.245 of the preamble and regulations. The Department notes that 
employer services described in Sec.  680.140(b)(2) must not be used to 
encourage business relocation to the local area from another State or 
local area.
    Comments: One commenter stated that it would be very difficult, if 
not impossible, to determine accurately when implementing a pay-for-
performance training contract the amount of administrative funds that 
were spent on this specific activity because administrative funds may 
be pooled and that pooling includes the youth program. This commenter 
asserted a similar concern for percentage limitations associated with 
incumbent worker training (Sec.  680.800), transitional jobs (Sec.  
680.820 in the NPRM; Sec.  680.195 in this Final Rule), and work 
experience activities in the youth program (Sec.  681.590).
    Department Response: WIOA allows Local WDBs to set aside and use up 
to 10 percent of their adult and dislocated worker funds on WIOA Pay-
for-Performance contract strategies (see WIOA sec. 134(d)(1)(A)(iii) 
and Sec.  683.500), up to 20 percent on incumbent worker training (see 
WIOA sec. 134(d)(4)), and up to 10 percent on transitional jobs (see 
WIOA sec. 134(d)(5)). See also Sec.  680.140(b)(1)(v), (b)(4), and 
(b)(8). Administrative activities necessary to initiate or procure Pay-
for-Performance contract strategies, incumbent worker training, and 
transitional jobs must be consistent with Sec.  683.215, which 
discusses how to determine whether an activity is administrative or 
programmatic for purposes of WIOA. If the activity would be considered 
programmatic under Sec.  683.215, then the cost would be subject to the 
caps discussed above. If the activity would be considered 
administrative under Sec.  683.215, it may be paid for out of the 
Boards' usual

[[Page 56115]]

administrative funds, and it is not subject to the caps. Therefore, the 
Board would not need to specifically account how much of the 
administrative funds are spent on these particular programs.
Section 680.150 What career services must be provided to adults and 
dislocated workers?
    Comments: A commenter stated that the definition of career services 
should be clarified to include pre-screening, application assistance, 
and colocation of application assistance services for the programs for 
which career services one-stop centers must provide information and 
referrals.
    Another commenter recommended that referrals to regionally 
accredited secondary-level educational programs providing entry-level 
workforce preparation and/or postsecondary education and training 
activities be included as part of basic services and counseling 
services. A commenter requested clarification regarding whether 
alternative secondary school (formerly General Education Diploma [GED]) 
preparation is considered a career service or a training service.
    One commenter recommended that Sec.  680.150(c) be revised to refer 
to activities provided for a ``participant'' and not a ``registered 
participant'' to avoid confusion resulting from ``registrants'' and 
``participants'' being two separately defined terms. Another suggested 
that the Department revise the regulations to allow participants to opt 
out of follow-up services, as was allowed under the WIA regulations. A 
few commenters requested clarification on the meaning of ``follow up 
services as appropriate.''
    A commenter recommended that supportive services such as tools, 
uniforms, bus passes, or childcare, be allowed for up to 1 year after 
the exit date of adults or dislocated workers, saying some individuals 
may need a little additional help to keep a job that may not have been 
known when the individual initially took the job.
    A commenter association recommended the addition of new paragraphs 
within Sec.  680.150 to (1) specify that career services can be 
provided by any of the one-stop partners, as opposed to having to be 
provided by a WIOA title I partner; and (2) create a framework by which 
prior interviews, evaluations, and assessments of participants can be 
used for purposes of evaluating eligibility for career services.
    Department Response: The Department has added ``basic'' before 
``career services'' to ensure consistency with 20 CFR 678.430(a) in how 
these services are described (see Joint WIOA Final Rule). No changes 
have been made to the regulatory text in response to the comments at 
Sec.  680.150(b).
    Career services are defined in 20 CFR 678.430 (see Joint WIOA Final 
Rule) and WIOA sec. 134(c)(2). Pre-screening, application assistance, 
referrals, and other information all would qualify as basic career 
services under 20 CFR 678.430(a). Basic career services under Sec.  
680.150(a) must be made available and are key to ensuring high quality 
services throughout the one-stop delivery system.
    The Department considers adult education and literacy activities 
(see WIOA sec. 3(3)) that lead to a secondary school diploma to be a 
training service. An entity that offers a program that leads to a 
secondary school diploma or its equivalent can be eligible as a State 
eligible training provider (ETP), see Sec.  680.420. The Department 
notes, however, that if title I adult and dislocated worker funds are 
used for these activities, they must be done concurrently or in 
coordination with any training activities in WIOA sec. 134(c)(3)(D)(i)-
(vii). The Department has added regulatory text to clarify this point 
at Sec.  680.350.
    The Department agrees with the suggestion that ``registered 
participant'' be changed to ``participant'' and has made this change in 
the regulatory text. The Department has added ``as determined 
appropriate by the Local WDB'' to proposed Sec.  680.150(c) to clarify 
how the determination is made to provide follow-up services. This 
addition is consistent with the statutory text at section 
134(c)(2)(xiii), which states that follow-up services are provided ``as 
appropriate.''
    The Department declines to make any change in regulatory text to 
allow the provision of supportive services for adult and dislocated 
workers for up to a year after exit; section 134(d)(2)(A) of WIOA 
requires that adults and dislocated workers must be participants to 
receive supportive services. The Department also declines to modify the 
regulatory text about the provision of career services. Career services 
are defined in 20 CFR 678.430, which is the one-stop section of the 
joint regulation, and they may be provided by any partner program. The 
Department has decided that the use of prior interviews, evaluations, 
and assessments of participants for the purpose of eligibility is to be 
determined by State and local policies.
Section 680.160 How are career services delivered?
    Comments: A few commenters expressed opposition to a requirement 
that Local WDBs obtain a waiver before providing career services. One 
of these commenters stated that the NPRM requirement that Local WDBs 
receive a waiver before being allowed to deliver career services would 
be a major change and a significant burden because getting a waiver is 
not an easy process. This commenter recommended that the Department 
provide States with an easier, quicker process for requesting waivers.
    A commenter recommended that, at a minimum, a waiver request should 
address: (1) Why the waiver is necessary, (2) how granting the waiver 
would provide service to the affected area superior to that which would 
have been provided as the result of a competitive process; (3) why the 
prospective designee is the best choice as the local one-stop operator 
or provider of career services; and (4) what process was used in making 
the determination (including the specific data that supports it).
    Department Response: For a Local WDB to provide career services, it 
must meet the requirements in WIOA sec. 107(g)(2), which allows for 
Local WDBs to be providers of career services of title I career 
services for adult and dislocated workers with the agreement of the CEO 
in the local area and the Governor. Although there is a waiver 
requirement for Local WDBs to provide training services under WIOA sec. 
107(g)(1)(B) and Sec.  679.410(c), which documents how Local WDBs may 
apply for a waiver with the State, there are no waiver requirements for 
Local WDBs to provide career services. No change is made in the 
regulatory text in response to these comments.
Section 680.170 What is the individual employment plan?
    The Department has moved the proposed Sec.  680.180 to Sec.  
680.170, so that the work experience regulation that was proposed as 
Sec.  680.170 can be renumbered as Sec.  680.180, closer to the 
transitional jobs provision at Sec.  680.190. In Sec.  680.170, the 
regulation also replaces the words ``case manager'' with ``career 
planner'' to be more consistent with the nomenclature used in WIOA.
    Comments: A few commenters requested clarification on the role of 
IEPs for all services categories of individuals and programs and urged 
the Department to ensure consistency at the program enrollment level, 
including when an IEP is required to be started/

[[Page 56116]]

completed and some flexibility in serving the general public job 
seeker. Another commenter asked whether: (1) The development of an IEP 
requires participation under WIOA title I, (2) this service can be 
delivered by ES staff, or (3) this determination can be made at the 
local level.
    Department Response: The Department strongly encourages the use of 
IEPs as a tool in the career planning process. However, there is no 
sequence of service requirement in WIOA and determining when an IEP is 
appropriate for individuals is a local decision. The Department 
encourages Local WDBs to develop policies and procedures for the 
appropriate use of IEPs.
    An IEP is an individualized career service and can be provided 
under either WIOA title I or the ES (as amended by WIOA title III and 
as described in Sec.  652.206), which is decided locally and is a part 
of the Memorandum of Understanding (MOU) governing the role of the ES 
in the one-stop delivery system.
Section 680.180 What is an internship or work experience for adults and 
dislocated workers?
    The Department has moved this proposed Sec.  680.170 to Sec.  
680.180, so that this work experience regulation is renumbered to be 
closer to the transitional jobs provision at Sec.  680.190.
    Comments: A commenter stated that it is important that WIOA 
participants who are placed in work experience or internships are fully 
protected by the nation's wage and hour laws and regulations. This 
commenter recommended that the Department revise proposed Sec.  680.170 
by deleting the language allowing for paid and unpaid work experiences 
and adding a cross reference to the U.S. Department of Labor Wage and 
Hour Division (WHD) regulations and guidance concerning unpaid 
internships. Similarly, a commenter requested clarification on when 
work experience can be unpaid, including assessment of the implications 
of unpaid work as a potential violation of the Fair Labor Standards 
Act.
    Department Response: The Department notes the comments and has 
added language to the regulatory text stating that internships and work 
experiences under WIOA may be paid or unpaid, as consistent with other 
laws, including the Fair Labor Standards Act. The Department will 
continue to use guidance and technical assistance to assist grantees in 
determining how WIOA intersects with other laws.
    Comments: A commenter encouraged the Department to maintain a broad 
definition of work experience that is applicable to all core programs, 
reasoning that work experience is an invaluable tool to engage 
businesses and to support job seekers in overcoming barriers by gaining 
experience that leads to unsubsidized employment.
    Department Response: The Department agrees with the commenter's 
suggestion and makes no change in the regulatory text.
    Comments: A commenter asked whether there were limitations on the 
percentage of funds to be utilized for paid work experience.
    Department Response: Work experiences may be paid or unpaid, 
consistent with the Fair Labor Standards Act and other applicable laws. 
Transitional jobs is a type of paid work experience described in 
Sec. Sec.  680.190 and 680.195. A Local WDB may use up to 10 percent of 
funds allocated to the local area under section 133(b) of WIOA to 
provide transitional jobs. (Sec. 134(d)(5) of WIOA.) Transitional jobs 
also are subject to certain eligibility criteria along with 
comprehensive career and supportive services requirements. In addition 
to transitional jobs, other work experiences may be paid; to be 
eligible for these work experiences an individual must meet adult and 
dislocated worker program eligibility and there is no requirement for 
comprehensive career and supportive services. These other types of paid 
work experiences are not subject to a statutory funding cap.
    Comments: Another commenter encouraged the Department to allow 
Local WDBs to determine the appropriate timeframe for internships and/
or work experience based upon multiple factors, including industry 
standard and/or practice and the sector-based accepted length of time 
needed to acquire one or more relevant skills and/or industry-
recognized credentials.
    Department Response: The Department has set no minimum or maximum 
duration requirements for work experiences. These factors may be used 
by Governors and Local WDBs in making such determinations.
Section 680.190 What is a transitional job?
    Comments: Many commenters asked for clarification of ``transitional 
jobs'' versus ``work experience;'' including exceptions to the 10 
percent cap on transitional jobs, the similarities between transitional 
jobs and work experiences, and distinctions from OJT.
    Another commenter expressed concern that the distinctions between 
transitional jobs and OJT contracts in the NPRM are not clear enough 
and recommended that the Department expand on the differences in the 
Final Rule several ways: (1) Unlike OJT, the program provider should 
act as employer of record and assume all responsibilities of the 
employer-employee relationship; (2) transitional jobs require a 100 
percent wage subsidy, while OJT subsidize up to 75 percent of wages; 
(3) funds for transitional jobs support all components of the service 
strategy; (4) transitional jobs should be targeted at those job seekers 
most in need of intervention; and (5) transitional jobs may be 
structured as offsite placements with private-sector, public-sector, or 
nonprofit employers or as in-house social enterprise or work crew 
placements.
    Department Response: The Department agrees with the recommendation 
of some commenters and has added language to Sec.  680.180, which 
defines what an internship or work experience is for adults and 
dislocated workers and clarifies that transitional jobs are considered 
to be a type of work experience. The Department also has moved proposed 
Sec. Sec.  680.830 and 680.840 to Sec. Sec.  680.190 and 680.195 
respectively.
    The Department agrees with the comments made about the OJT 
contracts, i.e., that in transitional jobs programs the program 
provider may act as the employer of record; however, there may be a 
joint employment relationship between the worker, the firm in which the 
worker is placed, and the program provider. The Department has added 
regulatory text defining transitional jobs as providing an individual 
with work experience that takes place within the context of an 
employee-employer relationship, in which the program provider may act 
as the employer, and with an opportunity to develop important workplace 
skills. The Department will provide further guidance and technical 
assistance on transitional jobs programs, including best practices.
    Comments: Some commenters asked the Department to define 
``inconsistent work history.'' One of these commenters also requested a 
substantive quantifiable definition of the term ``chronic 
unemployment.'' One commenter requested that the Department define 
``transitional jobs'' and asked for clarification of the required funds 
for career services and supportive services that must be provided with 
transitional jobs. A couple of commenters recommended that the 
Department strengthen the definition of ``transitional jobs'' with 
further guidance and technical support to States and localities. These 
commenters also

[[Page 56117]]

recommended that the Final Rule reiterate that the term means ``wage-
paid'' subsidized employment consistent with other definitions in 
Federal law and agency guidance. Similarly, another commenter 
recommended that the Department define ``transitional jobs'' as ``time-
limited wage-paid experiences that are subsidized for individuals with 
barriers to employment who are chronically unemployed or have an 
inconsistent work history.''
    Department Response: The Department has decided that the 
definitions of ``inconsistent work history'' and ``chronic 
unemployment'' should be left to the Local WDBs and has added language 
to the regulatory text in Sec.  680.190 to reflect this. The Department 
encourages Local WDBs to utilize information such as an individual's 
labor market history, unemployment status, durations of unemployment, 
long-term unemployment, and other factors that the Local WDB may 
determine appropriate for defining these terms. The Department has 
added language to better define transitional jobs, including adding the 
terms ``time-limited'' and ``wage-paid'' in Sec.  680.190. WIOA 
requires transitional jobs to include both comprehensive and supportive 
services. Local WDBs determine which comprehensive and supportive 
services are appropriate for each individual.
    Comments: One commenter recommended that the Department and the 
Internal Revenue Service (IRS) identify an acceptable means of paying a 
training stipend that does not trigger the Patient Protection and 
Affordable Care Act (PPACA) regulations. Another commenter recommended 
specific language to amend proposed Sec.  680.830 (as explained above, 
renumbered in the Final Rule to Sec.  680.190) to articulate that 
people who participate in transitional jobs are not counted toward 
labor participation rates, that is, not counted as ``employed persons'' 
by the BLS.
    Further, this commenter and others asserted that workers in 
transitional jobs should be classified as employees rather than 
contractors or trainees and should be subject to protections such as 
wage and hour laws, minimum wage laws, unemployment insurance, and 
workers compensation.
    Department Response: The ACA employer responsibility provisions are 
governed by the IRS and any training and employment agreements the 
grantees make may be subject to those provisions. The Department 
encourages grantees to utilize IRS resources and guidance when 
determining those responsibilities. The Department will issue 
subsequent guidance and technical assistance to help identify 
appropriate IRS resources and guidance. Transitional jobs and other 
work-based training often establish an employer-employee relationship 
that must follow applicable laws and regulations that govern such 
relationships, including: Wage and hour laws, minimum wage laws, 
unemployment insurance, and workers' compensation.
    The suggestion that transitional jobs not count in the labor force 
participation rate that is captured by the Current Population Survey 
that the BLS administers is not germane to WIOA or these regulations.
    Comments: A couple of commenters recommended that transitional jobs 
programs be targeted at populations with multiple employment barriers 
and people with sporadic, problematic and inconsistent work histories 
within the 2 years prior to engaging in the program. These commenters 
recommended targeting people experiencing homelessness; opportunity 
youth; people reentering communities from prison and those with 
criminal records; long-term recipients of TANF, SNAP and other public 
benefits; low-income noncustodial parents; and other chronically 
unemployed people.
    Some commenters recommended that allowable use of funds should 
include: Wages paid to transitional jobs program participants during 
their subsidized job placement; funding for employment-related case 
management and support such as transportation vouchers and clothing 
allowances; funding for job retention services for no fewer than 6 
months after placement in a subsidized job; supporting integration of 
literacy, adult basic education, training, and career advancement 
resources; and supporting program capacity-building needs, such as 
adding additional staff and/or infrastructure improvements as 
appropriate.
    Department Response: The Department considers these recommended 
criteria to be appropriate factors that a Local WDB may use when 
determining who is eligible for a transitional job and which groups to 
target. Thus, no change is made in the regulatory text. The Department 
will provide further guidance and technical assistance as appropriate.
    Allowable uses of transitional jobs funds include wages to the 
participant and supportive services such as transportation vouchers. 
The Department encourages local staff to align services and provide the 
appropriate mix of services to meet individuals' needs. Staff and 
infrastructure improvements are not allowable uses of transitional jobs 
funds.
    Comments: Commenters asserted that transitional jobs are typically 
3 to 9 months and seldom longer than 1 year. They recommended that 
transitional job arrangements include the following in order to avoid 
displacement of incumbent workers: Strong prohibitions against 
substitution and displacement; protections for recently laid-off 
employees, workers on leave, and striking workers; and preservation of 
recall rights under collective bargaining agreements for union 
employees of transitional job employer partners.
    Department Response: The regulations at Sec.  683.270 contain 
safeguards against displacement of employees that are applicable to 
WIOA title I employment and training activities, including transitional 
jobs. The Department also added Sec.  680.840, which clarifies that 
funds for work-based training and work experiences may not be used to 
fill openings that resulted from a labor dispute.
    Comments: Commenters recommended several ways to maximize the 
likelihood that workers are retained in unsubsidized employment after a 
transitional job program: (1) Monitoring participants and providing 
retention services for at least 6 months following unsubsidized job 
placement; (2) regular, frequent follow-up contacts by retention 
specialists; (3) ongoing retention-focused activities such as 
workshops, peer learning groups and support groups; (4) retention 
incentives in the form of monetary bonuses or nonmonetary incentives 
such as child care services; and (5) reemployment services for workers 
who are terminated from unsubsidized employment. The commenters also 
recommended several specific structure elements and polices that they 
asserted are essential: (1) A flexible length of time in subsidized 
employment based on the skill development needs of the individual; (2) 
subsidized employment offered should be no fewer than 20 hours per week 
and workers should be allowed to remain in the subsidized employment 
until unsubsidized employment slots are available for transition; (3) 
employers should support participant development and skill building; 
and (4) personal contact and consistent follow-up should be provided 
among program staff, participants, and employment supervisors, as well 
as opportunities to work with a case manager for the participant to 
address serious issues if they arise.
    Department Response: The Department declines to propose a

[[Page 56118]]

minimum or maximum duration for transitional jobs that could create 
unnecessary restrictions that may prevent an individual from obtaining 
unsubsidized employment. The Department also declines to create a one-
size-fits-all approach to transitional jobs, and considers these 
decisions are best made by the Local WDB and the individual's career 
planner. No changes have been made to the regulatory text in response 
to these comments. The Department will address these issues further 
through guidance and technical assistance.
    Comments: A commenter recommended that proposed Sec.  680.830 (as 
explained above, renumbered in the Final Rule to Sec.  680.190) be 
amended to refer to ``time-limited work experience'' to be consistent 
with the language and intent of WIOA sec. 134(d)(5).
    Department Response: The Department agrees with this comment and 
has amended the language in Sec.  680.190 to include the phrase ``time-
limited work experience.''
    Comments: Another commenter asked what is the employer 
reimbursement rate and contract length?
    Department Response: The employer reimbursement rate is to be 
determined by the Local WDB and can be up to 100 percent. The 
Department encourages Local WDBs to work with employers that are 
willing to provide a certain percentage of the cost of the transitional 
job.
Section 680.195 What funds may be used for transitional jobs?
    Comments: Some commenters requested clarification on the 10 percent 
limit on use of funds. In particular, some commenters asked if the 10 
percent limit would apply to work experience as an activity. A State 
WDB asked whether all adult and dislocated workers transitional job 
work experience is subject to the 10 percent cap.
    Department Response: The Department considers transitional jobs to 
be a targeted service that includes comprehensive career and supportive 
services. Non-transitional job work experiences have no requirement 
that they must be paid or unpaid, and they do not have the same 
requirements for comprehensive career and supportive services. They 
also are not subject to the 10 percent funding cap that transitional 
jobs are. The Department has added text to the regulatory text to 
further clarify the 10 percent cap and that transitional jobs, defining 
them as a certain type of work experience which is targeted to a 
specific population that is: ``chronically unemployed'' or has an 
``inconsistent work history.''
    Comments: A commenter asked for clarification on what 
``comprehensive career services'' means when required to be part of 
transitional jobs, and asked if it includes basic career services, 
individualized career services, or both, and if there is a sequence of 
services before service can be provided.
    Department Response: Comprehensive career services may include both 
basic and individualized career services and are based on the needs of 
the participant. Comprehensive career services and supportive services, 
which are required to be provided as part of any transitional jobs 
strategy, are not subject to the 10 percent cap described at Sec.  
680.195. However, the Department is providing flexibility to allow for 
these services to be provided with the funds set-aside for transitional 
jobs. Local areas determine which comprehensive and supportive services 
are appropriate for each individual. There is no sequence of service 
required.
3. Subpart B--Training Services
    Training services are discussed at Sec. Sec.  680.200 through 
680.230. WIOA is designed to increase participant access to training 
services. Training services are provided to equip individuals to enter 
the workforce and retain employment. Training services may include, for 
example, occupational skills training, OJT, registered apprenticeship 
(which incorporates both OJT and classroom training), incumbent worker 
training, pre-apprenticeship training, workplace training with related 
instruction, training programs operated by the private sector, skill 
upgrading and retraining, entrepreneurial training, and transitional 
jobs. Training services are available for individuals who, after 
interview, evaluation or assessment, and case management are determined 
to be unlikely or unable to obtain or retain employment that leads to 
self-sufficiency or higher wages than previous employment through 
career services alone. The participant must be determined to be in need 
of training services and possess the skills and qualifications to 
participate successfully in the selected program. It also must be 
determined that they are unlikely or unable to retain employment that 
leads to self-sufficiency or higher wages. Some participants may need 
additional services to assist their vocational training, such as job 
readiness training, literacy activities including English language 
training, and customized training.
    Comments: Comments generally were supportive of the Department's 
flexible approach to the delivery of training services for the WIOA 
title I adult and dislocated worker programs.
    Department Response: The Department has updated and clarified 
language regarding how registered apprenticeship and other 
apprenticeships may be utilized as a training solution for adult and 
dislocated worker customers.
Section 680.200 What are training services for adults and dislocated 
workers?
    Comments: Two commenters strongly recommended that local 
flexibility be preserved as it relates to determining the appropriate 
availability, structure, and mix of training services that are offered 
locally to individuals and employers. Another commenter encouraged the 
Department to avoid restrictive standards and allow customization of 
varying training practices because there is slower adoption among small 
businesses of newer best practices. This commenter stated that this 
flexibility is particularly important when considering the 
effectiveness of competency-based training versus number of hours 
trained.
    Department Response: The Department agrees that it is important to 
maintain local flexibility to make decisions about the appropriate mix 
of career and training services and has provided local flexibility in 
making those determinations.
    Comments: A few commenters provided input on pre-apprenticeships 
and non-registered apprenticeships. One commenter encouraged the 
Department to add more flexibility into the regulations as they relate 
to pre-apprenticeships and non-registered apprenticeships so that 
manufacturers can develop and use programs that best meet their unique 
needs. Another commenter cautioned the Department not to discriminate 
against non-registered apprenticeships because many smaller employers 
rely on these types of programs. One commenter recommended that 
employer-sponsored craft training programs that are not registered, but 
that lead to an industry-recognized credential, should have an 
automatic initial ETP determination and then, be required to satisfy 
continued eligibility requirements after 1 year.
    Department Response: WIOA sec. 122(a)(2)(B) provides automatic 
qualification for registered apprenticeship programs on eligible 
training provider lists (ETPLs) and WIOA in general provides an overall 
emphasis on registered apprenticeship

[[Page 56119]]

programs throughout the one-stop delivery system. The Department has 
used this emphasis to highlight the unique flexibilities the one-stop 
delivery system has in making use of registered apprenticeship programs 
to provide training services, including Individual Training Accounts 
(ITAs) and OJT. This in no way restricts pre-apprenticeship programs 
and non-registered apprenticeship programs from being an ETP according 
to the criteria in WIOA sec. 122(a). These training providers, in order 
to receive ITA payments, must go through the same eligibility criteria 
as other training providers on the ETPL. The Department considers 
programs that lead to an industry-recognized credential as valuable 
providers of training, and these programs are welcome to apply to 
become ETPs. The Department declines to make changes to the regulatory 
text in response to these comments.
    Comments: One commenter encouraged the Department to allow adult 
education providers to provide workforce preparation rather than 
training in sector work. The commenter stated that if community-based 
adult education providers were required to offer sector training, most 
of these providers would have to be completely transformed, would 
require significant capacity boosts, would be less likely to reach the 
hard-to-serve, and would have drastically reduced enrollment.
    One commenter requested clarification on the role of adult basic 
education.
    Department Response: Under WIOA sec 134(c)(3)(D)(x), title I adult 
and dislocated worker funds may be used to support adult education and 
literacy activities, provided concurrently or in combination with other 
training services. The Department has added regulatory text clarifying 
this use of WIOA title I adult and dislocated worker funds in Sec.  
680.350. This regulation involving appropriate uses of adult education 
and literacy activities only applies to WIOA title I adult and 
dislocated worker funds.
    Comments: A commenter expressed support for having both OJT and 
classroom training available to adult and dislocated workers. Two 
commenters supported the inclusion of integrated English literacy/
civics education programs in WIOA. These commenters recommended that 
the Departments of Labor and Education provide diverse examples of how 
such programs may be designed, including ways in which they may 
represent components of sector partnerships and/or career pathways 
initiatives, and how they may facilitate the economic, linguistic, and 
civic integration of participants.
    Department Response: The Department of Labor will work with the 
Department of Education to provide additional guidance and technical 
assistance on sector partnership and career pathways initiatives under 
WIOA, including how to integrate programs such as those the commenters 
highlighted.
    Comments: One commenter described the benefits of entrepreneurship 
training and encouraged the Department to revise performance indicators 
that would create a barrier to the inclusion of entrepreneurship 
training in the WIOA public workforce system.
    A few commenters requested clarification on what constitutes 
entrepreneurial training as cited at sec. 134(c)(3)(D)(vii) of WIOA.
    Department Response: Entrepreneurial training is an allowable 
training activity, and the Department will issue guidance and technical 
assistance to support its use and to address performance 
accountability. Additionally, the Department has addressed instances 
where quarterly wage records are not traditionally available for 
performance accountability purposes, as may be the case where 
participants have received entrepreneurial training, in 20 CFR 677.175 
(see Joint WIOA Final Rule).
    Comments: Two commenters recommended that the regulations 
explicitly recognize the need for direct support professionals to 
address the growing ``direct support worker crisis''.
    Department Response: WIOA sec. 108(b), which lists the required 
contents of local plans, states that the plans must include an analysis 
of existing and emerging in-demand industry sectors and occupations 
including the employment needs of employers in those sectors and 
occupations. Training programs for WIOA title I adult and dislocated 
worker programs are to be linked to in-demand industries and 
occupations in the local plan. The Final Rule does not explicitly 
recognize any specific industry or occupation needed to meet current 
workforce needs because these needs may change and often are based on 
State and local labor markets.
    Comments: One commenter suggested that the regulations should 
better articulate the important role for digital literacy instructions, 
reasoning that these skills are critical to job advancement as well as 
educational credentials, including high school equivalency diplomas. 
Additionally, this commenter urged the Department to adopt a flexible 
framework as it relates to the integration of occupational skills 
training, which the commenter stated should include a student-centered 
approach in which co-enrollment in workforce education programs be 
optional rather than required.
    Department Response: The Department considers digital literacy to 
be a pre-vocational service or a workforce preparation activity, both 
of which are considered to be individualized career services and not 
training services. The Department agrees that digital literacy is an 
important skill to succeed in the 21st century workforce, but considers 
it to be a service that may be made available based on individual need 
as determined by the local area. While WIOA encourages program 
alignment, and co-enrollment is one way to align service delivery, the 
Department does not require co-enrollment across programs.
    Comments: A commenter suggested that the Department provide the 
list of training services found in WIOA in the regulations rather than 
simply referencing the statutory citation.
    Department Response: The Department agrees with the recommendation 
and has adjusted the regulatory text of Sec.  680.200 to include the 
list of training services provided in WIOA sec.134(c)(3)(D).
    Comments: Commenters requested clarification on whether alternative 
secondary school (formerly GED) preparation is considered a career 
service or a training service.
    Department Response: The Department considers a program that leads 
to a secondary school diploma to be a training service. A program that 
leads to a secondary school diploma or its equivalent can be eligible 
as a State ETP, see Sec.  680.420.
Section 680.210 Who may receive training services?
    Comments: A commenter asked who would be responsible for 
determining what constitutes self-sufficiency when determining who may 
receive training services under proposed Sec.  680.210(a)(1).
    Department Response: Under WIOA sec. 134(a)(3)(A)(xii), States may 
use statewide funds reserved by the Governor for adopting, calculating, 
or commissioning for approval an economic self-sufficiency standard for 
the State that specifies the income needs of families, by family size, 
the number and ages of children in the family, and sub-State 
geographical considerations. Under WIOA sec. 134(d)(1)(A)(x), local 
areas may use employment and training funds to adjust the State 
standard for local considerations, or can adopt, calculate, or 
commission for approval a

[[Page 56120]]

self-sufficiency standard for the local area that specifies the same 
factors required of the State standard. Under WIOA sec. 134(c)(3)(A)(i) 
individuals who receive training must be unlikely or unable to obtain 
or retain employment that leads to economic self-sufficiency or wages 
comparable to or higher than wages from previous employment through 
career services. Additionally, they must be in need of training 
services to obtain or retain employment that leads to economic self-
sufficiency or wages comparable to or higher than wages from previous 
employment. The one-stop center is responsible for determining if an 
individual meets the self-sufficiency standard set by this process.
    Comments: A commenter requested clarification about the division of 
responsibilities between one-stop centers and local service providers, 
including clarification on who is responsible for determining who can 
receive training services.
    Department Response: The Department considers the ultimate 
responsibility for determining who can receive training services to 
rest with the Local WDB. However, through the service procurement 
process and other arrangements established through the local MOU, the 
board may delegate those responsibilities to the one-stop center or 
local service providers.
    Comments: A commenter disagreed with the language in proposed Sec.  
680.210(a) that indicates that a determination needs to be made that 
the training will result in receipt of wages higher than wages from 
previous employment, reasoning that economic conditions can make this 
difficult.
    Department Response: The Department notes that Sec.  680.210(a) 
mirrors the requirements for title I adult and dislocated worker 
services found in WIOA sec. 134(c)(3)(A), and that training that leads 
to a ``comparable wage'' also is allowed for individuals to receive 
training services. No changes have been made to the regulatory text in 
response to the comments.
    Comments: A commenter recommended that the Department make efforts 
to inform employers of the availability of training services to assist 
workers on short-term or long-term disability programs.
    Department Response: The Department considers this to be an example 
of an appropriate business or employer service that may be provided 
through the one-stop delivery system. While the Department will not add 
language to the regulatory text mandating specific employer services, 
the Department does recognize the importance of ensuring quality 
services for individuals with disabilities and will utilize guidance 
and technical assistance to ensure best practices in serving businesses 
and individuals with disabilities.
    Comments: A commenter suggested that the regulations should direct 
one-stop centers to take into account older workers' different training 
needs and lesser access to financial aid, and make sure that older 
workers are not discriminated against in access to WIOA-funded ITAs.
    Department Response: Older workers are identified as a target 
population for WIOA services, based on their inclusion in the 
definition of individuals with a barrier to employment in WIOA sec. 
3(24). The Department will issue guidance and technical assistance on 
best practices in providing career and training services to older 
workers.
Section 680.220 Are there particular career services an individual must 
receive before receiving training services under the Workforce 
Innovation and Opportunity Act?
    Comments: One commenter stated that there should be no required 
sequence of services prior to providing training services to allow more 
flexibility in meeting the needs of customers. Another commenter asked 
whether there is a frequency rate permitted to bypass career services 
and whether bypassing career services before training was considered to 
be an exception.
    One commenter requested further guidance and direction on how Local 
WDBs should document the circumstances that justify determinations that 
training services should be provided.
    Department Response: There is no sequence of service requirement 
and therefore, no requirement that career services must be provided 
before training services. Section 680.220(b) states, if training 
services are provided without career services, the Local WDB must 
document the circumstances that justified its determination to provide 
training without career services. Eligibility for training must be 
determined by an interview, evaluation, or assessment, and career 
planning or any other method through which the one-stop partner or 
partners can obtain enough information to make an eligibility 
determination for training services. Paragraph (b) of Sec.  680.220 
requires a case file that includes a determination of need for training 
services, based on the criteria discussed in Sec.  680.220(a). There is 
no frequency requirement; the need for training services should be 
determined prior to their provision. There have been no changes to the 
regulatory text in response to these comments.
    Comments: Several commenters requested clarification as to how far 
back an assessment could have been conducted to satisfy the 
prerequisite for training services.
    Department Response: The Department does not mandate a certain 
length of time that previous assessments may go back; however, the 
Department expects that the previous assessments must be recent. The 
Department recommends that Governors and Local WDBs develop policies 
for the use of recent assessments that are appropriate for the 
individual and the one-stop center. The recent assessment must have 
sufficient information to make an eligibility determination for 
training services.
    Comments: A commenter recommended replacing the references to 
``eligibility'' and ``eligible'' in proposed Sec.  680.220(a) with 
``determined appropriate,'' ``suitable,'' or ``ability to benefit'' to 
make it clear that this is not an additional eligibility determination 
beyond the eligibility determination conducted in Sec.  680.110.
    Department Response: WIOA sec. 134(c)(3)(A) refers to 
``eligibility'' for training services and this language is incorporated 
in the regulatory text. The Department recognizes that there are two 
types of eligibility--eligibility for program services and eligibility 
for training services. An individual must meet program service 
eligibility to be considered for training service eligibility.
    Comments: A commenter stated that the proposed steps required 
before a participant can receive training are appropriate for a 
customer who is in career transition, but questioned the 
appropriateness of the path where an employed worker is in need of 
skills upgrade to achieve economic self-sufficiency.
    Another commenter encouraged the addition of a provision that 
training for jobs that fall below economic self-sufficiency standards 
also must include ongoing training post-hire for career ladders within 
the industry and take into consideration other factors including 
benefits, retirement, vacation, and education that can mitigate and 
improve lower wage jobs.
    Department Response: The steps before a participant can be 
determined eligible for training services in the regulatory text are 
the minimum required by WIOA sec 134(c)(3)(A). The Department allows 
flexibility for local areas to develop methods to provide

[[Page 56121]]

services for individuals in need of a skills upgrade to achieve 
economic self-sufficiency. As part of the training eligibility, 
training services provided must be determined to lead to economic self-
sufficiency or wages comparable to or higher than previous employment.
Section 680.230 What are the requirements for coordination of Workforce 
Innovation and Opportunity Act training funds and other grant 
assistance?
    Comments: A commenter suggested that the Department revise the 
regulations to require, rather than recommend, that one-stop centers 
and partners take into account the full cost of training, including the 
cost of supportive services, when coordinating grant assistance.
    Department Response: The Department considers the full cost of 
training services to be an important factor when coordinating 
assistance from other grants or resources. The Department strongly 
encourages this coordination and consideration be taken into account. 
WIOA allows for one-stop centers or partners to make this a 
consideration and does not require it. Therefore, the Department has 
changed ``should'' to ``may'' in Sec.  680.230(a).
    Comments: Some commenters recommended revisions to the proposed 
regulations as they relate to reimbursement of WIOA funds for 
participants who eventually receive Pell Grants. Specifically, because 
of the difficulties associated with implementing the proposed 
framework, these commenters recommended that WIOA funds not be 
reimbursed in situations where a Pell Grant is subsequently awarded 
after a one-stop center has paid for training. A commenter asked 
whether required educational fees are considered part of the training 
expenses or education-related expenses. This commenter sought 
clarification on this issue, but recommended that they be considered 
training expenses and not education-related expenses.
    Department Response: The Department maintained the requirements of 
Pell Grant reimbursement, as described in Sec.  680.230(c). WIOA sec 
134(c)(3)(B)(ii) requires reimbursements to local areas from Federal 
Pell Grants to an individual who received WIOA title I training 
services while his or her Pell Grant was pending. The Department agrees 
with the commenters' suggestion that educational fees be considered 
part of the training expenses that should be reimbursed to the local 
area and has added language in Sec.  680.230(c) to require this 
reimbursement.
    Comments: A commenter stated that WIOA funds should be directed 
toward Temporary Assistance for Needy Families (TANF) recipients to 
enhance the work and training needs of the public assistance population 
without a requirement that TANF funds first be considered. Furthermore, 
the commenter stated that when resources in a local area are limited, 
local areas are best suited to determine which funds are dedicated to 
provide training and WIOA should be a primary funding source.
    Department Response: The Department declines to make a change in 
the regulatory text at Sec.  680.230(b). WIOA funds supplement other 
sources of training grants and do not supplant them.
    Comments: To ensure consistency with previous Federal guidance, a 
commenter suggested that the Department add language to Sec.  680.230 
to clarify that education and training benefits earned by veterans are 
not required to be coordinated with training funds available under WIOA 
title I.
    Department Response: While the Department declines to make a change 
in the regulatory text, it notes that the Department of Veterans 
Affairs benefits for education and training services are not included 
in the category of ``other sources of training grants'' listed in Sec.  
680.230(b). Therefore, veterans and spouses are not required to first 
use any available benefit entitlements associated with their military 
service before being considered eligible for WIOA funded training, and 
one-stop centers are not required to consider the availability of those 
funds.
    Comments: Some commenters recommended that the Department clarify 
that WIOA title I funds can support title II adult education programs, 
as the WIOA sec. 134(c)(3) definition of training includes ``adult 
education and literacy activities, including activities of English 
language acquisition and integrated education and training programs'' 
at sec. 134(c)(3)(x). Commenters asserted that this clarification was 
needed as expeditiously as possible so that the planning processes in 
the States can proceed efficiently.
    Department Response: Under WIOA sec. 134(c)(3)(D)(x), title I adult 
and dislocated worker funds may be used to support adult education and 
literacy activities, provided concurrently or in combination with other 
training services. The Department has added regulatory text clarifying 
this use of WIOA title I adult and dislocated worker funds in Sec.  
680.350. This regulation involving appropriate uses of adult education 
and literacy activities only applies to WIOA title I adult and 
dislocated worker funds.
    Comments: Because availability of training assistance depends on 
whether participants have access to other sources to pay for training, 
a commenter strongly encouraged the Department to stress to Local WDBs 
the importance of the optional services outlined in Sec.  680.140 for 
individuals with disabilities.
    Department Response: The Department identifies in Sec.  680.140 all 
of the required and permissible WIOA title I adult and dislocated 
worker services that Local WDBs may provide. The Department considers 
the permissible activities described in Sec.  680.140(b) that may help 
individuals with disabilities to navigate among multiple services and 
activities to be important. The Department also has listed ``reasonable 
accommodations for individuals with disabilities'' to be an allowable 
supportive service in Sec.  680.900.
4. Subpart C--Individual Training Accounts
    Individual Training Accounts (ITAs) are key tools used in the 
delivery of many training services. The Department seeks to provide 
maximum flexibility to State and local programs in managing ITAs. These 
regulations do not establish the procedures for making payments, 
restrictions on the duration or amounts of the ITA, or policies 
regarding exceptions to the limits. The authority to make those 
decisions resides with the State or Local WDBs. The authority that 
States or Local WDBs may use to restrict the duration of ITAs or 
restrict funding amounts must not be used to establish limits that 
arbitrarily exclude eligible training providers.
    Through the one-stop center, individuals will be provided with 
quality and performance information on providers of training and, with 
effective career services, case management, and career planning with 
the ITA as the payment mechanism. ITAs allow participants the 
opportunity to choose the training provider that best meets their 
needs. Under WIOA, ITAs can more easily support placing participants 
into registered apprenticeship programs.
Section 680.300 How are training services provided?
    Comments: A commenter expressed support for the ability to pay an 
ITA at the beginning of the training program rather than on an 
incremental basis, because it would allow Local WDBs to budget and 
manage their ITAs much

[[Page 56122]]

more easily, eliminates the concern about putting customers into 
training that straddles 2 program years, and simplifies the 
determination of how much carry over funding to include in the next 
program year's budget.
    Department Response: The Department considers it important to 
maintain flexibility in how ITA payments are made to support Local WDBs 
to use the most effective payment mechanisms. There have been no 
changes to the regulatory text in response to these comments.
Section 680.320 Under what circumstances may mechanisms other than 
Individual Training Accounts be used to provide training services?
    Comments: A few commenters expressed support for the approach 
proposed in Sec.  680.320. One commenter expressed support for the 
opportunity to contract for services rather than rely solely on ITAs, 
potentially support streamlining and more effective administration and 
planning for training providers. Another commenter expressed support 
for the training of cohorts, allowing States and local areas to 
contract with providers to assist groups of participants through one 
contract for services with defined goals and outcomes, rather than the 
administratively burdensome process of having each individual 
participant request services from providers through an ITA. Another 
commenter supported the Department's detailed list of circumstances 
under which a mechanism other than an ITA may be used to provide 
training services.
    Several commenters provided input on funding mechanisms for 
training for individuals with barriers to employment. One commenter 
expressed support for allowing local areas to contract directly with 
training providers to supply training that will effectively service 
individuals with barriers to employment, expanding innovative and 
effective models for helping participants obtain industry-recognized 
credentials. Another commenter recommended that the Department 
recognize the need for coordination with vocational rehabilitation 
programs when addressing services for individuals with disabilities to 
avoid duplication of effort.
    Department Response: The Department generally received supportive 
comments about the use of alternative methods to ITAs. The Department 
encourages coordination with Vocational Rehabilitation programs when 
serving individuals with disabilities to ensure effective service 
delivery. No changes have been made to the regulatory text in response 
to the comments, but the Department is adding, ``and the local area has 
fulfilled the consumer choice requirements of Sec.  680.340'' to Sec.  
680.320(a), to ensure that the statutory requirement at WIOA sec. 
134(c)(3)(G)(ii)(I) is included. This provision requires that a local 
area have a full ITA system in place even if it decides to provide 
training through contracts because one or more of the situations in 
Sec.  680.320(a)(1) through (5) applies. Section 680.320(c) provides 
that the local plan describe the process to be used in all cases to 
select training under a contract to be consistent with WIOA sec. 
108(b)(16).
    Comments: A few commenters recommended that the Department clarify 
which individuals are considered to have a barrier to employment as a 
result of being an English language learner. Specifically, these 
commenters asserted that the preamble and the regulatory text differ in 
that one requires that three elements be met ((1) English language 
learners, (2) individuals who have low levels of literacy, (3) 
individuals facing substantial cultural barriers) while the other 
allows any one element as triggering categorization of having a barrier 
to employment. One commenter asked that the Department add a definition 
of ``ex-offender'' and encouraged the Department to include individuals 
with deferred sentences to be included within the definition because 
these individuals encounter similar barriers to employment as those 
individuals who actually spend time incarcerated. Another commenter 
asserted that the regulation should include employer incentives to 
encourage the hiring of ex-offenders.
    Department Response: WIOA sec. 3(24) defines ``individuals with 
barriers to employment,'' and WIOA sec. 3(24)(I) includes the following 
groups that qualify for this definition: ``Individuals who are English 
language learners, individuals who have low levels of literacy, and 
individuals facing substantial cultural barriers.'' The Department 
clarifies that if an individual meets any one of the three criteria in 
WIOA sec. 3(24)(I), that individual may be considered to have a barrier 
to employment. WIOA defines ``English language learner'' in WIOA sec. 
203(7) and is one of the criteria that may be met to be considered an 
individual with a barrier to employment. The Department also considers 
the definition of ``literacy'' provided in WIOA sec. 203(13) as the 
standard to be used for determining if an individual is considered to 
have low literacy, and therefore a barrier to employment. The 
Department will use guidance and technical assistance to States and 
Local WDBs to aid in determining when these elements are met. The term 
``offender'' is defined in WIOA sec. 3(38) and the Department considers 
this to be the basis by which an individual is determined to be an 
``ex-offender.'' The Department declines to alter the regulatory text 
to include employer incentives for hiring of specific groups.
    Comments: One commenter expressed support for the inclusion of 
``older individuals'' in the list of barriers to employment, reasoning 
that the aging community has more challenges than younger workers in 
regaining employment once it has been lost and are more likely to be 
among the long term unemployed. Two commenters requested that the 
Department define the duration of unemployment that must be reached for 
an individual to be considered a long term unemployed individual.
    Department Response: The Department generally defers to the Bureau 
of Labor Statistics (BLS) definition and will provide additional 
guidance to States and local areas on long-term unemployed.
    Comments: Another commenter urged the Department to provide 
flexibility and guidance to use ITA funds concurrently or successively 
with paid work experience or OJT, reasoning that this combined use of 
ITA/OJT or ITA/paid work experience would provide additional benefits 
to the participants.
    Department Response: The Department notes that there is no 
prohibition on the combined use of ITAs and OJT as well as any other 
contracted training services under WIOA sec. 134(c)(3)(G)(iv). These 
decisions must be based on individual need and they must be paying for 
separate program elements. There also is no prohibition on using career 
services, such as work experience, in combination with ITAs.
    Comments: A commenter asked how the Department defines 
``institution of higher education'' as the term relates to funding 
mechanisms for training services in proposed Sec.  680.320.
    Department Response: The term ``institution of higher education'' 
is defined in WIOA sec. 3(28); the Department has added this citation 
into the regulatory text in Sec.  680.320(a)(4).
    Comments: One commenter recommended a minor technical correction to 
proposed Sec.  680.320(a)(4) to replace the phrase ``will facilitate'' 
with ``in order to facilitate.''
    Department Response: The Department agrees with the commenter's 
suggestion and has made

[[Page 56123]]

this nonsubstantive correction in the regulatory text in Sec.  
680.320(a)(4).
Section 680.330 How can Individual Training Accounts, supportive 
services, and needs-related payment be used to support placing 
participating adults and dislocated workers into a registered 
apprenticeship program and support participants once they are in a 
registered apprenticeship program?
    In this section, a new paragraph (a) was created, and proposed 
paragraph (a) is now (a)(1). Similarly, proposed paragraph (b) is now 
(a)(2). Proposed paragraph (c) has been renumbered to (b), and the 
following proposed paragraphs (d) and (e) are now (c) and (d).
    Comments: A few commenters expressed support for allowing ITA 
funding to be used to pay for supportive services and needs-related 
payments to support the placement of a participant into a registered 
apprenticeship program. A commenter asked whether supportive services 
would be provided throughout a multi-year apprenticeship and whether 
supportive services would be provided to an employed individual 
participating in an apprenticeship. Additionally, the commenter asked 
how WIOA would assist an already employed worker who moves up the 
career ladder and is put into an apprenticeship either through OJT, 
ITA, or support services. Another commenter stated that one-stop 
centers should provide career services and supportive services during 
the final year of an apprenticeship because this is a crucial time that 
can directly lead to employment.
    Some commenters stated that there should be no limitations placed 
on program service funding, including incumbent worker funding, which 
these commenters described as possibly the most appropriate funding to 
serve apprentices. In regard to incumbent worker funding, these 
commenters said that some companies may select current employees to 
upskill in a registered apprenticeship program given the length of the 
investment and the increased likelihood of the individual remaining 
engaged.
    Department Response: The Department refers to the regulatory text 
in Sec. Sec.  680.900 through 680.920, the general requirements for 
supportive services. Supportive services may be used for both employed 
and unemployed individuals to support their participation in career 
and/or training services. Decisions about the provision of supportive 
services, including the duration, timing, and type, are to be made by 
the Local WDB.
    The Department refers to the regulatory text in Sec. Sec.  680.700 
through 680.750 and in particular Sec.  680.710, which discusses the 
requirements for OJT contracts for employed workers. Incumbent worker 
training may be an appropriate service that would help an individual 
move up a career ladder within an apprenticeship program.
    Comments: A commenter recommended that the Department revise 
proposed Sec.  680.330(b) (renumbered in regulatory text as Sec.  
680.320(a)(2)) to allow for payments from ITAs to non-profit, joint 
labor-management training to defray the cost of providing 
apprenticeship or pre-apprenticeship training for programs that do not 
charge ``tuition.'' This commenter suggested that these payments should 
include not only the pro-rata cost of delivering direct training to 
enrollees, but also should cover costs incurred to retain third-party 
providers. Two commenters stated that ITAs could be used to pay for 
pre-requisites for apprenticeship such as math courses, required 
education courses, and/or certifications as part of the work-based 
experience. Another commenter encouraged the Department to support the 
use of ITAs for competency-based apprenticeship models.
    Department Response: The Department agrees with the comment that 
the term ``tuition'' does not reflect the funding arrangements of 
registered apprenticeship programs and has changed the text in Sec.  
680.330(a)(2) to change it to ``Training services provided under a 
registered apprenticeship program'' to address this and be consistent 
with the way the Department refers to other types of training. The 
other suggestions from commenters about allowable uses for ITA funds 
are acceptable as long as the providers of those services are on the 
ETPL. No other changes have been made to the regulatory text in 
response to the comments.
    Comments: A commenter recommended that the regulations should allow 
for contracted apprenticeship programs as well as the placement of 
trainees into these programs solely through the ITA system, which the 
commenter described as not allowing for the easy organization of 
cohort-based programs. This commenter asserted that cohort-based 
apprenticeships and pre-apprenticeships can work with students 
recruited through the one-stop delivery system as well as those 
recruited from outside the system but would require a threshold number 
of trainees to be cost effective. The commenter concluded that the 
availability of trainee cohort classes in apprenticeship and pre-
apprenticeship programs is a cost-effective approach to training.
    Department Response: The Department considers that these types of 
training cohorts are allowable provided that the individuals meet the 
training eligibility requirements and the training providers are on the 
ETPL.
    Comments: A commenter expressed the desire to be able to use ITAs 
to pay for apprenticeship programs that are not on the ETPL and that 
can last for many years to ensure that participants receive the 
training needed and that the local area is able to capture all 
applicable credentials received for performance purposes. Similarly, a 
commenter asked how long WIOA enrollment lasts past the 6 months of OJT 
if an apprenticeship lasts multiple years. This commenter also asked 
how a credential is documented if a WIOA participant exits the system 
prior to completion of the apprenticeship.
    Department Response: To receive funds from an ITA, the training 
provider must be on the ETPL. The Department encourages interested 
providers to apply to be ETPs. The Department is issuing guidance about 
the credential measures in performance. WIOA enrollment is governed by 
the definitions of ``participant'' and ``exit'' in 20 CFR 677.150 (see 
Joint WIOA Final Rule). Local areas can develop ITA contracts within 
the framework of these definitions and the requirements for ITAs. 
Training services should be provided based on the needs of the 
individual and ITAs should be structured to address those needs.
    Comments: To expand pre-apprenticeships and apprenticeships, some 
commenters recommended that the one-stop centers be given authority to 
initiate the application for registered apprenticeships. A commenter 
recommended that one-stop centers build and maintain relationships with 
apprenticeship programs that operate within their region to provide a 
point of contact for individuals that would like to enroll. To serve 
individuals enrolled in pre-apprenticeship or registered apprenticeship 
programs best, a commenter suggested including a regulatory requirement 
that the one-stop delivery system receive technical assistance to help 
expand one-stop center capacity to serve women entering these training 
programs.
    Department Response: There is no prohibition in WIOA on one-stop 
centers initiating applications for registered apprenticeships. The 
Department encourages Local WDBs to partner with registered 
apprenticeships, work to align service delivery, and make

[[Page 56124]]

appropriate arrangements to build on these partnerships. The Department 
encourages the one-stop delivery system to help populations access 
training in nontraditional employment and will provide technical 
assistance to share best practices on this subject.
    Comments: Two commenters listed the following ways in which a one-
stop delivery system could serve the pre-apprenticeship programs, 
including, marketing, referrals, training costs, direct placements in 
registered apprenticeships, and use of OJT funds.
    Department Response: The Department considers these recommendations 
to be examples of best practices to be shared through guidance and 
technical assistance.
    Comments: A commenter requested clarification on several issues 
related to pre-apprenticeships: (1) With pre-apprenticeship programs 
moving to ITAs and therefore onto the ETPL, is the expectation that all 
other intensive service providers also will be included in the ITAs and 
ETPL; (2) the treatment of pre-apprenticeship programs that are not 
linked to a registered apprenticeship under WIOA; and (3) whether an 
out-of-school youth under 18 or an in-school youth be approved for an 
ITA for a pre-apprenticeship program?
    Department Response: Pre-apprenticeship programs may be eligible 
for an ITA if they are on the ETPL. The Department encourages pre-
apprenticeship programs that provide training services under an ITA to 
apply to be an ETP. The Department considers pre-apprenticeship 
programs to be directly partnered with at least one registered 
apprenticeship program; programs that do not meet this criterion are 
not considered a pre-apprenticeship program for the purposes of WIOA. 
In order to receive an ITA under WIOA title I adult and dislocated 
worker programs, an individual must meet program eligibility criteria 
as well as the training eligibility criteria.
Section 680.340 What are the requirements for consumer choice?
    Comments: A commenter indicated that proposed Sec.  680.340 does 
not speak effectively to the concept of ``consumer choice.'' This 
commenter stated that it would take serious efforts by the Department 
to develop more extensive information regarding the learning providers 
to inform individuals seeking training opportunities properly. 
Furthermore, the commenter asserted that posting information about 
eligible trainers has not proven to assist the learner.
    Department Response: The regulations on consumer choice are 
consistent with the language in WIOA sec 134(c)(3)(F). The Department 
emphasizes the importance of performance information on training 
providers to ensure consumers may make an informed assessment of their 
training options. The Department considers the role of the career 
planner as critical to support individuals to make well-informed 
training decisions. Career planners are responsible for making training 
eligibility determinations, and these determinations require that 
States and local make available high quality performance information to 
participants to make informed training choices.
    Comments: One commenter suggested that the Department rewrite 
proposed Sec.  680.340(b) so that it is clear that there is no 
requirement for the employer to report outcomes when using OJT and 
customized training other than in those circumstances required by the 
Local WDB.
    Department Response: The Department agrees with the commenter and 
has changed the regulatory text in Sec.  680.340(b) to emphasize that 
the ETPL is a separate list from the list that the Governor may require 
for work-based training providers.
    Comments: A commenter recommended that proposed Sec.  680.340 be 
revised to make it clear that training funds are not an entitlement and 
that criteria in addition to eligibility are assessed prior to referral 
to a provider and program. Two other commenters requested clarification 
as to the reasons that training could be refused.
    Department Response: WIOA is not an entitlement program. 
Determinations for training are made consistent with the law, including 
WIOA sec. 134(c)(3)(A), State and local policies, funding availability, 
and other appropriate considerations. There have been no changes to the 
regulatory text in response to these comments.
    One commenter requested that the Department provide a definition 
for the term ``cost of referral'' as used in proposed Sec.  680.340(d).
    Department Response: The Department declines to define the term 
``cost of referral'' in the regulatory text.
    Comments: A commenter expressed support for the prioritization of 
funding for training programs that result in a recognized postsecondary 
credential.
    Department Response: The Department acknowledges the comment and 
has added language to the regulatory text in Sec.  680.340(f) 
referencing the citation for WIOA sec. 3(52), which defines a 
recognized postsecondary credential.
    Comments: A commenter recommended a technical correction to 
proposed Sec.  680.340(b) to reference paragraph (d) in WIOA sec. 122 
rather than paragraph (e).
    Department Response: The Department agrees and has made this 
nonsubstantive correction in the regulatory text in Sec.  680.340(b).
Section 680.350 May title I adult and dislocated worker funds be used 
to directly support adult education and literacy activities?
    Comments: Some commenters recommended that the Department clarify 
that WIOA title I funds can support title II adult education programs, 
as the WIOA sec. 134(c)(3) definition of training includes ``adult 
education and literacy activities, including activities of English 
language acquisition and integrated education and training programs'' 
at sec. 134(c)(3)(D)(x). A commenter recommended that referrals to 
regionally accredited secondary-level educational programs providing 
entry-level workforce preparation and/or postsecondary education and 
training activities be included as part of basic services and 
counseling services. A commenter requested clarification regarding 
whether alternative secondary school (formerly General Education 
Diploma [GED]) preparation is considered a career service or a training 
service.
    Department Response: Under WIOA sec. 134(c)(3)(D)(x), title I adult 
and dislocated worker funds may be used to support adult education and 
literacy activities, provided concurrently or in combination with other 
training services. The Department has added regulatory text clarifying 
this use of WIOA title I adult and dislocated worker funds in Sec.  
680.350. The Department notes that these activities for title I adult 
and dislocated worker funds must be done in coordination with other 
training activities in WIOA sec. 134(c)(3)(D)(x).
5. Subpart D--Eligible Training Providers
    This subpart describes the process by which organizations qualify 
as eligible training providers of training services under WIOA. It also 
describes the roles and responsibilities of the State and Local WDBs in 
managing this process and disseminating the State Eligible Training 
Providers and Programs List (ETPL). Throughout the preamble, the 
Department refers to the State Eligible Training Providers and Programs 
List as the ``State List,'' the List, and the ETPL. The State ETPL and 
the related

[[Page 56125]]

eligibility procedures ensure the accountability, quality, and labor 
market relevance of programs of training services that receive funds 
through WIOA title I, subtitle B. The regulations emphasize that the 
List and accompanying information must be easily understood and 
disseminated widely in order to maximize informed consumer choice and 
serve members of the public.
    The State plays a leadership role in ensuring the success of the 
eligible training provider system in partnership with Local WDBs, the 
one-stop delivery system, and the one-stop's partners. The Governor, in 
consultation with the State WDB, must establish eligibility criteria 
and procedures for initial and continued eligibility for training 
providers and programs to receive funds under WIOA title I, subtitle B. 
In doing so, the Governor may establish minimum performance levels for 
initial and continued eligibility and the Department encourages 
Governors to do so. In establishing minimum performance levels for 
eligibility, the Governor should take into consideration the need to 
serve targeted populations. Except for with respect to registered 
apprenticeship programs, the Local WDB may establish higher performance 
levels or require additional information from State eligible training 
providers to receive funds through the local area Individual Training 
Accounts (ITAs).
    The regulations in this subpart implement WIOA sec. 122 and refer 
to WIOA secs. 107, 116, and 134 where those sections affect program and 
provider eligibility, the ETPL, the use of ITAs, and the inclusion of 
registered apprenticeship programs on the ETPL. In Sec.  680.410, the 
regulations clarify what entities can be eligible training providers. 
Section 680.470 provides that registered apprenticeship programs, which 
WIOA treats differently than other eligible training providers in some 
respects, are automatically eligible to be included on the ETPL. 
Finally, Sec.  680.500 requires the Governor or State Workforce Agency 
(SWA) to disseminate the State ETPL with accompanying performance and 
cost information to Local WDBs in the State and to members of the 
public through specified means. The performance information must be 
presented in a way that is easily understood, in order to maximize 
informed consumer choice and serve all individuals seeking information 
on training outcomes, including WIOA participants and individuals with 
disabilities. Separately, 20 CFR 677.230 (see Joint WIOA Final Rule) 
addresses the ETP annual performance reports mandated at WIOA sec. 
116(d)(4), which require providers to report on, among other things, 
the levels of performance for the WIOA primary indicators of 
performance for all individuals enrolled in the program of study.
    In response to concerns expressed by stakeholders that some 
providers of training would face difficulties in participating in this 
WIOA-revised system, the Department has clarified the interrelated 
eligibility requirements and explained that while WIOA places an 
emphasis on quality training as measured by performance criteria, State 
and Local WDBs and training providers must work together in achieving 
this goal. The regulations emphasize the Governor's role in offering 
financial or technical assistance to training providers where the 
information requirements of this section result in undue cost or 
burden. Making a wide variety of high-quality programs of training 
available to participants will increase customer choice and training 
providers may find performance information useful to improve their 
programs of study, which in turn will provide a direct benefit to 
participants. The Department also encourages the Governor to work with 
eligible training providers to return aggregate performance information 
to the providers in ways that will help the providers improve their 
program performance. The State and Local WDBs must work together to 
ensure sufficient numbers and types of training providers and programs 
to maximize customer choice while maintaining the quality and integrity 
of training services. In addition, the regulations explain that 
community-based organizations (CBOs) can be eligible training 
providers, provided they meet the requirements to become eligible 
training providers in WIOA sec. 122 and this subpart. Because of WIOA's 
emphasis on ensuring the provision of quality training, and the 
importance of using performance criteria to obtain such quality, the 
Department does not intend to waive the requirement to submit 
performance information at this time.
    Throughout this subpart, the Department has changed references from 
the Eligible Training Provider List to the list of eligible training 
providers and programs to convey that the list is a compilation of the 
programs of training services for which ITAs can be used. The 
Department has also made revisions throughout this subpart for 
consistency in the use of the term ``program of training services'' and 
to incorporate the use of youth funds for ITAs for out-of-school youth 
(OSY) aged 16-24.
    The Department received a number of comments that pertain to the 
WIOA sec. 116(d)(4) ETP annual performance reports. The Department 
notes that submission of the ETP annual performance reports is required 
by WIOA sec. 116(d)(4) and comments and responses relating to this 
report are addressed in the Joint WIOA Final Rule preamble section for 
20 CFR 677.230. This subpart D of part 680 addresses the ETP 
eligibility requirements.
Section 680.400 What is the purpose of this subpart?
    Proposed Sec.  680.400 explained the purpose of this subpart. It 
stated that the list must be accompanied by relevant performance and 
cost information and made publicly available online through Web sites 
and searchable databases as well as any other means the States use to 
disseminate information to consumers. The Department has made non-
substantive corrections for consistency in how the Department uses 
terms throughout this section. Additionally, the Department has made 
substantive changes to paragraphs (a) and (b) of this section which are 
described in detail below.
    Comments: A commenter requested that Local WDBs ensure the 
availability of training providers that understand the unique needs of 
individuals with disabilities. Another commenter cited the challenges 
faced by older workers and recommended that the regulations direct one-
stop centers to take into account older workers' different training 
needs and lesser access to financial aid, and make sure that older 
workers are not discriminated against in access to WIOA-funded ITAs.
    Department Response: The unique needs of individuals with 
disabilities require a minor revision to Sec.  680.400 to emphasize the 
importance of disseminating the State ETPL to individuals with 
disabilities. One of WIOA's stated purposes is to increase access to 
employment and training for individuals with barriers to employment, 
which is defined in WIOA to include individuals with disabilities as 
well as older individuals. Individuals with disabilities (e.g., those 
who are blind or hearing-impaired) may have unique needs that prohibit 
access to information through the Internet or other common databases. 
To fulfill the statutory purpose of WIOA, the Department has added 
language to Sec.  680.400(b) that requires States to disseminate 
information to consumers in formats accessible to individuals with 
disabilities. In response to the comment that the regulations direct 
one-stop centers to take into account older

[[Page 56126]]

workers' different training needs, the Department notes that the 
ability to provide services to individuals with barriers to employment 
is a factor that must be taken into account in the Governor's 
eligibility procedures under Sec.  680.460(f)(9) and that WIOA sec. 
3(24)(D) and (E) define ``individual with a barrier to employment'' to 
include individuals with disabilities and older individuals. Because 
this is a required factor in the eligibility procedures, the Department 
has decided not to address this in the purpose section of the 
regulation. No changes were made to the regulatory text in response to 
these comments.
    Comments: Another commenter requested that the Department explain 
whether programs other than those authorized by WIOA title I must use 
the eligible training provider list. A few commenters recommended that 
Sec.  680.410 specify that the requirements apply to entities providing 
training to participants paid for with WIOA title I adult or dislocated 
worker funding only and are not more generally applicable to all 
entities providing training to adult and dislocated workers.
    Department Response: WIOA's requirements regarding the State list 
of eligible training providers pertains to WIOA title I, subtitle B 
funds only. Core programs and partners other than the title I programs 
are not required to use the list of eligible training providers and 
programs, although States may choose to employ their ETP list for other 
activities. No changes were made to the regulatory text in response to 
this comment.
    Comments: The Department received a number of comments regarding 
whether youth may use ITAs in response to proposed Sec.  681.550 (Are 
Individual Training Accounts permitted for youth participants?).
    Department Response: In Sec.  680.400, the Department has added 
that this subpart describes the process for determining eligible 
training providers and programs for the adult, dislocated worker, and 
youth programs. More information about this is provided in the preamble 
corresponding to Sec.  681.550. The Department has updated Sec. Sec.  
680.400(a), 680.430, and 680.490 to clarify which requirements of this 
subpart apply to the eligible training providers and programs that 
serve OSY aged 16 through 24 with ITAs.
Section 680.410 What is an eligible training provider?
    The Department made non-substantive edits for consistency in how 
the Department uses terms throughout this section. Additionally, the 
Department has made significant substantive revisions to this section 
that are explained below.
    The Department significantly revised this section to more clearly 
define the term ``eligible training provider'' (ETP) and changed the 
section's title to reflect this change. The Department made these 
changes to clarify which entities are considered ETPs, as many of the 
requirements of WIOA sec. 122 apply only to those entities that are 
considered ETPs under WIOA. This clarification responds to commenters' 
requests for clarification on which requirements of WIOA sec. 122 apply 
to which entities.
    Section 680.410(a) through (c) lays out the defining 
characteristics of ETPs. Specifically, revised Sec.  680.410(a) 
provides that ETPs are the only types of entities that can receive 
funding for training services through an ITA. This means that if an 
entity is not on the State ETPL, the entity may not receive ITA funds 
to pay for training services. Section 680.410(b) was revised to make 
clear that ETPs must be included on the State ETPL. The Department 
added new Sec.  680.410(c) to provide that ETPs must provide a program 
of training services as that term is defined at Sec.  680.420.
    The Department also added new Sec.  680.410(d) to describe the 
kinds of entities that can be ETPs. Eligible training providers can be 
institutions of higher education that provide a program which leads to 
a recognized postsecondary credential, entities that carry out programs 
registered under the National Apprenticeship Act (29 U.S.C. 50 et 
seq.), and other public or private providers of training services, 
which may include community-based organizations (Sec.  
680.410(d)(3)(i)), joint labor-management organizations (Sec.  
680.410(d)(3)(ii)), and eligible training providers of adult education 
and literacy activities under WIOA title II if such activities are 
provided in combination with the training services described at Sec.  
680.350 (Sec.  680.410(d)(3)(iii)).
    The Department deleted proposed paragraph (b) of Sec.  680.410 to 
clarify that this subpart is focused on ETPs and the State list of 
ETPs. The requirements for individuals receiving training from entities 
other than ETPs are addressed in Sec. Sec.  680.320 and 680.530. 
Further description of the training that can be provided to individuals 
through entities other than ETPs can be found in Sec.  680.530.
    Part of the reason for this revision to this section is to make it 
clear that only entities that have gone through the Governor's ETP 
eligibility procedures and registered apprenticeship programs are 
considered ETPs, are able to be on the State ETPL, and can receive 
funding through ITAs. Additionally, because only these entities are on 
the State ETPL, only these entities, except for registered 
apprenticeship programs, are required to provide information for the 
ETP annual eligible training provider performance report required by 
WIOA sec. 116(d)(4).
    Comments: Many commenters provided input on specific categories of 
training providers. A few commenters supported allowing Local WDBs to 
provide training services as long as the Local WDB is licensed, 
registered, or otherwise exempt by the State office of education. Some 
commenters requested guidance on approval of distance learning 
providers requesting to be put on the ETPL. One commenter requested 
that the Department define and add a distance learning category as a 
potential ETP.
    Another commenter encouraged the Department to expand the 
definition of eligibility for training providers to include platforms 
that work with accredited institutions of higher education to provide 
Massive Open Online Courses (MOOCs). Several commenters encouraged the 
Department to revise Sec.  680.410(a) to identify public television 
stations explicitly as an ETP with demonstrated expertise in developing 
and implementing evidence-based training services. Another commenter 
recommended that Sec.  680.410 explicitly identify public libraries as 
potential providers, and particularly for enhanced digital literacy 
training and services. One commenter recommended that industry-based 
multi-employer training programs with a minimum of 50 percent employer 
representatives be eligible for inclusion on the ETPL to allow for 
training funds to be included as providers who would then be eligible 
for WIOA support. Another commenter urged the Department to consider 
integrating microenterprise development organizations, entities that 
help people in the very earliest stages of creating their own 
businesses, into the WIOA system. In addition, one commenter suggested 
a revision to paragraphs (a)(1) through (3) of Sec.  680.410 to 
include, as examples of eligible training providers of training 
services with WIOA adult funds under title I, public or private 
organizations that have demonstrated effectiveness in providing 
regionally accredited secondary-level educational programs that include 
entry-level workforce preparation and/or postsecondary education and 
training activities.
    Department Response: The Department has determined it is not 
appropriate in the regulation to specify

[[Page 56127]]

types of public and private entities that are appropriate to be ETPs, 
as many of these entities could be ETPs if they meet the requirements 
for initial and continued eligibility under Sec.  680.410(d)(3). 
Instead, the Department has defined broadly the kinds of entities which 
are eligible to be ETPs based on WIOA sec. 122(a)(2). The public and 
private entities commenters encouraged for inclusion on the ETPL are 
within the parameters of entities under Sec.  680.410(d) that can be 
ETPs, provided they meet all other applicable requirements, such as the 
Governor's eligibility requirements. In addition, the Department has 
not regulated to require training to be delivered in a specific format; 
programs may be delivered in-person, online, or in a blended approach. 
Nothing in the regulation precludes any of these approaches to 
training; therefore, it is unnecessary to regulate specifically that 
these are permissible types of training. In addition, the Department is 
clarifying that Local WDBs may provide training services, if they meet 
the conditions of WIOA sec. 107(g)(1), which includes the information 
required in a written waiver request to the Governor. This provision is 
addressed in Sec.  679.410. In response to the commenter that suggested 
Local WDBs can provide training as long as the Local WDB is licensed, 
registered, or otherwise exempt by the State office of education, the 
Department notes that WIOA sec. 107(g)(1) establishes the requirements 
that must be met if a Local WDB wishes to provide training. Therefore, 
the Department has not included this in this section.
Section 680.420 What is a ``program of training services''?
    This section defines the term ``program of training services'' that 
is used throughout the regulations. The Department proposed to define 
the term as one or more courses or classes, or a structured regimen 
that leads to specified outcomes, including recognized postsecondary 
credentials, secondary school diplomas or their equivalent, employment, 
or measurable skill gains toward such credentials or employment. The 
Department made non-substantive edits for consistency in how the 
Department uses terms throughout this section. The Department also made 
substantive revisions to paragraphs (a) and (b) which are described in 
detail below.
    In the NPRM preamble, the Department explained that the definition 
of a WIOA ``program of training services'' includes a structured 
regimen that leads to an industry-recognized credential. The NPRM 
preamble indicated that the outcomes in the definition of program of 
training services aligned with performance requirements in WIOA sec. 
116(b)(2)(A).
    Comments: Many commenters requested that the definition of 
``program of training services'' be clarified with options to recognize 
``non-credentialed training, such as incumbent worker training, work-
based learning opportunities, or single courses that fall within a 
career pathway for employment.'' These commenters also requested 
clarification of ``industry-recognized credentials'' to avoid confusion 
over which programs should qualify as eligible for WIOA funding. 
Several commenters requested clarification regarding how or when a 
program of training services leads to ``a recognized postsecondary 
credential, secondary school diploma or its equivalent.'' A few 
commenters recommended that Sec.  680.420 include training programs 
that lead to a ``recognized postsecondary degree or industry recognized 
credential'' to avoid a potential debate over what constitutes a 
``postsecondary credential.'' Other commenters suggested that a 
definition of ``recognized industry credential'' include a degree, 
diploma, or certification provided by an educational institution, 
third-party industry association, or industry accreditation body if it 
is not widely recognized by multiple employers in a region or industry. 
One commenter recommended that the term ``industry-recognized 
credentials'' as used in the preamble to the NPRM be added to the 
regulatory text. Another commenter asked whether having a group of five 
employers state the certificate of completion from a training provider 
is ``industry recognized'' would meet the definition of industry-
recognized credential. One commenter recommended a change to Sec.  
680.420(a) through (c), to include, as outcomes of programs of training 
services, regionally accredited secondary education diplomas and career 
certification for entry-level work force preparation earned as a part 
of a secondary education program.
    Department Response: The Department has revised the regulatory text 
of Sec.  680.420 to further clarify which programs qualify as WIOA 
``programs of training services.'' The introductory text of Sec.  
680.420 was modified to clarify that a ``program of training services'' 
is one that provides the services in Sec.  680.200 and leads to any of 
the outcomes listed in paragraphs (a) through (d) of this section, 
making clear the relationship between the definition of ``program of 
training services'' in this section and the definition of ``training 
services'' in Sec.  680.200.
    Section 3(52) of WIOA defines the term ``recognized postsecondary 
credential,'' which was used in the Department's proposed definition of 
a ``program of training services.'' The Department has revised Sec.  
680.420(a) to include all of the credentials, certificates, licenses, 
and degrees included in the WIOA definition of ``recognized 
postsecondary credential.'' However, the Department removed the term 
``recognized postsecondary credential'' from the definition of 
``program of training services'' in response to comments that this may 
be read as too limiting if it is interpreted to mean that these 
credentials can only be obtained by individuals who have a secondary 
degree, or a high school diploma or its recognized equivalent. The new 
definition of ``program of training services'' remains consistent with 
the program outcomes described in WIOA sec. 116(b)(2)(A) and 20 CFR 
part 677 (see Joint WIOA Final Rule).
    The Department chose not to define the term ``industry-recognized 
credential'' in the subpart and used the term ``industry-recognized 
certificate or certification'' in the definition of ``program of 
training services'' in order to mirror the definition of ``recognized 
postsecondary credential'' under WIOA. The term ``industry-recognized 
credential'' is an evolving term and the Department determined that 
defining it in the regulation may limit future innovation around 
industry-relevant training.
    The Department agrees that programs of training services should be 
inclusive of non-credentialed training, such as incumbent worker 
training, work-based learning opportunities, or single courses that 
fall within a career pathway. The introduction to Sec.  680.420 
emphasizes that training services that ``lead to'' any of the outcomes 
listed at Sec.  680.420, which includes employment, is a program of 
training services. Therefore, programs that are components of such a 
regimen may be eligible programs.
    In addition, as explained in Sec. Sec.  680.410 and 680.350 and 
associated sections of the preamble, WIOA title I adult and dislocated 
worker funds may be used for programs of training services that provide 
adult education and literacy activities if they are provided 
concurrently or in combination with occupational skills training and 
training services specified in Sec.  680.350. For example, English as a 
second language may be part of a program of training services that 
leads to measurable skill gains toward postsecondary credentials, 
industry-recognized credentials, or

[[Page 56128]]

employment. The Department has added a cross reference to Sec.  680.350 
in Sec.  680.420(b) to clarify that a participant may utilize a program 
offering a secondary school diploma or its equivalent only when that 
program is offered in conjunction with occupational skills training and 
other training options listed at Sec.  680.350. The revised definition 
of program of training services and the acceptable outcomes to which a 
structured regimen may lead align with the definitions within WIOA sec. 
116(b)(2)(A) and in 20 CFR part 677 (see Joint WIOA Final Rule). 
Section 680.420(d) provides that a program of training services is one 
that leads to measurable skill gains towards a credential described in 
paragraph (a) or (b) of this section. In this context, the term 
``measurable skill gains'' is used similarly to its use in 20 CFR part 
677 and the accompanying ICR. For clarification, the Department notes 
that the ETP annual performance report layout required under WIOA sec. 
116(d)(4) uses the term ``training program,'' which is synonymous with 
``program of training services.''
Section 680.430 Who is responsible for managing the training provider 
eligibility process?
    Section 680.430 outlines the roles and responsibilities of the 
Governor, the State WDB, any designated State agencies, and Local WDBs 
in establishing and implementing criteria and procedures for 
determining the eligibility of training providers. The Department 
received several comments addressing Sec.  680.430. The Department made 
non-substantive edits for consistency in how the Department uses terms 
throughout this section and to this section's title. The Department 
also made substantive changes to paragraphs (a), (c)(3), and (d), and 
these changes are described in detail below.
    The title to this section of the NPRM was ``Who is responsible for 
managing the eligible provider process.'' The Department is making a 
non-substantive edit and inserting the word ``training'' between 
``eligible'' and ``provider'' for consistency.
    The Department modified Sec.  680.430(a) to clarify that the 
Governor, in consultation with the State WDB, establishes the criteria, 
information requirements, and procedures, including procedures 
identifying the roles of the State and local areas, governing 
eligibility of providers and programs of training services to receive 
funds for out-of-school youth as described in Sec.  681.550.
    The Department renumbered and re-arranged paragraph (d) and added 
paragraph (e) for consistency with other portions of this subpart, 
including Sec. Sec.  680.450, 680.460, and 680.470, in regard to what 
is required for registered apprenticeship programs to be an eligible 
training provider. These provisions of the subpart make it clear that 
registered apprenticeship programs are not required to follow the 
Governor's eligibility procedures (initial or continued) in order to be 
eligible training providers. This is consistent with WIOA sec. 
122(a)(3), which provides that registered apprenticeship programs are 
maintained on the State List for so long as the program is registered 
under the National Apprenticeship Act. Therefore, the Department 
modified this section to ensure that the registered apprenticeship 
programs are not subject to the additional standards that may be 
established by a local area.
    Because registered apprenticeship programs are not subject to the 
Governor's criteria and information requirements or required to report 
on their levels of performance for eligibility, Local WDBs cannot 
establish additional criteria and information requirements or establish 
higher levels of performance for these entities to receive training 
services in the local area. Moreover, permitting the Local WDBs to 
establish additional criteria and performance standards for registered 
apprenticeship programs would be in tension with what the Department 
has determined is a key purpose of sec. 122(a)(3): Encouraging the 
integration of the registered apprenticeship program into the WIOA 
system. Section 680.430(d) provides that the Local WDB can make 
recommendations to the Governor on the procedure used in determining 
the eligibility of providers and programs. This is not a change from 
the NPRM.
    The Department has added new Sec.  680.430(e), which contains the 
provisions from proposed Sec.  680.430(d)(2) and (3), but clarifies 
that the provisions do not apply with respect to registered 
apprenticeship programs. Except for registered apprenticeship programs, 
the Local WDB may establish higher performance levels or require 
additional information from State eligible training providers to 
receive funds through local area ITAs. Paragraph (e)(1) provides that 
the Local WDB can, except with respect to registered apprenticeship 
programs, require additional criteria and information from local 
programs to become or remain eligible, and paragraph (e)(2) states that 
the Local WDB can set higher levels of performance, except with respect 
to registered apprenticeship programs, than those required by the State 
for local programs to become or remain eligible. In paragraph (e)(2), 
the Department made a non-substantive edit changing the phrase ``local 
providers'' to ``local programs'' to clarify that eligibility is 
determined on a program-by-program basis and removed the word 
``particular'' from this paragraph as unnecessary.
    Comments: One commenter commended the Department for outlining the 
responsibilities of State and Local WDBs to ensure adequate 
availability of training services for individuals with disabilities and 
recommended that Sec.  680.430(c)(3) similarly remind Local WDBs to 
disseminate and maintain lists of providers in formats accessible to 
individuals with disabilities.
    Department Response: As noted above under Sec.  680.400, the State 
List must be made publicly available in a format this is accessible to 
individuals with disabilities. One of WIOA's stated purposes is to 
increase access to employment and training for individuals with 
barriers to employment, which WIOA defines as including individuals 
with disabilities as well as older individuals. Individuals with 
disabilities (e.g., those who are blind or hearing-impaired) may have 
unique needs that prohibit them from accessing information through the 
Internet or other common databases. To fulfill one of the statutory 
purposes of WIOA articulated in WIOA sec. 2(1), the Department has 
added language to Sec.  680.430(c)(3) requiring that Local WDBs ensure 
that the State list of eligible training providers and programs is 
disseminated through the one-stop delivery system in formats accessible 
to individuals with disabilities.
    Comments: A commenter asked the Department to revise Sec.  
680.430(d)(1) to require the Governor to engage with the Local WDB and 
to require an equal exchange of information that allows for mutual 
consent in the management of the ETP process.
    Department Response: The Department considered this comment; 
however, WIOA sec. 122 explicitly states that the Governor, in 
consultation with the State WDB, is to establish the criteria, 
information requirements, and procedures governing the eligibility of 
providers and programs and the Department will not create an additional 
requirement that the Governor obtain mutual consent of the Local WDBs. 
Moreover, Sec.  680.430(d) already provides a role for the Local WDB in 
this process: It allows Local WDBs to make recommendations to the 
Governor on

[[Page 56129]]

the procedures used to determine eligibility of providers and programs. 
The Department encourages Local WDBs to make such suggestions and 
strongly encourages the Governor to carefully consider and incorporate 
the Local WDBs' suggestions, as they are most familiar with the 
training needs of their specific area. No changes were made to the 
regulatory text in response to this comment.
    Comments: One commenter recommended that the regulation explicitly 
require a Governor to make the process for becoming an ETP transparent 
and ensure adequate access for CBOs to become ETPs. The commenter 
stated that a transparent and accessible process is necessary in order 
to expand access to a variety of high-quality providers and programs 
for individuals seeking employment and a way out of poverty.
    Department Response: The Department notes that Sec.  680.410 was 
modified to include paragraph (d)(3)(i), which explicitly acknowledges 
that CBOs may be eligible training providers. Moreover, CBOs can 
provide training through training contracts with the Local WDB under 
Sec.  680.320. The Department agrees that a transparent process is 
important. Section 680.450(c) requires the Governor to solicit and take 
into consideration recommendations from Local WDBs and providers, 
provide an opportunity for interested members of the public to comment, 
and designate a specific time for doing these things. Additionally, 
Sec.  680.460(e) requires that the Governor's procedures be described 
in the State Plan, which is subject to the public comment requirements 
for State Plans. Because the Department concludes the process will 
already be transparent as public comment is required in the development 
of the procedures and in the development of the State Plan, no changes 
were made to the regulatory text in response to this comment.
    Comments: Another commenter recommended that ``may'' be changed to 
``must'' in Sec.  680.430(c)(2), to ensure that States with large 
Indian, Alaska Native and Native Hawaiian populations focus attention 
on the special circumstances of these populations.
    Department Response: The Department notes that Sec.  680.430(c) 
requires the Local WDB to carry out the activities in Sec.  
680.430(c)(2) and already uses the term ``must.'' This section of the 
regulation implements WIOA sec. 107(d)(10)(E), which requires the Local 
WDB to work with the State to ``ensure there are sufficient numbers and 
types of providers of career services and training services (including 
eligible training providers with expertise in assisting individuals 
with disabilities and eligible training providers with expertise in 
assisting adults in need of adult education and literacy activities) 
serving the local area and providing the services involved in a manner 
that maximizes consumer choice, as well as providing opportunities that 
lead to competitive integrated employment for individuals with 
disabilities.'' This section is focused on ensuring consumer choice for 
individuals with disabilities and adults in need of adult education and 
literacy activities. However, the Department interprets Sec.  
680.430(c)(2) to ensure that there are sufficient numbers and types of 
providers of career services and training services, to include ensuring 
that such services are available to assist specific populations such as 
the Indian, Alaska Native, and Native Hawaiian populations. No changes 
to the regulatory text were made in response to these comments.
Section 680.440 [Reserved]
    The NPRM included a proposed Sec.  680.440 implementing WIOA sec. 
122(c), which allowed the Governor to establish a transition procedure 
for training providers eligible under WIA to maintain their eligibility 
and the eligibility of their programs under WIOA until December 31, 
2015. In this Final Rule, the Department has removed Sec.  680.440 in 
its entirety because the time during which providers could retain their 
eligibility under WIA into WIOA has elapsed. Therefore, this provision 
is no longer necessary. Although this provision is not in the Final 
Rule, the Department received several comments on the proposed rule and 
is addressing them below.
    Comments: Commenters addressed the Department's proposed timeline 
and transition procedures for implementation of the continued 
eligibility provisions for ETPs eligible under WIA. A handful of 
commenters expressed support for exempting ETPs eligible under WIA from 
initial eligibility procedures and for providing these ETPs a 
transition period before requiring compliance with the application 
procedures to establish continued eligibility.
    A number of commenters requested that the Department allow States 
more time to implement the continued eligibility procedures. One 
commenter recommended that the Department extend the time allowed for 
transition of ETPs to meet the new requirements under WIOA until June 
30, 2016. Another commenter recommended that the Department allow all 
ETPs to receive initial and/or subsequent eligibility under WIA 
regulations until the State publishes and implements its new 
eligibility procedures, no later than June 30, 2016, reasoning that 
this approach would be consistent with the Department's transition 
authority in sec. 503 of WIOA. One commenter cautioned that the 
procedures for initial and continued eligibility are lengthy and that 
there would not be enough time for implementation, then urged the 
Department to adopt more flexible procedures for easier implementation.
    A few commenters recommended that a waiver provision be added in 
the WIOA Final Rule relating to the application for continued 
eligibility of ETPs. Another commenter recommended a longer period of 
transition (i.e., more than 12 months) because of the additional 
information required from applicants to become an ETP under WIOA as 
well as the additional programming needed to electronically capture 
this information.
    One commenter recommended that States be allowed to use existing 
procedures for new providers and develop and implement new procedures 
by July 1, 2016, consistent with the start date of Unified State Plans. 
The commenter reasoned that this timeframe would allow States to 
identify best procedures and update software programming and user 
training and communicate these to potential providers. Other commenters 
recommended that the timeframe relevant in Sec.  680.440 be determined 
by each individual State policy as determined by the Governor, without 
providing additional detail about the specific activities of concern. 
One commenter requested that continued eligibility be implemented as a 
phased transition.
    Department Response: In order to facilitate the transition from WIA 
to WIOA and give the states sufficient time to create robust 
eligibility policies and procedures for ETPs, the Department exercised 
its transition authority and issued guidance (Training and Employment 
Guidance Letter (TEGL) 41-14, Change 1) that extended the timeline for 
implementation of continued eligibility requirements for training 
providers eligible under WIA by 6 months through June 30, 2016, unless 
the Governor determined that an earlier date was possible. While this 
is not the 12-month extension requested by a commenter, the Department 
concluded this was sufficient time for States to implement the 
continued eligibility procedures. The Department has chosen not to 
regulate waiver policy in the Final Rule.

[[Page 56130]]

    WIOA sec. 122(b)(4)(B) requires providers not previously approved 
under WIA to complete the initial eligibility procedure. WIOA sec. 
122(i) requires that the Governor and Local WDBs implement these 
requirements no later than 12 months after the date of enactment. 
Although States are required to implement new procedures for initial 
eligibility and continued eligibility, rather than using existing 
procedures, the regulation at Sec.  680.460(f)(1)(v) allows the 
Governor to use alternate factors for performance until performance 
information is available to establish continued eligibility. The 
Department notes that the Governor has discretion to determine what the 
alternate factors for performance are; thus the Governor's procedure 
may take into account existing performance information. Moreover, the 
regulation at Sec.  680.450(e)(2) requires the initial eligibility 
procedures to take into account ``a factor related to'' the indicators 
of performance which may take into account existing performance 
information.
    It is unclear what the commenter is suggesting by a ``phased 
transition.'' The Department notes that the Governor's transition 
procedures could have been implemented in phases if the Governor chose 
to conduct the transition this way, as long as the continued 
eligibility procedures were implemented in a timely way to ensure that 
continued eligibility was established prior to the end of the 
transition period in that State, which, consistent with ETA guidance, 
could have extended no later than June 30, 2016.
    The Department notes that it also received comments on this section 
related to the eligible training provider annual performance report 
required under WIOA sec. 116(d)(4). The Department addresses these 
comments and provides responses in the preamble to 20 CFR 677.230 (see 
Joint WIOA Final Rule).
    Comments: Several commenters expressed confusion about how 
providers designated under WIA between WIOA's enactment on July 22, 
2014, and implementation of WIOA's ETP provisions on July 22, 2015, 
were to be treated. One commenter requested that the Department clarify 
the date at which States are no longer allowed to use their old 
eligibility-determination process. Another commenter recommended either 
grandfathering or offering States the discretion to allow training 
providers that become eligible under WIA between July 22, 2014, and 
June 30, 2015, to remain eligible training providers until December 31, 
2015, or to an earlier date according to the Governor's transition 
procedures.
    Department Response: The Department is clarifying that WIOA sec. 
122(i) covers all providers and programs that were previously eligible 
under WIA. Thus, any provider that was previously eligible under WIA 
procedures, regardless of whether this was before or after the date of 
WIOA's enactment on July 22, 2014, is subject to the continued 
eligibility procedures under WIOA. This reading is consistent with WIOA 
and with the Department's intention stated in the NPRM to grandfather 
all WIA providers through the duration of the Governor's transition 
period. The Department modified Sec.  680.460(a)(1) to make the 
treatment of providers and programs eligible under WIA consistent, 
regardless of whether they became eligible before, on, or after July 
21, 2014. This interpretation is in accord with WIOA secs. 122(b)(4)(B) 
and 122(i) because all WIA providers determined eligible through June 
30, 2015, were deemed eligible under the version of WIA sec. 122 
requirements in effect on July 21, 2014 (the day before enactment of 
WIOA).
Section 680.450 What is the initial eligibility process for new 
providers and programs?
    Section 680.450 establishes the requirements for the initial 
eligibility procedures for new providers and programs. The Department 
made non-substantive edits for consistency in how the Department uses 
terms throughout this section. The Department also made substantive 
edits to paragraph (b), which are discussed in detail below.
    Comments: The Department received comments addressing various 
issues relating to Sec.  680.450. Several commenters expressed support 
for the proposed initial eligibility process. Other commenters 
suggested that provisions for waivers be included in Sec. Sec.  680.450 
(initial eligibility) and 680.460 (continued eligibility) of the Final 
Rule, and that WDBs be given authority to waive eligibility 
requirements on a case-by-case basis where it is in the best interest 
of those receiving training services. Some commenters recommended that 
Governors be given authority to approve public higher education schools 
automatically, similar to the proposed approach for registered 
apprenticeship programs, including eliminating the need for these 
institutions to be subject to initial or continued eligibility. These 
commenters stated that this was a duplicative burden on these 
institutions that are already required to report on programs to their 
primary funding sources. Several commenters recommended that National 
Farmworker Jobs Program (NFJP) grantees be presumed to be ETPs and be 
included on their States' ETPLs automatically to encourage and 
streamline the ability of WIOA adult and dislocated worker programs to 
co-enroll participants who also qualify for NFJP. In addition, one 
commenter expressed concern that its State would be unable to implement 
a new process that includes creating a technical system to track 
provider performance and other new WIOA requirements, as well as have 
public comment and implement by July 22, 2015, the date by which 
initial eligibility procedures are required to be implemented. Another 
commenter stated that even though local areas may set more stringent 
standards for performance for eligible training providers, because 
providers can apply to any Local WDB for approval to the statewide 
list, these more stringent standards are ineffective in ensuring 
provider quality. This commenter suggested that local areas should have 
full control over their Eligible Training Provider List, provided 
minimum standards are met.
    Department Response: The Department is clarifying in this preamble 
that States and local areas are the only entities authorized to 
determine new provider or program eligibility under WIOA. WIOA sec. 
122(a) requires the Governor to determine eligibility procedures. State 
and Local WDBs do not have authority under WIOA to waive initial or 
continued eligibility requirements. The Department is therefore not 
including such waiver authority in this subpart. However, the 
eligibility requirements in the regulations are quite flexible because 
although they require the Governor to take certain factors into 
account, they do not proscribe what weight is given to any one factor. 
Additionally, Local WDBs may use contractual arrangements under 
Sec. Sec.  680.320 and 680.530 to ensure that training is available. 
Automatic approval of higher education institutions or NFJP grantees as 
eligible training providers is not permitted under WIOA; these 
institutions and grantees will need to apply for initial eligibility in 
the same manner as all other training providers. In response to 
comments about duplicative burden, the Department acknowledges that 
there may be some duplication of requirements. However, the Department 
encourages these institutions to examine where there is overlap in the 
reporting requirements to minimize duplicative

[[Page 56131]]

work in complying with all of the institution's reporting requirements. 
Therefore, no change was made in response to this comment.
    The Department has made no change to the timeline for implementing 
initial eligibility procedures in order for new training providers and 
programs to be included on the State Eligible Training Provider and 
Programs List. The States must implement initial eligibility procedures 
within 1 year of WIOA's enactment as is required under WIOA sec. 
122(c).
    The Department corrected the reference to paragraph (d) in Sec.  
680.450(c) to paragraph (e).
    Comments: Several commenters provided input on the specific 
performance information that the Governor of each State is required to 
request from potential training providers under Sec.  680.450(e).
    Department Response: The Department considered commenters' 
suggestions on what kinds of information could be considered a ``factor 
related to the indicators of performance'' to meet Sec.  680.450(e)'s 
requirement. However, with regard to the comments on the performance 
information requirements in Sec.  680.450(e), no substantive changes 
were made to the regulatory text in response to these comments. In 
part, because the factors related to performance that a Governor must 
take into account to establish initial eligibility are set forth in 
WIOA sec. 122, the regulations are consistent with the statutory 
requirements. Moreover, WIOA sec. 122 gives the Governor the discretion 
to determine the procedures for initial eligibility and establish 
minimum performance standards and the Department wants to allow the 
Governor the flexibility to establish procedures that are most relevant 
and applicable to the Governor's State.
    Section 680.450(e)(2) requires the initial eligibility procedures 
to take into account ``a factor related to the indicators of 
performance . . . .'' This does not mandate a specific factor and it is 
at the Governor's discretion to determine what information to require 
for the applicant to meet this requirement. The Department has listed 
below the comments and responses received on the requirement at Sec.  
680.450(e)(2).
    Finally, the Department notes that it revised Sec.  680.450(e)(4) 
to clarify its implementation of WIOA sec. 122(b)(4)(E)(iii). This 
provision of WIOA permits the Governor to require other factors that 
indicate high-quality training services, including the factor described 
at WIOA sec. 122(b)(1)(H). WIOA sec. 122(b)(1)(H) requires an analysis 
of the quality of a program of training services, including programs of 
training services that lead to recognized postsecondary credentials. 
Therefore, the Department has made a minor revision to Sec.  
680.450(e)(4) to reflect that the Governor's criteria may require 
applicants to provide information demonstrating the program is a high 
quality program, which can include information related to training 
services that lead to recognized postsecondary credentials.
    Comments: A few commenters described the burden associated with the 
proposed performance information requirements and cautioned that they 
may limit the options available to training customers. Similarly, one 
commenter stated that the performance information requirements under 
both Sec. Sec.  680.450 and 680.460 were too burdensome for small 
training providers, who are generally not equipped for tracking 
employment outcomes.
    Department Response: The Department considered commenters' concerns 
about the burden of providing performance information under Sec. Sec.  
680.450 and 680.460. However, the information required for submission 
is set out in WIOA sec. 122 and the sections implement WIOA's 
requirements for initial and continued ETP eligibility. The Department 
encourages States and providers to consider the benefit to the programs 
of training of having robust performance outcome data that can be used 
to evaluate and advertise the effectiveness of their programs of 
training. No changes were made to the regulatory text in response to 
these comments.
    Comments: A commenter cautioned against requiring past performance 
information for new training providers that do not have past 
performance information to evaluate. Another commenter recommended 
requiring applicant training providers to present average earning rates 
after exit rather than median earnings.
    Department Response: The Department considered the commenter's 
recommendation, but determined that the Governor's flexibility to 
determine what factors related to the performance indicators will be 
selected as part of the initial eligibility criteria is sufficient. 
This includes determining what factor related to performance may be 
used for new training providers. The Department notes that while the 
Governor has discretion to determine the factor related to performance 
that may be used for initial eligibility, once eligibility is 
established, WIOA sec. 116(b)(2)(A)(i)(III) requires approved ETP 
programs to report on median earnings. However, this does not prohibit 
the Governor from also requiring ETP programs to report on average 
earnings. No changes were made to the regulatory text in response to 
these comments.
    Comments: One commenter requested changes in training provider 
eligibility criteria for providers that are different from WIA 
occupational skill providers (e.g., pre-apprenticeships, 
entrepreneurial training, customized and incumbent worker training, and 
youth services).
    Department Response: As explained above, the provider eligibility 
criteria are left to the Governor's discretion. No changes have been 
made to the regulatory text in response to this comment. However, the 
Department notes that it is within the Governor's discretion to have 
specific eligibility criteria for providers that provide training that 
is distinct from traditional WIA-occupational skill providers, as long 
as the criteria also comply with Sec. Sec.  680.450 and 680.460 and are 
included in the State's policies. Section 680.530 and its preamble 
provide additional information on how States may provide customized and 
incumbent worker training.
    Comments: One commenter asked whether each State is required to 
specify which elements from Sec.  680.450(e)(2) training providers need 
to provide information on or whether the training provider can submit 
information on any of the factors listed.
    Department Response: The State procedure must specify which 
elements from Sec.  680.450(e)(2) training providers need to provide 
information on and what verifiable information will satisfy this 
requirement.
    Comments: Another commenter sought clarification of the definition 
of ``partnership with a business'' as used in NPRM Sec.  680.450(e)(3), 
and asked how this would impact the eligibility of a training provider.
    Department Response: The Department is clarifying that information 
about whether a provider is ``in a partnership with a business'' under 
Sec.  680.450(e)(3) could include information about the quality and 
quantity of employer partnerships. However, the Department did not 
include this example, or others in the regulation text, as States may 
have other methods for determining whether the provider is in a 
partnership with a business and including one example may be seen as 
limiting State options. The impact of this factor on the eligibility of 
the training provider is

[[Page 56132]]

determined by the Governor's initial eligibility procedure.
    Comments: One commenter requested flexibility in initial 
eligibility requirements for training providers in rural areas and 
those serving the hardest to serve populations.
    Department Response: The Governor may require additional 
information in order to ensure that the needs of the State are being 
met, including in rural areas and in serving hard-to-serve populations. 
The Governor's procedure determines how these additional factors may 
impact initial eligibility. In addition, the Local WDB must work with 
the State to ensure there are sufficient numbers and types of providers 
of training services, including eligible training providers with 
expertise in assisting individuals with disabilities and eligible 
training providers with expertise in assisting adults in need of adult 
education and literacy activities described under WIOA sec. 
107(d)(10)(E), serving the local area. No changes were made to the 
regulatory text in response to this comment.
    Comments: Another commenter urged the Department to require new 
applicants to be subject to the same anti-discrimination provisions as 
registered apprenticeship programs under 29 CFR part 30. This commenter 
suggested that new applicants provide the following: A plan for 
recruitment to ensure underrepresented populations have access to 
nontraditional opportunities; capacity to deliver equitable training 
practices and classroom and OJT training environments that support 
underrepresented populations' success and retention in the training 
program; and support services, case management, mentorship, and other 
strategies necessary for underrepresented populations' success in 
training and employment.
    Department Response: Title 29 CFR part 30 governs the policies and 
procedures to promote equality of opportunity in apprenticeship 
programs registered with the U.S. Department of Labor and State 
apprenticeship programs registered with recognized State apprenticeship 
agencies. Therefore, the Department will not apply 29 CFR part 30 to 
all eligible training providers. However, for all other programs, the 
Department notes that the Governor has discretion to consider a wide 
range of factors when determining initial and continuing eligibility 
under Sec. Sec.  680.450 and 680.460. Therefore, if the Governor wishes 
to consider factors such as an eligible training provider's treatment 
of underrepresented populations, this is within the Governor's 
discretion. The Department has determined that applying criteria 
developed for one type of program of training to all types of training 
programs may unnecessarily limit the types of programs of training 
available to participants in WIOA programs. No changes were made to the 
regulatory text in response to this comment.
    Comments: The Department also received responses to the specific 
solicitation in the NPRM requesting comments about the types of 
verifiable program-specific information the Governor must require from 
providers seeking initial eligibility as ETPs under Sec.  680.450(e).
    Department Response: The Department has carefully analyzed the 
comments regarding verifiable program specific performance information, 
including the suggestions of specific factors and methods of providing 
verifiable information in the least costly manner. The Department has 
determined that no substantive changes to regulatory text are necessary 
in response to these comments. Instead, the Department is clarifying 
that the Governor and the States have discretion when developing their 
initial eligibility criteria and requirements to decide what 
constitutes verifiable program specific performance information and the 
factors related to indicators of performance. This flexibility will 
enable States to meet the individual needs of each State and allow each 
State to establish requirements that the ETPs and the State are able to 
manage given their current levels of technology. Examples of potential 
criteria include average earnings rates, average cost of training, and 
criteria based on information available in UI wage records. However, 
these examples are not intended to be an exhaustive list and States are 
not limited to the Department's suggestions.
    In meeting the requirement that the factor be ``related'' to the 
WIOA sec. 116 reporting requirements in Sec.  680.450(e)(2), this 
factor need not be limited to WIOA participants, even though under sec. 
116 the primary indicators of performance require reporting on WIOA 
participants. This is because programs of training applying for initial 
eligibility will be applying to serve WIOA participants for the first 
time and will not have results available for WIOA participants.
    Comments: One commenter stated that the easiest-to-verify 
information that providers could furnish would be customer-level data 
that States can match to unemployment insurance (UI) wage records to 
determine employment outcomes. The commenter stated that providers 
would be expected to submit that information if they are placed on the 
ETPL because this information would be required for the ETP annual 
performance report. The commenter asserted that requiring information 
for an eligibility determination that matches information required for 
the ETP annual performance report would reduce costs for both providers 
and States and increase data integrity. A few commenters stated that 
the most valid, reliable, and efficient way to measure training 
providers' performance is for the State to first collect a small set of 
seed records from each provider for each student (e.g., social security 
number, program of study, start date, end date, credential, and 
demographic characteristics) and then link the records with UI wage 
records and other administrative records used to determine outcomes.
    Department Response: The Department notes that these are potential 
options for States and the Governor may choose to utilize these 
approaches. However, the Department has chosen not to require States to 
implement these approaches for initial eligibility to give States the 
flexibility to determine the most effective method for obtaining 
verifiable program specific performance information for determining 
initial eligibility. As explained earlier, the Department recognizes 
that there is overlap between what is required for eligibility and the 
WIOA sec. 116(d)(4) ETP annual performance report. The Department 
strongly encourages States and ETPs to work together to find 
efficiencies in how information can be reported in the performance 
report and for eligibility purposes. No changes were made to the 
regulatory text in response to these comments.
    Comments: Another commenter stated that the regulations should 
encourage ETPs to focus their follow-up efforts on participants who do 
not appear in the UI wage records, relieving data collection burdens on 
the individual participants and the non-public training providers.
    Department Response: The Department recognizes that social security 
numbers will not be available for each participant and has determined 
that supplemental follow-up methods will be allowable. The use of 
supplemental information in performance reporting is further discussed 
in 20 CFR part 677 (see Joint WIOA Final Rule) and the associated ICR.
    Comments: Another commenter requested that the system used to 
gather ETP data should be accurate by nature

[[Page 56133]]

so that Local WDBs are not required to monitor or ensure accuracy of 
information.
    Department Response: The Governor or the Governor's designated SWA 
(or appropriate State entity) is responsible for ensuring that programs 
meet eligibility criteria and performance levels established by the 
State, including verifying the accuracy of the information. The Local 
WDB must carry out the procedures assigned to the Local WDB by the 
State, including monitoring and ensuring accuracy of the information. 
No changes were made to the regulatory text in response to this 
comment.
    Comments: One commenter recommended specific performance 
information to be collected, including average cost of training to 
include tuition, supplies, and supportive service needs; loan default 
rates; employer partners; and the completion rates of all students 
rather than the exit rates.
    Department Response: The Departments have included in the subpart 
only the performance information required by WIOA secs. 122 and 116. 
However, as described in Sec.  680.490(c), the Department notes that 
the Governor may require additional specific performance information 
that the Governor determines to be appropriate to determine or maintain 
eligibility. No changes were made to the regulatory text in response to 
this comment.
    Comments: One commenter stated that wages and retention should be 
verified using the employment base wage.
    Department Response: The Department is unclear what the commenter 
intends by ``employment base wage.'' However, the Department has chosen 
not to require States to implement these approaches for initial 
eligibility. States have the flexibility to determine the most 
efficient method for obtaining and verifying program specific 
performance information for determining initial eligibility.
    Comments: A few commenters suggested that States should be allowed 
to use supplemental/existing data because most schools are already 
required to report on programs to their primary funding sources, making 
the ETP reporting requirement a duplicative effort. These commenters 
asserted that the local area should determine if a training provider's 
performance is acceptable and whether the training provider should 
continue to be listed on the ETPL.
    Department Response: The Department recognizes that some of the 
information ETPs are currently reporting might overlap with the 
information required for reporting for initial eligibility. The 
Department encourages States to examine closely WIOA reporting 
requirements and the other requirements ETPs are subject to, to find 
overlap and reporting efficiencies. Regarding the commenter's 
suggestion that the local area determine if a training provider's 
performance is acceptable, the Department notes that WIOA sec. 
122(b)(3) and Sec.  680.430(e) provide that Local WDBs can establish 
criteria and information requirements, in addition to the Governor's, 
and require higher levels of performance than the Governor for purposes 
of determining the continuing eligibility of providers to receive funds 
to provide training services in the Local WDB's area. No changes to the 
regulatory text have been made in response to this comment.
    Comments: Some commenters recommended that the Department allow 
States to determine the definition of verifiable information. Another 
commenter requested clarification regarding the ``program specific'' 
indicators required by the Department and recommended that States be 
allowed the flexibility to define what those mandated indicators will 
be through their ETP State policy.
    Department Response: As explained above, this subpart leaves the 
Governor the flexibility to determine what constitutes ``verifiable 
program-specific information.'' No changes were made to the regulatory 
text in response to this comment.
    Comments: One commenter suggested that providers report data on 
(and States determine eligibility for) all similar degree programs as 
one. For example, all bachelor's degree programs at that provider are 
reporting as one bachelor's degree program, rather than breaking them 
out into bachelor's in education, bachelor's in biology, bachelor's in 
math, etc. This commenter also suggested that providers report data on 
(and States determine eligibility for) the main program of study, 
rather than all of the individual courses that make up the program. 
Further, this commenter recommended that providers do not need to 
report on (and States determine eligibility for) courses that are pre-
vocational intensive service or skills upgrade courses, or courses that 
cross industry sectors and occupations or which are less than 3 days in 
duration.
    Department Response: In response to the recommendation that 
eligibility be determined generally at the degree level, the Department 
is clarifying that eligibility is determined at the level of ``program 
of training'' as described in Sec.  680.420, rather than at the class, 
course or general degree level. A program of training may involve one 
course or a course of fewer than 3 days in duration, if the course 
leads to one of the outcomes as described in the definition of a 
program of training services at Sec.  680.420. In order for such a 
program of training to receive WIOA title I adult, dislocated worker, 
or youth training funds through an ITA, the program must be determined 
eligible and is therefore subject to reporting requirements. Registered 
apprenticeship programs are an exception to the eligibility 
requirements. Work-based training options do not receive training funds 
through an ITA, and are described at Sec.  680.530. No changes were 
made to the regulatory text in response to this comment.
    Comments: One commenter recommended that States be given an 
additional 2 years to implement the performance information 
requirements in Sec. Sec.  680.450(e) and 680.460(f). After stating 
that the Department does not anticipate complete performance data 
derived from wages until PY 2018, a few commenters suggested allowing 
eligibility to be based on completion rates and credentials until 
complete employment and wage performance data can be collected.
    Department Response: The Department has determined that a 
regulation change is not necessary given the flexibility in the 
regulation at Sec. Sec.  680.460(f)(1) and 680.450(e)(2). Under Sec.  
680.460(f)(1), the State may use alternate factors for performance 
until data from the conclusion of each performance indicator's first 
data cycle is available. Under Sec.  680.450(e)(2), the Governor's 
procedure must require applicant providers to provide information 
addressing a factor related to performance indicators, meaning that the 
Governor's initial eligibility procedure may not require the provision 
of the results for each of the indicators of performance. The required 
factors for initial and continued eligibility allow the Governor's 
procedure to determine whether to set minimum performance standards and 
how much emphasis to put on any one factor that is taken into account.
    Although the Department determined no change to the regulation was 
necessary in response to those comments, the Department has made a 
revision to Sec.  680.450(f) by inserting the word ``performance'' 
between ``minimum standards'' to clarify that the minimum standards a 
Governor may set refer to minimum performance standards. Additionally, 
in response to commenters who requested that initial

[[Page 56134]]

eligibility last for longer than a year because more time is needed to 
generate enough exiters to provide a meaningful outcome measurement 
given the data lag for performance indicators, the Department is 
clarifying that Sec.  680.460(f)(1)(v) allows the Governor to take into 
account alternate factors related to the performance indicators 
described in Sec.  680.460(f)(1) until performance information is 
available. Similarly, for initial eligibility, the Governor may use a 
factor related to performance in determining eligibility. Thus, the 
Governor's ability to establish continued eligibility procedures and to 
take other factors into account enable the State to build in 
consideration of the limits of initially eligible training providers to 
supply performance information after only 1 year. The Department notes 
that it also plans to launch an intensive technical assistance effort.
    Comments: A commenter requested that initial eligibility under 
Sec.  680.450(g) last longer than 1 year because more time is needed to 
generate enough exiters to provide a meaningful outcome measurement 
given the data lag for performance indicators, such as earnings in the 
fourth quarter after program exit.
    Department Response: The Department has determined that initial 
eligibility will be maintained at 1 year. WIOA sec. 122(b)(4)(B) 
provides that initial eligibility is ``for only 1 fiscal year.'' 
However, because program eligibility is not aligned with a fiscal year, 
the Department has removed the word ``fiscal'' from paragraph (g) in 
this section. Since initial eligibility may be determined at any time 
during a calendar year or program year, requiring initial eligibility 
to be for 1 year, rather than 1 fiscal year enables the State to 
establish a 12-month initial eligibility period for each program.
    Comments: One commenter recommended that the Department launch an 
intensive technical assistance effort for States to develop the IT 
infrastructure needed to meet these requirements. Another commenter 
requested that the regulation allow States and localities to waive the 
reporting requirements for libraries when developing lists of ETPs in 
the first year, on the grounds that libraries would be prevented from 
providing training with WIOA funding without such a waiver. A few 
commenters stated that reductions in overall funding and limited 
funding for the Governor's set-aside will make performance reporting 
requirements, including the need to modify data reporting systems, 
difficult. As a solution to this concern, commenters recommended that 
the full Governor's set-aside be reinstated. One commenter encouraged 
the Department to pay particular attention to the impact that the 
requirements would have upon students that have expressed a desire to 
reengage back into the educational system and obtain their accredited 
high school diploma. The commenter made several specific 
recommendations about programs that would be helpful for this 
particular population, including making State WIOA program eligibility 
to be dictated by regional accreditation.
    Department Response: The Department has already deployed technical 
assistance for ETP requirements, including webinars and a Quick Start 
Action Planner and plans to engage in a technical assistance effort to 
assist with ensuring adequate information technology infrastructure to 
implement the new WIOA requirements.
    The Department has chosen not to regulate waiver policy in the 
Final Rule. The Department does not have authority under WIOA to 
provide States and local areas the ability to grant waivers. Therefore, 
the Department has not included such waiver provisions in the Final 
Rule for libraries. However, the Department notes that small CBOs, such 
as libraries, can provide programs of training services under contracts 
with local areas as described at Sec. Sec.  680.530 and 680.320. 
Programs of training services provided under such contracts are not 
eligible training providers and are not included on the State ETPL. 
Thus, they are not required to comply with the requirements to be on 
and stay on the list. The Department additionally notes that because 
CBOs providing training services through a contract are not on the 
State ETPL, they are also not required to submit the WIOA sec. 
116(d)(4) ETP annual performance report.
    The set-aside amount is determined by Congress as part of the 
annual appropriations process and is therefore outside the scope of 
this regulation.
    The Governor's procedure for initial eligibility may require other 
information in order to demonstrate high quality training services and 
such information may include regional accreditation and the ability to 
serve students who wish to reengage the educational system. As 
described under Sec.  680.420, a program of training services may lead 
to a secondary diploma or its equivalent, as long as this is consistent 
with Sec.  680.350. No changes to the regulatory text were made in 
response to this comment.
    However, the Department has made a change to the regulatory text at 
Sec.  680.450(b) to align with changes made to Sec.  680.470, providing 
that apprenticeship programs registered under the National 
Apprenticeship Act are exempt from initial eligibility procedures and 
must be included and maintained on the State ETPL unless the program is 
removed from the list for the reasons in Sec.  680.470. This change was 
made to conform with changes made to Sec.  680.470, which are discussed 
in the preamble corresponding to that section. Although this is 
discussed more fully in the preamble to 20 CFR 677.230 (see Joint WIOA 
Final Rule), the Department notes that registered apprenticeship 
programs are not required to submit the WIOA sec. 116(d)(4) ETP annual 
performance report. Outcomes for WIOA participants in WIOA-funded 
registered apprenticeship programs must still be included in the 
State's annual performance report under WIOA sec. 116(d)(2). The 
Department also made a non-substantive change to this provision by 
removing the word ``corresponding'' from the phrase ``corresponding 
program'' as the word ``corresponding'' did not provide needed 
clarification and therefore was unnecessary.
Section 680.460 What is the application procedure for continued 
eligibility?
    Section 680.460 sets out the requirements for the application 
procedure for continued eligibility. The Department has made non-
substantive edits to this section for consistency with how the 
Department uses terms throughout the regulation. The Department has 
also made substantive revisions to paragraphs (c), (f)(1) and (10), and 
(j). The Department made edits to (i) to clarify the requirements for 
biennial review of eligibility information. These changes are discussed 
in further detail below.
    Comments: Several commenters supported requiring public comment 
during the development of continued ETP eligibility procedures as well 
as allowing the Governor discretion to set the timetable for 
consultation and public comment. One commenter recommended that the 
regulations be revised to provide assurance that the biennial review is 
transparent and that it allows for adequate input from employers, as 
well as to provide guidance on specific ways in which Governors may 
hold providers accountable for meeting the needs of local employers. 
Another commenter suggested that the Department provide more structure 
for the process of including education programs on the ETPL and include 
specific examples for

[[Page 56135]]

gauging program quality by demanding standards of effective practice.
    Department Response: The Department has determined that no changes 
to the regulatory text are necessary to address the concerns raised by 
commenters as the section already achieves the commenters' suggestions. 
The Governor's procedure for biennial review may take into 
consideration factors to ensure that the State will meet the needs of 
local employers. The Governor establishes the procedure after taking 
into consideration recommendations from Local WDBs and training 
providers and providing an opportunity for comment from interested 
members of the public, including representatives of business and labor 
organizations as required by Sec.  680.460(b)(1) through (3). In 
addition, States must describe the eligibility procedures in their 
State Plans, which are subject to public comment requirements that 
include allowing for input from key stakeholders such as employers. 
This is further discussed in 20 CFR part 676 (see Joint WIOA Final 
Rule) and the WIOA State Plan ICR. Therefore, commenters' concerns 
about public comment during the development of the policies are already 
addressed.
    In response to commenters' concerns about the Governor setting up a 
timetable for consultation with the public, the Department notes that 
Sec.  680.460(b)(3) requires the Governor to set up a time period for 
soliciting and considering recommendations from Local WDBs and 
providers and giving the public an opportunity for comment. However, 
this section of the regulation does not prescribe a specific time 
period. Therefore, the Governor has discretion to set up a timetable 
for considering recommendations and public comment. Per Sec.  
680.460(f)(4), the Governor must take into account the degree to which 
programs of training relate to in-demand industry sectors and 
occupations in the State. Further, as described in Sec.  
680.460(f)(11), the Governor may take into account other factors such 
as ensuring that one-stop centers are meeting the needs of local 
employers and participants. It is unclear what additional structure the 
commenter is recommending in order to gauge program quality by 
demanding standards of effective practice. WIOA performance 
accountability requirements, as addressed in the ETP performance 
reports in 20 CFR 677.230 (see Joint WIOA Final Rule), are highly 
structured. Through technical assistance, States will have 
opportunities to share effective practices to gauge program quality.
    The Department modified proposed Sec.  680.460(c). In the NPRM, 
this paragraph required programs registered under the National 
Apprenticeship Act (NAA) to be included and maintained on the list for 
as long as the program was registered and required the Governor's 
eligibility procedures to include a mechanism for registered 
apprenticeship programs to indicate interest in being on the list as 
described in Sec.  680.470. The Department reorganized this paragraph 
for clarity, moving the sentence that procedures for including 
registered apprenticeship programs on the list are found in Sec.  
680.470 to the beginning of the paragraph, instead of the end of the 
paragraph, and made a substantive revision for consistency with Sec.  
680.470. This section now provides that programs registered under the 
NAA are automatically eligible to be on the State's list and must 
remain on the State's list unless they are removed from the list for 
the reasons set forth in Sec.  680.470. This is a conforming edit to 
changes made in Sec.  680.470 and more can be read about that change 
below. The Department also made a non-substantive edit to this section 
removing the word ``corresponding'' as it was unnecessary.
    Comments: Many commenters responded to our request for comment 
under proposed Sec.  680.460(f)(1) on the alternate factors that may be 
used until performance data are available. The Department revised Sec.  
680.460(f), breaking the requirements into separate subsections for 
clarity and consistency with WIOA sec. 122(b)(1)(A)(i) and (ii). The 
flexibility for the Governor to use alternate factors until performance 
data are available is now located at Sec.  680.460(f)(1)(v). The 
regulation at Sec.  680.460(f)(1)(v) allows the Governor to use 
alternate factors for performance until performance information is 
available to establish continued eligibility. Several commenters 
suggested that alternate factors for performance be left to the 
Governor and Local WDBs to decide, while others offered a variety of 
specific alternate factors that the Governor could take into account. 
These suggestions included: WIA criteria; use of other information 
already supplied for State and Federal accountability measures, such as 
Carl D. Perkins Act performance indicators; three letters from local 
employers; completion rates; credentials; gainful employment measure; 
and graduation rates.
    Department Response: The Department acknowledges that the 
suggestions provided by commenters offer appropriate options for the 
Governor's procedure, but has chosen not to include these in the 
regulation text to give Governors flexibility in choosing what 
performance information to use. In this way, the Governor's procedure 
can be tailored to the best performance data available among applicant 
training providers in that State.
    Comments: A few commenters recommended a separate, lower set of 
performance standards for training providers who serve hard to serve 
participants, such as tribal colleges and programs specifically 
designed to provide combined workplace language and workplace skills to 
new Americans needing English literacy instructions. A few commenters 
recommended allowing States and local areas to grant waivers to CBOs 
for the reporting of data to ensure that these entities have the 
capacity to qualify as ETPs. However, a few other commenters stated 
that CBOs, including those serving hard to serve participants, must be 
held to the same standards as any other provider on the list.
    Department Response: The regulatory language authorizes the 
Governor to take into account such factors as meeting the needs of 
hard-to-serve participants and programs specifically designed to 
provide combined workplace language and workplace skills to new 
Americans needing English literacy instruction when developing the 
State's continued eligibility procedures. Section 680.460(f)(9) 
specifically requires the Governor to take into account the ability of 
providers to provide training services to individuals who are employed 
and individuals with barriers to employment. In addition, local areas 
may enter into contracts to provide training services under specific 
circumstances, including with CBOs. Because CBOs which are providing 
programs of training through contracts are not considered ETPs, they do 
not need to meet the initial and continuing eligibility requirements of 
this subpart. However, CBOs that are included in the State List of 
Eligible Training Providers and receive payment for the training 
services through ITAs, rather than contracts, are subject to the 
eligibility and reporting requirements of the State list. No changes to 
the regulatory text were made in response to these comments.
    Comments: Commenters addressed the performance information under 
Sec.  680.460(g) that the Governor must require for continued 
eligibility for the State list of ETPs. One commenter questioned 
whether 20 CFR 677.230, which requires reporting performance

[[Page 56136]]

information on all participants, is in conflict with Sec.  680.460(g) 
which requires reporting on WIOA-participants only.
    Department Response: The Department does not consider these 
provisions as being in conflict as they are derived from different 
statutory provisions and serve different purposes under WIOA. The ETP 
annual performance report is required by WIOA sec. 116(d)(4) and 
explicitly requires information on the levels of performance for all 
individuals in a program of study. As explained above, more information 
about this requirement can be found in 20 CFR 677.230 and its 
corresponding preamble (see Joint WIOA Final Rule). Separately, the 
requirements for a training provider to continue to be on the State 
List of Eligible Training Providers and programs are found in WIOA sec. 
122, and sec. 122(b)(2)(A) explicitly identifies the performance 
information the ETP must provide for this purpose. Thus, the WIOA sec. 
116(d)(4) annual report is for reporting on performance, while the 
requirements in Sec.  680.460 are for staying on the State List of 
Eligible Providers and Programs. In order to continue to be eligible, 
the ETP must provide information on the performance accountability 
measures in sec. 116 of WIOA for ``participants'' whose training is 
funded under title I, subtitle B. However, the Department notes that 
both the Governor, under WIOA sec. 122(b)(1)(J), and the Local WDB, 
under WIOA sec. 122(b)(3), have authority to require additional data 
from ETPs, which might include data on all students. In addition, WIOA 
sec. 122(b)(1)(A)(ii) explicitly permits the Governor to require 
reporting on all individuals enrolled in the programs in which WIOA-
funded participants studied.
    Comments: Several commenters cited the potential problem of a small 
number of participants (``small in size'') when providing WIOA-
participant-only data. These commenters stated that the resulting data 
would be too small to yield useful outcome information and would risk 
revealing personally identifiable information (PII). Other commenters 
suggested that Sec.  680.460(g) specifically include instructions 
similar to those found in WIOA sec. 116(d)(6)(C), which states that the 
disaggregation of data for the State performance reports is not 
required when the number of participants is too small to yield 
statistically reliable information or when results would reveal PII 
about an individual participant. One commenter said that an alternative 
approach is needed for using performance results for management, 
provider selection, and public/consumer information, but did not 
specify what the alternative approach would be. Some commenters 
suggested that the State List require reporting on all students in 
order to yield a larger data set. One commenter urged the Department to 
require biannual reporting of all completers and placement numbers for 
the previous year utilizing a standardized template to collect data to 
ensure an educated training program selection process. Several 
commenters recommended that the materials to be considered when 
determining ETP continued eligibility include information reported to 
State agencies on Federal and State training programs other than WIOA 
title I, subtitle B, and asked for submission of performance results 
for all students and not just those who received training subsidized by 
WIOA title I adult or dislocated worker funds.
    However, several commenters supported a requirement that 
performance reports include only WIOA-funded students. One commenter 
cautioned that the cost for reporting all students and not just WIOA-
funded students by program could result in training providers not 
accepting WIOA-funded students to avoid the reporting burden. One 
commenter stated that in order to avoid revealing data on any 
individual, it would normally not be required to disclose performance 
information on any program with a small number of participants and that 
performance data would be relatively meaningless if too few individuals 
are in the performance cohort. This commenter recommended that the 
regulations specifically recognize that this information shouldn't be 
revealed for those programs with low participant numbers.
    Department Response: With respect to the privacy concerns that 
arise from the small numbers in participant data, the Department notes 
that the regulation already addresses this issue. Paragraph (e) of 
Sec.  680.500 addresses privacy concerns for the dissemination of the 
ETPL by requiring that the State List and accompanying information be 
made available in a manner that does not reveal personally identifiable 
information about an individual participant and that, in developing the 
information to accompany the State List of Eligible Training Providers 
and Programs, disclosure of personally identifiable information from an 
education record must be carried out in accordance with the Family 
Educational Rights and Privacy Act, including the circumstances 
relating to prior written consent. Accordingly, additional regulatory 
text for Sec.  680.460 is not needed. While the Governor must take into 
account all of the information listed in WIOA sec. 122(b)(1) in setting 
the criteria for eligibility on the State ETPL, the Department 
interprets WIOA sec. 122(b)(1)(A)(ii) to provide discretion to the 
Governor to determine whether reporting on all students is an 
``appropriate'' measure of performance outcomes under that paragraph. 
The Department is not regulating State eligibility procedures to 
require reporting on all students in order to yield a larger data set; 
however, the Governor may choose to do so as part of the State's 
eligibility procedures.
    With respect to the minimum size of a data set that would ensure 
participant confidentiality and the reliability of outcomes data, the 
Department has determined that States will maintain confidentiality and 
reliability of data by complying with relevant State law and with WIOA 
itself. WIOA sec. 122(d)(3) states that the State List and accompanying 
information must be made available to such participants and to members 
of the public through the one-stop delivery system in the State in a 
manner that does not reveal PII about an individual participant. WIOA 
sec. 122 does not require that the performance information that 
accompanies the State List be statistically reliable in the same way 
that WIOA sec. 116(d)(6)(C) does for the annual performance reports. 
Therefore, the Department has not regulated this as a requirement.
    In response to commenters suggesting that the Department require 
biannual reporting of all completers and placement numbers for the 
previous year utilizing a standardized template, the Department has 
chosen not to require a template for the State List of Eligible 
Training Providers. While a standardized template is required for the 
reporting of information in the ETP Performance Reports, as described 
in 20 CFR 677.230 (see Joint WIOA Final Rule), the Department has 
concluded that WIOA intends the development of the State List to be at 
the State's discretion in order to meet the needs of individuals 
seeking training in that State. In addition, the flexibility to 
determine the format and presentation of the State List enables the 
State to accommodate additional information that the Governor may 
choose to require as part of the State's eligibility procedures.
    In response to commenters that suggested that eligibility 
information include materials submitted to State agencies on Federal 
and State training

[[Page 56137]]

programs other than programs within WIOA title I, subtitle B, this is 
already reflected in the factors that the Governor's continued 
eligibility must take into account under Sec.  680.460(f)(3).
    The Department again wishes to clarify that reporting on all 
participants is a requirement of the ETP performance reports described 
in 20 CFR 677.230. Suggestions that the ETP performance reports include 
WIOA-funded students only, and related comments citing potential 
concerns by training providers, are addressed in that section.
    Comments: Several commenters requested that the Department add 
waiver provisions to ease the transition to WIOA or to adjust reporting 
requirements for providers applying for continued eligibility for the 
ETPL. Other commenters disagreed with the proposed continued 
eligibility procedures for ETPs eligible under WIA and described them 
as a time-consuming burden for State and Local WDBs.
    Department Response: Because of WIOA's emphasis on ensuring the 
provision of quality training, and the importance of using performance 
criteria to obtain such quality, the Department is not including 
waivers in the regulation. In transitioning to collection of WIOA data, 
Sec.  680.460(f)(1) already provides sufficient flexibility by allowing 
the Governor to use alternate factors for performance until WIOA 
performance information is available for an ETP. No changes were made 
to the regulatory text in response to these comments.
    Comments: The Department received comments in response to the 
request for ideas on how to reduce the burden and avoid duplication of 
effort to meet reporting requirements under WIOA secs. 122 (provider 
eligibility) and 116 (performance accountability).
    A few commenters responded to the requirement that the State 
criteria for continued eligibility take into account the timely and 
accurate submission of ETP performance reports. Several commenters 
commented on the ETP annual performance report requirements under WIOA 
sec. 116(d)(4). Comments related to this report are more fully 
addressed in the preamble to 20 CFR 677.230 (see Joint WIOA Final 
Rule). A commenter cautioned that requiring training providers to 
submit appropriate, accurate, and timely information to the States to 
create the ETPL under Sec.  680.460(f)(10) is an unnecessary burden 
because most case management systems already capture and validate this 
information as part of case management, and that collecting this 
information from training providers would compromise the accuracy, 
validity, and consistency of the information. This commenter 
recommended that States be granted flexibility to capture this 
information in the manner that best balances the validity of data and 
efficiency of progress, rather than strictly from training providers. 
Another commenter stated that the Governor and local WDBs should have 
the discretion to utilize alternative data sources in the interim to 
determine ETPs' performance outcomes and that these data outcomes 
should not be prescribed by the Department because local case managers 
have real-time participant outcomes not subject to the lag time 
associated with DOL performance indicators. One commenter disagreed 
with the proposed WIOA continued eligibility requirements and 
recommended that the Department continue to use the WIA requirements.
    One commenter, referring to Sec.  680.460(l), questioned what 
qualifies as an ``undue cost or burden'' to remove a training provider 
from the performance requirement.
    Department Response: The information required under Sec.  680.460 
to maintain continued eligibility is separate from the ETP annual 
performance reports required under 20 CFR 677.230 (see Joint WIOA Final 
Rule). Paragraph (e)(3) of 20 CFR 677.230 addresses coordination and 
dissemination of the ETP performance reports and the State list of 
eligible training providers as described at Sec.  680.500. With respect 
to the commenter's recommendation that the requirement to consider 
whether a provider timely and accurately submits information for the 
WIOA sec. 116(d)(4) ETP annual report to the State, the Department 
acknowledges that there will be some overlap in what is required for 
inclusion in the WIOA sec. 116(d)(4) report and the information the 
State already has in its case management files. The Department 
recommends that States work with training providers to minimize the 
reporting burden and utilize integrated systems as much as possible. No 
change in the regulation text was made in response to this comment.
    Additionally, the Department notes that the provision at Sec.  
680.460(l) does not allow a State to remove a training provider from 
this performance requirement based on undue cost or burden. Rather, 
this provision allows the Governor to establish procedures and 
timeframes for providing technical assistance to training providers 
that are failing to meet the criteria and information requirements due 
to undue cost or burden. The Governor's procedures determine what 
constitutes undue cost or burden. The Department has chosen not to 
regulate what constitutes ``undue cost or burden'' in order to provide 
Governors the flexibility needed to best address the particular needs 
of the ETPs in each State.
    WIOA, not WIA, dictates the continued eligibility requirements and 
the Department declines to substitute WIA requirements for WIOA 
requirements. WIOA sets forth factors and the Governor's continued 
eligibility procedures determine how these WIOA-required factors are 
taken into account. WIOA and the regulations further provide that the 
Governor's criteria for eligibility and information requirements may 
include any appropriate additional information that the Governor may 
require. In addition, WIOA allows for WIA-eligible providers to remain 
eligible through December 31, 2015.
    Comments: One commenter requested clarification on the timeline for 
initial eligibility compared to the beginning of the biennial review 
and renewal period.
    Department Response: States have discretion in how they implement 
eligibility procedures and timelines for biennial review. Some States 
may find it efficient to review the entire State list every 2 years, 
while others may have a system for reviewing each provider on the 
second anniversary of when that provider established continued 
eligibility under WIOA. The timeline for how initially eligible 
training providers are deemed continued eligible training providers and 
thereby incorporated into the review system will vary from State to 
State. The Department made minor edits to Sec.  680.460(i) for clarity 
regarding the requirement for biennial review of eligibility 
information by inserting the word biennial before the word ``review.''
    The Department modified Sec.  680.460(j) on the biennial review to 
provide that, in addition to the verification of the registration 
status of registered apprenticeship programs, the biennial review also 
must include removal of any registered apprenticeship programs that are 
removed from the list under Sec.  680.470. This change was made to 
conform with changes to Sec.  680.470. More can be read about the 
Department's changes to proposed Sec.  680.470 below.
    Paragraph (f)(10) of Sec.  680.460 proposed to require the 
Governor, in establishing the eligibility criteria for continued 
eligibility, to take into account whether providers timely and 
accurately submitted the information needed for the WIOA sec. 116(d)(4) 
ETP report. The Department also revised this

[[Page 56138]]

provision to require the Governor to take into account whether the 
provider timely and accurately submitted the information required for 
initial and continued eligibility. Additionally, the Department revised 
this provision to require that the Governor consider whether the 
provider submitted ``all of the'' information for the report and 
eligibility procedures, which means the Governor must take into account 
whether the information the provider submitted is complete.
    In response to comments and to ensure that providers comply with 
the requirement to timely and accurately submit all of this 
information, the Department added Sec.  680.460(l) to require that the 
Governor's procedure include what the Governor considers to be a 
substantial violation of Sec.  680.460(f)(10). And Sec.  680.460(l)(2) 
requires those providers that substantially violate this requirement be 
removed from the State list of eligible training providers and programs 
consistent with Sec.  680.480(b).
    These modifications were made for consistency with WIOA sec. 
122(f)(1)(B), which requires programs be removed from the State list of 
eligible programs and providers when a provider substantially violates 
any of the requirements of title I of WIOA. Given WIOA's focus on 
performance accountability in WIOA sec. 116 and informed consumer 
choice in WIOA sec. 122, the Department has concluded that failure to 
timely and accurately submit the information required for the WIOA sec. 
116(d)(4) ETP report and the initial and continued eligibility 
constitutes a substantial violation of WIOA title I requirements.
    Because WIOA sec. 122(f)(1)(B) requires the determination of a 
substantial violation to be made by an individual or entity specified 
in the Governor's procedures, Sec.  680.460(l) gives the Governor the 
discretion to determine what constitutes a substantial violation of the 
requirement to timely and accurately submit all of the required 
information. Therefore, the Governor has the flexibility to take into 
account the specific circumstances in the State that affect a 
provider's ability to submit the required information. Moreover, the 
Department notes that paragraph (l)(1) requires the Governor's 
determination of what constitutes a substantial violation of the 
requirement to timely and accurately submit all of this information to 
take into account exceptional circumstances beyond the provider's 
control, such as natural disasters, unexpected personnel transitions, 
and unexpected technology-related issues. The Department included this 
provision specifically to address instances in which, through no fault 
of its own, a provider may not be able to timely or accurately submit 
all of the information required. In those instances, the Governor may 
not determine that a substantial violation has occurred. Additionally, 
the Department notes that the list of the exceptional circumstances in 
this regulatory provision is not exhaustive and the Department 
encourages Governors to consider the particular needs of providers in 
the State in creating the policy and determining what constitutes 
exceptional circumstances beyond the provider's control.
    The Department also has made a clarifying change to Sec.  
680.460(f)(10) adding the words ``information required for completion 
of'' between ``submitted'' and ``eligible'' to clarify that while the 
ETPs are required to provide accurate and timely information for 
purposes of completion of the ETP performance report required by WIOA 
sec. 116, an ETP will not have all of the information to complete that 
report.
    Finally, the Department removed paragraph (k) because the authority 
for the Local WDBs to require higher levels of performance for local 
programs is already referenced in Sec.  680.430(e). Therefore, this 
provision was unnecessary. The Department renumbered what was 
previously proposed paragraph (l) to paragraph (k) to conform to this 
change.
Section 680.470 What are the procedures for including and removing 
registered apprenticeship programs on a State list of eligible training 
providers and programs?
    Section 680.470 described the process for including and maintaining 
registered apprenticeship programs on the ETPL. The Department made 
non-substantive edits for consistency in how the Department uses terms 
throughout this section. The Department also made substantive changes 
to Sec.  680.470(a) and (b), and added new paragraphs (c) and (f). The 
Department received comments regarding Sec.  680.470(d), which is now 
renumbered as (e).
    Proposed Sec.  680.470(a) provided that all registered 
apprenticeship programs would be automatically eligible to be included 
on a State Eligible Training Providers and Programs List and required 
the Governor to establish a mechanism by which registered 
apprenticeship programs may indicate whether they wish to be included 
on the State Eligible Training Providers and Programs List. The NPRM 
required registered apprenticeship programs to indicate interest to be 
included in the State Eligible Training Providers and Programs List. 
Due to concern that some registered apprenticeship programs may not 
wish to be on the State ETPL, proposed Sec.  680.470(b) provided that 
registered apprenticeship programs will remain on the List until they 
are deregistered or have notified the State that they no longer wish to 
be included on the List. The proposed section was silent on whether a 
registered apprenticeship program could be subject to the provisions 
for removal from the ETPL under Sec.  680.480, and Sec.  680.480 did 
not provide an express exclusion from those procedures for registered 
apprenticeship programs. Proposed Sec.  680.470(d) encouraged Governors 
to consult with State and Local WDBs and other entities to establish 
voluntary reporting of performance information for registered 
apprenticeship programs, because WIOA sec. 122(a)(3) specifically 
exempts registered apprenticeship programs from the criteria and 
information requirements and Governor-established procedures required 
for inclusion on the State ETPL, and therefore the NPRM did not require 
registered apprenticeship programs to provide performance information 
in order to be included on the ETPL. In addition, 20 CFR 677.230(b) of 
the Joint WIOA NPRM (regarding information required for the ETP 
performance report) exempted registered apprenticeship programs from 
reporting information for purposes of the ETP performance report 
required by WIOA sec. 116(d)(4) but specified that any such information 
submitted voluntarily to a State must be included by the State in the 
ETP annual performance report required by 20 CFR 677.230. A number of 
changes were made to this Sec.  680.470 in response to comments 
received and for purposes of clarity.
    Comments: Several commenters expressed support for automatic 
qualification of registered apprenticeship programs for the State ETPL. 
In addition, several commenters offered suggestions on how registered 
apprenticeship programs are added to and removed from a State List of 
Eligible Training Providers and Programs. One commenter urged the 
Department to create a uniform standard for all Governors to follow 
when developing a mechanism by which registered apprenticeship programs 
request inclusion on the List. The commenter warned that nationally 
registered apprenticeship programs that offer training in various 
States would need to assess each State's process, which could prove 
overly burdensome

[[Page 56139]]

if States have different mechanisms. Another commenter objected to 
placing the burden on registered apprenticeship training programs to 
ensure inclusion on the ETPL, in part because of the statutory mandate 
that registered apprenticeship programs be eligible to be included on 
the List. The commenter expressed concern that the added requirement to 
indicate interest would create confusion and cause delay in getting 
registered apprenticeship programs on the State List. A few commenters 
were concerned that States with a history of being unfriendly or 
hostile to unions or of having significant bureaucratic inertia may use 
the requirement as an excuse to disfavor registered apprenticeship 
programs. Another commenter recommended revising the regulations to 
create an opt-out framework rather than an opt-in framework, such that 
registered apprenticeship programs would be included on the ETPL unless 
the program took steps to be excluded. This commenter stated that an 
opt-out system would allow program sponsors that may not wish to be on 
the State List to remove themselves while avoiding ill-designed opt-in 
procedures that could preclude or delay, intentionally or accidentally, 
the sponsors of registered joint labor-management apprenticeship 
programs from appearing on the State ETPL. Other commenters supported 
the proposal to require registered apprenticeship programs to opt in. 
Some commenters suggested revising the regulation to clarify when 
registered apprenticeship programs may be removed from the State List 
of Eligible Training Providers and Programs and whether registered 
apprenticeship programs are exempt from the enforcement provisions of 
WIOA sec. 122(f) that were set forth in proposed Sec.  680.480. One 
commenter asked how States should monitor registered apprenticeship 
programs for compliance and what the criteria are to qualify as a 
registered apprenticeship program.
    One commenter stated that proposed Sec.  680.480 was inconsistent 
with WIOA to the extent that it allows registered apprenticeship 
programs to be removed from the List for any reason other than 
deregistration because, in this commenter's view, the requirement in 
WIOA sec. 122(a)(3) that registered apprenticeship programs shall be 
included and maintained on the State ETPL for so long as the program is 
registered precludes removal for any reason other than deregistration. 
According to the commenter, the standards for deregistration under the 
National Apprenticeship Act are sufficient to trigger removal from the 
ETPL where appropriate, and application of the enforcement provisions 
in WIOA sec. 122(f) is inappropriate and unnecessary. The commenter 
states that regulations implementing the National Apprenticeship Act 
already include clearly-defined, qualitative standards governing when 
such a program can be deregistered. The commenter suggested a change to 
the enforcement section of the ETP requirements at proposed Sec.  
680.480 to affirm that registered apprenticeship programs are not 
subject to these enforcement provisions. The commenter suggested adding 
language to Sec.  680.480(a) that states: ``Except for a provider 
described in section 122(a)(3) of WIOA, a training provider may lose 
its eligibility pursuant to this section.''
    Department Response: The Department has made revisions to Sec.  
680.470(a) to clarify the process for including registered 
apprenticeship programs on the State List of Eligible Training 
Providers and Programs. Through a mechanism established by the 
Governor, registered apprenticeship programs must be informed of their 
automatic eligibility and must be provided an opportunity to consent to 
their inclusion before being placed on the State Eligible Training 
Providers and Programs List. The Department chose this approach in 
order to ensure that the States include registered apprenticeship 
programs that are interested in accepting WIOA participants while at 
the same time ensuring that all registered apprenticeship programs are 
readily included with minimal burden. The Department chose to allow 
Governors to develop such a process, rather than create a uniform 
standard for all States, in keeping with the Governor's discretion to 
implement procedures regarding the State List of Eligible Training 
Providers. This approach will also allow each Governor to establish a 
procedure that works best for the registered apprenticeship programs in 
that specific State.
    While the NPRM provided that the Governor's mechanism ``should'' be 
developed based on guidance from the U.S. Department of Labor Office of 
Apprenticeship representative in the State or the assistance of the 
recognized State apprenticeship agency, Sec.  680.470(a) now requires 
the procedures to be developed based on such guidance. This guidance 
includes how to ensure that national registered apprenticeship programs 
are included as eligible training providers. Finally, this paragraph 
has been amended to add a requirement that the Governor develop a 
process to impose only minimum burden on registered apprenticeship 
programs. In response to commenters' concerns that States with a 
history of being unfriendly or hostile to unions or of having 
significant bureaucratic inertia may use the requirement as an excuse 
to disfavor registered apprenticeship programs, these changes together 
with Departmental technical assistance and guidance ensures that States 
are inclusive of registered apprenticeship programs.
    These revisions will provide registered apprenticeship programs the 
opportunity to consent to being included on the State List of Eligible 
Training Providers and Programs while minimizing the affirmative burden 
placed on them to do so. The Department has concluded that this type of 
process will increase the participation rate of registered 
apprenticeship programs on the ETPL and further the aims of the 
registered apprenticeship program by having such programs included on 
the State List as soon and as easily as possible. The Department chose 
not to revise the regulation to require registered apprenticeship 
programs be included on this List unless they choose to opt out, in 
order to reduce the potential confusion for participants utilizing the 
List. Allowing for registered apprenticeship programs to consent allows 
States to ensure that only providers that are willing to accept WIOA 
participants are included on the State List of ETPs.
    The Department has also revised the regulation at Sec.  680.470(b) 
and added a new Sec.  680.470(c) to clarify that registered 
apprenticeship programs may be removed from the State List of Eligible 
Training Providers and Programs for violations of WIOA and that 
enforcement provisions may apply in such cases. The regulation now 
includes Sec.  680.470(b)(3), which provides that a registered 
apprenticeship program may be removed from the State List of Eligible 
Training Providers and Programs for having intentionally supplied 
inaccurate information or substantially violated any provision of WIOA 
title I (e.g., civil rights or discrimination violations) or WIOA 
regulations.
    Section 680.470(c) provides that removal from the List for reasons 
under Sec.  680.470(b)(3) will result in a termination of eligibility 
for the ETPL for not less than 2 years and liability to repay all 
training funds received during the period of noncompliance, consistent 
with the requirements under Sec.  680.480 for all other ETPs. Section 
Sec.  680.470(c) further provides that the Governor must specify in 
enforcement procedures

[[Page 56140]]

established under Sec.  680.480 the process for and the entity making 
the determination of ineligibility, and must provide an opportunity for 
hearing. The Department has concluded that the process used for all 
non-compliant eligible training providers must be applied to 
noncompliant registered apprenticeship programs, including removal from 
the State ETPL. This is needed to maintain the integrity and quality of 
the State ETPL. Application of the WIOA enforcement provisions to 
registered apprenticeship programs enables the State to take action to 
remove a registered apprenticeship program from the State List, if that 
program is in significant violation of WIOA. The Department wishes to 
avoid a scenario where a registered apprenticeship program that is in 
significant violation of WIOA could remain on the State List of ETPs 
until that program's registered status is reviewed under the National 
Apprenticeship Act.
    In addition, the Department disagrees that WIOA requires the 
Department to exclude registered apprenticeship programs from the 
enforcement provisions of WIOA sec. 122(f). WIOA sec. 122 contains 
express statutory exceptions for registered apprenticeship programs 
from providing performance information as a requirement for inclusion 
and maintenance on the State ETPL but WIOA sec. 122 contains no similar 
exception for registered apprenticeship programs from the enforcement 
provisions. In fact, WIOA sec. 122(h) contains express exemptions from 
the enforcement provisions for several types of providers, but does not 
include registered apprenticeship programs on that list of exempted 
entities. The Department interprets this silence to mean that the 
regular WIOA enforcement provisions apply to registered apprenticeship 
programs. Accordingly, the Final Rule now allows the State to take 
action as appropriate, in addition to the enforcement and 
deregistration process under the National Apprenticeship Act.
    The Department has also revised the wording in the title of Sec.  
680.470 to reflect that this section addresses both inclusion and 
removal of registered apprenticeship programs from the State List of 
Eligible Training Providers and Programs.
    Comments: A few commenters encouraged mandatory reporting of 
performance information for all training programs, including registered 
apprenticeship programs, that seek to be included on a State's List of 
Eligible Training Providers and Programs. Several commenters stated 
that registered apprenticeship programs should not be exempt from 
reporting ETP performance data, reasoning that this information is 
valuable in determining the effectiveness of registered apprenticeship 
programs in leading individuals to unsubsidized employment. One 
commenter supported exempting registered apprenticeship programs from 
the application procedures, information requirements, and performance 
reporting requirements of other training providers in light of the 
rigorous process for registering apprenticeship programs with the 
Department. Several commenters opposed any additional reporting for 
registered apprenticeship programs and requested that the regulation 
clearly describe applicable reporting requirements for registered 
apprenticeship programs. One commenter pointed out that States and 
local areas will have to determine and establish data collection for 
tracking for performance and asked whether the Department will define 
the measures for registered apprenticeship program performance.
    Department Response: The Department has decided to maintain the 
wording of proposed Sec.  680.470(d) in the Final Rule, renumbered to 
Sec.  680.470(e), because of the addition of new Sec.  680.470(c). The 
exception for registered apprenticeship programs from providing 
performance information to be included or maintained on the State ETPL 
is required by WIOA sec. 122(a)(3). However, the Department is 
clarifying that voluntary reporting of performance information by 
registered apprenticeship programs is encouraged under the regulation. 
More information can be read on this in the preamble to 20 CFR 677.230 
(see Joint WIOA Final Rule). In addition, the Department is maintaining 
the exception for registered apprenticeship programs from providing 
performance information for the ETP performance report required under 
20 CFR 677.230 for the reasons discussed in the preamble to that 
section, but notes that outcomes for WIOA participants in WIOA-funded 
registered apprenticeship programs must still be included in the 
State's annual performance report under WIOA sec. 116(d)(2).
    Comments: A few commenters recommended that apprenticeship programs 
be required to demonstrate recruitment of underrepresented populations. 
One commenter suggested that a key qualification for apprenticeship 
programs' integration into the use of ITAs be adherence to existing 
requirements under 29 CFR part 30, which prohibits discrimination based 
on race, color, religion, national origin, or sex in apprenticeship 
programs. Another commenter suggested that the WIOA regulations should 
ensure that older workers are not discriminated against in 
apprenticeship programs.
    Department Response: The Department has concluded that putting 
additional requirements on registered apprenticeship programs in order 
to participate in the State List of ETPs or to use ITAs is outside the 
scope of this regulation because WIOA designates registered 
apprenticeship programs as eligible to serve as ETPs. In addition, 
registered apprenticeship programs are already required to comply with 
20 CFR part 30 anti-discrimination provisions.
    Comments: Other commenters recommended that pre-apprenticeship 
programs be included on the State ETPL but with a performance 
measurement model that is more appropriate for the activity, for 
example, enrollment in an apprenticeship program or a community college 
program would both be positive outcomes.
    Department Response: The commenter did not specify whether it meant 
that pre-apprenticeship programs should be included under the exception 
for registered apprenticeship programs or included through the 
Governor's eligibility procedures for eligible training providers. 
However, the Department acknowledges the need to clarify how pre-
apprenticeship programs are treated for inclusion on the State ETPL. 
The Department has added a Sec.  680.470(f) to clarify that because 
pre-apprenticeship programs are not registered under the National 
Apprenticeship Act and are not included in the exceptions for 
registered apprenticeship programs under WIOA sec. 122(a)(3), they must 
follow the Governor's procedure for eligibility in this subpart. Pre-
apprenticeship providers that wish to use WIOA funds to provide 
training services may go through the normal training provider program 
application procedure to be included on the State List of Eligible 
Training Providers and Programs. Therefore, such pre-apprenticeship 
programs would be subject to the eligibility and information reporting 
requirements of the State ETPs.
    Comments: One commenter expressed concern throughout the regulation 
that in defining how individual training accounts may be used, and 
defining the use of on-the-job training funds, preference is given to 
registered apprenticeship programs. The commenter urged the Department 
to revise the regulation to reflect the

[[Page 56141]]

importance of other OJT programs. The commenter emphasized the robust 
and valuable non-registered apprenticeship programs embraced by many 
manufacturers, and that training for in-demand skills is available in 
multiple venues and that these programs should be considered based on 
the value of their training, rather than their registration status with 
a government entity. However, the commenter did not provide suggestions 
on how the Department could address the commenter's concerns.
    Department Response: The Department has determined that no changes 
to the regulatory text are needed in response to this comment. Both the 
requirement that registered apprenticeship programs shall be included 
on the State ETPL and the exemption for registered apprenticeship 
programs from the requirement to submit performance information for 
inclusion on the State List are specifically limited to registered 
apprenticeship programs by WIOA sec. 122(a)(3). Regarding the commenter 
suggesting a revision to the regulatory text to emphasize OJT, it is 
unclear what revisions to the regulation the commenter is suggesting. 
The Department has made revisions to Sec.  680.530 to clarify how 
exceptions to the eligible training provider List, which may provide 
training through contracts with the Local WDB, including OJT, are to be 
treated; more about this change can be read in the preamble to Sec.  
680.530. The Department agrees with the commenter that non-registered 
apprenticeship programs and work-based training are important training 
options.
Section 680.480 May an eligible training provider lose its eligibility?
    Section 680.480 describes the enforcement provisions available to 
apply to training providers who are not in compliance with WIOA and 
WIOA regulations. The Department made non-substantive edits for 
consistency in how the Department uses terms throughout this section. 
The Department also made substantive changes to paragraphs (b) and (c) 
which are further described below.
    The Department made a clarifying edit to Sec.  680.480(a). The 
Department is deleting the phrase ``deliver results'' and replacing it 
with language to clarify that this provision requires that training 
programs meet the Governor's eligibility requirements and that training 
providers provide accurate information.
    The Department also made a clarifying edit to Sec.  680.480(e) to 
clarify that if a training program is removed from the eligible 
training providers in a local area because the training program failed 
to meet the local area's higher performance standards, the training 
provider may appeal this eligibility denial under Sec.  683.630(b). 
This provision no longer requires Local WDBs to create an appeals 
procedure for these purposes.
    Proposed Sec.  680.480(b) provided that providers whose eligibility 
is terminated under this section are liable to repay all adult and 
dislocated worker funds received during the period of non-compliance. 
The Department revised this paragraph for consistency with Sec.  
681.550 that permits youth funds to pay for training for out-of-school 
youth aged 16-24 and such funds are also subject to the requirement to 
repay funds received during non-compliance.
    Comments: The Department received only a handful of comments 
addressing proposed Sec.  680.480. As discussed above, one commenter 
stated that proposed Sec.  680.480 was inconsistent with WIOA to the 
extent that it allows registered apprenticeship programs to be removed 
from the List for any reason other than deregistration.
    Department Response: The Department revised Sec.  680.480(c) by 
adding language stating that registered apprenticeship programs may 
only be removed from the List for reasons set forth in Sec.  680.470. 
The regulation includes registered apprenticeship programs within the 
enforcement provisions in WIOA sec. 122(f) for the reasons set forth in 
the preamble to Sec.  680.470. WIOA sec. 122 does not require 
registered apprenticeship programs to supply performance information in 
order to be determined eligible training providers, in light of the 
extensive vetting process that registered apprenticeship programs 
undergo in order to become registered. Therefore, the Department is not 
regulating that registered apprenticeship programs be removed from the 
State List of Eligible Training Providers for reasons related to 
performance.
    Comments: Another commenter stated that training providers should 
be considered to be noncompliant when less than 50 percent of those 
enrolled complete the program in the allotted training period or when 
less than 50 percent of completers fail to find employment within 180 
days of completion. The commenter stated that these statistics should 
be based on all enrolled students, not just WIOA-funded individuals. In 
addition, a commenter suggested that ETPs that do not provide 
performance information as required under WIOA should be removed from 
the State ETPL, as those that are non-compliant or intentionally 
provide inaccurate information. The commenter said that such providers 
should also be liable for repayment of adult and dislocated worker 
funds. Another commenter asked how monitoring of training providers 
will be conducted and who has ultimate responsibility for this task.
    Department Response: The Governor's procedures for establishing 
eligibility may establish minimum performance standards for all 
providers other than registered apprenticeship programs. Under Sec.  
680.480(c), the Governor may remove provider programs from the State 
List during its biennial renewal procedure for failure to meet State 
eligibility criteria, including any minimum performance levels 
established. The Department has not regulated specific threshold 
amounts for compliance because it is within the Governor's authority 
under WIOA to establish appropriate minimum standards through its 
procedure. Under Sec.  680.430(e), the Local WDB may establish higher 
levels of performance than those required by the Governor for a 
provider to be eligible to receive training funds from that local area. 
The Department made a minor revision to Sec.  680.480(e) for 
consistency with Sec.  680.430(e) to clarify that if the Local WDB has 
established higher performance standards pursuant to Sec.  680.430(e), 
the Local WDB can remove a program of training services from the 
eligible programs in that local area for failure to meet those higher 
performance standards. In response to the comment suggesting that ETPs 
who do not provide performance information should be removed from the 
State ETPL, the Department refers readers to Sec.  680.460 and its 
accompanying preamble.
    Regarding comments on which entity is responsible for monitoring 
ETPs, the Department notes that under WIOA sec. 122, States and local 
areas are responsible for monitoring eligible training providers and 
for determining how such monitoring is conducted. Per Sec.  
680.430(b)(2) and (c), the Governor or the Governor's designated SWA 
(or appropriate State entity) is responsible for ensuring that programs 
meet eligibility criteria and performance levels established by the 
State, including verifying the accuracy of the information, and the 
Local WDB must carry out procedures assigned to the Local WDB by the 
State.

[[Page 56142]]

Section 680.490 What kind of performance and cost information must 
eligible training providers other than registered apprenticeship 
programs provide for each program of training services?
    Section 680.490 describes the information that training providers 
must submit to the State to meet initial and continued eligibility 
criteria for inclusion on the State List of Eligible Training Providers 
and Programs under Sec.  680.460(h). Proposed Sec.  680.490(d) required 
the Governor to establish a procedure and methods to assist training 
providers who demonstrate that providing the required information is 
unduly burdensome or costly. This section has been adopted as proposed, 
with revisions for clarity and consistency of terms and one substantive 
change at paragraph (c).
    The Department revised proposed Sec.  680.490(a) for clarity. 
Proposed Sec.  680.490(a) provided that, in accordance with Sec.  
680.460(h), every 2 years training providers are required to submit 
appropriate, timely, and accurate performance and cost information. 
However, the Department changed the reference to Sec.  680.460(h) in 
this paragraph to Sec.  680.460(i) to clarify that eligible training 
providers, except registered apprenticeship programs, must submit this 
information at least every 2 years in accordance with the State's 
continued eligibility policy.
    The Department also modified Sec.  680.490(c) by adding that the 
Governor may require additional performance information if the Governor 
determines it is appropriate to better inform consumers. This paragraph 
originally provided that the Governor could add this information if the 
Governor determined it was appropriate for determining or maintaining 
eligibility. However, WIOA sec. 122(b)(1)(J)(iii) provides that the 
Governor's criteria and information requirements can include other 
factors the Governor determines are appropriate to ensure informed 
choice of participants among training service providers, and the 
modification to this section reflects this authority.
    Comments: Several commenters agreed with the Department's message 
that the Governor must assist providers in supplying the information 
required of them under WIOA and the NPRM. These commenters urged that 
the State ETPL coordinators at the State level be required to maintain 
a list of available technical assistance for training providers and 
that a probationary period be included for all those who may miss 
eligibility. One commenter encouraged the Department to ensure that the 
regulations provide maximum flexibility for the State to work with 
training providers to report on the primary indicators of performance.
    Department Response: The Department cannot require States to 
provide a probationary period or maintain technical assistance lists. 
However, the Governor has significant flexibility under Sec.  
680.490(d). For example, if a provider demonstrates that providing 
additional information required under this section would be unduly 
burdensome or costly, the Governor may provide additional resources 
from funds for State workforce investment activities reserved under 
WIOA secs. 128(a) and 133(a)(1) as provided in Sec.  680.490(d)(2) to 
assist providers in the information collection. Further, in addition to 
the required factors, the regulations allow the Governor to take any 
appropriate additional factors into account when developing procedures 
for providers to be included and maintained on the State List of 
Eligible Training Providers and Programs. No changes to regulatory text 
were made as a result of these comments.
    Comments: Several commenters supported the Sec.  680.490(d) 
requirement that Governors have a procedure in place to address the 
costs and burden of any increased reporting requirements. One commenter 
expressed appreciation for the Department's recognition of the 
potential cost and burden of WIOA's requirements for ETPs in meeting 
their performance reports and urged the Department to issue guidance to 
the States on how to streamline performance reporting for training 
providers and minimize the burden associated with reporting on multiple 
programs through the ETP performance reports required by WIOA sec. 116 
and the performance information required by WIOA sec. 122 for inclusion 
and maintenance on the State ETPL. A number of comments appear to 
reflect confusion between these two types of performance information.
    A few commenters stated that many of the requested reporting 
elements are not valuable to the consumer and asserted that local areas 
should determine if a provider should continue to be listed on the ETPL 
because local areas' performance is directly related to the quality of 
the training programs. One commenter suggested that for each program of 
study, the following information be collected: Number enrolled, number 
completed, number of completers employed at 90 and 180 days after exit, 
and wage at placement of those employed.
    Department Response: WIOA sec. 122 requires specific information 
that must accompany the State List of Eligible Training Providers and 
Programs. The Departments of Education and Labor are issuing joint 
guidance on data sharing. Submission of ETP performance reports is 
required by WIOA sec. 116(d)(4) and addressed in 20 CFR 677.230 of the 
regulations (see Joint WIOA Final Rule). This section of the preamble 
addresses Sec.  680.460 and is focused on the requirements for ETP 
eligibility and maintenance of the State ETPL. Comments related to the 
ETP annual performance reports required under WIOA sec. 116(d)(4) and 
other issues related to specific performance indicators are addressed 
in the Joint WIOA Final Rule preamble section relating to 20 CFR part 
677. In addition, the Governor's procedure for continued eligibility 
and for publishing the State List may include the specific information 
suggested by the commenter. No changes were made to the regulatory text 
in response to these comments.
    Comments: Several commenters stated that flexibility is needed in 
the performance reporting requirements for inclusion on the State ETPL 
to allow Local WDBs to assess providers at the course, program, or 
institutional level because the proposed ETP performance reporting 
requirements could raise data privacy concerns where PII is provided. 
One commenter suggested that performance information be maintained at 
the participant level and not across programs.
    Department Response: The Department has determined that reporting 
requirements for inclusion and maintenance of the State ETPL must be 
established at the program level only. WIOA clearly establishes initial 
and continued eligibility requirements for provider programs. 
Eligibility and performance reporting is thus determined on a program-
by-program basis for each provider under the regulations. Therefore, 
reporting is done through the program of study, rather than the 
individual courses that make up the program. All performance reporting 
requirements must be carried out consistent with all applicable Federal 
and State privacy laws and the Department is issuing guidance to assist 
States in complying with these laws.
    In addition, the Department made a revision to the title of Sec.  
680.490 to clarify that registered apprenticeship programs are not 
subject to these performance reporting requirements. As the Department 
explained in the preamble addressing Sec.  680.470, WIOA exempts 
registered apprenticeship

[[Page 56143]]

programs from ETP performance reporting requirements for inclusion on 
the ETP list. However, voluntary reporting of performance information 
by registered apprenticeship programs is encouraged under the 
regulation. The Department also modified Sec.  680.490(a) to clarify, 
consistent with the decision that registered apprenticeship programs 
are exempt from the performance reporting requirements, that registered 
apprenticeship programs are not required to submit the performance and 
cost information required by this section.
    Finally, as noted in the preamble to Sec.  680.400, Sec.  
680.490(b) has been revised to require performance reporting on all 
WIOA participants enrolled in a program of training services and 
receiving funding through an ITA for the performance information on 
WIOA participants required by Sec.  680.490(b). This includes OSY aged 
16-24. As the Department is permitting youth program funds for OSY aged 
16-24 to use ITAs, it is important that the performance information 
required encompass these WIOA participants. However, the ETPs will 
report based on the adult primary indicators of performance for these 
youth to provide comparability and to eliminate the burden that would 
be imposed if ETPs were required to report on separate performance 
indicators for adults and dislocated workers and for the subset of 
youth who may receive training through ITAs.
Section 680.500 How is the State list of eligible training providers 
and programs disseminated?
    Section 680.500 describes the requirements for distributing the 
State List of Eligible Training Providers and Programs and accompanying 
cost and performance information to Local WDBs and to the general 
public. Other than non-substantive changes for consistency of terms, 
the Department has adopted this section as proposed.
    Comments: One commenter supported making the ETPL publicly 
accessible in a consumer friendly format. Another commenter stated that 
only one List per State should be permitted to be published because 
multiple publications within a State would be confusing for 
participants and ETPs. One commenter recommended that States be 
required to identify and list credentialing organizations and helpful 
information about key or high growth sectors on the homepages of the 
State Lists of Eligible Training Providers and Programs, including 
providing a list of high growth industries. This commenter stated that 
when a nationally-recognized, industry-driven credential has been 
discovered by a State or local entity, or the Federal government, this 
information should be shared publicly to raise the bar on training 
programs and help ensure that tasks are performed to the highest 
standards available, while maintaining and improving American 
competitiveness.
    Department Response: WIOA requires the State to generate and 
disseminate its List of ETPs that contains, at a minimum, the 
information required by WIOA sec. 122(d) and Sec.  680.500. However, as 
provided at Sec.  680.430(e), Local WDBs may establish higher 
performance standards or additional information and criteria, except 
with respect to registered apprenticeship programs. In addition, the 
Department notes that States have the discretion to identify 
credentialing organizations or to restrict the types of providers 
included on the State List. It is up to the State to determine what 
providers meet its initial and continued eligibility criteria in order 
to be included on the State List. Some of this information, including 
whether a provider organization provides an industry-recognized 
credential may be noted on the State List. No changes were made to the 
regulatory text in response to these comments.
    Comments: Several commenters responded to the Department's request 
for comments on the value of a summary sheet to accompany the ETPL. A 
few commenters stated that a summary sheet was not necessary because 
applicants only need the following key data to make an informed choice: 
Completion rate, placement rate, credential, and wages. In contrast, 
another commenter encouraged the use of a uniform summary sheet to help 
prospective students compare information across all participating 
programs. This commenter recommended that the summary sheet include 
detailed information about the programs, including many data points 
that are part of the ETP performance reports, such as comparative 
information about costs, program completion, and job placement rates, 
average starting salaries, and debt upon completion. Other commenters 
recommended that each State be allowed to design its own accompanying 
information. One commenter suggested that the information required for 
the ETP be detailed in a simple chart format with cohort information 
for completion and placement information, and that the public site 
should include information that is pertinent to the customer. One 
commenter urged the Department to consider the work of Local WDBs that 
already have scorecards. Another commenter encouraged developing ``ease 
of use reports'' that meet the needs of training seekers while 
minimizing the reporting burden on providers and States. Another 
commenter recommended allowing States to design their own display.
    Department Response: The Department has determined that no 
revisions to the regulatory text are needed in response to these 
comments. The list of ETPs and accompanying cost and performance 
information must be disseminated in coordination with the ETP annual 
performance reports in accordance with 20 CFR 677.230(e)(3) (see Joint 
WIOA Final Rule). The ETP annual performance report must include the 
information required under WIOA sec. 116(d)(4) and must be provided 
using a template created by the Department. In contrast, WIOA sec. 
122(d) does not require that the State List of Eligible Training 
Providers and Programs and accompanying information comport with a 
Federal template or format. The Department, therefore, has decided that 
the statutory mandate is best met by leaving it to the States' 
discretion to determine: (1) What information should accompany the 
State ETPL provided that the accompanying information meets statutory 
requirements (including the requirement in WIOA sec. 122(d)(1) that the 
accompanying information identify the recognized postsecondary 
credential); (2) the best format to provide that information to users; 
and (3) how to coordinate its distribution with the ETP performance 
reports. The Department plans to issue further guidance to States 
regarding the relationship between ETP performance reports and the 
State List of Eligible Training Providers and Programs.
    Comments: One commenter stated that some State laws include 
additional restrictions on data sharing beyond the Federal law 
requirements and encouraged the Department to consider how regulations 
and guidance can help States interpret or revise their own laws to 
allow greater access to data for strategic planning and evaluation 
purposes. One commenter urged the Department to issue guidance and 
technical assistance on how data shared for WIOA performance reporting 
may be incorporated into Statewide Longitudinal Data Systems (SLDS) in 
compliance with both UI confidentiality provisions and the Family 
Educational Rights and Privacy Act (FERPA). The commenter stated that 
the data collected would be useful for a variety of stakeholders, 
including for longitudinal

[[Page 56144]]

research and evaluation to improve the mix and targeting of program 
services.
    Department Response: Privacy concerns in regard to how the State 
List and accompanying information are made available are addressed 
under the regulations in Sec.  680.500(e). In developing the 
information to accompany the State List described in Sec.  680.490(b), 
disclosure of personally identifiable information from an education 
record must be carried out in accordance with the Family Educational 
Rights and Privacy Act, including the circumstances relating to prior 
written consent. No changes were made to the regulatory text in 
response to these comments. Instead, the Department intends to provide 
additional guidance on this issue and will also provide technical 
assistance to States who face legal barriers in complying with 
performance reporting requirements.
Section 680.510 In what ways can a Local Workforce Development Board 
supplement the information available from the State list of eligible 
training providers and programs?
    The Department did not receive any comments addressing Sec.  
680.510 other than a general statement of support for the provision as 
drafted. The Department made non-substantive edits to the title of this 
section for uniformity in use of the term ``State list.'' The 
Department also modified Sec.  680.510 to clarify that, as explained 
above, the Local WDB cannot supplement the criteria and information 
requirements established by the Governor for registered apprenticeship 
programs.
Section 680.520 May individuals choose training providers and programs 
located outside of the local area or outside of the State?
    Section 680.520 governs when an individual can choose to attend a 
training program located outside of the local area or State. The 
Department has made non-substantive revisions to this section for 
consistency in the use of terms, and made revisions for clarity to this 
section.
    Section 680.520(a) provides that individuals may choose training 
providers and programs outside of the local area provided that the 
training program is on the State List and it is consistent with local 
policies and procedures. For State ETPs that are outside of the local 
area or that do not meet the local area's criteria for eligibility, 
local policies and procedures determine whether participants in the 
local area may utilize ITAs for training. However, the local area may 
choose to make exceptions to its local eligibility criteria. The local 
policies and procedures must be consistent with State policies and 
procedures in order for the program to receive funds through an ITA.
    Section 680.520(b) provides that individuals may choose eligible 
training providers and programs outside of the State consistent with 
State and local policies and procedures and that State policies and 
procedures may provide for reciprocal or other agreements established 
with another State to permit eligible training providers in a State to 
accept ITAs provided by the other State. The State policies and 
procedures may allow training providers or programs located outside of 
that State to receive funds through a participant's ITA within specific 
circumstances, or a State may enter into a broader agreement with 
another State to establish that ETPs in the other State are eligible in 
the ``home'' State. State policies may determine whether the training 
providers and programs in another State must meet any or all of the 
``home'' State's eligibility criteria order to receive the ITA funds 
provided by the State. In either case, the local policies and 
procedures can have more stringent standards than the State policy, and 
therefore any use of ITAs for training providers and programs outside 
of the State must be consistent with both State and local policies and 
procedures.
    Comments: The Department received a handful of comments addressing 
proposed Sec.  680.520. One commenter supported allowing participants 
to choose training located outside the local area or in other States. 
Another commenter agreed with allowing individuals to choose training 
providers located outside of the local area as long as the training 
providers meet the performance criteria set by the Local WDB in the 
local area where the person resides.
    One commenter urged the Department to work with inter-governmental 
organizations to develop guidance for the active inclusion of out-of-
area and eLearning options into the training approaches of Local WDBs. 
This commenter stated that guidance would be preferable to reciprocity 
agreements to reduce the time required to understand and implement the 
specifics of interstate agreements.
    Department Response: The Department has concluded that reciprocity 
agreements will be maintained in Sec.  680.520 because they are 
specifically authorized under WIOA sec. 122(g) and they further the 
goals of WIOA. Reciprocity agreements reduce the burden on States and 
providers by eliminating duplicative procedures. They also expand the 
array of training options available to individuals seeking training. 
The Department recommends that States consider how best to establish 
and implement reciprocity agreements, and how these agreements may be 
used to expand distance and online training options. The Department 
notes that its revisions to this section, in Sec.  680.520(b), permit 
the States to develop other agreements that permit ETPs in a State to 
accept ITAs provided by another State. This provides additional 
flexibility to the States as the agreement does not have to be 
reciprocal. The Department will consider whether there is a need for 
additional guidance on this issue in the future.
Section 680.530 What eligibility requirements apply to providers of on-
the-job training, customized training, incumbent worker training, and 
other training exceptions?
    Section 680.530 explains that providers of OJT, customized 
training, incumbent worker training, internships, paid or unpaid work 
experience, or transitional jobs are not subject to the same WIOA 
eligibility requirements of sec. 122(a) through (f) that are 
established for providers listed on the State List of Eligible Training 
Providers and Programs. Section 680.530 requires local one-stop 
operators to collect any separate performance information required by 
the Governor and determine whether these providers meet the Governor's 
performance criteria. The Department made non-substantive edits for 
consistency in how the Department uses terms throughout this section 
and made substantive edits to the provision which are further explained 
below.
    The Department reorganized this section for clarity by breaking 
what was one paragraph into several paragraphs. Paragraph (a) now 
provides that providers of OJT, customized training, incumbent worker 
training, internships, paid or unpaid work experience, or transitional 
jobs are not subject to the requirements applicable to providers and 
programs which are included on the State ETPL. Paragraph (b) now 
provides that the Governor may establish performance criteria those 
providers must meet to receive funds through the adult or dislocated 
worker programs pursuant to a contract consistent with Sec.  680.320. 
Thus, while these kinds of programs cannot be paid for with ITAs, Local 
WDBs may enter into a contract with these entities to provide these 
training services. More information can be read about this in Sec.  
680.320 and its accompanying preamble. Paragraph (c) provides that one-
stop operators must

[[Page 56145]]

collect any performance information required by the Governor and 
determine if the provider meets these performance standards. For those 
that meet the Governor's standards, paragraph (d) requires the one-stop 
operator to distribute information about those programs, with the 
relevant performance information, throughout the system.
    Comments: Several comments requested clarification of whether these 
other training providers are exempted from the State eligibility 
process required by WIOA sec. 122 and/or from the ETP performance 
reporting process required by WIOA sec. 116, if they are not included 
on the State List of Eligible Training Providers and Programs. Other 
commenters supported allowing local areas to contract with providers 
not on the State List of Eligible Training Providers for customized 
training, incumbent worker training, internships, paid or unpaid work 
experience, and transitional employment. One commenter expressed 
support for exempting OJT, customized, and incumbent worker training 
from the ETP process but recommended that these training programs be 
subject to performance reporting. Another commenter recommended 
revising Sec.  680.530 to provide that OJT, customized training, 
incumbent working training, and other training exceptions are not 
exempt from rigorous performance standards even though they are exempt 
from the general performance metrics in WIOA sec. 122 and must be 
subjected to rigorous performance standards suited to the type of 
program. This commenter recommended that Sec.  680.530 be revised to 
emphasize that local one-stop operators must collect the performance 
information that the Governor shall require and to emphasize that local 
one-stop operators must disseminate this list of training exceptions. 
This commenter recommends requiring inclusion of the Governor's 
performance criteria for OJT, customized training, and incumbent worker 
training in the State Plan and annual reports and that the monitoring 
of these programs be referenced in Sec.  680.530. Further, this 
commenter recommended that performance of these programs be detailed by 
industry, company, and occupation at the quarterly meetings of Local 
and State WDBs Another commenter suggested the Local WDB must concur 
with the Governor that such information is worth collecting and that 
the Local WDB should determine how best to collect the information. 
This commenter felt that requiring the operator to collect such 
information is likely to be less efficient that obtaining the 
information directly from the service provider or UI wage records, and 
that local areas should decide if it is worth collecting data on every 
work-based, customized, incumbent worker training, internship, or work 
experience arrangement.
    One commenter recommended that work experience programs be excluded 
from reporting. Another commenter suggested that the Department require 
the Governor's performance standards for these exceptions to be 
described in the State Plan. Some commenters recommended that these 
exceptions be subject to the same accountability, transparency, and 
monitoring standards that apply to all programs regulated by WIOA. One 
commenter recommended that where a Local WDB is using short-term and/or 
eLearning assisted ``training,'' these training services should be 
regarded as being provided by the Local WDB, and these approaches 
should be exempted from the ETP process. This commenter stated that 
these training programs should be subject to performance reporting. One 
commenter stated that OJT and customized training providers should not 
be included on the State ETPL because these should be matters of 
negotiation between Local WDBs and affected business entities. Finally, 
one commenter said that customized training, registered apprenticeship, 
or OJT are all work-relevant, but the section-by-section discussion in 
the regulation should clarify that these are examples and not an 
exhaustive list of the types of training that would have to be provided 
by a business. Such limitation could deem ineligible representatives of 
the business community who may successfully offer alternative types of 
training such as a non-registered apprenticeship.
    Department Response: The Department has made changes to the 
regulatory text of Sec.  680.530 to clarify that the training providers 
listed in this section are not included on the State ETPL. The 
Department is including among these exceptions the types of work-based 
training included at WIOA section 122(h), which does not specifically 
identify non-registered apprenticeship programs but does include on-
the-job training, customized training, incumbent worker training, 
internships, paid or unpaid work experience, and transitional jobs. 
There is no Federal restriction on States and Local WDBs including non-
registered apprenticeship programs on the ETPL; however, these programs 
must apply through the Governor's eligibility procedure to become an 
eligible training provider, just as any other potential eligible 
training provider would. Additionally, there is no restriction on non-
registered apprenticeship programs participating in on-the-job training 
or customized training through contracts as described in Sec.  680.530, 
if it is determined appropriate by the State and Local WDB. This 
decision is based on the exception in WIOA sec. 122(h) exempting these 
providers from the requirements for inclusion on the List, maintenance 
on the List, and removal from the List. Notwithstanding this exclusion, 
that exemption in WIOA sec. 122(h) further authorizes the Governor to 
require the local area to collect performance information on these 
providers. That information can be the same as that required for ETPs 
or may be different information.
    Local WDBs may provide training services, including short-term and/
or eLearning assisted training, if the Local WDB meets the conditions 
of WIOA sec. 107(g)(1), which includes the information required in a 
written waiver request to the Governor.
    The revised regulatory text at Sec.  680.530(d) clarifies that one-
stop operators must disseminate information identifying providers and 
programs that have met the Governor's performance criteria and the 
relevant performance information as required by the Governor throughout 
the one-stop delivery system. Local WDBs are not required to concur 
with the Governor regarding the value of the performance information 
that the Governor chooses to require.
    While States are not required in their State Plans to describe the 
State's performance standards for on-the-job training, incumbent worker 
training, transitional jobs, and customized training, the State is 
required to describe the State's strategies for how these exceptions 
ensure high quality training for both the participant and the employer. 
State Plan requirements are fully described in the WIOA State Plan ICR 
and 20 CFR part 676 (see Joint WIOA Final Rule).
    The Department does not have the authority to require State or 
Local WDBs to review performance information by industry at quarterly 
meetings.
    Further, the regulatory text has been modified to clarify that 
these other training providers are eligible to receive WIOA funding 
through a contract for services rather than through ITAs. The 
regulatory text was also edited to remove the statement that approved 
providers under this section are considered eligible training providers 
services, which could inappropriately suggest that these entities may 
serve as

[[Page 56146]]

ETPs and receive funding through ITAs without going through the 
Governor's eligibility procedures. As explained, this is not the case. 
The regulation text was also revised to clarify that these providers 
are not subject to the other requirements that training providers and 
programs which are on the State ETPL must fulfill. However, these 
providers are still subject to other requirements of WIOA outside of 
this subpart.
    The Department has also made a change to the terminology used in 
reference to transitional employment. For consistency with other areas 
of the WIOA Final Rule, the Department is using the term transitional 
jobs.
    Comments: One commenter recommended that Sec.  680.530 be revised 
to ensure that non-credit training and education be included on the 
ETP, and that performance-related elements are consistent across all 
ETPs, including community colleges, to ensure better program outcomes 
and a level playing field for all ETPs. Two commenters suggested that 
work experience should be excluded from any reporting required of these 
training exceptions.
    Department Response: Section 680.530 describes programs that are 
not included on the State ETPL. The programs listed in this section may 
or may not offer credit, and the eligible training providers included 
in the State List of Eligible Training Providers and Programs may or 
may not offer credit. For performance reporting, the performance-
related elements required by WIOA are consistent across all eligible 
training providers, except for registered apprenticeship programs. For 
eligibility procedures, the performance-related elements in the 
Governor's procedure should be consistent across all programs in the 
State. However, the Governor's performance criteria for the work-based 
training exceptions described at Sec.  680.530 may be quite different 
and these programs are not a part of the State List of Eligible 
Training Providers. No changes were made to the regulatory text in 
response to these comments.
    Comments: Several commenters requested clarification of how the 
Governor may treat providers who fall within the exceptions to ITAs 
described at Sec. Sec.  680.320 and 680.530 as to whether these 
excepted providers may use ITAs or only contracts, and what is required 
if they are to be on the State ETPL.
    Department Response: As described above, local areas may contract 
for these work-based training exceptions and these programs of training 
services do not need to be on the State List nor are they subject to 
the ETP eligibility procedures. However, these providers also could 
have programs of training that are not excepted under Sec.  680.530 and 
that the provider wishes to be eligible to use ITAs. As explained 
above, only ETPs on the State List are able to use ITAs. Therefore, 
when a provider that provides a program of training services through 
contract to a local area wishes to be eligible to receive students 
using ITA funding, the training provider would need to complete the ETP 
eligibility process described in this subpart. These programs would be 
subject to the Governor's eligibility procedure. An example of such a 
case would be a company that provides OJT through a contract with a 
local area and also offers classroom training or credentialing; the 
classroom training could be a regular ETP while the company could have 
a contract for the OJT. More information about the ETP exceptions can 
be found in Sec.  680.320. No changes were made to the regulatory text 
in response to these comments.
6. Subpart E--Priority and Special Populations
Introduction
    The services provided with adult funds can be a pathway to the 
middle class for low-income adults, public assistance recipients, and 
individuals who are basic skills deficient. The regulations implement 
the statutorily-required priority for the use of adult funds, and 
ensure any other priorities or designations are consistent with the 
statutory priority. This subpart contains regulations about how 
participants from certain populations are able to access adult and 
dislocated worker services, and regulations establishing priority 
access to these services. WIOA sec. 134(c)(3)(E) provides that priority 
for adult training services and certain career services must be given 
to recipients of public assistance, other low-income individuals, and 
individuals who are basic skills deficient. Under WIOA, priority access 
to services by members of this group is always in effect regardless of 
funding levels. Nonetheless, WIOA allows one-stop centers to provide 
individualized career services to individuals who are not members of 
these groups, if determined appropriate by the one-stop center.
    The Department encourages close cooperation between WIOA-funded 
programs and other Federal and State sources of assistance for job 
seekers. Coordination between WIOA-funded programs and the TANF program 
is a crucial element in serving individuals who are on public 
assistance. TANF is a required partner in the one-stop delivery system. 
Through close cooperation, each program's participants will have access 
to a much broader range of services to promote employment retention and 
self-sufficiency than if they relied only on the services available 
under a single program.
    In this subpart, the Department explains how displaced homemakers 
may be served with both adult and dislocated worker funds. Under WIOA, 
a displaced homemaker qualifies as an ``individual with a barrier to 
employment'' (see WIOA sec. 3(24)(A) and Sec.  680.320(b)). 
Additionally, displaced homemakers meet the definition of a 
``dislocated worker,'' as defined in WIOA sec. 3(15)(D). Displaced 
homemakers, whose work, albeit without a formal connection to the 
workforce, is recognized for its value, may need WIOA services to 
develop further work skills. WIOA also expands the definition of 
displaced homemakers to include dependent spouses of the Armed Forces 
on active duty to ensure they have access to WIOA title I services.
    This subpart ensures that veterans and certain service members have 
access to adult and dislocated worker programs. Under WIOA, as was the 
case under WIA, veterans receive priority of service in all Department-
funded employment and training programs. The regulations in this 
subpart describe what is meant by ``priority of service.'' The 
regulation is consistent with guidance it issued in TEGL No. 22-04 
(``Serving Military Service Members and Military Spouses under the 
Workforce Investment Act Dislocated Worker Formula Grant''), dated 
March 22, 2005 (http://wdr.doleta.gov/directives/attach/TEGL22-04.pdf) 
and expanded in TEGL No. 3-15 (``Guidance on Services Provided through 
the Adult and Dislocated Worker Program under the Workforce Innovation 
and Opportunity Act (WIOA or Opportunity Act) and Wagner Peyser, as 
Amended by WIOA, and Guidance for the Transition to WIOA Services''), 
dated July 1, 2015 (http://wdr.doleta.gov/directives/attach/TEGL/TEGL_03-15.pdf) that separating service members meet the eligibility 
requirements for dislocated worker activities. This regulation will 
ensure that service members will have access to the full array of 
services available through the one-stop delivery system.

[[Page 56147]]

Section 680.600 What priority must be given to low-income adults and 
public assistance recipients and individuals who are basic skills 
deficient served with adult funds under title I?
    Comments: Several commenters expressed general support for giving 
priority for service to recipients of public assistance, other low-
income individuals, and individuals who are basic skills deficient. In 
contrast, a few commenters expressed disagreement with the priority of 
service provisions, reasoning that the regulations fail to address 
employer needs and focus instead solely on the needs of the employee. 
Two commenter recognized the need to be responsive to both the 
employers and the employees.
    Department Response: The Department notes that WIOA sec. 
134(c)(3)(E) requires priority be given to individuals who are public 
assistance recipients, low income, or basic skills deficient, with 
regard to the provision of individualized career services and training 
services. This priority applies to funds allocated to a local area for 
the WIOA title I adult program, It is not an eligibility criterion for 
the program, but it is the means to ensure an emphasis on providing 
services to these populations. This priority is not required for the 
WIOA title I dislocated worker program. The Department recognizes the 
need to serve not only low-skilled individuals but also those with more 
advanced skills and training who also need assistance. The Department 
also recognizes the importance of the one-stop delivery system's 
employer customer, assisting them to find, hire, train, or upskill 
their workforces. The one-stop delivery system connects the provision 
of career services and training to help individuals get good jobs and 
build careers and the development of the skilled workers employers need 
and their match to employers. Work-based training focuses on employer 
workforce needs, particularly incumbent worker training, where the 
employer is the primary customer.
    Comments: A few commenters supported the removal of the WIA 
``limited funding'' exception. Two commenters strongly urged the 
Department to clarify in the Final Rule that the priority is in effect 
regardless of funding. Two commenters stated that it was preferential 
to apply the proposed priority of service provisions when funds are 
limited. One commenter questioned whether the regulations pre-suppose 
that limited funding exists and expressed support for the development 
of criteria that would give local areas the authority to set priority 
of service thresholds that would take effect only during times of 
limited funding.
    Department Response: The application of priority under the title I 
adult program applies at all times as required in WIOA sec. 
134(c)(3)(E).
    Comments: A commenter recommended that the regulation allow for 
local definition of low income rather than the Federally defined Lower 
Living Standard Income Level (LLSIL), reasoning that an individual 
might not be below the low-income level as defined by the LLSIL, but 
still be far below the level of self-sufficiency in the local area. 
Another commenter asked what the definition of ``family'' would be when 
determining whether someone is considered low income in regard to 
priority of service. One commenter recommended incorporating the 
definition of family from WIA sec. 101(15) into the regulations to 
clarify the meaning of low income. One commenter questioned how the 
priority groups included in the regulation relate to Equal Employment 
Opportunity (EEO) considerations and requested clarification within the 
regulation that EEO applies within the priority groups rather than 
before prioritization is considered.
    A few commenters asserted that insufficient detail was provided in 
the regulations (e.g., family income calculations) and expressed 
concern with an approach that provided these details through guidance, 
reasoning that guidance allows for requirements to change over time.
    Department Response: The term ``low-income individual'' is 
statutorily defined in WIOA sec. 3(36); it includes language that the 
LLSIL is determined by the Secretary. The Department agrees with the 
commenters requesting a definition of ``family'' and has added language 
to the definitions in part 675 of this Rule. Discussion of the added 
definition is provided in the preamble accompanying part 675.
    The non-discrimination provisions of WIOA sec. 188 do not provide 
for preference for services. They protect against discrimination in the 
provision of services and prevent individuals from being otherwise 
adversely affected because of their membership in a protected class. 
Therefore, the Department has declined to make changes in the 
regulatory text in response to this comment.
    Comments: Several commenters recommended a revision to proposed 
Sec.  680.600(c) to clarify that any designation of priority for other 
eligible individuals must be subject to both the veterans priority of 
service requirements at Sec.  680.650 and the WIOA statutory priority 
of service requirements in sec. 134(c)(3)(E). A commenter suggested 
that any guidance in this area, including guidance on expectations for 
State and local implementation, should support flexibility to allow 
States and localities to serve their unique and diverse populations 
best. One commenter questioned the relative priority that should be 
applied to other groups of individuals designated by the Local WDB or 
Governor as receiving priority of service compared to those explicitly 
listed in WIOA.
    Department Response: The Department agrees with the commenters' 
suggestion that any additional priority populations identified by the 
Governor must be consistent with the statutory priority as well as the 
veteran's priority of service. The Department has made changes to the 
regulatory text at Sec.  680.600(c) to reflect this suggestion. The 
Department will issue guidance and technical assistance about the 
implementation of these priority requirements.
    Comments: Several commenters stated that the Department must revise 
proposed Sec.  680.600(a) to align with WIOA and allow for priority to 
be given to ``recipients of public assistance, other low-income 
individuals, and individuals who are basic skills deficient,'' not 
``recipients of public assistance, other low-income individuals, who 
are basic skills deficient,'' as was proposed. A commenter requested 
clarification as to whether being basic skills deficient alone would 
quality an individual for priority of service.
    Department Response: The Department agrees with the commenters and 
has modified the regulatory text in Sec.  680.600(a) to make clear that 
individuals who are basic skills deficient is its own category to be 
eligible for priority of service in the WIOA title I adult program.
Basic Skills Deficient
    Comments: A commenter provided several recommendations about 
priority of service for individuals who are basic skills deficient: (1) 
Basic skills deficient should include computer literacy skills as a 
skill necessary to function on the job; (2) the process for identifying 
basic skills deficient should allow self-attestation and observation by 
one-stop staff; (3) a standard tool for measuring basic skills 
deficient should be developed and should include consideration of 
career-oriented employability skills; and (4) any individual who meets 
the definition of basic skills deficient should be eligible for 
services.

[[Page 56148]]

    A few commenters cautioned against using a definition of basic 
skills deficient that considered how the individual's skill set would 
allow them to ``function on the job.'' These commenters reasoned that 
such a definition could create a loophole that might diminish the 
priority of service requirement by permitting services to otherwise 
non-low- income individuals who simply lack some skill needed to do a 
specific job. A few commenters recommended that the methodology for 
determining basic skills deficiency should be identified in State or 
local policy, rather than in regulation or Department policy.
    Department Response: The term ``basic skills deficient'' is defined 
in WIOA sec 3(5). States and Local WDBs have flexibility in determining 
when an individual meets this definition.
    Comments: A commenter stated that proposed paragraphs (a) and (c) 
of Sec.  680.600 included inconsistent language when describing 
individuals who are basic skills deficient, one paragraph using the 
term ``basic skills deficient'' and the other using the term 
``individuals without basic work skills.'' The commenter asserted that 
consistent terminology is important.
    Department Response: The Department agrees with these comments and 
has modified the regulatory text to incorporate this suggestion.
Implementation of Priority of Service Requirements
    Comments: Several commenters requested guidance on the 
implementation of the priority of service requirements. A few 
commenters stated that guidance should include an explanation of how 
States and localities will be monitored to ensure that an appropriate 
process or protocol is established and details on what the protocols 
should include. Because the priority groups could be seen as a threat 
to successful performance tracking, one commenter stated that reporting 
and incentives should be put into place to ensure these participants 
are actually served and supported.
    Several commenters provided additional input on how to implement 
the priority of service requirements, including the following 
recommendations, building on the Department's use of veterans' priority 
of service, utilizing technical assistance and best practices, 
developing performance metrics and benchmarks, and coordination with 
immigration and refugee organizations and State Refugee Coordinators.
    A few commenters described how U.S. Census data could be used to 
implement or verify the priority of service requirements. To verify 
that the priority of service has been properly implemented, two 
commenters recommended that the Department require that State and local 
planning efforts utilize the most current Census and administrative 
data available to develop estimates of each priority service population 
in their planning efforts and update these data year to year. 
Additionally, these commenters recommended that this data be used in 
Federal reviews of State Plans to ensure that system designs and 
projected investments are equitably targeted to service priority 
populations. The commenters also stated that this data should be used 
to benchmark system performance in actual implementation of the 
priority of service from year to year.
    Department Response: The Department will provide further guidance 
to clarify how priority of service should be implemented and monitored.
Section 680.610 Does the statutory priority for use of adult funds also 
apply to dislocated worker funds?
    Comments: A commenter sought clarification as to whether the same 
priority given to adult funds applied to dislocated worker funds that 
were transferred to the adult program.
    Department Response: The Department considers funds transferred 
from the dislocated worker program to the adult program to be adult 
program funds and fall under the priority requirements of the adult 
program. Likewise, any transfer of funds from the adult program to the 
dislocated worker program will fall under the requirements of the 
dislocated worker program.
    Comments: Commenting that older workers are more likely to show up 
in the dislocated worker program than in the adult program, one 
commenter recommended that priorities and protections should be 
established within the dislocated workers program.
    Department Response: There is no priority in the dislocated worker 
program, other than veteran's priority of service. Participants must 
meet the dislocated worker eligibility criteria in order to participate 
in this program. No changes have been made to the regulatory text in 
response to the comments.
Section 680.620 How does the Temporary Assistance for Needy Families 
program relate to the one-stop delivery system?
    Comments: A commenter suggested that the statement in the NPRM 
introduction to subpart E that the ``Department strongly encourages 
close cooperation'' between WIOA-funded programs and other Federal and 
State sources of assistance for job seekers does not convey the 
strength needed to have full coordination between WIOA-funded programs 
and the TANF program. This commenter recommended changing the wording 
to ``mandates close coordination with funding tied to coordinated 
partnerships.''
    One commenter recommended that the Department seek out 
opportunities for increased alignment between WIOA common performance 
indicators and TANF. This commenter stated that one challenge is that 
TANF programs are not measured by the same accountability measures as 
the other core WIOA programs.
    Department Response: WIOA delegated the authority to Governors and 
Local WDBs, to decide how closely to align and coordinate their plans 
with WIOA programs and other sources of public assistance like TANF. 
The Department encourages strong partnership and close alignment with 
TANF at the State and local level.
    Comments: A commenter requested clarification on whether TANF 
funding had to be used, rather than WIOA funds, if available, and how 
TANF organizations should document that TANF funds are not available.
    Department Response: Under Sec.  680.230(b) and WIOA sec. 
134(c)(3)(B), one-stop centers are required to consider the 
availability of other sources of grants to pay for training costs, 
which includes TANF funds. The Department will provide additional 
guidance and technical assistance to one-stop centers to answer 
questions about how to document whether funds from other sources such 
as TANF are available.
    Comments: Several commenters recommended that the Department ensure 
that Local WDBs or their standing youth committees identify how 
connections will be made with TANF partners at one-stop centers to 
ensure policy and programmatic alignment for the young adult population 
under 25, who may receive a different set of services if they are not 
served though WIOA title I youth programs. These commenters asserted 
that WIOA and TANF differ greatly from each other, requiring specific 
policy and

[[Page 56149]]

programmatic alignment by the State and Local WDBs to service TANF 
recipients in a WIOA program.
    Department Response: Coordination between TANF and WIOA services 
must take place at the State and local level and therefore, States and 
local areas are responsible for establishing policies and MOUs, and 
aligning plans wherever they deem to be appropriate to serve 
participants best. The Department recognizes that there are challenges 
associated with such planning and coordination and will continue to 
provide guidance and technical assistance to assist with these 
processes. No change is made in the regulatory text.
Section 680.630 How does a displaced homemaker qualify for services 
under title I?
    Comments: A commenter expressed support for the inclusion of 
spouses of members of the Armed Forces on active duty as a displaced 
homemaker. Two commenters encouraged the Department to urge States to 
highlight the displaced military spouse homemakers in dissemination of 
information about services to this population.
    Department Response: The Department agrees with the commenters' 
suggestion and encourages States and Local WDBs to highlight the 
eligibility for displaced military spouse homemakers in the information 
they disseminate about this program. No changes have been made to the 
regulatory text in response to the comments.
Section 680.640 May an individual with a disability whose family does 
not meet income eligibility criteria under the Workforce Innovation and 
Opportunity Act be eligible for priority as a low-income adult?
    Comments: A few commenters expressed support for the provisions in 
Sec.  680.640 as proposed. One comment also expressed support for the 
provisions in proposed Sec.  680.640 to keep a family's income separate 
from the adult with a disability's income to that services are provided 
to all individuals who need it and that another eligibility barrier is 
not created to ensuring access to these services.
    One commenter requested clarification on whether the provisions 
specifying the circumstances under which an individual with a 
disability may still qualify as a priority low-income adult, even when 
family income does not meet the low-income eligibility criteria, also 
apply to persons receiving Social Security Disability Insurance.
    Another commenter recommended the Department clearly identify 
receipt of Social Security disability benefits as a barrier to 
employment.
    Department Response: The circumstances that allow these individuals 
to qualify still as a low-income adult, regardless of family income, do 
not apply to persons receiving Social Security Disability Insurance 
(SSDI). The Department considers WIOA to be very specific about what 
does count and what does not with regard to income-based eligibility in 
its definition of ``low-income individual'' in WIOA sec. 3(36). This 
definition allows individuals on Supplemental Security Income (SSI) to 
be considered low-income, but does not consider individuals on SSDI to 
be considered low-income of the basis of that status alone. Also, SSDI 
payment cannot be excluded when making income-based eligibility 
determinations. However, individuals receiving SSDI meets the 
definition of an individual with a disability, which means the 
individual meets the criteria of an individual with a barrier to 
employment under WIOA sec. 3(24) and Sec.  680.320(b). The Department 
encourages individuals receiving SSDI who are seeking to return to 
employment to access services through the one-stop delivery system. 
WIOA is subject to 38 U.S.C. 4213, and therefore military benefits are 
excluded from income-based eligibility determinations under WIOA.
7. Subpart F--Work-Based Training
    Sections 680.700 through 680.850 are regulations for work-based 
training under WIOA. The regulations apply to (OJT) training, 
customized training, incumbent worker training, and transitional jobs. 
The regulations include specific information about general, contract, 
and employer payment requirements. Work-based training is employer-
driven with the goal of unsubsidized employment after participation. 
Generally, work-based training involves a commitment by an employer or 
employers to employ successful participants fully after they have 
completed the program. Registered apprenticeship training is a type of 
work-based training that can be funded in the adult and dislocated 
worker programs; additionally pre-apprenticeships may be used to 
provide work experiences that can help participants obtain the skills 
needed to be placed into a registered apprenticeship.
    Work-based training can be an effective training strategy that can 
provide additional opportunities for participants and employers in both 
finding high quality work and in developing a highly skilled workforce. 
Each of these work-based models can be effectively used to meet a 
variety of job seeker and employer needs. OJT is primarily designed to 
first hire the participant and provide them with the knowledge and 
skills necessary for the full performance of the job. Incumbent worker 
training is designed to ensure that employees of a company are able to 
acquire the skills necessary to retain employment and advance within 
the company or to provide the skills necessary to avert a layoff. 
Customized training is designed to provide local areas with flexibility 
to ensure that training meets the unique needs of the job seekers and 
employers or groups of employers.
    Both training providers and employers providing OJT opportunities 
must be providing the highest quality training to participants. OJT 
contracts must be continually monitored so that WIOA funds provided 
through OJT contracts are providing participants the training to retain 
employment successfully. It is important that OJTs provide participants 
with relevant skills and opportunities for career advancement and 
provides employers with a skilled workforce.
    Under WIOA, the statute enables a Governor or Local WDB to increase 
the reimbursement rate for OJT from 50 to 75 percent. This is designed 
to give States and Local WDBs additional flexibility in developing OJT 
opportunities that work best with the participating employers and in 
the local economy.
    WIOA also explicitly allows for incumbent worker training at the 
local level. WIOA introduces incumbent worker training as an allowable 
type of training for a local area to provide. Incumbent worker training 
is designed to either assist workers in obtaining the skills necessary 
to retain employment or to avert layoffs and must increase both a 
participant's and a company's competitiveness. Local areas may use up 
to 20 percent of their local adult and dislocated worker funds for 
incumbent worker training. The Department seeks to ensure that 
incumbent worker training is targeted to improving the skills and 
competitiveness of the participant and increasing the competitiveness 
of the employer. The training should, wherever possible, allow the 
participant to gain industry-recognized training experience and 
ultimately should lead to an increase in wages. To receive incumbent 
worker funding under WIOA, an incumbent worker must have an employer-
employee relationship, and an

[[Page 56150]]

established employment history, with the employer. Incumbent workers 
are employed at the time of their participation, and the contract funds 
are paid to the employer for training provided to the incumbent worker 
either to avert a lay-off or otherwise retain employment. A ``model'' 
incumbent worker training would be one where a participant acquires new 
skills allowing him or her to move into a higher skilled and higher 
paid job within the company, thus permitting the company to hire a job 
seeker to backfill the incumbent worker's pre-training position.
    Comments: A commenter recommended that the regulations clarify that 
OJT, customized, and incumbent worker training are exempt from the ETP 
process.
    Department Response: Work-based training and work experiences are 
subject to the dissemination requirements of WIOA sec. 134 (a)(2)(B)(v) 
and the requirements of WIOA sec. 122(h) as the Governor may require. 
These requirements are separate from the ETP section of WIOA sec. 
122(a) through (f). The Department has modified the language of the 
regulatory text in Sec.  680.340(b), which requires Local WDBs to 
disseminate the list of ETPs, to make clear that the work-based 
training provider information requirements are separate from the 
requirements governing the ETPL. These provisions of WIOA sec. 122(h) 
apply to providers of work-based training.
On-the-Job Training
    Comments: A commenter expressed support for the proposed 
requirements regarding OJT. Another asked the Department to earmark 
funding either on the national or State level for employer education as 
to the benefits of hiring after training is received.
    Department Response: The Department considers employer engagement 
to be critical to the success of these programs. It plans to provide 
additional guidance and technical assistance for this purpose.
    Comments: A commenter expressed concern that the different 
``employer match'' requirements for OJT, customized training, and 
incumbent worker training would present a challenge to explain to 
employers, and recommended that the Department simplify the match 
requirements and lower them for small businesses to encourage their 
participation in the programs. Specifically, this commenter recommended 
that the match requirement be the same across all three types of 
training and be differentiated based on business size.
    Department Response: The matching requirements training for these 
three types of training are specified in WIOA, and are provided, 
consistent with WIOA, at: Sec.  680.700 for OJT, Sec.  680.760 for 
customized training, and Sec.  680.820 for incumbent worker training. 
Each type of training emphasizes a different need of employers and 
individuals, and the employment match is designed to reflect the 
differences in those training types. No change is made in the 
regulatory text.
Section 680.700 What are the requirements for on-the-job training?
    Comments: Two commenters asked if it would be permissible to enter 
into an OJT contract with a public non-profit agency such as a local 
fire department or board of education.
    Department Response: Yes, as long as the requirements of Sec. Sec.  
680.700 through 680.730 are met, this type of OJT contract would be 
allowable.
    Comments: Regarding the circumstances under which adult and 
dislocated worker funding may not be used to enter into an OJT 
contract, two commenters recommended adding to Sec.  680.700(b) that 
OJT training contracts may not be entered into with employers that have 
unpaid unemployment insurance and workers compensation taxes.
    Department Response: The Department considers this to be at the 
discretion of State and Local WDBs and declines to modify the 
regulatory text to include this requirement.
    Comments: Two commenters recommended adding language to Sec.  
680.700 requiring OJT contracts that cover ``apprenticeable 
occupations'' and pre-apprenticeship programs to be attached to 
registered apprenticeship programs. These commenters also recommended 
adding an additional condition to the list of factors that the Governor 
or Local WDB must take into account when exercising discretion to 
increase the reimbursement rate for OJT contracts in Sec.  680.730(a). 
Specifically, these commenters recommended that the Department add a 
new subparagraph that would prohibit reimbursements for OJT programs 
for apprenticeable occupations unless they are part of a registered 
apprenticeship program.
    This commenter also suggested that this new regulatory provision 
require the Governor to consider whether the OJT contracts are 
harmonized with registered apprenticeship programs such that no OJT 
contract operates to train in an apprenticeable occupation unless it is 
part of a registered apprenticeship program (or comparable program 
determined by the Secretary not to undermine registered apprenticeship 
programs) and that any contract for pre-apprenticeship is articulated 
with at least one registered apprenticeship programs.
    Department Response: Section 680.740 specifies how registered 
apprenticeship program sponsors or participating employers in 
registered apprenticeship programs may be contracted to provide OJT. 
The Department declines to add language that restricts the OJT portion 
of non-registered apprenticeships from receiving OJT funds providing 
that they meet the requirements of Sec. Sec.  680.700 through 680.730 
and any criteria established by the Local WDB.
    Comments: One commenter requested that the Department amend Sec.  
680.700 to include work-based learning activities that are identified 
and linked to training provided by ETPs.
    Department Response: There are no prohibitions to ETPs providing 
work-based learning activities, provided that those activities meet the 
conditions of Sec. Sec.  680.700 through 680.730.
    Comments: To prevent hiring workers for the duration of the OJT 
with no job continuity afterwards, a commenter recommended there be a 
minimum standard to address performance relating to both employment and 
career pathways to which all Governors would be required to adhere.
    Department Response: OJT participants are part of the performance 
accountability system under WIOA which includes employment related 
outcomes, and performance information will be collected on all 
participants in OJT. This approach will help to ensure that States and 
local areas are utilizing high quality training providers for both ITAs 
and work-based training. In addition to the required performance 
information, Governors may set additional performance criteria for 
work-based training under WIOA sec. 122(h). The Department will 
continue to support collaboration across all WIOA title I programs.
    Comments: Regarding the duration of an OJT contract, a commenter 
recommended that OJT be used for 6 to 12 months with discretion resting 
with the Local WDB.
    Department Response: The Department is not requiring specific OJT 
duration limitations. The Department agrees with the comment that the 
discretion should be left to the Local WDBs and declines to make 
changes to the regulatory text at Sec.  680.700(c). Comment: Two 
commenters requested that Sec.  680.700 include a reference to 
agreements with registered apprenticeship programs under

[[Page 56151]]

Sec.  680.740(a), to make clear OJT can be provided by registered 
apprenticeship programs.
    Department Response: The Department has added language to Sec.  
680.700 to be clear that OJT contracts may be written with registered 
apprenticeship program sponsors.
Section 680.710 What are the requirements for on-the-job training 
contracts for employed workers?
    Comments: A commenter stated that the determination of a ``self-
sufficient wage'' should be left to the State and local areas and 
driven by local circumstances.
    Department Response: The Department maintains the self-sufficiency 
standard. States may develop a State self sufficiency standard, and 
local areas may adjust the standard, within the set parameters of WIOA 
sec. 134(c)(3) and (d)(1)(a).
    Comments: A commenter recommended insertion of a reference to 
``workers with barriers to employment, including people with 
disabilities'' in Sec.  680.710(a) and broadening OJT contracts to 
include introduction of accessible technology and other workplace 
accommodations for workers with emerging disabilities in need to 
training to stay on the job.
    Department Response: Title I adult and dislocated worker funds are 
to be used to target services to individuals with barriers to 
employment as defined in WIOA sec. 3(24). Individuals with disabilities 
are a part of this definition. The Department has added ``reasonable 
accommodations for individuals with disabilities'' as an allowable 
supportive service in Sec.  680.900, which can be used to help enable 
an individual to participate in OJT training.
Section 680.720 What conditions govern on-the-job training payments to 
employers?
    Comments: Several commenters concurred with the Department's 
decision not to define ``extraordinary costs'' through the regulation, 
allowing for flexibility. One commenter would leave the definition up 
to the States, while another recommended that it be left to local 
discretion to ensure their OJT arrangements are applicable to local 
market conditions.
    One commenter recommended that ``extraordinary costs'' be defined 
according to the Association for Talent Development Guidelines, which 
divide expenses according to whether they are direct or indirect. The 
commenter suggested that at a minimum that the regulations provide 
explicit coverage of unrecoverable material expenses (i.e., materials 
and articles nonproductively expended in training that do not create a 
usable product) and of participant trainees and trainers lost from 
productive work.
    Two commenters recommended deleting proposed Sec.  680.720(c), 
which specified that employers are not required to document the 
extraordinary costs associated with training OJT participants and 
replace it with a requirement that the Governor collect performance 
data regarding OJT to ensure that OJT contracts are fulfilling the 
purposes of WIOA.
    Department Response: The Department declines to require additional 
cost or other documentation from employers to avoid creating an 
unnecessary burden. States and local areas may further define what 
constitutes an ``extraordinary cost'' at their discretion.
Section 680.730 Under what conditions may a Governor or Local Workforce 
Development Board raise the on-the-job training reimbursement rate up 
to 75 percent of the wage rate?
    Comments: A commenter requested clarification about when a Local 
WDB may increase the rate for OJT contracts up to 75 percent, and 
specifically asked if a Governor may limit the Local WDB's authority to 
increase the reimbursement rate if all factors required in the 
regulation and under local policy are met.
    Department Response: The Governor may not limit the Local WDB's 
authority to increase the reimbursement rate for OJT contracts provided 
with funds allocated to the local area. The difference between the 
Governor and the Local WDB with respect to OJT reimbursement rates is 
what funding source each is allowed to raise the reimbursement rate 
for. The Governor may increase the reimbursement rate for OJT contracts 
provided with Governor's Reserve funds or NDWG funds. Local WDBs may 
increase the reimbursement rate for OJT contracts provided with funds 
allocated to the local area.
    Comments: A commenter suggested that employers paying above the 
median wage for the occupation should be eligible for increased 
reimbursement as follows: ``Entry Level'' at 50 percent, ``Median'' at 
60 percent, and ``Experienced'' at 75 percent.
    Another commenter described its current waiver that allows for a 
graduated rate of OJT reimbursements based on the size of the company, 
which it asserted has helped small businesses gain funding and skilled 
employees.
    Department Response: The Department declines to add these factors 
into the regulatory text. They may be determined appropriate by the 
Governors or Local WDBs under Sec.  680.730(a)(4).
    Comments: One commenter asked if a State needs to seek a waiver to 
reimburse employers more than 75 percent of the OJT wage, and if the 
waiver could be obtained before July 1, 2015. This commenter described 
its current waiver to provide up to a 90 percent employer reimbursement 
rate.
    Department Response: The Department is not considering waiver 
requests as part of this rule making. All WIOA title I adult and 
dislocated worker OJT projects going forward are expected to adhere to 
the reimbursement rates set forth in WIOA.
    Comments: A commenter urged the Department to provide guidance to 
State and Local WDBs on coordinating the increased reimbursement 
criteria with high-road economic development strategies that improve 
wages, benefits, and other job quality factors for front-line 
employment in a State and region.
    Department Response: The Department will issue guidance and 
technical assistance on work-based learning, including OJT, sector 
strategies, and industry partnerships.
    Comments: A commenter recommended that the Department include a 
reference to individuals with disabilities in Sec.  680.730(a)(1) to 
provide an incentive to State and Local WDBs to focus on this 
population.
    Department Response: Paragraph (a)(1) of Sec.  680.730 states that 
Governors may take the characteristics of the participants into 
consideration when raising the reimbursement rate, emphasizing 
``individuals with barriers to employment'' as defined in WIOA sec. 
3(24). Individuals with disabilities are included in this definition. 
No change is made to the regulatory text.
    Comments: Some commenters stated that the factors to be considered 
regarding the relation of training to the competitiveness of the 
participant should be the size of the employer or the characteristics 
of the participant as determined by the Governor or Local WDB. A 
commenter agreed that employer size should be a factor related to 
increasing an OJT reimbursements rate, stating that smaller employers 
often need additional support.
    Two commenters requested that the Department numerically clarify or 
define ``small businesses'' as it applies to the employer size factor 
under Sec.  680.730(a)(2). Similarly, two commenters recommended that 
the Department clarify the meaning of ``with an emphasis on small 
businesses'' in Sec.  680.730(a)(2). One commenter

[[Page 56152]]

recommended that the Department rely upon the Small Business 
Administration's (SBA's) definition of ``small business.'' Another 
commenter requested that ``size of the employer, with an emphasis on 
small businesses'' be removed from Sec.  680.730(a)(2), or at least 
clarified to ensure that it does not negatively impact medium and large 
employers seeking a higher OJT reimbursement rate.
    Department Response: The Department included ``the size of the 
employer'' as a factor that Governors and Local WDBs may take into 
account when deciding to raise the reimbursement rate for a particular 
OJT project. The Department recognizes that providing these services to 
small businesses, which may need additional support in providing OJT, 
is an important factor in determining the reimbursement rate for OJT. 
However, there is not requirement that only small businesses may 
receive a higher reimbursement rate. The Department recommends that 
Governors and Local WDBs refer to SBA's definition of ``small 
business'' as a guide which varies by industry; it can be found at 
https://www.sba.gov/content/summary-size-standards-industry-sector.
    Comments: A commenter stated that before entering training, all 
individuals should be thoroughly assessed to determine appropriateness 
of training--including demand of an occupation, post-training wages, 
and other individualized customer-level criteria--to be as efficient as 
possible with limited training resources. Several commenters 
specifically addressed the ``competitiveness of the participant'' 
factor (proposed Sec.  680.730(a)(4)); including, its use in the 
provision of incumbent worker training, a measure used in determining 
wages for eligibility purposes, job retention, and credential 
attainment.
    Department Response: In order for an individual to receive 
training, he or she must meet the criteria in WIOA sec 134(c)(3)(A). 
The Department notes that there is no sequence of service requirement; 
however, the eligibility for training must be established by the Local 
WDB. An assessment is one appropriate ways of determining training 
eligibility. The Department considers the ``competitiveness of a 
participant'' to be an appropriate factor that Governors or Local WDBs 
may use when determining the OJT reimbursement rate, under Sec.  
680.730(a)(4). The Department agrees with the commenters' 
recommendation and declines to define ``competitiveness of a 
participant'' through regulation. Governors and Local WDBs may develop 
a policy or criteria to be used in determining ``competitiveness of a 
participant.''
Section 680.740 How can on-the-job training funds be used to support 
placing participants into a registered apprenticeship program?
    Comments: Many commenters addressed the issue of maximum amount of 
time for OJT funds to be used to support registered apprenticeships; 
including, what entity decides the duration, flexibilities in 
determining duration, and tailoring to the needs of the participant.
    Department Response: The Department has considered these comments 
and declines to make changes to the regulatory text that would limit 
the flexibility of States and local areas to determine the appropriate 
duration for OJT funds used to support placing apprentices into a 
registered apprenticeship program. These decisions to be best made on a 
case-by-case basis at the State and local level based on individual 
need.
    Comments: One commenter stated that WIOA funding for apprenticeship 
is useful only if it: (1) Could support a pre-apprenticeship class of 
15 to 20 students for a 90-day training class; and (2) provide 
additional funding for State-approved apprenticeship training, and if 
funding could go directly to the program and not an intermediary like 
the State WDB. The commenter warned that most registered apprenticeship 
programs are multi-employer, which makes it difficult to offer OJT 
contracts to employers as a hiring incentive; instead, the commenter 
suggested that it would be more productive to use OJT contracts as an 
incentive to enroll OJT contract-eligible individuals in their 
apprenticeship programs.
    Two commenters requested clarification regarding management of 
reimbursement to employers by the registered apprenticeship training 
program when relationships with multiple employers exist; for example, 
when registered apprenticeship participants work for multiple employers 
during an OJT to maintain full-time employment.
    A commenter urged the Department to revise Sec.  680.740 to provide 
that OJT contracts may be written with a registered apprenticeship 
program, an employer participating in a registered apprenticeship 
program, or both. This commenter stated that having registered 
apprenticeship programs as signatories to OJT contracts guards against 
OJT becoming an employer subsidy without advancing the worker's 
progress. Further, the commenter recommended that OJT funds initially 
be received by the apprenticeship program, then reimbursed to the 
participating employer for the ``extraordinary costs.''
    Several commenters said that States would benefit from guidance and 
technical assistance on facilitation and implementation of 
apprenticeships.
    Department Response: The Department recognizes the value of pre-
apprenticeships and encourages pre-apprenticeship programs to become 
ETPs through WIOA sec. 122(d). Pre-apprenticeship programs do not 
automatically qualify to be on the ETPL like RA programs do; however, 
if they meet the requirements under the provisions of sec. 122(a-f) to 
become ETPs, they can be funded using ITAs. To provide information and 
new technical assistance resources for starting and enhancing 
registered apprenticeship programs, the Department issued Training and 
Employment Notice No. 20-15, dated January 11, 2016 (http://wdr.doleta.gov/directives/attach/TEN/TEN_20-15.pdf). The Department 
plans on issuing additional guidance and technical assistance 
clarifying pre-apprenticeship and registered apprenticeship use in the 
one-stop delivery system. The Department has changed the regulatory 
text in Sec.  680.740(a) to make it clear that OJT contracts may be 
entered into with registered apprenticeship program sponsors or 
participating employers in a registered apprenticeship program for the 
OJT portion of the registered apprenticeship program.
    Comments: Commenters urged the Department to revise the regulation 
to allow OJT funding to be used for non-registered apprenticeship 
programs. Similarly, two different commenters stated that Sec.  680.740 
should not limit OJT funds to registered apprenticeship programs.
    Department Response: WIOA sec. 122(a)(2)(B) provides automatic 
qualification for registered apprenticeship programs on ETPLs and 
provides an overall emphasis on registered apprenticeship programs 
throughout the one-stop delivery system. The Department has used this 
emphasis to highlight the unique flexibilities the one-stop delivery 
system has in making use of registered apprenticeship programs to 
provide training services, including ITAs and OJT. The regulatory text 
in Sec.  680.740 is designed to highlight those flexibilities for OJT. 
This in no way restricts other appropriate uses of OJT, including for 
use with non-registered apprenticeships. The Department declines to 
make a regulatory text change include all allowable training

[[Page 56153]]

types; however, because of WIOA's emphasis on registered 
apprenticeship, the Department has determined it appropriate to 
highlight.
    Comments: A commenter expressed support for combining funds to 
support registered apprenticeship training under Sec. Sec.  680.740 and 
680.750.
    Department Response: This allows for the combined use of OJT and 
ITAs to support placing participants in a registered apprenticeship 
program. The Department notes that there is no prohibition on the 
combined use of ITAs and OJT as well as any other contracted training 
services under WIOA sec. 134(c)(3)(G)(iv). However these decisions must 
be based on individual need, and they must be paying for separate 
program elements. No changes have been made to the regulatory text in 
response to the comment.
Section 680.760 What is customized training?
    Comments: A commenter requested clarification of the ``commitment'' 
by the employer to employ all individuals upon successful completion of 
customized training; specifically, whether it must be by written letter 
or verbal, and whether an employer may use a temporary agency for the 
first 90 days of employment. Similarly, another commenter urged that 
the regulations address an employer's expectation to commit to hire.
    Department Response: The ``commitment'' is a statutory requirement 
in WIOA sec. 3(14) and 134(c)(3)(g)(1) requires a contract between the 
employer and the Local WDB for customized training. Local WDBs have 
flexibility in determining what constitutes an appropriate commitment 
to hire the individuals on behalf of the employer.
    Comments: One commenter requested that the Department include 
language in Sec.  680.760 that would exempt the requirement that ``the 
employer pays a significant cost of the training'' when the Local WDB 
determines that the workers are ``at-risk'' for layoff. This commenter 
reasoned that customized training seems the most appropriate support to 
provide when workers are determined to be vulnerable to layoff or 
closure and have basic skills but may lack a preferred credential and/
or industry-recognized certification.
    Department Response: WIOA sec. 3(14) states that for customized 
training, employers must pay for a significant cost of the training, 
which is to be determined by the Local WDB. Customized training is 
generally for hiring new or recent employees and not for retraining 
existing employees. Incumbent worker training may be used to provide 
training for current employees as a layoff aversion strategy. No 
changes have been made to the regulatory text in response to the 
comments.
    Comments: Two commenters asked if the Sec.  680.760(c) requirement 
that an employer pay a ``significant cost of the training'' means the 
employer must pay for more than 50 percent of the cost of training. One 
commenter recommended that ``significant cost of the training'' should 
be eliminated as a criterion for customized training under Sec.  
680.760 because it is vague and arbitrary.
    Department Response: WIOA sec. 3(14)(C) requires that employers pay 
a ``significant cost of the training'' of WIOA. Local WDBs have the 
discretion to define the term ``significant cost of the training'' as 
is appropriate for their local areas. No change is made in the 
regulatory text.
    Comments: A commenter proposed adding a paragraph (d) to the 
definition of customized training in Sec.  680.760 stating, ``For which 
the training results in a degree, certificate, or industry-recognized 
credential.''
    Department Response: The requirements for customized training are 
defined in WIOA sec. 3(14). No change is made to the regulatory text. 
The Department encourages the use of customized training that leads to 
credentials, but this is not a requirement of customized training.
Section 680.770 What are the requirements for customized training for 
employed workers?
    Comments: Two commenters recommended that the Department remove the 
requirement for employed workers to be under the self-sufficient wage 
to participate in customized training because it is a deterrent for 
many companies and does not provide an optimal situation for new hires. 
Other commenters asserted that the provision would prevent dislocated 
workers reemployed at a lower wage but still above the self-sufficiency 
wage from participating in customized training that could help them 
reach their prior wage levels. One commenter recommended that the 
Department eliminate ``self-sufficient wage'' as a criterion or 
standard for use by Local WDBs in determining work-based training 
arrangements under Sec.  680.770 because it is arbitrary and holds 
different meanings in different communities. This commenter asserted 
that wage gain is a more objective measure.
    One commenter expressed concern that the self-sufficient wage 
requirement and the requirement for training to incorporate new 
technologies, processes, or procedures are too restrictive.
    Department Response: The Department is maintaining the self-
sufficiency standard for employed workers to be eligible for customized 
training, consistent with eligibility for training services under WIOA 
sec. 134(c)(3)(A). The Department considers wage gain an important 
measure that a Local WDB may consider when determining if customized 
training would be appropriate.
    Comments: A commenter recommended adding a criterion to the 
regulation that would allow customized training for individuals making 
more than self-sufficient wage if it would prevent them from being 
unemployed as a result of a layoff.
    Department Response: The Department considers incumbent worker 
training to be the most appropriate type of training for layoff 
aversion. Customized training is generally for hiring new or recent 
employees and not for retaining existing employees, although there may 
be instances where customized training is appropriate in that 
circumstance. In those instances customized training may be used for 
individuals making more than self-sufficient wages if all appropriate 
criteria are met. Lastly, customized employment can be used for 
individuals making more than self-sufficient wages as long as it leads 
to comparable to or higher than previous employment.
    Comments: A commenter cautioned that if customized training and 
incumbent worker training are differentiated for low-skilled workers 
below the self-sufficiency wage, the regulations should add language 
that requires local areas to fund and promote both options to 
employers.
    Department Response: Under WIOA, both incumbent worker training and 
customized training are permissible activities, each with specific 
eligibility, funding, and allowable criteria. Local WDBs have the 
flexibility to provide the appropriate types of training and services 
needed by their local area.
    Comments: One commenter recommended that small businesses and Local 
WDBs be given maximum flexibility to develop customized training 
programs tailored for their individual needs. This commenter stated 
that customized training should definitely include OJT. Expressing 
concern that proposed Sec.  680.770 is overly burdensome and would 
erect a

[[Page 56154]]

significant barrier for access to training funds, another commenter 
stated that, by definition, if a manufacturer is providing the training 
then it is in-demand and valuable in the workplace.
    Department Response: Customized training and OJT are two distinct 
types of allowable training. OJT participants learn on the job, while 
customized training is generally designed so that participants are 
trained by a third party for the employer. The regulatory text at Sec.  
680.770 is consistent with WIOA sec. 134(c)(3)(A) about how individuals 
may qualify to receive training services. Local WDBs determine training 
service investments based upon an analysis of the employment needs of 
the employers in current and emerging in-demand industry sectors and 
occupations and the needs of the area's labor force.
    Comments: A commenter stated that for customized training involving 
multiple employers, opportunities must be offered to contract directly 
with a training provider without triggering procurement requirements.
    Department Response: Grant recipients and subrecipients must adhere 
to the procurement standards set forth by the Uniform Guidance at 2 CFR 
200.317 through 200.326. When procuring property and services under a 
Federal award, States must follow the same policies and procedures used 
for procurements from its non-Federal funds [2 CFR 200.317]. All 
entities that are not States must ensure that procurements are 
conducted in a manner that is consistent with 2 CFR 200.318 through 
200.326.
    Comments: Several commenters addressed the distinction between OJT 
and customized training; including, customization, use of classroom 
training, and needs of the participant and employer.
    Department Response: WIOA defines both customized training and OJT 
at WIOA sec. 3(14) for customized training and sec. 3(44) for OJT and 
provides the differentiation, which is primarily OJT is focused on 
learning on the job, while customized training is generally classroom 
based and is often provided by a third party for the employer. There 
have been no changes to the regulatory text in response to this 
comment.
Section 680.780 Who is an ``incumbent worker'' for purposes of 
statewide and local employment and training activities?
    Comments: One commenter expressed concern that the definition of 
``incumbent worker'' was unclear and stated that if the definition of 
incumbent worker is to be refined by Governors, factors such as hours 
worked and skill level should be considered. Another commenter stated 
that there was confusion under WIA about the distinctions between 
``employed'' and ``incumbent'' workers.
    Department Response: While the Department agrees that hours worked 
and skill level are appropriate considerations that may be used by 
Governors and the Local WDBs when deciding when an employer is eligible 
to receive incumbent worker training under Sec.  680.810. Any further 
definition may occur outside of the regulation, including by Governors 
and Local WDBs.
    Incumbent worker training is designed to meet the workforce needs 
of an employer or group of employers. The employer must meet the 
eligibility criteria established in Sec.  680.810. The incumbent worker 
must meet the requirements established in Sec.  680.780 and the 
incumbent worker training requirements described in Sec.  680.790, 
which discuss the requirements for incumbent worker training for 
individuals receiving training and the standard by which incumbent 
worker training should be provided. An incumbent worker does not have 
to meet the eligibility criteria for WIOA title I adult and dislocated 
worker programs. An employed worker must meet title I eligibility 
criteria for adult and dislocated worker programs in order to receive 
career services, and/or must meet the wage requirements of WIOA sec. 
134(c)(3)(A)(i) and Sec.  680.210(a)(1) and (2) to receive training 
services while also being employed at the beginning of participation in 
career and training services. No changes have been made to the 
regulatory text in response to these comments.
    Comments: Many commenters addressed the issue of the appropriate 
amount of time an employee must have worked for an employer before 
being eligible for incumbent worker training. There was a range of 
timeframes recommended, ranging from 3 months to 1 year, and some 
commenters recommending no minimum timeframe. Some commenters stated 
that it should be when an employee is off of probationary status or 
once the employer-employee relationship is established. One commenter 
discussed that new employees are often the most in need of training. 
One commenter wanted Local WDBs to develop policies on employee tenure 
with a company. A commenter recommended that the Department utilize a 
standard that is based on the company's tenure in a community as the 
standard not to incentivize business relocation. Lastly, a commenter 
wanted the Department to ensure there was no maximum duration of time 
an employee could work for a company and not be eligible for incumbent 
worker training.
    Department Response: Incumbent worker training is intended for 
workers with an established work history with the current employer, and 
who have the knowledge, skills, and abilities needed by their current 
employer but because of changes in the necessary skills to remain in 
their position, to advance in the company, or to avoid a layoff, the 
employees now need additional training. Thus, the Department has 
decided to retain the 6-month requirement for incumbent workers.
    The Department does not consider incumbent worker training to be 
part of the occupational training for the position in which the new 
employee was hired. This type of training is most appropriate for an 
OJT or customized training. However, given that some incumbent worker 
training may be provided for a cohort of employees, the Department 
recognizes the concern about excluding certain members of a cohort 
based on this criterion and has added language into the regulatory text 
in Sec.  680.780 to create an exception for cohort training, stating 
that a majority of the cohort must meet the 6-month requirement.
    Comments: Many commenters recommended adding specific language to 
Sec.  680.780 recognizing the need for incumbent training services to 
assist long-term workers who were hired when skill level requirements 
were much lower.
    Department Response: While the Department has established a 6-month 
rule for the minimum duration of employment for incumbent worker 
training eligibility, it has not set a maximum duration of employment. 
Long-term workers who are looking to gain new skills may benefit from 
incumbent worker training.
    Comments: The Department received a number of comments on the 
requirement incumbent worker training ``must satisfy the requirements 
in WIOA sec. 134(d)(4) and Sec.  680.790 and increase the 
competitiveness of the employee or employer.'' Because this sentence is 
more properly included in Sec.  680.790, which discusses what incumbent 
worker training is, the Department removed the text from Sec.  680.780 
and instead included it in Sec.  680.790. The comments received about 
this text are discussed below, in the discussion of Sec.  680.790.
    The Department made one final clarifying change at the end of Sec.  
680.780. The NPRM stated that an

[[Page 56155]]

incumbent worker does not necessarily have to meet the eligibility 
requirements for career and training services for adults and dislocated 
workers under WIOA. The Department has added language to make clear 
that if the worker is receiving other services in addition to incumbent 
worker training, the individual must meet the eligibility requirements 
like all other adult or dislocated worker participants.
Section 680.790 What is incumbent worker training?
    Comments: Two commenters urged the Department to define how 
incumbent worker training should ``increase the competitiveness of the 
employee or employer'' and recommended that such training be designed 
to retain a skilled workforce or avert the need to lay off employees. 
Another commenter urged the Department to define ``improving the skills 
and competitiveness of the participant'' and ``increasing the 
competiveness of the employer'' and to stipulate how competitiveness 
will be initially assessed and continuously measured. One commenter 
recommended that ``increasing the competitiveness of the employee or 
employer'' be defined in State policy to allow for flexibility or, 
alternatively, be defined as training that retains and advances a 
skilled workforce.
    Department Response: The Department agrees that the phrase 
``increase the competitiveness of the employee or employer'' may be 
defined under State and Local WDB policy, as consistent with the 
discussion below, and with any future guidance provided by the 
Department. No change is made to the regulatory text.
    Comments: A commenter stated that incumbent worker training should 
be ``employer driven'' and ``competitiveness of the participant'' 
should be a factor only for determining if incumbent worker training is 
appropriate.
    Another commenter recommended that States be allowed to develop 
incumbent worker training policies while the Department provides 
technical assistance and guidance. This commenter urged against relying 
on layoff aversion and recommended using available labor market data 
and sector strategies to target occupations for training.
    Some commenters urged the Department to omit layoff aversion as a 
criterion for incumbent worker training, asserting that it would have a 
chilling effect and would not be offered during healthy economic times. 
One commenter asserted that proposed Sec.  680.790 is too restrictive 
in focusing only on averting layoffs or retaining employment. This 
commenter recommended that the Department add specific language 
allowing incumbent training ``to promote the competitiveness of both 
the participant and the employer'' and ``to ensure an employee's skill 
set is advanced.''
    One commenter stated that incumbent worker training should be used 
for individuals who are at a self-sufficient wage and require training 
that helps the employer stay competitive and retain a skilled workforce 
or avert a layoff.
    Department Response: WIOA sec. 134(d)(4)(B) states that incumbent 
worker training is to assist workers in obtaining the skills necessary 
to retain employment or avert layoffs. The Department considers these 
to be two distinct, although not mutually exclusive, types of 
requirements for the training, and the regulatory text retains the 
requirements at Sec.  680.790. Further definition of these terms may be 
articulated in State and local policies. There have been no changes to 
the regulatory text in response to this comment.
    Comments: Some commenters recommended using earnings growth in the 
6 months following incumbent worker training to measure increased 
competitiveness of the employee. One commenter recommended measuring 
increased competitiveness by higher wages 1 year after training, 
portability, layoff aversion, and progress toward self-sufficiency.
    Another commenter recommended measuring ``competiveness of the 
employee'' by documented wage increases; access to other documented 
benefits, bonuses, or commissions; obtaining industry-recognized 
certificates or credentials; or ascension of the worker into an 
advanced job classification or pay grade. This commenter stated that 
identifying opportunities for increased competitiveness of employers 
might require access to confidential business information.
    One commenter recommended that the Department require the following 
to ``increase the competitiveness of the employee and employer'': (1) 
Training takes place on company time and trainees are compensated at no 
less than their normal rate of pay while attending training; (2) 
training is short-term and ideally 6 months or less; (3) training 
focuses on occupational skills; and (4) businesses must demonstrate 
that the costs of training are reasonable.
    Department Response: Section 680.810 outlines the factors that a 
Local WDB must consider when determining eligibility for an employer to 
receive incumbent worker funds and provides flexibility to the Local 
WDB to establish other factors in making such a determination. The 
Department notes that some ideas commenters provided about how to 
provide incumbent worker training have merit, and the Department will 
include them in guidance and technical assistance. No changes have been 
made to the regulatory text in response to these comments.
    Comments: One commenter recommended the following metrics for 
evaluating the effectiveness of incumbent worker training: Revenue 
increase, contracts awarded, sales data, geographic expansion, wage 
increase, increased education attainment, and increased credential 
attainment. Another commenter stated that incumbent worker training 
arrangement should be flexible, with success measured by metrics such 
as earnings gains, new skills and competencies gained, new 
certifications received and/or number of employees migrating into new 
employment, especially in the case of layoff aversion. One commenter 
recommended that an employer should demonstrate where incumbent worker 
training would increase revenue and lead to an increase in wage level 
within 90 days of training completion.
    Department Response: With respect to eligibility for incumbent 
worker training, many of these metrics are what the Department 
considers to be possible factors for a State or local area in 
determining incumbent worker training eligibility for training 
providers, employers, and employees, as included under Sec. Sec.  
680.780 and 680.810. The Department may issue further guidance on this 
subject.
    The Department clarifies that, because of the unique nature of the 
Incumbent Worker Training Program, where the Local WDB only evaluates 
the employers for eligibility consistent with Sec.  680.810, 
individuals receiving Incumbent Worker Training are not subject to the 
eligibility criteria that apply to participants in the adult or 
dislocated worker programs, unless they are also receiving other 
services under those programs. Therefore, individuals who only receive 
incumbent worker training and no other WIOA title I service do not fall 
within the definition of ``participant'' in 20 CFR 677.150(a) (see 
Joint WIOA Final Rule). As such, they are not included in calculations 
for the State Primary Indicators of Performance. The Department is 
making a change to be consistent with this in Sec.  680.810(a) and (b) 
by removing the word ``participant'' and inserting ``individual'' to 
reflect that incumbent

[[Page 56156]]

worker training eligibility is decided at the employer level.
    States and Local WDBs are, however, required to report on 
individuals who receive incumbent worker training, including employment 
status after training, wages after training, and credential attainment, 
the details of which are provided through the Department's ICR process 
and subsequent guidance. As part of future collections and guidance, 
the Department may seek to collect additional employer data, such as 
employer size, industry, and other information that may be used to 
evaluate the effectiveness of Incumbent Worker Training programs for 
both the employer and employee.
    Regarding the development and provision of Incumbent Worker 
Training by States and local areas, the Department encourages States 
and local areas to cultivate opportunities and develop policies that 
can appropriately support employers in their efforts to develop a more 
competitive workforce or avert potential layoffs and that provide 
incumbent workers with opportunities for advancement and wage gains 
within their company. Incumbent Worker Training policies must be 
aligned with State and Local Plans, as well as with sector strategy 
approaches for in-demand occupations.
    In addition to the required performance indicators, WIOA sec. 
122(h)(2) says that the Governor may require and use performance 
information relating to incumbent worker training and other work-based 
training to determine whether providers meet such performance criteria 
as required by the Governor. More detailed information on performance 
definitions and metrics are in 20 CFR part 677 (see Joint WIOA Final 
Rule).
    Comments: Several commenters said that it is unrealistic to expect 
incumbent worker training to result in the employee being promoted; 
instead, local areas need flexibility on timing of training and hiring 
new workers that coincides with the needs of business. In response to 
the NPRM preamble statement that ideal incumbent worker training would 
result in promotion and hiring to backfill the incumbent worker's 
position, two commenters asked if it is realistic to expect a company, 
through a round of training to retain workers, to also be able to add 
new employees. One of these commenters stated that this is an ideal 
structure that would be better served under customized training for 
employed workers. However, one commenter agreed with the Department's 
goal of using incumbent worker training to ``advance-and-backfill'' to 
benefit two employees.
    Department Response: The Department clarifies that the ideal 
incumbent worker training strategy of upskilling and backfilling 
employee positions is meant as an illustrative example of an ideal 
incumbent worker opportunity and not as the only type of successful 
incumbent worker training strategy. In a situation where incumbent 
worker training is needed to avert a layoff, the alternative of 
upskilling and backfilling positions would be unlikely. The Department 
is committed to ensuring that the regulations maintain flexibility for 
States and local areas to develop incumbent worker training strategies 
that best fit the needs of their State and community.
    Comments: One commenter asked if the definition of incumbent worker 
training would allow for contracted training through business and 
industry, adult education, etc.
    Department Response: The Department declines to specify all of the 
incumbent worker training contracting options in regulatory text. 
However, to secure incumbent worker training, grant recipients and 
subrecipients must adhere to the procurement standards set forth by the 
Uniform Guidance at 2 CFR 200.317 through 200.26. When procuring 
property and services under a Federal award, States must follow the 
same policies and procedures it uses for procurements from its non-
Federal funds [2 CFR 200.317]. All entities that are not States must 
ensure that procurements are conducted in a manner that is consistent 
with 2 CFR 200.318 through 200.326.
    Comments: A commenter recommended that incumbent worker training be 
structured to incorporate the biggest return on investment for Local 
WDBs, workers, and businesses by using economies of scale to upskill 
many workers at a time.
    Department Response: The Department agrees with this concern and 
has added language to Sec.  680.780 to clarify that cohort training is 
an acceptable use of incumbent worker training funds.
    Comments: A commenter stated that apprenticeship should be an 
approved expense for incumbent worker training if it would lead to a 
higher paid, higher skilled job.
    Department Response: The Department considers apprenticeship 
training to be an allowable incumbent worker training expense, provided 
the requirements for incumbent worker training in Sec. Sec.  680.780 
and 680.790 are met.
    Comments: A commenter recommended that cost reimbursement be 
limited to: Costs of outside vendors or in-house trainers; costs of 
textbooks and training materials; distance learning fees; and 
credentialing exam fees. This commenter stated that trainees should be 
full-time or part-time employees with a permanent, year-round 
attachment to the business, so that temporary employees, seasonal 
employees, public employees, and volunteers would not be eligible.
    Department Response: Allowable costs of incumbent worker training 
are consistent with the allowable costs rules for all types of 
training. The allowability regulations are explained in Departmental 
guidance. To be eligible, the incumbent worker must be employed, meet 
the Fair Labor Standards Act requirements for an employer-employee 
relationship, and have an established employment history for more than 
6 months. The Department may utilize guidance to clarify specific types 
of employment relationships that are eligible for employers to receive 
incumbent worker training funds.
Section 680.800 What funds may be used for incumbent worker training?
    Comments: A commenter asked the Department to clarify if the 20 
percent in proposed Sec.  680.800(a) refers to total dollars or program 
dollars and does not include administrative funds. Another commenter 
recommended that the regulations clearly indicate the difference 
between employed workers and incumbent workers and that the 20 percent 
limitation on training for incumbent workers would not apply to 
employed workers.
    Department Response: WIOA sec. 134(d)(4) allows Local WDBs to set 
aside up to 20 percent of their total allocation of title I adult and 
dislocated worker funds on incumbent worker training, this includes 
administrative funds. The Department agrees with the commenter about 
the 20 percent restriction only applying to incumbent workers and not 
employed workers.
    Comments: A commenter asked for clarification to distinguish 
customized from incumbent worker training, and commented that 
Sec. Sec.  680.800, 680.810, and 680.820 seem to apply to customized 
training for employed workers rather than incumbent worker training.
    Department Response: Customized training, as defined in WIOA sec. 
3(14), is used to train individuals who are not employed with the 
participating employer at the start of participation. Incumbent worker 
training, as defined

[[Page 56157]]

in WIOA sec. 134(d)(4), is used to enhance the competitiveness of the 
employee/employer and/or avert a layoff. Incumbent workers are employed 
with the participating company when the training begins consistent with 
Sec.  680.780. The Department will provide further clarification 
through guidance and technical assistance.
    Comments: A commenter stated that it may be difficult, if not 
impossible, to determine accurately the amount of administrative funds 
that were spent on incumbent working training and transitional jobs.
    Department Response: WIOA allows Local WDBs to set aside up to 10 
percent of their adult and dislocated worker funds on Pay-for-
Performance contract strategies (see WIOA sec. 134(d)(1)(A)(iii)), Up 
to 20 percent on incumbent worker training (see WIOA sec. 134(d)(4)), 
and up to 10 percent on transitional jobs (see WIOA sec. 134(d)(5)). 
These provisions are discussed in Sec.  680.140(b)(1)(v), (b)(4), and 
(b)(8). Administrative activities necessary to initiate or procure a 
Pay-for-Performance contract strategies, incumbent worker training, and 
transitional jobs must be consistent with Sec.  683.215, which also 
discusses how to determine whether an activity is administrative or 
programmatic for purposes of WIOA. If the activity would be considered 
programmatic under Sec.  683.215, then the cost would be subject to the 
caps discussed above. If the activity would be considered 
administrative under Sec.  683.215, it may be paid for out of the Local 
WDBs' usual administrative funds, and it is not subject to the caps. 
Therefore, the Local WDB would not need to specifically account how 
much of the administrative funds are spent on these particular 
programs.
Section 680.810 What criteria must be taken into account for an 
employer to be eligible to receive local incumbent worker funds?
    Comments: A commenter asserted that proposed Sec.  680.810 would 
impose a burden on States to write a policy for use of funds for 
incumbent worker training and asked what is the requirement for 
performance.
    Department Response: The Department acknowledges that State and 
local policy must be developed to govern the use of funds for incumbent 
worker training; however, since this activity was required to properly 
perform incumbent worker training under WIA, it is not an increase in 
burden. Incumbent worker training is a permissible activity; if a State 
or Local WDB decide to utilize incumbent worker training as a workforce 
strategy for local businesses then they need to have clear State and 
local policies on its use.
    The Department declines to add specific language to the regulatory 
text addressing the concern about performance requirements. Specific 
definitions of metrics that will be used to evaluate performance are 
defined through the WIOA Joint Performance ICR. More detailed 
information on performance definitions and metrics are at 20 CFR part 
677 (see Joint WIOA Final Rule). The Department plans to issue guidance 
on incumbent worker training, including how it is impacted by 
performance.
    The Department notes, as explained above, that it made a clarifying 
change to Sec.  680.810 to replace the word ``participant'' with 
``individual'' to reflect that incumbent worker training eligibility is 
decided at the employer level; individual workers participating in 
incumbent worker training are not considered ``participants'' under 20 
CFR 677.150(a), unless they receive other adult or dislocated worker 
services (see Joint WIOA Final Rule).
    Comments: Two commenters requested that the Department add a 
paragraph (d) directing that incumbent worker training contracts may 
not be entered into with employers that have unpaid unemployment 
insurance and workers compensation taxes.
    Department Response: The Department declines to add specific 
language to the regulatory text addressing this concern. The Department 
considers the suggested factor to be an allowable consideration under 
Sec.  680.810(c).
Section 680.820 Are there cost sharing requirements for local area 
incumbent worker training?
    Comments: A commenter suggested that the required non-Federal share 
for incumbent training be waived for companies that are close to a 
layoff.
    Department Response: The non-Federal share for incumbent worker 
training is required under WIOA sec. 134(d)(4). The Department expects 
Local WDBs to adhere to the requirements for non-Federal share 
contributions as set forth in WIOA. Thus, the Department declines to 
discuss waivers of this provision and makes no change to the regulatory 
text.
    Comments: A commenter asked if Sec.  680.820 is meant to ensure 
that no other funding source is contributing to the cost of the 
incumbent worker training or that the employer is paying 100 percent of 
the cost from its own funds, excluding the Federal contribution.
    Department Response: Under WIOA sec. 134(d)(4) employers 
participating in incumbent worker training are responsible for paying 
the non-Federal share of the cost of providing training to their 
incumbent workers. Employers have flexibility in how they arrange to 
pay for these costs; however, the payments must not come out of any 
other Federal funds.
Section 680.830 May funds provided to employers for work-based training 
be used to assist, promote, or deter union organizing?
    Comments: The Department received comments in support of Sec.  
680.850 (renumbered as Sec.  680.830) as proposed, regarding the 
relationship between work-based training funds and union organizing.
Section 680.840 May funds provided to employers for work-based training 
and other work experiences be used to fill job openings as a result of 
a labor dispute?
    Comments: A commenter suggested that for transitional jobs there 
should be protections around the displacement of workers.
    Department Response: The Department has added a new section to the 
regulatory text at Sec.  680.840 entitled ``May funds provided to 
employers for work-based training and other work experiences be used to 
fill job openings as a result of a labor dispute?'' This section 
clarifies that funds for work-based training may not be used for this 
purpose. It is consistent with WIOA and with the Wagner-Peyser Act 
regulatory text in Sec.  652.9 to remain neutral in matters relating to 
union organizing and activities that would promote or deter 
organization.
8. Subpart G--Supportive Services
    This section defines the scope and purpose of supportive services 
and the requirements governing their disbursement. A key principle in 
WIOA is to provide local areas with the authority to make policy and 
administrative decisions and the flexibility to tailor the public 
workforce system to the needs of the local community. To ensure maximum 
flexibility, the regulations provide local areas the discretion to 
provide the supportive services they deem appropriate subject to the 
limited conditions prescribed by WIOA. Local WDBs must develop policies 
and procedures to ensure coordination with other entities to ensure 
non-duplication of resources and services and to

[[Page 56158]]

establish limits on the amount and duration of such services. Local 
WDBs are encouraged to develop policies and procedures that ensure that 
supportive services are WIOA-funded only when these services are not 
available through other agencies and that the services are necessary 
for the individual to participate in title I activities. Supportive 
services may be made available to anyone participating in WIOA title I 
activities.
    A commenter expressed support for the proposed regulations in 
subpart G.
Section 680.900 What are supportive services for adults and dislocated 
workers?
    Comments: A commenter recommended that Sec.  680.900 include an 
exhaustive list of available support services consistent with the 
approach in the section on support services for youth. Another 
commenter strongly supported the inclusion of legal aid services in the 
Department's list of examples of supportive services, noting that legal 
aid can uniquely address certain barriers to employment, including 
access to driver's licenses, expunging criminal records, and resolving 
issues with debt, credit, and housing. One commenter recommended that 
supportive services involving WIOA funding be available to cover all 
steps/aspects of the licensing process (e.g., testing and transcripts).
    Because access to many supportive services is an impediment to 
individuals with disabilities in entering or re-entering the workforce, 
one commenter recommended specific reference to this population in 
subpart G.
    Department Response: The Department agrees with the commenter that 
supportive services for adults and dislocated workers under WIOA title 
I programs be aligned with the supportive services available under the 
title I youth program. The Department has modified the regulatory text 
to include a list of supportive services that may be made available at 
Sec.  680.900(a) through (l). This list is not intended to be 
exhaustive, but rather to illustrate the types of supportive services 
that may be made available. The changes to the regulatory text also 
include a couple of suggestions that commenters provided regarding the 
addition of providing assistance with books, fees, school supplies, and 
other necessary items for students enrolled in postsecondary education 
classes. The Department concurs that legal aid can uniquely address 
certain barriers to employment, as enumerated by the commenter. 
Therefore, the Department has included legal aid services under Sec.  
680.900 and made a corresponding change to the list of supportive 
services allowable in the youth program in Sec.  681.570. Additionally, 
the Department added that payments and fees for employment and 
training-related applications, test, and certifications be covered, 
because these costs may be a barrier to entry for individuals looking 
for unsubsidized employment. The Department also has added ``Reasonable 
accommodations for individuals with disabilities'' as Sec.  680.900(g).
    Comments: Citing the requirement that participants first obtain 
supportive services through other programs before relying on WIOA title 
I funding, a commenter stated that it is vital that the programs 
covered by WIOA work closely together to ensure that job seekers 
receive all the benefits to which they are entitled under all aspects 
of the law.
    Department Response: The Department agrees with this comment and 
encourages that programs work closely together in order to align 
programs better and leverage resources as WIOA is intended to do to 
serve job seekers better.
Section 680.910 When may supportive services be provided to 
participants?
    Comments: The Department received a comment regarding the 
importance of coordinating across programs allowed in Sec.  680.140, 
because Sec.  680.910 states that supportive services must be provided 
through non-WIOA programs first. The commenter particularly emphasized 
the need for coordinating services with vocational rehabilitation 
programs so individuals with disabilities receive the supportive 
services they need.
    Department Response: The Department agrees with the commenter that 
coordinating services across the WIOA core programs, as well as non-
core programs is vital to help individuals with barriers to employment, 
including individuals with disabilities, obtain the support they need 
to successfully participate in and complete WIOA career and training 
services and ultimately, obtain unsubsidized employment. Local WDBs are 
responsible for developing supportive service policies, and the 
Department considers how these services are coordinated to be a key 
part of those policies.
Section 680.920 Are there limits on the amount or duration of funds for 
supportive services?
    Comments: A commenter recommended that the definition of supportive 
services and extended case management include ongoing, extended 
services as participants proceed through training and employment.
    Department Response: Supportive services under WIOA sec. 134(d)(2) 
are provided to allow an individual to participate in career and 
training services. The commenter was interested in extending supportive 
services after the period of exit from the WIOA title I adult and 
dislocated worker programs; however, this is outside of the authority 
of WIOA. Supportive services are provided to enable participation in 
career and training services. No changes have been made to the 
regulatory text in response to the comment.
    Comments: Two commenters raised a similar concern about the 
authority related to the one-stop center determining what supportive 
services may be provided if the one-stop center is not the WIOA service 
provider in a local area.
    Department Response: To guide supportive service determinations, 
the Local WDB ultimately is responsible for developing a supportive 
service policy for the area, including eligibility, types of supportive 
services to provide, and the methods of service delivery.
Section 680.930 What are needs-related payments?
    Comments: A few commenters provided input on needs-related 
payments. One commenter suggested that the Department consider whether 
the underemployed should be considered for needs-related payments. One 
commenter stated that funding levels are not adequate to support needs-
related payments, which the commenter stated will result in these 
services being provided on a very limited basis. Some commenter focused 
on funding levels for needs-related payments.
    Department Response: To receive needs-related payments, individuals 
must be unemployed and must not qualify for (or have ceased to quality 
for) unemployment compensation. While underemployed individuals are not 
eligible for needs-related payments under WIOA sec. 134(d)(3), there is 
no prohibition on providing supportive services to the underemployed, 
other than needs-related payments. Additionally, WIOA sec. 134(d)(1)(B) 
allows for work support activities for low-wage workers. The Department 
may provide additional guidance on how to ensure quality services to 
individuals who are underemployed. No changes have been made to the 
regulatory text in response to the comments. The Department notes that 
needs-related payment levels are permissible and

[[Page 56159]]

thus, are left to the discretion of the Local WDB.
Section 680.970 How is the level of needs-related payments determined?
    Comments: Two commenters recommended that States be allowed to 
determine the amount for needs-related payments for State funded 
projects.
    Department Response: The Department agrees with the suggestion that 
States be allowed to make determinations for needs-related payments for 
State funded projects and has added language to the regulatory text at 
Sec.  680.970(a) to reflect this change. No other changes have been 
made to the regulatory text in response to the comments.
Other Comments on Adult and Dislocated Worker Activities Under WIOA 
Title I
Limited English Proficiency Individuals
    Comments: A commenter encouraged the Department to provide 
additional guidance, whether through regulation or other types of 
policy directives, to States and localities regarding the alignment of 
WIOA title I and title II services to improve services to immigrant and 
limited English proficiency (LEP) individuals. This commenter 
recommended that the guidance acknowledge and allow for differences in 
eligibility criteria across the titles, encouraging States and 
localities to align services without precluding participation by 
individuals who may be eligible for services under one title but not 
another.
    Department Response: The Department agrees with the commenter on 
the importance of aligning services among titles to ensure that 
individuals receive the services they need. The Department will provide 
guidance and technical assistance on this issue.
Industry or Sector Partnerships
    Comments: A few commenters recommended the establishment of a new 
subpart H covering industry or sector partnerships. These commenters 
discussed at length the topics they believed should be addressed in 
this proposed new subpart, including, the purpose of industry and 
sector partnerships, permissible partners, who may lead partnerships, 
evaluating effective partnerships, and ensuring minimum standards.
    Department Response: The Department recognizes the importance of 
the industry and sector partnerships as an important strategy for 
economic and workforce development. Due to the constantly changing 
nature of business and industry, these partnership strategies continue 
to be most appropriately addressed through guidance and technical 
assistance issued by the Department.

E. Part 681--Youth Activities Under Title I of the Workforce Innovation 
and Opportunity Act

1. Introduction
    WIOA affirms the Department's commitment to providing high quality 
services for youth and young adults beginning with career exploration 
and guidance; continuing support for educational attainment, 
opportunities for skills training in in-demand industries and 
occupations; and culminating with a good job along a career pathway or 
enrollment in postsecondary education. All of the Department's youth-
serving programs continue to promote evidence-based strategies that 
also meet the highest levels of performance, accountability, and 
quality in preparing young people for the workforce.
    WIOA maintains WIA's focus on out-of-school youth (OSY) in Job 
Corps and YouthBuild, while greatly increasing the focus on OSY in the 
WIOA youth formula-funded program. The shift in policy to focus on 
those youth most in need is based on the current state of youth 
employment. In 2015, an estimated 5.5 million or 13.8 percent of 16 to 
24 year olds in our country were not employed or in school. WIOA youth 
programs provide a continuum of services to help these young people 
acquire skills and pursue careers. The Department, working with its 
Department of Education and Health and Human Services partners, plan to 
provide intensive technical assistance around meeting the needs of this 
population.
    WIOA calls for customer-focused services based on the needs of the 
individual participant. This includes the creation of career pathways 
for youth in all title I youth programs, including a connection to 
career pathways as part of a youth's individual service strategy (ISS) 
in the youth formula-funded program. The ISS must directly link to one 
or more of the performance indicators. WIOA also calls for participants 
to be intimately involved in the design and implementation of services 
so the youth voice is represented and their needs are being met.
    This integrated vision also applies to the public workforce 
system's other shared customer--employers. Employers have the 
opportunity to build a pipeline of skilled workers: They are critical 
partners that provide meaningful growth opportunities for young people 
through work experiences that give them the opportunity to learn and 
apply skills in real-world settings and ultimately jobs.
    WIOA includes a number of significant changes for the youth 
formula-funded program. WIOA shifts to focus resources primarily on 
OSY, increasing the minimum percentage of funds required to be spent on 
OSY from 30 to 75 percent. The Department recognized the transition to 
serve more OSY would take time to implement, and, as explained in WIOA 
operating guidance TEGL No. 23-14 (``Workforce Innovation and 
Opportunity Act (WIOA) Youth Program Transition''), found at http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm, the 
Department has provided States and local areas a year to show progress 
towards meeting the 75 percent minimum OSY expenditure rate 
requirement. In addition, WIOA increases the focus on providing youth 
with work experience opportunities, with a requirement that local areas 
must spend a minimum of 20 percent of local area funds on work 
experience.
    Under WIOA, work experience becomes the most critical of the 
program elements. WIOA also introduces 5 new program elements: 
Financial literacy; entrepreneurial skills training; services that 
provide labor market and employment information about in-demand 
industry sectors or occupations available in the local areas; 
activities that help youth prepare for and transition to postsecondary 
education and training; and education offered concurrently with and in 
the same context as workforce preparation activities and training for a 
specific occupation or occupational cluster.
    During the 60-day comment period for the NPRM, the Department 
received hundreds of comments that expressed general support for the 
proposed youth program regulations as well as some constructive 
feedback that made the Final Rule clearer.
    The most significant change between the NPRM and the Final Rule 
occurs in Sec.  681.400. This section clarifies that youth activities 
may be conducted by the local grant recipient and that only when the 
Local WDB chooses to award grants or contracts to youth service 
providers, such awards must be made using a competitive procurement 
process in accordance with WIOA sec. 123. While this revision 
represents a significant change in that it provides Local WBDs with 
flexibility in determining which WIOA youth services to procure, the 
Department expects Local WDBs to continue to

[[Page 56160]]

contract with youth service providers to provide the program elements 
that youth service providers are best positioned to offer participants 
based on prior success in serving youth.
    The analyses that follows provides the Department's response to 
public comments received on the proposed part 681 regulations. If a 
section is not addressed in the discussion below, it is because the 
public comments submitted in response to the NPRM did not substantively 
address that specific section and no changes have been made to the 
regulatory text. Further, the Department received a number of comments 
on this part that were outside the scope of the regulation and the 
Department offers no response. Lastly, the Department has made a number 
of non-substantive changes to correct grammatical and typographical 
errors to improve the readability and conform the document 
stylistically that are not discussed in the analysis below.
2. Subpart A--Standing Youth Committees
Section 681.100 What is a standing youth committee?
    This section describes a standing youth committee. WIOA does not 
require Local WDBs to establish a youth council; however, the Local 
WDBs are encouraged to establish a standing youth committee to provide 
information and to assist with planning, operational, and other issues 
relating to the provision of services to youth (WIOA sec. 
107(b)(4)(A)(ii)). The Department received many comments on standing 
youth committees and in response to the comments made a small addition 
to the regulation text as explained here.
    Comments: One commenter expressed support for all of the proposed 
regulations regarding standing youth committees. Several commenters 
also supported the proposed language that would allow Local WBDs to 
maintain existing effective youth councils as standing youth 
committees. Several commenters recommended that the proposed language 
allow Local WDBs the flexibility to maintain existing effective youth 
councils, have the Local WDB secure the role of the standing youth 
committee, or create a new standing youth committee.
    Department Response: The Department notes the comments received 
about standing youth committees. The language in Sec. Sec.  681.100 and 
681.110 provides Local WDBs with the flexibility to maintain existing 
effective youth councils; have the Local WDB take on the role of the 
standing youth committee; or create a new standing youth committee.
    Comments: One commenter expressed disappointment with the removal 
of mandated youth councils and stated that the Department should 
strongly encourage Local WDBs to establish standing youth committees.
    Department Response: The Department recognizes the challenges some 
local areas experienced in finding and retaining the required youth 
council members. In the final regulations, the Department accepted the 
suggestion to ``encourage'' Local WDBs to establish standing youth 
committees rather than the proposed language, ``a Local WDB may choose 
to establish a standing committee.'' This change recognizes that Local 
WDB have a choice as to whether or not they have a standing youth 
committee while at the same time reflects the Department's support of 
such entities.
    Comments: A couple of respondents stated that because the proposed 
regulations did not mandate the implementation of a standing youth 
committee or any other youth organization, a Local Workforce 
Development Board (WDB) should be able to assemble a group to oversee 
youth activities without having to formally create a standing youth 
committee that would be subject to regulations.
    Department Response: As discussed above, the Department recognizes 
the challenge of bringing together required partners and understands 
the local area's interest in taking advantage of the flexibility under 
WIOA to form an ad hoc group that would informally advise the Local WDB 
on youth matters. The Department supports Local WDBs seeking outside 
youth expertise to inform the programs. If such groups do not have the 
required members as outlined in Sec.  681.110, however, they may not 
call themselves standing youth committees.
    Comments: Second, a commenter raised the concern over how a Local 
WDB could efficiently oversee youth activities without the expertise of 
a standing youth committee with prior experience in handling the youth 
activities. This commenter requested additional clarification as to how 
the Local WDB would provide efficient oversight. The commenter further 
asked if the Department would provide recommended models in order to 
ensure that they were implementing youth activities effectively and if 
the Department will provide recommended approaches in future technical 
assistance activities.
    Department Response: If a Local WDB chooses not to delegate this 
function to a standing youth committee, it is still responsible under 
WIOA sec. 107(d)(8)(A)(i) for conducting oversight in partnership with 
the CEO for the local area of youth workforce investment activities 
under WIOA sec. 129(c). The Department notes the commenter's concern 
and recognizes that without youth experts it may be hard for a local 
area to oversee its youth program properly. The Department will address 
this commenter's concerns through technical assistance.
Section 681.110 Who is included on a standing youth committee?
    This section describes the members of a standing youth committee.
    Comments: Two commenters recommended that Local WDBs be given the 
maximum flexibility possible when determining membership requirements 
for their standing youth committee, stating that the Local WDBs would 
have the best understanding of their local area's needs. One of these 
commenters reasoned that there should be no rigid membership 
requirements for standing youth committees because the committees would 
be optional under the proposed language. Similarly, another commenter 
remarked that Local WDBs should be able to define the appropriate level 
of experience needed for members of the standing youth committee. This 
commenter stated that Local WDBs also should have the ability to 
establish the standards for what a community-based organization's 
(CBO's) ``demonstrated record of success'' must be.
    One respondent suggested that the Department provide more specific 
guidance on committee membership requirements. This commenter further 
recommended that the committee should include individuals from CBOs who 
serve youth with disabilities, as well as individuals from the local 
education system.
    Department Response: The Department concurs with the commenters 
that said the Local WDBs need the maximum flexibility possible when 
establishing membership requirements for their standing youth 
committee. The NPRM and Final Rule reflect the WIOA requirements found 
in sec. 107(b)(4)(A)(ii). The Department does not define a CBO's 
demonstrated record of success in the proposed regulation or Final 
Rule. The Department did accept the suggestion to add disability 
organizations and local education entities to the list of possible 
standing youth committee members.

[[Page 56161]]

Section 681.120 What does a standing youth committee do?
    This section describes the duties of a standing youth committee. 
Commenters expressed support for the proposed roles of standing youth 
committees.
    Comments: Several commenters suggested that the Department include 
a list of suggested tasks in the final regulation that a standing youth 
committee could be charged with. These commenters recommended that the 
Department reemphasize that if the Local WDB chooses not to establish a 
youth council or standing youth committee, oversight of the suggested 
activities listed in the regulations will fall under the jurisdiction 
of the Local WDB, which will then be responsible for overseeing the 
activities and providing opportunity for stakeholder comment. These 
commenters also suggested that the Department should require that Local 
WDBs and/or their standing youth committees state how they will:
     Facilitate co-enrollment of individuals across core 
programs, especially for those individuals between the ages of 18 and 
24 who could be served under WIOA titles I, II, and IV.
     Implement specific provisions related to career pathways 
requirements.
     Adapt the procurement and request for proposal processes, 
in order to encourage longer-term and more thorough services for OSY.
     Align Temporary Assistance for Needy Families (TANF) with 
WIOA youth programs, so that TANF recipients who are under 25 can 
benefit from OSY programs when appropriate.
    Department Response: The Department concluded that standing youth 
committees need as much flexibility as possible to reflect the needs of 
their local area. The Department will provide technical assistance to 
local areas and plans to incorporate many of the commenters' ideas. No 
change to the regulatory text was made in response to these comments.
3. Subpart B--Eligibility for Youth Services
Section 681.210 Who is an ``out-of-school youth''?
    This section describes how one meets the eligibility for an OSY for 
purposes of the title I WIOA youth program. OSY youth must not attend 
any school, be between the ages of 16 and 24 at time of enrollment, and 
meet one or more of a list of nine criteria. The section clarifies that 
age is based on time of enrollment and as long as the individual meets 
the age eligibility at time of enrollment he or she can continue to 
receive WIOA youth services beyond the age of 24. Low income is not a 
requirement to meet eligibility for most categories of OSY under WIOA. 
Low income is, however, a part of the criteria for youth who need 
additional assistance to enter or complete an educational program or to 
secure or hold employment. Also, WIOA has made youth with a disability 
a separate eligibility criterion.
    Comments: A few commenters expressed their support of the expansion 
of the age requirements from 21 to 24. One commenter stated that this 
increase would be a positive change as it continues to see greater 
numbers of older young adults who are seeking employment and training 
services. Another commenter expressed support of the proposed 
regulations' focus on the needs of OSY. The Department recognizes that 
many youth service providers moved to serving more OSY under WIA. In 
Program Years 2011 and 2012, the national OSY expenditure rate was 57 
percent.
    On the other hand, a number of commenters noted that the proposed 
regulations mark a substantial change in the delivery of services to 
youth, specifically shifting service priorities from ISY to OSY. These 
commenters stated that because of this significant change, Governors 
and Local WDBs should have jurisdiction over defining the eligibility 
requirements for OSY.
    Department Response: The Department acknowledges that WIOA's focus 
on OSY represents a significant change in the focus of the youth 
formula program. The Department also acknowledges the important role 
State and local leaders play in implementing the law. Nonetheless, WIOA 
clearly defines the eligibility requirements for OSY. No change was 
made in the regulatory text in response to these comments.
    Comments: Several commenters proposed additions to the OSY 
definition. A few commenters offered that any individual who does not 
pass the high school exit exam should automatically be considered an 
OSY as well.
    Department Response: The impact of high school exit exams on 
individual youth represents only one reason why the Department has 
concluded that under WIOA, local areas will need to work closer than 
ever with the local education providers to ensure the success of their 
participants. In-school or out-of-school eligibility status is 
determined at the time of enrollment. Therefore, a student enrolled in 
high school when taking high school exit exam, would count as an ISY.
    Comments: Another commenter recommended that the definition of OSY 
be broadened to include ``youth ages 16-24 who may be enrolled in 
school, but in fact are spending less than 10 hours per week at that 
school or adult education center,'' noting that often students are 
technically enrolled in school but in reality hardly ever attend. 
Similarly, a commenter expressed concern that ``if compulsory school 
attendance is defined by State law as 16, what happens to 14 and 15 
year olds who are out-of-school?''
    Department Response: The Department understands that many students 
attend high school irregularly and are at great risk of becoming 
disconnected. In the cases where compulsory-age students do not attend 
school on a regular basis, under WIOA they count as ISY. WIOA clearly 
defines the eligibility requirements for OSY. No changes were made to 
the regulatory text in response to these comments.
Measuring Attendance by School Year Quarters
    WIOA includes a new criterion for determining OSY eligibility: A 
youth who is within the age of compulsory school attendance, but has 
not attended school for at least the most recent school year calendar 
quarter. The school year quarter is based on how a local school 
district defines its school year quarters.
    Comments: One commenter asked the Department to include an 
alternative definition for OSY requirements for schools that do not 
utilize school year quarters. This commenter suggested that the 
Department could use calendar year quarters as an alternative 
benchmark. Another commenter expressed a concern over the proposed 
language's reliance on school year quarters as a benchmark to measure 
OSY eligibility because it would require local areas to have an 
understanding of the local school district's school year quarters.
    Department Response: In Final Rule text, the Department added 
language clarifying that when schools do not use a quarter system, 
schools must use calendar year quarters. The Department encourages 
local areas to know their local school system's leaders as a strategy 
to ensuring that all youth know about the public workforce system and 
maximizing the limited resources available in an area. Conversations 
around school year calendars may serve as an entry point for future 
collaboration. Both commenters requested further clarification from the 
Department as to the measurement of length of attendance by school year

[[Page 56162]]

quarters. The Department will issue additional guidance on school year 
quarters.
Definition of Attending
    Comments: A number of commenters recommended that the Department 
define what ``attending'' means when determining the eligibility of an 
individual. These commenters asked the Department for clarification as 
to whether taking one course at a community college would count as 
``attending'' and thus, render an individual ineligible for OSY 
services. These commenters also asked the Department whether or not 
being enrolled in a non-credit granting course or continuing education 
class would be classified as attending school, making those individuals 
ineligible for OSY services.
    Another commenter requested clarification around the definition of 
OSY and a concern that youth with disabilities who are involved in 
remedial, non-credit coursework would be excluded from title I youth 
programs under WIOA. The commenter noted that non-credit education and 
remedial coursework often provide a vital opportunity to strengthen 
basic skills needed in order to enroll in credentialing programs and to 
maximize independence. The commenter suggested the Department include 
language creating an exception to ensure that students with 
disabilities in need of remedial coursework will remain eligible for 
title I youth programs under WIOA.
    Another commenter noted that the OSY definition language includes 
``an individual that is not attending any school as defined under State 
law'' and it creates inconsistency in the application of State 
regulations resulting in a different treatment of youth from one State 
to the next. The commenter proposed clarification to the regulation to 
include attendance at an alternative high school for eligibility in the 
OSY component, for all States.
    Department Response: The Department will provide further guidance 
around ``attending'' and non-credit granting courses, continuing 
education classes, and one community college course.
General Education Development (GED) & Dropout Prevention/Recovery 
Program Eligibility
    Comments: A few commenters expressed support for the proposed 
language that would classify individuals enrolled in a GED class as 
OSY. These commenters further recommended that youth in GED programs be 
classified as ``high school drop-outs'' in the proposed regulations so 
that they would not be subjected to compliance with the low-income 
eligibility requirements, and suggested that because they did not 
complete their high school education, it would be illogical to define 
them as ISY. Two commenters recommended that individuals enrolled in 
GED or high school equivalency programs be considered OSY.
    Two other commenters suggested that individuals enrolled in a 
dropout re-engagement program also be classified as OSY under the 
proposed regulations. Specifically, a commenter recommended adding the 
following language, ``. . . for purposes of WIOA, the Department does 
not consider providers of dropout re-engagement programs or providers 
of adult education . . . to be schools.'' This commenter stated that 
this language would provide clarification that after an individual has 
dropped out of school, he or she can continue his or her education in 
an alternative form without being considered an ISY. Another commenter 
suggested that youth in these programs are not participating in 
traditional schools and therefore should not be classified as ISY.
    Department Response: Based on the recommendation of commenters, the 
Department has added high school equivalency programs and dropout re-
engagement programs as additional types of programs in Sec.  681.230 
that are not considered ``schools'' for the purposes of determining 
school status.
    Comments: Other commenters asked for clarification from the 
Department as to whether an individual recruited and persuaded to 
return to school through a dropout recovery program would be considered 
an OSY under the proposed regulations, even if he or she had not missed 
an entire semester of school. One commenter also asked for 
clarification from the Department regarding why an individual would be 
required to wait an entire semester to be classified as an OSY.
    Department Response: As a point of clarification, WIOA does not 
require a person to miss an entire semester; rather, the law considers 
school year quarters. Further, the Department reminds service providers 
that ISY or OSY status determination occurs when a youth enrolls into 
the WIOA Youth Formula Program and does not change as the youth moves 
though the program. Therefore, an OSY who returns to school through a 
dropout recovery program remains classified as an OSY for WIOA 
purposes.
Foster Care Individuals/Individuals in the Justice System
    Comments: Regarding the eligibility requirements for individuals in 
the foster care or justice systems, one respondent commented that the 
proposed regulation's definition of OSY would not efficiently serve 
individuals in the foster care or juvenile justice systems, stating 
that the proposed language would require individuals in the juvenile 
justice system or foster care system to drop out of school in order to 
be eligible to receive WIOA youth services, which the commenter 
suggested would put them at an even greater risk. Another commenter 
recommended that the Department amend the OSY eligibility criteria 
regarding youth in foster care to include youth who were formerly in 
foster care, but may have returned to their biological families before 
turning 18, sharing that although these individuals are no longer in 
foster care and did not technically ``age out'' of the system, they are 
still disadvantaged and in need of assistance. Two commenters 
recommended that any incarcerated youth be automatically considered an 
OSY.
    Department Response: Although the Department recognizes that a few 
State-level foster care policies may result in this practice occurring, 
the Department does not interpret WIOA to require individuals in the 
juvenile justice system or foster care system to drop out of school in 
order to be eligible to receive WIOA youth services. Nor is it the 
Department's intent to have youth leave school in order to receive WIOA 
youth program services.
    Relating to the comment that individuals who stay in foster care 
until late adolescence may not technically ``age out'' of the system 
but remain disadvantaged, the Department agrees. The Department 
consulted with the Department of Health and Human Services John H. 
Chafee Foster Care Independence Program and added ``or an individual 
who has attained 16 years of age and left foster care for kinship 
guardianship or adoption,'' to the final regulation for Sec. Sec.  
681.210 and 681.220 to encompass this fragile population.
    Further, to make the regulation easier to understand, the 
Department separated foster care youth and homeless and runaway youth 
into two separate eligibility categories. In addressing the comments 
around individuals involved in the juvenile justice system, WIOA uses 
slightly different wording between ISY and OSY eligibility criteria. 
For OSY eligibility WIOA at sec. 129(a)(1)(B)(iii)(IV) states,

[[Page 56163]]

``An individual who is subject to the juvenile or adult justice 
system,'' while for ISY, sec. 129(a)(1)(C)(iv)(III) says, ``offender.'' 
WIOA sec. 3(38) defines ``offender'' as ``an adult or juvenile-- (A) 
who is or has been subject to any stage of the criminal justice 
process, and for whom services under this Act may be beneficial; or (B) 
who requires assistance in overcoming artificial barriers to employment 
resulting from a record of arrest or conviction.'' The Department 
changed the wording in the Final Rule to use ``offender'' for the 
eligibility criteria for both ISY and OSY, to clarify that the OSY 
eligibility criterion at Sec.  681.210(c)(4) includes all individuals 
who fit the definition of ``offender'' under sec. 3(38). The Department 
concluded that the intent of the OSY eligibility criterion is not to 
treat youth who were subject to the juvenile or adult system 
differently from those who are currently subject, but rather to call 
attention to the fact that both the juvenile and adult justice systems 
may include OSY.
Homeless Individuals
    Comments: A commenter expressed support for the inclusion of 
homeless individuals as one of the possible eligibility criteria for 
OSY in the proposed regulations. This commenter further recommended 
that the definition of homeless individual in Sec.  681.210(c)(5) be 
derived from the Runaway and Homeless Youth Act (42 U.S.C. 5601 et 
seq.) and read ``. . . a homeless child or youth (as defined in sec. 
725(2) of the McKinney Vento Homeless Assistance Act (42 U.S.C. 
11434a(2))), a runaway or homeless youth (as defined by 42 U.S.C. 5601 
et seq.) who is referred to the labor board by an RHY provider . . . 
.'' This commenter also suggested that homeless status of an individual 
should be determined by referral from a runaway or homeless youth (RHY) 
or other homeless youth provider, but that pure self-attestation by the 
individual should also count as sufficient evidence of homelessness.
    Department Response: Runaway and Homeless Youth programs serve 
individuals as young as 12 years old, which is younger than permitted 
by WIOA youth formula program statute. Therefore, no changes were made 
in the regulatory text in response to these comments. The Department 
will provide future guidance and technical assistance around provider 
referrals and self-attestation when determining program eligibility. 
The Department did add language to clarify that for the OSY category, 
all homeless individuals qualify up to the age of 24.
Individual Who Is Pregnant or Parenting
    Comments: A commenter asked the Department to clarify that an 
``individual who is pregnant or parenting'' includes noncustodial 
parents, such as fathers. Suggesting that re-engagement of fathers and 
noncustodial parents is critical to supporting children, this commenter 
pointed out that because youth served by its members often are 
parenting a child whose paternity has never been determined, these 
partners are in fact parenting, even if not legally custodial.
    Department Response: The Department recognizes the role all 
parents, custodial and non-custodial, play in the lives of their 
children and plans to provide future technical assistance on this 
subpopulation.
Disability
    Comments: Another respondent noted that the NPRM defines OSY as an 
individual who meets criteria in paragraphs (a) and (b) in this 
section, as well as one or more of the criteria identified in paragraph 
(c). Two of the criteria described in this part are: (8) An individual 
with a disability; (6) a low-income individual who requires additional 
assistance to enter or complete an educational program or to secure or 
hold employment. The commenter further described that low income is a 
part of the criteria for youth who need additional assistance to enter 
or complete an educational program or to secure or hold employment, and 
WIOA has made youth with a disability a separate eligibility criterion. 
The commenter asked the Department to state specifically that low 
income is not an eligibility requirement for serving youth with a 
disability.
    Department Response: The commenter's observation does not 
necessitate a change to the Final Rule. For OSY, low income is not an 
eligibility requirement for serving youth with a disability. For ISY 
with disabilities, low-income eligibility requirements exist. However, 
for ISY with disabilities, WIOA sec. 3(36)(A)(vi) provides that the 
income level for eligibility purposes is based on the individual's own 
income rather than his/her family's income. The Department plans to 
provide additional technical assistance around serving youth with 
disabilities.
Section 681.220 Who is an ``in-school youth''?
    This section describes how one meets the eligibility for an ISY for 
purposes of the WIOA title I youth program. ISY youth must be attending 
school, including secondary or postsecondary school, be between the 
ages of 14 and 21 at time of enrollment, be low-income, and meet one or 
more of a list of eight criteria. These are essentially the same 
criteria as under WIA but the disability criterion has been separated 
from the ``needs additional assistance'' criterion. The section 
clarifies that age is based on time of enrollment and as long as the 
individual meets the age eligibility at time of enrollment, he or she 
can continue to receive WIOA youth services beyond the age of 21. WIOA 
includes a youth as low-income if he or she receives or is eligible to 
receive a free or reduced-price lunch under the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1751, et seq.).
Foster Care Individuals
    Comments: A commenter recommended that the Department amend the OSY 
eligibility criteria regarding youth in foster care to include youth 
who were formerly in foster care, but may have returned to their 
biological families before turning 18 because although these 
individuals are no longer in foster care and did not technically ``age 
out'' of the system, they are still disadvantaged and in need of 
assistance.
    Department Response: The Department concluded that same logic 
applies to Sec.  681.220: Individuals who leave foster care after 
remaining there until late adolescence may not technically ``age out'' 
of the system and yet remain disadvantaged. The Department, in 
consultation with the Department of Health and Human Services John H. 
Chafee Foster Care Independence Program, added ``or who has attained 16 
years of age and left foster care for kinship guardianship or 
adoption,'' to the final regulation for Sec. Sec.  681.210 and 681.220 
to encompass this fragile population.
Homeless Individuals
    Comments: A commenter expressed support for the inclusion of 
homeless individuals as one of the possible eligibility criteria for 
OSY in the proposed regulations. This commenter further recommended 
that the definition of homeless individual in Sec.  681.210(c)(5) be 
derived from the Runaway and Homeless Youth Act (RHYA) (42 U.S.C. 5601 
et seq.) and would read ``. . . a homeless child or youth (as defined 
in sec. 725(2) of the McKinney Vento Homeless Assistance Act (42 U.S.C. 
11434a(2))), a runaway or homeless youth (as defined by 42 U.S.C. 5601 
et seq.) who is referred to the labor board by an RHY provider. . . .'' 
This commenter also suggested that homeless

[[Page 56164]]

status of an individual should be determined by referral from an RHY or 
other homeless youth provider, but that pure self-attestation by the 
individual should also count as sufficient evidence of homelessness.
    Department Response: The Department consulted with the Department 
of Health and Human Service's Administration for Children and Families 
when considering this comment. The Department learned that the Runaway 
and Homeless Youth programs serve individuals as young as 12 years old 
which is younger than permitted by WIOA youth formula program statute. 
No changes were made to the regulatory text in response to this 
comment. The Department will provide future guidance and technical 
assistance around provider referrals and self-attestation when 
determining program eligibility.
    Similar to the OSY criteria, the Department added language to 
clarify that for the ISY category, homeless individuals aged 14-21 
qualify. Also similar to the OSY criteria, to make the regulation 
easier to understand, the Department separated foster care youth and 
homeless and runaway youth into two separate eligibility categories. 
This more accurately distinguishes between the types of barriers youth 
may experience.
Individual Who Is Pregnant or Parenting
    Comments: A commenter asked the Department to clarify that an 
``individual who is pregnant or parenting'' includes noncustodial 
parents, such as fathers. Suggesting that re-engagement of fathers and 
noncustodial parents is critical to supporting children, this commenter 
pointed out that because youth served by its members often are 
parenting a child whose paternity has never been determined, these 
partners are in fact parenting, even if not legally custodial.
    Department Response: An individual who is pregnant or parenting 
does include noncustodial parents, such as fathers. The Department 
recognizes the role all parents, custodial and non-custodial play in 
the lives of their children and plans to provide future technical 
assistance on this subpopulation.
Section 681.230 What does ``school'' refer to in the ``not attending or 
attending any school'' in the out-of-school and in-school eligibility 
criteria?
    The eligibility criteria for the WIOA title I youth program for 
out-of-school youth at WIOA sec. 129(a)(1)(B)(i) requires that the 
individual is ``not attending any school (as defined in State law),'' 
and for in-school youth, sec. 129(a)(1)(C)(i) requires that the 
individual is ``attending school (as defined in State law).'' The 
Department has changed the title of Sec.  681.230 to clarify that the 
terms the section uses are from those eligibility criteria. The term 
``school'' refers to both secondary and postsecondary school as defined 
by the applicable State law for secondary and postsecondary 
institutions. Section 681.230 provides that for purposes of title I of 
WIOA, the Department does not consider providers of adult education 
under title II of WIOA, YouthBuild programs, or Job Corps programs as 
schools. Therefore, if the only ``school'' the youth attends is adult 
education provided under title II of WIOA, YouthBuild, or Job Corps, 
the Department will consider the individual an OSY youth for purposes 
of title I of WIOA youth program eligibility.
    Comments: The Department received comments on several provisions 
within this section. Some commenters expressed concern over the 
proposed allowance of State law to determine the definition of 
``school.'' Discussing the fact that their particular State's laws only 
apply to grades K-12 and do not include postsecondary school, these 
commenters suggested that the definition of ``school'' should be 
clarified, and amended to address potential inconsistencies that would 
arise due to varying State laws. One commenter recommended that each 
State WDB should be given the flexibility to determine whether to 
include postsecondary education as in-school or out-of-school, if the 
State does not specify it in its statutes. A number of commenters 
suggested that the definition of OSY be expanded to include individuals 
who are enrolled in postsecondary education. Similarly, a commenter 
stated that States do not support the definition in the proposed 
regulations that would classify youth engaged in postsecondary programs 
as ISY because the proposed language would lead to fewer youth in 
postsecondary education being served due to the 75 percent OSY 
expenditure requirement. Another commenter suggested that youth 
enrolled in postsecondary developmental education courses be considered 
OSY.
    Department Response: WIOA's increased OSY expenditure rate is 
designed to increase focus on disconnected youth. All State education 
agencies recognize 2- and 4-year colleges as ``schools,'' and the 
Department has determined that both secondary and postsecondary 
institutions are considered ``schools'' for the purpose of determining 
school status for WIOA youth program eligibility.
    Comments: A number of commenters recommended that the definition of 
OSY include individuals attending alternative schools. One of these 
commenters stated that an individual who attends an alternative school 
is at as great a risk as those who are attending no school. Some of 
these commenters suggested that an individual's enrollment at an 
alternative school is an implicit indicator of need for WIOA youth 
services because of the low graduation and high dropout rates 
associated with alternative schools. A commenter recommended that the 
Department enhance the definition of school to include: Individuals in 
court-mandated programs, alternative schools, community schools, 
incarcerated youth, those who have not passed the high school exit 
exam, and individuals who attend independent studies programs.
    Department Response: The Department did not incorporate the term 
``alternative school'' into the definition of an OSY because 
alternative school is a general term that may encompass many different 
types of programs. Rather, the Department has incorporated into the 
Final Rule additional types of programs that it does not consider 
schools, such as high school equivalency programs and dropout re-
engagement programs.
    Comments: A number of commenters recommended that youth 
participating in a dropout re-engagement program be considered out of 
school for the purposes of WIOA and suggested clarifying that in Sec.  
681.230. Another commenter encouraged the Department to clarify further 
that youth in high school equivalency programs, such as GED programs, 
also are considered dropouts.
    Department Response: Based on the recommendation of commenters, the 
Department has added high school equivalency programs and dropout re-
engagement programs as additional types of programs that are not 
considered ``schools'' for the purposes of determining school status.
    Comments: With regard to the eligibility of individuals who are 
enrolled in adult education programs, a number of commenters expressed 
support for these individuals' eligibility as OSY. Several of these 
commenters stated that the potential for co-enrollment would be very 
beneficial to youth in need of these services. Citing data from a 
survey that found low rates of co-enrollment, two commenters stated 
that because of this past evidence of low percentages of co-enrollment, 
they supported the proposed

[[Page 56165]]

regulations, which would not define adult education programs as 
schools. Another commenter recommended that the Department expand the 
provision to include those individuals who are officially enrolled in 
school, but who in actuality only are receiving an education at an 
adult education center. A number of commenters requested that 
individuals who are enrolled in an adult education program would be 
considered OSY under WIOA title I, regardless of how the adult 
education services are funded. Several commenters suggested that many 
individuals attend adult education programs that are not funded by 
title II of WIOA, and that limiting eligibility for OSY services solely 
to those who attend programs funded by title II would limit the number 
of youth who would be eligible for co-enrollment.
    Department Response: The Department agrees that the determination 
of whether an adult education program is considered a ``school'' should 
not be based on funding source. Providers of adult education under 
title II of WIOA do not need to be wholly funded by title II in order 
to meet the provision described in Sec.  681.230.
    Comments: Regarding the school status of individuals participating 
in YouthBuild programs not funded by the Department of Labor, a few 
commenters recommended that the Department revise the proposed 
regulation to apply to all YouthBuild programs regardless of how they 
are funded. Another commenter also stated that the exception of not 
classifying YouthBuild programs as schools should be applied to all 
YouthBuild programs, suggesting that many YouthBuild programs have a 
variety of funding sources outside of Department grants and that the 
individuals enrolled in those programs should not be penalized because 
of how their program is funded.
    Department Response: The Department agrees that the determination 
of whether a YouthBuild program is considered a ``school'' should not 
be based on funding source. All YouthBuild programs, whether funded by 
the Department of Labor wholly, partially, or not at all meet the 
provision described in Sec.  681.230 and are not considered schools for 
purposes of WIOA youth program eligibility determination.
    Comments: One commenter stated that all individuals enrolled in Job 
Corps programs should be considered OSY for WIOA youth services. A 
number of commenters requested clarification from the Department as to 
whether individuals involved in all Job Corps programs would be 
considered OSY, since Job Corps students may finish accredited high 
school diploma program or complete a high school equivalency 
certificate or diploma.
    Department Response: The Department does not consider any Job Corps 
program to be a ``school'' for purposes of determining WIOA youth 
program eligibility regardless of whether students in the Job Corps 
program are pursuing a high school diploma a high school equivalency 
certificate.
Section 681.240 When do local youth programs verify dropout status?
    This section provides that dropout status is determined at the time 
of enrollment for eligibility as an OSY and that once a youth is 
enrolled as an OSY, that status continues, for purposes of the minimum 
75 percent OSY expenditure requirement, for the duration of the youth's 
enrollment, even if the youth later returns to a school.
    Comments: Several commenters expressed their support for the 
proposed language. A number of these commenters specifically expressed 
their support for the allowance of youth who are determined eligible to 
receive services at the time of their enrollment to continue to receive 
services and maintain eligibility even if they are placed later in an 
alternative school. These commenters recommend that an individual's 
status be portable when moving across other WIOA funding streams as 
long as that movement is part of the individual career plan and part of 
an articulated agreement among the partners. One commenter recommended 
changing an individual's school status from ISY to OSY when a youth 
graduates from high school as this would assist States with achieving 
the required minimum 75 percent OSY expenditure rate and will 
accurately reflect the status of youth with WIOA expenditures.
    Department Response: The Department has concluded that the most 
straightforward and least burdensome approach is for school status to 
remain the same throughout the program. In addition, this policy will 
encourage local programs to assist OSY re-engage in school without 
concern that re-engaging them in school would negatively impact their 
minimum OSY expenditure rate.
    Comments: A number of commenters expressed concerns over the 
provision that would allow States to define the term ``alternative 
school.'' Some of those commenters suggested that States with broad 
definitions of schools could end up preventing youth who have dropped 
out of school and are attending alternative schools from receiving WIOA 
OSY services. One of the commenters recommended that the Department not 
leave the definition of alternative schools up to States, saying that 
there should be a consistent definition across States. Another 
commenter recommended that, consistent with the State's definition of 
alternative education, any youth that attends an alternative school 
also be considered an OSY.
    Department Response: The Department agrees on the importance of 
consistent definitions across States. Because the term ``alternative 
school'' is a general term that may encompass many different types of 
programs, the Department deleted all references to the term 
``alternative school'' in Sec.  681.240, and it is no longer required 
to be defined in State Plans. Rather, as discussed in Sec.  681.230 
above, the Department has added high school equivalency programs and 
dropout re-engagement programs as additional types of programs that are 
not considered ``schools'' for the purposes of determining school 
status.
Section 681.250 Who does the low-income eligibility requirement apply 
to?
    This section discusses the low-income eligibility criteria for OSY 
and ISY. All ISY must be low-income with the exception that up to 5 
percent of ISY youth who meet all the other eligibility requirements 
need not be low-income. The up to 5 percent is calculated based on all 
newly enrolled youth who would ordinarily be required to meet the low-
income criteria in a given program year. For OSY, only those youth who 
are the recipient of a secondary school diploma or its recognized 
equivalent and are either basic skills deficient or an English language 
learner and youth who require additional assistance to enter or 
complete an educational program or to secure or hold employment must be 
low-income.
    Comments: Commenters expressed support for the amended low-income 
eligibility requirements, and their streamlined documentation and 
process requirements, with one commenter remarking the change would be 
beneficial to youth. Another commenter stated that the OSY low-income 
eligibility criteria would be confusing.
    Department Response: The Department concurs with these commenters 
that the new low-income eligibility requirements will lead to 
streamlined documentation and process requirements.
    Comments: A commenter expressed concern over needing to document 
low-income status for ISY, fearing it may

[[Page 56166]]

create a challenge in working with schools on career pathway 
activities. The commenter noted that schools prefer to provide all 
students with the same experience regardless of family income.
    Department Response: The Department notes the concern expressed 
about the compatibility between how schools and workforce partners 
approach youth. The Department cannot change the ISY income level 
requirements as WIOA defines them. The Department plans to provide 
tools on approaches to implementing career pathways.
    Comments: A commenter recommended that all OSY be exempt from 
having to meet low-income eligibility requirements, stating that there 
is a high correlation between being disconnected from school and work 
and the likelihood of entering poverty, especially at a young age. 
Similarly, a commenter recommended that the low-income requirement be 
removed from the OSY eligibility criteria for individuals who need 
additional assistance to complete an educational program or to secure 
or hold employment, and for recipients of a secondary school diploma 
who are basic skills deficient or an English language learner, 
asserting that the OSY requirements would be more effective if the low-
income criteria were removed from these two categories of individuals.
    Department Response: The Department recognizes the high correlation 
between being disconnected from school and work and the likelihood of 
entering poverty. It also understands that removing low-income criteria 
from all of the OSY eligibility criteria would simplify the program. 
Nonetheless, these eligibility requirements are statutory comments in 
WIOA, and therefore the Department cannot change them in regulation.
    Comments: Another commenter requested that the Department revise 
the proposed regulations so that OSY may be considered low-income if 
they receive or are eligible to receive free or reduced lunches, 
asserting that currently the proposed regulations are written so that 
only ISY who are eligible for free or reduced price lunches are 
considered to be low-income.
    Department Response: The Department considered the commenter's 
suggestion that OSY may be considered low-income if they receive or are 
eligible to receive free or reduced lunches. The Department decided not 
to change the Final Rule because youth must be enrolled in school to be 
eligible for the Richard B. Russell National School Lunch Act.
    Comments: A commenter requested clarification from the Department 
concerning the criteria that would be used to determine if an 
individual is an English language learner for the purposes of the low-
income eligibility requirement.
    Department Response: The Department understands the need for 
criteria for determining if an individual is an English language 
learner for the purposes of the low-income eligibility requirement. 
There will be guidance and technical assistance provided on this topic 
in the future. No regulatory change was made in response to this 
comment.
    Comments: A person commented that the proposed regulations would 
make youth with a disability a separate eligibility requirement from 
low-income requirements. This commenter and another commenter suggested 
that the Department specifically clarify that for youth with a 
disability, low income would not be an eligibility requirement under 
the proposed regulations for OSY with a disability.
    Department Response: Upon analyzing these comments the Department 
discovered a technical error in the NPRM. The Final Rule clarifies that 
OSY with disabilities do not need to meet low-income eligibility 
requirements and the Department has changed the regulatory text to read 
as follows: ``All other OSY meeting OSY eligibility under Sec.  
681.210(c)(1), (2), (4), (5), (6), (7) and (8) are not required to be 
low-income. Additionally, the Department clarified in Sec.  681.280 
that OSY with disabilities are not required to be low income. For ISY 
with a disability, the youth's own income rather than his or her 
family's income must meet the low-income definition and not exceed the 
higher of the poverty line or 70 percent of the lower living standard 
income level.
    Comments: A commenter suggested that any youth who attends a school 
that is considered by the U.S. Department of Education to be a 
``designated low-income school'' should be considered a low-income 
youth for the purpose of WIOA services. Similarly, another commenter 
requested that the Department add to the regulations that any youth who 
attend a title I school would automatically be considered low-income 
for eligibility purposes for WIOA youth services.
    Department Response: The Department analyzed these two similar 
suggestions and did not modify the regulation text. The Department 
reviewed the Department of Education's title I designation and 
concluded that the WIOA high poverty threshold represents a more 
impoverished area than the Department of Education's title I school 
status.
    Comments: A commenter asked for clarification as to whether this 5 
percent of youth means new youth enrollees in a given program year or 5 
percent of all youth enrolled. Another commenter asked whether the 5 
percent who do not have to be low income includes youth that are 
eligible because of non-income applicable criteria such as being 
homeless, a member of the juvenile justice system, or having dropped 
out of high school.
    Department Response: The Department clarified in the regulation 
text that for the 5 percent low-income exception, the 5 percent of 
youth means new youth in a given program year. In addition, the 
Department has clarified in regulatory text that the calculation for 
the 5 percent exception is based on only those youth who would 
ordinarily need to be low income. It is not based on all youth since 
many of the OSY categories do not require low-income status. In fact, 
all nine categories at Sec.  681.210(c) except for paragraphs (c)(3) 
and (9) do not require low-income status. Because not all OSY are 
required to be low-income, the 5 percent low-income exception under 
WIOA is calculated based on the 5 percent of youth enrolled in a given 
program year who would ordinarily be required to meet the low-income 
criteria. For example, a local area enrolled 200 youth and 100 of those 
youth were OSY who were not required to meet the low-income criteria, 
50 were OSY who were required to meet the low-income criteria (i.e., 
either Sec.  681.210(c)(3) or (9)), and 50 were ISY. In this example 
the 50 OSY required to be low income and the 50 ISY are the only youth 
factored into the 5 percent low-income exception calculation. 
Therefore, in this example, 5 of the 100 youth who ordinarily would be 
required to be low-income do not have to meet the low-income criteria 
based on the low-income exception. This percent is calculated at the 
end of a program year based on new enrollees in that program year.
    Comments: A few commenters were concerned that setting a limit on 
the percent of youth that may be deemed eligible based on needing 
additional assistance limits who can be served when there is not an 
abundance of youth that have one of the other eligibility 
characteristics. A number of commenters requested that the Department 
consider recommending that the 5 percent limitation be removed at such 
time that WIOA is amended that states that 5 percent of youth who meet 
all other WIOA youth services eligibility

[[Page 56167]]

requirements do not have to be low income.
    Department Response: While the Department did not include language 
in the NPRM relating to the 5 percent limitation on the ``requires 
additional assistance'' criterion for ISY, that was an unintentional 
omission. The Department has added Sec.  681.310(b), which describes 
the 5 percent ISY limitation for the ``requires additional assistance'' 
criterion. The Department will take the concerns about the 5 percent 
limitation into consideration when providing any technical assistance 
to Congress on WIOA reauthorization.
    Comments: A few commenters asked for clarification regarding a 
definition for ``family'' for the purposes of determining low-income 
eligibility for WIOA title I youth program. Another commenter 
recommended that the Department incorporate the definition of 
``family'' from WIA sec. 101(15) into the WIOA regulations. A request 
was made that the Department provide an updated version of the WIA 
definition that is more inclusive of all family types, including same-
sex marriages and domestic partnerships.
    Department Response: In response to the comments seeking 
clarification of ``family'' in WIOA, the Department added a definition 
of family in 20 CFR part 675, and it is further discussed in the 
preamble that applies to that part.
    Comments: Some commenters asked what items would be included for 
determining if an individual is in a family with total family income 
that does not exceed the poverty line. In particular, these commenters 
asked the Department if sources of funding such as pensions, foster 
care child payments, or unemployment compensation would be included 
when determining a family's low-income status. A commenter asked the 
Department what the definition of a dependent child would be for 
purposes of determining income eligibility and up to what age could an 
OSY be considered a dependent child of the parent or guardian.
    Department Response: When determining up to what age an OSY could 
be considered a dependent child of the parent or guardian use the IRS 
definition of dependent. The Department will provide additional 
guidance on eligibility.
Section 681.260 How does the Department define ``high poverty area'' 
for the purposes of the special rule for low-income youth in the 
Workforce Innovation and Opportunity Act?
    WIOA contains a new provision that allows for youth living in a 
high poverty area to meet automatically the low-income criterion that 
is one of the eligibility criteria for ISY and for some OSY.
    Comments: The Department received many comments on how to define 
``high poverty area.'' A number of the commenters focused on the 30 
percent rate as set every 5 years using American Community Survey 5-
Year data and if that was the appropriate threshold. For example, a few 
commenters expressed their support for the proposed language in this 
section, suggesting that the 30 percent threshold for defining a high 
poverty area would be an accurate measure. In particular, an entity 
commented that the proposed regulation would help to relieve some of 
the burden of meeting income eligibility requirements on youth.
    However, another commenter wrote that the proposed 30 percent 
threshold would be unreasonable, and requested additional clarification 
regarding the calculation methods of contiguous tracts in determining 
high poverty areas. Specifically, this commenter asked the Department 
whether it would measure high poverty thresholds for a contiguous tract 
using an average of the contiguous tracts, or just whether a contiguous 
tract meets the threshold.
    Citing data from the American Community Survey, another commenter 
suggested that there are actually few census tracts that would meet the 
30 percent poverty threshold. This commenter further stated that census 
data, particularly for low-income neighborhoods, often includes a large 
margin of error. This commenter recommended that the Department modify 
the definition of high poverty area to reflect actual geographic 
concentrations of OSY better.
    A few commenters suggested that the definition of high poverty area 
should not be higher than 20 percent of the population meeting the low-
income threshold. Other commenters recommended that the proposed high 
poverty area definition be lowered from 30 percent of the population to 
25 percent.
    Citing statistics a commenter said that in Maine, there are no 
areas in which the 30 percent poverty threshold would be met, one 
commenter recommended that the Department lower the low-income 
threshold from 30 percent in order to accommodate more rural and less 
densely populated States.
    One commenter recommended that the regulations be modified to state 
that if any measure of poverty in a census tract exceeds 30 percent, 
the census tract should be considered a high poverty census tract, 
stating that in some cases the overall high poverty may be under 30 
percent but certain measures within the overall tract could be over 30 
percent.
    Two commenters recommended that the Department allow States to 
define their own poverty area thresholds between 20 and 40 percent that 
is consistent with the State's demographics. Another commenter 
recommended that the Department allow Local WDBs to determine the 
thresholds for poverty in their local areas.
    Another commenter recommended that Local WDBs submit documentation 
to the Department concerning extenuating circumstances in their area 
that would cause them to need to lower their low-income threshold.
    Department Response: After analyzing the many comments received on 
the proposed regulation, the Department concluded that a poverty rate 
of at least 30 percent as set every 5 years using American Community 
Survey 5-Year data was too high. The regulation text was changed to 
reflect a poverty rate of at least 25 percent as set every 5 years 
using American Community Survey 5-Year data. Local areas must decide 
how to combine census tracts into larger contiguous areas and the 
weighted average of the poverty rates of the census tracts in each 
contiguous area to meet the threshold. The Census Bureau defines a 
``poverty area'' as a census tract where at least 20 percent of the 
residents are poor. Therefore, the term ``high poverty'' must be 
greater than 20 percent; the Department concluded that 25 percent was 
the most appropriate threshold. Because allowing States to define their 
own poverty threshold would lead to inconsistencies in eligible youth 
across the country, the Department did not include that recommendation 
in the Final Rule.
    Comments: Citing statistics regarding the high poverty rates in 
Merced County and all of San Joaquin valley, a commenter recommended 
that the ``area'' measured when determining whether an area is high 
poverty, be amended from using counties to cities. A different 
commenter recommended that the Department modify the proposed 
regulations to include ``city'' as an additional geographical division 
that could be used when determining low-income status of an area. 
Another commenter recommended that any city with more than 20 percent 
of its census tracts considered ``high poverty'' should be considered a 
high poverty area, expressing that poverty areas are not always 
contiguous and can be separated by land occupied by government 
buildings, shopping malls, and colleges.

[[Page 56168]]

    Department Response: Because most cities include multiple 
neighborhoods and census tracts that can vary greatly in their levels 
of poverty, the Department decided that using city as the geographical 
area is too large of an area to use.
    Comments: A commenter recommended that the Department should use 
zip codes to determine low-income levels instead of census tracts, 
asserting that there are often sub-areas of high poverty within a 
census tract and that census tracts often do not reflect these 
concentrated area of high poverty.
    Department Response: The Department analyzed the effect of adding 
city and zip code as an additional geographic division and decided to 
stay with the proposed set of contiguous census tracts as the Census 
Bureau defines poverty areas using census tracts. The conclusion will 
result in a more consistent implementation of the regulation.
    Comments: A few commenters suggested that the Department revise the 
proposed regulations so that the 30 percent poverty threshold is 
defined using the numbers from the population in an area who are 
eligible to participate in the program (ages 16 through 24), and not 
using the percentage from the general population. Two commenters also 
recommended that high poverty areas be defined by the youth poverty 
rate of an area, stating that census tract data are minimally useful 
for the purpose of determining the level of poverty in an area. 
Similarly, one commenter asserted that using the American Community 
Survey 5-Year data for all ages in an area could be limited in its 
usefulness. This commenter suggested that the data be limited to 
individuals who are under 18 living in an area. This commenter 
recommended that the Department clarify whether the American Community 
Survey data should be limited to youth in an area or whether States 
have discretion to decide which data to use.
    Department Response: While the Department acknowledges the value 
behind using poverty data that reflect the population the program 
serves, it concluded that because this measure applies to ISY (14-21) 
and OSY (16-24), and these age ranges are not currently easily 
accessible with the American Community Survey, it would not specify 
that the data need to reflect a specific subpopulation as a requirement 
in the regulatory text.
    Comments: Another respondent sought clarification from the 
Department regarding the proposed method of defining high poverty 
areas. Similarly, one commenter stated that the Final Rule would need 
to be clearer as to how a local area can determine whether or not they 
are considered a high poverty area. Another commenter asked the 
Department to clarify how a service provider would document that an 
individual has met the income eligibility requirements for WIOA youth 
services by living in a high poverty area. One commenter asked if Local 
WDBs could use the U.S. Department of Housing and Urban Development 
(HUD) Web site to determine if an area is high poverty.
    Department Response: The Department recognizes that several 
commenters want directions and tools on how a local area could 
determine whether they are considered a high poverty area. The 
Department will provide technical assistance to youth service 
providers, making it easier to calculate if an area qualifies as a high 
poverty area for WIOA purposes.
    Comments: Several commenters recommended that the regulations 
include a variety of measures to determine whether an area is ``high 
poverty.'' Specifically, some of these commenters recommended that the 
Department revise the NPRM to include additional high poverty area 
proxies to capture low-income youth such as living in areas contiguous 
to high poverty areas, living in public housing, or living in an area 
where over a certain percent of the student population is eligible for 
free or reduced price lunches. An entity recommended using additional 
low-income proxies for high poverty area, sharing that the current 
proposed language would exclude individuals from participation in these 
services based on their zip code.
    One commenter suggested that school district borders be used to 
define areas of high poverty instead of State or county borders, 
asserting that this would decrease economic disparity between 
communities.
    Another commenter recommended that the Department use the most 
current data available to determine high poverty areas. This commenter 
suggested using data from other sources instead of solely relying on 
data from the American Community Survey, and recommended also using 
data from Empowerment Zones and other partner agency information 
systems.
    Department Response: The Department considered all of the 
alternative measures suggested and decided to use the proposed 
calculation method, with a slight adjustment to 25 percent from 30 
percent poverty rate in order to keep the calculation relatively 
straightforward, easy to understand, and not burdensome to document or 
implement.
    Comments: Another commenter stated that the proposed method of 
classifying high poverty areas is not consistent with WIOA's intent of 
serving the neediest youth, asserting that eligibility should be based 
on individual needs instead.
    Department Response: The Department appreciates the concern 
regarding serving the neediest youth. WIOA sec. 129(a)(2) includes the 
phrase ``high poverty area,'' which the Department interpreted to mean 
a geographic area and not an individual determination.
    Comments: Finally, a commenter suggested that the Department revise 
proposed Sec.  681.260 to make it more precise and eliminate ambiguity 
in the term ``tribal area.''
    Department Response: The Department accepted the commenter's 
suggestion and replaced, ``Indian Reservation, tribal land, or Native 
Alaskan Village'' with ``an American Indian Reservation, Oklahoma 
Tribal Statistical Area (as defined by the U.S. Census Bureau), Alaska 
Native Village Statistical Area or Alaska Native Regional Corporation 
Area, Native Hawaiian Homeland Area, or other tribal land as defined by 
the Secretary in guidance'' in the Final Rule.
Section 681.270 May a local program use eligibility for free or reduced 
price lunches under the National School Lunch Program as a substitute 
for the income eligibility criteria under title I of the Workforce 
Innovation and Opportunity Act?
    This section explains that WIOA sec. 3(36) defines a low-income 
individual to include an individual who receives (or is eligible to 
receive) a free or reduced price lunch under the Richard B. Russell 
National School Lunch Act.
    Comments: A number of commenters expressed support for the proposed 
language's acceptance of eligibility for free or reduced price lunch as 
a substitute for WIOA youth income eligibility requirements criteria.
    One commenter asked the Department whether an OSY with a sibling 
receiving free or reduced lunches would be considered eligible under 
the proposed regulations. Similarly, another commenter requested 
clarification from the Department regarding whether an OSY high school 
graduate could use their family's participation in the National School 
Lunch Program as fulfillment of their low-income requirements. Yet 
another commenter recommended that a youth who lives in a household 
where his or her family

[[Page 56169]]

member(s) receive or are eligible to receive free or reduced price 
lunch should automatically also be eligible for WIOA youth services.
    Department Response: The Department analyzed the requests to use 
family member's eligibility to receive free or reduced price lunch as a 
proxy allowing a youth not enrolled in school to automatically meet 
low-income eligibility criteria for WIOA youth services. The Department 
did not change the Final Rule because WIOA states ``an individual must 
receive or is eligible to receive a free or reduce-priced lunch'' and 
youth must be enrolled in school to be eligible for Richard B. Russell 
National School Lunch Act. Furthermore, low-income is not an 
eligibility requirement for significant portions of the OSY program.
    Comments: A few commenters requested clarification from the 
Department as to whether in a city or a town in which 100 percent of 
students are eligible for free or reduced lunches, any student who 
lives in the area would be considered low-income automatically and 
therefore, eligible for WIOA youth services, and only would need to 
prove his or her residency. Further, these commenters requested 
clarification from the Department regarding whether an individual who 
attends a school that qualifies for a Community Eligibility Provision 
(CEP) under the Healthy, Hunger-Free Kids Act of 2010 would be 
considered low-income for WIOA youth program eligibility purposes. 
Another commenter also discussed the requirements of the CEP and asked 
how a school district's participation in a CEP would affect the low-
income eligibility of youth for WIOA services.
    Department Response: The Healthy, Hunger-Free Kids Act of 2010 
(Pub. L. 111-296, December 13, 2010, 124 Stat. 3183) amends the Richard 
B. Russell National School Lunch Act which includes the CEP, but does 
not replace it. The Department found that many cities, towns, and 
schools that participate in the CEP have relatively low poverty rates 
as compared to the WIOA determined high poverty area. As a result of 
this research, the Department decided not to change the Final Rule to 
include the CEP.
Section 681.280 Is a youth with a disability eligible for youth 
services under the Workforce Innovation and Opportunity Act if his or 
her family income exceeds the income eligibility criteria?
    This section reiterates the WIOA provision that, for an ISY with a 
disability, income level for eligibility purposes is based on his/her 
own income rather than his/her family's income. For OSY with a 
disability, income is not an eligibility criterion.
    Comments: Two commenters expressed support for this provision, 
noting that it would eliminate barriers for individuals with 
disabilities for accessing necessary support services.
    Another commenter stated that there was an inconsistency between 
proposed Sec. Sec.  681.250 and 681.280. Specifically, the commenter 
said that Sec.  681.250 indicates that the low-income requirement would 
not apply to OSY with disabilities. However, Sec.  681.280 states that 
for an individual with a disability, the income level for eligibility 
purposes would be based on the person's individual income as opposed to 
his or her family's income. This commenter recommended that the 
regulatory text be rewritten to clarify that the low-income requirement 
for individuals with disabilities would be applicable only to ISY and 
not OSY.
    Department Response: The Department concurs that the proposed 
regulation did not factor in the OSY eligibility criteria. To address 
the commenter's concern, the final regulation includes the following 
line, ``Furthermore, only ISY with a disability must be low income. OSY 
with a disability are not required to be low income.''
Section 681.290 How does the Department define the ``basic skills 
deficient'' criterion in this part?
    This section reiterates the basic skills deficient criterion that 
is part of the eligibility criteria for both OSY and ISY, for purposes 
of title I of WIOA. The section also provides that local programs must 
use valid and reliable assessment instruments and provide reasonable 
accommodations to youth with disabilities in the assessment process in 
making this determination.
    Comments: A commenter recommended that the Department revise the 
phrase provided in Sec.  681.290(a)(2), ``(2) Are unable to compute or 
solve problems, or read, write, or speak English at a level necessary 
to function on the job, in the individual's family, or in society. 
(WIOA sec. 3(5)).''
    Department Response: The Department declines to revise this 
language because it comes directly from the statutory language of WIOA.
    Comments: A commenter recommended that the Department include 
language in Sec.  681.290(b), which governs the State WDBs' policies to 
determine if a youth is basic skills deficient, to require the use of 
age and/or developmentally appropriate criteria. Another commenter 
recommended that the Department clarify that local areas must state in 
the local plan how they will assess individuals, and that States should 
establish State policies for how to define basic skills deficient.
    Department Response: The Department addressed these comments in 
State planning guidance, TEGL No. 14-15 (``Workforce Innovation and 
Opportunity Act (WIOA) Requirements for Unified and Combined State 
Plan''), which can be found at http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm.
    Comments: One commenter requested clarification regarding the Sec.  
681.290(c) requirement that in assessing basic skills, local programs 
must use assessment instruments that are valid and appropriate for the 
target population. One commenter expressed its support for the explicit 
inclusion of ``valid and reliable assessment instruments'' and 
``reasonable accommodations'' for individuals with disabilities, saying 
that this language would create the opportunity for State and Local 
WDBs to put metrics-driven services and supports into place. This 
commenter recommended, however, that the Sec.  681.290 language be 
further modified to provide State and Local WDBs with guidance on how 
to connect youth with disabilities with the resources they need if they 
are deemed skills deficient. A number of commenters asked about the 
types of basic skills assessments that are allowable.
    Department Response: The Department will provide guidance or 
technical assistance on ways to help youth with disabilities access the 
resources they need.
    Comments: A commenter recommended that the Department revise Sec.  
681.290(c) to include assessment instruments that are valid and 
appropriate for the target population and must provide reasonable 
accommodation in the assessment process, if necessary, for people with 
disabilities.
    Department Response: The Department concluded that local programs 
need flexibility to use assessments they choose as long as they are 
valid and appropriate. Requiring assessments only approved by the 
Department of Education's National Reporting System would be overly 
burdensome for local youth programs. No change has been made to the 
regulatory text in response to the comment.
    Comments: A commenter suggested that the language of this section 
be amended to provide further guidance if

[[Page 56170]]

a youth with a disability is unable to demonstrate basic skills, and 
that language should be included that will guide State and Local WDBs 
as they work to meet the needs of youth who are basic skills deficient. 
The commenter suggested specific procedures should be put into place to 
connect skills deficient youth with disabilities with the training and 
resources they need in order to succeed.
    Department Response: The Department acknowledges the concerns about 
serving basic skills deficient youth, including those with 
disabilities, and will provide guidance and technical assistance to 
address these concerns. No change is made to the regulatory text in 
response to this comment.
    Comments: Another commenter suggested that local programs should be 
able to use the Individual Education Program (IEP) to determine 
individuals' basic skills, because it is a summary of their reading, 
writing, and math skills. Finally, a commenter recommended that the 
Department remove the basic skills deficient criteria for the time 
being, noting that all other program requirements are beginning in July 
2015.
    Department Response: Regarding the use of an IEP, the Department 
will issue further guidance describing the use of previously conducted 
assessments. In addition, the Department cannot remove the basic skills 
deficient criteria because the criteria are set forth in the statutory 
language of WIOA. No changes were made to the regulatory text in 
response to these comments.
Section 681.300 How does the Department define the ``requires 
additional assistance to enter or complete an educational program, or 
to secure and hold employment'' criterion in this part for OSY?
    The Department added this section in the Final Rule to be more 
clearly consistent with the ``requires additional assistance'' 
eligibility criteria in WIOA secs. 129(a)(1)(B)(iv)(VIII) (for OSY) and 
129(a)(1)(C)(iv)(VII) (for ISY). The criterion is slightly different 
for ISY and OSY, in that the OSY section contains the phrase ``to enter 
or complete an educational program'' while the ISY language states ``to 
complete an educational program.'' Therefore, the Final Rule includes 
two separate sections for the ISY and OSY ``requires additional 
assistance'' criteria. The new Sec.  681.300 is the OSY section, while 
proposed Sec.  681.300 is now Sec.  681.310, the ISY section. Proposed 
Sec.  681.310 has also been renumbered to Sec.  681.320.
Section 681.310 How does the Department define the ``requires 
additional assistance to complete an educational program, or to secure 
and hold employment'' criterion in this part for ISY?
    This section allows States and/or local areas to define the 
``requires additional assistance . . .'' criterion that is part of the 
ISY eligibility. It clarifies that if this criterion is not defined at 
the State level and a local area uses this criterion in its ISY 
eligibility, the local area must define this criterion in its local 
plan. The Department received comments on this section as discussed 
below.
    Comments: A number of commenters recommended that the Department 
provide additional guidance, such as including an acceptable list of 
possible ``additional assistance'' in order to set national standards 
for what ``additional assistance'' means. Many of these commenters 
expressed concern about the proposed language being overly broad, with 
the potential to expand services beyond the high-risk populations 
envisioned by WIOA. For this reason, these commenters recommended that 
the educational program that the individual needs should be geared to 
the achievement of basic skills at the secondary level and that 
``requiring additional assistance to secure or hold employment'' should 
mean that there are deficits in basic academic skills (not technical 
skills, or advanced academic skills) that are needed to secure 
employment or succeed on the job.
    Another commenter recommended that States and/or local areas should 
have an established definition for an ``individual requiring additional 
assistance to complete an education program or to secure or hold 
employment'' and include a student who is significantly over-aged and 
under-credited, (i.e., 2 or more years below grade level or off track 
from high school graduation). One commenter recommended that the 
Department require State and Local WDBs to establish policy using age 
and/or developmentally appropriate criteria to determine when a youth 
requires additional assistance to complete an educational program or to 
secure and hold employment.
    Department Response: The Department understands the need for more 
specific language to define the ``requires additional assistance'' 
criterion and plans, and further guidance on the need for more specific 
definitions at the State and local level will be issued. No change to 
the regulatory text, however, was made in response to these comments.
    Comments: A few commenters asked about the 5 percent limitation on 
ISY using the ``requires additional assistance'' provision.
    Department Response: It was an oversight that the Department did 
not include this new limitation in the NPRM. Therefore, the Final Rule 
includes Sec.  681.310(b) that describes the 5 percent ISY limitation 
on the use of the ``requires additional assistance'' criterion.
Section 681.320 Must youth participants enroll to participate in the 
youth program?
    This section clarifies that there is no self-service concept for 
the WIOA youth program and every individual receiving services under 
WIOA youth must meet ISY or OSY eligibility criteria and formally 
enroll in the program. It defines participation as an eligibility 
determination, the provision of an objective assessment, development of 
an individual service strategy, and participation in any 1 of the 14 
program elements.
    Comments: The Department received a number of comments, as 
discussed below, recommending the Department clarify the point of 
participation for a WIOA title I youth program participant.
    Department Response: The Department has added Sec.  681.320(b)(2) 
to clarify that the point of program participation does not begin until 
after the youth is determined eligible, the youth receives an objective 
assessment, and the youth participates in 1 of the 14 program elements. 
In addition, the Department made a minor language change in Sec.  
681.320(b) in order to be consistent with language in the performance 
section of the Final Rule.
    Comments: A number of commenters expressed their support for the 
NPRM's specification that there would be no self-service for WIOA youth 
and that every individual must enroll formally in the program. These 
commenters also stated that they support the proposed language's 
definition of enrollment as the collection of information.
    Several commenters expressed concern regarding the burden placed on 
individuals who have to demonstrate their eligibility through 
documentation. Some of these commenters requested that the Department 
clarify and make explicit that the ``collection of information'' 
associated with enrollment can be supported with self-attestation, in 
order to ensure upfront eligibility, especially for high-risk 
individuals. Although acknowledging the improvements in burden 
associated

[[Page 56171]]

with certification of income eligibility brought about by WIOA, many 
commenters suggested that requiring individuals who are at high risk to 
prove their status before they receive services that they rely on would 
be detrimental to those in need. These commenters suggested that the 
Department use the guidance for self-attestation that was included in 
the ``Advisory Training and Employment Guidance Letter No. 6-14 Program 
Year (PY) 2013/Fiscal Year (FY) 2014 Data Validation and Performance 
Requirements and Associated Timelines.'' Discussing how self-
attestation is defined in this document, these commenters recommended 
that the Department amend the proposed language to state that the 
collection of information that triggers enrollment could include self-
attestation, and that self-attestation is even preferable to other 
methods of information collection.
    Department Response: The Department does allow self-attestation for 
the collection of a number of data elements. The Department will 
provide further guidance on documentation requirements for data 
elements in the Department's forthcoming data validation guidance.
    Comments: Commenters also recommended that the Department modify 
the proposed regulations to state that an individual is not enrolled in 
WIOA title I programs with the collection of information, and that 
local areas are allowed to begin assessment activities and other 
efforts through the one-stop delivery system. These commenters also 
recommended the Department apply a consistent definition of point of 
enrollment across all WIOA titles and recommended that the point of 
enrollment should be activated with the individual's participation in a 
program activity, not just their involvement in initial assessment 
activities.
    A commenter recommended that the Department clarify that staff 
assisted activities such as assisting youth post-exit in transition, 
navigation, and support are encouraged and do not trigger enrollment 
for individuals in WIOA youth programs. Another commenter stated that 
the point at which the Department defines when an individual is 
enrolled is critical to data collection and validation. This commenter 
suggested that collecting an individual's data at the time of 
eligibility verification and at enrollment would be redundant and 
provide increased opportunity for inconsistent data reporting.
    Another commented that the time of enrollment needs to be 
clarified, as they were concerned that the proposed regulations as they 
stand would allow the process of taking a WIOA application and 
determining its eligibility to be categorized as a ``basic career 
service'', therefore, counting the individual as enrolled. This 
commenter recommended that the regulations be amended so that 
enrollment into WIOA title I services would be the first service 
provided, after eligibility has already been determined.
    Department Response: The Department has clarified in Sec.  
681.320(b) of this DOL WIOA Final Rule that the point of participation 
is after an eligibility determination, and added in Sec.  681.320(b) 
that the point of participation occurs after the provision of an 
objective assessment, development of an individual service strategy, 
and participation in any of the 14 WIOA youth program elements. In 
addition, the Department will ensure consistency in the point of 
participation across all WIOA titles through the performance section in 
20 CFR 677.150(a)(2) (see Joint WIOA Final Rule).
Other Eligibility Issues
    Comments: A commenter recommended that the Department explicitly 
clarify that youth who are eligible to work under Deferred Action for 
Childhood Arrivals (DACA) also would be eligible for WIOA programs.
    Department Response: The Department declines to address DACA in the 
WIOA Final Rule (due to pending court decisions). The Department issued 
guidance on DACA in TEGL No. 02-14 (``Eligibility of Deferred Action 
for Childhood Arrivals Participants for Workforce Investment Act and 
Wagner-Peyser Act Programs''), which can be found at https://wdr.doleta.gov/directives/attach/TEGL/TEGL_2-14.pdf.
    Comments: Two commenters noted that WIOA sec. 132 (b)(1)(B)(v)(I) 
defines an adult to mean an individual who is not less than age 22 and 
not more than age 72. The commenters identified that in other instances 
(title I sec. 3, title II), adults are defined as being 18 and not 22. 
These commenters requested further clarification from the Department as 
to whether this age difference was an oversight on the part of the 
Department.
    Department Response: WIOA sec. 132 discusses the allotment formula 
for States and outlying areas used each program year and refers to the 
adult age range used in the statutory formula to determine the amount 
of funds a State or outlying area receives in a given program year. The 
other references to WIOA titles I and II the commenters cite relate to 
eligibility age for specific services and is not a Department 
oversight. No changes have been made to regulatory text in response to 
these comments.
4. Subpart C--Youth Program Design, Elements, and Parameters
Section 681.400 What is the process used to select eligible youth 
service providers?
    This section clarifies that youth activities may be conducted by 
the local grant recipient and that when the Local WDB chooses to award 
grants or contracts to youth service providers, such awards must be 
made using a competitive procurement process in accordance with WIOA 
sec. 123.
    The Final Rule clarifies that the grant recipient/fiscal agent has 
the option to provide some or all of the youth workforce investment 
activities directly themselves rather than entering into a grant or 
contract to provide the activities. The competitive procurement 
provision discussed in WIOA sec. 123 is only applicable if the Local 
WDB chooses to award grants or contracts to youth service providers. 
The Department encourages Local WDBs to continue to award contracts to 
youth service providers when local areas have access to experienced and 
effective youth service providers. The revision also uses the 
terminology ``youth service providers'' consistently to refer to these 
providers. While this revision represents a significant change in that 
it provides Local WDBs with flexibility in determining which WIOA youth 
services to procure, the Department expects Local WDBs to continue to 
contract with youth service providers to provide the program elements 
which youth service providers are best positioned to offer. The intent 
of this flexibility is to allow for Local WDBs to directly provide the 
WIOA youth program elements that they can most efficiently and cost-
effectively provide, such as labor market and employment information 
and framework services including assessment, intake, supportive 
services and follow-up services. The Department received a number of 
comments on this section as discussed below. Based on these comments, 
the Department has made a significant revision to this section in the 
Final Rule.
    Comments: A number of commenters asked the Department to provide 
specific guidance as to which WIOA youth services must be competitively 
procured and when this regulation would take effect. One commenter 
requested additional clarification from the Department regarding the

[[Page 56172]]

competitive selection requirement, specifically inquiring as to what 
the framework required by local areas would be.
    In addition, since the proposed regulation stated at Sec.  
681.400(b) that competitive selection requirements do not apply to 
``the design framework services when these services are more 
appropriately provided by the grant recipient/fiscal agent,'' a couple 
of commenters asked the Department to clarify framework services. One 
of these commenters stated that framework services are described 
differently in the NPRM preamble discussion and the proposed regulatory 
text at Sec. Sec.  681.400(b) and 681.420(a). One commenter asked the 
Department for clarification as to whether a county within a local area 
that is not a fiscal agent could perform framework activities, 
suggesting that disallowing this would not be cost effective.
    Department Response: The Department determined a need for greater 
clarity about the specific youth services that must be competitively 
procured. In addition, the concept of framework services in the NPRM 
was overly complex. The Final Rule clarifies that the competitive 
procurement requirements in sec. 123 of WIOA apply only if the Local 
WDB chooses to award grants or contracts to youth service providers to 
provide some or all of the youth program elements. For example, a Local 
WDB could choose to procure competitively all youth program elements or 
it could choose to competitively procure a few of the youth program 
elements, and provide the remaining program elements themselves. This 
simplification in the Final Rule eliminates the need for the discussion 
of framework services in Sec.  681.400(b).
    Comments: With regard to proposed Sec.  681.400(a)(3), which would 
allow a Local WDB to sole source awards if it determines there is an 
insufficient number of eligible training providers of youth activities 
in the local area, a commenter asked the Department how a Local WDB 
would determine that there is an insufficient number of youth 
providers. Further, this commenter asked if a determination that a 
local area is ``rural''--for example, by using the Census Bureau, 
Office of Rural Health Policy, or Office of Management and Budget 
definition--alone provides justification for sole sourcing. Some 
commenters recommended that the Department expand the proposed Sec.  
681.400(a)(3) language to allow for the Local WDB to allow the grant 
recipient/fiscal agent to deliver the elements when there are no 
eligible training providers available, as this would be most useful in 
rural areas.
    Department Response: The Final Rule in Sec.  681.400(b)(4) does not 
address how to determine an insufficient number of eligible youth 
providers. Rather, the Local WDB should have a policy that defines what 
would constitute an insufficient number of eligible youth providers. 
Based on the changes made in the Final Rule, the grant recipient/fiscal 
agent will have the flexibility to deliver youth program elements as 
recommended by the commenter.
    Comments: A number of commenters recommended that the Department 
expand the Sec.  681.400 language to encourage Local WDBs to ensure 
that the competitive process does not discourage or limit co-enrollment 
of youth participants in other core or partner programs. One commenter 
recommended that the youth provider selection process should include 
suggested quality criteria for Local WDBs and/or States to use when 
selecting eligible training providers. This commenter also suggested 
that the Department provide in the regulation examples of public or 
private entities that have demonstrated effectiveness in providing 
regionally accredited secondary level educational programs providing 
entry-level workforce preparation and/or leading to recognized 
postsecondary education and training activities.
    Department Response: The Department agrees that it is important not 
to discourage co-enrollment and to incorporate quality criteria. The 
Department concluded that this type of language is more appropriate in 
guidance. The Department also agrees with the importance of 
competitively selecting high quality youth service providers, as 
appropriate, and will address this issue in future guidance.
    Comments: A commenter asked whether waivers for providing intake, 
assessment, development of ISS, case management, and follow-up services 
are still recognized under the regulation. Finally, one commenter 
observed that the term ``local program'' is used throughout subpart C 
without a clear definition, and recommended that the Department add a 
definition of ``local program'' to Sec.  681.400.
    Department Response: Because of the revisions to the Final Rule 
that provide additional flexibility in delivering youth program 
elements, waivers related to WIOA sec. 123 are no longer necessary. In 
addition, the Department declines to add a new definition of ``local 
program''; the term ``local program'' refers to a local workforce 
area's WIOA title I youth formula-funded program. No changes were made 
to the final regulation in response to these comments.
Section 681.410 Does the requirement that a State and local area expend 
at least 75 percent of youth funds to provide services to out-of-school 
youth apply to all youth funds?
    This section describes the new requirement under WIOA that States 
and local areas must expend a minimum of 75 percent of youth funds on 
OSY. This section also clarifies the guidelines by which a State that 
receives a minimum allotment under WIOA sec. 127(b)(1) or under WIOA 
sec. 132(b)(1) may request an exception to decrease the minimum 
expenditure percentage to not less than 50 percent.
    Comments: Numerous commenters expressed their support for the 
increase in mandatory minimum OSY expenditure from 30 to 75 percent, 
asserting that this change along with others would lead to improved 
outcomes for OSY. One commenter expressed its support for the proposed 
regulations, but further encouraged the Department to provide guidance 
as to how programs can transition to help the OSY population now that 
they are a priority. This commenter cautioned that without such 
guidance, providers with experience meeting Federal requirements and/or 
with expertise in hybridized ``earn and learn'' models could be 
excluded from the system. In addition to supporting the proposed 
regulations regarding the 75 percent funding requirement, one commenter 
expressed support for the Department's attempts to limit opportunities 
for waivers that would reduce this funding requirement. A few 
commenters expressed their support of the language that would allow 
organizations a transition period before they have to reach the 75 
percent OSY funding goal. One of these commenters suggested that 
allowing for this gradual transition would help public workforce 
systems to decrease their expenditures on ISY slowly. Another commenter 
was concerned about the 75 percent requirement because for its State 
and others with low-dropout rates, reaching the requirement would be 
unrealistic and would fail to serve many at-risk ISY. This commenter 
recommended that the requirement be reduced to 40 percent for the first 
year after implementation and increased to 60 percent at the third year 
and thereafter.
    Department Response: While the Department notes the commenters' 
concerns about the shift to spending more funds on OSY, the Department 
issued TEGL No. 23-14 (``WIOA Youth

[[Page 56173]]

Program Transition Guidance''), which can be found at http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm, on March 26, 
2015. This guidance discusses transitioning to the minimum 75 percent 
OSY expenditure requirement that allows a gradual transition in the 
first WIOA program year. The Department plans to issue additional 
guidance and technical assistance to help programs serve more OSY.
    Comments: A commenter expressed concern that transitioning to the 
75 percent OSY requirement would decrease performance outcomes 
throughout the youth services system because the OSY population is 
often difficult to retain contact with, especially after they have 
exited the program. Therefore, this commenter predicted that local 
areas would enroll a limited number of youth, except that those youth 
have a relatively high prospect for success, and devote significant 
resources to tracking and reporting on that limited population. This 
commenter requested confirmation that the Department would prefer that 
local areas forgo volume considerations and do everything possible for 
the few OSY that could meet these expectations.
    Department Response: The Department recognizes that OSY may require 
additional resources for services and expects local programs to provide 
the necessary resources to ensure the success of OSY. There is no 
specific expectation on the number of OSY programs must serve, only on 
the percentage of funds spent on OSY. States and local areas will have 
the opportunity to set performance targets based on the population they 
serve.
    Comments: Commenting that many ISY are at risk regardless of the 
fact that they are attending school, a commenter stated that the 
proposed regulations would not give enough support to areas who want to 
continue to help serve ISY. Further, this commenter was concerned that 
some ISY may end up dropping out in order to be eligible for OSY 
services and assistance and, therefore, suggested that local areas 
should be able to determine the needs of their own areas and serve 
those individuals as such.
    Department Response: The Department recognizes the concerns about 
serving fewer ISY. However, the focus in WIOA is on expending 
additional resources on OSY. Local WDBs do not have the authority under 
WIOA to determine ISY and OSY expenditure rates based on the needs of 
their own area. Local areas must spend a minimum of 75 percent of youth 
funds on OSY, with the exception that local area administrative 
expenditures are not a part of the 75 percent OSY minimum expenditure 
calculation.
    Comments: Describing the impact the 75 percent OSY minimum 
expenditure requirement would have on its summer transition program, 
one commenter opposed the OSY minimum expenditure requirement, stating 
that it would prevent 15 ISY who have been identified as high-risk from 
participating in its program due to a lack of funding for ISY.
    Department Response: The Department recognizes concerns regarding 
continuing to serve ISY and issued TEGL No. 23-14 (``WIOA Youth Program 
Transition Guidance'') on March 26, 2015, which can be found at http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm, which 
addresses transitioning ISY and ensures they can successfully complete 
the program and are not exited from the program prematurely.
    Comments: A number of commenters recommended that the Department 
provide additional detail about what is required in the analysis of ISY 
and OSY populations in a local area that would be required as part of 
the waiver process to reduce the OSY minimum expenditure percentage for 
States that receive the small State minimum allotment (proposed Sec.  
681.410(b)(1)).
    Department Response: The Department will provide guidance on what 
is required when submitting waivers to reduce the required OSY minimum 
expenditure rate for States that receive the small State minimum 
allotment.
Section 681.420 How must Local Workforce Development Boards design 
Workforce Innovation and Opportunity Act youth programs?
    This section describes the framework for the WIOA youth program 
design. This section also describes the requirement that Local WDBs 
must link to youth-serving agencies and adds local human services 
agencies to the list that WIA required.
Objective Assessment
    Comments: One commenter recommended that the Department clarify 
that the proposed Sec.  681.420(a)(1) requirement that the youth 
program design framework services must provide for an individual 
objective assessment does not require testing to determine an 
individual's Grade Level Equivalent or Educational Functioning Level 
unless needed to determine that the participant is basic skills 
deficient or to document a measurable skill gains for purposes of 
measuring performance. Another commenter recommended that the objective 
assessments and individual services planning process be completed using 
``strength-based'' approaches that focus on the strengths of the 
individuals instead of their faults.
    Department Response: The Department has incorporated language into 
Sec.  681.420(a)(1) to review youth strengths as part of the assessment 
process. It is also the intention of the Department to clarify the 
requirements around the youth program design framework in system 
guidance.
Individual Service Strategy
    Comments: A commenter recommended that a participant's ISS be 
developed with the individual's needs in mind and not on the time 
constraints or structure of the provider.
    Department Response: The Department has incorporated language into 
Sec.  681.420(a)(2) to develop the ISS based on the needs of the 
participant.
Career Pathways
    Comments: Several commenters recommended that the Department 
clarify that the Local WDB may require that youth services be aligned 
with specific career pathways identified by the Local WDB. Further, 
these commenters suggested that the regulations should clarify that the 
requirement under WIOA sec. 3(7)(F) that a career pathway must enable 
an individual to attain a secondary school diploma or its equivalent, 
and at least one recognized postsecondary credential, does not limit 
the ability of local areas to serve youth who have already attained a 
secondary school diploma or its equivalent.
    A number of commenters requested clarification from the Department 
about the activities that States and Local WDBs must carry out 
regarding career pathways, and whether they have to establish specific 
processes and policies concerning career pathways. Additionally, many 
of these commenters requested that the Department clarify whether Local 
WDBs must implement each element outlined in the WIOA definition and 
stated that WIOA does not indicate whether the identification of career 
pathways as part of the assessment and individual service strategy 
would create any additional requirements for local areas or youth 
service providers. Some of these commenters also recommended that the 
regulation clarify that the WIOA sec. 3(7)(C) requirement relating to 
counseling does not create an affirmative requirement for Local WDBs or 
youth service providers to provide counseling to every individual, but 
only to the extent that such counseling

[[Page 56174]]

would be consistent with the objective assessment and the ISS.
    One commenter agreed that Local WDBs should foster relationships 
with secondary and postsecondary education providers regarding the 
implementation of local career pathway strategies, stating that because 
of the shift in focus to OSY, Local WDBs should consult with experts 
that understand youth needs to design effective career pathway 
strategies.
    Department Response: The Department agrees that additional guidance 
is necessary to describe WIOA requirements for incorporating career 
pathways into the WIOA title I youth program, although the Department 
has determined that additional regulatory text on career pathways is 
not necessary. The Departments of Labor, Education, Health and Human 
Services in coordination with nine other Federal agencies plan to 
provide additional guidance and technical assistance on the 
implementation of career pathways in WIOA.
Follow-Up Services
    Comments: A couple of commenters expressed concern that proposed 
Sec.  681.420(a) listed follow-up services as part of the design 
framework services and proposed Sec.  681.460(a)(9) listed follow-up 
services as 1 of the 14 program elements because design framework 
services do not have to be procured, while program elements do. These 
commenters requested that the Department clarify that youth program 
operators have the flexibility to include follow-up services in the 
design framework or as a youth program element.
    Department Response: The Department clarified the procurement 
requirements for all program elements, including follow-up services, in 
Sec.  681.400.
Involvement of the Community
    Comments: One commenter requested that the Department clarify the 
term ``actively involved'' in the proposed Sec.  681.420(g) requirement 
that Local WDBs ensure ``that parents, youth participants, and other 
members of the community with experience relating to youth programs are 
actively involved in both the design and implementation of its youth 
programs.'' Another commenter stated that requiring those individuals 
be ``actively involved'' is overly prescriptive and not required in 
legislation. The commenter expressed concern that public meetings allow 
open access and it would be impossible to ensure engaged participation.
    Department Response: The Department agrees with this comment and 
has deleted the word ``actively'' from the Final Rule.
    Comments: Another commenter recommended that the Department amend 
Sec.  681.420 to better reflect the diverse range of stakeholders and 
perspectives of youth with disabilities. Specifically, this commenter 
recommended that the requirement that specific members of the community 
be involved with the establishment of program design should include 
youth with disabilities.
    Department Response: The Department has not added additional 
language based on this comment as Sec.  681.420(c)(6) already 
specifically names local disability-serving agencies.
Pay-for-Performance
    Comments: One commenter asked about the performance and reporting 
requirements of the pay-for-performance provision, specifically whether 
the Department will change how States report.
    Department Response: The Department plans to issue further guidance 
about the Pay-for-Performance contract strategies provision of WIOA and 
the requirements of subpart E of part 683.
Section 681.430 May youth participate in both the Workforce Innovation 
and Opportunity Act (WIOA) youth and adult programs concurrently, and 
how do local program operators track concurrent enrollment in the WIOA 
youth and adult programs?
    This section provides that youth may participate in both the WIOA 
youth program and the adult program at the same time if they are 
eligible for both and it is appropriate. The section also provides that 
youth who are eligible under both programs may enroll concurrently in 
WIOA title I and II programs.
    Comments: Several commenters expressed support for the proposed 
language that clarifies that youth may be co-enrolled in WIOA title I 
and II programs. However, many of these commenters also recommended 
that the Department strengthen the language to encourage Local WDBs to 
incorporate co-enrollment with other core programs as part of the 
overall youth program design. One of these commenters also stated that 
co-enrollment would create difficulties in terms of data collection and 
capacity. Specifically, this commenter said that to move successfully 
between systems without significant disruption, data collection, and 
storage must track the individual youth themselves, instead of just the 
programs they are in. This commenter suggested that additional funding 
and technical support may be necessary to assist States and local areas 
in developing comprehensive data systems.
    Some commenters also expressed their support of the proposed 
regulations' encouragement of co-enrollment, especially because of how 
it could extend more services to OSY. However, these commenters 
expressed concerns that potential disincentives for co-enrollment exist 
related to inconsistencies across funding streams in how enrollment, 
exit, and participation in activities are defined and how performance 
is measured in programs across the different titles.
    Department Response: The Department acknowledges the concerns 
regarding disincentives for co-enrollment due to data tracking issues 
and performance measure implications. However, the Department intends 
to provide additional guidance and technical assistance to support co-
enrollment across core programs. No changes were made to the regulatory 
text to reflect these comments.
    Comments: One commenter expressed its support for the proposed 
regulation's allowance of dual eligibility in WIOA title I and II 
programs, but recommended that the Department issue additional guidance 
to Local WDBs about how to coordinate their resources effectively for 
individuals who could co-enroll in both title I and title II services. 
Further, this commenter asked the Department for clarification as to 
whether co-enrolled individuals would need Individual Training Accounts 
(ITAs) and whether States should have to maintain documentation of 
providers who have expertise in services under both titles I and II. A 
few commenters expressed their support for the option of co-enrollment 
in WIOA title I and II programs, stating that this allowance would be 
particularly beneficial for youth under the Deferred Action for 
Childhood Arrivals policy who have not yet received their high school 
equivalency certificate because their participation in youth services 
under title I could further instill in them a greater educational work 
ethic. Further, these commenters recommended that the Department search 
for potential methods for how State and Local WDBs could recruit and 
ensure that they are providing services to eligible immigrants.
    Department Response: On November 17, 2015, the Department provided 
preliminary guidance regarding partnering between WIOA titles I, II,

[[Page 56175]]

and IV in TEGL No. 08-15 (``Second Title I WIOA Youth Program 
Transition Guidance''), which can be found at http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm.
    The Department will provide additional technical assistance 
regarding partnering across the WIOA programs on an on-going basis, 
including services to eligible immigrants. No changes were made to the 
regulatory text in response to these comments.
    Comments: Another commenter recommended tracking expenditures 
individually by each program.
    Department Response: The Department already does require tracking 
expenditures by each program, and no changes were made to the 
regulatory text in response to this comment.
Section 681.440 How does a local youth program determine if an 18 to 24 
year old is enrolled in the Workforce Innovation and Opportunity Act 
(WIOA) youth program or the WIOA adult program?
    Individuals aged 18 to 24 are eligible for the WIOA adult and youth 
programs. This section provides that local youth program needs to 
determine whether to enroll an 18 to 24 year old in the youth program 
or adult program based on the individual's career readiness as 
determined through an assessment of his or her occupational skills, 
prior work experience, employability, and participant needs.
    Comments: A commenter recommended that, given the intent of WIOA, 
individuals should be able to determine the programs in which they will 
participate. However, this commenter further recommended that the 
Department modify the proposed language to give guidance to States in 
terms of how to present materials on program choice to individuals and 
ensure that the materials presented would be understood by a wide 
variety of individuals, including those with disabilities.
    Another comment stated that determining in which program an 18 to 
24 year old should enroll would impose a burden on local areas to 
establish processes to ensure that services are provided to an 
individual in the appropriate program.
    A commenter suggested that, in cases of eligibility for co-
enrollment in WIOA title I and II activities, it would not be suitable 
for an 18 to 24 year-old youth to be enrolled in the adult program 
without first undergoing an assessment to determine whether the adult 
program would be appropriate for meeting his or her needs.
    Department Response: The Department does not intend to require 
local WDBs to establish specific processes to ensure that individuals 
are served in the appropriate program. Rather the Department wants to 
emphasize that youth may be served by either program depending on the 
young adult's individual needs, knowledge, skills, and interests. Local 
WDBs need a process in place to assist in determining the appropriate 
program for participants between the ages of 18 and 24.
    Based upon the comments received, the Department updated the Final 
Rule and removed the word ``objective'' from in front of assessment to 
indicate that a formal evaluation is not needed and the Department 
removed the reference to WIOA sec. 129(c)(1)(A).
Section 681.450 For how long must a local Workforce Innovation and 
Opportunity Act youth program serve a participant?
    The Department has continually provided guidance and direction that 
youth programs serve participants for the amount of time necessary to 
ensure they are successfully prepared to enter postsecondary education 
and/or unsubsidized employment. While there is no minimum or maximum 
time a youth can participate in the WIOA youth program, programs must 
link program participation to a participant's ISS and not the timing of 
youth service provider contracts or program years.
    Comments: Some commenters expressed their support for the proposed 
regulations' allowance to serve youth until their needs have been met, 
stating that this would alleviate stress on participants from having to 
deal with time constraints.
    A few of these commenters also stated, however, concerns about the 
use of the word ``must.'' These commenters recommended that the 
language be amended to say, ``Local youth programs must provide service 
to a youth participating in their individual service strategy in good 
faith for the amount of time necessary to ensure successful preparation 
to enter postsecondary education, registered apprenticeships, and/or 
unsubsidized employment.''
    In addition to allowing an individual to remain enrolled in WIOA 
youth services until he or she completes his or her plan of service, a 
commenter recommended that youth may remain enrolled in their services 
regardless of whether they are experiencing a period of inactivity in a 
program, as long as they are active in their career counseling 
services.
    Another commenter stated that the proposed regulations would not 
allow individuals who do not abide by the rules of their program to 
discontinue services and re-enroll in the program as long as they were 
within the age requirement. This commenter recommended that the 
Department revise this regulation to focus on the needs of individuals 
who must temporarily suspend their services for legitimate reasons.
    Department Response: The Department recognizes that at times youth 
face obstacles that make it hard for them to commit to a program, 
however the services that all youth receive should still align with 
their ISS. The program should review the ISS with the youth and 
determine if the program has the appropriate services available for the 
young adult. Additionally a youth may remain in the program for as long 
as he or she is receiving at least one program element, other than 
follow-up services. Therefore, because WIOA sec. 129(c)(2)(M) includes 
career counseling services, the scenario described above with a youth 
only participating in career counseling would be acceptable under the 
Final Rule. No change has been made in the regulatory text in response 
to these comments.
    Comments: Two commenters requested additional clarification from 
the Department about how they would measure and explicitly define 
``successful preparation to enter postsecondary education and/or 
unsubsidized employment.'' One of these commenters further recommended 
that they not measure successful preparation by an individual's actual 
entry into either postsecondary education or unsubsidized employment, 
stating that there may be outside, uncontrollable factors that are 
preventing them from engaging in those activities, other than their 
level of readiness.
    Department Response: The required reported outcomes for individuals 
entering postsecondary education and/or unsubsidized employment do not 
differ from the other WIOA youth program performance indicators. 
Additional information on required performance indicators is found in 
20 CFR part 677 (see Joint WIOA Final Rule).
Section 681.460 What services must local programs offer to youth 
participants?
    This section lists the 14 program elements, including 5 new youth 
program elements in WIOA sec. 129(c)(2) that were not included under 
WIA. These new elements are (1)

[[Page 56176]]

education offered concurrently with and in the same context as 
workforce preparation activities and training for a specific occupation 
or occupational cluster; (2) financial literacy education; (3) 
entrepreneurial skills training; (4) services that provide labor market 
and employment information about in-demand industry sectors or 
occupations available in the local area, such as career awareness, 
career counseling, and career exploration services; and (5) activities 
that help youth prepare for and transition to postsecondary education 
and training. In addition, WIOA revised some of the WIA program 
elements. For example, the element on tutoring, study skills training, 
and instruction leading to the completion of secondary school, 
including dropout prevention strategies, has been revised to provide 
that the dropout prevention (and recovery) strategies must be evidence-
based and to make clear that the completion of secondary school can be 
accomplished by attainment of a secondary school diploma or its 
recognized equivalent, including a certificate of attendance or similar 
document for individuals with disabilities.
    WIOA also combines the two WIA elements of summer youth employment 
programs and work experiences so that summer youth employment programs 
become one item in a list of work experiences and adds pre-
apprenticeship programs to the list of work experiences. Finally, WIOA 
expands the description of the occupational skill training element to 
provide for priority consideration for training programs that lead to 
recognized postsecondary credentials that are aligned with in-demand 
industry sectors or occupations if the programs meet WIOA's quality 
criteria. This change is consistent with WIOA's increased emphasis on 
credential attainment. The section clarifies that while local WIOA 
youth programs must make all 14 program elements available to WIOA 
youth participants, local programs have the discretion to determine 
which elements to provide to a participant based on the participant's 
assessment and ISS.
    The Department received many comments, which are discussed below, 
on provisions within Sec.  681.460.
    Comments: A commenter asked for clarification from the Department 
regarding the reasons for WIOA's increase in the number of required 
program elements that a local area must be able to provide. Another 
entity commented that not all of the 14 proposed program elements are 
available in every local area, citing mentorship programs as a primary 
example.
    Another commenter stated that local areas should be allowed to 
choose which of the 14 program elements to provide, reasoning that 
local areas will have the best insight into what is needed for the 
individuals in their particular area.
    Department Response: The Department understands that in some local 
areas it takes effort to identify quality providers for all program 
elements; however, WIOA explicitly requires these 14 elements for youth 
programs. While all 14 program elements must be available in a local 
area, every youth does not have to receive every element. For instance, 
only youth that have mentoring included on their ISS need to receive 
the program element.
    The Department acknowledges that in some areas mentoring is 
particularly challenging and has changed Sec.  681.490 to allow case 
managers to serve as adult mentors.
    Comments: Another commenter recommended that the Department clarify 
that youth programs may bring in multiple public/private partners and 
evidence-based programs that support the attainment of a secondary 
school diploma or its recognized equivalent, entry into postsecondary 
education, and career readiness for participants.
    Department Response: The Department agrees that partnering with 
other organizations to provide some program elements can be valuable 
and has added Sec.  681.460(c), that reads, ``When available, the 
Department encourages local programs to partner with existing local, 
State, or national entities that can provide program element(s) at no 
cost to the local youth program.''
    Comments: One commenter said that services offered to an individual 
must be in the area where the youth live because too often programs' 
inability to relieve transportation challenges has resulted in program 
non-completion. The commenter suggested that the Department include 
language regarding the need for State and Local WDBs to support 
investments in transportation services and program operations beyond 
non-traditional hours of operation.
    Department Response: The Department recognizes the need for program 
operation during non-traditional hours as well as the challenge 
transportation presents across the country. As described in Sec.  
681.570(b) supportive services may include transportation costs. The 
Department did not change the proposed regulation, though through 
technical assistance it will emphasize the possibility of using WIOA 
funds to cover transportation needs.
    Comments: Another commenter recommended that the Department clarify 
that providers must incorporate a number of items in their dropout 
recovery services (proposed Sec.  681.460(a)(2)), such as credit 
recovery opportunities leading to postsecondary education; flexible 
scheduling; various learning models; performance-based assessments; 
mentoring; and ``comprehensive'' support service.
    Department Response: The Department recognizes the value of dropout 
recovery services for youth and its success in reconnecting 
disconnected youth. Because many of the items suggested by the 
commenter are either WIOA program elements or allowable under other 
program activities, the Department decided not to change the regulatory 
text about alternative secondary school services. The Department plans 
to provide technical assistance on the program elements, including 
those that contain dropout recovery services.
    Comments: One commenter recommended that, in order to clarify that 
neither the Governor nor the State WDB should impose policies that 
require a sequence of services, the Department should revise proposed 
Sec.  681.460(a)(3) to clarify that ``academic and occupational 
education as a component of work experience'' may be provided on a 
concurrent or sequential basis based upon a participant's ISS, stating 
that local areas should have the flexibility to meet participants' 
individual needs.
    Department Response: The Department concurs that youth may receive 
academic and occupational education as a component of work experience 
on a concurrent or sequential basis based upon the ISS. The Department 
included new language in the Final Rule text of Sec.  681.600(b) that 
clarifies that the academic and occupational education of work 
experience may occur on a concurrent or sequential basis.
Section 681.470 Does the Department require local programs to use 
Workforce Innovation and Opportunity Act funds for each of the 14 
program elements?
    This section clarifies that local WIOA youth programs must make all 
14 program elements available to youth participants, but not all 
services must be funded with WIOA youth funds. Local programs may 
leverage partner resources to provide program elements that are 
available in the local area. If a local program does not fund an 
activity

[[Page 56177]]

with WIOA title I youth funds, the local area must have an agreement in 
place with the partner to offer the program element and ensure that the 
activity is connected and coordinated with the WIOA youth program if 
enrolled youth participate in the program element.
    Comments: A few commenters suggested the proposed language would 
require that local programs that are not using WIOA funds to fund an 
activity establish agreements with the partner with which they are 
engaging in the activity. These commenters stated that a referral 
should be sufficient in this case, adding that if services outside of 
WIOA funding streams are present in the community, an agreement would 
be unnecessary and is overly regulative.
    Department Response: While the Department does not require a local 
youth service provider to pay for all program elements, the Department 
does require the program elements provided to a youth to align with the 
goals the youth set forth in the ISS. Case managers must update the ISS 
on an on-going basis and document, among other items, the services 
provided and participant's progress, activities completed, benchmarks 
reached, and any other accomplishments. Case managers must document 
this information regardless of who provides the element. Therefore, the 
Department did not change the proposed regulation; the information 
needed for the ISS necessitates an agreement between the partner 
organization and the program.
    Comments: A couple of commenters asked for clarification regarding 
the proposed regulations' requirement for the creation of agreements 
between youth services providers and partner organizations outside of 
WIOA funding. Specifically, these commenters asked for clarification 
from the Department about what ``monitor'' means in this language, and 
when this requirement would be necessary.
    Department Response: The Department notes that the term ``monitor'' 
came from the NPRM preamble and was not a proposed requirement. It 
appeared in the following context, ``By closely connected and 
coordinated, the Department means that case managers must contact and 
monitor the provider of the non-WIOA-funded activity to ensure the 
activity is of high quality and beneficial to the youth participant.'' 
The case manager must check on the provider of the non-WIOA-funded 
activity and make sure the youth participant gets quality services that 
match the program, element requirements.
    Comments: A commenter recommended that the Department issue 
guidance on performance requirements and a reporting process for each 
of the required youth program elements to help local areas and States 
in the creation of their plans.
    Department Response: The Department is including guidance and 
specifics on the performance requirements and reporting through the ICR 
process, which was done for 20 CFR part 677 (see Joint WIOA Final 
Rule). The Department is providing additional information regarding the 
required reporting of data elements, including each of the 14 youth 
program elements through that process. More information is also 
available in the Joint WIOA Final Rule discussion of 20 CFR part 677.
Section 681.480 What is a pre-apprenticeship program?
    A pre-apprenticeship is a program or set of strategies designed to 
prepare individuals to enter and succeed in a registered apprenticeship 
program and has a documented partnership with at least one, if not 
more, registered apprenticeship program(s).
    Comments: A couple of commenters requested clarification regarding 
what constitutes a partnership for the purposes of this section, asking 
further whether it is direct entry into a partnership or whether a form 
of collaboration would be sufficient for these purposes. Other 
commenters sought clarification regarding pre-apprenticeship and 
performance indicators.
    Department Response: The Department further edited the pre-
apprenticeship regulation to provide a more detailed and consistent 
explanation of the components of pre-apprenticeship programs as 
described throughout this Final Rule. The type of required reported 
outcomes for individuals engaging in pre-apprenticeship programs do not 
differ from the other WIOA youth program performance indicators. 
Additional information on required performance indicators is found in 
20 CFR part 677 (see Joint WIOA Final Rule).
Section 681.490 What is adult mentoring?
    This section describes the adult mentoring program element. The 
Department received many comments on proposed Sec.  681.490 and made 
changes to the Final Rule as discussed below.
    Comments: A number of commenters recommended that the Department 
provide flexibility for States in how the mentoring programs are 
arranged and length of time participants receive mentoring. Some of 
these commenters reasoned that adult mentoring is difficult for small 
States to establish because mentoring services with which to partner 
are not widely available and because of limited funds. With regard to 
the language that would require the inclusion of a mentor other than 
the individual's case manager (proposed Sec.  681.490(a)(3)), a 
commenter suggested that a case manager should be suitable for 
consideration as an individual's mentor if he or she is providing the 
guidance and support that would be required of a mentor. This commenter 
explained that in rural areas, mentoring programs are rare and 
oversubscribed if they exist, so the WIOA case manager is, in fact, the 
chief adult mentor for the youth.
    In addition, several commenters did not like the proposed minimum 
12-month requirement for adult mentoring (proposed Sec.  
681.490(a)(1)), recommending that the length of mentoring should 
instead be evaluated and defined on a case-by-case basis and determined 
by the individual, his or her mentor, and his or her case manager. One 
commenter said that the timeframe for adult mentoring is better suited 
for local control to allow for direct assessment of participant needs. 
Another commenter stated that the language in this section should be no 
more prescriptive than the WIOA statute.
    Department Response: Under WIA, most local areas were able to 
secure qualified mentors, other than case managers, for youth 
participants. Nonetheless, the Department acknowledges that in a few 
areas of the country finding mentors may present a burden to a program. 
While the Department strongly prefers that case managers not serve as 
mentors, it changed the final regulation deleting proposed Sec.  
681.490(a)(3), ``include a mentor who is an adult other than the 
assigned youth case manager''. The Final Rule allows case managers to 
serve as mentors in areas where adult mentors are sparse. Because WIOA 
defines the length of time required for mentoring as not less than 12 
months, no changes were made in the regulatory text.
    Comments: Another commenter suggested that local areas study 
evidence-based models that they may implement when designing their 
mentorship programs. Suggesting that the purpose of adult mentoring 
should be clarified to indicate expected results of the mentor 
relationship and guide the types of activities and engagement that 
should result. A commenter

[[Page 56178]]

recommended that the Department revise Sec.  681.490 to clarify that 
adult mentoring should result in effectively engaging students in high-
quality, career relevant instructions and establishing clear 
connections between work-based learning and classroom experiences.
    Department Response: The Department supports the use of evidence-
based models. The Department anticipates that the expected outcomes of 
a mentoring relationship will connect to the goals set forth in the 
individual participant's ISS. Therefore, mentoring results will vary by 
participant.
    Citing their use of ``advocates'' in lieu of mentorship programs to 
engage with youth, one commenter recommended that the Department amend 
proposed Sec.  681.490 to include that mentorship services may include 
activities such as providing transportation or transportation 
assistance, aid in attaining work experience opportunities, court 
advocacy, foster care support, tutoring help, fostering of community 
relationships, and engagement with family.
    Department Response: The Department affirms activities such as 
providing transportation, aid in attaining work experience 
opportunities, court advocacy, foster care support, tutoring help, 
fostering of community relationships, and engagement with family care. 
However, other WIOA youth program elements cover several of these 
activities. While mentors may help participants attain their goals, the 
additional suggested activities above go beyond the basic WIOA adult 
mentoring requirements. No changes were made in the regulatory text in 
response these comments.
Section 681.500 What is financial literacy education?
    This section describes the financial literacy program element, new 
under WIOA. The Department received many comments on the new program 
element. Several of the comments described below resulted in changes to 
the Final Rule text.
    Comments: A few commenters expressed their support for the proposed 
regulations' description of the elements of financial literacy 
education. In particular, one expressed its support particularly for 
the inclusion of identity theft education.
    Some commenters stated that as the proposed language as written, it 
appears as though all of the elements listed are requirements that must 
be present within the financial literacy program element itself. These 
commenters recommended that the Sec.  681.500 introductory language be 
amended to State, ``The financial literacy education program element 
may include activities which. . . .'' Similarly, another commenter 
asked the Department to clarify that the list of activities for 
financial literacy education (proposed Sec.  681.500) and 
entrepreneurial skills training (proposed Sec.  681.560) are 
illustrative and that each individual topic is not required for every 
participant. Other commenters expressed their support for the proposed 
language's flexibility regarding the activities related to financial 
literacy education, and that the list included in the proposed 
regulations is not required, but provides guidance. Alternatively, one 
commenter recommended that the Department eliminate the requirements of 
proposed Sec.  681.500(g) and (h), stating that these proposed 
requirements are overly prescriptive and limit flexibility.
    Department Response: The Department understands the commenters' 
concern that providing all of the financial literacy sub-elements to 
every participant that receives this program element may be overly 
prescriptive. The Department anticipates each item will be available in 
locations implementing a robust financial literacy program. However, 
the Department did not intend for every youth to receive each sub-
element. Instead, every youth, based on his/her individual needs, would 
receive many of the items included in this regulation. The actual 
services delivered may vary by program participant. As a result, the 
Department accepts the proposed language change and replaced ``must'' 
with ``may'' in the Final Rule.
    Comments: One commenter recommended the addition of an element to 
the list in proposed Sec.  681.500 to assist individuals about the 
impact that employment has on their receipt of public benefits. This 
commenter reasoned that educating individuals of this impact may lessen 
the fear they may have of losing their Medicaid or other public 
benefits if they are competitively employed. Another commenter 
recommended that Sec.  681.500 should specifically state that for youth 
who are receiving disability Social Security benefits, their financial 
literacy education must include benefits planning and work incentives 
counseling from a qualified provider.
    Department Response: The Department concurs with the suggested 
addition and added Sec.  681.500(g), ``Support activities that address 
the particular financial literacy needs of youth with disabilities, 
including connecting them to benefits planning and work incentives 
counseling;'' to the Final Rule text.
    Comments: One commenter shared that this proposed program element 
requirement would place a burden on local areas related to identifying 
a financial literacy program that includes an identity theft component.
    Department Response: By changing ``must'' to ``may'' at the 
beginning of Sec.  681.500, the Department addresses this commenter's 
concern about finding a local entity that addresses identity theft.
    Comments: Several commenters provided suggestions on how to 
implement the element. In response to the Department's request for 
comments on how to achieve the goal of equipping workers with the 
knowledge and skills they need to achieve long-term financial 
stability, one commenter recommended that the Department survey 
programs that have been funded and implemented by companies and their 
foundations in the financial services sector. Another commenter 
responded that many banks have an effective financial literary 
curriculum and recommended that the Department foster partnerships with 
banks that would be willing to provide the curriculum for free to local 
organizations.
    Another commenter recommended that financial literacy education be 
implemented in an online or in-person classroom setting where 
retirement requirements, banking, debt, lease, and mortgage information 
are covered. This commenter also suggested that these programs must 
result in the issuance of certification of completion and should be 
developed by a recognized financial planning authority, but not an 
entity with investment products on the market.
    Department Response: The Department has found that a number of 
local and national entities want to help make this element relevant to 
youth and a success. Many financial literacy tools and curriculums are 
readily available for use and include formats that engage youth. The 
Department has begun to provide technical assistance on financial 
literacy element and has engaged with many Federal financial agencies 
about supporting the public workforce system in implementing this 
program element.
    Comments: Citing a 2014 Consumer Financial Protection Bureau report 
that described the components necessary for successful youth employment 
programs, one commenter recommended that the Department amend the 
language in this section from referring to ``financial literacy 
education'' to using the term ``financial capability services,'' 
reasoning that the latter term would align more closely with the WIOA

[[Page 56179]]

requirement because it focuses on knowledge, skills, and access. 
Further, this commenter recommended that the Department use the 
definition provided by the President's Council on Financial Capability 
to define financial capability services (``the capacity based on 
knowledge, skills and access, to manage financial resources 
effectively''). This commenter also recommended that the Department 
ensure it is connecting youth employment programs with resources that 
highlight best practices and financial institutions that could be key 
partners. Regarding the measuring of financial capability outcomes for 
youth programs, this commenter suggested that the Departments of Labor 
and Education provide youth programs with resources and guidance to 
ensure they are able to effectively track clients' progress and 
outcomes and that workforce organizations also may need additional 
tools and resources to improve the financial education services they 
offer. Given the varied outcomes associated with the Sec.  681.500 list 
of allowable financial literacy education activities, the commenter 
encouraged States and localities to collect outcome data as related to 
their provided service.
    Department Response: The Department decided that a name change from 
``financial literacy education'' to the term ``financial capability 
services'' will confuse youth programs and did not change the 
regulatory text. The Department continues to work with the Consumer 
Financial Protection Bureau to help local areas implement this new WIOA 
requirement with the goal of connecting youth employment programs with 
resources, best practices, and financial institutions that can become 
workforce partners. The Department captures information about youth 
participating in this program element as described in WIOA State Plan 
ICR and uses the same youth WIOA performance indicators discussed in 20 
CFR part 677 (see Joint WIOA Final Rule). The Departments note that the 
Governor also has the authority to identify, in their Unified or 
Combined State Plan, additional performance accountability indicators.
    Comments: A few commenters recommended that the Department grant 
local areas the role of determining the necessary elements for 
financial literacy education programs. Similarly, a commenter 
recommended that the Department grant States the jurisdiction to create 
their own policies regarding financial literacy education.
    Department Response: With the change in the final regulation from 
``must'' to ``may'' at Sec.  681.500, local areas may determine the 
necessary elements for financial literacy education programs. The 
Department analyzed the suggestion to give States the jurisdiction to 
create their own policies regarding financial literacy education and 
concluded that with the above regulation text change, it was not 
needed.
    Comments: Finally, a commenter requested clarification from the 
Department concerning the difference between personal financial 
literacy and entrepreneurial financial literacy. Further, this 
commenter suggested that youth would be best served by learning 
financial literacy through practice rather than pure instruction.
    Department Response: The Department concurs that a hands-on 
approach to financial literacy is best and entrepreneurial financial 
literacy is one way to provide a practical financial literacy 
application. The Department, along with other Federal partners, will 
provide further technical assistance around this element.
Section 681.510 What is comprehensive guidance and counseling?
    Comprehensive guidance and counseling provides individualized 
counseling to participants. This includes drug and alcohol abuse 
counseling, mental health counseling, and referral to partner programs, 
as appropriate. (WIOA sec. 129(c)(2)(J).) When referring participants 
to necessary counseling that cannot be provided by the local youth 
program or its service providers, the local youth program must 
coordinate with the organization it refers to in order to ensure 
continuity of service.
    Comments: Citing the activities that YouthBuild offers about 
counseling services, a commenter stated the importance of counseling 
and its beneficial impact on youth's success. Another commenter 
requested clarification from the Department as to the credentials and 
training that would be required for guidance counselors under the 
proposed regulations.
    Department Response: The Department acknowledges that accessing 
counseling services impacts the success of many youth who receive 
program services. The Department understands that counselors' education 
and experience will vary depending on the type of guidance and 
counseling offered and did not address it in the final regulation.
    Comments: Citing the proposed language that would require that 
local youth programs ``when referring participants to necessary 
counseling that cannot be provided by the local youth program or its 
service providers, the local youth program must coordinate with the 
organization it refers to in order to ensure continuity of service,'' a 
commenter said that coordination with multiple organizations would be 
unnecessary and that a referral should be sufficient in and of itself. 
Along the same line, a commenter asked for clarification concerning the 
requirement that youth service providers collaborate with the outside 
services they use for counseling in order to ensure the continuity of 
service for individuals. This commenter requested that the Department 
provide additional guidance for how service providers should interpret 
these requirements.
    Department Response: The Department views a referral as one part of 
the comprehensive guidance and counseling element; the local service 
provider must coordinate with the organization to which the referral 
was made in order to ensure youth receive comprehensive services. The 
Department plans to provide additional technical assistance on 
comprehensive guidance and counseling. No changes were made to the 
regulatory text in response to this comment.
    Comments: A commenter asked for guidance from the Department about 
whether comprehensive guidance and counseling encompasses academic 
counseling as is stated in Sec.  681.510, suggesting that it is not 
included in the language in Sec.  681.460.
    Department Response: The Department considered this input and 
agreed with the commenter that the proposed regulation duplicated 
counseling types found in other program elements. As a result, the 
Department removed ``career and academic counseling'' from the 
comprehensive guidance and counseling element.
Section 681.530 What are positive social and civic behaviors?
    While WIA included positive social behaviors as part of the 
description of leadership development opportunities, WIOA adds ``civic 
behaviors'' to the description of the leadership development program 
element. This section provides examples of positive social and civic 
behaviors.
    Comments: Citing the list of positive social and civic behaviors 
that YouthBuild programs are based on, a commenter expressed their 
support over the proposed list of behaviors and recommend that WIOA 
youth services programs incorporate their list into the proposed 
regulations. On the other hand, citing the language listing some of

[[Page 56180]]

the indicators of positive social and civic behaviors, a commenter 
stated that only paragraph (i), ``positive job attitudes and work 
skills,'' is measurable and relevant to the goal of workforce training. 
This commenter suggested that the other listed potential indicators of 
these behaviors are irrelevant, and that paragraphs (h) and (j) could 
be considered inappropriate.
    Department Response: Comprehensive in nature, the WIOA youth 
program provides a wide array of supports and services. The Department 
finds the sub-elements in positive social and civic behaviors relevant 
and connected to the workplace traits employers seek. It recognizes 
that the list is not all-inclusive and other personal attributes 
contribute to positive social and civic behavior. The Department did 
not add additional items to the final regulation. Noting the strong 
objection to proposed paragraphs (h) and (j), the Department did delete 
proposed paragraphs (h) (``Postponing parenting and responsible 
parenting, including child support education'') and (j) (``Keeping 
informed in community affairs and current events'') from the final 
regulation text.
    Comments: A commenter suggested that the behaviors in this section 
would be difficult to measure, which may result in the measurement 
through default indicators such as the individual didn't get arrested 
or isn't a youth parent.
    Department Response: The Department appreciates the commenters 
concerns about the difficulty of measuring positive social and civic 
behaviors. From the Department's perspective these behaviors contribute 
to characteristics that businesses seek in their employees. No change 
is made in the regulatory text in response to this comment.
Section 681.540 What is occupational skills training?
    This section provides a definition for the occupational skills 
training program element. WIOA sec. 129(c)(2)(D) further sharpens the 
focus on occupational skills training by requiring local areas to give 
priority consideration for training programs that lead to recognized 
postsecondary credentials that align with in-demand industries or 
occupations in the local area.
    Comments: Commenters expressed concern that the regulations in the 
section are too prescriptive, stating that the attainment of 
postsecondary credentials or other credential training would be 
inappropriate for some individuals. Further, this commenter suggested 
that as they are written, the proposed regulations would not allow for 
training that would be a step towards a postsecondary degree but does 
not in and of itself result in one. Similarly, a couple of commenters 
expressed their support for the proposed regulations' emphasis on 
occupational skills training, but stated their concern with the 
language that requires that all occupational skills training result in 
a postsecondary level education. The commenters suggested that 
requiring postsecondary education would not be appropriate for 
everyone, and recommended that instead, the regulations allow for 
individuals to result in one of the three options instead of all three. 
This commenter further recommended that the language, ``. . . result in 
the opportunity to obtain a recognized postsecondary credential, or a 
certificate of job readiness, or an industry credential,'' be added to 
the section.
    Department Response: The Department notes the concerns around 
occupational skills training needing to result in attainment of a 
recognized postsecondary credential. The Department has changed this 
language in the Final Rule to state that occupational skills training 
must lead to the attainment of a recognized postsecondary credential.
    Comments: One commenter recommended that the Department clarify 
that service providers should put into effect activities that include 
work experience to prepare for employment that leads to self-
sufficiency, a sequenced series of work-based learning opportunities, a 
college and career ready curriculum, dual enrollment, and supplemental 
instruction.
    This commenter also recommended that the implementation of these 
activities should result in collaboration between WIOA youth service 
providers, Local WDBs, and educational institutions.
    Department Response: The Department concluded that these 
recommendations are more appropriate for technical assistance; as such, 
no changes were made in the regulatory text in response to these 
comments. The Department will provide guidance and technical assistance 
on all program elements, including occupational skills training.
    Comments: A commenter recommended that the Department modify the 
proposed text to state, ``. . . and result in attainment of a 
recognized postsecondary credential, job readiness certificate, or 
industry credential,'' suggesting that this language would still 
encourage individuals to participate in experiences that will help them 
to gain certifications and credentials, but gives them flexibility they 
may need to demonstrate success, depending on their choice of field.
    Department Response: The Department modified Final Rule text, as 
discussed above, regarding the attainment of a recognized postsecondary 
credential. An ``industry credential'' is encompassed in the term 
``recognized postsecondary credential.'' A job readiness certificate 
relates to foundational work readiness skills and does not result from 
occupational skills training. Therefore, the Department did not 
incorporate language referring to a job readiness certificate in the 
regulatory text.
    Comments: Another commenter requested that the Department include 
entry-level career preparation training services that are taught or led 
by regionally accredited secondary-level education programs.
    Department Response: The Department determined that career 
preparation services are not a type of occupational skills training and 
did not make a change in the regulatory text in response to this 
comment.
Section 681.550 Are Individual Training Accounts permitted for youth 
participants?
    This section allows ITAs for OSY aged 16 to 24.
    The Department received a number of comments about ITAs that 
resulted in a final regulation change discussed below.
    Comments: A number of commenters expressed their support for the 
allowance of OSY aged 18-24 to use ITAs in the proposed regulations. 
Many commenters suggested that the allowance of these ITAs is important 
for youth aged 18-24, as they may be receiving services from multiple 
WIOA title funding streams. A few commenters expressed their support 
for the use of ITAs for both ISY and OSY. Further, stating that it 
would reduce the burden of duplicative administrative work, a few 
commenters recommended that the proposed regulations be amended to 
allow ITAs for youth aged 18-24.
    A commenter offered that ITAs be expanded to include OSY 16-24 
instead of 18-24. This commenter said that individuals who drop out of 
high school at 16 and have received their high school equivalency, are 
left dislocated until they reach the age of 18 and can then pursue an 
ITA, on-the-job training, or a career; therefore this commenter said 
that lowering the age limit to 16 would allow these youth to remain 
engaged.
    A commenter requested clarification from the Department regarding 
whether

[[Page 56181]]

or not OSY with ITAs would have to use the State permitted Eligible 
Training Provider List (ETPL) under these proposed regulations.
    Two commenters requested clarification from the Department 
regarding ITAs for OSY. A commenter stated that the proposed 
regulations indicate that only OSY would be allowed to use ITAs, but 
that the regulations also include occupational skills training as one 
of the 14 required youth program elements. This commenter asked the 
Department to explain what the difference would be in using an ITA or 
occupational skills services for an ISY who has graduated from high 
school and wants to pursue a postsecondary education. This commenter 
further requested guidance from the Department concerning how providers 
could provide occupational skills training service to all WIOA eligible 
youth, regardless of whether they are ISY or OSY.
    Stating that ITAs can help to close the gap between Federal 
contracting requirements and individuals with disabilities, a commenter 
recommended that this section be modified to encourage State and Local 
WDBs to connect Federal contracts with youth with disabilities and use 
ITAs for meeting employer requirements.
    Department Response: The Department analyzed the comments received 
and expanded the ITA language to allow all OSY, ages 16-24, access to 
ITAs. Upon reflection of the above comments, the Department concluded 
the final regulation change made policy and administrative sense by 
expanding training options, increasing program flexibility, enhancing 
customer choice, and reducing paperwork for all OSY. When using youth 
funds for ITAs, the Eligible Training Provider List (ETPL) must be 
used. Accessing the ETPL allows the program to avoid further 
procurement processes.
    The Department did not expand ITAs to ISY. However, ISY ages 18 or 
older may access ITAs through the adult program.
    Finally, the Department did not change the regulatory text to 
encourage State and Local WDBs to connect Federal contracts with youth 
with disabilities because the request is outside the scope of ITAs. The 
Department will provide further guidance on youth ITAs and related 
topics.
Section 681.560 What is entrepreneurial skills training and how is it 
taught?
    This section discusses entrepreneurial skills training, a new 
program element under WIOA. The Department received a number of 
comments on the proposed entrepreneurial skills training regulation 
which resulted in a minor word change in the final regulation as 
explained below.
    Comments: Two commenters expressed their support over the proposed 
examples of entrepreneurial skills training activity options. In 
contrast, a number of commenters stated that the Department should not 
be dogmatic in determining specific methods and processes for how 
entrepreneurial skills would be taught under the proposed regulations.
    Department Response: The Department did not intend to be limiting 
in the list of ways to develop entrepreneurial skills. To emphasize 
that this list is not all-inclusive, the Department added the word 
``may'' to the final regulation at Sec.  681.560(a).
    Comments: Several commenters provided thoughts on other skills to 
develop under this program element as discussed in the next several 
paragraphs.
    One commenter shared its support of the inclusion of 
entrepreneurial skills training, citing the programs it has created in 
its State and programs that engage with small business centers, 
suggesting that the Department should use such services and programs 
for teaching these skills. Another commenter recommended that the 
Department use Junior Achievement and other organizations in their 
entrepreneurial skills training services, and stated that the 
Department also should include presentations and training sessions from 
local entrepreneurs in their skills training programs.
    Similarly, a commenter expressed their support of the inclusion of 
entrepreneurial skills training in the proposed regulations. This 
commenter further cited: Experiences that provide individuals with the 
knowledge of how to start their own business, the creation of a 
business plan, education on applying for loans and grants for business 
operations, and experiences related to running a business day-to-day, 
as potential activities used to teach individuals entrepreneurial 
skills.
    A commenter recommended that healthy relationship skills classes be 
included in the entrepreneurial training program, stating that building 
strong and healthy relationships are a key component to being a 
successful entrepreneur.
    In addition, a commenter recommended that Local WDBs use 
experiential learning programs to teach individuals entrepreneurial 
skills, stating that using hands-on experiences is most effective for 
training individuals. Further, this commenter specifically recommended 
that entrepreneurial skills training include the following: Education 
assessment and pathway identification; leadership development 
activities; and soft skills training based on industry demand.
    A commenter expressed its support over the inclusion of these 
skills training, and recommended that it include the development of 
business plans and lessons on the various ways an entrepreneur can 
obtain start-up funding.
    Department Response: The Department acknowledges the many 
suggestions about how to local area may provide entrepreneurial skills 
training in a meaningful, relevant way to youth. The Department will 
provide technical assistance on this new element.
    Comments: A commenter recommended that the Department amend the 
proposed language so that ``enterprise development'' is removed as a 
skill that would be included in this entrepreneurial training, and be 
replaced with ``crowd-funding,'' sharing that crowd sourced funding 
would be a more viable option if a youth individual were trying to 
build a business as he or she would be unlikely to secure a loan.
    Department Response: While the Department did not change the 
regulatory text, the Department agrees with suggestion to include 
skills such as ``crowd-funding'' that may be more relevant for the 
youth population and will address them in future technical assistance.
    Comments: A commenter wondered about the reliability of wages for 
participants in these programs as well as how participants' wages would 
be tracked, and requested clarification from the Department regarding 
these issues.
    Department Response: The Department notes that the performance 
indicators for youth engaged in this program element remain the same as 
the youth performance indicators explained in the joint regulation at 
20 CFR part 677 (see Joint WIOA Final Rule).
    Comments: A commenter requested clarification from the Department 
about the definition of entrepreneurial skills training and what the 
requirements are around certification at the program's completion. 
Similarly, a commenter recommended that the skills and techniques 
involved with

[[Page 56182]]

entrepreneurial skills training should be in line with local 
postsecondary school curriculums and standards.
    Department Response: Postsecondary institutions and other training 
providers that develop entrepreneurial programs are best positioned to 
identify standards upon which certificates could be awarded. No changes 
were made in the regulatory text in response to this comment.
    Comments: Another commenter asked the Department if entrepreneurial 
skills training would only be provided to older youth.
    Department Response: Entrepreneurial skills training, similar to 
the other youth program elements, is available to youth regardless of 
age and must align with their ISS goals.
Section 681.570 What are supportive services for youth?
    This section lists examples of supportive services for youth. The 
Department received a few comments on proposed Sec. Sec.  681.570 and 
680.900, which discusses supportive services in the context of adult 
programs. The Department chose to align these regulations which 
resulted in the addition of ``Assistance with books, fees, school 
supplies, and other necessary items for students enrolled in 
postsecondary education classes''; and ``Payments and fees for 
employment and training-related applications, tests, and 
certifications,'' to the regulation at Sec.  681.570(k) through (l).
    Comments: One commenter recommended that the Department include 
groceries, on-site meals, hygiene products, clothing, and items for 
postsecondary education courses in the definition of supportive 
services. Another commenter recommended that transportation be provided 
to individuals in these programs, and that the transportation services 
available should include transportation to one-stop centers. This 
commenter stated that in some areas the one-stop center may be miles 
away from where the youth providers are located, and reaching these 
one-stop centers to receive necessary services may be difficult for 
disengaged or homeless youth. This commenter also recommended that food 
services (other than food banks and soup kitchens) and subsidized 
services for document attainment be provided as support services for 
youth.
    One commenter recommended that healthy relationship skills should 
be included in the workforce development training programs for 
disconnected youth, including supportive services. This commenter 
reasoned that relationship skills help participants build crucial 
interpersonal skills that are valued by employers and specifically 
mentioned skills including communications, problem solving, conflict 
resolution, reliability, and teamwork. The commenter also stated that 
learning healthy relationship skills can help participants prevent 
unplanned pregnancy and therefore avoid dropping out of school due to 
pregnancy. A commenter recommended that the Department align supportive 
services across the youth, adult, and dislocated worker programs. 
Another commenter strongly supported the inclusion of legal aid 
services in the Department's list of examples of supportive services in 
Sec.  680.900, noting that legal aid can uniquely address certain 
barriers to employment, including access to driver's licenses, 
expunging criminal records, and resolving issues with debt, credit, and 
housing.
    Department Response: The Department analyzed the suggested 
additions to supportive services and decided, as noted above, to add 
three new paragraphs (h), (k), and (l) to the Final Rule. The 
Department determined that some suggested items such as tutoring, 
apprenticeship programs, work-place interpersonal skills, work-related 
hygiene products and clothing attire, and addiction may be encompassed 
by other program elements. Assistance with transportation is allowable 
under supportive service. As discussed above, the Department has 
included legal aid services under the list of supportive services in 
Sec.  680.900 for the adult and dislocated worker programs; we made a 
corresponding change to the list of supportive services allowable for 
the youth program in Sec.  681.570 for the same reason as for the 
addition to Sec.  680.900 and to align the list of supportive services 
across programs. Groceries and on-site meals for program participants 
are beyond the scope of WIOA.
    Comments: Citing the language about supportive services in this 
section, a commenter requested clarification from the Department 
concerning whether needs related payments are allowed for youth aged 
18-24 in WIOA youth services.
    Department Response: Yes, the Department affirms that needs related 
payments are allowed for youth ages 18-24 enrolled in WIOA youth 
services.
Section 681.580 What are follow-up services for youth?
    This proposed section discusses the importance of follow-up 
services and lists examples of follow-up services for youth.
    The Department received a number of comments on this section as 
discussed below.
    Comments: A commenter expressed its support of the proposed 
regulations in this section and another commenter expressed support 
citing all of the benefits of follow-up services. Citing the benefits 
and purposes behind follow-up services, another commenter agreed that 
follow-up services can be extremely beneficial to youth and help to 
ensure that they focus on and accomplish their long-term goals. Another 
commenter expressed their support of the follow-up requirements, but 
recommended that the Department create and distribute guidance to 
States regarding how they should document an individual who is 
unresponsive under the proposed regulations.
    A couple of commenters expressed concern over the requirements for 
follow-up services, suggesting that often when youth no longer access 
services, they no longer communicate with their providers, regardless 
of the efforts of the case manager. Therefore, these commenters 
recommended that States' youth follow-up activities be evaluated on the 
quality of follow up services provided to engaged youth and not be 
viewed negatively when follow up does not happen. Further, these 
commenters recommended that States be allowed to establish policies 
that when a provider has exhausted all options in an attempt to engage 
a youth individual in follow-up services with no results, he or she may 
end follow-up activities. Likewise, one commenter recommended that in 
instances where the service provider attempts to reach the individual 
with no contact made for 90 days, he or she should be able to receive 
an exemption or waiver for needing to provide follow-up services for 
that individual.
    A number of commenters expressed concern with the proposed 
regulations, suggesting that the language concerning follow-up services 
should give more flexibility and account for those individuals who have 
moved and provided no contact information. These commenters recommended 
that in situations such as those stated above, follow-up contact 
attempts should end, and the attempts to make contact should be 
documented. One of these commenters also suggested that if multiple 
attempts at contact are made with no response, the provider should not 
be punished for being unable to contact the individual. Further, some 
of these commenters recommended that the regulations be modified to 
reduce the 12-month minimum to 6 months. Another commenter stated that 
follow-up services should allow for decreasing

[[Page 56183]]

concentration for follow-up contact with individuals after 6 months 
after end of enrollment in the program. Further, this commenter stated 
that text messaging and contact through social media should be 
considered contact for the purposed of follow-up services. Another 
commenter recommended the Department not be overly prescriptive with 
its follow-up services requirements.
    Department Response: The Department recognizes the concerns that 
some youth may not be responsive to attempted contacts for follow-up, 
and other youth may be difficult to locate making it impossible to 
provide follow-up services for such individuals. Based on the comments 
received, the Department has added language to the regulatory text to 
Sec.  681.580(c) clarifying that follow-up services must be provided to 
all participants for a minimum of 12 months unless the participant 
declines to receive follow-up services or the participant cannot be 
located or contacted. This alleviates the concern expressed by many 
commenters about youth who are not able to be located or who refuse 
follow-up. Local programs should have policies in place to establish 
when a participant cannot be located or contacted. The Department did 
not incorporate the recommendation to reduce follow-up to 6 months as 
WIOA sec. 129(c)(2)(I) requires follow-up services for not less than 12 
months. The Department will issue further guidance on follow-up 
services.
    Comments: One commenter recommended that the Department create 
guidance that would allow local areas to establish orientations for 
youth participants that would inform them of the follow-up services and 
recommended that the Department provide incentives for an individual's 
participation in follow-up services. Stating that WIOA does not list 
all of the youth services offerings as being available for follow-up 
services, one commenter recommended that all WIOA program services be 
available for any individual in their follow-up services. Another 
commenter recommended that follow-up services should begin while an 
individual is still enrolled in the program, suggesting that follow-up 
services include supportive and other services that could ensure a 
participant's success after the program. One commenter noted that the 
follow-up services listed in this section are significantly more 
intensive than under WIA and more closely resemble active programming 
and recommended guidance on managing the transition from active 
programming to follow-up services, particularly under the proposed 
definition of ``exit'' in 20 CFR 677.150 (see Joint WIOA Final Rule).
    Department Response: At Sec.  681.580(b), the Department clarified 
which specific program elements may be provided during follow-up. The 
Department plans to issue further guidance on follow-up services; it 
will clarify that follow-up services do not trigger re-enrollment in 
the WIOA youth program.
    Comments: Another commenter recommended that the follow-up services 
provided be concentrated on individuals gaining employment or 
postsecondary education. A couple of commenters also recommended that 
the Department clarify that incentive payments and supportive services 
would be allowed to be provided to youth during the period of follow-up 
services. Further, a commenter stated that in order to complete follow-
up services as they are currently written, youth providers would need 
to be given additional funding.
    Department Response: The Department clarifies in the regulatory 
text that supportive services are allowed to be provided during follow-
up. Incentive payments are covered in Sec.  681.640.
    Comments: One commenter recommended adding the following language 
to this section, ``Follow-up plans should be set by youth and their 
case manager allowing the youth to have an active voice in setting such 
plans. Follow-up plans for youth should be re-assessed and flexible and 
may include . . . ,'' saying that this language would encourage case 
managers to educate the youth they are responsible for as to the 
benefit of follow-up services and allow youth to become more engaged 
with his or her services. This commenter also recommended that youth be 
able to opt out of their follow-up services due to relocation without 
negatively impacting the performance scores of their provider.
    One commenter recommended that the language that states that 
follow-up services must be ``provided'' by youth programs should be 
amended to say that they must be ``offered.'' Finally, one commenter 
recommended that during the required 12-month follow-up period, 
multiple employees be allowed to administer follow-up services.
    Department Response: As discussed above, the Department has amended 
regulatory text to state that follow-up services must be offered to all 
participants and added language to address participant relocation.
Section 681.590 What is the work experience priority and how will local 
youth programs track the work experience priority?
    The section discusses the 20 percent minimum expenditure 
requirement on the work experience program element in WIOA sec. 
129(c)(4) and how local WIOA youth programs track program funds spent 
on work experiences and report such expenditures as part of the local 
WIOA youth financial reporting.
    The Department received a few comments on this section as discussed 
below.
    Comments: Multiple commenters expressed their support for this 
section. One commenter requested that the Department clarify in the 
proposed regulations that career pathways must lead to a postsecondary 
credential, and that the requirements for these credentials will be 
aligned with the current State college and workplace readiness 
standards in place for each specific State. Another commenter expressed 
their support for the proposed regulations' emphasis on work 
experiences; however, this commenter further recommended that the 
Department clarify in the regulations that youth service providers are 
strongly encouraged to ``coordinate work experiences with employers 
participating in industry or sector partnerships developed and 
implemented in the local area.''
    Department Response: The Department agrees that career pathways in 
coordination with employers are important. The Department will continue 
to emphasize employer engagement in career pathways in future guidance 
or technical assistance. Please see TEN 17-15, building upon its 
``Career Pathways Toolkit: A Guide for System Development'' (2015) 
found at https://wdr.doleta.gov/directives/attach/TEN/TEN_17-15_Attachment_Acc.pdf.
    Comments: A number of commenters expressed their concerns regarding 
whether the proposed 20 percent work experience expenditure requirement 
would include leveraged resources. These commenters stated the 
requirement would negatively impact the support they receive from non-
WIOA funding streams and the proposed language would require them to 
spend their WIOA funds first on work-based experience programs, which 
could be detrimental to their ability to attract private funds. Thus, 
the commenters recommended that the proposed regulations be amended to 
allow waivers that would allow Local WDBs to count non-WIOA funds 
towards the 20 percent work experience

[[Page 56184]]

expenditure requirement. Similarly, a few commenters recommended that 
the 20 percent work experience requirement be extended to include other 
funding sources, instead of relying only on WIOA funds to meet this 
requirement. Some of these commenters further stated that staff who are 
engaged in creating these strategies, as well as implementing them, 
should also be included in the minimum 20 percent expenditure 
requirement, while another commenters asked the Department to clarify 
if staffing or administrative costs count toward the expenditure 
requirement. Likewise, one commenter recommended that the academic 
component of the work experience requirements can be included in the 20 
percent expenditure requirement. Another commenter recommended that the 
proposed regulations be amended so that the minimum 20 percent work 
experience expenditure requirement also includes the administrative and 
recruitment costs spent in order to place an individual in his or her 
work experience. Conversely, a commenter suggested that staffing costs 
should not be an allowable expenditure in the minimum 20 percent work 
experience expenditure requirement; rather, funds should be focused on 
direct participant costs.
    Similarly, the Department received very few comments on Sec.  
681.610. One commenter noted that Sec.  681.610 clearly states to not 
include administration in this calculation which should be made 
consistent with Sec.  681.590 instead of in a separate section of the 
regulations. Another commenter recommended that the term ``incentives 
payments'' be added to this section in order to ensure consistency. 
Stating that in many cases local areas utilize funding from a variety 
of funding sources, a few commenters recommended that Local WDBs should 
be able to use these funds for the purpose of the costs included in 
work experiences such as wages for individuals and training, and that 
these funds should be included in the work experience minimum 
expenditure requirement.
    Department Response: The Department recognizes that it is important 
to clarify further the types of expenditures that count toward the work 
experience expenditure rate. The Department issued TEGL No. 08-15 
(``Second Title I WIOA Youth Program Transition Guidance'') in November 
2015, which can be downloaded at http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm. The TEGL discussed the types of costs 
that count toward the work experience expenditure requirement. The 
Department has added Sec.  681.590(b) that describes the types of 
expenditures that count toward the work experience minimum expenditure 
requirement and how to calculate the minimum expenditure requirement. 
Leveraged resources cannot count toward the expenditure requirement; 
WIOA sec. 129(c)(4) clearly states that the expenditure requirement is 
based on WIOA youth funds allocated to the local area. Because the 
Department has incorporated the language from proposed Sec.  681.610 
into Sec.  681.590, the Department deleted proposed Sec.  681.610 and 
has renumbered proposed Sec. Sec.  681.620 through 681.660 as 
Sec. Sec.  681.610 through 681.650.
    Comments: A commenter recommended that the Department allow a 
transition period for local areas to move funding to comply with the 
minimum 20 percent expenditure requirement. Another commenter expressed 
their support of the proposed emphasis on work experience, but 
recommended that the language be strengthened to emphasize the 
importance of connecting youth with disabilities to work experiences.
    Department Response: The Department did not provide for a 
transition period for the minimum expenditure requirement as part of 
its guidance. The Department agrees on the importance of connecting 
youth with disabilities to work experience opportunities and will 
emphasize it in future guidance or technical assistance.
Section 681.600 What are work experiences?
    The section defines the work experience program element and 
includes the four work experience categories listed in WIOA sec. 
129(c)(2)(C). The Department received a few comments on this section as 
discussed below.
    Comments: A commenter expressed its support for this section, 
especially due to its inclusion of on-the-job training eservices. 
Another commenter expressed its support for the proposed language in 
this section, especially that the inclusion of both academic work 
experience and occupation training are important for an individual's 
success. A commenter expressed its support of the inclusion of a 
variety of activities that could be included as work experience in the 
proposed regulations, and one commenter expressed its support over the 
allowance of on-the-job training as an appropriate work experience.
    A number of commenters requested clarification from the Department 
concerning the requirement that work experiences have to include 
academic and occupational education experiences, whether those 
education experiences can be provided by the individual's employer, and 
whether the education experience has to be provided in the individual's 
workplace. One of these commenters further recommended that these 
experiences be allowed to take place outside of the traditional 
workplace and could be provided by an educational provider other than 
the employer. A few commenters recommended that the language stating, 
``Work experience must include academic and occupational education'' be 
amended to state, ``work experiences must not deter from a 
participant's academic and occupational education goals. Ensuring all 
youth receive academic and occupational education is at the forefront 
of the goals of WIOA,'' suggesting that the current language's use of 
the words ``and'' and ``must'' may dissuade individuals from 
participating as they are at high risk and are concerned about feeding 
their families. A commenter requested clarification from the Department 
as to whom the occupational and academic training experiences must be 
provided by and recommended that the regulations allow for the employer 
to provide these training experiences. Further, this commenter 
recommended that if these training and educational experiences incur 
any costs, that they be included in the minimum 20 percent work 
experience expenditure requirement.
    Department Response: Based on comments requesting clarification on 
the academic and occupational education component of work experiences, 
the Department has added language to the Final Rule at Sec.  681.600(b) 
clarifying that the educational component may occur concurrently or 
sequentially with the work experience, and that the academic and 
occupational education may occur inside or outside the work site. The 
Department does not have any requirement about who provides the 
academic and occupational education, and such education may be provided 
by the employer. States and local areas have the flexibility to decide 
who provides the education. Because WIOA states this program element as 
``paid and unpaid work experiences that have as a component academic 
and occupational education,'' the Department does not have the 
flexibility to amend the regulatory text to the suggested ``work 
experiences must not deter from a participant's academic and 
occupational education.''
    Comments: A commenter recommended that the Department remove the 
following language from the

[[Page 56185]]

section, ``work experience may be paid or unpaid, as appropriate.'' The 
commenter further recommended that the Department should clarify that 
youth will be protected under the Fair Labor Standards Act and wage and 
hour laws.
    Department Response: WIOA sec. 129(c)(2)(C) states that work 
experiences may be paid or unpaid. The Final Rule contains language 
regarding the Fair Labor Standards Act at Sec.  680.180.
    Comments: One commenter recommended that the Department clarify 
skills needs and how to assess skill mismatches. This commenter 
recommended more updates to the O*NET system and State/local work on 
job vacancies, analysis of ``real time'' labor market information, 
better projections data, new/emerging occupations, and wage record 
research on use of occupational title enhancements.
    Department Response: The Department agrees with the importance of 
using labor market information to plan work experiences and will 
continue to encourage its use in future guidance and technical 
assistance.
Section 681.610 Does the Workforce Innovation and Opportunity Act 
require Local Workforce Development Boards to offer summer employment 
opportunities in the local youth program?
    This section discusses that while summer employment opportunities 
are an allowable activity and a type of work experience that counts 
toward the work experience priority, they are not a required program 
element as they previously were under WIA. Note that this provision was 
proposed as Sec.  681.620. However, as noted above, because the 
Department has incorporated the language from proposed Sec.  681.610 
into Sec.  681.590, the Department deleted proposed Sec.  681.610 and 
has renumbered proposed Sec. Sec.  681.620 through 681.660 as 
Sec. Sec.  681.610 through 681.650.
    The Department did not receive any comments on this section. No 
changes were made to the regulatory text.
Section 681.620 How are summer employment opportunities administered?
    This section discusses how summer employment opportunities are 
administered. Note that this provision was proposed as Sec.  681.630. 
However, as noted above, because the Department has incorporated the 
language from proposed Sec.  681.610 into Sec.  681.590, the Department 
deleted proposed Sec.  681.610 and has renumbered proposed Sec. Sec.  
681.620 through 681.660 as Sec. Sec.  681.610 through 681.650.
    The Department received only one comment on this section. The 
commenter stated that in rural areas it would be more cost effective 
for a case manager to arrange work experiences for youth than for the 
provider to arrange a work experience through the procurement process. 
This commenter asked for further clarification from the Department 
regarding whether or not a case manager would arrange a work experience 
during the school year.
    Department Response: As discussed in Sec.  681.400, the Final Rule 
clarifies that Local WDBs have the option of competitively procuring 
youth service providers or providing services directly. This additional 
flexibility will allow case managers to arrange work experiences 
directly. This section includes language changes to be consistent with 
the changes in Sec.  681.400, and to make it clearer that the 
requirements of Sec.  681.400 apply to the selection of youth service 
providers who administer the work experience program element in a local 
area.
Section 681.630 What does education offered concurrently with and in 
the same context as workforce preparation activities and training for a 
specific occupation or occupational cluster mean?
    This section describes the new program element at WIOA sec. 
129(c)(2)(E): ``education offered concurrently and in the same context 
as workforce preparation activities and training for a specific 
occupation or occupational cluster.'' The Department notes that this 
provision was proposed as Sec.  681.640. However, because the 
Department has incorporated the language from proposed Sec.  681.610 
into Sec.  681.590, the Department deleted proposed Sec.  681.610 and 
has renumbered proposed Sec. Sec.  681.620 through 681.660 as 
Sec. Sec.  681.610 through 681.650.
    The Department received a few comments on this section as discussed 
below.
    Comments: A few commenters expressed their support for the proposed 
language, particularly that the simultaneous offering of education 
service and workforce training can help individuals to gain skills at a 
much faster pace than if they were engaged in these activities 
separately. One commenter expressed its support with this proposed 
language and recommended that the Departments collaborate to ensure 
that the language in the WIOA title II regulation in 34 CFR 463.37 is 
aligned with the title I regulation in Sec.  681.630.
    One commenter requested clarification from the Department regarding 
the definitional language in this section. This commenter further 
stated that the definitions for this program element and the work 
experience program element need to be amended to provide more 
distinction between the two if they are meant to be separate.
    Another commenter recommended that the Department provide specific 
examples of ``a high-quality, integrated education and training model 
that requires integrated education and training to occur concurrently 
and contextually with workforce preparation activities and workforce 
training.'' This commenter further recommended a number of such 
examples. This commenter also suggested that the involvement of youth 
providers in these activities should help to create relationships 
between the providers and CBOs.
    A commenter suggested the Department include a statement that these 
educational programs include entry-level workforce preparation and/or 
preparation for recognized postsecondary education and training 
activities.
    Department Response: The Department plans to provide future 
guidance on all of the WIOA youth program elements, including the 
education program element defined in this section. The Department will 
incorporate in the guidance some examples of high-quality integrated 
education and training models and ensure consistency with the language 
in 34 CFR 463.37. While the Department did not incorporate any 
suggested additions to the regulatory text, it has made minor language 
changes to this section to make the section clearer.
Section 681.640 Are incentive payments to youth participants permitted?
    This section clarifies that incentives under the WIOA youth program 
are permitted. The Department has included the reference to the Uniform 
Guidance at 2 CFR part 200 to emphasize that while incentive payments 
are allowable under WIOA, the incentives must be in compliance with the 
requirements in 2 CFR part 200. For example, Federal funds may not be 
spent on entertainment costs. Therefore, incentives may not include 
entertainment, such as movie or sporting event tickets or gift cards to 
movie theaters or other venues whose sole purpose is entertainment. 
Additionally, there are requirements related to internal controls to 
safeguard

[[Page 56186]]

cash, which also apply to safeguarding of gift cards, which are 
essentially cash. As noted above, because the Department has 
incorporated the language from proposed Sec.  681.610 into Sec.  
681.590, the Department deleted proposed Sec.  681.610 and has 
renumbered proposed Sec. Sec.  681.620 through 681.660 as Sec. Sec.  
681.610 through 681.650.
    Comments: A couple of commenters expressed support for the 
allowance of incentive payments for youth, citing the effect they can 
have on low-income and homeless individuals in WIOA youth services 
programs as well as the positive effect incentive payments have on 
YouthBuild programs.
    One commenter requested clarification about whether incentive 
payments would be allowed for activities other than just training and 
work experiences, and for short-term youth programs. Further, this 
commenter recommended that the Department give local areas flexibility 
in the creation of their own policies for providing incentives to 
youth. Another commenter recommended that the Department allow 
incentive payments for youth engaging in the literacy and numeracy 
post-tests for Program Year 2015.
    A commenter expressed support of the inclusion of incentive 
programs and support services for individuals in the WIOA youth 
program, stating that the eligibility determination process is often 
difficult for youth as they sometimes struggle to obtain documentation, 
especially those who have experienced loss or abuse of their identity 
documentation in the past. Therefore, this commenter recommended 
providing incentives to youth for maintaining their documentation or 
attempting to obtain their documentation. Further, this commenter 
suggested that the Department should provide incentives to youth for 
providing word-of-mouth marketing to their peers about the WIOA youth 
services available, as incentives for referrals and recruitments could 
be very beneficial to the Department's efforts to reach youth.
    One commenter expressed concern with this section due to its 
allowance for incentive payments only under the circumstances of work 
experience and training activities. This commenter suggested that 
incentive payments should be granted for achievements such as 
employment placement and retention, or improvements marked by testing. 
This commenter recommended that the incentive payments should be 
granted in those circumstances and not on the basis of engaging in 
training activities and work experiences. Similarly, a couple of 
commenters expressed concern with the proposed regulation's allowance 
of incentives for activities only related to training and work 
experiences, and recommended that the language regarding incentive 
payments not be amended from its original form in WIA and suggesting 
that incentives are needed to reach and engage youth.
    Department Response: While the Department recognizes the importance 
of incentives as motivators for various activities such as recruitment, 
submitting eligibility documentation, and participation in the program, 
the Department concluded that incentives must be connected to 
recognition of achievement of milestones in the program tied to work 
experience or training. Such incentives for achievement could include 
improvements marked by testing or other successful outcomes. While WIOA 
funds cannot be used for incentives for recruitment and eligibility 
documentation, local areas may leverage private funds for such 
incentives.
    Comments: Another commenter recommended that the Department amend 
the proposed regulations to allow for incentive payment for ISY who 
graduate from a regular high school, suggesting the current language is 
inconsistent in its provision of incentives to students who receive 
their high school equivalency or GED certificates, but not to those who 
receive a traditional high school diploma. Further, this commenter 
recommended allowing for the provision of incentive payment for youth 
who participate or complete leadership activities, suggesting that not 
offering incentives for leadership activities will infringe upon the 
provider's ability to engage youth.
    Department Response: There is no specific language in the 
regulatory text limiting incentive payments to students who receive 
their high school equivalency. Incentive payments may be provided to 
both ISY and OSY as long as they comply with the regulations stated in 
this section.
    Comments: One commenter recommended that the Department amend the 
language at the start of this section in order to make it more 
encouraging. Specifically, this commenter recommended that the section 
read, ``Incentive programs are crucial to keeping homeless and 
disconnected youth engaged in programs and should be provided to youth 
participants for recognition.''
    Department Response: The Department agrees that incentives can be a 
critical tool to keep youth participants engaged in the program. 
However, no changes were made to the regulatory text in response to 
this comment.
    Comments: Another commenter recommended that a definition of 
incentive payments should be added to this section to retain 
consistency throughout the proposed regulations.
    Department Response: The Department concluded that the existing 
regulatory text adequately defines incentive payments. No further 
definition is necessary in the Final Rule. The Department did make 
minor edits to the first paragraph of the regulatory text to clarify 
this section.
Section 681.650 How can parents, youth, and other members of the 
community get involved in the design and implementation of local youth 
programs?
    This section discusses the requirement in WIOA sec. 129(c)(3)(C) 
for the involvement of parents, participants, and community members in 
the design and implementation of the WIOA youth program and provides 
examples of the type of involvement that would be beneficial. The 
Department also has included in this proposed section the requirement 
in WIOA sec. 129(c)(8) that Local WDBs also must make opportunities 
available to successful participants to volunteer to help other 
participants as mentors or tutors, or in other activities. The 
Department notes that this provision was proposed as Sec.  681.660. 
However, as noted above, because the Department has incorporated the 
language from proposed Sec.  681.610 into Sec.  681.590, the Department 
deleted proposed Sec.  681.610 and has renumbered proposed Sec. Sec.  
681.620 through 681.660 as Sec. Sec.  681.610 through 681.650.
    Comments: The Department received a few comments on the proposed 
regulation. One commenter suggested that the language in this section 
be strengthened to show the importance of including individuals with 
disabilities in the design and implementation of these programs, 
stating that their involvement is vital.
    One commenter suggested that making opportunities available to 
youth peer volunteers be removed, and be replaced with language that 
would make the service an option for Local WDBs to choose to make, 
suggesting that the supervision and background investigation needed for 
volunteers to provide services to youth would be potentially too costly 
for WDBs and therefore shouldn't be a requirement. Another commenter 
requested clarification from the Department

[[Page 56187]]

concerning the extent to which the population and community of an area 
must be involved in the creation of these programs and services and the 
type of involvement that is required of them, suggesting that requiring 
the community to be involved is contradictory to the intent of WIOA, 
which abolished the requirement of youth councils.
    Department Response: No changes were made in the regulatory text in 
response to these comments. The Department values the input of 
individuals with disabilities. Nothing in the proposed regulation 
precludes them from getting involved in the design and implementation 
of a local youth program. The populations identified in the regulation 
(parents, youth, and other members of the community) come directly from 
WIOA sec. 129(c)(3)(C), which clearly states the intent to have them 
involved in the design and implementation of the programs. The 
Department understands that this might seem to contradict the law's 
approach to youth councils; however, this requirement does not have the 
time commitment and obligatory structures that were required of WIA's 
youth councils. The Department will provide additional guidance and 
technical assistance on involvement in youth program design and 
implementation.
5. Subpart D--One-Stop Center Services to Youth
Section 681.700 What is the connection between the youth program and 
the one-stop delivery system?
    This section describes the WIOA youth program's required role in 
the one-stop delivery system, and includes examples of the connections 
between the youth program and the one-stop delivery system.
    Comments: Several commenters expressed their support for these 
provisions and their focus on collaboration across programs and the 
requirement of WIOA youth programs to serve as a one-stop partner. A 
number of commenters expressed their support for the regulations' 
encouragement of partnerships between WIOA youth programs and one-stop 
centers, suggesting that under WIA the one-stop delivery system was not 
encouraging of youth engagement. These commenters further recommended 
that the Department encourage training of one-stop operator staff for 
effectively serving youth. Similarly, one commenter suggested that this 
proposed language would require either equipping and training staff at 
one-stop centers with information on serving youth, or colocation of 
WIOA youth service providers at one-stop centers.
    Department Response: The Department does encourage training of one-
stop operator staff and added language to the Final Rule at Sec.  
681.700(c) encouraging one-stop center staff be trained to build their 
capacity in serving youth.
Section 681.710 Do Local Workforce Development Boards have the 
flexibility to offer services to area youth who are not eligible under 
the youth program through the one-stop centers?
    This section clarifies that Local WDBs may provide services to 
youth through one-stop centers even if the youth are not eligible for 
the WIOA youth program.
    The Department received a few comments on this section as discussed 
below.
    Comments: One commenter expressed their support of the proposed 
regulation's requirement that one-stop centers provide services for 
individuals who are ineligible for WIOA youth programs, suggesting that 
providing these services would allow for youth to receive services they 
need while still working to obtain documentation that would make them 
eligible for WIOA youth services.
    A few commenters requested clarification regarding whether WIOA 
youth program funding would be allowed to support these services at 
one-stop centers without enrollment and whether Local WDBs would 
provide youth services if they are ineligible for WIOA title I youth 
services, and if so, which program would be funded through the 
provision of those services. These commenters further recommended that 
the Department give States the authority to use WIOA funding for the 
purposes of supporting workforce market information and career 
awareness education to ISY, as is indicated in this section under the 
proposed regulations. Similarly, one commenter requested clarification 
from the Department about whether WIOA youth funds could be used to 
provide support for services if the support is for materials, general 
information, or relationships with local businesses. This commenter 
further recommended that the Department allow States to use WIOA youth 
funds to support general labor market information to promote career 
awareness for ISY, reasoning that providing this information would help 
to prepare these ISY for their transition out of school and into their 
career and/or postsecondary school.
    Department Response: While providing labor market information and 
career awareness are allowable uses of WIOA youth funds, WIOA youth 
funds may be used to provide services only to eligible youth enrolled 
in the WIOA youth program. As described in this section, one-stop 
centers may provide basic labor exchange services such as the ones 
suggested under the Wagner-Peyser Act to any youth.
    Comments: Suggesting that often times individuals who are not 
eligible for WIOA youth services fall within the eligibility of WIOA 
adult services, a number of commenters recommended that Local WDBs be 
required to ensure that youth aged 18-24 have access to one-stop center 
services and are not simply referred to WIOA youth services instead.
    Department Response: The Department agrees that youth aged 18-24 
should have access to one-stop center services. The Department has 
concluded that this recommendation does not necessitate any changes to 
the Final Rule language and instead, will incorporate this 
recommendation in future guidance or technical assistance. The Final 
Rule adopts the provision as proposed.

F. Part 682--Statewide Activities Under Title I of the Workforce 
Innovation and Opportunity Act

1. Introduction
    WIOA provides a reservation of funds from the adult, dislocated 
worker and youth programs to be undertaken by States, for statewide 
activities. States have both required and allowable activities to be 
undertaken on a statewide basis for adults, dislocated workers and 
youth. These funds support States to innovate, continually improve 
their comprehensive workforce programs, oversee a public workforce 
system that meets the needs of job seekers, workers and employers, and 
contribute to building a body of evidence to improve the effectiveness 
of services under WIOA. WIOA designates the percentage of funds that 
may be devoted to these activities from annual allotments to the 
States--up to 15 percent must be reserved from youth, adult, and 
dislocated worker funding streams, and up to an additional 25 percent 
of dislocated worker funds must be reserved for statewide rapid 
response activities. The up to 15 percent funds from the 3 funding 
streams may be expended on employment and training activities without 
regard to the source of the funding. For example, funds reserved from 
the adult funding stream may be used to carry out statewide youth 
activities and vice versa.

[[Page 56188]]

2. Subpart A--General Description
    This subpart describes what is encompassed by the term ``statewide 
employment and training activities.'' It explains that States have both 
required and allowable activities to be undertaken on a statewide basis 
for adults, dislocated workers and youth. States have significant 
flexibility in the development of policies and strategies for the use 
of their statewide funds.
Section 682.110 How are statewide employment and training activities 
funded?
    The Governor has authority to use up to 15 percent of the adult, 
dislocated worker, and youth funds allocated to the State for statewide 
activities. The regulation provides that the adult, dislocated worker 
and youth 15 percent funds may be combined for use on required or 
allowed statewide activities regardless of the funding source. These 
activities are funded in the same manner as they were under WIA.
    Comments: Several commenters expressed concern regarding the 
appropriation-based restriction of 10 percent availability for the 
required and allowable statewide activities. These commenters 
recommended that funding be increased to a level that covers the costs 
of the required activities and, at a minimum, that statewide funds be 
fully funded at the 15 percent level. In addition, the commenters 
recommended that the Department provide a waiver process for States on 
required activities if the full appropriation is not made available. 
Several of these commenters also suggested that the required State 
activities would necessitate resources in excess of Federal funding, 
and the program therefore could be considered an unfunded mandate. 
Lastly, one commenter expressed confusion about whether subrecipients 
may incur costs for administrative functions, as set forth in Sec.  
683.215, with statewide activities funds.
    Department Response: The allowable percentage of funding for 
statewide activities is governed by the authorizations and 
appropriations established by Congress, not by the Department. 
Furthermore, the regulation contains no unfunded mandates as defined in 
2 U.S.C. 658(b). Waivers are covered at Sec. Sec.  679.600 through 
679.620, for waivers to States or local areas in a State, and at 
Sec. Sec.  684.900 through 684.920, for waivers relating to Indian and 
Native American programs. Waivers are considered on an individual basis 
and granted as appropriate, with such conditions as the Department may 
require. Subrecipients may incur costs for administrative functions 
consistent with the administrative cost limitation provisions at 
Sec. Sec.  683.205 and 683.215. No changes have been made to the 
regulatory text as a result of these comments.
3. Subpart B--Required and Allowable Statewide Employment and Training 
Activities
    This subpart first discusses required statewide activities. WIOA 
continues the activities that were required under WIA, but adds several 
additional required activities, such as assistance to State entities 
and agencies described in the State Plan, alignment of data systems, 
regional planning, and implementation of industry or sector 
partnerships. Required statewide activities under WIA and continued 
under WIOA include: Dissemination of information regarding outreach to 
businesses, dissemination of information on the performance and cost of 
attendance for programs offered by ETPs, and conducting evaluations.
    This subpart also discusses allowable statewide activities. The 
Department provides States with a significant amount of flexibility in 
how these funds may be used for statewide activities. States can test 
and develop promising strategies. The regulation at Sec.  682.210 is 
not designed to be an exhaustive list, but more illustrative of the 
types of allowable statewide activities that may be provided with these 
funds.
Section 682.200 What are required statewide employment and training 
activities?
    Comments: One commenter asked for a definition of ``non-traditional 
training'' services and for the statutory basis for the requirement 
that the ETPL include providers of nontraditional training services. 
This commenter further stated that Sec.  682.200(b)(5) would require 
collection and dissemination of cost of attendance information for 
youth and for on-the-job and other training programs that is exempted 
from the ETP requirements (WIOA sec. 122(h)), and asked what the 
statutory authorization was for this requirement. Finally, this 
commenter asserted that there was a conflict over proposed requirements 
for these WIOA sec. 122(h) programs/data between proposed Sec. Sec.  
682.200 and 680.340.
    Department Response: Nontraditional training is defined as training 
activities leading to employment in occupations or fields of work in 
which individuals of one gender comprise less than 25 percent of the 
individuals so employed. The statutory basis for this definition is 
found in the definition of nontraditional employment at WIOA sec. 
3(37). The statutory requirement for disseminating information 
regarding the State list of eligible training providers of training 
services (including those providing non-traditional training services) 
is found at WIOA sec. 134(a)(2)(B)(v)(I). The Department has revised 
Sec.  682.200(b)(5) for consistency with Sec. Sec.  680.490 and 
680.530, which specify the reporting requirements for certain providers 
of training services, such as providers of OJT.
    Comments: The commenter stated that there might be a conflict 
between proposed Sec. Sec.  682.200 and 680.350 and referred to the 
title of Sec.  680.350 as ``What is meant by `provision of additional 
assistance' in the Workforce Innovation and Opportunity Act?''
    Department Response: There was no section numbered Sec.  680.350 in 
the NPRM, and there is no conflict between the requirements of 
Sec. Sec.  682.200 and 682.350. However, the commenter may have been 
referring to the requirement of Sec.  680.340, specifically paragraph 
(b), which states that the Local WDBs must make available to customers 
the State list of eligible training providers required in WIOA sec. 
122(e), including local area information on work based training 
providers under WIOA sec. 122(h). This could be read to conflict with 
Sec.  682.200(b), which includes disseminating the list of ETPs and 
information identifying other eligible training providers of training 
as a required statewide activity. There are two sections of WIOA that 
cover the dissemination of the list of ETPs, secs. 134(a)(2)(B)(v) and 
134(c)(3)(F)(ii). The first requires the State to disseminate the list. 
The latter requires that Local WDBs make the list available through the 
one-stop centers. Operationally, States are tasked with maintaining the 
list and disseminating it to the Local WDBs. The task of the Local WDBs 
is to make sure that this information is readily available through the 
one-stop delivery system. No changes have been made to the regulatory 
text as a result of these comments.
    Comments: Two commenters also questioned the proposed Sec.  
682.200(b)(2) requirement to disseminate information identifying 
eligible training providers of work-based training, reasoning that 
disclosing information about employers could negatively impact the 
working relationships that case managers and business specialists have 
developed. Further, these commenters stated that if the Governor does 
not require collection of performance information from these training 
providers, it is not necessary to provide information about such 
providers to the public. A separate

[[Page 56189]]

commenter expressed concern that the performance reporting requirements 
could result in disclosure of personally-identifiable information.
    Department Response: WIOA sec. 122(h) exempts providers of on-the-
job training and other employer-based training from the requirements at 
WIOA sec. 122(a)-(f). However, the identity of employers that access 
WIOA funds for employer-based training, as well as any performance 
information required by the State under WIOA sec. 122(h)(2), may not be 
kept from the public and is disclosable. This statutory disclosure 
requirement under WIOA sec. 122(h)(2), which applies to recipients of 
funds to provide training services, promotes full transparency, reduces 
instances of conflict of interest, and ensures compliance with the 
sunshine provisions of WIOA. Performance report made available to the 
pubic requirements do not include any information that could be 
considered personally identifiable. There are no names, addresses, 
dates of birth or Social Security numbers. WIOA sec. 122(d)(4) 
prohibits disclosure of personally identifiable information without 
prior written consent of the parent or student. All other comments and 
responses involving eligible training providers are found at subpart D, 
Sec. Sec.  680.400 through 680.530. No changes have been made to the 
regulatory text as a result of these comments.
    Comments: A commenter recommended that Sec.  682.200(b) specify 
that information about physical and programmatic accessibility for 
individuals with disabilities (proposed Sec.  682.200(b)(7)) be made 
available in accessible formats.
    Department Response: The requirement to make this information 
available in accessible formats is already required under the Americans 
with Disabilities Act and other provisions of WIOA. Therefore, no 
changes were made as a result of this comment.
    Comments: Regarding proposed Sec.  682.200(d), commenters asserted 
that conducting evaluations is not the best use of limited State funds 
and recommended that it be an allowable statewide activity or reserved 
for the Federal government.
    Department Response: WIOA provides that evaluation is a required 
activity. Evaluation as a statewide activity is further discussed under 
Sec.  682.220. The Department notes that there was a small edit to 
Sec.  682.200(d) moving the statutory reference to the end of the 
regulatory text. However, no changes have been made to the regulatory 
text as a result of this comment.
    Comments: One commenter recommended that the Department require 
that the one-stop delivery system receive technical assistance to help 
women entering apprenticeship and pre-apprenticeship programs, and 
recommended that Sec.  682.200(f) be expanded to require technical 
assistance delivery to all front line and managerial staff at one-stop 
centers and to provide information on the economic benefits of 
nontraditional careers to one-stop participants.
    Department Response: The Department has determined that there are 
sufficient references and requirements throughout WIOA and this Rule 
that provide an improved linkage to apprenticeship and pre-
apprenticeship programs and that this specific requirement is not 
needed. Furthermore, Sec.  682.210(e) already allows for the 
implementation of programs to increase the number of individuals 
training for and placed in nontraditional employment. No changes have 
been made to the regulatory text as a result of these comments.
    Comments: A commenter recommended that Sec.  682.200(f) 
specifically include individuals with disabilities in its statement of 
the requirement that States assist in local staff training to provide 
opportunities for individuals with barriers to employment. Also with 
regard to Sec.  682.200(f), this commenter recommended that States 
should examine Federal contractors doing business in their States, as 
doing so is particularly important for job seekers with disabilities 
because of the regulations implementing sec. 503 of the Rehabilitation 
Act of 1973, as amended, at 41 CFR part 60-741.
    Department Response: Individuals with disabilities are a target 
population of WIOA. The Department has determined that the reference to 
barriers to employment sufficiently includes individuals with 
disabilities based on the statutory definition contained in WIOA sec. 
3(24)(D). With regard to States examining Federal contractors doing 
business in their area, they must follow the regulations governing the 
Rehabilitation Act of 1973, as amended. No changes have been made to 
the regulatory text as a result of these comments.
    Comments: Regarding proposed Sec.  682.200(g), several commenters 
recommended that the Department clarify how States are required to 
``assist'' local areas. One commenter requested clarification of what 
it means to assist local areas in regional planning and service 
delivery, and whether this includes financial assistance.
    Department Response: States must ``assist'' local areas through a 
variety of methods. This will include the provision of technical 
assistance, compliance assistance, strategic planning initiatives, or 
other activities designed to improve or enhance the workforce 
development system at the local level. The Department declines to 
define explicitly ``assist'' further. Doing so might limit the types of 
technical assistance and other efforts that a State may seek to 
provide. With regard to the provision of financial assistance, yes, an 
allowable use of statewide activities funds under Sec.  682.200 could 
include financial assistance related to regional planning efforts.
    Comments: Regarding proposed Sec.  682.200(h), a commenter 
recommended that the Departments issue additional guidance on 
implementation of the industry or sector partnerships that are a 
required activity at the State and local levels. This commenter also 
expressed concerns that the NPRMs provided little guidance on how 
States and local areas can meet their statutory requirements with 
respect to industry or sector partnerships. This commenter predicted 
that limited instruction may lead to confusion and delayed 
implementation among stakeholders. A separate commenter recommended an 
emphasis on the needs of and opportunities for immigrant and Limited 
English Proficient workers and business owners.
    Department Response: The Department is committed to the successful 
implementation of industry and sector partnerships throughout the 
nation's workforce development system. To accomplish this, significant 
technical assistance activities will occur in this area. The Department 
has strategically chosen not to further define the requirements around 
industry and sector partnerships in regulations as effective models and 
solutions are likely will evolve over time. Instead, the Department's 
efforts will be focused on the collection and dissemination of 
promising practices from States and local areas that have already 
developed successful models. The Department has determined that rather 
than a lack of instruction leading to confusion or delay, a lack of a 
more rigid definition will provide for the highest level of innovation 
possible. Additional guidance may be issued on this topic in the 
future. In addition, the Department will support various technical 
assistance efforts focusing on industry and sector partnerships based 
on successful models from around the

[[Page 56190]]

nation. Furthermore, there is no need to place additional emphasis on 
immigrant and Limited English Proficient populations since these 
individuals would generally be included in the definition of those with 
barriers to employment, whose needs are already emphasized throughout 
WIOA. No changes have been made to the regulatory text as a result of 
these comments.
    Comments: A commenter recommended that Sec.  682.200(k) clarify 
that providing ``additional assistance'' to local areas with a high 
concentration of eligible youth may include creation of a central 
coordinating body or use of a ``qualified intermediary'' defined as an 
entity with a demonstrated expertise in building partnerships. The 
commenter stated that qualified intermediaries serve an important role 
by streamlining services and filling gaps in support and services. 
Further, this commenter recommended that the Department clarify that 
``additional assistance'' includes supporting development of credit 
transfers and articulation agreements between local education agencies 
(LEAs) and institutions of higher education within the State. The 
commenter reasoned that these programs bridge the connection between 
academics and career preparation, as well as between secondary and 
postsecondary school education.
    Department Response: WIOA allows States to engage in any of the 
activities described by the commenter, as the provision of additional 
assistance under Sec.  682.200(k). The regulation requires States to 
assist local areas with high concentrations of eligible youth. The 
assistance needed is likely to vary from local to local. This 
assistance might be provided in the areas of program design, 
partnering, resource sharing, and other areas. Providing a definitive 
list of assistance or specific examples might be limiting. Instead, the 
Department will continue its focus on technical assistance and regular 
guidance in the area of youth services. No changes have been made to 
the regulatory text as a result of these comments.
    Comments: One commenter requested that the Department develop a 
common intake at the Federal level that covers all required partners 
and test it for customer satisfaction. Similarly, another commenter 
asked if States would be developing and disseminating common intake 
procedures and related items, including registration processes, across 
core and partner programs.
    Department Response: Given the variety of State and local workforce 
development systems, a single, Federally mandated common intake process 
is not feasible. However, the Department remains committed to working 
with the Federal partners to limit the duplication of effort among and 
between core and partner programs relative to service design and 
eligibility requirements. The States are best positioned to develop 
common intake procedures through the State WDB. No changes have been 
made to the regulatory text as a result of these comments.
Section 682.210 What are allowable statewide employment and training 
activities?
    In addition to the required statewide activities, States are 
provided with significant flexibility to innovate within the public 
workforce system with various allowable statewide employment and 
training activities. These allowable activities are vital to ensuring a 
high quality public workforce system, and can be used to ensure 
continuous improvement throughout the system. This regulation is not 
designed to be an exhaustive list, but more illustrative of the types 
of allowable statewide activities that may be provided with these 
funds. The Department has made a clarifying edit at the beginning of 
Sec.  682.210.
    Comments: A commenter expressed support for proposed Sec.  
682.210(c) because it emphasizes the State's role in developing and 
implementing strategies for serving individuals with barriers to 
employment and encourages States to partner with other agencies to 
coordinate services among one-stop partners. This commenter asserted 
that Governors have a vital role in coordinating different funding 
sources for training to enable effective service delivery. Another 
commenter supported the flexibility in Sec.  682.210 for the types of 
statewide activities that States can implement using the Governor's 
Reserve. However, this commenter recommended that the Department amend 
this section or provide additional guidance to encourage States to 
consider programs that will help align core WIOA title I programs with 
one another and with title II programs (e.g., career pathway programs 
and technology access programs). A separate commenter also expressed 
support for the Departments to issue guidance on the alignment of WIOA 
title I and title II services directed to immigrant and Limited English 
Proficiency individuals, and additionally in support of formal guidance 
affirming that all individuals with work authorization, including 
immigrant youth with Deferred Action for Childhood Arrivals (DACA) 
status, are eligible to participate in title I programs.
    Department Response: The Department agrees that the Governors have 
a vital role in coordinating the different funding sources for training 
available in their State. Furthermore, the Department has concluded 
that this role extends well beyond WIOA and should include the 
coordination of all funding sources (Federal, State, foundations, etc.) 
available within the State. Additional guidance will be issued by the 
Department, outside of the regulations, to help Governors strengthen 
alignment of all programs contained under WIOA and all those related to 
workforce development. Based on the planning requirements at the State, 
regional and local level already contained in this regulation, the 
Department has determined that a change to this section is not 
warranted. Nothing in this statute or regulations prohibits States from 
acting independently to align the programs covered under WIOA or 
outside of it. WIOA and the implementing regulations provide only the 
minimum of what States must do to be compliant. WIOA and regulations 
should be seen as a starting point for further alignment of the 
workforce development, economic development, and educational systems 
within a State. With regard to youth with DACA status, the Department 
will consider issuing guidance as necessary. No changes have been made 
to the regulatory text as a result of these comments.
    Comments: A commenter recommended that Sec.  682.210 specify how 
activities can target individuals with disabilities wherever possible 
(e.g., in paragraphs (c), (k), (m), and (n)(2)). Further, this 
commenter recommended that the Final Rule specifically identify State 
programs relating to intellectual and developmental disabilities, 
Statewide Independent Living Councils, and centers for independent 
living so that they are not overlooked in program coordination. In 
regard to developing strategies to serve individuals with barriers to 
employment as permitted by proposed Sec.  682.210(c), this commenter 
detailed several core areas for States to focus their partnership 
building efforts, including supporting businesses in their efforts to 
employ individuals with disabilities, building capacity of front line 
staff to implement evidence-based practices in serving employees with 
disabilities and the employers who hire them, and preparing youth with 
disabilities for careers that use their full potential.
    Department Response: The Department agrees that coordination

[[Page 56191]]

between and among the organizations listed by the commenter and the 
State and local workforce development systems are essential to 
improving services to individuals with disabilities. However, the 
Department has concluded that there is no need to list these 
organizations specifically in the regulatory text, and that each State 
and local area is uniquely positioned to determine which of these 
organizations and programs are included in their planning processes and 
service delivery models. However, the Department notes that WIOA sec. 
3(24) defines ``individual with a barrier to employment'' to include 
``individuals with disabilities,'' and reminds the public that the 
emphasis throughout WIOA and this regulation on including, and 
tailoring services to meet the needs of, individuals with barriers to 
employment encompasses an emphasis on including, and tailoring services 
to meet the needs of, individuals with disabilities and other barriers 
to employment. By extension: the regulatory text at Sec.  682.210(c), 
(k), and (m) should be understood to include programs carried out by 
local areas for individuals with disabilities. The Department also 
agrees that WIOA requires training for front-line staff and the 
identification and dissemination of promising practices on all areas of 
workforce development, including the provision of services to 
individuals with disabilities, including youth. [WIOA secs. 
107(d)(11)(B), 108(b)(6)(C), and 134(a)(2)(B)(i)(IV).] No changes have 
been made to the regulatory text as a result of these comments.
    Comments: Regarding the NPRM preamble discussion of Sec.  
682.210(d) and (e), a commenter requested that the Department clarify 
the term ``real-time labor market analysis,'' commenting that real-time 
LMI is a commonly used term that often refers to current data but that 
the term has a lot of associations that are not well-defined in terms 
of data items, levels, and area of detail.
    Department Response: Traditional labor market information (LMI) is 
based on data gathered through Federal and State surveys and 
administrative data. These surveys typically utilize rigorous sampling 
criteria and careful sampling frames. Traditional LMI provides 
significant insight into labor market trends and indicators, but the 
process of gathering the data is time-consuming and results in 
unavoidable lag-time for publication. Real-time labor market analysis, 
also referred to as real-time LMI, utilizes online job postings that 
are aggregated daily. Given the ever-increasing use of technology in 
the LMI field, the Department has determined not to define the term 
``real-time labor market analysis.'' The Department has supported 
previous evaluations and research products on real-time labor market 
analysis all of which are available online through the Web site of the 
Employment and Training Administration at www.doleta.gov and through 
the Workforce GPS platform at www.workforcegps.org. No changes have 
been made to the regulatory text as a result of these comments.
    Comments: Two commenters supported including NFJP grantees among 
entities with access to Governors' 15 percent set-aside funds for 
statewide activities.
    Department Response: NFJP grantees are awarded funds through 
various grant programs. Furthermore, there is no restriction on 
additional partnerships that States can make with NFJP grantees under 
the statewide activities section. The Department has concluded that a 
special reference to NFJP grantees is not warranted and no changes have 
been made as a result of these comments.
    Comments: A commenter suggested that statewide activities funds 
should be accessible to a labor/management training fund of which the 
employer is a contributing member, and that apprenticeships should be 
an approved expense for incumbent worker training.
    Department Response: The regulation does not restrict the States 
from engaging in the activities described by the commenter related to 
labor/management training funds and apprenticeship. The types of 
programs and partnerships that a State chooses to enter into are best 
left to the individual State WDBs to meet the specific workforce needs 
in their State. No changes have been made to the regulatory text as a 
result of these comments.
    Comments: A commenter recommended that Governors be authorized to 
approve automatically public higher education schools as eligible 
training providers under WIOA, in a similar manner to the authority for 
automatic approval of apprenticeship programs. The commenter further 
urged that such approval should cover all programs of study and that 
the school not be subject to initial or subsequent designation.
    Department Response: WIOA does not provide the authority for this 
type of automatic designation, so no changes have been made as a result 
of this comment.
Section 682.220 What are States' responsibilities in regard to 
evaluations?
    Comments: The Department received a number of comments on the 
proposed regulations in Sec.  682.220, concerning State 
responsibilities on evaluations under WIOA sec. 116(e) and the required 
use of State set-aside funds under WIOA sec. 129(b)(1)(A) and sec. 
134(a)(2)(B)(vi) to conduct evaluations. Several commenters were 
supportive of provisions in this section, with one commenter expressing 
optimism about the possibility of States conducting longer-term impact 
studies of Vocational Rehabilitation. Another commenter supported the 
development of evaluations ``to explore innovations surrounding 
integrated systems, coordinated services, career pathways, and multiple 
forms of engagement with businesses.'' However, many comments were 
critical of the requirements that States conduct evaluations using the 
State set-aside funds and provide data for Federal evaluations.
    Regarding States' conducting their own evaluations, commenters 
cited a lack of sufficient funds from the Governors' set-aside as well 
as a lack of staff capacity. One commenter stated that the requirement 
``ignores the funding reality'' and, along with other commenters, 
emphasized the many competing requirements for which set-aside funds 
must be used--a problem noted to be particularly acute in States with a 
small amount of set-aside funds. The commenters also noted that many 
States lack staff with requisite knowledge and skills to conduct an 
evaluation and cannot afford to use consultants. Three commenters noted 
that, with the exception of evaluations conducted and published by a 
few States, there is no ``established broad-based record of State 
knowledge of research principles sufficient to effectively manage an 
evaluation agenda under WIOA.'' To remedy this situation, commenters 
suggested that States receive dedicated funding and Federal support to 
build their evaluation infrastructure and that the Department waive or 
suspend the requirement to conduct evaluations until States have 
sufficient funding and skills, and that the Department should assume 
primary responsibility for conducting evaluations. Another commenter 
suggested that conducting evaluations should be an allowable not a 
required statewide activity.
    Department Response: The Department acknowledges that States must 
balance many priorities in their use of the set-aside, including 
multiple required activities. The lack of sufficient funds (in the set-
aside or from a dedicated funding stream of some kind) to conduct 
evaluations, as well as lack of staff capacity or, in some cases, lack 
of available or reliable data, will

[[Page 56192]]

constrain many States' ability to conduct evaluations. However, WIOA 
sec. 129(b)(1)(A) and sec. 134(a)(2)(B)(vi) require States to use funds 
reserved by the Governor for statewide activities to conduct 
evaluations. Further, the Department has determined that State-
conducted evaluations have the potential to be of great practical value 
to States, including informing service delivery strategies, improving 
performance, and meeting other requirements under WIOA. For example, 
evaluation could be used to assist State WDBs in systematically 
identify promising or proven practices, as required under Sec.  
679.130(e), or for analyzing data on the quality, effectiveness, and/or 
assist the State to prepare its strategic planning process under 20 CFR 
676.105 (see Joint WIOA Final Rule). It could further be used for 
exploring, with other State agencies, how well integration and 
coordination of services and data systems is proceeding. Therefore, the 
regulations retain the requirement that States conduct evaluations.
    Given the problems identified by commenters, the Department sees 
the development of States' capacity to conduct evaluation projects as a 
long-range and iterative process, which the Department intends to aid 
through various forms of technical assistance and guidance. An initial, 
primary goal is to enhance capacity by building knowledge among State 
staff regarding various methodologies, approaches for enlisting 
expertise, and the potential role of evaluations and research in 
meeting State goals and priorities. Further, the regulations at Sec.  
682.220(e) and (f) identify areas for State discretion in the 
methodology, duration and funding of evaluations, all of which may 
assist States to target their investment in a manner appropriate to the 
funding available to the State. The paragraphs describe flexibilities 
that States may use to leverage other funding, and to conduct such 
evaluation over multiple program years.
    Despite flexibilities as to the types of evaluation, methodologies, 
phases, duration, and funding sources, some States may still be unable 
to fulfill the requirement to conduct evaluations and seek a waiver. 
Such a waiver request, like others submitted to the Department in 
regard to statutory provisions of WIOA, will be reviewed on a case-by-
case basis, and will be subject to any appropriate conditions and 
limitations of the Secretary's waiver authority and procedures found at 
WIOA sec. 189(i)(3), and consistent with Sec. Sec.  679.610 and 
679.620. No changes have been made to the regulatory text as a result 
of these comments.
    Comments: Several commenters objected to annual submission of 
evaluation reports, which they felt too excessive, given the 
requirements for annual submission of performance reports. One 
commenter suggested that States should instead make available to the 
public and to State and Local WDBs evaluation and research reports 
prepared by Federal evaluators with State-specific comments, in line 
with suggestions that evaluation be primarily a responsibility for the 
Federal government.
    Department Response: While WIOA sec. 116(e)(3) requires the State 
to annually prepare, submit, and make available to the public reports 
containing the results of evaluations conducted using State set-aside 
funds, the Department recognizes that evaluations may be lengthy and 
not end neatly within a program year. For this reason, the regulation 
has been revised to clarify that the reports are to be prepared, 
submitted to State and Local WDBs, and made available to the public 
when results become available. The revision to the regulation at Sec.  
682.220(c) is described in more detail below. Also, since States retain 
the responsibility to disseminate reports on State-conducted 
evaluation, the Department declines to adopt the suggestion that States 
only distribute Federal evaluations with State comments.
    Comments: Several commenters were critical of the regulation to 
implement the requirements in sec. 116(e) that States cooperate to the 
extent practicable in evaluations conducted by the Departments of Labor 
and Education (under WIOA secs. 169 and 242 and relevant sections of 
the Rehabilitation Act of 1973) by providing data, responding to 
surveys, allowing timely site visits, and informing the Secretary in 
writing if such cooperation was not practicable. A few commenters 
asserted that quantitative data was already available because the data 
elements and narrative reports provided to the Department and the other 
Federal agencies should provide an ample source of statistical data for 
evaluators without interrupting individual States with data requests. 
The commenters indicated that States' responsibilities regarding 
evaluations and research are only ``to allow on-site observation and in 
limited circumstances provide supplemental qualitative data.'' Another 
commenter felt that the regulations were ``adversarial'' and would 
result in minimum levels of cooperation from States. The commenter 
stated that the regulation did not define the term ``to the extent 
practicable,'' but noted that in the UI regulation, it is defined as 
non-interference ``with the administration of State UC law.'' The 
commenter also stated that the Department's ``intrusion into State 
evaluation activities is by its very nature `interference' with non-UI 
State agency functions, since it is carried out pursuant to 
``adversarial rules'' and for this reason, needed to be withdrawn.
    Department Response: The Department notes that the regulation at 
Sec.  682.220(d) implements a statutory requirement under WIOA sec. 
116(e)(4) requiring State cooperation, to the extent practicable, in 
Federal evaluations. WIOA sec. 116(e)(4) specifically identifies such 
cooperation as including the provision of data and survey responses, 
and allowing site visits in a timely manner. As noted in the preamble 
to the NPRM, this requirement in WIOA sec. 116(e)(4) recognizes the 
vital role of States in providing various forms of quantitative and 
qualitative data and information for Federal evaluations that are not 
available at the Federal level. In order to conduct evaluations, 
individuals need to be tracked over time periods that do not align well 
with quarterly performance reporting. Depending on the research 
questions an evaluation is addressing, data on the same individuals or 
cohorts of individuals may be needed for timeframes within the same 
quarter or across multiple quarters, neither of which is feasible to 
track or match within the performance reporting structure of WIOA. High 
quality evaluations also involve the collection of data on control or 
comparison groups of individuals, so supplemental data may be needed to 
account for this. Frequently, individual level earnings information is 
critical for evaluations. Data, survey responses, and site visit 
information are often needed to understand, for example, participant 
characteristics, services, systems, labor market outcomes, the role of 
decision-makers, implementation issues, and the quality of the customer 
experience. In response to the commenters' suggestions, the Department 
notes that States may, in response to data requests for a Department of 
Labor or a Department of Education evaluation, identify other data 
already provided to the Federal government and of possible use in the 
evaluation, and the Departments will work with the State to determine 
if the other data are suitable. However, no change to the regulatory 
text has been made in response to the comments.
    Further, the Department disagrees with the characterization of 
these

[[Page 56193]]

regulations, which implement a statutory requirement by requiring 
cooperation to the extent practicable, as adversarial or as 
interference. The Department also declines to further define ``to the 
extent practicable'' in the regulation. Rather, if a State determines 
that timely cooperation in data provision is not practicable, the State 
may proceed according to Sec.  682.220(d)(3) and identify in writing 
the reasons it is not practicable, and cooperate with the Department to 
develop a plan or strategy to mitigate or overcome the problems 
preventing timely provision of data, survey responses and site visits, 
as statutorily required. The requirement at Sec.  682.220(d)(3) was 
intended to afford a relatively easy method for communicating with the 
Department and allowing for an amicable resolution of any problems. No 
changes have been made to the regulatory text as a result of these 
comments.
    Comments: Several comments were received regarding promoting 
specific evaluation and research projects to be conducted at the State 
level under sec. 116(e) or at the Federal level under sec. 169 (which 
sets forth the Department's role in evaluation and research and 
authorizes a wide array of studies). One commenter recommended that the 
regulations require States to focus evaluations on services to 
individuals with disabilities under WIOA title I and that customer 
feedback be developed from this population be developed to determine if 
programs are truly responding to their needs.
    Department Response: The Department notes that while these proposed 
specific evaluation and research projects are permissible and 
desirable, WIOA sec. 116(e) allows States to determine the content of 
any evaluation. The Department will not reduce the States' flexibility 
by requiring particular evaluation or research projects. No changes 
have been made to the regulatory text as a result of these comments.
    While the Department did not promulgate regulations for WIOA sec. 
169, the Department is addressing comments relating to Departmental 
evaluation and other research activity, since it is similar to the 
evaluation functions required of States under WIOA sec. 116(e). There 
are no changes to the regulatory text as a result of these comments. 
The comments and the Department's response are as follows.
    Comments: Several commenters expressed support for the requirement 
under WIOA sec. 169(b)(4)(I) that the Department conduct a multi-State 
project to develop capacity for, implement, and build upon career 
advancement models and practices for low-wage health care providers and 
providers of early education and child care.
    Department Response: The Department notes that it has conducted and 
is currently engaged in research and evaluation projects related to 
career pathways programs in health care and child care occupations. 
Separately, the Department notes that developing and implementing 
career pathways is a function of State WDBs and Local WDBs under WIOA 
sec. 101(d)(3)(B) and sec. 107(d)(5)and has been promoted by ETA in 
guidance and various forms of technical assistance to the public 
workforce system.
    Comments: Another commenter suggested that the regulations state 
that the Department undertake research into women's representation in 
nontraditional jobs covering and the means by which barriers to women's 
employment in these occupations can be removed. The commenter also 
suggested that guidance eventually be issued on the content of such 
studies and offered example of topics that could be covered in them, 
such one-stop capacity, training, and policies in regard to 
nontraditional careers for women.
    Department Response: The Department notes that it is currently 
conducting a research project, under prior legislative authority, on 
employment in nontraditional occupations in order to identify, and 
evaluate evidence-based strategies to increase opportunities for 
traditionally under-represented groups.
    For the convenience of the reader in understanding the totality of 
the regulation at Sec.  682.220 and the changes made in the section, 
each part is discussed sequentially below. The revisions entailed 
reorganizing portions of the section to clarify the requirements and 
flexibilities for States, all in response to comments and to ensure 
conformity with statute.
    In particular, the revisions reflect the distinction between the 
requirement that States conduct evaluations of title I core program 
activities (as per WIOA secs. 129(b)(1)(A) and 134(a)(2)(B)(vi)) and 
the permissible ability of States to conduct research and demonstration 
projects as an allowable statewide activity under WIOA secs. 
129(b)(2)(A) and 134(a)(3)(A)(ix) Accordingly, the title of this 
section has been revised as ``What are States' responsibilities in 
regard to evaluations?,'' with the concluding phrase ``and research'' 
removed. Likewise, the phrases ``evaluations and research projects'' 
and ``evaluations and other research'' have been consistently revised 
throughout this section to refer only to ``evaluations.'' These 
revisions ensure that the requirements of Sec.  682.220, including the 
coordination and reporting requirements, apply only to evaluations 
conducted as a required statewide activity. It should be noted that 
these the provisions of Sec.  682.220 do not apply to research and 
demonstration projects conducted as an allowable statewide activity.
    The Department made a number of revisions to the regulatory text to 
clearly identify certain options that States may, but are not required 
to, use in fulfilling the statutory requirement to conduct evaluations 
as a statewide activity. Some of these options were identified in the 
NPRM, while others have been developed in response to comments 
received. In order to distinguish between regulatory requirements and 
regulatory flexibilities, this section has been reorganized so that 
these options are now stated in revised Sec.  682.220(e) and in the new 
Sec.  682.220(f).
Section 682.220(a)
    Section 682.220(a) describes the requirement under WIOA sec. 
134(a)(2)(B)(vi) for States to use funds reserved by the Governor for 
statewide activities to conduct evaluations of activities under the 
WIOA title I core programs, according to the provisions of sec. 116(e). 
The paragraph has been revised to state that the purpose of evaluations 
is ``to promote continuous improvement, research and test innovative 
services and strategies, and achieve high levels of performance and 
outcomes.'' The first and third purposes--promoting continuous 
improvement, and achieving high levels of performance and outcomes--
reflect the statutory requirement of WIOA sec. 116(e)(1). The second 
purpose, as proposed by the Department in the NPRM, was to test 
innovative services and strategies. It has been revised to reflect the 
reality that rigorous tests of such services and strategies often are 
preceded or accompanied by related forms of research. This section has 
also been renumbered from Sec.  682.220(a)(1) to Sec.  682.220(a).
    The paragraph proposed as Sec.  682.220(a)(2) has been deleted. 
This paragraph was deleted to avoid any confusion about research and 
demonstration projects conducted as an allowable statewide activity, to 
which the provisions of Sec.  682.220 do not apply. Also, Sec.  
682.220(a)(3), regarding the use of funds other than the Governor's 
Reserve, has been revised and relocated to a new Sec.  682.220(f), as 
discussed below.

[[Page 56194]]

Section 682.220(b)
    The regulations under Sec.  682.220(b) describe a number of 
requirements for evaluation under the State Set-aside. The language at 
Sec.  682.220(b) was revised from that in the NPRM to remove the 
reference to ``research projects'' and thus to clarify that the 
requirements are statutorily required only for evaluations. In 
addition, the Department made a technical revision to replace the 
reference to evaluations ``funded in whole or in part with WIOA title I 
funds'' with a reference to evaluations ``conducted under paragraph 
(a).'' The language was revised to clarify that the requirements in 
paragraph (b) apply to evaluations conducted pursuant to paragraph (a).
    Paragraph (b)(1) of this section implements the statutory 
requirement for States to coordinate and design evaluations in 
conjunction with State and Local WDBs and with other agencies 
responsible for core programs, as set forth in WIOA sec. 116(e)(2). 
Paragraph (b)(2) implements the requirement for States to include, 
where appropriate, analysis of customer feedback and outcome and 
process measures in the statewide workforce development system, as set 
forth in WIOA sec. 116(e)(2). Where the Department requires specific 
information related to these requirements, it will do so through the 
ICR process. Paragraph (b)(3) implements the requirement for States, in 
conducting evaluations, to use designs that employ the most rigorous 
analytical and statistical measures such as the use of control groups, 
as set forth in WIOA sec. 116(e)(2). The regulation clarifies that 
these approaches should be used when appropriate and feasible, thus 
indicating they are not intended as a ``one-size-fits-all'' checklist 
of requirements for every evaluation project. Paragraph (b)(4) 
implements the statutory requirement set forth in WIOA sec. 116(e)(1) 
for States, to the extent feasible, to coordinate the State's 
evaluations with those provided by the Secretary of Labor and the 
Secretary of Education under the particular statutes as cited. These 
paragraphs are adopted as proposed.
Section 682.220(c)
    Section 682.220(c) implements the statutory requirement for States 
to annually prepare, submit, and make available reports containing the 
results of the evaluations the States conduct, as set forth in WIOA 
sec. 116(e)(3). The Department has made two revisions to this section. 
First, as noted above, in response to comments received, the 
Departments has clarified that States must prepare, submit to the State 
and Local WDBs, and disseminate to the public results from these 
evaluations ``as available.'' The Department recognizes that when 
evaluations are conducted over multiple program years, as permitted in 
revised paragraph (e)(3), results may not be available in every program 
year. Evaluation reports must be made publically available during the 
program year the final report is finalized. In light of the options 
States have in terms of the components and time needed for evaluations 
as clarified in Sec.  682.220(e)(3), evaluations may extend into 
multiple program years. Second, the Department has revised this section 
to remove any reference to ``other research'' to avoid any confusion 
with research as an allowable statewide activity, for which the 
reporting requirements are not statutorily required under WIOA. 
However, the Department, in recognition of the benefits of 
disseminating research, strongly encourages States to make publicly 
available the reports emanating from such other research that States 
conduct.
Section 682.220(d)
    Section 682.220(d) implements the statutory requirement for States 
to cooperate, to the extent practicable, in evaluations and related 
research projects conducted by the Secretaries of Labor and Education. 
The Department has made minor revisions, for the sake of clarity, to 
three aspects of this section. First, the Department has removed the 
reference to the ``agents'' of the ``Secretaries of Labor and 
Education'' because a reference to the Secretaries always implicitly 
includes their agents, such as sub-agencies, contractors, or grantees. 
Second, the Department has replaced the reference to ``sec. 116(e)(4) 
of WIOA'' with a reference to the ``laws cited in paragraph (b)(4) of 
this section.'' This revision is non-substantive as the laws cited in 
paragraph (b)(4) of this section are those noted under sec. 116(e)(4) 
of WIOA, intended to simplify the language of the regulation.
    Paragraph (d)(1) of this section describes the particular data, 
information, and assistance that States must timely provide in 
cooperation with evaluations and related research projects conducted by 
the Secretary of Labor and Secretary of Education. Paragraph (d)(2) 
describes the requirement for the States to encourage cooperation in 
data provision by one-stop partners at the local level. Paragraph 
(d)(3) describes the requirement for the Governor to provide written 
notification to the Secretary if it is not practicable for the State to 
timely provide the data described in paragraph (d)(1).
    No comments were received regarding these paragraphs. However, 
paragraph (d)(2) has been revised to correct an erroneous reference to 
paragraph (f)(1)(a)-(c) to the appropriate citation to paragraphs 
(d)(1)(i)-(iv). These paragraphs are adopted as proposed, with the 
described revision.
Section 682.220(e)
    Section 682.220(e) has been revised to identify allowable 
flexibilities in the types of studies, phases, and time frames that are 
available to States in fulfilling their obligation to conduct 
evaluations, all in response to the concerns expressed in the comments 
about this requirement.
    Paragraph (e)(1) of Sec.  682.220 clarifies that under WIOA sec. 
116(e)(1) States, while required to use set-aside funds to evaluate 
activities under title I core programs, are permitted to conduct 
evaluations that jointly examine activities under title I and those 
under other core programs, so long as such evaluations are developed 
and designed in coordination with the relevant State agencies 
responsible for core programs under Sec.  682.220(b)(1). Examples of 
evaluations of activities under multiple core programs include studies 
of referral processes, systems integration, or infrastructure cost 
sharing among the core programs.
    Paragraph (e)(2) provides a new flexibility to permit States to 
conduct evaluations similar to those authorized for, or conducted by, 
the Departments of Labor and Education under the laws cited in Sec.  
682.220(b)(4), and cites as examples ``process and outcome studies, 
pilot and demonstration projects that have an evaluative component, 
analyses of programmatic data, impact and benefit-cost analyses, and 
use of rigorous designs to test the efficacy of various 
interventions.''
    Paragraph (e)(3) was added to clarify flexibilities for States to 
conduct evaluations over multiple program years, involving multiple 
phases ``such as a literature or evidence review, feasibility study, 
planning, research, coordination, design, data collection, and 
analysis, and report preparation, clearance, and dissemination.'' As 
noted above, the Department has added these flexibilities for States 
since, based on its own experiences in conducting evaluations, which 
have often entailed many such components and extended over multiple 
years.

[[Page 56195]]

Section 682.220(f)
    Section 682.220(f) describes allowable flexibilities for the States 
in funding evaluations in the use of funds from sources other than the 
State set-aside. Section 682.220(f)(1) permits States to use funds from 
any WIOA title I through IV core program to conduct evaluations, as 
determined through the coordinative processes associated with paragraph 
(b)(1). This paragraph was, for the sake of clarity, relocated from 
Sec.  682.220(a)(3) of the NPRM. Further, consistent with the decisions 
discussed above, the reference to ``other research'' was removed. The 
Department also revised the paragraph to clarify that States may use 
funds from any WIOA title I through IV core program (per WIOA sec. 
116(e)(1)); the NPRM had referred to only title II through IV core 
programs. This revision clarifies that, while States must conduct 
evaluations using State set-aside funds under WIOA secs. 129(b)(1)(A) 
and 134(a)(2)(B)(vi)), they may additionally use available funds from 
other core programs for such evaluations. This flexibility may be of 
particular interest to States planning evaluations that jointly study 
WIOA title I core program and other core program activities (a 
flexibility identified in Sec.  682.220(e)(1) above).
    Section 682.220(f)(2) permits States to use or combine funds, 
consistent with Federal and State law, regulation and guidance, from 
other public or private sources, to conduct evaluations relating to 
activities under the WIOA title I through IV core programs. Such 
projects may include those funded by the Department of Labor and other 
Federal agencies, among other sources. This section was initially 
located at Sec.  682.220(e) of the NPRM. In response to concerns 
expressed by commenters, the Department has revised this section 
slightly by adding language to clarify that these additional public or 
private funding sources can include Department of Labor or other 
Federal agencies' grants, cooperative agreements and contracts. The 
Department has also revised this section, consistent with the decisions 
discussed above, to remove the reference to ``research, and other 
demonstration projects.''
4. Subpart C--Rapid Response Activities
Introduction
    This subpart discusses the important role that rapid response plays 
in providing customer-focused services to both dislocated workers and 
employers, ensuring immediate access to affected workers to help them 
quickly re-enter the workforce. The regulations reflect the lessons 
learned from the innovations by, and best practices of, various rapid 
response programs around the country in planning for and meeting the 
challenges posed by events precipitating substantial increases in the 
number of unemployed individuals in States, regions, and local areas. 
The regulations provide a comprehensive framework for operating 
successful rapid response programs in a way that promotes innovation 
and maintains flexibility to enable States to manage successfully 
economic transitions.
    The Department is making a technical correction to Sec.  
682.300(a). Proposed Sec.  682.300(a) made reference to rapid response 
being discussed in Sec. Sec.  682.310 through 682.370. The reference to 
Sec.  682.310 is corrected to reflect Sec.  682.300. This technical 
correction makes it clear that the regulatory text in Sec.  682.300 
also is intended to be included in the description of rapid response.
    The remaining analysis that follows provides the Department's 
response to public comments received on the proposed part 682 
regulations. If a section is not addressed in the discussion below, it 
is because the public comments submitted in response to the NPRM did 
not substantively address that specific section and no changes have 
been made to the regulatory text. Further, the Department received a 
number of comments on this part that were outside the scope of the 
regulation and the Department offers no response. Lastly, the 
Department has made a number of non-substantive changes to correct 
grammatical and typographical errors to improve the readability and 
conform the document stylistically that are not discussed in the 
analysis below.
Section 682.300 What is rapid response, and what is its purpose?
    Section 682.300 describes rapid response, which promotes economic 
development and vitality and delivers critically important solutions to 
workers and businesses in transition.
    Comments: The Department received comments on other areas of part 
682, subpart C, relating directly to rapid response, (e.g., comments 
received on Sec.  682.330(i) regarding Trade Adjustment Assistance 
(TAA) and a comment regarding Worker Adjustment and Retraining 
Notification (WARN), both discussed later in this preamble). The nature 
of some of these comments led the Department to conclude that 
clarifying information is needed regarding the circumstances under 
which rapid response must be delivered as well as the term ``mass 
layoff.''
    Department Response: In order to provide this clarification, the 
Department made the following revisions to Sec.  682.300 and other 
sections of subpart C: (1) The Department made a correction to the 
regulatory text in several places by adding the word ``mass'' to the 
text in Sec. Sec.  682.330(j) and 682.350 to align the regulatory text 
with the statutory language in WIOA sec. 134(a)(2)(A)(i)(II), which 
refers to ``mass layoffs,'' whereas the proposed regulatory text only 
referred to ``layoffs''; (2) The Department has added new sections to 
the regulatory text to clarify the circumstances under which rapid 
response must be delivered (Sec.  682.302) and to reflect the 
definition of the term ``mass layoff'' for purposes of rapid response 
(Sec.  682.305); and (3) The text at Sec.  682.300(a)(1) has been 
revised to include a reference to new section, Sec.  682.302. As a 
result of the addition of Sec.  682.302, paragraphs (i) and (ii) of 
Sec.  682.300(a)(1) were deleted and incorporated into Sec.  682.302, 
since these items are more relevant to that section. The Department 
also notes that the text that was previously at Sec.  682.300(a)(1)(i) 
and incorporated into Sec.  682.302 at Sec.  682.302(a) has been 
revised. Where the previous text referred to ``announcement of a 
closure or a layoff,'' the new text refers to ``announcement or 
notification of a permanent closure, regardless of the number of 
workers affected.'' The Department has determined that these revisions 
more clearly relay its intent that Rapid Response services are required 
to be delivered in the case of a permanent closure and irrespective of 
whether information about the layoff is received via an announcement or 
other notification method. The revision also makes it clear that there 
is no numerical threshold for delivering rapid response in these 
instances. Rapid Response is required, regardless of the number of 
workers affected by the closure. Additional information regarding the 
circumstances under which rapid response must be delivered, are further 
explained in the preamble discussion in Sec.  682.302 below.
Section 682.302 Under what circumstances must rapid response services 
be delivered?
    This section explains the circumstances that trigger the delivery 
of rapid response.
    As previously noted in the preamble discussion on Sec.  682.300, 
the Department received comments that led the Department to add Sec.  
682.302 in order to clarify the circumstances under which rapid 
response must be delivered. Rapid Response must be provided when one or

[[Page 56196]]

more of the following circumstances occur:
    (a) Announcement or notification of a permanent closure:
    An announcement or notification of a permanent closure of a 
facility, store, enterprise, or plant, regardless of the number of 
workers affected;
    (b) Announcement or notification of a mass layoff as defined in 
Sec.  682.305 and discussed in that section of this preamble;
    (c) A mass job dislocation resulting from a disaster:
    Any natural or other disaster event, as defined by state or local 
emergency management policies, that results in job loss for a number of 
workers sufficient to meet a state's definition for mass layoff (see 
the discussion under number 4 below), or causing 50 or more workers to 
become dislocated. The Department encourages States to consider 
appropriate roles and responsibilities for rapid response activities 
following a natural or other disaster event and establish these roles 
and responsibilities as part of any emergency management plans that are 
developed;
    (d) The filing of a TAA petition:
    This is required in accordance with the requirement in sec. 
221(a)(2)(A) of the Trade Act, which requires that the Governor ensure 
that rapid response services are delivered to all workers who are 
covered by the petition for TAA. Additionally, please see the 
discussion below in response to comments on Sec.  682.330(i).
    Although the regulatory text now reflects the circumstances that 
require delivery of Rapid Response and the Final Rule preamble 
clarifies the circumstances under which rapid response must be 
provided, the Department is not suggesting that these are the only 
instances for which States and local workforce areas may provide rapid 
response. Instead, the Department strongly encourages States or their 
designated entities to deliver rapid response services to as many 
workers and companies as possible and to adopt policies that maximize 
the opportunities for rapid response services to be provided in a 
manner that best supports the businesses and workers in their 
communities.
Section 682.305 How does the Department define the term ``mass layoff'' 
for the purposes of rapid response?
    This section explains the definition of the term ``mass layoff'' 
for the purposes of rapid response.
    As previously noted in the preamble discussion on Sec.  682.300, 
the Department received comments that led the Department to define the 
term ``mass layoff'' for purposes of Rapid Response.
    A mass layoff will have occurred for the purposes of rapid response 
when at least one of the following conditions have been met:
     A mass layoff, as defined by the State; however, under no 
circumstances may a State's definition of mass layoff exceed a minimum 
threshold of 50 workers. For example, in its definition, the State 
cannot set the minimum threshold of laid off workers at 75, but it can 
be set to as few as 1. The definition may be based upon factors such as 
the size of the company that is impacted, the percentage of workers 
impacted by a layoff, the income level of the employees, and other 
relevant factors;
     Where a State has not defined a minimum threshold for mass 
layoff, any layoff affecting 50 or more workers; or,
     Upon receipt of a WARN Act notice (see discussion in Sec.  
682.320 below in response to a comment on this subpart), regardless of 
the number of workers affected by the layoff announced.
    Additionally, the Department notes that the definition of ``mass 
layoff'' discussed in this subpart and included in the new regulatory 
text at Sec.  682.305, differs from the definition used in part 687, 
National Dislocated Worker Grants, which also refers to the term ``mass 
layoff.'' For Rapid Response, the Department allows States more 
flexibility in defining mass layoffs. Rapid Response services encompass 
strategies and activities that States can provide to assist workers 
affected by layoffs and closures as described at Sec.  682.300 
(including information about available employment and training 
programs), and the Department encourages States to do so, regardless of 
the number of workers affected. In contrast, the DWG program is aimed 
at significant events that cannot reasonably be expected to be 
accommodated within the ongoing operations of the formula-funded 
dislocated worker program. Accordingly, for the purposes of the DWG 
program, the Department separately defines ``mass layoff'' as those 
affecting 50 or more workers from one employer in the same area. 
Additional details can be found in part 687.
Section 682.310 Who is responsible for carrying out rapid response 
activities?
    Section 682.310 clarifies that the State or an entity designated by 
the State is responsible for carrying out rapid response activities.
    The Department would like to clarify the intent in Sec.  
682.310(a). The regulatory text indicates that rapid response must be 
carried out by the State or by another entity designated by the State. 
The State or entity designated by the State must coordinate, 
communicate, and work with Local WDBs, CEOs, and other stakeholders as 
appropriate. The Department included ``other stakeholders'' because it 
has determined that the intent of the law is to ensure coordination 
with all relevant parties so rapid response services can be delivered 
effectively. Paragraph (b) of Sec.  682.310 reinforces the requirement 
that regardless of whether a State designates a non-State entity or 
entities to carry out rapid response, the State must establish and 
maintain a rapid response unit to oversee this program.
Section 682.320 What is layoff aversion, and what are appropriate 
layoff aversion strategies and activities?
    This section describes a comprehensive approach to layoff aversion, 
designed to prevent or minimize the duration of unemployment.
    Comments: The Department received a few comments requesting some 
additional changes be made to the text of the NPRM.
    One commenter requested an addition to Sec.  682.320(b)(2) to 
insert language that States should work with both business and labor 
organizations in those instances where a collective bargaining 
agreement is in place and consult with unions in cases where no such 
agreement exists. The commenter also requested that language on 
partnering or contracting with labor organizations be added to Sec.  
682.320(b)(7). Lastly, the commenter recommended an additional 
provision that included language about working with labor 
organizations.
    Department Response: Paragraph (b)(2) includes the following as an 
allowable layoff aversion activity: ``ongoing engagement, partnership, 
and relationship-building activities with businesses in the community, 
in order to create an environment for successful layoff aversion 
efforts and to enable the provision of assistance to dislocated workers 
in obtaining reemployment as soon as possible.'' Developing strong 
relationships with businesses is critical in layoff aversion, and the 
Department has concluded the proposed regulatory text best supports the 
intent of this paragraph by maintaining its sole focus on the business 
partnership, since businesses are often the most critical players in 
helping avert layoffs. However, developing relationships with unions is 
important as well, and language to this effect can be found at Sec.  
682.330(h) which requires that States

[[Page 56197]]

develop partnerships with a variety of organizations, including unions, 
as appropriate, in order to exchange information among these partners 
so that rapid response is provided as early as possible. Information 
relating to the customization of layoff aversion activities is 
specifically highlighted in the regulation requiring these 
partnerships. No changes were made to the regulatory text in response 
to these comments.
    Comments: One commenter suggested that allowable layoff aversion 
activities be organized into ``core'' and ``complementary'' activities. 
Core activities would be those that the commenter considers to be 
``true business disruption turn-around services,'' and complementary 
would be those ``that are important, but would not avert closure . . . 
in an emergency business disruption.''
    Department Response: The Department concluded that making 
distinctions between types of layoff aversion activities does not 
meaningfully impact the ability of States or local workforce areas to 
conduct layoff aversion activities, and operators of rapid response 
programs are best suited to determine how they organize or manage their 
layoff aversion activities in accordance with the requirements. As a 
result, the Department has determined that the proposed regulatory text 
permits State and local rapid response operators the flexibility to 
meet these requirements based on the specific needs of the companies 
and workers being served and the particular characteristics of each 
event. The categories suggested by the commenter imply that some 
activities listed are more important than others. The Department has 
concluded that any allowable activities that are designed to prevent or 
minimize the duration of unemployment are equally important and 
valuable, and encourages State and local rapid response teams to 
develop strategies that maximize the ability to deploy the appropriate 
layoff aversion solutions for the challenges they face. No changes were 
made to the regulatory text in response to this comment.
    Comments: A few commenters requested that the Department add 
language to Sec.  682.320 that requires States to describe their layoff 
aversion strategies in their Combined State Plan or Unified State Plan.
    Department Response: The Department does not agree that this 
language should be added to the regulatory text. Instead, the joint 
planning guidelines issued by the Secretaries of Labor and Education in 
March 2016 in TEGL No. 14-15, provides the overall content requirements 
for the WIOA Unified or Combined State Plans. The guidance is in TEGL 
No. 14-15, released March 2016, entitled ``Workforce Innovation and 
Opportunity Act (WIOA) Requirements for Unified and Combined State 
Plans'' and may be found at http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm. No changes were made to the regulatory 
text in response to these comments.
    Comments: One commenter requested that language regarding the WARN 
Act be included in Sec.  682.320 or Sec.  682.330 since WARN 
notification is an ``automatic trigger'' to conduct rapid response.
    Department Response: The Department agrees that the receipt of a 
WARN notice is a trigger for rapid response as indicated previously and 
is clarifying that the issuance of a WARN notification, regardless of 
the number of workers affected by the layoff announced, generates the 
requirement to deliver rapid response. WARN Act notice is required 
generally for plant closures and mass layoffs as defined in the WARN 
Act or under State laws expanding the scope of notice requirements, 
and, thus, a WARN layoff meets the Department's general requirements 
for mass layoffs and this is reflected in Sec.  682.305. Because WARN 
notification is covered in this section, no change is being made to the 
text at Sec.  682.320 or Sec.  682.330 to include WARN notice language.
    In Sec.  682.320(b)(4), incumbent worker training is identified as 
one of the allowable layoff aversion activities. Although no comments 
were received with regard to this text, the Department has determined 
that a correction to the regulatory text at Sec.  682.320(b)(4) to 
insert the word ``funding'' is needed in order to align the regulatory 
text with another section of the regulations (Sec.  680.800(b)) and to 
clarify that the Department intended rapid response funds to be used to 
pay for this training to help ensure workers have the skills needed to 
conduct the work of the employer and that businesses are able to build 
a skilled workforce commensurate to their needs. An additional 
correction is made to the regulatory text to make it clear that any 
incumbent worker training program conducted with rapid response funding 
must be tied to a broader layoff aversion strategy or must be intended 
for the purpose of preventing workers from losing their jobs. Incumbent 
worker training is a critical layoff aversion approach and our intent 
is to allow rapid response funds to pay for these activities in order 
to help ensure that rapid response meets its primary goal, which is to 
prevent or minimize the duration of unemployment.
    In order to demonstrate that the funds are being used as part of a 
layoff aversion strategy or activity, States must develop policies and 
procedures with respect to the use of rapid response funds for 
incumbent worker training, including the circumstances under which 
using rapid response funds for incumbent worker training would be 
applicable. As with all incumbent worker training funds, however, the 
use of rapid response resources to provide incumbent worker training as 
part of layoff aversion must be above and beyond the normal training 
offered by businesses to their employees. Rapid response resources must 
not supplant private funds in these situations.
Section 682.330 What rapid response activities are required?
    This section describes the required rapid response activities.
    Comments: One commenter requested that the introductory sentence in 
the regulatory text at Sec.  682.330 be changed from ``Rapid response 
activities must include'' to ``Rapid response services that must be 
made available include.'' The commenter explained that the reason for 
this request is due to the fact that the State cannot be compelled to 
deliver services if businesses refuse them.
    Department Response: The Department understands that businesses 
might not always be open to participating in the rapid response 
process; however, the proposed regulatory text reflects a requirement 
that was also in effect under WIA and shows the significant 
responsibility that States have to ensure that rapid response staff 
establish relationships and develop the skills needed to be able to 
work with businesses that will enable successful delivery of rapid 
response services. No changes in regulatory text were made in response 
to these comments. However, the Department recognizes that businesses 
are under no obligation to allow or help ensure the smooth delivery of 
rapid response services, and this can present a significant challenge 
for rapid response staff. Therefore, the Department determined that 
States which make all reasonable efforts to deliver services to 
affected workers, will be determined to have met the requirements of 
this section. However, the Department considers reasonable efforts to 
include more than just cursory attempts. For example, if a business 
refuses to allow services to be delivered on site or during business 
hours, rapid response teams

[[Page 56198]]

should make every effort to ensure worker access to rapid response 
services at off-site locations and during convenient hours. As 
previously noted, the requirement that Rapid Response services include 
services to businesses existed under WIA and during the administration 
of that law the Department never found a State who had made all 
reasonable efforts to deliver services to be out of compliance.
    Comments: One commenter remarked that the language at Sec.  
682.330(i) gives the impression that rapid response must be provided in 
parallel to Trade Adjustment Assistance (TAA), and this is often not 
the sequence. The commenter stated that these services are usually 
decoupled and that rapid response may occur prior to TAA application.
    Department Response: The provision at Sec.  682.330(i) is 
consistent with the requirement in the Trade Act and is included in 
this regulation to help ensure that this requirement is met. The 
regulatory text requires that, as appropriate, rapid response services 
be provided to trade-impacted workers for whom petitions have been 
filed. Rapid response operators, of course, may assist in coordinating 
with State TAA staff, local one-stop staff, employers, workers, or 
unions in filing a petition for TAA on behalf of a worker group 
negatively impacted by foreign trade. Thus, a delay between petition 
filing and petition certification will occur, and as petitions may be 
filed up to 1 year after a worker separation, there may be delays 
between a worker separation, a petition filing, and the petition 
certification. The regulatory text is not meant to imply that rapid 
response services may only be provided once the Trade petition has been 
filed. Like other workers impacted by layoffs, rapid response services 
may be provided upon notification of layoffs consistent with State or 
local procedure. A worker may receive rapid response services prior to 
the TAA petition filing and re-delivery of rapid response services may 
or may not be appropriate, depending on the individual circumstances or 
timing of the events. Additionally, the content of information provided 
to the worker group through rapid response may change due to the 
circumstances or timing of the event, or additional information, such 
as a TAA Orientation, may occur after petition certification. No 
changes were made to the regulatory text in response to this comment.
    Comments: The Department received several comments on the provision 
at Sec.  682.330(g)(3) regarding the tracking of information related to 
rapid response activities. The commenters expressed that it is 
difficult to track rapid response activities and funds separately.
    One commenter opined that this level of detail should not be 
included as a requirement.
    Department Response: The Department expects that its programs must 
be evidence-based, whenever possible, and rapid response is no 
different. Capturing and tracking performance and outcome data and 
information is critical for continuous improvement, for identifying 
promising practices, and for reporting, and this tracking is required 
to be done for rapid response activities, as appropriate. No changes 
were made to the regulatory text in response to this comment.
    Comments: Another commenter gave an example of the difficulty 
involved in tracking rapid response activities. The example provided 
was visiting with the employer to present affected workers with 
services. The commenter noted that unless there is a way to track the 
employees' participation, it would be difficult to determine the 
outcomes of that activity.
    Department Response: The Department does not specify what 
programmatic data and information States must capture and track; States 
are best suited to determine what they capture and track based upon the 
specific circumstances in each State. But, States are required to 
report to ETA some programmatic information (in accordance with Sec.  
682.360, further explained in the preamble) and report expenditure 
information, through the ETA 9130 form. Both of these requirements 
remain consistent from requirements under WIA. However, given the 
nature of some rapid response activities, the Department agrees that 
tracking outcome and performance data for all rapid response activities 
might prove difficult in some instances and the Department will 
provide, as necessary, guidance or technical assistance to support 
States with this requirement. No changes were made to the regulatory 
text in response to this comment.
    Regarding the requirement at Sec.  682.330(j) to provide additional 
assistance to local areas, although no comments were received about 
this text, the Department wishes to clarify the connection between WIOA 
and the regulatory text. WIOA refers to events ``that precipitate 
substantial increases in the number of unemployed individuals'' as the 
trigger for potential additional assistance. In the regulatory text, 
the Department has interpreted this to mean that additional assistance 
may be provided ``when such events exceed the capacity of the local 
area to respond with existing resources'' to address situations such as 
significant increases in unemployment that have resulted in, or have 
the potential to cause, a significant impact on the local area's 
resources. Therefore, additional assistance also may be used to support 
responses to major dislocation events, to provide layoff aversion 
efforts, and other allowable activities when these activities exceed 
the capacity of a local area's formula resources.
    Finally, the Department is making several corrections to the 
regulatory text that includes an edit to Sec.  682.330(e), to delete 
the reference to WIOA secs. 101(38) and 134(a)(2)(A). Because the 
paragraph is specifically referencing national dislocated worker 
grants, it now cites only to the part governing those grants, to be 
more clear. Also, an edit to Sec.  682.330(h) was made by inserting the 
word ``and'' between Sec.  682.330(h)(1) and (2) to reflect that both 
are expected benefits of developing and maintaining partnerships 
described at Sec.  682.330(h).
Section 682.360 What rapid response, layoff aversion, or other 
information will States be required to report to the Employment and 
Training Administration?
    Section 682.360 requires the reporting of rapid response 
information on the WIOA individual record.
    Comments: The Department received several comments on the issue of 
reporting. One commenter requested that States and locals be given the 
opportunity to respond to proposed data collection requirements before 
they are enacted.
    Department Response: The Department solicited feedback on proposed 
data collection requirements through the ICR process governed by the 
Paperwork Reduction Act (see 80 FR 43474 (July 22, 2015) and 80 FR 
52798 (Sept. 1, 2015)) to ensure that those impacted by collection 
requirements would have an opportunity to comment on them. Should 
additional performance data reporting elements be required for rapid 
response, the Department will work with States and local areas to 
ensure that reporting burdens are minimized while still meeting program 
reporting goals. Any additional reporting requirements would be subject 
to public comment through the ICR process. No changes were made to the 
regulatory text in response to this comment.
    Comments: Another commenter requested that the services required to 
be captured match the WIASRD.
    Department Response: Much of what was collected and reported under 
WIA

[[Page 56199]]

will continue under WIOA. States will be required to collect and report 
in accordance with sec. 116 of WIOA and 20 CFR part 677 (see Joint WIOA 
Final Rule). In order to provide clarity on the performance data 
reporting expectations for rapid response, the Department has revised 
the text at Sec.  682.360. The former text required States to report 
the receipt of rapid response services of individuals enrolled as 
dislocated workers on the WIOA individual record,'' whereas the text in 
the Final Rule clarifies that States are required to report the receipt 
of rapid response services for those individuals who have an existing 
WIOA individual record or for whom a WIOA individual record is created 
under programs that report through this mechanism. The new text also 
clarifies the population to be reported by revising the text from 
``individuals enrolled as dislocated workers on the WIOA individual 
record'' to ``individuals served under programs reporting through the 
WIOA individual record.'' These changes account for and align with the 
performance definitions for participant and reportable individual 
located at 20 CFR 677.150(a) and (b), provide consistency with the 
language on the reports, and also place a parameter to more clearly 
align with those programs that are required to fulfill reporting 
requirements under 20 CFR part 677 (see Joint WIOA Final Rule). The 
Department notes that Sec.  682.360 does not independently require the 
creation of a WIOA individual record for individuals on account of 
their receipt of rapid response, layoff aversion, or other services 
under subpart C of this part; rather, Sec.  682.360 requires that where 
a WIOA individual record exists for an individual served under programs 
reporting through the WIOA individual record, States must also report 
information regarding the receipt of services under subpart C. The 
Department has also added paragraph (b) to Sec.  682.360, which relays 
that States are required to comply with these reporting requirements, 
as explained in the Department's guidance. The DOL Performance ICR 
contains further specifications regarding the collection and reporting 
of receipt of services under subpart C of this part.
    Comments: A few commenters noted that there are difficulties 
involved with reporting rapid response activities through the WIOA 
individual record because rapid response services are not necessarily 
individualized. The commenters stated that the rapid response services 
are primarily employer and worksite based and that this information is 
collected retroactively at best and not likely to produce an accurate 
report.
    Department Response: While the Department understands the 
challenges of using the individual record to report data on rapid 
response activities, which are often group-based rather than 
individualized, there are various methods by which rapid response 
operators may identify and report on individuals who receive rapid 
response services. The Department will provide States with technical 
assistance on this topic as needed. Additionally, the Department 
recognizes the challenges associated with retroactive collection of 
information from employers or worksites on rapid response activities 
and services; the importance of valid and reliable collection is an 
area that was established as a priority under WIA and continues to be 
under WIOA. The Department will continue to work across programs to 
identify best practices and effective means of collecting data and 
ensuring valid, accurate, and reliable reporting. No changes were made 
to the regulatory text in response to these comments.
Section 682.370 What are the statewide activities for which rapid 
response funds remaining unobligated after the first program year for 
which the funds were allotted may be used by the State?
    Section 682.370 describes the statewide activities for which rapid 
response funds that are unobligated after the first program year for 
which the funds were allotted may be used.
    Comments: The Department received a few questions from a commenter 
regarding this section. The commenter asked whether the term 
``unspent'' (used in Sec.  682.370 of the NPRM) means unobligated or 
unexpended.
    Department Response: The Department agrees that using the term 
unspent was confusing and, as a result, has changed the regulatory text 
to use the term ``unobligated'' to reflect the provision in WIOA at 
sec. 134(a)(2)(A)(ii) in order to avoid confusion. The regulatory text 
was further changed to more closely align with the statutory text, 
providing a clearer explanation that the Governor may use these 
unobligated funds to carry out statewide activities as described in 
both Sec. Sec.  682.200 and 682.210. For consistency with the WIOA 
provision, the section header has also been changed and now reads 
``What are the statewide activities for which rapid response funds 
remaining unobligated after the first program year for which the funds 
were allotted may be used by the State?''
    Comments: The commenter also requested to know whether the 
provision at Sec.  682.370 required governors to use unobligated rapid 
response funds for statewide activities, and whether statewide 
activities are only for ``15 percent funds.''
    Department Response: To address the first question, the use of 
unobligated funds by the Governor for statewide activities is allowed, 
but is not a requirement. The Governor is not required to use the 
unobligated rapid response funds to carry out statewide activities, but 
has the option of doing so. In response to the commenter's second 
comment, the Final Rule text clarifies that the statewide activities 
for which the funds may be used include the required statewide 
activities described at Sec.  682.200 and the allowable statewide 
activities described at Sec.  682.210, which are often referred to 
informally as the 15 percent funds.

G. Part 683--Administrative Provisions Under Title I of the Workforce 
Innovation and Opportunity Act

    This part establishes the administrative provisions for the 
programs authorized under title I of WIOA. Some of the provisions are 
also applicable to grants provided under the Wagner-Peyser Act, as 
indicated in specific sections of this part. The remaining Wagner-
Peyser Act administrative rules are located in 20 CFR part 658. The 
Department notes that administrative provisions for Job Corps (subtitle 
C of title I of WIOA) contracts are addressed separately in 20 CFR part 
686. The analysis that follows provides the Department's response to 
public comments received on the proposed regulations for Administrative 
Provisions Under Title I of WIOA. If a section is not addressed in the 
discussion below, it is because the public comments submitted in 
response to the NPRM did not substantively address that specific 
section and no changes have been made to the regulatory text. Further, 
the Department received a number of comments on this part that were 
outside the scope of the regulation and the Department offers no 
response. The Department has made a number of non-substantive changes 
to correct grammatical and typographical errors to improve the 
readability and conform the document stylistically that are not 
discussed in the analysis below. Lastly, the terms ``performance 
measure'' and ``performance accountability measure'' have been replaced 
throughout with ``performance indicator'' and references to the

[[Page 56200]]

implementing regulations for WIOA sec. 188 at 29 CFR part 37 have been 
updated to refer to 29 CFR part 38 per the Department's recent 
nondiscrimination rulemaking.
1. Subpart A--Funding and Closeout
Section 683.100 When do Workforce Innovation and Opportunity Act grant 
funds become available for obligation?
    Section 683.100 describes the statutory requirements for the 
Department's release of formula funds under title I of WIOA and the 
Wagner-Peyser Act.
    Comments: A commenter requested clarification on whether there is 
consideration for agencies that are not one-stop operators to operate 
after June 30, 2016, because their agency received ``WIA'' (Workforce 
Investment Act) funds from the State and were informed that they can no 
longer perform direct services.
    Department Response: It is unclear from the comment to what 
agencies and what services the commenter is referring. Because the 
Department is unable to determine the meaning of the comment, the 
Department has adopted the provision as proposed. However, for 
additional information that may be useful, the commenter should see 
WIOA sec. 107(d)(10), which provides the local Workforce Development 
Boards' (WDBs) responsibilities in selecting operators and providers. 
WIOA sec. 107(d)(10) is further discussed in 20 CFR part 679. 
Additionally, WIOA sec. 122 details requirements for identifying 
eligible training providers. This section is further addressed in 20 
CFR part 680. Finally, the Department provided guidance and 
instructions on the transition of participants, funds, performance 
reports, grants, and subrecipient contracts under title I of the 
Workforce Investment Act of 1998 and under the Wagner-Peyser Act to 
WIOA. This guidance can be found at TEGL No. 38-14 (``Operational 
Guidance to Support the Orderly Transition of Workforce Investment Act 
Participants, Funds, and Subrecipient Contracts to the Workforce 
Innovation and Opportunity Act'') issued on June 8, 2015; 
www.doleta.gov/WIOA/.
    The Department also received comments concerning the required 
obligation rate of WIOA funds and the reallotment process. The 
Department addresses these comments in Sec.  683.135.
    No changes were made to regulatory text in response to these 
comments.
Section 683.105 What award document authorizes the expenditure of funds 
under title I of the Workforce Innovation and Opportunity Act and the 
Wagner-Peyser Act?
    This section recognizes the use of the three funding instruments 
that conform with the Uniform Guidance: Grant agreements, cooperative 
agreements, and contracts.
    Comments: A few commenters requested the Department provide 
clarification to paragraph (e)(3) of this part regarding the length of 
time allowed for each award for research, studies, or multi-State 
projects under WIOA sec. 169.
    Department Response: The Department added additional language in 
(e)(3) to clarify the timeline and application of competitive 
reevaluation. Awards made under WIOA sec. 169 that do not fall under 
the exceptions at paragraph (e)(3)(ii) or (iii) will require a 
competitive reevaluation after a 3 year period. This practice is 
generally consistent with the practices at other major Federal 
grantmaking agencies. Through this competitive reevaluation, the 
Department will ensure that the awardee would be competitive should the 
award be recompeted. The actual details of the competitive reevaluation 
process may vary by award. However, competitive reevaluations generally 
will consist of an examination of whether the awardee is meeting its 
performance goals and financial reporting obligations. The Department 
will not require competitive reevaluation for the types of awards 
described in paragraphs (e)(3)(ii) and (iii) because pursuant to the 
provisions of WIOA sec. 169(b)(6)(A), awards that meet these 
requirements do not need to be competitively evaluated when initially 
awarded. However, the regulation includes criteria that must be met for 
these types of awards to avoid the competitive reevaluation 
requirement. The Department notes that there will be a transition 
period while the Department puts in place the processes and procedures 
for competitive reevaluation described in this Final Rule.
    Additionally, the Department clarified where the language in Sec.  
683.105 applies to grants, contracts, and cooperative agreements.
    Comments: A commenter requested the Department provide 
clarification on whether local areas can utilize only funding to serve 
customers in their jurisdictions or if the State can set policy to 
allow a broader use of funds.
    Department Response: WIOA does not prohibit or require local 
residency for an individual to receive services from a local area. 
Instead, whether a local area can serve individuals living outside 
their local area boundaries depends on State law and policy. Because 
the comment does not request a change to the language, no changes were 
made in the regulatory text.
    Aside from the changes discussed above, the Final Rule adopts the 
remainder of the section as proposed with a technical edit to Sec.  
683.105(e)(4) to correct language that was inadvertently retained from 
the WIA regulations and make this regulation more reflective of the 
statutory language at sec. 169(b)(6)(D) of WIOA, and additional 
technical edits for clarity to Sec.  683.105(f).
Section 683.110 What is the period of performance of Workforce 
Innovation and Opportunity Act title I and Wagner-Peyser Act funds?
    This section describes the period of performance for different 
types of WIOA title I and Wagner-Peyser Act grant awards.
    Comments: The Department received several comments requesting 
clarification concerning Sec.  683.110. One commenter requested 
clarification regarding the period of time in which funds are available 
to carry out a Pay-for-Performance contract strategy.
    Department Response: As provided in WIOA sec. 189(g)(2)(D) and 
discussed in Sec.  683.530, funds used for a WIOA Pay-for-Performance 
contract strategy are available until expended. Because WIOA sec. 
189(g)(2)(D) and Sec.  683.530 provide the period of availability for 
funds used for WIOA Pay-for-Performance contract strategies, no changes 
were made in the regulatory text. The Department expects to provide 
future guidance on carrying out WIOA Pay-for-Performance contract 
strategies.
    Comments: Several commenters discussed the applicability of Sec.  
683.110 to the National Farmworker Jobs Program (NFJP) grant 
recipients. Specifically the commenters recommended that the Department 
be consistent across programs when considering modifications to allow 
carryover of funding and not add restrictions for National Farmworker 
Jobs Program (NFJP) grant recipients. One commenter recommended that 
NFJP grant recipients have the same performance standard stringency as 
others and be offered in Sec.  683.110(e) the carryover provisions that 
approximate available expenditure allowances by States in Sec.  
683.110(b), and that NFJP have the same flexibility as the Governor to 
adjust on-the-job training

[[Page 56201]]

(OJT) employer reimbursement levels from 50 to 75 percent.
    Department Response: The Department addresses the issues concerning 
the NFJP program in the preamble discussion in part 685.
    Comments: The Department also received comments concerning the 
applicability of Sec.  683.110 for title II programs and State Adult 
Education and Family Literacy Act (AEFLA) agencies.
    Department Response: The provisions found in Sec.  683.110 are 
applicable to funds authorized under title I of WIOA and the Wagner-
Peyser Act. The Department refers the commenters to the Department of 
Education's regulations for Programs and Activities Authorized by the 
Adult Education and Family Literacy Act at 34 CFR parts 462 and 463.for 
additional information regarding AAFLA and title II programs. Because 
Sec.  683.110 only applies to WIOA title I and Wagner-Peyser Act funds, 
this DOL WIOA Final Rule adopts the provision as proposed.
    The Department received no comments on the remaining provisions of 
Sec.  683.110, and the Final Rule adopts the section as proposed with 
technical corrections. The Department has corrected the reference in 
Sec.  683.110(c)(1)(ii) so that it refers to the provision governing 
the availability of funds used for WIOA Pay-for-Performance contract 
strategies, and it clarifies that this provision is referring 
specifically to WIOA Pay-for-Performance contract strategies, as 
defined in sec. 3 of WIOA and in subpart E of this part. The Department 
notes that the term ``used'' in Sec.  683.110(c)(1)(ii) refers to the 
reservation and use of funds mentioned in WIOA secs. 129(c)(1)(D) and 
134(d)(1)(A)(ii). Additionally, the Department has corrected Sec.  
683.110(f) so that it refers to award documents instead of terms and 
conditions of award.
Section 683.120 How are Workforce Innovation and Opportunity Act title 
I formula funds allocated to local areas?
    This section describes the timeframe and formula factors a Governor 
must employ when allocating fund to local areas under secs.128 and 133. 
It also specifies the steps a Governor must take when issuing 
allocations, including consulting with Local WDBs and elected official 
prior to issuing the allocation.
    Comments: The Department received a comment in support of this 
section. The Department also received several comments concerning the 
applicability of Sec.  683.120 to title II programs and State AEFLA 
agencies.
    Department Response: The provisions found in Sec.  683.120 are 
applicable to funds authorized under title I of WIOA and the Wagner-
Peyser Act. The Department refers the commenters to 34 CFR parts 462 
and 463 for additional information regarding AEFLA and title II 
programs. Because Sec.  683.120 does not apply to title II and AEFLA 
agencies, the Final Rule adopts the provision as proposed, with a 
technical amendment to Sec.  683.120(a) to correct list format and an 
additional technical amendment to Sec.  683.120(b) clarifying the 
application of WIOA secs. 129(b) and 134(a).
Section 683.125 What minimum funding provisions apply to Workforce 
Innovation and Opportunity Act adult, dislocated worker, and youth 
allocations?
    This section addresses the minimum funding thresholds for States 
funded under title I, subtitle B of WIOA.
    Comments: The Department received several comments regarding Sec.  
683.125. A few comments raised concerns about the application of a 
fiscal year basis versus a program year basis for the minimum funding 
provisions. Another comment raised a concern on the application of the 
minimum funding thresholds in local areas that have been impacted by 
geographical boundary changes.
    Two commenters stated that Sec.  683.125(a) should take effect Oct. 
1, 2015, for fiscal year (FY) 2016. These commenters stated that the 
proposed regulations are silent on whether Sec.  683.125(a) refers to 
program year (PY) or FY, but that the Department through TEGL No. 29-14 
(``Workforce Innovation and Opportunity Act (WIOA) Adult, Dislocated 
Worker and Youth Activities Program Allotments for Program Year (PY) 
2015; Final PY 2015 Allotments for the Wagner-Peyser Act Employment 
Service (ES) Program Allotments; and Workforce Information Grants to 
States Allotments for PY 2015'') has specified that this section refers 
to PY 2016.
    Department Response: The Department's fiscal year monies are 
distributed to grant recipients on a program year basis, as described 
in Sec. Sec.  683.100 and 683.125. The youth and adult minimum funding 
provisions existed under WIA. The minimum funding provisions under the 
WIOA statute go into effect when the FY 2016 funds become available on 
July 1, 2016, consistent with TEGL No. 29-14 (see http://wdr.doleta.gov/directives/All_WIOA_Related_Advisories.cfm). However, 
the Department agrees that the language proposed for Sec.  683.125 was 
confusing and has made changes to clarify the relationship between the 
fiscal year appropriations and the program year availability in 
relation to the minimum funding provisions.
    Comments: A commenter also recommended that local areas that change 
boundaries should still be eligible for the minimum percentage 
provisions for the adult, dislocated worker, and youth programs.
    Department Response: The Department agrees that this was a gap in 
the language of the proposed regulation and has added Sec.  683.125(c) 
to address this issue. States may use WIOA minimum funding procedures 
even where the geographical boundaries of some or all local areas are 
different from the previous allocation. For example, this can be done 
for the PY 2016 WIOA allotment by (1) taking the amount allocated to 
WIOA local areas; (2) calculating the amount each local area would have 
received using the PY 2015 and PY 2015 WIA allocations (WIA proxy 
amounts); and (3) calculating 90 percent of the average WIA proxy 
amounts for each local area. Under either the permitted WIA hold 
harmless or the WIOA minimum funding (hold harmless) provision, the 
amount needed to provide the increased allocation(s) to the affected 
local areas is to be obtained by ratably reducing the allocations to 
the other local areas.
Section 683.130 Does a Local Workforce Development Board have the 
authority to transfer funds between the adult employment and training 
activities allocation and the dislocated worker employment and training 
activities allocation?
    This section provides flexibility to local WDBs to provide services 
in the areas of greatest need by allowing fund transfers of up to 100 
percent of a program year allocation between the local adult and the 
local dislocated worker allocations.
    Comments: The Department received several comments regarding Sec.  
683.130. Some commenters were concerned with the Governor's approval of 
the transfer request and whether the Governor would complete the 
request timely or would unreasonably deny a request.
    Department Response: The Department agrees that additional language 
ensuring that requests are timely and reasonably evaluated would be 
beneficial. Consequently, the Department has adopted new regulatory 
text for Sec.  683.130 to address the comments regarding the grounds or 
criteria a Governor must consider when approving or denying a request 
for transfer. The modified text requires the Governor to establish 
written policy that

[[Page 56202]]

provides the criteria the Governor will utilize for approving a request 
to transfer adult or dislocated worker employment and training activity 
funds.
    Comments: Another commenter expressed concern that the flexibility 
in Sec.  683.130 could lead to local areas transferring 100 percent of 
funding away from title I adult programs and could result in drastic 
reduction in services to those who need them most. This commenter 
recommended a waiver requirement as a prerequisite to gaining funding 
transfer flexibility between adult and dislocated worker programs.
    Department Response: The Department considered the comments and 
determined that a transfer of 100 percent of funds out of one program 
to another may drastically reduce services to that program. This 
recommendation is inconsistent with the statutory language for two 
reasons. First, sec. 133(b)(4) of WIOA explicitly states that 100 
percent of the allocated adult and dislocated funds can be transferred. 
Second, WIOA states that the Governor is responsible for approving 
transfers between the adult and dislocated worker funds, which makes an 
additional waiver requirement inappropriate. With the exception of the 
previous paragraph, the regulatory text is unchanged.
    Comments: Other commenters expressed concern regarding the 
performance of local areas and sought clarification whether performance 
indicator targets would be rescinded if 100 percent of funds were 
transferred from one program to the other.
    Department Response: As addressed in 20 CFR part 677 Performance 
Accountability (see Joint WIOA Final Rule), the negotiated levels of 
performance for the primary indicators remain in effect and a local 
area must consider how it will meet adjusted levels of performance for 
the primary indicators before requesting such transfer. If the local 
area transfers 100 percent of a certain type of funding, it would still 
be responsible for meeting the adjusted levels of performance for any 
participants that it is required to serve. The Department also 
reiterates that when funds are transferred from one program to another, 
the transferred funds adopt the identity of the new fund source and are 
bound by all of the requirements of that source. The concerns of this 
commenter are addressed in part 680. No change was made in the 
regulatory text for part 683 in response to these comments.
Section 683.135 What reallotment procedures does the Secretary use?
    This section implements secs. 127(c) and 132(c) of WIOA, and 
explains the Department's process for recapture and reallotment of 
formula funds awarded to the States under title I.
    Comments: The Department received several comments requesting 
general clarification regarding the Department's procedure for 
recapturing and realloting WIOA funds. Additionally, the Department 
also received comments asking whether rapid response funds are 
considered obligated and whether the amounts allocated to the local 
areas must be reported as obligated on the ETA 9130 form.
    Department Response: Upon reviewing the proposed language, the 
Department concluded that the proposed language was ambiguous because 
it (1) implied that certain interagency transfers and amounts allocated 
by the States to the local areas under secs. 128(b) and 133(b) of WIOA 
were not obligations under 2 CFR 200.71; and (2) inaccurately stated 
that certain obligations needed to be reported on the DOL financial 
form. Consequently, the Department has revised the language at Sec.  
683.135(c).
    The Department has simplified the language at Sec.  683.135(c) so 
that it simply states that the ``term `obligation' is defined at 2 CFR 
200.71.'' This change was made because comments revealed that the 
specific inclusion of the items in paragraphs (c)(1) and (2) of the 
NPRM led readers to question why other obligations were not included in 
this list. This change is meant to clarify that everything that 
qualifies as an obligation under 2 CFR 200.71, including rapid response 
obligations under sec. 133(a)(2) of WIOA and the transfers and 
allocations referenced in paragraphs (c)(1) and (2) of the proposed 
regulation, should be counted for the purposes of the reallotment 
calculation in Sec.  683.135(a).
    In addition to simplifying Sec.  683.135(c), the Department added 
Sec.  683.135(d), which states that obligations must be reported on 
Department financial forms unless otherwise noted in guidance. 
Evaluation of the proposed language done in response to questions about 
whether amounts allocated to local areas must be included on the ETA 
9130 form revealed that not all obligations for the purposes of 
reallotment calculation in Sec.  683.135(a) need to be reported on the 
9130 form. The Department has clarified the regulation so that it says 
all obligations must be reported on Department financial forms unless 
subsequent guidance from the Department includes instructions to the 
contrary.
Section 683.140 What reallocation procedures must the Governors use?
    This section describes procedures for reallocating youth, adult, 
and dislocated worker funds among local areas in the State, in 
accordance with secs. 128(c) and 133(c) of WIOA.
    Comments: The Department received a comment requesting 
clarification on who makes the funding reallocation decision and what 
is the maximum time frame for decision-making.
    Department Response: WIOA secs. 128(c) and 133(c) provides that the 
Governor, after consultation with the State WDB, may reallocate to 
eligible local areas youth, adult, and dislocated worker funds. Section 
683.140(a) mirrors the statutory language and provides that the 
Governor may reallocate local funds after consulting with the State 
WDB. Because WIOA identifies the reallocation decision-maker as the 
Governor, no change was made in the regulatory text in response to this 
comment.
    Section 683.140(b) and (c) provide that the reallocation 
determination occurs for the prior program year after an evaluation of 
all local areas' obligation rates has occurred. However, there is no 
required timeframe for a Governor to make a decision as the regulation 
maintains the Governor's flexibility and responsibility to make 
reallocation decisions regarding the WIOA grant funds. No change was 
made to the regulatory text.
Section 683.145 What merit review and risk assessment does the 
Department conduct for Federal financial assistance awards made under 
Workforce Innovation and Opportunity Act title I, subtitle D?
    This section includes requirements mandated by the Uniform 
Guidance.
    Comments: The Department received several comments requesting a 
clarification of ``merit review.''
    Department Response: Section 683.145(a) includes the requirements 
mandated by the Uniform Guidance at 2 CFR 200.204 that the Department 
utilize a merit review process when awarding competitive awards. Title 
2 CFR 200.204 states that the process for merit review will be 
described in the funding opportunity announcement. The Department has 
determined that because the process necessary for ensuring a fair merit 
review may vary by competition, additional description of ``merit 
review'' is not appropriate for this regulation. No change was made to

[[Page 56203]]

the regulatory text in response to these comments.
Section 683.150 What closeout requirements apply to grants funded with 
Workforce Innovation and Opportunity Act title I and Wagner-Peyser Act 
funds?
    This section addresses closeout, which is an important component to 
complete the grant lifecycle. This section paraphrases the Uniform 
Administrative requirement sections on closeout and post-closeout 
adjustments (2 CFR 200.343 through 200.344).
    Comments: The Department received a comment requesting 
clarification of the period of time that the Federal government can 
disallow costs and for which the grant recipient remains liable for a 
Federal debt after grant closeout.
    Department Response: Because WIOA of limitations for collection of 
a Federal debt depends on many variables not appropriate to regulate, 
no changes were made to the regulatory text in response to this 
comment.
2. Subpart B--Administrative Rules, Costs, and Limitations
Section 683.200 What general fiscal and administrative rules apply to 
the use of Workforce Innovation and Opportunity Act title I and Wagner-
Peyser Act funds?
    This section describes the application of Uniform Guidance and the 
corresponding exceptions authorized by the Department at 2 CFR part 
2900 for all grant recipients and sub recipients, including for-profit 
organizations and foreign entities.
    Comments: One commenter requested that an appeal process should be 
required when the State (pass-through entity) implements requirements 
outside the Federal guidelines in 2 CFR part 200.
    Department Response: The Department has decided not to require an 
appeals process when pass-through entities implement requirements 
outside the Federal guidelines in the Uniform Guidance at 2 CFR part 
200. This is consistent with 2 CFR part 200, which provides necessary 
flexibility to States by extending special considerations when 
administering grant funds. The Department determined that requiring an 
appeals process when a pass-through entity implements requirements not 
included in 2 CFR part 200 would be unduly burdensome and counter to 
the effective administration of the grants. The commenter should note 
that Sec.  683.600 offers protections for subrecipients if a 
requirement imposed by a pass-through entity violates the requirements 
of title I of WIOA. Consequently, because the Department has determined 
that the proposed appeals process would not support the effective 
administration of the grants and adequate protections are already in 
place, no change was made in the regulatory text.
    Comments: One commenter requested an explanation of the addition 
method in Sec.  683.200(c)(6).
    Department Response: The Department has determined that the 
description in Sec.  683.200(c)(6) and reference to 2 CFR 200.307 
adequately describes the addition method for the purposes of the 
regulation and that any additional description of the method would be 
better suited to guidance and technical assistance. No change was made 
to the regulatory text in response to comments.
    Comments: One commenter requested clarification on how a State 
should determine compliance with the Buy American provisions. The same 
commenter also asked whether State oversight and monitoring 
responsibilities under Sec.  683.200 include programmatic monitoring of 
local areas or simply financial monitoring and oversight, and if the 
latter, where programmatic monitoring expenses should be charged. 
Several commenters asked for clarification regarding the applicability 
of the section to title II funds, specifically to the requirement to 
use the addition method and the Buy American Act.
    Department Response: Upon reviewing the commenter's request, the 
Department determined that the proposed language about ``American-made 
equipment and products'' was confusing. Consequently, the Department 
replaced this language with a reference to the relevant section of the 
Buy American Act. Additionally, the Department directs the commenter to 
Sec.  683.410 of this part which addresses the issue concerning the 
classification of costs as either programmatic or administrative for 
purposes of WIOA. Section 683.200 describes the application of the 
Uniform Guidance and the corresponding exceptions authorized by the 
Department at 2 CFR part 2900 for all title I WIOA and Wagner-Peyser 
Act grant recipients and subrecipients, including for-profit 
organizations and foreign entities. The Department also directs the 
commenter to Sec.  683.215(b)(2), which provides that monitoring and 
oversight activities related to administrative functions are defined as 
administrative. Because these issues are addressed elsewhere, no change 
was made to the regulatory text in response to this comment.
    The Buy-American requirements apply to funds made available under 
title I, title II, or under the Wagner-Peyser Act. However, Sec.  
683.200(f) only applies to funds authorized under title I of WIOA and 
the Wagner-Peyser Act; no change was made in the regulatory text in 
response to this comment.
Section 683.205 What administrative cost limitations apply to Workforce 
Innovation and Opportunity Act title I grants?
    This section specifies the statutory administrative cost 
limitations of title I grant funds.
    Comments: The Department received a comment requesting 
clarification on whether it is allowable to combine the 10 percent 
administrative cost limitation in Sec.  683.205 for all three WIOA 
programs into one pool as long as the administrative costs for all 
three combined do not exceed the pooled amount.
    Department Response: Section 683.205(a)(2) mirrors the language in 
WIOA secs. 128(b)(4) and 134(a)(3) and provides flexibility to States 
and local areas by allowing administrative funds from the three WIOA 
formula funding streams awarded under title I, subtitle B of WIOA to be 
pooled and used together for administrative costs for any of the three 
programs at the State and locals' discretion. The statutory and 
regulatory language clearly state that local areas may pool funds for 
administrative costs. No changes were made to regulatory text in 
response to this comment.
Section 683.215 What Workforce Innovation and Opportunity Act title I 
functions and activities constitute the costs of administration subject 
to the administrative cost limitation?
    This section defines the functions and activities that constitute 
administration in accordance with sec. 3(1) of WIOA, and therefore are 
subject to the administrative cost limitations discussed in Sec.  
683.205.
    Comments: In issuing the NPRM, the Department requested comments on 
whether the Department should issue the proposed administrative costs 
list as a regulation or as a general description or guidance, whether 
the list should be stable or subject to periodic review, and whether 
indirect costs should be programmatic or administrative.
    The Department received numerous and varied responses regarding its 
solicitation. The majority of the comments received concerned whether 
the regulation should use a static list to define administrative costs 
or whether the regulation should include a more flexible definition, 
with a majority of

[[Page 56204]]

the comments stating a preference to maintain a static list to define 
administrative costs.
    Department Response: The Department reviewed and analyzed the 
comments received and decided to maintain a list of administrative 
functions in a defined, succinct list instead of adopting a more 
flexible definition because it agreed with commenters that it ensures 
consistency and clarity in the treatment of the expenditures for WIOA 
title I grant funded activities. No change was made in the regulatory 
text in response these comments.
    Comments: Additionally, commenters also responded to the inquiry as 
to whether the Department should treat indirect costs as administrative 
or programmatic costs with many commenters suggesting that costs should 
be charged to administration or program depending on activity and 
function.
    Department Response: After reviewing the comments, the Department 
concluded that charging of direct and indirect costs as administrative 
or programmatic depending on the function is consistent with statute. 
This results in an accurate classification of costs and is consistent 
with the Uniform Guidance at 2 CFR part 200. Consequently, indirect 
costs will be charged as administrative or program costs depending on 
activity and function. The proposed language was consistent with this 
conclusion. No changes were made to the regulatory text in response to 
these comments.
    Comments: Several commenters suggested that the language in Sec.  
683.215(a) was an expansion from WIA and should not apply to one-stop 
operators.
    Department Response: Section 683.215(a) provides that 
administrative costs are those expenditures incurred by State and Local 
Development WDBs, Regions, direct grant recipients, local grant 
subrecipients, local fiscal agents, and one-stop operators for the 
overall management of the WIOA system and are listed among the 
functions enumerated in the list in Sec.  683.215(b). This definition 
is substantially the same as it was in WIA. The entities listed in 
Sec.  683.215(a) are the same entities, with the exception of Regions, 
that are explicitly included in the definition of administrative costs 
in sec. 3(1) of WIOA. WIOA clearly requires the inclusion of one-stop 
operators, no change was made in the regulatory text in response to 
these comments.
    Comments: Commenters suggested deleting certain language in Sec.  
683.215(b)(4) related to which travel costs should be considered 
administrative costs. Commenters suggested that the Department delete 
the language referring to overall management of the WIOA system as it 
was vague and potentially required certain program costs to be counted 
as administrative costs.
    Department Response: Section 683.125(b)(4) defined administrative 
travel costs as travel costs ``incurred for official business in 
carrying out administrative activities or the overall management of the 
WIOA system.'' The Department reviewed the section and determined that 
it agreed with the commenters. Consequently, the Department modified 
the language in Sec.  683.215(b)(4). Two changes have also been made to 
Sec.  683.215(c) from the proposed language.
    Comments: The Department received a comment requesting a change to 
Sec.  683.215(c)(2) so that grant recipients are not required to track 
personnel expenditures based on documented distributions of actual time 
worked or other equitable cost allocation methods because the language 
is inconsistent with the Uniform Guidance in 2 CFR part 200.
    Department Response: The Department agreed with the commenter and 
removed the language from the Final Rule.
    Comments: The Department received several comments concerning Sec.  
683.215(c)(4), asking for clarification as to which subgrantees are 
responsible for tracking administrative costs and are subject to 
administrative cost limitations; specifically, some commenters were 
inquiring about the treatment of local grant subrecipients.
    Department Response: The Department determined that the proposed 
language was ambiguous about how costs incurred for the functions and 
activities of local grant subrecipients, as identified in Sec.  
683.215(a), should be categorized. Consequently, the Department 
modified Sec.  683.215(c)(4) and added language to clarify how the 
administrative costs of subrecipients listed in Sec.  683.215(a) should 
be categorized. The added language states that costs of contractors and 
subrecipients that meet the requirements of (c)(4), other than 
subrecipients listed in (a), are program costs. The addition of the 
language in the Final Rule will ensure that the intent of WIOA for the 
entities responsible for the management of the public workforce system 
to track their administrative expenses is clear. The change also 
reflects that incidental administrative costs incurred by a contractor 
or subgrantee whose intended purpose is to provide identifiable program 
services do not have to be identified, broken out from other costs 
incurred under the contract or subaward, and tracked against the 
administrative cost limitation. Finally, this change does not alter the 
requirement provided in Sec.  683.215(c)(1) that costs incurred under 
contracts whose intended purpose is administrative must be charged to 
the administrative cost category.
    Comments: The Department received a request to clarify the 
guidelines on infrastructure funding. The Department also received 
several comments concerning the applicability of Sec.  683.215 to title 
II programs and State AEFLA agencies.
    Department Response: The Department notes that infrastructure 
funding is discussed in 20 CFR part 678 (see Joint WIOA Final Rule). 
Because another part governs infrastructure funding, no change was made 
to the regulatory text. The provisions found in Sec.  683.215 are 
applicable to funds authorized under title I of WIOA. The Department 
refers the commenters to 34 CFR part 462 and 463 for additional 
information regarding AEFLA and title II programs. No changes were made 
to the regulatory text in response to this comment.
Section 683.220 What are the internal control requirements for 
recipients and subrecipients of Workforce Innovation and Opportunity 
Act title I and Wagner-Peyser Act funds?
    This section describes the internal controls that recipients and 
subrecipients must install and have in place when expending WIOA and 
Wagner-Peyser Act funds, and is based on 2 CFR 200.303.
    Comments: The Department received comments requesting clarification 
with regard to the internal control requirements of Sec.  683.220. One 
commenter requested a clear definition of the personally identifiable 
information (PII) and sensitive information, including documentation 
allowed for financial and program data and participant-specific 
verification. Another commenter requested clarification of the ``tools 
and assistance'' for improving internal control structure under Sec.  
683.220.
    Department Response: The Department determined that additional 
guidance on the definition of PII and available tools and assistance 
are not appropriate regulatory text because of the detail that would be 
required and the flexibility that is necessary for these definitions. 
The Department previously issued guidance on handling Personally

[[Page 56205]]

Identifiable Information (PII) which is found in TEGL No. 39-11 
(``Guidance on the Handling and Protection of Personally Identifiable 
Information (PII)''), issued on June 28, 2012 (see http://wdr.doleta.gov/directives/attach/TEGL/TEGL_39_11.pdf).
    The Department will provide additional guidance on this issue. No 
change was made to the regulatory text.
Section 683.230 Are there special rules that apply to veterans when 
income is a factor in eligibility determinations?
    This section addresses the laws governing the determination of 
eligibility for veterans and their spouses for WIOA funded services 
with income qualification requirements.
    Comments: Two commenters expressed concern about simply referring 
questions to the Veterans' Employment and Training Service (VETS) 
without further guidance and recommended that the Department explicitly 
state the procedures and exceptions in regulations. These commenters 
also recommended specific training for one-stop operators and one-stop 
staff.
    Department Response: The Department agrees with the commenters that 
language clarifying procedures and exceptions would be more appropriate 
to the regulation than the language referring questions to VETS. 
Consequently, the Department has struck the language referring 
questions regarding the applicability of 38 U.S.C. 4213 to VETS. In its 
place, the Department added language that states that a veteran must 
still meet each program's eligibility criteria to receive services 
under the respective employment and training program. This same 
language also appears in part 680 (Adult and Dislocated Worker 
Activities Under Title I of the WIOA). Changing the language in part 
683 compliments what is provided in the regulations for the adult and 
dislocated worker section and ensures that both sections are congruent 
with regard to the Military Pay Disregard for Eligibility 
Determination. The added language also clarifies that a veteran must 
meet all eligibility criteria to receive services. Finally, although 
the Department deleted the language referring questions about the 
applicability of 38 U.S.C. 4213 to VETS from the text of the 
regulation, the Department encourages interested parties to reach out 
to VETS if they have any questions about 38 U.S.C. 4213.
    The Department does not agree with the necessity of adding 
eligibility and income procedures to the regulation because their 
detailed and technical nature is better suited for guidance developed 
with the Assistant Secretary for VETS. The Department will consider the 
request future for training. No change to the regulatory text was made 
in response to these comments.
Section 683.235 May Workforce Innovation and Opportunity Act title I 
funds be spent for construction?
    This section is based on the requirements in the Uniform Guidance 
at 2 CFR 200.439(b)(3), and states that WIOA title I funds must not be 
spent on construction, purchase of facilities or buildings, or other 
capital expenditures for improvements to land or buildings except with 
prior approval of the Secretary.
    Comments: A few commenters requested the Department add language to 
this section to clarify the allowability of WIOA funds for 
construction.
    Department Response: Section 683.235 is written to allow the 
Secretary to approve the use of title I WIOA funds in the circumstances 
provided for in WIOA, including, disaster relief projects under WIOA 
sec. 170(d), YouthBuild programs under WIOA sec. 171(c)(2)(A)(i), grant 
recipients' responsibilities in meeting obligations to provide physical 
and programmatic accessibility, reasonable accommodations, and the 
provision of repairs, renovations, alterations, and capital 
improvements of property, as well as for other projects that the 
Secretary determines necessary to carry out WIOA, as described by under 
sec. 189(c) of WIOA.
    The Department intended to provide the Secretary with the 
flexibility authorized under WIOA to use funds for construction in any 
situation where it might be necessary and has determined that it would 
not be prudent to limit this flexibility by imposing any requirements 
or exclusive lists of use of funds. No change is made in the regulatory 
text in response to these comments.
    Comments: One commenter suggested that the Department amend this 
section to impose a requirement that WIOA funding only be allowed if 
the recipient confirms that all contractors and subcontractors that 
support a registered apprenticeship program meet the on-the-job 
training contract requirements of Sec.  680.700, and are deemed 
``responsible contractors'' under E.O. 13673 and the related Federal 
Acquisition Regulations (FAR).
    Department Response: The Department will provide additional 
guidance on using funds for construction. Because the Department 
concludes that the detailed nature of the suggested addition is better 
suited to guidance and technical assistance, no change was made to the 
regulatory text.
Section 683.240 What are the instructions for using real property with 
Federal equity?
    This section provides rules on State Employment Security Act (SESA) 
properties, Reed Act-funded properties, and JTPA-funded properties.
    Comments: The Department received two comments requesting the 
Department to give priority to UI and WP when transferring or disposing 
of real property with Federal equity.
    Department Response: The Department does not agree with the 
commenters' suggestion to establish priority upon transfer or 
disposition as this would undermine the language in sec. 192(a) of WIOA 
that allows for the portion of real property that is attributable to 
the Federal equity to be used to carry out UI, WP, or WIOA activities. 
The use of the buildings, including the proceeds related to their 
disposition or transfer, is intended to maximize available resources 
and provide flexibilities to UI, WP and WIOA programs. However, the 
Department recognizes that the proposed regulation language did not 
include guidance as to how proceeds from the disposition of property 
with a Reed Act equity should be treated. Consequently, the Final Rule 
contains language that clarifies that when there is a disposition of 
Reed Act property, that Reed Act equity must be returned to the State's 
account in the Unemployment Trust Fund.
Section 683.245 Are employment generating activities, or similar 
activities, allowable under title I of the Workforce Innovation and 
Opportunity Act?
    This section implements sec. 181(e) of WIOA, which restricts the 
use of WIOA funds for employment generating activities except where the 
activities are directly related to training for eligible individuals.
    Comments: Several commenters requested that the Department define 
``employment generating activities'' to guide relationships with 
economic development partners that also assist with business outreach 
and services.
    Department Response: Section 683.245 identifies several examples of 
employer outreach and job development activities that are considered 
``directly related to training for eligible individuals,'' including 
employer outreach and job development activities and therefore, are not 
prohibited employment generating activities. The list is an 
illustrative, but not an

[[Page 56206]]

exhaustive list of examples because the Department does not want to be 
overly prescriptive, limiting the discretion of grant recipients in 
making decisions about what is ``directly related to training for 
eligible individuals'' in their areas. The Department has determined 
that additional definition of ``employment generating activities'' is 
not necessary. However, the Department will provide future guidance or 
technical assistance on this subject.
    Comments: Additionally, commenters also recommended that the 
Department clarify that business services are an allowable activity for 
WDBs and are chargeable to the program cost category.
    Department Response: It is unclear as to what business services 
activities the commenters are referring. However, the Department has 
determined that WIOA and regulations provide sufficient guidance about 
which activities are allowable and whether those activities qualify as 
program costs. In addition to the guidance found in this section, WIOA 
sec. 107(d)(4) provides that local WDBs shall conduct business 
engagement and lead efforts to engage with a diverse range of 
employers. The employer engagement activities are further defined in 
Sec.  679.370(e). Furthermore, the determination of whether an activity 
is administrative or programmatic for purposes of WIOA is discussed in 
Sec.  683.215. Because WIOA and regulation already provide sufficient 
clarity, no change was made in the regulatory text.
Section 683.250 What other activities are prohibited under title I of 
the Workforce Innovation and Opportunity Act?
    This section describes other activities that are expressly 
prohibited in title I of WIOA, including foreign travel paid for by 
WIOA formula funds (sec. 181(e) of WIOA), payment of wages of incumbent 
workers participating in economic development activities (sec. 181(b) 
of WIOA), contracts with persons falsely labeling products as made in 
America (sec. 502(c) of WIOA) and others.
    Comments: The Department received comments requesting the 
Department clearly define prohibited economic development activities in 
Sec.  683.250.
    Department Response: The language in Sec.  683.250 mirrors the 
language in WIOA sec. 181(b)(1) in prohibiting WIOA funds from being 
used for the wages of incumbent employees during their participation in 
economic development activities provided through a statewide workforce 
development system. The Department determined that additional 
clarification, because of its technical and detailed nature, is not 
appropriate for the regulatory text. However, the Department will 
provide additional guidance on this subject.
    No changes were made to the regulatory text in response to these 
comments.
Section 683.260 What prohibitions apply to the use of Workforce 
Innovation and Opportunity Act title I funds to encourage business 
relocation?
    This section describes the prohibitions on the use of WIOA title I 
funds to encourage business relocation, including specific timeframes 
when entities can begin working with such businesses. This section also 
describes the States' obligation to develop procedures to implement 
these rules.
    Comments: The Department received a comment recommending that the 
Department add language to Sec.  683.260(b) to indicate that a State's 
pre-award review criteria must be explained in their Unified or 
Combined State Plan, which is available for review by all stakeholders.
    Department Response: Section 683.260(b) requires States to complete 
a pre-award review to verify that WIOA funds are not used to encourage 
or induce a business to relocate from another area if the relocation 
results in any employee losing his or her job at the original location. 
Section 683.260(b) permits States to develop the criteria for the pre-
review but also requires, in Sec.  683.260(b)(1), that certain elements 
must be included.
    The Department has determined that it is not necessary to require 
that the pre-award criteria be explained in the State's unified or 
combined State plan because Sec.  683.260 already requires the State to 
create a standardized procedure. The Department will provide additional 
guidance and technical assistance on this matter. No change was made to 
the regulatory text.
    Comments: The Department also received a comment requesting 
clarification regarding whether a company that relocates one of its 
offices to another State is eligible for WIOA funds to train workers 
that are relocating, as long as funds are used to upgrade skills and 
not to induce relocation or displace workers, or if this prohibited 
under Sec.  683.260.
    Department Response: The Department has determined that it is not 
appropriate to address such a detailed and fact-specific scenario in 
regulatory text. However, the Department will provide additional 
guidance on this concern. No change was made in the regulatory text in 
response to this comment.
Section 683.275 What wage and labor standards apply to participants in 
activities under title I of the Workforce Innovation and Opportunity 
Act?
    This section describes the wage and labor standards that apply to 
WIOA title I participants, including the requirements under the Federal 
Fair Labor Standards Act (FLSA) and State and local minimum wage laws.
    Comments: Comments requested that the Department define and 
distinguish which types of work-based learning, including 
apprenticeship and pre-apprenticeship, are subject to the wage and 
labor standards in Sec.  683.275.
    Department Response: Section 683.275(a) states that it is 
applicable to individuals in the work-based learning opportunities who 
are determined to be employed in activities under title I of WIOA. The 
FLSA, as amended, 29 U.S.C. 201, et seq., applies in determining 
whether participants are employees who are covered by the FLSA's 
minimum wage and overtime provisions. The Department plans to provide 
detailed guidance on when participants must be considered employees 
protected under the FLSA. Consequently, the Department has determined 
that it would not be appropriate to contain additional clarification on 
this point in the text of the regulation.
    Section 683.275(c) applies to work-based learning and employment 
under title I of WIOA. As described above, whether a particular job 
triggers these requirements and protections is a fact-specific enquiry. 
The Department has determined it would not be appropriate to analyze 
the application of this provision to the two types of jobs submitted by 
the commenter. Such analysis is better suited for guidance and 
technical assistance.
    Section 683.275(d) applies to all allowances, earnings, and 
payments to individuals participating in programs under title I of 
WIOA. Because the application of this provision does not depend on the 
types of jobs involved, the Department has determined that this 
provision does not need additional clarification. Consequently, for the 
reasons described above, the Department adopts the provision as 
proposed.
    The commenter should note that the Department previously issued 
guidance on the application of the FLSA to work-based training 
programs. In addition, the Department will provide additional guidance 
on this section.
    No changes were made to the regulatory text in response to these 
comments.

[[Page 56207]]

Section 683.280 What health and safety standards apply to the working 
conditions of participants in activities under title I of the Workforce 
Innovation and Opportunity Act?
    This section explains what health and safety standards and workers 
compensation laws apply to WIOA title I participants.
    Comments: The Department received a comment requesting a change in 
the regulatory text of Sec.  683.280 to specify that the health and 
safety protections in the regulation are also applicable to student 
workers.
    Department Response: Section 683.280 mirrors the language in WIOA 
sec. 181(b)(4). WIOA and this regulation provide that the health and 
safety standards established under Federal and State law otherwise 
applicable to working conditions of employees are equally applicable to 
working conditions of participants engaged in programs and activities 
under title I of WIOA.
    WIOA utilizes the word ``participant'' throughout the statute and 
specifically in sec. 181(b)(4). The term ``participant'' encompasses 
the student workers referred to by the commenter and the students are 
covered by health and safety laws to the extent that those laws cover 
students. Because whether students are covered by the protections at 
sec. 181(b)(4) and Sec.  683.280 depends the applicable Federal and 
State laws and regulations and cannot be succinctly summarized, the 
Department has determined to retain the use of ``participant'' in this 
section. No changes were made to the regulatory text in response to 
this comment.
Section 683.285 What are a recipient's obligations to ensure 
nondiscrimination and equal opportunity, and what are a recipient's 
obligations with respect to religious activities?
    This section describes the nondiscrimination, equal opportunity, 
and religious activities requirements that, as defined in WIAO sec. 188 
and at 29 CFR part 38, must adhere to when using WIOA title I funds.
    Comments: The Department received a comment in support for this 
provision as well as two comments requesting the Department to provide 
boilerplate language as technical assistance for the required provision 
under Sec.  683.285 because it is useful to the States.
    Department Response: The Department intends to provide additional 
guidance and ongoing technical assistance. Additionally, the Department 
is not modifying the non-discrimination provisions in the section 
because this subject is covered in much greater detail in the WIOA sec. 
188 nondiscrimination regulations at 29 CFR part 38. Finally, the grant 
agreements issued by the Department, as described in Sec.  683.105, 
describe the terms and conditions applicable to the award of title I 
WIOA funds and Wagner-Peyser funds, including the non-discrimination 
provisions of Sec.  683.285. No changes were made to the regulatory 
text in response to these comments.
    WIOA sec. 188(a)(5) refers to immigrants authorized by the Attorney 
General to work in the United States. Pursuant to the Homeland Security 
Act of 2002, Pub. L. 107-296, that authority has been transferred to 
the Department of Homeland Security. Section 1517 of the Homeland 
Security Act (codified at 6 U.S.C. 557) provides that reference in any 
other Federal law to any function transferred by the Homeland Security 
Act ``and exercised on or after the effective date of the Act'' shall 
refer to the official to whom that function is transferred. 
Consequently, the Final Rule contains a reference to the Secretary of 
Homeland Security.
Section 683.295 Is earning of profit allowed under the Workforce 
Innovation and Opportunity Act?
    This section addresses earning profit under WIOA.
    Comments: The Department received a comment requesting confirmation 
that WIOA allows profit for a one-stop operator.
    Department Response: The Department has outlined in Sec.  
683.295(a)(2) a requirement for grants and other Federal financial 
assistance awarded under secs. 121(d), 122(a), and 134(b) of WIOA, 
which allows awardees of Federal financial assistance, such as one-stop 
operators, service providers, or ETPs, to earn profit. The pass through 
entity must follow 2 CFR 200.323 to ensure that the entities' charges 
are reasonable and fair. No changes were made to the regulatory text in 
response to this comment.
3. Subpart C--Reporting Requirements
683.300 What are the reporting requirements for programs funded under 
the Workforce Innovation and Opportunity Act?
    Section 683.300 specifies the reporting requirements for programs 
funded under WIOA and the deadlines for such reports.
    Comments: The Department received comments regarding what data 
standards and performance indicators the Department should require and 
how to define and assess the data standards and performance indicators.
    Department Response: Section 683.300 does not detail the program 
performance elements that a grant recipient should report to the 
Department; these elements are discussed in 20 CFR part 677 (see Joint 
WIOA Final Rule). The Department will also provide additional guidance 
on this section and 20 CFR part 677. No changes were made to the 
regulatory text in response to these comments.
    Comments: The Department received several comments on Sec.  683.300 
concerning the amount of data collection required under WIOA and the 
value of the data collected. The commenters suggested that agencies 
instead share the information they already have and also periodically 
review the reported data to ensure its value to the program and 
eliminate any unnecessary reporting of data.
    Department Response: The Department's goal is to promote the 
government's initiative to manage information as an asset to increase 
operational efficiencies, reduce costs, improve services, support 
mission needs, safeguard personal information, and increase public 
access. The Department intends to use data collected from the 
financial, performance, and annual reports to empower our public 
workforce system while providing transparency and accountability to our 
stakeholders. The Department is not seeking to burden the public 
workforce system by the data collection. While the Department 
implements its reporting requirements, it will work to ensure that the 
reporting is not unnecessarily duplicative while still ensuring that 
the interest described above is protected. However, the Department has 
determined that additional detail on reporting requirement 
implementation is not appropriate for regulation. Consequently, the 
Final Rule adopts the provision as proposed.
    Comments: A comment was received that requested that the Department 
explicitly clarify that reporting requirements may be waived for 
libraries when developing lists of ETPs during the first year of WIOA 
implementation.
    Department Response: WIOA sec. 122 details requirements for 
identifying eligible training providers. This section is further 
addressed in 20 CFR part 680. The Department did not receive any other 
comments on this section. The Final Rule adopts the provision as 
proposed with a technical amendment made to Sec.  683.300(a), because 
it is unnecessary to clarify that the Department's reporting 
requirements would be consistent with governing

[[Page 56208]]

statutes, and a technical amendment to Sec.  683.300(e)(2) and the 
addition of Sec.  683.300(h), so as to more clearly reflect the 
requirements in 2 CFR part 200.
4. Subpart D--Oversight and Resolution of Findings
Section 683.410 What are the oversight roles and responsibilities of 
recipients and subrecipients of Federal financial assistance awarded 
under title I of the Workforce Innovation and Opportunity Act and the 
Wagner-Peyser Act?
    This section defines the roles and areas in which oversight must be 
conducted by the recipients and subrecipients, including ensuring 
compliance with relevant rules and developing a monitoring system.
    Comments: The Department received several comments in support of 
this section and explicitly in support of the Department's requirements 
for recipients and subrecipients to comply with the EEO requirements of 
WIOA as well as the Assistive Technology Act of 1998. A comment was 
received recommending that the Department be notified to work with 
their State Assistive Technology Act Program (ATAP) with regard to 
physical and programmatic accessibility issues.
    Department Response: It is unclear from the comment what 
notification to the Department the commenter is requesting. No changes 
were made to the regulatory text in response to the comments regarding 
ATAP. However, the Department will consider State ATAPs as potential 
resources while implementing this section.
    Comments: A comment received requested clarification on what kind 
of grant monitoring is proposed under Sec.  683.410 and whether 
recipients and subrecipients will have access to clear monitoring and 
oversight standards.
    Department Response: Section 683.410(a) requires that each 
recipient and subrecipient of title I WIOA funds and Wagner-Peyser Act 
funds conduct regular oversight and monitoring of its WIOA and Wagner-
Peyser Act funded programs to ensure compliance with the stated 
requirements of title I of WIOA, the Wagner-Peyser Act, the Uniform 
Guidance at 2 CFR part 200, and the Department exceptions to the 
Uniform Administrative Requirements at 2 CFR part 2900. Section 
683.410(b) further requires that Governors are responsible for 
developing a State monitoring system that meets the requirements set 
forth in Sec.  683.410(b)(2).
    The Department is providing grant recipients the flexibility with 
designing the monitoring process and procedures to meet the 
requirements of Sec.  683.410 and does not want to limit this 
flexibility by imposing a specific monitoring process. However, the 
Department will continue to provide technical assistance and guidance 
on this subject.
    No changes were made to the regulatory text in response to these 
comments. Additionally, the Department would like to note that although 
Sec.  683.410(b)(2)(iii) requires States to have a monitoring system 
that enables Governors to determine if subrecipients and contractors 
have demonstrated substantial compliance with Wagner-Peyser Act 
requirements, violations of Wagner-Peyser Act requirements will be 
handled pursuant to the authority and processes in the Wagner-Peyser 
Act, as amended, and the implementing regulations at 20 CFR part 658.
5. Subpart E--Pay-for-Performance Contract Strategies
Section 683.500 What is a Workforce Innovation and Opportunity Act Pay-
for-Performance contract strategy?
    This section describes the components of a WIOA Pay-for-Performance 
contract strategy and describes WIOA Pay-for-Performance contract as a 
specific type of performance-based contract.
    Comments: The Department received several comments regarding Sec.  
683.500. Several comments requested clarification as to what was 
required for a WIOA Pay-for-Performance contract strategy. Some of the 
comments received inquired as to the meaning of ``independently'' 
validating in Sec.  683.500(a)(3) and requested clarification and 
guidance as to the Department's intended definition of independent. 
Additionally, commenters questioned the affordability of conducting the 
feasibility study given the 10 percent funding limitation. Finally, 
commenters asked the Department to allow local areas to use existing 
studies instead of commissioning new studies. Many of the comments 
received concerned the feasibility study requirements. Some comments 
requested the elimination of the feasibility study; some comments 
questioned its affordability; some comments requested the Department 
prescribe what is contained in the feasibility study, and other 
comments requested that the Department allow local areas to use 
existing studies instead of commissioning new studies.
    Department Response: The Department decided against prescribing a 
definition of independent validation in order to retain flexibility. 
The WIOA Pay-for-Performance contract strategy is one of several 
innovative strategies WIOA adopts to place a higher emphasis on 
performance outcomes and provider accountability, drive better results, 
and incorporate rigorous evaluation and evidence-based practice into 
the delivery of workforce services. The WIOA Pay-for-Performance 
contract strategy can benefit local areas, job seekers, and business 
customers when used to support interventions that either have a high 
probability of success based on prior evidence or that have potential 
as a promising innovation; have measurable outcomes supported with 
authoritative data and strong evaluation methodologies; and are 
overseen by experienced managers that have flexibility to adjust their 
approach. As authorized by WIOA, the Department intends to provide 
local areas with the flexibility needed to implement a WIOA Pay-for-
Performance contract strategy that meets the needs and challenges in 
each local area. The Department will provide additional guidance on 
this subject to address the scope and minimum requirements of 
independent validation.
    WIOA sec. 3 provides that the WIOA Pay-for-Performance contract 
strategy is a procurement strategy for funds allocated to local areas 
for the provision of adult, dislocated worker, or youth training 
services. WIOA limits the amount of local allocations available for 
WIOA Pay-for-Performance contract strategies to 10 percent of the local 
area's allocation available under secs. 128(b) and 133(b)(2)-(3) of 
WIOA. WIOA sec. 189(g)(2)(D) specifies that funds used for WIOA Pay-
for-Performance contract strategies shall remain available until 
expended.
    The NPRM defined the WIOA Pay-for-Performance contract strategy as 
having four distinct characteristics, including in Sec.  683.500(a)(2) 
a feasibility study to determine whether the proposed intervention is 
suitable for a WIOA Pay-for-Performance contract strategy. The 
Department required the feasibility study because it determined that, 
prior to beginning a WIOA Pay-for-Performance contract strategy, a 
local area needs to conduct an analysis to determine whether a WIOA 
Pay-for-Performance contract strategy is the right approach. Upon 
reviewing the comments, the Department retains its conclusion that the 
feasibility study is necessary. Consequently, the regulatory text 
retains the feasibility study requirement.
    In analyzing the comments received and reviewing the proposed 
language, the Department concluded that the

[[Page 56209]]

definition of a WIOA Pay-for-Performance contract strategy and the 
requirement of a feasibility study as part of the strategy could 
potentially limit the availability of this innovative strategy because 
local areas would not have enough funds available under the 10 percent 
limit to do both the feasibility study and the rest of the WIOA Pay-
for-Performance contract strategy.
    To address this issue, the Department modified that language in 
Sec.  683.500(a) and removed the feasibility study requirement from the 
WIOA Pay-for-Performance contract strategy definition. However, because 
the Department has determined that a feasibility study is necessary, 
the Department added a new paragraph (b) in Sec.  683.500 that requires 
a local area to conduct a feasibility study prior to implementing a 
WIOA Pay-for-Performance contract strategy. Because the feasibility 
study is not included in the definition of ``WIOA Pay-for-Performance 
contract strategy'' in the Final Rule, the feasibility study is not 
subject to the 10 percent limitation.
    In addition, the Department decided against prescribing what should 
be included in a feasibility study in order to retain flexibility. The 
Department intends to provide local areas with flexibility authorized 
under WIOA needed to implement a WIOA Pay-for-Performance contract 
strategy that meets the needs and challenges in each local area. The 
Department does not want to limit this flexibility by imposing any 
other requirements or exclusive definitions for WIOA Pay-for-
Performance contract strategies. However, the Department will provide 
additional guidance on this subject to address the scope and minimum 
requirements of the feasibility study.
    The Department decided against prescribing whether local areas can 
use existing studies for the reasons described in the previous 
paragraph.
    Comments: Other commenters recommended adding a phrase to proposed 
Sec.  683.500(b) to indicate that a WIOA Pay-for-Performance contract 
strategy must include a prohibition against a short-term training 
activity and placement into low-wage job strategy for harder to serve 
participants.
    Department Response: The Department decided against prescribing 
prohibitions or outcomes for locals who employ the use of a WIOA Pay-
for-Performance contract strategy in order to retain the local areas' 
flexibility authorized under WIOA. However, the Department will provide 
additional guidance on this subject.
    Comments: Commenters also asked for clarification on whether NFJP 
providers or WIOA title II providers are included in WIOA Pay-for-
Performance contracting strategy.
    Department Response: WIOA sec. 3(47) is clear that WIOA Pay-for-
Performance contract strategies only include strategies for the 
provision of training services under WIOA secs. 134(c)(3) and 
129(c)(2). Neither the NFJP program nor title II are located at sec. 
134(c)(3) or 129(c)(2). Because WIOA is clear that NFJP and title II 
providers are not included in the definition of a WIOA Pay-for-
Performance strategy, the Final Rule adopts the provision as proposed. 
However, as described in the NPRM, a WIOA Pay-for-Performance 
contracting strategy is only one specific type of a performance-based 
contract strategy. Neither WIOA nor the Final Rule is meant to 
foreclose NFJP providers, title II providers, or any other providers 
from pursuing performance-based contracts or strategies as they are 
generally understood, and they are encouraged to do so. The strategies 
are considered WIOA Pay-for-Performance contract strategies only if 
they fit within the strict requirements of WIOA sec. 3(47) and this 
subpart.
    No changes were made to the regulatory text in response to these 
comments.
Section 683.510 What is a Workforce Innovation and Opportunity Act Pay-
for-Performance contract?
    This section defines the requirements associated with a WIOA Pay-
for-Performance contract, which would be awarded under a WIOA Pay-for-
Performance contract strategy.
    Comments: The Department received numerous comments regarding Sec.  
683.510 and what is an allowable WIOA Pay-for-Performance contract.
    Several comments either equated the WIOA Pay-for-Performance 
contract strategies in WIOA to a Pay for Success financing strategy 
(sometimes referred to as social impact bonds) or inquired as to the 
allowability of a Pay for Success financing model in WIOA, specifically 
the allowability of social impact bonds. Other comments recommended 
that the Department specify in greater detail the WIOA Pay-for-
Performance contract requirements and that the Department issue 
requirements for applications.
    Department Response: Pay for Success financing models are an 
available WIOA Pay-for-Performance contract type under Sec.  683.510 as 
long as the requirements of Sec.  683.500 are met; the Department will 
issue future guidance. The Department intends to provide local areas 
with flexibility authorized under WIOA needed to implement a WIOA Pay-
for-Performance contract strategy that meets the needs and challenges 
in each local area. The Department does not want to limit this 
flexibility by imposing any other requirements or exclusive definitions 
for WIOA Pay-for-Performance contracts and contract strategies. 
However, the Department will provide additional guidance on this 
subject. Because Sec.  683.510 does not prohibit the use of a Pay for 
Success model and the Department wants to maintain flexibility, the 
Department has determined that no additions to the proposed text are 
necessary. No changes were made to the regulatory text.
    Comments: A few commenters requested that the Department eliminate 
the requirement that organizations be eligible service providers to 
qualify for WIOA Pay-for-Performance contract funding.
    Department Response: WIOA sec. 3(47) limits the WIOA Pay-for-
Performance contractors to those organizations that are eligible under 
WIOA secs. 122 or 123. Because this requirement is part of WIOA, the 
Department cannot eliminate it. No changes to the regulatory text were 
made in response to these comments.
    Comments: One comment requested clarification on what providers are 
eligible service providers and whether YouthBuild could form a 
consortium in an area to provide the services.
    Department Response: The requirements for Eligible Training 
providers are discussed in 20 CFR part 680. Because another part 
governs eligible training providers, the Final Rule adopts the 
provision as proposed.
    Comments: Another comment sought clarification on whether for-
profits and not-for-profits are treated the same under this section.
    Department Response: Section 683.510(f) provides that local 
entities may enter into WIOA Pay-for-Performance contracts with 
training providers that are eligible under WIOA secs. 122 or 123. 
Because WIOA secs. 122 and 123 state, and Sec.  683.295 further 
clarifies, that for-profit agencies are eligible to be an eligible 
training provider, the Department has determined that these provisions 
do not need additional clarification regarding the treatment of for-
profits and non-for-profits agencies. No changes were made in the 
regulatory text in response to this comment.
    Comments: One commenter requested clarification on whether the 
Sec.  683.510(e) requirement that the primary indicators of performance 
in sec. 116(b)(2)(A) of

[[Page 56210]]

WIOA be used for performance outcomes means that these primary 
indicators of performance are the only indicators that may be utilized.
    Department Response: Section 583.510(e) mirrors the language the 
WIOA sec. 3(47) which states that the performance elements that must be 
included in any WIOA Pay-for-Performance contract are the primary 
indicators of performance described in WIOA sec. 116(b)(2)(A). As WIOA 
requires the elements at sec. 116(b)(2)(A), they are mandatory for all 
WIOA Pay-for-Performance contracts. The Department will provide 
additional guidance on whether additional performance outcomes can be 
used in determining the amount to be paid a service provider under a 
WIOA Pay-for-Performance contract.
    Comments: Another comment stated that WIOA Pay-for-Performance 
contracts should give priority to innovative interventions that aim to 
help hard-to-serve participant populations find jobs and careers that 
lead to family-sustaining wages.
    Department Response: The Department intends to provide local areas 
with flexibility authorized under WIOA that is necessary for the 
implementation of a WIOA Pay-for-Performance contract strategy that 
meets the needs and challenges in each local area. For that reason, the 
Department has decided against adding the proposed priority to the 
regulation. The Department does not want to limit this flexibility by 
imposing any other requirements or exclusive definitions for WIOA Pay-
for-Performance contracts. However, the Department will provide 
additional guidance on this subject.
    Comments: A commenter recommended replacing ``must'' in Sec.  
683.510(d) with ``may only'' because the use of WIOA Pay-for-
Performance contracts for adult training services or youth activities 
is optional under WIOA.
    Department Response: The Department is maintaining the language as 
proposed because although the WIOA Pay-for-Performance contracts 
strategy is optional under WIOA, if it is implemented, it must be used 
to provide the services as described in Sec.  683.510(d).
    Comments: Commenters urged the Department to clarify the use of the 
bonus payments as described in Sec.  683.510(h).
    Department Response: The Department has determined that the 
inclusion of incentive payments in this provision confused the 
Department's description of bonuses. Consequently, the Department has 
removed references to incentive payments from this provision. Because 
the Department has determined that any additional clarification would 
result in an amount of detail not appropriate to this regulation, the 
Final Rule adopts the remainder of paragraph (h) as proposed.
    Comments: Another comment suggested that requiring independent 
validations from an independent evaluator without providing adequate 
funding would force local areas to cut services. This commenter 
recommended that the Department contract for nationwide local area 
evaluation and rotate areas every year that are evaluated.
    Department Response: As discussed in the preamble to Sec.  683.500, 
the parameters of independent validation will be addressed in future 
guidance. However, the local areas will have flexibility in entering 
into strategies to validate independently the outcomes achieved under 
the WIOA Pay-for-Performance contracts, which should allow local areas 
to manage the cost of this external validation while maximizing the 
benefits Pay-for-Performance can yield. Independent validation must 
meet the statutory requirement of ensuring the performance outcomes 
were achieved, thus ensuring the integrity of the payments. No changes 
were made to the regulatory text in response to this comment.
Section 683.520 What funds can be used for Workforce Innovation and 
Opportunity Act Pay-for-Performance contract strategies?
    This section restates the WIOA requirements that funds allocated 
under secs. 133(b)(2) and (3) of WIOA can be used for WIOA Pay-for-
Performance contract strategies providing adult and dislocated worker 
training, and funds allocated under sec. 128(b) of WIOA can be used for 
WIOA Pay-for-Performance contract strategies providing youth 
activities.
    Comments: The Department received several comments requesting 
clarification regarding Sec.  683.520.
    One commenter requested clarification concerning the WIOA Pay-for-
Performance contract strategy limits and performance-based contracting. 
This same commenter requested clarification of on what expenses are 
included in the 10 percent limit for WIOA Pay-for-Performance contract 
strategies.
    Department Response: Ten percent of the local adult, dislocated, 
and youth funds allocated under WIOA secs. 128(b) and 133(b)(2)-(3) are 
available for WIOA Pay-for-Performance contract strategies, as 
described in Sec.  683.520. However, these caps only are applicable to 
WIOA Pay-for-Performance contract strategies, as discussed in this 
subpart, and do not impact a local area utilizing performance-based 
contracting. Under WIA, many Workforce Investment Boards (Workforce 
Development Boards (WDBs) under WIOA) utilized elements of performance-
based contracts with training providers. These contracts incorporated 
performance outcomes that contractors were required to meet to obtain 
payment. However, these contracts did not contain required elements of 
a WIOA Pay-for-Performance contract strategy articulated in this 
subpart.
    Performance-based contracts are still an available option for local 
areas and there is no limit on the use of funds for typical 
performance-based contracts, as defined in the Federal Acquisition 
Regulations (FAR). Contracts that are not executed under the WIOA Pay-
For-Performance contracting authority may continue to include 
performance incentives, either positive or negative or both, in 
compliance with the Federal Acquisition Regulations. However, funds 
used for performance-based contracts that do not qualify as Pay-For-
Performance contracts do not remain available until expended under WIOA 
sec. 189(g)(2)(D). The Department does encourage local areas to refocus 
these traditional performance-based contracts to place an emphasis on 
the contractor achieving outcomes like participants obtaining and 
retaining good jobs, rather than outputs like the number of people 
served.
    The Department has determined additional clarification on what is 
included in the 10 percent limit is not necessary because the 
regulation already contains this information. The 10 percent limit 
applies to WIOA Pay-for-Performance contract strategies, a term that is 
defined in Sec.  683.500(a). Because the regulation already describes 
what expenses are included in the 10 percent limit, the Final Rule 
adopts the provision as proposed.
    Comments: Another commenter requested clarification as to whether 
Individual Training Accounts (ITA) are viewed as typical performance-
based contracts and, thus, there is no limit on use of funds for them 
under Sec.  683.520.
    Department Response: ITAs are defined in Sec.  680.300 and are 
payment agreements established on behalf of an individual participant 
with a training provider for the provision of training services. ITAs 
are not contracts entered into by a local area for the provision of 
services to multiple people for the

[[Page 56211]]

provision of all of the performance outcomes in sec. 116(b)(2)(A) of 
WIOA; therefore they do not meet the requirements of this subpart.
    Comments: A commenter requested clarification on whether the 10 
percent limitation in Sec.  683.520 references allotment of funds at 
the local level.
    Department Response: The Final Rule makes changes to Sec.  
683.520(b) to replace the word ``expended'' with ``reserved and used,'' 
to be more consistent with WIOA secs. 129(c)(1)(D) and 
134(d)(1)(A)(iii). Section 683.520(b) provides that no more than 10 
percent of the total local adult and dislocated worker allocations can 
be reserved and used on the implementation of WIOA Pay-for-Performance 
contract strategies for adult training services described in sec. 
134(c)(3) of WIOA. Section 683.520(b) further provides that no more 
than 10 percent of the local youth allocation can be reserved and used 
on the implementation of WIOA Pay-for-Performance contract strategies 
for youth training services and other activities described in sec. 
129(c)(2) of WIOA. Sections 129(c)(1)(D) and 134(d)(1)(A)(iii) of WIOA 
make clear that this limitation applies to funds allocated to the local 
areas. Therefore, the regulation as proposed is clear that the 10 
percent limits apply to allocations at the local level. The Final Rule 
adopts the remainder of Sec.  683.520(b) as proposed, with technical 
corrections to better align it with secs. 129(c)(1)(D) and 
134(d)(1)(A)(iii) of WIOA. The Department will issue guidance to 
explain these new practices in Sec.  683.520.
Section 683.530 How long are funds used for Workforce Innovation and 
Opportunity Act Pay-for-Performance contract strategies available?
    This section discusses how long funds used for WIOA Pay-for-
Performance contract strategies are available.
    Comments: The Department received several comments requesting that 
the Department clarify the length of time funds are available for Pay-
for-Performance contract strategies.
    Department Response: WIOA sec. 189(g)(2)(D) specifies that funds 
used for WIOA Pay-for-Performance contract strategies are available 
until expended. This is meant to allow local areas to structure 
contracts that include time-intensive service delivery strategies and/
or to structure payments based on outcomes that may take longer to 
achieve, measure, and validate than the typical 2-year funding 
availability of local area funds. Funds that are obligated but not 
expended due to a contractor not achieving the levels of performance 
specified in a WIOA Pay-for-Performance contract may be reallocated for 
further activities related to WIOA Pay-for-Performance contract 
strategies only. The Department will issue guidance to explain these 
new practices. WIOA and regulation sufficiently describe the length of 
time funds are available for WIOA Pay-for-Performance contract 
strategies. No changes were made to the regulatory text in response to 
these comments.
Section 683.540 What is the State's role in assisting local areas in 
using Workforce Innovation and Opportunity Act Pay-for-Performance 
contract strategies?
    This section describes both allowable and required State activities 
related to WIOA Pay-for-Performance contract strategies.
    Comments: Commenters requested clarification if WIOA Pay-for-
Performance contracts would need to be reported under a new line item 
on the Summary of Expenditures Report, or if this is tracked during the 
procurement process.
    Department Response: This information is being issued under 
separate Paperwork Reduction Act ICRs. Additionally, the Department 
expects to put performance and implementation requirements in place in 
the future and will issue guidance to explain these new practices. 
Because the Department is still analyzing how to implement the 
reporting requirements, no changes were made to the regulatory text.
    Comments: Another commenter urged the Department to align the 
regulations at Sec.  683.540 with WIOA and Congressional intent in 
order to make clear that the Governor's statewide reserve is an 
acceptable funding source for Pay-for-Performance core end-payments--
which the commenter defines as the success payments at the end of a 
Pay-for-Success contract.
    Department Response: This comment raises two potential issues: (1) 
the use of Governor's Reserve funds to pay for State performance-based 
contract strategies that do not fit within the strict requirements of 
WIOA ``Pay-for-Performance contract strategies'' as defined in WIOA 
sec. 3(47) and this subpart and (2) the use of Governor's Reserve funds 
to support WIOA Pay-for-Performance contract strategies.
    This part of the regulation does not limit the ability of the State 
to use the statewide reserve funds to carry out various kinds of 
performance-based contracts, as defined in the Federal Acquisition 
Regulations (FAR). Rather, this part of the regulation addresses how 
Governor's reserve funds may be used to support WIOA Pay-for-
Performance contract strategies, a term defined in sec. 3(47) of WIOA 
and Sec.  683.500. State and local funds may be used to support 
performance-based contracting, including projects that involve ``core-
end payments'' so long as these funds are used consistently with any 
restrictions and requirements that might govern those funding sources. 
However, grantees should note that unlike the 10 percent of local funds 
identified in WIOA secs. 129(c)(1)(D) and 134(d)(1)(A)(iii) as being 
available for WIOA Pay-for-Performance contract strategies, funds used 
for other types of performance-based contracting do not have the 
potential extended period of availability identified in WIOA sec. 
189(g)(2)(D) as applying to the 10 percent of funds described in WIOA 
secs. 129(c)(1)(D) and 134(d)(1)(A)(iii).
    In response to the issue of the use of Governor's Reserve funds to 
support WIOA Pay-for-Performance contract strategies, the Department 
has added a paragraph (a)(3) to clarify that the items listed in Sec.  
683.540(a) are not an exhaustive list of ways in which Governor's 
Reserve funds can be used to support WIOA Pay-for-Performance contract 
strategies. As the addition explains, Governor's Reserve funds can be 
used for other activities supporting WIOA Pay-for-Performance contract 
strategies if those uses otherwise comply with limitations that govern 
the use of those funds.
    For example, as provided in Sec.  683.540(a), Governors may provide 
technical assistance to local areas, including assistance with 
structuring WIOA Pay-for-Performance contract strategies, performance 
data collection, meeting performance data entry requirements, and 
identifying levels of performance. This technical assistance can help 
local areas move forward in using this contract strategy. Additionally, 
the State may either conduct evaluations of such strategies and/or 
provide technical assistance to locals regarding the importance of 
evaluation of WIOA Pay-for-Performance contract strategies. The State 
and local areas may conduct their own evaluations of the WIOA Pay-for-
Performance contracts, or procure an independent evaluator.
    Governor's Reserve funds used to support Pay-for-Performance 
contract strategies, like Governor's Reserve funds used for other types 
of performance-based contracting, do not have the potential extended 
period of availability identified in WIOA sec. 189(g)(2)(D). The 
Department will issue additional guidance on how these funds may be 
used to support WIOA Pay-for-

[[Page 56212]]

Performance contract strategies, including utilizing the Governor's 
Reserve for ``core-end payments,'' in compliance with the law. No other 
changes were made to the regulatory text in response to these comments.
6. Subpart F--Grievance Procedures, Complaints, and State Appeals 
Processes
Section 683.600 What local area, State, and direct recipient grievance 
procedures must be established?
    This section requires local areas, States, outlying areas, and 
direct grant recipients of WIOA title I funds to establish and maintain 
a procedure for grievances and complaints, including appeals as 
appropriate, and describes what the procedure must include, as required 
by WIOA sec. 181(c)(1).
    Comments: The Department received a comment in support of the 
regulation as proposed and another comment requesting clarification 
whether Local WDBs or CEOs are considered ``other interested parties 
affected'' by the recipient's WIOA programs under Sec.  683.600.
    Department Response: Local WDBs and CEOs are among the parties that 
qualify as ``other interested parties.'' The Department has determined 
that no additional changes to the regulatory text are necessary to 
clarify that the broad term ``other interested parties'' includes Local 
WDBs and CEOs. No changes were made to the regulatory text in response 
to this comment.
7. Subpart G--Sanctions, Corrective Actions, and Waiver of Liability
Section 683.700 When can the Secretary impose sanctions and corrective 
actions on recipients and subrecipients of title I Workforce Innovation 
and Opportunity Act funds?
    This section describes the procedures and circumstances under which 
the Department will impose sanctions or take corrective actions, as 
described in WIOA sec. 184(b) and (e), against States, local areas, and 
grant recipients and subrecipients.
    Comments: The Department received several comments on Sec.  683.700 
that cited a reference to the ``amount that would be reserved by the 
Governor'' and stated that this is currently the Governor's 5 percent 
set-aside, then asked for clarification of what portion of funds are 
subject to the 5 percent reduction and if this amount is affected by 
failure to meet performance standards under Vocational Rehabilitation. 
The commenters also requested clarification as to which programs the 5 
percent reduction affected.
    Department Response: Section 683.700 clarifies that the procedures 
described at 20 CFR part 677 will be used to impose a sanction or 
corrective action for a violation of WIOA sec. 116 (see Joint WIOA 
Final Rule). The cited language in the comment is not in Sec.  683.700 
and appears to reference sanctions for a violation of WIOA sec. 116 and 
the procedures established in 20 CFR part 677. The preamble to 20 CFR 
part 677 addresses issues concerning performance and any applicable 
sanctions related to WIOA sec. 116. Because these comments do not 
appear to relate to this section, no changes were made to the 
regulatory text in response to these comments.
Section 683.710 Who is responsible for funds provided under title I and 
the Wagner-Peyser Act?
    This section identifies the recipient as the responsible party for 
title I and Wagner-Peyser Act funds.
    Comments: The Department received a comment requesting 
clarification as to Sec.  683.710's application to planning regions. 
Specifically, the commenter requested clarification as to what 
protections exist if one service area in a region has a corrective 
action plan in place.
    Department Response: Section 683.710(a) provides that the recipient 
of funds is responsible for all funds under its grant award. Section 
683.710(b) further provides that where a planning region includes two 
separate units of local government, the chief elected official (CEO) of 
each unit of local government is the responsible party and that the 
individual jurisdictional liability must be established in a written 
agreement between the CEOs. The regulation as proposed clearly states 
that the potential liability of any unit of general local government in 
a planning region is dependent on what the CEOs agree to in the written 
agreement required under Sec.  683.710(b)(2). No changes were made to 
the regulatory text in response to these comments.
Section 683.720 What actions are required to address the failure of a 
local area to comply with the applicable uniform administrative 
provisions?
    This section requires the Governor to take corrective action and 
impose sanctions on a local area if it fails to comply with the 
requirements described in this section.
    Comments: The Department received a comment requesting a change to 
Sec.  683.720(a)(2) to add language that prior to imposing sanctions, 
the Governor should find a substantial violation and that the local 
area has failed to take corrective action. The commenter suggested that 
the additional language would align to Sec.  683.720(a)(2) with WIOA 
sec. 184(b)(1).
    Department Response: The Department analyzed the comment as well as 
all of the language in WIOA sec. 184 and determined that Sec.  
683.720(a)(2) is consistent with WIOA sec. 184. WIOA sec. 184(a)(5) 
provides that if a Governor determines that a local area is not in 
compliance with the uniform administrative requirements, the Governor 
must require corrective action to secure prompt compliance with the 
requirements and impose the sanctions found at WIOA sec. 184(b). WIOA 
sec. 184(a)(5) requires corrective action regardless of whether the 
violation of the Uniform Administrative Requirements is substantial. In 
contrast, WIOA sec. 184(b) only requires action by the Governor for 
violations of title I of WIOA if those violations are substantial. WIOA 
clearly requires corrective action for violations of the Uniform 
Administrative Requirements even if those violations are not 
substantial. No changes were made to the regulatory text in response to 
this comment.
    Comments: The Department received a comment requesting a change in 
Sec.  683.720(c)(1) to add language stating that if the Secretary finds 
that a Governor has failed to meet the requirements in Sec.  
683.720(c)(1), then the Secretary must take the action required in 
Sec.  683.700(b) consistent with procedures established in Sec.  
683.440.
    Department Response: The Department determined that adding the 
language in Sec.  683.720(c)(1) is not necessary as Sec.  683.700 
adequately outlines the necessary actions the Secretary should take if 
a Governor fails to take actions against a local area and includes the 
requirement that the Grant Officer use the procedures outlined in Sec.  
683.440 (except in certain circumstances not applicable to violations 
of WIOA sec. 184(a)). No changes were made to the regulatory text in 
response to this comment.
Section 683.730 When can the Secretary waive the imposition of 
sanctions?
    This section permits a recipient to request a waiver of liability, 
and describes the factors the Grant Officer will consider when 
determining whether to grant the request.
    Comments: The Department received comments regarding Sec.  683.730. 
The comments requested the Department fix a clerical error in Sec.  
683.730(b)(1) by

[[Page 56213]]

removing the word ``is'' after the word ``waiver'' to better clarify 
the meaning of the provision.
    Department Response: The Department agrees about the need to make a 
non-substantive textual edit to Sec.  683.730(b)(1) and has made the 
suggested change.
    The Department received no comments on the remaining provisions in 
Sec.  683.730, and has adopted each as proposed.

H. Part 684--Indian and Native American Programs Under Title I of the 
Workforce Innovation and Opportunity Act

1. Introduction
    This part of the Final Rule governs the Indian and Native American 
Programs authorized under sec. 166 of WIOA. This Final Rule section-by-
section discussion details the Department's responses to public 
comments on the proposed part 684 regulations. The analysis that 
follows provides the Department's response to public comments received 
on proposed part 684 regulations. If a section is not addressed below, 
it is because the public comments submitted did not substantively 
address that specific section and no changes have been made to the 
regulatory text. Further, the Department received a number of comments 
on this part that were outside of the scope of the regulation and the 
Department offers no response. Lastly, the Department has made a number 
on non-substantive changes to correct grammatical and typographical 
errors to improve the readability and conform the document 
stylistically that are not discussed in the analysis below.
    In this part, one conforming edit was made throughout to replace 
the term, ``performance measures'' with the term ``performance 
indicators.''
2. Subpart A--Purposes and Policies
Section 684.110 How must Indian and Native American programs be 
administered?
    Comments: Multiple commenters recommended that Sec.  684.110 
include language that would require the Department to utilize staff 
with a particular competence in Federal policies that have tribal 
implications and address the government-to-government relationship 
between the United States and Indian tribes.
    Department Response: The Department agrees with the commenter that 
it is in the best interest of the INA program to utilize employees that 
have a particular competence in INA employment and training programs. 
The Department makes every effort to ensure staff are fully competent 
in the relevant field to administer all of the Department's programs, 
including the INA program authorized by sec. 166 of WIOA. As part of 
this effort, the Department actively recruits experienced and 
knowledgeable staff, including through recruitment of individuals 
eligible for Indian hiring preference for positions within the Division 
of Indian and Native American Programs. This effort also targets those 
who have experience in working with Indian tribes and communities in 
the development and administration of INA employment and training 
programs.
    The Department seeks to hire competent individuals for all of its 
programs and has determined that it is not appropriate to include a 
competency requirement in regulation for just the INA program. No 
changes to the regulatory text were made in response to these comments.
Section 684.120 What obligation does the Department have to consult 
with the Indian and Native American program grantee community in 
developing rules, regulations, and standards of accountability for 
Indian and Native American programs?
    Comments: A commenter expressed concern about whether the WIOA 
primary indicators of performance had been developed with input from 
the INA communities and the Native American Employment and Training 
Council (NAETC) and whether the new WIOA indicators removed the 
requirement of consultation. This commenter further stated that the 
NAETC has been working to develop realistic performance goals and 
suggested that INA programs should not be evaluated on national 
standards that cannot be attained in Native communities.
    Department Response: Per secs. 166(h) and 166(i)(2) of WIOA and 
Sec. Sec.  684.120, 684.460, 684.620, and 684.940, the Department is 
required to consult with NAETC and INA communities. The Department 
conducted town hall meetings, tribal consultations, and listening 
sessions with the NAETC and INA communities and will continue to ensure 
that INA programs and the NAETC be consulted. No changes to the 
regulatory text were made in response to this comment.
    Comments: The comment also references the requirement that INA 
program grantees report on the primary indicators of performance 
described in sec. 116(b)(2)(A) of WIOA.
    Department Response: As described in sec. 116(b)(2)(A) of WIOA, the 
performance indicators are mandated by WIOA. The Department does not 
have the authority to change the statutorily required performance 
indicators in WIOA. However, it fully intends to continue meaningful 
discussions and consultation with the NAETC as well as with INA program 
grantees and other stakeholders in the implementation of the 
indicators, including the establishment of targets and levels of 
performance for each indicator as well as the potential for waivers.
Section 684.130 What definitions apply to terms used in this part?
    Comments: Regarding the ``high-