On the Job Training

Rochelle DanielsAssistant County Attorney

WorkForce One Employment Solutions

6301 NW 5th Way, Suite 3000

Fort Lauderdale, Florida 33309

Rdaniels@WF1broward.com

On the Job Training - OJT

• The two unique features of OJT are

– The individual begins training as an employee of

the employer

– The trainee is subject to the same working

conditions as other similarly employed individuals

• The OJT Employee/Trainee receives

– Training in a productive setting

– Under appropriate supervision,

– Acquires occupational skills and knowledge in an

on-the-job training environment.

On the Job Training - OJT

• There is an obvious benefit to employers

• But the focus of OJT is the participant

– OJT provides an opportunity for eligible individuals

to receive the training necessary to acquire skills

and knowledge that will enable them to maintain

unsubsidized employment and compete for job

advancement.

• If properly administered, OJT provides the

most direct opportunity for unsubsidized

employment

OJT~ The Basics - WIA 122

Eligible Training Providers Exception

• Providers of OJT are not subject to the eligible training provider requirements– They do not need to be on the list or be pre-qualified

and approved by the local board

– Does this refer to third party providers or employers• It refers to both

• However note third party providers ( OJT providers as opposed to employers) need to be procured and approved by the local board except

– when the provider is a designated /procured one stop operator

– When the provider is a procured intensive service provider

» With OJT identified as an activity in the procurement

OJT ~ The BasicsWIA 101 (31)

• ``On-the-job training''

– Means training by an employer provided to a paid participant in a job that--

• Provides knowledge or skills essential to the full and adequate performance of the job;

• Provides reimbursement to the employer

– Of up to 50%* of the wage rate of the participant

– For the extraordinary costs of providing the training and additional supervision related to the training;

• Is limited in duration as appropriate to the occupation considering

– The content of the training

– The prior work experience of the participant, and

– The participant service strategy

• * Note some states have waivers of the 50% and NEG OJT allows for a greater reimbursement.

Change From Previous Law

• Even though it was over 10 years ago there is

a difference between JTPA and WIA

– JTPA limited OJT to six months

– WIA does not limit OJT to six months

• WIA Sec. 101(31)(C) states OJT duration is determined

based upon the occupation being trained for.

OJT Duration20 CFR Sec. 663.700 (c)

• OJT contracts are limited in duration – To the time needed

• For a participant to become proficient

• In the occupation for which training is being provided

– In determining how long the training should be consider:

• The skill requirements of the occupation

• The academic and occupational skill level of the participant,

• The prior work experience,

• The participant's individual employment plan.

(WIA sec. 101(31)(C).)

Note: NEG OJT is limited to 6 months

OJT ~ The BasicsSec. 663.700(c)

• OJT contracts must

– Identify the occupation

– The skills and competencies to be learned

– The length of time the training will be provided.

• Preamble

– States and local areas have the flexibility to

determine the information needed for inclusion in

OJT contracts.

– No mandate that contracts contain documentation

that competencies are acquired

What are the requirements for OJT?

20 CFR Sec. 663.700

• 663.700 sets out the requirement for a contract

– There must be a contract with the employer

– The Preamble – USDOL believes that written

agreements are necessary to ensure OJT

requirements are met.

– Contracts are with employers - who is an employer?

• Public sector

• Private non-profit sector

• Private sector.

• NEG OJT – No public sector contracts

Extra-Ordinary Costs20 CFR Sec. 663.700

• Through the OJT contract– Occupational training is provided

– In exchange for the reimbursement of up to 50 percent of the wage

• To compensate for the employer's extraordinary costs. (WIA sec.101(31)(B).)

– Training

– Supervision

– Reduction in production

• Employers are not required to document extraordinary costs 663.710 (c).

– Can local boards reimburse for benefits?• No – because the law says 50% of the wage

“Bad Employers”20 CFR Sec. 663.700 (b)

• Local areas should not contract with “bad

employers”– An employer with a pattern of

• Failing to retain OJT participants

• Failing to provide

– Wages, benefits, and working conditions

– Equal to those provided to regular employees

– Who have worked a similar length of time and are

doing the same type of work. (WIA sec. 195(4).)

The Preamble - Employers

• Local Boards may consider these and other factors in

selecting employers for OJT but there is no mandate

– Wages and benefits that lead to family self sufficiency;

– Ensure long term self sufficiency for their employees

– Exhibit a strong pattern of union management cooperation;

– After upgrading existing employees through OJT, agree to

backfill vacancies with public assistance recipients and other

low income persons.

OJT Requirements for Employed

Workers

Sec. 663.705

• OJT contracts may be written for eligible employed workers when– The employee is not earning a self-sufficient wage as

determined by Local Board policy

– The requirements in Sec. 663.700 are met; and

– The OJT relates to the

• Introduction of new technologies

• Introduction to new production or service procedures,

• Upgrading to new jobs that require

– Additional skills

– Workplace literacy

– Or other appropriate purposes identified by the Local Board.

Employed Worker Eligibility

• WIA 134 (d)(3)(A)(ii) and (d)(4)(A)(i),provides that one

of the eligibility criteria for intensive and training

services for employed individuals is

– They need the services to obtain or retain employment that

allows for self-sufficiency.

– These criteria enable employed adults in entry level jobs

• To receive services leading to a career or

• To obtain those skills necessary to improve their earning capacity

in another job to assist them in attaining self-sufficiency.

• This eligibility requirement does not apply to training provided as

part of Statewide workforce investment activities under 20 CFR

665.210(d)

Relocation

• OJT contracts cannot be executed with a company – Which has in whole or in part relocated from

somewhere else in the US

– dislocating employees • What if all employees are offered jobs in the new

location?

• It doesn’t matter unless they all decide to move

– until 120 days after opening up for business in the new location

– See 667.268, 667.269

NEG OJT

• 4/30/09 TEGL 19-08

– Expanded access to NEG Funds

– Established NEG eligibility for workers previously

excluded from receiving NEG services

– Clarified NEG program service coordination with

Trade Adjustment Assistance (TAA)

– Created two new types of NEGs:

• Regional Economic Impact (REI) and

• Formula Funds Replenishment.

– Funds can be spent through June 2012

NEG OJT – WIA Sec 173

• Background

– NEGs are discretionary grants awarded by DOL under section 173 of WIA

– Provides employment-related services for dislocated workers.

– Intended to temporarily expand service capacity at the state and local levels by providing time-limited funding in response to significant dislocation events.

• Plant closures and mass layoffs

• Other events per 20 CFR 671.11 0(f)).

NEG OJT

• It is expected workers will come from

– Sectors with high job losses or

– Recently dislocated workers who are

transitioning from temporary or under-

employed situations in

• Construction

• Manufacturing

• Transportation and logistics

• Administrative and support services opportunity

NEG OJT

• ARRA OJT NEGs are limited to

– dislocated workers

– Laid offs 01/01/2008 and after

– Use WIA definition of eligibility

• These individuals are considered unlikely to

return to their previous industry or occupation for

purposes of determining eligibility to participate

under these grants.

NEG OJT Eligibility

• Registered apprenticeship sponsors can

use this program for new apprentices if

the apprentice meets the definition of a

dislocated worker.

• Recently returned veterans who meet the

definition of a dislocated worker are

eligible

– Veterans receive priority of service for WIA

The Skills Gap Reimbursement

Waiver

• Skill gaps– States have flexibility to implement a sliding scale

for employer reimbursement based• On the participant’s initial skill level and

• the skill level needed to perform the job,

• within a scale to be established by state policy which incorporates the use of recognized skill assessment tools.

– The sliding scales for reimbursement willbe built into the terms and conditions of the grant award for different size employers and the skills gap

The Average Wage

Calculation

• Employers may also be reimbursed

based upon the average wage

• This is a more complicated calculation

NEG OJT Duration

• NEG OJT limited to 6 months

– This exceeds the average length of time for

current WIA OJT activities.

– Co-enrollment cannot be used to expand

the training beyond 6 months

What about the ARRA Prohibitions

• All grant requirements and limitations

applicable to ARRA funded NEGs will be

applicable to the OJT NEG

• OJT jobs are prohibited at

– Casinos or other gambling establishments

– Swimming pools

– Aquariums

– Zoos

– Golf courses

Sequential NEG OJT

• Sequential OJT is allowable

• Skill training should be an integral

component of the OJT NEG initiative.

• The Individual Development Plan should

articulate each training component.

Can start up companies be

potential OJT NEG partners?

• Yes

– They must be an established business entity

– With a verifiable Employer Id Number (EIN)

or DUNS number.

Placement agencies and

NEG OJT

• OJTs may not be entered into with staffing

companies

– OJT NEG is intended to benefit dislocated workers

by utilizing employers who are willing to

• Train participants who are in need of up-skilling and

• To permanently hire trainees at the end of the OJT

• OJT contracts can only be written with employers actually

employing participants and assuming the costs and

benefits of the OJT.

NEG OJT and Retention

• It is ETA’s intention that OJT participants

receive priority for hiring with the employer

once the training period has ended.

• OJT contracts should be developed so as to

maximize the potential of trainees to be

permanently hired once the training period has

ended.

When is OJT Right?

• The skills the participant needs are those

which can be learned from the work

environment

• Skills required for the job are better learned

through OJT than classroom training

• The job and its career ladder are a logical step

in achieving goals set forth in the participant

ISS

Marketing

• In general, OJT is an employer service

• But it is entered into for the benefit of the

participant.

– OJT positions should be developed using a

team approach

• The marketers

• The case manager/ counselor and

• The participant

Marketing

• Develop, develop, develop– Maintain an inventory of job openings

• Many may never be filled

• Disappoint employers

• A lot of work for no return

• A job is always available – but vacancies do not stay openindefinitely

• Consider– Identifying a participant and developing a position

suitable to meet the individual’s interests and skilllevels.

– Reverse referrals

– Participant self referral

MARKETING AND

PLACEMENT• Identify Key Employers

– Large Companies

– Public Agencies

– Mid Size Companies

– Major Industries

– Small Companies

– Major Training

– Health Care

– Education

– Not for Profits

• Identify Your Client

– Welfare Recipient

– Dislocated Workers

– Displaced Homemakers

– Older Workers

– Disabled

– Offenders

– Out of School Youth

– Other

Selling OJT to Employers

• WIB staff should encourage WIB members to participate

• WIB members are ambassadors for the program

– Chamber Meetings

– Rotary

– Intermediaries

– Business meetings

Selling OJT to Employers

• Divide the workforce area

– By type of business / Industry

– Geographically

– Small business, Medium, Large

– Retail v Manufacturing

• Staff should familiarize themselves with the type of business

• Make an appointment

Selling OJT to Employers• Onsite visit

– Benefit to the employer – business

– During this economy

• Helps to defray wages (most expensive cost of doing

business) while the economy returns

• For NEG OJT – displaced workers are experienced

workers generally with

– Good employability skills

– Transferable skills

– Assumed not likely to return to pervious occupation

• For Fledgling start ups – stretch the investment $

Selling to Employers

• In any economy– Support is provided to the trainees

• Soft Skills

• Transportation

• Clothes or uniforms

• Tools

– Trainees are matched based upon interests and skills

• Employer knows exactly what the trainees skills are

• Employer has an opportunity to train based upon what best meets the needs of the business

Selling to OJT Employers

• Reverse referral – Got a bad rap

• Some employers hired participants prior to contract execution

• Some employers hired previous employees into the same jobs

– Can work• Employer becomes part of the recruitment strategy

• Explain carefully what is not allowed

• Know that the employer will accept the trainee that they refer

• Make sure to check the wage records and to ask some critical questions of the participant before final approval

Selling OJT to Employers

• The contract is so long…– Maybe, but most of the requirements are not new

requirements they are the law regardless of who is hired

• Will the IRS be coming to look at my books– Not because of this program

• How about immigration– We are not the immigration police

– All participants must be “legal” to work in the United States

Selling to Employers

• There is so much paperwork– We can do it in an hour

– It only happens once – use a master contract

– Let’s break it down• Contract

• Invoices

– You can arrange for one performance based bill or monthly invoicing

– The employer is receiving significant monetary incentive

– The employer receives one stop support worth $ _______

– The OJT full package is worth $ ______

The OJT Contract

• Using a master contract– Only one agreement per employer regardless of the

number of employees

– Each employee/trainee has an OJT training plan for their position it includes the $ and is signed by the parties.

– The training plan• Skills of the job

• Skills to be acquired

• Length of time

• A measurement

• The wage – ( the reimbursement )

OJT Contract• OJT contracts must

– ensure participants are given a structured training opportunity - that is why there is a training plan

• to gain the knowledge and competencies

• to be successful in the occupation in which they receive training.

– identify the occupation

– Identify the skills and competencies to be learned

– State the length of time the training will be provided.

The OJT Contract• Participants may not begin training prior to contract

execution.

• Contract execution is complete when the contractpackage has all required signatures– For the employer

• Its the owner where the business is not incorporated

• A partner where the business is a partnership

• An officer if the business is a corporation.

Corporations may designate other signatories but you shouldhave a resolution

• The contract should be reviewed with the employer priorto execution to familiarize the employer with therequirements.

The OJT Contract

• Who Are The Parties?

– Contractor / Employer

– WIB or the Providers

• Concern is that providers change

• What About Third Party Agencies?

NEG OJT Clauses

• Prohibited placements

– Zoos, aquariums, golf courses, casinos

– Limit of average wage or skill gap

– Limit of 6 months

– Partnership requirements

– Prohibition against staffing companies

– Limited to dislocated workers

Payment Requirements

• Payroll Canceled Checks or ACH

– Make sure employers pay only by check no cash.

– Employer must maintain and make available payroll

and other records to support the reimbursement

– Time & attend records

– # Trainees - Training Plan

– Wage Reimbursement

• Start Wage

• 50% of participant reimbursement

Some Other Required Items• Relocation Certificate

• Non discrimination

• Sectarian and Labor assurances

• Drug Free

• Debarment Certificates

• Lobbying Certificates

• Records Retention - 5 Years

• Maintenance of Effort

• Modification

• Access to Records

• Participant Progress

• Covenant against contingent fees

• Reasonableness of costs – third party, high wages– NEG capped by average wage

Contract Clauses • Conditions For Participant Termination

• Necessary Equipment and Tools

• Support Services

• Coupled or Sequenced Training

• Disallowed Costs

• Non Disclosure of Confidential Information

• Length of OJT - See Employer Terms

• Retention

• Performance Based?– Retention Impacts Contractor Demonstrated Performance

• Employer’s. Notification before termination - If possible

The Contract

• Subcontracting and Assignment

• Notices

• Unilateral Amendments To Address Changes In Law/Regulations

• Conflict of Interest and Nepotism

• Assurance no one charged a fee for the placement or referral of the individual to an OJT position