Apprenticeship Programs, Labor Standards for Registration, Amendment of Regulations

Federal RegisterMar 11, 2020

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DEPARTMENT OF LABOR

29 CFR Part 29

RIN 1205-AB85

Apprenticeship Programs, Labor Standards for Registration, Amendment of Regulations

AGENCY:

Employment and Training Administration, Labor.

ACTION:

Final rule.

SUMMARY:

To address America's skills gap and to rapidly increase the availability of high-quality apprenticeship programs in sectors where apprenticeship opportunities are not widespread, the U.S. Department of Labor (DOL or the Department) is issuing this final rule under the authority of the National Apprenticeship Act (NAA). This final rule establishes a process for the DOL's Office of Apprenticeship (OA) Administrator (Administrator), or any person designated by the Administrator, to recognize qualified third-party entities, known as Standards Recognition Entities (SREs), which will, in turn, evaluate and recognize Industry-Recognized Apprenticeship Programs (IRAPs). This final rule describes what entities may become recognized SREs; outlines the responsibilities and requirements for SREs, as well as the standards of the high-quality Industry-Recognized Apprenticeship Programs the SREs will recognize; and sets forth how the Administrator will oversee SREs.

DATES:

This final rule is effective May 11, 2020.

FOR FURTHER INFORMATION CONTACT:

John V. Ladd, Administrator, Office of Apprenticeship, U.S. Department of Labor, 200 Constitution Avenue NW, Room C-5311, Washington, DC 20210; telephone (202) 693-2796 (this is not a toll-free number).

Individuals with hearing or speech impairments may access the telephone number above via TTY by calling the toll-free Federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

Preamble Table of Contents

I. Background

A. Purpose of This Regulation

B. Legal Authority

C. General Comments Received on the Notice of Proposed Rulemaking

II. Section-by-Section Analysis of the Final Rule

A. Subpart A—Registered Apprenticeship Programs

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

III. Agency Determinations

A. Executive Orders 12866 (Regulatory Planning and Review) and 13563 (Improving Regulation and Regulatory Review)

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

C. Paperwork Reduction Act

D. Executive Order 13132 (Federalism)

E. Unfunded Mandates Reform Act of 1995

F. Executive Order 13175 (Indian Tribal Governments)

I. Background

A. Purpose of This Regulation

On June 25, 2019, the Department published a Notice of Proposed Rulemaking (NPRM) in the

Federal Register

(84 FR 29970), proposing to amend 29 CFR part 29 (Labor Standards for the Registration of Apprenticeship Programs) by authorizing the Administrator to recognize SREs who meet the criteria outlined herein. These SREs would, in turn, evaluate and recognize IRAPs

that satisfied the standards and guidelines for program quality described in the NPRM. The NPRM invited written comments from the public concerning this proposed rulemaking. These comments may be viewed at

http://www.regulations.gov

by entering docket number ETA-2019-0005.

In the NPRM for this regulation, the Department also referred to industry-recognized apprenticeship programs as “Industry Programs.” In the text of this final rule, however, the Department has opted to utilize the acronym “IRAP” to refer to this new apprenticeship model.

After careful consideration of the comments received, the Department is adopting this final rule, which supplements the existing system of registered apprenticeships with a flexible, industry-led model—one that will be capable of rapidly increasing the availability of apprenticeships in emerging, high-growth sectors.

Since its enactment, the Department has implemented the NAA by registering individual apprenticeship programs and apprentices. The registration of programs and apprentices occurs either directly under the auspices of the Department's OA, or through recognized State Apprenticeship Agencies (SAAs). While registered apprenticeships have been successful in certain sectors, in particular construction and its allied trades, the existing registered apprenticeship model has not increased the availability of apprenticeships in other rapidly-expanding sectors of the economy. The proportion of apprentices constitutes only about 0.2 percent of the U.S. workforce.

Additionally, a 2017 Harvard Business School study identified nearly 50 occupations as ripe for apprenticeship expansion.

See Robert I. Lerman, “Proposal 7: Expanding Apprenticeship Opportunities in the United States,” The Hamilton Project, Brookings Institution, 2014,

http://ow.ly/UlDmN

Joseph B. Fuller and Matthew Sigelman, “Room to Grow: Identifying New Frontiers for Apprenticeships,” Nov. 2017, 3,

https://www.hbs.edu/managing-the-future-of-work/Documents/room-to-grow.pdf

The United States is also experiencing an economic challenge: a discrepancy between the occupational competencies that businesses need and the job skills of aspiring workers. There were 6.4 million job openings in the United States at the end of 2019.

Some of these jobs are going unfilled because employers have not been able to locate enough workers with the skills required to perform them. This pervasive skills gap has posed a serious impediment to job growth and productivity.

A recent report issued by the National Federation of Independent Businesses reinforced that a shortage of qualified, skilled workers is inhibiting small business hiring growth.

Another recent report produced jointly by Deloitte and the Manufacturing Institute projected that the skills gap may leave an estimated 2.4 million positions unfilled in the manufacturing sector between 2018 and 2028, placing more than $2.5 trillion in U.S. manufacturing output at risk during that period, if the skills shortage is not addressed effectively.

U.S. Bureau of Labor Statistics (BLS), “Job Openings and Labor Turnover—December 2019,” Feb. 11, 2020,

https://www.bls.gov/news.release/archives/jolts_02112020.pdf

See,

e.g.,

Task Force on Apprenticeship Expansion, “Final Report to the President of the United States,” May 10, 2018, 16 (citing 2018 report from National Federation of Independent Business); Business Roundtable, “Closing the Skills Gap,”

https://www.businessroundtable.org/policy-perspectives/education-workforce/closing-the-skills-gap

(last visited Dec. 7, 2019);

cf.

Deloitte and the Manufacturing Institute, “2018 Deloitte and The Manufacturing Institute Skills Gap and Future of Work Study,” Nov. 2018, 2 (estimating manufacturing jobs that may go unfilled due to skills gap),

http://www.themanufacturinginstitute.org/~/media/E323C4D8F75A470E8C96D7A07F0A14FB/DI_2018_Deloitte_MFI_skills_gap_FoW_study.pdf

See

National Federation of Independent Businesses, “September 2019 Jobs Report,” Sept. 2019,

https://www.nfib.com/foundations/research-center/monthly-reports/jobs-report/

Deloitte and the Manufacturing Institute, “2018 Deloitte and The Manufacturing Institute Skills Gap and Future of Work Study,” Nov. 2018, 3-5.

In their comments on the NPRM, several industry groups highlighted that the skills gap has led to a lack of qualified candidates, which has stalled business growth and undermined competitiveness in the global marketplace. Another commenter stated

that failure to close the skills gaps “risks ceding U.S. technology leadership to other countries, with broad consequences for our nation's economic [sic] and even national security.” Other commenters stated that they recognize the need for an expanded, well-crafted apprenticeship program in order to address the skills gap in multiple industries. A member of Congress also commented that IRAPs will equip additional Americans with the necessary skills to contribute to and benefit from a prosperous economy.

In light of these challenges, in January 2017—within days of assuming office—President Donald J. Trump and his Administration began promoting apprenticeships as a critical component of addressing the skills gap. On June 15, 2017, President Trump signed Executive Order (E.O.) 13801, “Expanding Apprenticeships in America” (82 FR 28229), which charged the Secretary of Labor (Secretary) with considering the issuance of regulations that promote the development of apprenticeship programs by third parties. Specifically, the proposed regulations would reflect an assessment of determining how qualified third parties may provide recognition to high-quality apprenticeship programs.

E.O. 13801, Expanding Apprenticeships in America, 82 FR 28229 (June 15, 2017), sec. 4(a).

Section 8 of the E.O. directed the Secretary to establish a Task Force on Apprenticeship Expansion (Task Force), to identify strategies and proposals to promote apprenticeships, especially in sectors where they are insufficient. During its 6 months of deliberations, the Task Force developed recommendations for improving the educational and credentialing aspects of apprenticeship; attracting more businesses to apprenticeship; expanding public awareness of, and access to, apprenticeships; and developing administrative and regulatory strategies to expand apprenticeship.

See

Task Force on Apprenticeship Expansion, “Final Report to the President of the United States,” May 10, 2018, 10-11.

On May 10, 2018, the Task Force transmitted its final report to President Trump. The report explained that many employers choose to establish apprenticeship programs outside of the registered apprenticeship program, in part because of the paperwork and process involved in registering a program. In addition, the report noted that there is insufficient flexibility in program requirements within the registered apprenticeship program to meet the varying needs of different industries. The report pointed out that IRAPs would provide a new apprenticeship pathway that gives industry organizations and employers more autonomy and authority to identify high-quality apprenticeship programs and opportunities.

Id.

at 34.

The issuance of this final rule fulfills E.O. 13801's mandate concerning IRAPs and implements key recommendations contained in the Task Force report. The final rule also reflects input from the large number of commenters who offered substantive recommendations for the refinement and improvement of the proposed rulemaking.

In this final rule, the Department has modified 29 CFR part 29 by creating two subparts—one governing the operation of registered apprenticeship programs (subpart A), and the other establishing quality guidelines for DOL-recognized SREs and IRAPs (subpart B). The existing regulatory language of 29 CFR part 29, setting forth the labor standards for the registration of apprenticeship programs, has been fully retained within the new subpart A, with minor conforming edits to accommodate the addition of the new subpart B. Subpart B establishes the process for organizations to apply to become DOL-recognized SREs of IRAPs. Once recognized by the Department, these SREs will work with employers and other entities to establish, recognize, and monitor high-quality IRAPs. The final rule includes measures and guidelines to facilitate the recognition of these high-quality IRAPs, and it sets out how the Department will oversee SREs. The final rule also adopts changes suggested by commenters that increase the Department's role in program oversight, clarify the requirements to become a recognized SRE, and heighten SRE and IRAP program transparency.

The Department expects that the issuance of this final rule will accelerate the expansion of quality apprenticeships by introducing a flexible, market-based, industry-led model that is capable of expanding apprenticeships in emerging, high-growth sectors while also reaching underserved populations. By establishing a supplementary apprenticeship pathway that addresses the varying needs of different industries, the final rule seeks to address the skills gap in the U.S. labor force while promoting the growth of high-quality, sustainable jobs for the American workforce.

This final rule is considered an E.O. 13771 regulatory action. Details on the estimated costs of this final rule can be found in the rule's economic analysis.

B. Legal Authority

As relevant to this final rule, the NAA authorizes the Department to: (1) Formulate labor standards to safeguard the welfare of apprentices and to encourage their inclusion in apprenticeship contracts; (2) bring together employers and labor for the formulation of programs of apprentices; and (3) cooperate with State agencies engaged in the formulation and promotion of standards of apprenticeship. 29 U.S.C. 50.

This final rule implements the NAA's direction that the Secretary “bring together employers and labor for the formulation of programs of apprenticeship” by creating a flexible, industry-driven model for apprenticeship designed to bring together diverse groups of employers and prospective apprentices in industries and occupations that do not have a robust presence in the registered apprenticeship system. The final rule further implements the NAA's direction by establishing standards for this apprenticeship model that are designed to safeguard the welfare of apprentices. As discussed in more detail below, all IRAPs must comply with the standards for high-quality apprenticeships contained in the regulation, and with their respective SRE's policies and procedures, and must provide apprentices with a written apprenticeship agreement outlining the conditions of employment and training consistent with their respective SRE's requirements (which would include those required by this regulation).

Several commenters contended that the NPRM was inconsistent with the NAA, referring to the legislative history and purpose of the NAA. Commenters highlighted congressional comments about Federal intervention to halt manipulative and dishonest apprenticeship training programs that failed to train apprentices.

The Department has determined that it has authority under the NAA to establish this program. The NAA provides a general authorization and direction for the Secretary to create and promote standards of apprenticeship, including through contracts, and to interface with employers, labor, and States to create apprenticeships and apprenticeship standards. See 29 U.S.C. 50. This final rule does not exceed or conflict with the broad authority granted by Congress in the NAA. The NAA does not mandate or require that the current registered apprenticeship system be the exclusive apprenticeship system administered by the Department, nor does it suggest that the Department

is limited to one approach in executing the NAA.

One commenter stated that the NAA does not authorize the IRAP model because the legislative history of the NAA indicates it was meant “to bring Government oversight to apprenticeship, and that it did so by directing DOL, in concert with the states, to establish minimum standards to protect apprentices from exploitation.” Commenters argued that the IRAP model does not match this history because it places trust in private actors who could manipulate and mislead apprentices without government oversight.

In response to these particular comments, the Department notes that this regulation establishes the broad standards under which apprentices will work and train, including the requirement that apprentices enter into an apprenticeship agreement that discloses the terms and conditions of the program. In addition, the Department maintains a robust oversight role over SREs, and has a number of tools at its disposal should it determine that a recognized SRE or an SRE's recognized IRAP is not in compliance with the standards laid out in the regulation.

The Department further notes that while the NAA establishes that the Federal Government may help develop and encourage the adoption of apprenticeship standards, the text of the NAA does not require that any apprenticeship programs receive Department approval or use the standards developed by the Department—participation in the IRAP model, as with registered apprenticeship, is voluntary. Had Congress meant for the Department to mandate standards for all U.S. apprenticeships, it surely would have used stronger language than it did. Phrases like “formulate and promote,” “encourage[e] the inclusion,” “bring together,” and “cooperate,” are not how Congress typically establishes universal mandates. Cf.,

e.g.,

29 U.S.C. 654(a) (“Each employer . . . shall furnish to each of his employees employment and a place of employment . . . free from recognized hazards that are causing or likely to cause death or serious physical harm to his employees . . . [and] shall comply with occupational safety and health standards promulgated under this Act.”). This reading of the text is supported by the NAA's legislative history. The NAA's legislative history states that the Department has no authority “to compel adherence to its recommendations” for apprenticeship standards but could encourage their inclusion in contracts, as well as the provision of technical assistance to employers and labor. See S. Rep. No. 75-1078, at 3. The legislative history of the NAA further indicates that Congress intended to give the Secretary multiple tools to improve the quality of American apprenticeship. It speaks not only of the importance of formulating standards for training and safety to ensure quality apprenticeship opportunities, but the need for Federal assistance in expanding the number of apprenticeship programs to fill the skills needs of industry. See H. Rep. No. 75-945, at 2-3.

Commenters also argued that the statutory text prohibits the IRAP model. One commenter argued that DOL could only create the IRAP model if Congress passed a new law, because DOL cannot deviate from the standards of registered apprenticeship. Another commenter stated that DOL must comply with the authorizations and directions of the NAA at the same time and that the proposed rule did not do so, because it did not provide for the welfare of apprentices.

As noted, the NAA does not dictate the terms of how the Department takes these steps or restrict the Department to only one particular approach, nor does the NAA require the Department to establish one set of standards. The NAA “is written in very broad terms” and “contains a wide grant of authority to the Secretary of Labor.”

Gregory Elec. Co.

U.S. Dep't of Labor,

268 F. Supp. 987, 991 (D.S.C. 1967). As discussed below, the final rule sets out an extensive list of requirements and protections in § 29.22 that are designed to safeguard the welfare of apprentices and to require quality training, progressively-advancing skills, and industry-relevant credentials. Further, unlike the commenter who suggested all provisions of the NAA must be met at the same time, the Department reads the NAA as simply listing the various activities that Congress has authorized and directed the Department to engage in. The NAA authorizes the Department to formulate and promote apprenticeship standards, to encourage the inclusion of those standards in contracts of apprenticeship, to bring employers and labor together, to cooperate with State agencies in the formulation of State standards of apprenticeship, and to cooperate with the Secretary of Education. As a practical matter, these activities may be carried out independently of each other, and nothing in the statute suggests that any particular activity engaged in by the Department must include all five activities to be a valid activity under the NAA. With that said, as discussed below, the final rule sets out an extensive list of requirements and protections in § 29.22 that are designed to safeguard the welfare of apprentices and to require quality training, progressively advancing skills, and industry-relevant credentials.

Many commenters contended that the proposed rule was problematic because it lacks specificity or does not involve States. Other commenters argued that the NAA does not authorize the proposed rule, because the rule did not provide as detailed or comprehensive a set of requirements as the Department's registered apprenticeship regulations. Several states submitted comments either opposed to the rule or urging greater State involvement in the IRAP initiative.

The NAA does not require the Department to promulgate highly specific apprenticeship standards, only those standards formulated by the Department that are necessary to safeguard the welfare of apprentices, which, as discussed above and below, the final rule accomplishes. The Department disagrees that the rule lacks specificity, as the final rule provides many requirements for IRAPs and SREs—including detailed performance metrics not required of registered apprenticeship programs. And while the NAA encourages cooperation with States in the development of their standards of apprenticeship, there is no requirement that DOL consult or operate its apprenticeship initiatives through States, nor a requirement that States participate directly in the development of this regulation or any other apprenticeship standards the Department has or may develop. Many states submitted comments on the proposed rule and the Department considered these comments in developing this final rule.

C. General Comments Received on the Notice of Proposed Rulemaking

The Department received a total of 326,798 public comments, of which 17,671 were unique. The majority of the remainder were letters associated with 290 form-letter campaigns. Almost all of the form-letter campaigns addressed the exclusion of the construction industry from the Department's proposed approach to IRAPs. This issue is discussed at length in the section-by-section discussion of § 29.30 of this final rule (§ 29.31 in the proposed rule).

The commenters represented a range of stakeholders from the public, private, and non-profit sectors. Public sector commenters included Federal, State, and local government agencies and

elected officials. Private sector commenters included employers/business owners, construction and building trades firms, and trade or industry organizations. Non-profit sector commenters included national and local labor unions, professional associations, and educational and training organizations. The majority of public comments received in response to the proposal were from private citizens, including current and former apprentices.

General Support for and Opposition to the IRAP Framework

Many commenters expressed general support for the Department's efforts in the proposed rule to establish a framework for IRAPs. Some commenters noted that there is room for more than one pathway to achieving successful apprenticeship programs. Another commenter stated that IRAPs and registered apprenticeship programs can operate in parallel, commenting that by allowing industry groups to recognize IRAPs, DOL is empowering the private sector to create more apprenticeship programs in a more efficient fashion. Commenters stated that IRAPs will equip Americans with the necessary skills to contribute to the booming economy and would allow workers to be trained for flexibility in performing their jobs and other duties. One commenter expressed support for the brevity and simplicity of the proposed rule. Another commenter remarked that workers' choice to participate in apprenticeship programs should not be restricted by the presence of a union-sponsored program in the geographical location where they would choose to attend an IRAP. Several commenters also stated that the proposed rule is beneficial because it could help cut through bureaucratic red tape to put businesses and employees at the center of the conversation; allow businesses to meet labor-market needs; allow small businesses to focus on serving program participants while also protecting apprentices from discrimination; and help industries adjust to and face changes, boost incomes, and curb student debt.

Other commenters contended that the IRAP model does not operate in the best interests of the apprentice because the model has not adopted minimum standards for IRAPs, such as formal apprentice contracts, progressive wage increases, fair discipline and proper supervision, standards for instructors' education, independent oversight, statewide uniformity, safety standards, and protection of apprentices against discrimination and harassment. Multiple commenters indicated that the IRAP model “takes a macroeconomic view of the industry and workforce development and exhibits only a superficial investment in the interests of the apprentice.” A few commenters predicted that the IRAP model would fail in a few years because the model enables “profit-driven” organizations to “cut corners” in order to boost profits at the expense of their workers. A commenter stated that the market-driven approach to scaling the apprenticeship model damages the skilled workforce and apprenticeships by making industry less flexible and resilient to economic downturns, and more susceptible to manipulation by policymakers and diminishing economic growth. A commenter asserted that IRAPs are not apprenticeships at all and, therefore, do not belong in 29 CFR part 29.

The Department appreciates the comments recognizing the benefits of IRAPs to the U.S. economy and workforce. The Department shares the view of commenters who believe that there is room in the workforce for both registered apprenticeship programs and IRAPs. The Department acknowledges the concerns articulated by commenters doubting the success of IRAPs and questioning the ability of the IRAP model to adequately train and safeguard the welfare of apprentices. The Department has responded to these concerns, as discussed in detail below in the section-by-section analysis. In the final rule, the Department has strengthened the standards of high-quality IRAPs to provide more detailed training requirements and protections for apprentices, enhanced Departmental oversight of SREs and—by extension—IRAPs, and included additional requirements on SREs to develop processes that support IRAPs, hold IRAPs accountable, and provide greater protection to apprentices.

The Department disagrees with commenters who have suggested that IRAPs will have a negative effect on the economy and the workforce and would be less flexible during economic downturns. On the contrary, the purpose of IRAPs is to increase high-quality apprenticeships in a manner that ensures industry-relevant training and skills, appropriate safeguards for apprentices, and a skilled, adaptable workforce. IRAPs could provide additional opportunities for workers during economic downturns and assist workers to achieve mobility and transferrable skills through industry-relevant training and credentials.

Support for Registered Apprenticeship Programs

Many commenters expressed general concerns about IRAPs as an alternative path to registered apprenticeship programs. Numerous commenters urged the Department to withdraw the proposed IRAP model and focus on supporting and improving registered apprenticeship programs in order to achieve the goal of retaining skilled and qualified tradespeople for long-term success. A commenter expressed the view that IRAPs would divert resources from DOL that could be used to promote registered apprenticeships and would reduce the capacity of DOL to ensure high-quality standards in apprenticeship programs. Some commenters stated that instead of developing a new program, the Department should focus efforts on additional funding of registered apprenticeship programs through Federal grants or tax credits. Multiple commenters remarked on the significant growth of registered apprenticeship and the number of active registered apprentices today as compared to the 20-year national average. Other commenters remarked on the success of registered apprenticeships in “apprenticeable occupations.” Some commenters urged DOL to promote joint labor-management apprenticeship programs rather than creating a system of IRAPs. Many commenters asserted that robust, privately-funded registered apprenticeship programs have helped millions of workers obtain upward mobility and learn nationally-recognized skills and that they have benefited employers by supplying a qualified and highly-trained workforce, improving safety, and allowing greater productivity. Many commenters also provided personal stories and examples of professional success gained by completing a registered apprenticeship that cultivates safety-oriented, high-performance apprentices in middle-class careers. A commenter remarked that high-quality apprenticeship programs boost the economy, while another commenter stated that existing programs have one of the highest rates of return on investment for employers.

A commenter asserted that, while the registered apprenticeship system is in need of some improvements—such as streamlining the program approval process, achieving greater diversity, and clarifying misperceptions about how apprenticeship operates—the proposed rule does not address issues to improve the registered apprenticeship system. Some commenters disagreed with the notion that the current registered

apprenticeship system is rigid, inflexible, cumbersome, or burdensome, noting instead that their experience was to the contrary and that registered apprenticeships are fully adaptable to business needs. Other commenters included resolutions from their State apprenticeship advisory bodies listing the important attributes of registered apprenticeship programs and affirming their support for such programs. The resolutions included statements of opposition to the proposed IRAP model because of concerns that the new approach would undermine the existing registered apprenticeship model.

The Department appreciates commenters' concerns about IRAPs' effect on the registered apprenticeship program. The Department emphasizes, however, that IRAPs are not intended to disrupt, supplant, or otherwise negatively affect registered apprenticeship programs. The Department views IRAPs and registered apprenticeship programs as operating in parallel. It further views the market-driven approach with IRAPs as designed to encourage growth in use of the apprenticeship model such that quality IRAPs would succeed alongside registered apprenticeship programs. Moreover, the need to rapidly increase apprenticeships in the United States through a new apprenticeship model is evident when one considers that the proportion of apprentices in the labor force in other countries is considerably greater than in the United States. While apprentices account for approximately 0.2 percent of the American labor force, they constitute 2.2 percent of the labor force in Canada, 2.7 percent in the United Kingdom, and 3.7 percent in Germany and Australia.

See

Robert I. Lerman, “Proposal 7: Expanding Apprenticeship Opportunities in the United States,” The Hamilton Project, Brookings Institution, 2014,

http://ow.ly/UlDmN

As discussed in more detail below in the Department's explanation of § 29.30, the Department has determined that programs that seek to train apprentices to perform construction activities, as described in § 29.30, will not be recognized as IRAPs. The Department's goal in this rulemaking is to expand apprenticeships to

new

industry sectors and occupations. Registered apprenticeship programs are more widespread and well-established in the construction sector than in any other sector. Further, commenters raised concerns about allowing IRAPs in the construction sector in particular. In light of the purpose of this rulemaking, there is no need to take the risk, whatever the magnitude, of disrupting or displacing registered construction programs.

The Department intends to continue to promote, improve, and increase the availability of registered apprenticeship programs. The Department appreciates commenters' support of registered apprenticeship programs and, particularly, their view that registered apprenticeship programs contain sufficient rigor without creating burdensome requirements. The Department also appreciates the numerous success stories shared by commenters, and the Department agrees that the earn-and-learn model of apprenticeship provides numerous benefits to workers and employers. Furthermore, the Department is well aware of the high rates of return that employers receive from the investment in apprenticeship programs. As for the comment that this rule does not address improvements to the registered apprenticeship system, this rule is not intended to make changes to the registered apprenticeship program but rather to establish a separate system of apprenticeship. This alternative pathway for apprenticeship is to provide additional avenues for addressing the skills gap and creating apprenticeship opportunities. The Department will continue to promote and improve the registered apprenticeship model through streamlined processes and development of electronic tools, among other things. Nevertheless, with this rule, the Department is also acknowledging that an industry-led alternative model may be better suited to some industries and has determined that IRAPs are a valid, parallel option to increase apprenticeship opportunities in the United States.

The Department intends to utilize funds appropriated for registered apprenticeship to continue to improve and support registered apprenticeship programs. The Department also notes that any available grant funding for registered apprenticeships will be announced through future funding opportunity announcements. Comments concerning tax credits to support apprenticeship are outside the scope of this final rule.

The Role of States in IRAPs

Commenters recommended that the Federal Government should empower and appropriately fund all States to operate their own, federally-approved registered apprenticeship programs. Another commenter encouraged the Department to consider a role for States in engaging with IRAPs within their State, in addition to the SREs recognizing those IRAPs, and to support state-agency capacity for this engagement. Multiple commenters expressed concern that IRAPs would bypass the SAA system and States would not have oversight of the apprenticeship programs operating within their borders. A commenter expressed concern about creating a parallel system with no role for SAAs. Another commenter stated that SAAs have been at the forefront of increasing opportunities for apprenticeship in new industries, occupations, and populations. A commenter asserted that the proposed rule could jeopardize its State's history of success in maintaining superior buildings, worksite safety, and family wage jobs in the construction sector. Multiple commenters suggested that IRAPs would undermine their States' longstanding registered apprenticeships in the building trades. One commenter questioned the proposed funding scheme for IRAPs and asked whether there would be any fiscal impact on State labor departments.

The Department appreciates the role of SAAs in the registered apprenticeship program and will continue to support and promote such engagement. The Department also notes that this rule allows States and local government agencies or entities to participate as SREs; therefore, States may serve such a role if they so choose and fulfill the regulatory requirements. The Department appreciates the concern that a State may not have oversight of IRAPs within its borders. The Department notes, however, that various parts of the rule require IRAPs to abide by State and local laws, and State enforcement mechanisms would apply to employers offering IRAPs as to other employers operating within the State. The Department encourages SAA States to continue supporting and promoting registered apprenticeships, and the Department intends to continue to support and promote registered apprenticeships in both SAA and non-SAA States. Concerning the comments about the construction sector's superior buildings, worksite safety, family wage jobs, and State registered apprenticeships in the building trades, the Department has included in the final rule at § 29.30 an exclusion from this subpart for programs that seek to train apprentices to perform construction activities. This means that SREs may not recognize as IRAPs programs that seek to train apprentices to perform construction activities as defined in § 29.30. The Department does not anticipate that this rule generally will have a fiscal impact on State labor

departments, but the Department also notes that State labor departments, or any other State agencies or entities, may choose to become recognized SREs as set forth in §§ 29.20 and 29.21.

Distinction Between Registered Apprenticeship Programs and IRAPs

Several commenters stated that the distinction between registered apprenticeships and IRAPs should be emphasized given that, according to the commenters, registered apprenticeships have rigorous standards and are not profit-driven. Multiple commenters asserted that IRAP and registered apprenticeship contractors would often be indistinguishable to the public, who might choose less qualified personnel without recognizing the difference. Multiple commenters recommended that the terms “apprentice” or “apprenticeship” not be used for IRAPs to prevent confusion with registered apprenticeships. A commenter expressed support for DOL's statement in the NPRM that recognition as an IRAP is different from registration as a Registered Apprenticeship Program. Numerous commenters argued that a “bright line distinction” is warranted, particularly in the construction industry, because, according to them, registered apprenticeship programs are rigorously reviewed and operate at a higher level of commitment to training than the proposed IRAPs would. Commenters also approved of a bright line distinction as applied to the ability to apply for Federal funding given that, in their view, IRAPs would not have the same requirements for standards and quality of instruction and protection of apprentices. Another commenter asserted that it is unrealistic to expect an IRAP to invest the capital and resources that a labor union already “invests as part of its commitment to producing well and broadly trained” employees “with years of rigorous classroom, field, and on the job preparation.”

The Department acknowledges commenters' statements that there should be a bright-line distinction between registered apprenticeship programs and IRAPs. The Department has determined that the IRAP model sufficiently diverges from the registered apprenticeship model so that a bright line distinction exists without a need for a regulatory change. The Department disagrees with the premise that IRAPs are inherently less safe or rigorous, given the detailed requirements set forth below. Additionally, because construction activities are excluded from the subpart, as discussed further below in the Department's explanation of § 29.30, there is no need for any bright-line distinction for apprenticeships involving construction activities.

Regarding Federal funding for IRAPs, it is the Department's view that in cases where Federal programs confer categorical eligibility, exclusive funding, or special status to registered apprenticeship programs, such benefits do not extend to IRAPs. Such benefits were designed with the registered apprenticeship programs in mind, and it is therefore appropriate to maintain preferential status only for registered apprenticeships. In cases where high-quality apprenticeship programs are generally eligible for funding, such as in the Department's H-1B Job Training Grant Program, the Department maintains that IRAPs should be eligible for such funding. With respect to the comment that IRAPs may not invest in training to the same degree as labor unions, the Department anticipates that employers that chose to participate in IRAPs will have every reason to invest in job training. The Department anticipates that the establishment of a new apprenticeship pathway will incentivize employers to seek innovative and high-quality methods for training their employees. This is because an employer has every incentive to ensure that its apprenticing employees gain the skills necessary to do the tasks the employer needs. Presumably that is why an employer would offer an IRAP in the first place. Additionally, employers have a market incentive to offer an IRAP. It distinguishes these employers in the competition for talent from other employers who do not offer an IRAP.

The Department also believes it is overly simplistic to state that registered apprenticeship programs are not profit-driven. Many for-profit companies participate in registered programs.

Decision Not To Pursue IRAP Pilot Program

Multiple commenters stated that the proposed rule did not follow the Task Force's Recommendation 14 to begin IRAP implementation with a pilot program in an industry without well-established registered apprenticeship programs. Several commenters said that there was no empirical evidence supporting the decision not to implement a pilot program. A commenter stated that a pilot program would have helped the Department assess the effectiveness of IRAPs before issuing a rule and requested that DOL explain the decision not to implement a pilot program as well as provide evidence that supports IRAPs' effectiveness.

Several commenters requested that the Department implement a pilot program in the final rule in order to test the program model narrowly at first and make adjustments as needed to ensure proper implementation and success before applying the program on a larger scale. Other commenters opined that determining which occupations should be included in a pilot project depends on which occupations are experiencing a skills gap, which is hard to identify in any given industry that does not already have a training program via registered apprenticeship. One of these commenters further stated that, because of insufficient reliable data to understand the scope of U.S. apprenticeships, the proposed rule should be withdrawn until adequate data are obtained.

After due consideration of these comments, the Department maintains that the large skills gap requires a more immediate response than a pilot project would permit. The Department believes that the problems posed by the current skills gap necessitate the comprehensive implementation of IRAPs, and that a pilot program would by its very nature be insufficient to address the current shortage of skilled American workers at the scale required. Further, nothing in the NAA requires that bringing together “employers and labor for the formulation of programs of apprenticeship” be done first as a pilot program. The Department has discretion under the broad language of the NAA to establish the IRAP program as it is done here.

Industry-Driven Apprenticeship Model Framework

Several commenters suggested that the IRAP framework should coordinate with State, local, and regional partners and stakeholders (local businesses, workforce and education systems, human services organizations, labor and labor-management partnerships, and other community-based organizations) to ensure IRAPs are aligned with the workforce, education, and human services programming in which Federal, State, and local governments and the private sector currently invest.

One commenter argued that the proposed rule leaves many issues unaddressed, such as challenges employers face in navigating the apprenticeship system, lack of attention to reciprocity, and uncertainty among apprentices about how to evaluate program quality. Multiple commenters suggested that each SRE applicant and each IRAP should be classified

according to the North American Industry Classification System (NAICS) or Occupational Information Network (O*NET) codes, stating that to do otherwise might disrupt the current registered apprenticeship system.

The Department anticipates that the IRAP model will strike the appropriate balance between coordinating at the regional and national levels, as will be more practical for large employers, and coordinating with State and local governments, as may be more practical for many smaller employers. The Department stresses that the IRAP model provides flexibility for industries to set the training requirements, program structure, and teaching curricula that strikes the ideal balance between geographic and industry-wide concerns. This approach, which is intended to minimize administrative burdens on adopters of the IRAP model, should encourage a more rapid scaling of quality apprenticeships across multiple industries where apprenticeships are currently underutilized. With respect to NAICS and O*NET codes, the Department will be requesting such information from each prospective SRE about the IRAPs it will recognize and expects there to be a uniformity in classification between IRAPs and registered apprenticeships. The Department also acknowledges the concern that employers and prospective apprentices may face difficulty in navigating and comparing potential apprenticeship options. As discussed in more detail below, the Department addressed such concerns by incorporating the enhanced metrics listed in § 29.22(h) as well as the reporting required by § 29.24 of the final rule.

Requests To Extend the Comment Period

Ten commenters submitted requests to extend the comment period for the proposed rule. Seven commenters requested a 30-day extension of the comment period, and three commenters requested a 60-day extension. In general, commenters requesting an extension of the comment period cited their desire to provide meaningful and comprehensive comments.

While the Department acknowledges these concerns, the Department concluded that the 60-day comment period was reasonable and sufficient to provide the public a meaningful opportunity to comment. This conclusion is supported by the large volume of complex and thoughtful comments received, including detailed comments from all 10 commenters requesting an extension, which demonstrates that the public has had adequate time to meaningfully participate in the rulemaking. For these reasons, the Department declined to extend the 60-day public comment period on the NPRM.

Other Suggestions About Public Participation

A commenter expressed concern that the proposed rule had been developed with no consultation with, or input from, SAAs or the Advisory Committee on Apprenticeship. Another commenter suggested that the Department should work with previously-contracted intermediaries for registered apprenticeships that have an understanding of the issues within the current system to make changes needed to gain wider adoption by the technology sector. A commenter suggested that the Department offer the public an additional opportunity for public comment, because the proposed rule lacked a discussion of the validity of IRAP-issued credentials.

The Department believes that these concerns are overstated and insubstantial. The Department benefitted from input from the Task Force Report, which helped inform the development of the proposed rule. The Task Force consisted of a wide range of stakeholders, including State elected officials, major trade and industry groups, labor unions, and concerned citizens. In addition, the Department received several comments from SAAs subsequent to the publication of the proposed rule, which were taken into consideration during development of the final rule.

Administrative Procedure Act

A commenter raised concerns that the Department has already established both the fact that SREs exist and that SREs may be approved and awarded a favorable determination before the related regulation is finalized. The commenter also asserted that the Department has no intention of taking into serious consideration any critical comments that will be submitted in response to the NPRM, which it is required to do pursuant to the APA.

The Department notes that Training and Employment Notice (TEN) 3-18 and TEN 3-18, Change 1 (issued on July 27, 2018, and June 25, 2019, respectively) were rescinded on October 22, 2019. Accordingly, the Department withdrew the information collection request (ICR) package associated with the TEN on October 22, 2019. The TEN provided that a potential SRE could apply for a favorable determination from the Department as to whether its policies and procedures met the hallmarks outlined in the TEN. The favorable determination was not intended to provide any benefit or formal recognition to an entity, nor was it envisioned as a prerequisite to any activity. And regardless, the form from which such a determination would be made was only proposed and never went into effect. Conversely, this final rule establishes that a potential SRE must apply for recognition by the Department to become a recognized SRE. Moreover, the Department will not award a favorable determination to an SRE prior to the publication of this final rule. The Department takes seriously its obligation under the APA to review and respond to all germane comments received from the public concerning the NPRM, as amply demonstrated by this final rule release.

II. Section-by-Section Analysis

The analysis in this section provides the Department's responses to public comments received on the proposed rule. The Department received a number of comments on the proposed rule that were outside the scope of the proposed regulations, and the Department offers no response to such comments. The Department also has made some non-substantive changes to the regulatory text to correct grammatical and typographical errors, in order to improve the readability and conform the document stylistically that are not discussed below.

A. Subpart A—Registered Apprenticeship Programs

Revisions to part 29 account for its division into two subparts. Each subpart addresses a different type of apprenticeship program. Accordingly, revisions to current part 29—now proposed subpart A—made conforming edits to account for subpart B, and for how SREs and IRAPs establish a new, distinct pathway for the expansion of apprenticeships.

The first type of conforming edit in subpart A replaces prior references to part 29 with references to subpart A. Second, the final rule adds the phrase “[f]or the purpose of this subpart” before definitions provided in subpart A, § 29.2. This revision clarifies the distinction between the current registered apprenticeship system and what new subpart B establishes.

DOL received no comments on conforming edits to subpart A. Revised regulatory text will be implemented as proposed.

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

Section 29.20 Standards Recognition Entities, Industry-Recognized Apprenticeship Programs, Administrator, and Apprentices

Section 29.20 of the final rule explains that subpart B establishes a new apprenticeship pathway distinct from the registered program described in subpart A. This section also defines four key terms used in subpart B. These terms are standards recognition entity (SRE), Industry-Recognized Apprenticeship Program (IRAP), Administrator, and Apprentice. The Department received comments on the definitions of an SRE, IRAP, and Apprentice as well as recommendations to define other terms used in the proposed rule. A discussion of these comments is described in detail below. The Department received no comments on the definition of Administrator.

Definition of SRE

Paragraph (a) of § 29.20 in the final rule defines an SRE as an entity that is qualified to recognize apprenticeship programs as IRAPs under § 29.21 and that the Department has recognized as an SRE. The Department received a few comments related to the proposed definition of an SRE in paragraph (a) of § 29.20. Multiple commenters requested that the Department propose a regulatory definition for an SRE. Another commenter stated that the proposed definition lacked defined qualifications to ensure SREs are recognizing programs that protect apprentices and provide proper, uniform supervision and instruction.

In response to the comments, the Department notes that it established a definition for an SRE in the proposed rule. As stated in the proposed rule, an SRE is defined as “an entity that is qualified to recognize apprenticeship programs as [IRAPs] under § 29.21 and that has been recognized by [DOL].” The Department also notes that in addition to establishing a definition for an SRE, the proposed rule also had provisions for the types of entities that can become a recognized SRE in § 29.20(a)(1), the process and criteria in which an entity becomes a recognized SRE in § 29.21, and the responsibilities and requirements of an SRE in § 29.22 as a means of providing the full scope of what being an SRE means.

The Department believes entities will have sufficient qualifications to ensure that they are recognizing high-quality programs, and more fully discusses the specific qualifications for SREs to recognize high-quality apprenticeship programs in § 29.21 of the final regulation. Accordingly, the Department declines to revise the definition of an SRE, and the final rule adopts the provision as proposed.

The Department inadvertently designated the types of entities that can become a recognized SRE in paragraphs (a)(1)(i) through (vii) under § 29.20 in the proposed rule. The Department has corrected this designation and proposed § 29.20(a)(1)(i) through (vii) has been redesignated as § 29.20(a)(1) through (9) in the final rule. Paragraph (a)(1) of § 29.20 in the proposed rule contained a nonexhaustive list of the types of entities that can become recognized SREs. These entities include but are not limited to: (1) Trade, industry, and employer groups or associations; (2) educational institutions, such as universities or community colleges; (3) State and local government agencies or entities; (4) non-profit organizations; (5) unions; (6) joint labor-management organizations; or (7) a consortium or partnership of entities such as those above. In the final rule, the Department has added two types of entities that can become a recognized SRE in § 29.20(a): (1) Corporations and other organized entities; and (2) certification and accreditation bodies or entities for a profession or industry, to align with the types of eligible entities listed in the Industry-Recognized Apprenticeship Program Standards Recognition Entity Application (Form ETA-9183). The final rule now establishes that the types of entities that can become recognized SREs under § 29.20(a) include: (1) Trade, industry, and employer groups or associations; (2) corporations and other organized entities; (3) educational institutions, such as universities or community colleges; (4) State and local government agencies or entities; (5) non-profit organizations; (6) unions; (7) joint labor-management organizations; (8) certification and accreditation bodies or entities for a profession or industry; or (9) a consortium or partnership of entities such as those above.

Although the application, as proposed in the NPRM, included “companies” and “certification and accreditation bodies” as a type of eligible entity that can become a recognized SRE, the Department has revised “companies” to be “corporations and other organized entities” and “certification and accreditation bodies” to be “certification and accreditation bodies or entities for a profession or industry” in the final rule. By revising this text, the Department aims to provide greater specificity and additional clarity concerning the types of entities that can act as an SRE.

As noted above, paragraphs (a)(1) through (9) of § 29.20 in the final rule contain a nonexhaustive list of the types of entities that can serve as SREs. A consortium of these entities can also apply to become a recognized SRE. By not limiting the types of entities that may receive recognition, the Department aims to encourage the creation of SREs in a broad range of industries and occupational areas. Accordingly, the Department invited public comment on this approach in the proposed rule.

Several commenters expressed support for establishing a wide list of eligible entities that may become recognized SREs. One commenter proposed that the types of entities that may become recognized SREs should include both individuals and organizations in order to encourage innovation. Other commenters argued that the types of entities that can become a recognized SRE should be restricted to non-profit organizations or exclude individual employers in order to mitigate conflicts of interest.

The Department has considered the various comments received pertaining to this section and maintains that retaining a nonexhaustive list of the types of entities that can serve as an SRE will encourage the development and expansion of apprenticeships, particularly in high-growth and in-demand industries. A nonexhaustive list of eligible entities can also enable building on existing partnerships and cultivating new relationships within industries, which could be instrumental in ensuring the success of an apprenticeship. To alleviate the concerns expressed by commenters requesting that specific types of entities be restricted from becoming a recognized SRE, the Department has added a requirement in § 29.21(b)(6) of the final rule concerning mitigating conflicts. Under this provision, which is discussed at greater length below, potential SREs are required to demonstrate that they can effectively mitigate any potential or actual conflicts of interest as part of their application to becoming a recognized SRE. By adding this provision, the Department is taking the necessary steps to ensure that each SRE applicant addresses any inherent conflicts through specific policies, processes, procedures, organizational structures, or a combination thereof, which will be evaluated by the Department prior to its recognition as an SRE.

One commenter stated that the proposed rule does not explicitly address strategies to encourage

organizations to consider forming SREs and may not necessarily motivate entities that do not yet participate in apprenticeship partnerships to begin doing so in the proposed IRAP framework.

Although the Department did not explicitly address strategies to encourage organizations to consider establishing SREs in the proposed rule, the Department recognizes the importance of engaging with stakeholders and supports partnership development between employer and labor organizations, education and training providers, and others to promote and expand apprenticeship opportunities. The Department believes that the successful implementation of the IRAP initiative will require robust engagement and partnerships to foster the growth and innovation of these types of apprenticeships, particularly in industries lacking such opportunities.

Some commenters expressed concern that having multiple SREs within an industry may generate significant fragmentation and confusion among potential apprentices, employers, and sponsors. One commenter raised several questions about how SREs will operate across State lines. Specifically, the commenter asked how multiple SREs within a State or industry would handle competition over limited resources, and how SREs will count apprentices when they operate across States or regions. Another commenter opined that SAAs should not be allowed to apply to be an SRE, because SAAs are authorized by the Department to recognize registered apprenticeship programs, and it would lead to apprentices in the same industry receiving inconsistent training, affecting their skill level and marketability. In contrast, a different commenter provided specific language to amend the proposed regulations to allow SAAs to serve as an SRE. The commenter expressed its belief that SAAs should be at the forefront of those entities considered as potential SREs.

The Department does not share the concerns raised by commenters questioning how multiple SREs within an industry or State would function. If apprenticeships are to thrive in emerging industries and spread to new and innovative occupational areas, then having multiple SREs within any given industry or State would result in an increase in the number of apprenticeship programs that are able to effectively train individuals for industries and occupations most in need of skilled workers. In addition, the presence of multiple SREs will provide prospective IRAPs and employers with an opportunity to assess and determine which SRE is best suited to meet the needs of their program.

The Department disagrees with the commenter who opined that SAAs should not be allowed to apply to become a recognized SRE. The Department understands the importance of SAAs and believes that they are well positioned to be recognized as an SRE due to their level of expertise and experience with identifying quality apprenticeships, not only in the private sector but also in the public sector. The Department envisions that SAAs and other State and local government entities that are recognized by the Department as SREs may decide to develop and recognize IRAPs in the public administration sector. The Department believes this will result in the expansion of public administration apprenticeships, thereby building talent pipelines for employers, which will lead to the creation of career opportunities for apprentices in State and local government and to future economic growth in the United States. The Department also disagrees with another commenter's recommendation to amend the regulation so that SAAs are specifically added as an eligible entity, as SAAs already fall within the scope of “State and local government agencies or entities.”

Definition of IRAP

The Department has replaced the term “Industry Programs” that was used in paragraph (b) of § 29.20 in the proposed rule with “IRAPs” in paragraph (b) of § 29.20 in the final rule. The Department made this change in § 29.20(b) (and throughout the final rule) to limit confusion among stakeholders since the term “Industry Program” is used widely in both the public and private sectors. For that reason, an employer could potentially establish an apprenticeship program on an independent basis and refer to it as an “Industry Program.” By making this change, the Department will make clear to stakeholders that “IRAP” is a Department-specific term for an apprenticeship model established in accordance with the NAA.

Paragraph (b) of § 29.20 in the final rule defines IRAPs as high-quality apprenticeship programs that are recognized by an SRE, wherein an individual obtains workplace-relevant knowledge and progressively advancing skills, that include a paid-work component and an educational or instructional component, and that result in an industry-recognized credential. Under § 29.20(b), an IRAP is developed or delivered by entities such as those outlined in § 29.20(a).

Many commenters warned that the term “IRAP” is defined in a vague and overbroad manner and does not provide any meaningful guidance or protection for apprentices. One commenter suggested amending the definition of “IRAP” to add language stating that an apprentice's compensation cannot be less than the minimum wage, and that wages must increase as work and training benchmarks are achieved. The commenter also recommended that the term “industry-recognized credential” be defined in the final rule since it is referenced in the definition of “IRAP.”

The Department did not make changes in response to the comments suggesting that the definition of “IRAP” is vague or broadly written. In the proposed rule, the Department required in § 29.22(a)(4) that a program seeking recognition as an IRAP adhere to standards of high quality in order to obtain and maintain recognition by an SRE. The standards of high-quality apprenticeships outlined in § 29.22(a)(4) served to supplement the definition of “IRAP” as proposed in § 29.20(b). The SRE, in accordance with the parameters established under this regulation, is charged with establishing the standards for training, structure, and curricula that an IRAP must conform to. The Department has determined that refining the definition of “IRAP” to include wage requirements, other requirements concerning the welfare of an apprentice, and the parameters of an industry-recognized credential is unnecessary, because these topics are addressed in this final rule at § 29.22. Accordingly, the final rule substantively adopts the definition as proposed, with nonsubstantive textual edits for clarity and to reflect an update to a regulatory citation in accordance with the provisions outlined in 29.22(a)(4).

Definition of Administrator

Paragraph (c) of § 29.20 in the final rule clarifies that the “Administrator” is the Administrator of OA, or any person specifically designated by the Administrator. The Department did not receive any comments related to the proposed definition of “Administrator” in paragraph (c) of § 29.20 in the proposed rule. Accordingly, the final rule adopts the provision as proposed.

Definition of Apprentice

Paragraph (d) of § 29.20 in the final rule defines an “apprentice” as an individual training in an IRAP under an apprenticeship agreement. The Department received some comments recommending the revision of the definition of “apprentice” in § 29.20(d) of the proposed rule. One commenter

stated that the proposed definition of “apprentice” should be revised by substituting the term “training” in place of the term “participating.” Other commenters stated that the definition of “apprentice” should be revised either to align with the definition of “apprentice” in subpart A or should be written in a manner that is as robust as the subpart A definition. These commenters asserted that aligning the definitions of “apprentice” would provide additional clarity on the rights and responsibilities of an apprentice and the protections that safeguard the welfare of an apprentice, thereby ensuring that underage workers are prohibited from participating in an IRAP.

The Department agrees with the commenter's suggestion to revise the definition of “apprentice” to clarify that an apprentice is an individual “training” in an IRAP, and accordingly, has revised the definition in the final rule. The use of the term “training” in place of the term “participating” in the definition could eliminate potential ambiguity, since mentors and related instruction providers may also be deemed participants in an IRAP.

The Department acknowledges the other commenters' recommendation to revise the definition of “apprentice” so that it aligns with the subpart A definition of “apprentice,” which references the standards of apprenticeship. Although the Department declines to adopt this recommendation, the Department has made additional refinements to the definition beyond replacing the term “participating” with the term “training” as noted above. As discussed below in § 29.22(a)(4)(x) of the final rule, IRAPs are now required to have an apprenticeship agreement with each apprentice. Accordingly, the Department has added the phrase “under an apprenticeship agreement” to the definition of “apprentice” in the final rule. Because an apprenticeship agreement establishes the conditions of employment between an IRAP and an apprentice, and this final rule establishes parameters to protect the welfare of all IRAP apprentices as described below in § 29.22, the Department does not think it is necessary to revise this definition further to create alignment with the subpart A definition. The definition comports with the broad discretion the Department possesses under the NAA. In addition, IRAPs must comply with all employment and age-related laws that apply to their employers, thereby conferring upon apprentices the same protections afforded other employees.

Recommendations for Additional Terminology Definitions

Several commenters recommended adding definitions for other terms. These terms include “accessibility,” “accreditation,” “categorical eligibility,” “complex task,” “consensus-based process,” “construction,” “consultative services,” “employer engagement,” “high-quality,” “industry-essential skills,” “industry expertise/expert,” “industry-recognized credential/credential,” “paid work,” “recognition decision/recognize,” “sector,” “significant opportunities,” “structured mentorship,” “structured work experience,” and “Universal Design for Learning.” A commenter specifically urged that the proposed rule's lack of definitions in proposed subpart B requires a “re-proposal” to provide the opportunity for comment.

Of the recommended terms that commenters requested definitions, five terms—“accessibility,” “categorical eligibility,” “employer engagement,” “industry expertise,” and “Universal Design for Learning”—were not used in the proposed regulatory text;

two terms—“consultative services” and “recognition decisions”—were used in § 29.22(f) of the proposed regulatory text, but were not carried over into the final regulatory text as discussed below in § 29.22 (under the “Conflicts of Interest” heading); and one term—“significant opportunities”—was used in § 29.31 of the proposed regulatory text, but was not carried over into the final regulatory text. The Department has determined that these terms do not require definitions, because they are not included in the final rule's regulatory text. Although the term “construction” was not used in the proposed regulatory text, the proposed rule incorporated a long-standing definition of the building and construction industry from case law as part of the Department's approach in determining which entities and programs are eligible to participate in the IRAP framework. However, after reviewing many comments concerning the need to define “construction,” the Department has revised its construction exclusion in § 29.30 of this final rule, as discussed in detail below.

Three terms did not appear in the preamble discussion of the proposed rule either: “accessibility,” “employer engagement,” and “Universal Design for Learning.”

With regards to the terms that were used in the proposed rule and are carried over into the final rule, the Department has determined that these terms are either discussed in the relevant section of the regulation below and can be understood in the context of the appropriate section or according to their plain and ordinary meaning. Accordingly, defining these terms in this section is not necessary. In addition, the Department disagrees with the commenter's assertion that the rule would require a reproposal due to a lack of definitions in subpart B. The Department has identified the key terms that warrant a definition and given sufficient notice and opportunity for comment with respect to these definitions, and believes these definitions are sufficient for public understanding.

Section 29.21 Becoming a Standards Recognition Entity

Section 29.21 outlines the process by which an entity may apply for Departmental recognition as an SRE, as well as the criteria against which the Department will assess applications. The Department will recognize entities that show they have the expertise to set standards for high-quality apprenticeship programs that result in industry-recognized credentials and equip apprentices with competencies needed for proficiency in specified industries or occupational areas, as would be demonstrated through components of the entity's application (described in more detail below).

Several commenters provided suggestions relating to the Department's proposed process for reviewing an entity's application to serve as an SRE contained in the preamble of the proposed rule. One commenter suggested that the proposed panel of reviewers either be broadened to include industry training experts from companies and schools, or that it be narrowed to include only Department personnel who possess the experience in apprenticeship programs necessary to adjudicate the application. Another commenter stated that the Department should not delegate its decision-making to Federal contractors, especially considering that the specific expertise and performance standards for the contractors are not defined. A commenter expressed concern that the Department's use of contractors to review an entity's application could present conflicts of interest. Another commenter proposed that DOL instead establish a national advisory committee to review and make recommendations regarding SRE applications and to serve as a forum for discussion about issues related to the recognition of SREs.

Commenters also suggested that DOL's proposed review of entities' applications appeared to be too limited. The commenter noted that concerns

regarding the initial review would also apply to resubmitted applications. One commenter expressed concern about the proposed panel's limited review of SRE applications in light of the estimate of over 200 SREs approved in the first year. Several commenters expressed concern that the Department lacks the staffing and funding to review the expected number of SRE applications, with one commenter adding that the Department struggles to oversee the registered apprenticeship system.

The Department determined that, for at least the first year of its evaluating SRE applications, a panel of two contractors and one full-time federal employee will conduct these evaluations. After reviewing the comments received, the Department concluded that limiting SRE application review panels to only industry experts or only Department staff could lead to a lack of capacity that could be critical in translating the needs of industry into this new apprenticeship recognition process under the NAA. The Department has concluded that this mix of federal, industry, and credentialing experts would be essential to implementing this rulemaking as quickly and effectively as possible. The Department may adjust the ratio of federal staff, industry experts, and credentialing experts as it continues to implement and refine the review process.

As with all of its programs, the Department will continuously review this process to find the best, most-efficient way of implementing these rules. Additionally, the Department may alter the composition of the panel depending on the nature and breadth of sectors and occupations covered by a particular application, although it expects that three will be the minimum number of reviewers for the initial stages of the evaluation to include Departmental expertise, industry expertise, and credentialing expertise. The Department agrees that the panel of reviewers should include industry experts, rather than consistently relying on two contractors from the credentialing community as proposed. The Department otherwise anticipates following the process outlined in the proposed rule to review entity's applications.

The Department will take all steps necessary to prevent contractors from reviewing applications for which they have a stake in the outcome; furthermore, regardless of the composition of the panel, the Administrator or the Administrator's designee will make the final decision on recognition. In response to comments calling for a national advisory committee review of SRE applications, the Department determined that assembling such a committee and coordinating its review would be difficult and could impose unnecessary burdens on entities applying to be SREs. Accordingly, it will not take this approach for reviewing applications. The Department made no change to the regulatory text in response to these comments, and it has not included regulatory text addressing the composition of an evaluation panel to maintain flexibility to find the best, most efficient way to handle SRE applications.

Regarding the concern that application review appears limited, the Department notes that its proposed process provides for multiple layers of review. The Department also notes that it has made every effort to reduce the burden of applying to be an SRE without sacrificing quality. The Department notes that review of an initial application and an application for re-recognition are based on the same criteria and thus will necessarily follow similar review processes. The Department acknowledges that its staffing and resources are limited, but it anticipates being able to utilize available appropriated funds to review SRE applications.

Application Process—§ 29.21(a)

Paragraph (a) of § 29.21 states that an entity must submit an application to the Administrator to become a recognized SRE. The Department will review the application to determine whether the entity is qualified to be an SRE. This determination will depend in large part on the scope and nature of the IRAPs the SRE seeks to recognize. Accordingly, the application would give the Department information about the industry(ies) and occupational area(s) for which programs would train apprentices.

Numerous commenters suggested that applications should be required to go through notice and comment before receiving approval. Commenters stated that requiring notice and comment on entities' applications may provide for transparency and ensure that the needs of apprentices and industry are met. Commenters also suggested that notice-and-comment review of applications would increase the efficacy, credibility, and appropriateness of the standards that SREs recognize. One commenter suggested that public comment from a wide range of sources would ensure that SREs have the expertise necessary to ensure the creation of high-quality IRAPs and to ensure that apprentices receive sought-after competencies and industry-recognized credentials. The commenter suggested that confidential business information not be shared, but that other portions of an entity's application be made available for public comment. Another commenter suggested that an SRE's standards should be required to go through a notice-and-comment process.

Other commenters proposed that applications be shared with industry groups so that these groups may raise concerns or provide input to the Department as part of the application process. Many commenters expressed concern that allowing multiple SREs with differing standards to operate in the same occupations and the same geographic area would lead to confusion. A commenter characterized such potential for confusion as “massive” and representative of a major change to apprenticeship. One commenter proposed that the rule should incorporate a standard of reasonable consistency to ensure that training results in transferable skills. The commenter suggested that reasonable consistency could be achieved by allowing industry groups to object to an SRE's training and structures if they are not reasonably consistent with the training and requirements of programs in the same occupation and same area. Another commenter stated that SREs should be required to coordinate with any registered apprenticeship programs in their industry or occupations in which they are certifying programs in order to ensure the programs and standards are complementary and do not undercut each other.

The Department determined that requiring SRE applications to undergo a notice-and-comment period would be a large and unnecessary burden and would not be the best use of Department resources. Such a process would require additional Departmental staff resources to post applications for public comment; review, reconcile, and consider comments; and compare comments concerning an entity's application. The Department further believes that the time required to perform such a process for each entity's application would produce a backlog of applications. In response to the comment proposing that an entity's standards should go through notice and comment, the Department determined that such a requirement would be likely to produce a similar strain on Departmental resources, and a similar potential for delays and backlogs. The Department is confident its expertise combined with the expertise of the panelists will enable the

Administrator or the Administrator's designee to assess an entity's application to determine whether the entity will be able to serve as an effective SRE. Notably, many of the application requirements, such as possessing sufficient financial resources and not being debarred from conducting business with the Federal Government, are criteria that turn on data not readily available to members of the public.

Similarly, the Department determined that sharing applications with industry groups would present unnecessary burdens and potential delays similar to those described above. To become recognized SREs, entities must demonstrate that they have the expertise to set standards through a consensus-based process involving industry experts, and the Department thus expects that entities will demonstrate broad-based support from industry. This places the burden on applicants to demonstrate that they have consensus on how to train apprentices in a way appropriate to the industry. It does not mean, however, that SREs must demonstrate that they have adopted the only approach for training apprentices in an industry. Accordingly, the Department has determined it unnecessary for it to identify and consult industry experts on an applicant's qualifications, as the application must demonstrate, in the Department's evaluation, that an applicant has built consensus and garnered expertise to set training standards in an industry. A successful SRE application will contain all the information necessary for the Department to independently determine whether a prospective SRE developed its curricula and requirements through a consensus-based approach. Requiring that entities share their applications with other industry groups that may include potential competitors could also raise issues of privacy and confidentiality. To the extent that the Department requires outside expertise to assess an entity's application, the Department may rely on the expertise of credentialing experts and industry experts as explained above. The Department's review will be limited to only the application, and the Department will not approve applications that are ambiguous.

The Department does not anticipate that multiple SREs operating in the same industry or occupational area will lead to confusion. The Department notes that standards and training plans associated with IRAPs in the same industry or occupational area may understandably vary depending on the industry-recognized credentials obtained by apprentices. The Department determined that requiring reasonable consistency between IRAPs operating in the same occupation and area would be unworkable and would unnecessarily restrict employer choice Such a standard could stifle apprenticeship expansion by requiring SREs to achieve “reasonable consistency” in areas or occupations where such consistency does not exist. Similarly, while SREs are welcome to coordinate with registered apprenticeship programs in the same occupation, the Department determined that it would be most appropriate to allow SREs the flexibility to choose with whom to consult.

Several commenters stated that the attestation-based model of certification is neither rigorous nor transparent. According to one commenter, the H-2B Temporary Worker Visa program demonstrated that an attestation-based process invites fraud. The commenter suggested that the rule be amended to require on-site review in-line with the Nationally Recognized Testing Laboratory program. A different commenter proposed that the application process mirror that of the American National Standards Institute (ANSI), which the commenter characterized as the “gold standard” for private industry. This process involves a detailed application, opportunity for public comment, and a multi-layered review that involves both Department of Education staff and an advisory committee of industry professionals. Another commenter noted that the rule incorporates no method by which the Department will independently verify the information and supporting documentation contained in an entity's application. Even if an application is rejected, the commenter noted that the entity could seemingly correct its application, reapply, and be approved in two business days.

A few commenters suggested that, in addition to the Administrator, SAAs also should be permitted to assess entities' applications. One commenter noted that under a newly-passed state law, SREs must be certified to operate in-state, and the commenter requested that the rule be amended to allow the Administrator to delegate to SAAs the authority to approve SRE applications. One commenter noted that the lack of a role for States makes this subpart unique among education and workforce development programs and could lead to significant confusion for both training providers and businesses if training is not aligned with State priorities under other workforce and education plans. A commenter recommended that the Department coordinate with other Federal agencies including the Bureau of Land Management, the Bureau of Reclamation, the National Park Service, the Fish and Wildlife Service, and the U.S. Forest Service to encourage unique public-private partnership. A commenter proposed that third-party accreditors such as ANSI should review and assess entities' applications rather than the Department.

The Department notes that the application process provided for is not solely attestation-based, because paragraph (b) of § 29.21 requires that the applicant demonstrate its qualifications by submitting various required documents that include processes and procedures. Paragraph (a) of § 29.21 was also amended to require a prospective SRE to provide a written attestation that all information and documentation provided is true and accurate. Notably, many or all of the attestations in the proposed rule were contained in the proposed form, which was eliminated from the final rule, as explained below. The Department determined that conducting on-site assessments of SREs would offer few insights into an SRE's application while requiring significant time and resources from the Department. The process for reviewing entities' applications involves multiple layers, including processing by program analysts, panel review, a panel meeting, and review by the Administrator or the Administrator's designee. Though this process does not involve the same layers as the ANSI process, the Department is confident that it will result in effective assessment given the rigorous review.

The Department does not anticipate independently verifying all information submitted in conjunction with entities' applications, as proposed by one commenter. However, the Department will be able to identify errors in applications through careful review. The Department will request clarifying information from entities if portions of an entity's application seem to contain potential errors because of unclear or inconsistent information included in the application. In addition, willfully making materially false statements or representations to the Federal Government in an application may constitute a crime under 18 U.S.C. 1001. If an entity were to correct an error and resubmit its application, the Department sees it as a potential benefit that the application may be timely reviewed and approved. Indeed, the Department expressly encourages such resubmission in § 29.21(d)(2). The Department notes, of course, that not every deficiency in an application may be readily corrected. The Department will exercise particular

care in evaluating applications that contradict previously-provided financial information or descriptions of an entity's subsidiaries, as one example.

The final rule does not permit the Administrator to delegate the approval of SREs to States or SAAs. Given the nature of the applications and the possibility that SREs operate on a regional or national scale, the Department is in the best position to assess applications from entities given its national reach and expertise. For this same reason, the Department declined to provide for the assessment of applications by third parties. The Department notes that State and local government agencies or entities are eligible under § 29.21(a)(1) to apply to become recognized SREs. No change to the rule was made in response to these comments.

Several commenters requested that the Department work to minimize the burdens in the application approval process. Multiple commenters suggested that the process to be recognized as an SRE appeared more burdensome than the registration process under subpart A. A commenter suggested that the application process imposes unnecessary and unjustified requirements, including the requirements to establish a consensus-based process, demonstrate capacity and quality assurance processes, and the requirement to apply for re-recognition. The commenter described such burdens as disincentives to apprenticeship expansion.

In response to comments, the Department has made every effort to minimize burdens while still ensuring that the Department collects the information necessary to recognize high-quality IRAPs. The Department determined that the information required to be provided to the Department by § 29.21 is needed to accurately assess SREs. As part of this effort, the Department revised the proposed form to better align the information collected with the information required. The Department determined that the form had the potential to cause confusion, because some parts of the proposed form contained language that varied slightly from the substantive requirements in proposed § 29.21. The Department, therefore, deleted the form from the regulatory text. The Department also revised paragraph (a) of § 29.21 to clarify that the application must be in a form prescribed by the Administrator.

Required Qualifications To Become a Recognized SRE—§ 29.21(b)

Paragraph (b) of § 29.21 describes the criteria against which an SRE application will be assessed. The Department received no comments relating directly to the first sentence in paragraph (b) that as proposed read, “[a]n entity is qualified to be a[n] [SRE] if it demonstrates in its application that . . .” The Department edited § 29.21(b) to remove the words “in its application that” to align paragraph (b) of this section with the clarification in paragraph (a) of § 29.21 that the application is in a form prescribed by the Administrator.

The proposed rule set forth the requirements to become a recognized SRE in three paragraphs that were numbered § 29.21(b)(1) through (3). In response to the comment received, this final rule has been revised so that there are eight paragraphs numbered § 29.21(b)(1) through (8), integrating some requirements that were previously in the form included in the proposed rule.

Paragraph (b)(1) of § 29.21 of the proposed rule provided that an entity must demonstrate that it has the expertise to set standards, through a consensus-based process involving industry experts, for the requisite training, structure, and curricula for apprenticeship programs in the industry(ies) or occupational area(s) in which the entity seeks to be an SRE. An SRE should demonstrate sufficient support and input from industry authorities to give confidence in the SRE's expertise, given where its IRAPs will operate. This standards-setting process will, in turn, inform and guide the IRAPs the SRE recognizes, so that those programs impart the competencies and skills apprentices need to operate successfully in their respective industries or occupational areas.

A number of commenters responded to the Department's request for comments on whether SREs should set competency-based standards for training, structure, and curricula, rather than focus on potentially superficial requirements such as seat time. Many commenters expressed support for empowering SREs to set competency-based standards. Commenters noted benefits of competency-based standards, including those focusing on competency-based standards will allow IRAPs to train apprentices in the most efficient manner possible, and that some apprentices receive proficiency on an accelerated timeline using competency-based standards. A commenter also warned that apprenticeships need flexibility to maximize positive results for both apprentices and employers, meaning that apprentices should not be bound to a certain number of hours, but instead progress through the program to gain a specific skill set and then perform these skills in a real industry setting. Other commenters expressed concern that traditional time-based programs are well established and that SREs are likely to use time-based standards. Also, some credentials may be tied to a minimum amount of seat time. One commenter proposed that the Department impose a minimum competency baseline, while another requested that the Department impose transparency requirements with respect to the competencies that will be attained.

The Department agrees with numerous commenters who noted the various benefits of competency-based programs, and paragraph (b)(1) of § 29.21 is accordingly revised to expressly require that entities have the expertise to set competency-based standards, through a consensus-based process involving industry experts, for the requisite training, structure, and curricula for apprenticeship programs in the industry(ies) or occupational area(s) in which it seeks to be an SRE. The Department has concluded that requiring SREs to develop competency-based standards that measure an apprentice's skill acquisition through the apprentice's successful demonstration of acquired skills and knowledge is consistent with ensuring that IRAPs offer innovative and high-quality training.

Though the Department is requiring competency-based standards, the Department does not intend to restrict SREs in using their expertise in designing those standards, and SREs are not precluded from including time-based requirements as a function of or in addition to competency-based standards. For example, an SRE might determine that time-based requirements are necessary for apprentices to achieve competency. Accordingly, SREs will retain the flexibility to decide how competency is achieved, which may include the utilization of time-based measures.

Requiring SREs to set competency-based standards will ensure that IRAPs and apprentices benefit as much as possible from the knowledge of each SRE's industry experts. Requiring that standards be competency based will further ensure that apprentices gain a specific skill set and perform such skills in a real industry setting, as proposed by one commenter. In addition, requiring SREs to develop competency-based standards is consistent with

Recommendations 1 and 5 of the Task Force on Apprenticeship Expansion Final Report to the President of the United States. Included in Recommendation 5 was the suggestion that technical instruction be competency-based, not seat-time based, and that technical instruction be directly aligned with the knowledge, skills, and abilities needed on the job. The Department does not intend for the requirement that standards be competency-based to preclude SREs from tracking time towards any minimum requirements that must be met to receive a particular industry-recognized credential. The Department agrees that transparency regarding competencies is important and notes that language was added in § 29.22(a) that requires IRAPs to provide apprentices with a written training plan.

The Department determined not to set a minimum time requirement for IRAPs, because the standards developed by SREs are required to be competency-based and may include any time-based requirements the SREs deem necessary for apprentices to achieve competency.

A commenter requested clarification regarding how the Department will review standards. One commenter proposed that if competency-based standards are developed using Federal funding, then SREs should be required to release such competency-based standards to the public so that they become part of the public domain. The commenter suggested that spending taxpayer money on multiple competing competency-based standards would be an example of wasteful spending.

The Department will use the combined expertise of Department staff and outside contractors to review entities' applications to assess the expertise and the sufficiency of the process by which the entities would develop standards. The Department declines to require that standards be made part of the public domain. In the event that the Department enters into grants, contracts, or cooperative agreements to use Federal funding for the creation of standards, the ownership of such standards will be addressed in such agreements. No changes were made to the regulatory text in response to these comments.

Several commenters responded to DOL's question in the preamble to the proposed rule regarding whether additional requirements are needed in paragraph (b)(1) to guarantee that the standards-setting processes of SREs will align the skills that apprentices receive to the needs of employers in a given region. One commenter proposed that DOL should weigh an applicant's history of developing and operating under the workforce development model using data collected under the Workforce Innovation and Opportunity Act (WIOA). Conversely, the commenter suggested that when considering SRE applications from entities with existing standards-setting processes, the Department should consider how the processes may increase employment outcomes for those with barriers to employment. Another commenter proposed that SREs be required to consult with both industry experts and State Workforce Development Boards, which the commenter suggested are well-suited to identify the industry-recognized credentials needed to meet labor-market demand. Several commenters suggested that allowing multiple entities to act as SREs, each with their own unique standards, would create confusion. A commenter proposed that SREs must demonstrate significant industry engagement at national and local levels and evaluate whether industry programs align with activities of industries.

A commenter recommended focusing on the continuity of standards. Without continuity, the commenter suggested, there would be significant risk for apprentices in finding employment outside of the first sponsoring employer.

Other commenters requested that no geographic approach be incorporated into the final rule. One commenter noted that a small hotel chain might operate in multiple States but still require one comprehensive solution to the hotel chain's workforce needs. Several commenters suggested that this subpart might be interpreted at a local level with no consistency from state to state or even city to city, creating varying levels of IRAP program quality.

Some commenters also suggested that “expertise” and “experts,” as used in this paragraph, was vague and should be more specific or should be defined. A proposed clarification was that expertise could be demonstrated by having the support, commitment, and buy-in from multiple employers. Other commenters proposed that the Department specify the qualifications necessary to demonstrate such expertise. A different commenter proposed that the Department attempt to ensure that industry experts are truly representative of their industries, rather than leaving the selection of experts up to the SRE. A commenter suggested that unless the term “expert” were defined, the Department's review panel would have little basis by which to make a consistent assessment, thereby leading to the inclusion of experts of any stripe. Another commenter requested that the Department provide additional clarification regarding how SRE applicants will be expected to show their expertise in setting standards, impartiality, and credentialing in establishing IRAPs.

Other commenters proposed alternatives to demonstrating expertise. One commenter proposed that the paragraph be amended to allow for an SRE to have the expertise to set standards through a consensus-based process involving industry experts, or that it “possesses the ability to convene a body of industry experts.” Several commenters suggested that an applicant's history with workforce development programs should be a possible alternative to demonstrating input from industry experts. A group of commenters noted that “consensus-based process” is vague and undefined. One commenter proposed that the Department define the concept of consensus standards and also questioned whether consensus standards for a given industry are any different from a work process schedule required in § 29.5 of subpart A.

A commenter requested that quantitative and qualitative measures carry equal weight in an entity's application.

The Department agrees that weighing an entity's experience operating under the workforce development system would be relevant information that should be provided in an entity's application if the entity possesses such experience. However, the Department has determined that requiring all applicants provide metrics measured under WIOA may exclude potentially qualified entities from applying. As discussed below, the Department declines to establish minimum experience requirements for entities to apply to become recognized SREs. The Department agrees that a proven track record of positive outcomes for those with barriers to employment would be a relevant and persuasive point of discussion in an entity's application for entities that have such experience. However, the Department declines to require that entities demonstrate the likelihood of expanding opportunities for those with barriers to employment in their applications as it would create a different application standard for applicants experienced in handling such issues. Additionally, the final rule maintains flexibility to allow entities to design programs most responsive to their workforce and economic needs. Additionally, while WIOA is directed in large part toward those with barriers to employment as defined by that statute, the NAA is directed toward apprentices

broadly and generally; consistent with the NAA, the industry-led apprenticeship model envisioned by this rule is intended to serve apprentices in a variety of industries and with a variety of backgrounds, not just those who are currently experiencing barriers to employment as that term is used in WIOA. While input from one or more State Workforce Development Boards could demonstrate valuable knowledge and expertise on the part of an applicant, the Department declines to require that every applicant consult with every relevant State Workforce Development Board.

As discussed above, the Department does not share the concern that a variety of SREs will lead to confusion and inconsistent IRAP program quality. To the contrary, the Department expects that any SREs complying with the requirements of this subpart will only recognize IRAPs that provide high-quality training. The Department views slight variations in approach that will occur between SREs as a net benefit that will provide apprentices and employers with increased options to meet the training needs of their workforce. Furthermore, the Department anticipates that many entities that may be interested in becoming recognized SREs already have standards-setting processes that reflect well-established and high-quality training, and the Department does not anticipate that expanding access to such programs will lead to confusion.

In response to the comment that SREs must be able to demonstrate significant industry engagement at national and local levels, the Department notes that coordination with industry experts is an existing requirement in paragraph (b)(1) of § 29.21. The Department also notes that it would be difficult and burdensome for SREs to list in their applications every local area in which it anticipates recognizing IRAPs.

The Department appreciates the concern with focusing on the continuity of standards to ensure the employability of completing apprentices. Notably, as discussed above, apprentices will train according to competency-based standards that reflect the consensus of experts and thereby convey consistency and employability. In addition, as discussed below, SREs will report on credential attainment and employment outcomes of their IRAPs, thereby demonstrating continuity of training and employability.

The Department disagrees with the concern that allowing SREs to adjust their practices for each State and city in which they certify programs could lead to varying levels of certification quality, and therefore, has declined to prohibit such an approach. To the contrary, the Department envisions that SREs will make these adjustments as a matter of necessity to successfully operate in a State or region. For example, an apprentice working in automotive body repair in the southwestern United States may not need to achieve competency in repairing damage caused by road salt that may be common in other regions of the country. The Department notes, however, SREs must ensure that IRAPs lead to apprentices receiving industry-recognized credentials, and some State by State credentialing and licensing requirements are inevitable and will need to be considered by SREs.

The Department intends for the term “expert” as used in § 29.21(b)(1) to mean a person who has comprehensive knowledge of a particular area. The Department declines to set minimum experience or qualification requirements as such qualifications may necessarily vary across industries. A worker with in-depth knowledge of his or her occupation or related occupations and an instructor with extensive knowledge in credentialing may both bring valuable expertise to an SRE and could conceivably be included among the SRE's experts. The selection of experts must necessarily be left up to the SRE as the Department would not be in a position to require consultation with specific industry experts. The Department declines to adopt suggested alternative approaches to demonstrating expertise, such as possessing experience with workforce development, as that would impinge on the flexibility the Department believes SREs should be given.

The ability to set competency-based standards through a consensus-based process involving industry experts is essential to ensuring that the SRE recognizes only high-quality IRAPs. The requirement that standards be the result of a consensus-based process is intended to ensure that an SRE's experts agree that the standards will result in high-quality IRAPs that convey industry-recognized credentials consistent with the requirements in this subpart. Entities are required to identify in their applications the industry expertise on which they will rely and the processes by which the entity will develop standards. Once recognized, the SRE must rely on the opinion of experts as described in the entity's application, but need not rely on any particular expert(s) identified on the application. The Department anticipates that the ability to convene a body of industry experts could serve as part, though not all, of an entity's consensus-based process. The Department therefore declines to make the ability to convene a body of experts an alternative to establishing a consensus-based process. Although a history of working with the workforce development system could potentially demonstrate an entity's expertise, the Department does not consider such experience as an alternative to establishing a consensus-based process.

The Department intends for the term “consensus-based process” to require that the competency-based standards developed are the product of agreement by experts in the fields. Regarding the comment questioning whether consensus standards are the same as a “work process schedule” as those terms are used in subpart A, the Department agrees that the two concepts are comparable. The Department expects that SREs will organize their competency-based standards such that IRAPs and apprentices will clearly understand the skills and knowledge that must be demonstrated in order to complete the program. Although the idea of a work process schedule is a common method of describing knowledge and skill attainment under subpart A, the Department is not requiring the establishment of work process schedules under this subpart.

The Department anticipates that qualitative measures of demonstrating qualifications may be more common in entities' applications as the applications must demonstrate expertise and describe competencies. Quantitative measures will be relevant for entities with extensive experience in training apprentices and such measures will also be assessed in the re-recognition process as described in § 29.21(c)(1)(ii). No change was made in the regulatory text in response to these comments.

Paragraph (b)(1)(i) of § 29.21 clarifies that the requirements in § 29.21(b)(1) may be met by an entity's past or current standard-setting activities, and need only engender new activity if necessary to comply with this rule. This paragraph accounts for how some prospective SREs already have standards-setting processes that reflect well-established, industry-, occupation-, and employer-specific needs and skills. Rather than requiring those prospective SREs to alter their approach to setting standards, the Department seeks to clarify its expectation that such entities' processes for setting standards likely meet the requirements of this proposed rule, and need only change if necessary to comply with it.

One commenter suggested that this paragraph as drafted would properly

account for an entity's past efforts in standard setting. A different commenter questioned whether DOL anticipated grandfathering in existing standards-setting entities and suggested such a practice would be inappropriate. The Department agrees that the paragraph as proposed appropriately accounts for entities already setting standards based on the consensus of industry experts; the text is adopted as proposed. The Department does not intend to grandfather in existing standards-setting entities—such entities still must apply to become recognized SREs and will need to alter their processes and procedures as necessary to comply with this subpart.

Although paragraph (b)(1)(ii) of § 29.21 is reserved, one commenter proposed that text be added at this paragraph to clarify that SAAs in good standing receive automatic recognition as SREs. While State entities are eligible to apply to become recognized SREs, the SAA evaluation process is significantly different than the process the Department has designed for evaluating SREs. Accordingly, the Department has determined it necessary that any SAA that seeks SRE recognition to goes through the application process prescribed in this subpart to ensure it has the processes and procedures in place to recognize high-quality IRAPs. This paragraph remains reserved as proposed.

Paragraph (b)(2) of § 29.21 states that the entity must demonstrate that it has the capacity and quality assurance processes and procedures sufficient to comply with paragraph § 29.22(a)(4), given the scope of the IRAPs to be recognized. That paragraph authorizes SREs to recognize and maintain recognition of only high-quality apprenticeship programs.

Paragraph (b)(3) of § 29.21, as proposed, noted that prospective SREs must demonstrate they meet the other requirements of the subpart, in particular those outlined in § 29.22. The Department received no comments on this proposed paragraph. However, the paragraph was renumbered as (b)(8) to account for the additional application requirements as follows. The final text was changed from “[i]t meets the other requirements of this subpart” to “[i]t meets any other applicable requirements of this subpart.” The change was made to clarify that not every requirement of this subpart would be an eligibility requirement at the time of application.

The new paragraph (b)(3) of § 29.21 in the final rule incorporates a requirement that an entity indicate that it has the resources to operate as an SRE for a 5-year period, and to report any bankruptcies during the previous five years. This requirement is taken from the proposed form that required an entity to demonstrate its ability to operate for the next five years and provide a financial statement. The form is not included in the final rule for the reasons discussed above. The text of the final rule is intended to ensure the future financial stability of an SRE to the greatest extent possible. The Department's recognition signals to prospective IRAP sponsors about the operational health of an SRE and thus a sense of security in the sustainability of the SRE. Additionally, this approach minimizes the burden on applicants as requested by several commenters.

A commenter noted that, in its view, a financially unstable training program will not safeguard the welfare of apprentices. Multiple commenters noted, in their view, the importance of verifying that the credential provider remains financially viable. One such commenter added that apprentices may not receive the benefit of industry-recognized credentials if the credential issuer later becomes defunct. Another commenter suggested that measures to ensure the financial viability of SREs be strengthened to ensure that SREs have sufficient financial contributions from IRAPs to operate successfully. One commenter noted that the proposed form seemed to indicate that the Department lacks confidence in prospective SREs, because it asked prospective SREs to address their financial stability over the next five years.

Several commenters pointed to the potential for financial conflicts. Multiple commenters suggested that SREs will have a financial incentive to recognize as many IRAPs as possible. One such commenter suggested that SREs provide a plan for how they will sustain losses from reduced fees if the SRE must derecognize IRAPs. The commenter suggested that such a financial tension has been a central challenge for the higher education accreditation system.

The Department agrees that an SRE's financial viability is crucial to ensuring safety and ensuring the long-term value of industry-recognized credentials, and the Department has included the new paragraph (b)(3) of § 29.21 in the final rule in response to these comments. The bankruptcy or dissolution of an SRE could also disrupt apprentices' training, as the SRE's IRAPs would have to apply for recognition from a different SRE. The Department has determined that an entity should demonstrate its financial viability for five years, which is intended to capture at least one full recognition cycle for the SRE. SREs are in the best position to determine whether to charge fees, and if so, to set the fees necessary to support their operations. As explained in more detail below, the Department has not set minimum or maximum levels of fees that SREs may charge.

The Department also agrees that demonstrating financial stability at the application stage will ensure that SREs' financial viability is not based on recognizing as many IRAPs as possible without heeding to program quality, and that SREs will be able to absorb lost fees if some IRAPs must be derecognized.

New paragraph (b)(4) of § 29.21 requires that an entity disclose relationships with subsidiaries or other related entities that could reasonably impact its impartiality. The requirement is taken from the proposed form, which requested lists of related bodies, such as parent or subordinate organizations, as well as a list of confirmed or potential partners. The Department received one comment related to this paragraph, which was that conflict of interest provisions related to an SRE offering consultative services should be extended to related entities or subsidiaries.

The Department agrees that potential conflicts of interest involving subsidiaries or related entities could be imputed to the SRE, and paragraph (b)(4) of § 29.21 has been added in part to address such concerns. Proposed 29.22(e) and (f) have also been amended in response to this and other comments, as explained below. Paragraph (b)(4) also requires that the entity describe the roles of confirmed or potential partners. In addition, such information may provide context related to an entity's ability to perform the required functions of an SRE.

Paragraph (b)(5) of § 29.21 has been added to the final rule and requires entities to demonstrate that they are not currently suspended or debarred from conducting business with the U.S. Federal Government. The debarment restriction is intended to exclude entities that have carried out bad acts that would call into serious doubt their ability to effectively function as an SRE. The debarment restriction is taken from the proposed form, which requested that entities affirm they have no relevant injunctions, debarments, or other restrictions that would prevent them from doing business with the Federal Government or members of their industry sector. The final text has been changed from the language in the proposed form to clarify that relevant debarments are those that would prevent the entity from conducting

business with the U.S. Federal Government, as the term “debarment” is commonly understood. The Department received no comments related to the debarment question in the proposed form that is carried forward in this paragraph.

Paragraph (b)(6) of § 29.21 has been added to the final rule and requires entities to mitigate any actual or potential conflicts of interest, including, but not limited to, conflicts that may arise from the entity recognizing its own apprenticeship programs and conflicts relating to providing services to actual or prospective IRAPs. Such actual or potential conflicts must be addressed through specific policies, processes, procedures, structures, or a combination thereof. The requirements in this paragraph are replacing those proposed in paragraphs (e) and (f) of § 29.22 in the proposed rule. As discussed in greater detail in the § 29.22 discussion below, this revision is meant to strengthen the conflict of interest provisions by moving the requirement from § 29.22 of the proposed rule to § 29.21 of the final rule. By moving the requirements to § 29.21(b)(6), every entity is required to address potential conflicts of interest through specific policies, procedures, organizational structures, or a combination thereof that will be assessed by the Department before the entity may be recognized as an SRE. This change was made in response to numerous commenters who suggested the proposed rule insufficiently addressed conflicts of interest. The Department also has broadened the requirement to include recognizing an SRE's own IRAPs or offering services to actual or prospective IRAPs as non-exhaustive examples of the types of actual or potential conflicts that must be addressed. This change was made in response to several commenters who noted that other conflicts may exist. The comments on conflicts of interest are addressed in the § 29.22 discussion below, because that is the provision in which those requirements were initially proposed (as § 29.22(e) and (f)). Relatedly, as discussed in further detail below, proposed § 29.22 also requires that an SRE's recognition procedures assure that IRAPs receive equitable treatment and are evaluated based on their merits, and this requirement was carried forward in § 29.22(d) of the final rule.

Paragraph (b)(7) of § 29.21 was added to the final rule and requires that an entity demonstrate that it has the appropriate knowledge and resources to recognize IRAPs in the sectors and occupations in the intended geographic area, which may be nationwide or limited to a region, State, or local area. This requirement was taken from the proposed form that in Section I asked entities where they planned to recognize IRAPs. Obtaining such information is necessary to ensure that the Department can refer prospective apprentices or IRAPs to nearby SREs or IRAPs in the relevant sector or occupation. As noted in the final regulatory text, the knowledge and expertise that an entity would need to demonstrate would necessarily vary if the entity is interested in recognizing IRAPs in a single State versus nationwide.

Consideration of Commenters' Suggestions for Additional SRE Eligibility Requirements

A few commenters proposed additional eligibility requirements for entities to become recognized SREs. One commenter proposed that the Department limit SRE eligibility to well-established, industry-recognized associations or non-profit organizations. Another commenter suggested that entities should have experience in the area in which they are seeking recognition in order to set standards. The commenter suggested that a community college, for-profit institution, or non-profit organization should not be able to set standards for a trade in which the entities do not perform such work. A commenter proposed that the Department consider requiring that agencies have a minimum of two years of experience to demonstrate that the entity is effective in assessing the quality of workforce programs. Alternatively, the commenter suggested that the Department limit the scope of operations of SREs that lack such experience. One commenter suggested that applicants with accreditation experience should receive priority processing, because such experience would help to maintain consistency across IRAPs.

The Department declines to set minimum experience requirements for entities to apply to become recognized SREs. Notably, § 29.20 addresses the eligibility of a partnership or consortia of entities applying to become recognized SREs in light of the diverse expertise required of SREs. The Department declined to limit eligibility to well-established entities, as a start-up SRE or a new partnership or consortium of entities may be equally well-positioned to serve as effective SREs. Furthermore, it would disadvantage cutting-edge industries and stifle the expansion of apprenticeship to require that all SREs be well established. The Department similarly declined to require that SREs perform the work of an industry or occupation. The Department notes that SREs must possess a variety of abilities beyond establishing training plans and recognizing standards. SREs must also perform quality-control functions, receive and address complaints, and collect and report data. Moreover, universities and community colleges may possess expertise in classroom instruction and credentialing and licensing that is also required by the subpart. Although an entity possessing actual experience ensuring the quality of workforce programs would be well-positioned to meet the requirements of this paragraph, the Department also anticipates that many entities may not possess such experience but may, nevertheless, be able to demonstrate that they possess the required capacity. For example, an entity without such experience may be able to demonstrate its capacity and quality assurance processes by hiring quality assurance personnel or by implementing industry best-practices. The Department decided not to make SRE approval conditional or limited at the outset. Notably, SREs are expected to comply with the requirements of this subpart immediately upon recognition. The Department made no changes in response to the comments.

Applications for Re-Recognition—§ 29.21(c)(1)

Paragraph (c) of § 29.21 indicates that the Administrator will recognize an entity as an SRE if the applicant is qualified, and also provides additional details about recognition. This paragraph ensures that the Administrator undertakes adequate review of SREs, both over time and following any significant changes that would affect the SRE's qualification or ability to recognize IRAPs.

Section 29.21(c)(1) indicates that SREs will be recognized for 5 years. An SRE must reapply if it seeks continued recognition. The Department proposed a 5-year time period to be consistent with best practices in the credentialing industry and to ensure that already-recognized SREs continue to account for the development and evolution in competencies needed within their industries. Changes were also made in response to comments to clarify that an SRE must reapply at least 6 months before its recognition is set to expire.

Numerous commenters stated that, in their view, a 5-year recognition period is too long. Several commenters suggested that SREs should be recognized for a 1-year probationary period and then be reassessed as part of a process that would be similar to

§ 29.3(g) in subpart A. A commenter argued that it would be unfair for SREs to receive 5-year approval whereas a registered apprenticeship program could only be registered provisionally for 1 year. One commenter suggested that the criteria for approval are not stringent enough to result in recognition for 5 years. Another commenter questioned why an entity with no proven track record of high-quality training would be recognized for 5 years. One commenter urged that approval for a shorter period would allow SREs to better keep pace with rapid changes in industry. Conversely, multiple commenters agreed that approval for 5 years is consistent with the practices in the credentialing industry.

A commenter suggested that SREs should be recognized for 5 years, but that they should be required to apply for re-recognition before the 5-year period ends in order to ensure that IRAPs not be approved and monitored by SREs with expired recognition. A different commenter proposed that an SRE should be recognized for 5 years, unless the SRE is an SAA, in which case the recognition should last indefinitely.

Another commenter proposed that re-recognition should take into consideration a measure of employer uptake. The commenter explained that employer uptake would measure the extent to which employers in a given sector emulate or adopt the standards recognized by an SRE.

As discussed above, the Department strengthened the recognition requirements by adding five new paragraphs to paragraph (b) of § 29.21. During the approval period, the Department has broad discretion to conduct both compliance assistance reviews under § 29.23 as well as reviews under § 29.26 that may lead to suspension or derecognition. Such reviews may be conducted at any time, including before the 1-year mark after initial recognition. This oversight ability will allow the Department to monitor SREs for compliance with its regulations. Further, SREs will be able to adapt to rapid changes in industry by amending their recognition process and notifying the Administrator as required under paragraph (c)(2) of § 29.21, discussed below. These measures are more than sufficient to meet the broad and general directives of the NAA, which do not require the Department to adopt precisely the same procedures used in the Registered Apprenticeship program for other programs, nor establish specific time periods of any sort. Rather, the Department is only directed to “bring together employers and labor for the formulation of programs of apprenticeship” and to “formulate and promote the furtherance of labor standards necessary to safeguard the welfare of apprentices,” which this regulation does.

The Department agrees that allowing SREs to apply for re-recognition on the date of expiration could lead to confusion during the time in which the Department is adjudicating the SRE's application. In response to this comment, the Department amended § 29.21(c)(1) to require an SRE to apply for re-recognition at least 6 months before its current recognition is set to expire. In response to the comment suggesting that SAAs should receive indefinite recognition if they are recognized as SREs, the Department declines to establish different recognition periods for different types of entities because of the potential for confusion.

Paragraph (c)(1)(i) of § 29.21 was added to clarify that an SRE must apply for re-recognition by submitting an updated application to the Administrator in a form prescribed by the Administrator. This paragraph was added to mirror the changes made to paragraph § 29.21(a) that explain the initial application process.

Paragraph (c)(1)(ii) of § 29.21 was added to establish the standard against which an application for re-recognition is assessed. It provides that the information contained in the application will be evaluated for compliance with § 29.21(b)(1) through (8) in much the same manner as an initial application. In addition, the paragraph recognizes that the SRE will have reported data pursuant to § 29.22(h) that will reflect the outcomes of the IRAPs the SRE has recognized.

An SRE applying for re-recognition must submit its quality assurance processes and procedures that will ensure compliance with § 29.22(a)(4), as required by § 29.21(b)(2). The Department will also review data provided by the SRE to ensure that the quantifiable requirements of this subpart were and are being achieved. The Department does not intend for § 29.21(c)(1)(ii) to establish minimum benchmarks that SREs must meet to receive re-recognition. Rather, the Department intends to use all available relevant data to enhance quality assurance and ensure that the processes and procedures submitted as required by § 29.21 are resulting in the recognition of high-quality IRAPs that meet the requirements of § 29.22(a)(4). Thus, for example, the SRE's application for re-recognition must demonstrate policies and procedures that will ensure its IRAPs will provide apprentices with a safe working environment and industry-recognized credential(s) during participation or upon completion of the program, among other requirements. If, however, the same SRE's data submitted pursuant to § 29.22(h) indicated that apprentices are completing the SRE's requirements and are not earning industry-recognized credentials, such data may well reveal that an SRE's quality assurance processes and procedures are and were inadequate.

Obligation To Notify the Administrator of Substantive Change—§ 29.21(c)(2)

Paragraph (c)(2) of § 29.21 requires that an SRE notify the Administrator and provide all related material information about any major change that could affect the operations of the recognition program. The requirement that an SRE notify the Administrator if the SRE makes a substantive change to its recognition processes was not carried forward in the final rule in light of the requirement added to § 29.22(p), discussed below, that requires an SRE to notify the Administrator when an SRE makes a significant change to its policies or procedures. Changes under § 29.21(c)(2) would include involvement in lawsuits that materially affect the SRE; changes in legal status; or any other change that materially affects the SRE's ability to function in its recognition capacity. Likewise, the SRE must notify the Administrator and provide all related material information if it seeks to recognize apprenticeship programs in new sectors or occupations. Paragraph (c)(3) of § 29.21 further states an SRE must notify the Administrator of major changes that could affect its recognition program, prior to their implementation. Such changes include seeking to recognize IRAPs in new sectors or geographical areas. In light of the information received, the Administrator will evaluate whether the SRE remains qualified for recognition under § 29.21(b).

The Department received one comment on this paragraph. The commenter suggested that language be added stating that conflicts of interest arising after recognition should be considered substantive changes that must be submitted to the Administrator. In addition, the commenter suggested that major expansions of programs, major changes to the type of program offered, or changes to the type of credential offered should be considered substantive changes.

The Department appreciates the concern that a conflict of interest could constitute a material change. The Department addressed this concern by

moving the conflict of interest requirement to § 29.21(b)(6) and thus requiring all SREs to submit processes, procedures, organizational structures, or a combination thereof that mitigate actual or potential conflicts of interest. Once recognized by the Department, SREs must comply with their own policies and procedures as stated in § 29.22(p), discussed below. Notably, as explained, § 29.22(p) contains a requirement that the Administrator be notified if the SRE makes significant changes to its processes or procedures, which would require the SRE to notify the Department about changes in procedures that address conflicts of interest.

The Department agrees that changes to the type of credential offered would constitute major changes that affect the operation of the SRE and thus require notification to the Administrator.

Because all SREs are required to develop competency-based standards, changes from one type of apprenticeship program to another, such as a change from a time-based program to a competency-based program, are no longer permissible. Thus, an SRE could revise its competency-based standards without notifying the Department if the SRE developed the standards using its existing processes and procedures. If, however, the SRE changed its processes and procedures for setting competency-based standards, § 29.22(p) would require that the Administrator be notified of the change in process.

The Department made no changes to this paragraph in response to the comment. The Department did, however, add the word “calendar” to § 29.21(c)(2)(iii) to clarify that days are calculated as calendar days. This change was made throughout the rule.

Denials of Recognition—§ 29.21(d)

Paragraph (d) of § 29.21 outlines the requirements associated with any denials of recognition after the Department receives a prospective SRE's application. The Administrator's denial must be in writing and must state the reason(s) for denial. The denial must also specify the remedies that must be undertaken prior to consideration of a resubmitted application and must state that a request for administrative review may be made within 30 calendar days of receipt of the notice. Under the final rule, the denial must also explain that a request for administrative review made by the applicant must comply with 29 CFR part 18's service requirements. Additionally, the final rule clarifies that the appeal procedures in § 29.29 apply to appeals under § 29.21(d).

The Department received no comments on this paragraph and added clarifying language to the first sentence stating that the requirements for denials of recognition “are as follows.” The Department also edited § 29.21(d)(2) to clarify that notice to the Office of Administrative Law Judges must comply with the service requirements contained in 29 CFR part 18. This change is intended to account for any future change to the regulations promulgated by the Office of Administrative Law Judges.

Section 29.22 Responsibilities and Requirements of Standards Recognition Entities

Section 29.22 describes the responsibilities of and requirements for SREs, including recognizing high-quality IRAPs, developing policies and procedures on a range of issues, reporting data to the Department and the public, and giving notice to the public of complaints and fees. The Department received many comments on this section, as described in detail below, and made several changes in response to those comments. In particular, the Department clarified some of the standards of high-quality apprenticeship programs in § 29.22(a)(4) and strengthened the SRE's requirement that an SRE validate and attest, in § 29.22(b), both at initial recognition and on an annual basis, that its IRAPs meet the standards of § 29.22(a)(4) and any other SRE requirements. The Department also included a requirement in § 29.22(d) that the SRE disclose to the Administrator its policies and procedures for ensuring consistent assessments of IRAPs for recognition and compliance with subpart B.

As explained in the earlier discussion of § 29.21, the Department moved paragraphs (e) and (f) concerning conflicts of interest from § 29.22 to § 29.21 and relettered the paragraphs in § 29.22 accordingly. Therefore, within § 29.22 of the final rule, paragraph (g) regarding 5-year recognition of IRAPs is now paragraph (e); paragraph (h) regarding the quality-control relationship between the SRE and its IRAPs is now paragraph (f); paragraph (i) regarding joint employer status is now paragraph (g); paragraph (j) regarding SRE reporting of IRAP data is now paragraph (h); and paragraph (k) regarding equal employment opportunity (EEO) policies and procedures is now paragraph (i).

The Department also added two additional requirements to the quality-control relationship between the SRE and the IRAP in § 29.22(f) (previously (h)) and included additional reporting requirements in § 29.22(h) (previously (j)), requiring information to be made publicly available and reported to the Department. The Department received comments to other sections of the rule concerning complaints against SREs and IRAPs and derecognition of SREs. These comments resulted in the Department's decision to add paragraphs (j) through (m) to § 29.22. Among other things, these paragraphs clarify the notice an SRE must give of the right to file a complaint against an SRE or an IRAP and of SRE derecognition. The Department also added § 29.22(n) to require that the SRE make publicly available any fees that it charges to IRAPs, § 29.22(o) to ensure that records relating to IRAP recognition and compliance are maintained, and § 29.22(p) to clarify that the SRE must follow its own policies and procedures and notify the Administrator when it makes significant changes to either.

SRE Requirements for Recognizing High-Quality IRAPs

Paragraph (a) of § 29.22 describes various obligations of SREs and identifies the characteristics of high-quality apprenticeship programs. The Department received numerous comments about this paragraph, particularly regarding the characteristics of high-quality apprenticeships set forth in § 29.22(a)(4). Many commenters contrasted the requirements of paragraph (a) of § 29.22 with the requirements for registered apprenticeship programs. Others detailed the successes of their registered apprenticeship programs and the importance of safeguarding the welfare of apprentices. Some commenters faulted the rule for providing the SREs with too much discretion, stating that the rule did not provide adequate protection against exploitation because IRAPs would admit “apprentices” yet provide limited or inadequate training and pay them less than the prevailing wage rates. Commenters expressed concern about industry providing inadequate training and substandard working conditions to create a low-skilled, low-wage labor pool.

Other commenters expressed support for the rule's flexibility and for allowing SREs to set industry-relevant requirements. They praised the rule's approach of ensuring high-quality apprenticeships and adequate protection for apprentices while at the same time providing flexibility to allow for increasing apprenticeships and promoting innovation in industries that may not yet have robust apprenticeship programs. Commenters favorably remarked that IRAPs would create

healthy competition with registered programs, would not be restricted by the presence of union-sponsored programs, and would encourage modernization of and investment in training by SREs, IRAPs, and registered apprenticeships.

These comments and the Department's responses and changes to the final rule are detailed in the paragraph-by-paragraph section below. Among other things, the Department's changes enhance its oversight of SREs by adding additional reporting requirements for SREs and quality assurance measures. The changes also strengthen the requirements for the quality-control relationship between an SRE and its IRAPs, the protections for apprentices by enhancing the requirements for high-quality IRAPs, the SREs' oversight of IRAPs, and further adding measures concerning SRE responsibilities. The Department also received comments that it deemed not applicable or appropriate to address in this rule, such as a suggestion to require employers to use e-Verify for the employment eligibility of apprentices and a suggestion to specify whether SREs would be eligible for State-specific funding or benefits.

Timeliness of SRE Recognition

Paragraph (a)(1) of § 29.22 provides that SREs must recognize or reject apprenticeship programs seeking recognition in a timely manner. The Department received comments suggesting that IRAP applications be subject to a public comment period of 60 days before an SRE's recognition of the IRAP. Commenters noted that this would ensure transparency and the quality of the IRAPs by allowing industry participation before IRAP recognition. Commenters also stated that a notice-and-comment period would allow the public to verify that the IRAP is not for an occupation in the construction industry. Other commenters suggested that the Department require a firm deadline by which IRAPs would be notified of their recognition status, noting that the Department imposes such a deadline on SRE recognition. A commenter also recommended requiring SREs to provide a clear reason for rejecting an IRAP.

The Department acknowledges the comments about ensuring transparency and high quality. The Department has determined, however, that public notice and an opportunity to comment on the recognition of IRAPs is not necessary. SREs are best positioned to determine whether an IRAP meets the standards of a high-quality apprenticeship program, in accordance with the parameters of this rule. The Department has prescribed the standards of a high-quality apprenticeship program in § 29.22(a)(4) and has taken steps elsewhere in the rule to strengthen existing oversight measures. SREs are responsible for ensuring that IRAPs meet the standards of a high-quality apprenticeship program established by the Department, and both SREs and IRAPs are subject to the quality-control requirements established in this rule. The SRE is responsible for ensuring that its IRAPs continue to meet the requirements of this rule, and this SRE responsibility, coupled with the Department's oversight of SREs, provides the apprentices with protection against low-quality or exploitative IRAPs. The SRE may derecognize IRAPs that fail to meet the requirements of a high-quality apprenticeship program set forth in § 29.22(a)(4), and the Department may derecognize SREs for failure to comply with the requirements of this subpart.

Further, the Department determined that a notice-and-comment period for the recognition of each IRAP is not necessary as the SRE itself must conduct a thorough vetting process to ensure that potential IRAPs meet the requirements of § 29.22(a)(4). As discussed in § 29.21 above, SREs must demonstrate that they have the expertise to set standards for apprenticeship programs in the industries or occupational areas for which they seek recognition, and SREs must also demonstrate that they have the capacity and quality assurance processes and procedures to comply with the requirements of § 29.22(a)(4). SREs' responsibilities as contemplated by this rule require due diligence and thorough vetting of prospective IRAPs.

With respect to concerns about IRAPs in the construction sector, as discussed in greater detail below, the Department has revised proposed § 29.31 (finalized as § 29.30). The Department will not recognize SREs that recognize IRAPs engaged in any construction activities as described in § 29.30, and the Department prohibits SREs from recognizing as IRAPs programs that train apprentices in construction activities as described in § 29.30. The Department has determined the responsibilities of both the Department and the SRE are sufficient to prevent the recognition of IRAPs that would train apprentices in construction activities as defined in § 29.30, obviating the need for a public notice-and-comment period for IRAP recognition.

The Department notes the requirement in § 29.22(d) that the SRE must disclose to the Administrator its policies and procedures for ensuring consistent assessment of IRAPs for recognition. The Department anticipates such policies and procedures will include the timeframe for IRAP recognition and how the SRE will notify prospective IRAPs of recognition or rejection. The Department declines to require a certain timeframe or requirement for SRE notice to prospective IRAPs given the different types and needs of SREs and IRAPs.

The Department has revised several other sections of § 29.22 to incorporate concerns about the quality and transparency of IRAPs. For example, as explained in detail below, the Department added language to strengthen some of the components of high-quality programs, such as a training plan, a mentorship program with experienced mentors, and an apprenticeship agreement. The Department also added sections concerning the quality-control relationship between SREs and IRAPs, the Department's oversight of SREs, and the Department's ability to collect and evaluate data concerning the performance of IRAPs and SREs. The Department added the phrase “as an IRAP” to clarify that the program is seeking recognition as an IRAP from the SRE. Otherwise, the final rule adopts paragraph (a)(1) of § 29.22 as proposed.

Informing the Administrator of IRAP Recognition

Paragraph (a)(2) of § 29.22 requires an SRE to inform the Administrator within 30 calendar days if it has recognized a new IRAP or suspended or derecognized an existing IRAP. The SRE must also inform the Administrator of the name and contact information of the IRAP. This information will assist the Administrator in fulfilling his or her obligations under § 29.24 (Publication of Standards Recognition Entities and Industry-Recognized Apprenticeship Programs).

The Department changed the phrase “terminated the recognition of” to “derecognized” for clarity and consistency. Finally, the Department added the term “calendar” to the requirement for the SRE to inform the Administrator within 30 calendar days to clarify the relevant timeframe.

Some commenters asked about transparency regarding SRE decisions to decline to recognize or terminate the recognition of an IRAP. One commenter suggested that an SRE be required to inform the Administrator when the SRE declines to recognize a new IRAP, in addition to giving notice to the Administrator of approval or termination of approval. The commenter also suggested that the SRE be required to inform the Administrator of the

reason for declining to recognize or terminating the recognition of an existing IRAP. The commenter stated that the Administrator would benefit from such information to determine the effect on the safety and welfare of apprentices and to ensure objective and impartial decision-making with respect to recognition of IRAPs. Commenters also raised concerns that the public would not be aware of IRAP recognition until months after recognition because the SRE is required to notify only the Administrator within 30 calendar days of the recognition. Otherwise, the SRE is only required to inform the public about the IRAPs it recognizes on an annual basis under paragraph (h) of § 29.22.

The Department acknowledges commenters' concerns about SRE transparency in its decisions concerning IRAP recognition. However, as explained below in the discussion of § 29.22(d), the Department decided to require each SRE to submit to the Department its policies and procedures for assessing IRAPs in a consistent manner. The Department will have the opportunity to review these policies and procedures during the SRE recognition process. The Department declines to require additional information concerning an SRE's decision not to recognize an IRAP or the reasons for an SRE's derecognition of an IRAP. Rather, the Administrator can rely on § 29.23 to request such information if needed. If, for example, the Department receives complaints about an SRE's conduct with respect to recognition of IRAPs or if a compliance assistance review reveals irregularities in the SRE's processes or procedures, the Department may request further information as necessary. Further, the Department may initiate suspension or derecognition proceedings, if warranted.

Regarding the concern that the public would not be aware of the existence of IRAPs in a timely manner, the Department notes that, as discussed in further detail in § 29.24, it plans to regularly update its publicly available list of SREs and IRAPs. Thus, the public will have access to timely information on the Department's website. The Department also expects that SREs and IRAPs will themselves publicize the existence of new IRAPs in order to inform the public and recruit prospective apprentices.

SRE Requirement To Provide Information to Administrator

Paragraph (a)(3) of § 29.22 requires SREs to provide to the Administrator any data or information the Administrator is expressly authorized to collect under this subpart. This rule identifies the specific circumstances under which the Administrator is authorized to collect from SREs any information related to the requirements of this subpart, including the documentation identified in this subpart or required to be maintained under this subpart. This provision will enable the Administrator to request information, as needed, to ascertain SREs' conformity to the subpart under § 29.23 (Quality Assurance). The Department did not receive any substantive comments on this section. The final rule adopts the provision as proposed.

Standards for High-Quality IRAPs

Paragraph (a)(4) of § 29.22 states that SREs may only recognize and maintain the recognition of IRAPs that meet certain requirements, which the Department determined are standards of high-quality apprenticeship programs. These standards of high quality include paid work; work-based learning; mentorship; education and instruction; obtaining industry-recognized credentials; a written training plan and apprenticeship agreement; safety and supervision; and adherence to EEO obligations. In addition to the requirements that IRAPs must meet, SREs, in consultation with their industry experts, must set competency-based standards for the training, structure, and curricula of the industries or occupational areas in which they are recognized.

General Discussion About High-Quality IRAPs

The Department received a number of comments asking for additional clarity as to what constitutes a “high-quality” IRAP generally. Commenters suggested specific changes to the rule, such as further defining certain terms as addressed above in the discussion of § 29.20; including a progressive wage structure; enhancing safety and welfare protections; and requiring evaluation and enhanced quality control. Some commenters disagreed with the Department's proposal that SREs be responsible for recognizing IRAPs, suggesting that the Department is abdicating its responsibility to safeguard apprentices under the NAA. Other commenters expressed concern about the possibility that multiple, diverse training standards would exist within a single industry, which would lead to a “balkanization” of credentials that would confuse the markets. Some commenters remarked that the lack of clarity and specificity of requirements would discourage the development of IRAPs and worker participation in them. Commenters also expressed concern that IRAPs seem similar to internships that already exist in industries such as the technology industries.

Other commenters expressed support for greater flexibility for industry participation and an industry-driven apprenticeship model that can both expand apprenticeship in new industries while also tailoring apprenticeship programs to best serve industries' needs for a skilled workforce. A commenter suggested that the Department set standards for IRAPs that parallel the registered apprenticeship system and include: (1) Written classroom and on-the-job training requirements; (2) established wage progressions; (3) journeyworker to apprentice ratios; (4) mandatory safety training for apprentices; (5) instructors who are subject matter experts trained in educational methods; and (6) nondiscrimination in the operation of the program.

The Department made changes to certain paragraphs in § 29.22(a)(4), as described in further detail below, to clarify some of the high-quality requirements for IRAPs that satisfy the NAA's direction that the Department formulate and promote labor standards that safeguard the welfare of apprentices. The Department also made changes to other sections of § 29.22 to address comments about the quality-control relationship between SREs and the IRAPs they recognize, data collection by the Department and the SREs, and assessment of performance. As for the industry-driven model envisioned by this rule, the Department has determined that empowering SREs to recognize IRAPs allows the flexibility necessary to encourage more apprenticeships in new industry sectors while also ensuring that apprenticeships meet the standards of high quality determined by the Department. Further, this rule intentionally diverges from the registered apprenticeship program requirements. The Department considers IRAPs separate and distinct from registered apprenticeship programs because of the industry-driven characteristics of the programs, as determined by SREs rather than the Department. Although the Department has drawn from some of the characteristics of the registered apprenticeship model, it declines commenters' suggestions to model IRAPs after registered apprenticeship programs. Rather, as reflected in the discussion of specific sections below, the Department has established a rigorous framework for SRE and IRAP recognition while at the same time providing the needed flexibility to allow industry-driven innovation. The

Department acknowledges commenters' concerns about the possibility of varying standards within industries, but views SREs and their industry experts as best-positioned to set standards consistent with the requirements in this rule in accordance with market conditions. The Department views variances in standards and programs to be a benefit in increasing the competitiveness and utility of IRAPs.

The Department has addressed several of the commenters' concerns in various parts of the final rule. As discussed below, the Department added language to proposed § 29.22(a)(4)(ii), (v), (vi), and (vii) to clarify the standards of a high-quality apprenticeship program and strengthen requirements to better safeguard the welfare of apprentices. The Department has also added § 29.22(a)(4)(x), which requires IRAPs to have an apprenticeship agreement with each apprentice that establishes the employment relationship and sets forth the terms and conditions of the apprentice's employment and training. The Department has also added measures concerning quality assurance (§§ 29.22(f), 29.23), data collection (§ 29.22(h)), and performance assessment (§§ 29.22(h), 29.23). The changes are discussed in further detail in each paragraph below. It bears repeating that the NAA is written in general and discretionary terms, and directs that the Department only formulate and promote labor standards that safeguard the welfare of apprentices. The Department has used its expertise and policy judgment in making these particular changes, which it believes well-exceed the NAA's standard.

A commenter suggested that the Department make IRAP recognition contingent upon a process for the IRAP to use data to identify program strengths and necessary improvements.

The Department has declined to affirmatively require that IRAP recognition by an SRE be contingent upon a process for the IRAP to use data to identify program strengths and necessary improvements. However, this could be required by an SRE, as the Department anticipates that the SRE would make a decision about any such requirements through its own processes and procedures and its quality-control relationship with its IRAPs, as provided in § 29.22(f). The Department notes that there is no such requirement on registered apprenticeship programs. Further, the Department's data and reporting requirements set forth in § 29.22(h) include program-level data and performance outcomes for IRAPs, which allows the Department, the SREs, the IRAPs, and the public to review and assess IRAP performance.

Commenters suggested that Universal Design for Learning (UDL)

be included as a core component of high-quality industry-recognized apprenticeships. A commenter observed that UDL could ensure that more people successfully transition to well-paying and meaningful occupations through apprenticeship training because of UDL's focus on designing training and employment opportunities for a broader range of learners. Two commenters suggested adding to § 29.22(a)(4) a requirement that an IRAP “ensure[ ] digital material and technology accessibility in work experiences and classroom or related instruction, including information and communication technology (ICT) and websites.” The commenters noted that the Department has already adopted UDL as a requirement for Trade Adjustment Assistance Community College and Career Training grant funds. They also noted that the Department selected a pilot site focused on universally designing apprenticeship pathways in advanced manufacturing as part of the Apprenticeship Inclusion Models grant and provided funding for YouthBuild, which uses UDL to increase young people's engagement in STEM careers.

UDL is defined in 20 U.S.C. 1003 as:

[A] Scientifically valid framework for guiding educational practice that—

(A) provides flexibility in the ways information is presented, in the ways students respond or demonstrate knowledge and skills, and in the ways students are engaged; and

(B) reduces barriers in instruction, provides appropriate accommodations, supports, and challenges, and maintains high achievement expectations for all students, including students with disabilities and students who are limited English proficient.

Under this rule, SREs and IRAPs would be free to include UDL in their apprenticeship programs, and the Department expects some may choose to do so to the extent UDL is useful and allows them to reach a broader pool of potential apprentices. The Department also notes that IRAPs are required to adhere to Federal, State, and local EEO laws and that SREs are required to have policies and procedures that reflect comprehensive outreach strategies to reach diverse populations. However, the Department declines to make UDL a requirement f

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