Veterans Training Under the Service Members Occupational Conversion and Training Program

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Parts 2 and 21

RIN 2900-AG56

Veterans Training Under the Service Members Occupational

Conversion and Training Program

AGENCY: Department of Veterans Affairs.

ACTION: Interim final rule with request for public comment.

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SUMMARY: The Service Members Occupational Conversion and Training Act

of 1992 established a job training program for recently discharged

[[Page 5849]] veterans. That act authorizes the Secretary of Defense to

delegate some of the responsibility for implementing it to either the

Secretary of Veterans Affairs, the Secretary of Labor or both. The

Secretary of Defense has delegated responsibilities to both officials.

These regulations will acquaint the public with the way in which

Department of Veterans Affairs (VA) will implement the responsibilities

which have been delegated to the Secretary of Veterans Affairs.

DATES: Effective date January 31, 1995. Comments must be received on or

before April 3, 1995.

ADDRESSES: Mail written comments concerning these proposed regulations

to: Director, Office of Regulations Management (02D), Department of

Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 20420; or hand

deliver written comments to: Office of Regulations Management, Room

1176, 810 Eye Street NW., Washington, DC 20001. Comments should

indicate that they are submitted in response to ``RIN 2900-AG56.'' All

written comments will be available for public inspection in the Office

of Regulations Management, Room 1176, 801 Eye Street NW., Washington,

DC 20001 between the hours of 8:00 a.m. and 4:30 p.m., Monday through

Friday (except holidays).

FOR FURTHER INFORMATION CONTACT: June C. Schaeffer, Assistant Director

for Policy and Program Administration, Education Service, Veterans

Benefits Administration, 202-273-7187.

SUPPLEMENTARY INFORMATION: The Service Members Occupational Conversion

and Training Act (Pub. L. 101-484, Subtitle G) establishes a program to

reimburse employers for part of the cost of training recently

discharged veterans in a training program leading to permanent, stable

employment. The Service Members Occupational Conversion and Training

Act authorizes the Secretary of Defense to enter into an agreement with

the Secretary of Veterans Affairs and the Secretary of Labor to

implement that program.

On March 11, 1993, the Department of Defense entered into such an

agreement with VA and the Department of Labor to implement this

program. The Memorandum of Agreement, among other things, places upon

VA the responsibility for making payments under the Service Members

Occupational Conversion and Training Act and gives VA the authority to

issue implementing regulations in order to do so. These regulations are

adopted pursuant to that memorandum.

The Service Members Occupational Conversion and Training Act gives

the implementing official considerable latitude in implementing certain

portions of that Act. The areas in which VA adopted policies which are

permitted by law but are not specifically stated in the law are

discussed below. Section numbers included in the discussion refer to

the section numbers found in Pub. L. 102-484.

While no money was appropriated for the Service Members

Occupational Conversion and Training Act for Fiscal Year (FY) 1995,

Public Law 103-335, enacted on September 30, 1994, permits unobligated

funds designated for the Service Members Occupational Conversion and

Training Act that were remaining on September 30, 1994, to be obligated

during FY 1995. VA estimates that all of these funds will be obligated

by late in the first quarter or early in the second quarter of the

fiscal year.

VA notes that money obligated during FY95 and earlier fiscal years

will continue to be sent to the veterans' employers as the veterans are

trained. Since these programs may be up to 18 months long and the final

payment is made to the employer four months after the training program

is completed, some of the money obligated early in the second quarter

of FY95 will be sent to the employer during the first quarter of FY97.

The Service Members Occupational Conversion and Training Act uses

certain terms that are not defined by the Act and are open to a variety

of different meanings. Thus, Sec. 21,4802 defines the terms for

purposes of the Service Members Occupational Conversion and Training

Act in a manner deemed by the Secretary to be consistent with the

purpose and intent of the job training program provided by the Act.

The Act requires that, to establish program eligibility based on

unemployment, a veteran must have been unemployed for at least 8 of the

15 weeks preceding application (sec. 4485(a)(1)(A)). However, it

further states that ``part-time or temporary employment'' as defined by

the Secretary will be disregarded in determining the individual's

employment for this purpose (sec. 4485(a)(3)).

Accordingly, Sec. 21.4802(k) defines ``part-time'' employment as

employment when a work schedule requires a lesser number of hours of

work than that which is customary in the community for full-time

employment in a given position. VA considered a definition applicable

to all employers based upon a fixed number of hours of work per week

that would be necessary to reach the full-time rather than part-time

employment level. However, since the standard or normal workweek is not

consistent among communities, especially where determined by collective

bargaining with unions, such a rule could be arbitrary in its

application. Further, the definition adopted will maximize the number

of veterans who may qualify for training and thus, further the goals of

the program.

As noted, ``temporary employment,'' also, is excludable for

purposes of determining whether the veteran was employed during the 15-

week period preceding application. The Secretary has determined that

for this purpose ``temporary employment'' shall be any employment which

is not ``permanent.'' (See Sec. 21.4802(r).) The latter term is

defined, in turn, as employment which is clearly continuous in nature

and which would not terminate upon the completion by the employer of a

particular product, task, obligation, contract or assignment. Thus, a

veteran, who was ``employed'' on a full-time basis during each of the

15 weeks preceding application, but on a job scheduled to end upon

completion of the task being performed, e.g., completion of

construction of a particular building, will be found to have been

``unemployed'' for purposes of determining his or her eligibility to

participate under the Act. VA could have adopted a more narrow

definition of the term ``temporary employment'', but believes to do so

would thwart the intent of the statute to provide veterans the

opportunity for stable, long-term employment in a career field through

training under the Act. This conclusion is based upon the determination

that a person employed on a task-limited job has little likelihood of

being able to sustain that type of employment for the long term beyond

the project at hand.

In addition to these terms, required to be defined for eligibility

purposes, the Act uses other terms in discussing the type and duration

of employment for which the participating veteran is to be trained by

the employer. Section 4487(b) limits approvable job training programs

to those not leading to jobs which are ``seasonal,'' ``intermittent,''

or ``temporary.'' The Secretary is adopting, for the purpose of

approval of a job training program, the definitions of these terms

found in Sec. 21.4802(n), (i) and (s), respectively. A ``temporary

job'' is defined as time-limited employment which is known or expected,

at the time training begins, to be only of short duration (e.g., 1 year

or less). VA has determined that while it would be unreasonable to

expect the prospective [[Page 5850]] employer to assure that the

employer will be able to provide lifetime employment to the veteran who

successfully completes the job training program, the employer should be

able to assure that a reasonable likelihood exists of ongoing

employment for the veteran in the position for which trained. It would

be wasteful and absurd to subsidize an employer for 18 months of

training a veteran for a job known or expected to last only 1 year or

less after training is completed. VA notes that section of the statute

provides for withholding a portion of the payment due the employer

until the veteran has been employed for 4 months after training is

completed as an incentive to the employer to retain the veteran in

employment. However, a mere guarantee of a job for 4 months clearly

would not be sufficient to indicate that the training will result in

long-term, stable employment. VA could have circumscribed the duration

of employment deemed temporary at any greater number of months or years

but settled on a range up to 1 year, consistent with the temporary

employment concept generally used in Federal hiring, as reasonably

reflecting jobs considered to be of short duration.

The definition of the term ``intermittent job'' recognizes that in

most jobs the employee works on a regular schedule. If the nature of

the job is such that the employer cannot provide the employee with a

regular job schedule, VA has determined that the sporadic nature of the

veteran's employment would be intermittent at best and the definition

provides accordingly.

The amount of work provided in ``seasonal jobs ``varies from place

to place within the United States. For example, in some states along

the northern tier outdoor construction is unavailable for half of the

work year, while in other states such as Florida and Hawaii this type

of work is available year-round. Rather than define ``seasonal job'' by

listing specific jobs which are seasonal in at least part of the

country, VA has chosen to define this in terms of the number of

consecutive days for which no employment is provided. VA chose 90 days

because this is approximately one-quarter of the year. A job which

provides no work for at least this length of time would truly be

seasonal.

Finally, the term ``related employment'' is defined, as more fully

explained below, to indicate that the job training to be provided may

actually result in long-term employment in a different but ``related

job'' or one at a higher level in the same field.

The Service Members Occupational Conversion and Training Act

provides a list of items an employer must certify in order to obtain

payments for training a veteran. The last item in this list states that

the certification may include other criteria which are essential for

the effective implementation of the program (sec. 4486(d)(13)).

Consequently, the list of items to be certified contains some which are

not specifically enumerated in the statute.

Section 21.4822(a)(3)(xiii) requires the employer to consider any

prior training the veteran may have had in the field for which he or

she is to be trained and to shorten the training program appropriately.

The Act requires that the employer not place in a training program

anyone who is fully qualified for the job which is the goal of the

program. Shortening the training program for those who are partially

qualified, VA believes, is in accord with the intent of this

restriction and will preserve the limited monetary resources in this

program so that the number of veterans to be trained will be maximized.

Section 21.4822(a)(3)(xv) requires the employer to state the number

of employees in the firm if the employer wishes to be paid monthly. The

Service Members Occupational Conversion and Training Act states that

employers may be paid monthly if being paid quarterly would be unduly

burdensome for the employer. VA's experience in administering the

Veterans' Job Training Act, a similar program with a similar provision,

has shown that the burden on the employer is related to the number of

employees, because of the need of employers with few employees to

maintain their cash flow. Section 21.4832(a)(2) discussed below limits

the number of employees an employer may have and still be paid monthly.

Hence, the need for this information.

Section 21.4822(a)(3)(xii) provides that the employer will certify

that the trainee will have the opportunity to participate in a personal

interview with a case manager if one is assigned to him or her. The

Service Members Occupational Conversion and Training Act (sec. 4493)

provides that the implementing official will provide case managers to

be assigned under certain circumstances to veterans in training. The

Act further provides that the trainee will have an in-person interview

with the case manager within 60 days of entering into training. Under

the provisions of the Memorandum of Agreement the Secretary of Labor

will provide these case managers. It is reasonable, given the

requirements of the law for an in-person interview, that the employer

certify that the interview may take place during normal working hours.

The Service Members Occupational Conversion and Training Act

provides that the implementing official may prohibit payments to an

employer on behalf of new trainees when the completion rate for a

training program is disproportionately low due to deficiencies in the

quality of the program. The law is specific as to the evidence the

official must consider when determining when there are deficiencies in

the quality of the program, but the law does not state what a

disproportionately low percentage is. Section 21.4823(c) specifies the

minimum completion rate needed to qualify for payment.

That paragraph provides that unless the program has had at least

five trainees only very strong evidence that deficiencies exist will

cause VA to consider whether the completion rate is disproportionately

low. Four or fewer trainees do not provide sufficient data for a

percentage determination to be meaningful.

If there have been five or more trainees, the regulation provides

that, in effect, VA will compare the percentage of trainees who have

successfully completed the particular training program during the three

years which immediately precede the calculation with the percentage of

all trainees who have ever successfully completed all training

programs. If the percentage of successful completers of a program is

less than half the percentage of successful completers of all programs,

the percentage is low and will be considered as disproportionately low

if the program fails to meet the other qualifications in the

regulation. While the legislative history of the Act fails to define or

indicate what constitutes a disproportionately low successful

completion rate, VA believes that requiring a successful completion

rate of at least half the national average will not place too great a

burden on employers. Requiring no greater than half the national

average adequately takes into account the fact that with less than 10

or 12 trainees the one unsuccessful trainee may have a large effect on

the successful completion rate.

Section 21.4824 provides for withdrawal of approval if VA discovers

that the program ceases to meet approval requirements, or the required

employer's certifications were false in any material respect, or the

employer refuses to make available the progress records for the

trainees in a training program. While the Service Members Occupational

Conversion and Training [[Page 5851]] Act does not specifically provide

for a withdrawal of program approval, withdrawal of approval is

implicit in the law. Since program approval is predicated upon the

employer's meeting certain approval requirements, it clearly follows

that such approval cannot be maintained if the approval requirements

for the employer's program were not or are not met.

Continued compliance with approval requirements is required. For

example, one requirement is that there be enough space available to

train the trainees. It is conceivable that, after having obtained

approval, the employer may move to a new place of business where space

is inadequate, thus bringing the employer into noncompliance.

Similarly, VA may discover that an employer's certification was

false. For example, an employer may falsely certify that there are

sufficient instructor personnel available to train the trainees.

Compliance monitoring may reveal that this is not the case. In that

event approval should be withdrawn. To continue approval would make

meaningless the compliance monitoring provided for in the law.

The Service Members Occupational Conversion and Training Act (sec.

4487(a)(2)) and Sec. 21.4822(a)(3)(xv) provide that employers may be

paid monthly if being paid quarterly would be burdensome. Section

21.4832(a) provides for monthly payments if the employer has less than

75 employees and wants to be paid monthly.

As noted above, VA has had experience administering a similar Act,

the Veterans' Job Training Act, which had a similar provision, and the

department found that the burden was related to the number of employees

the employer had, because of the need of these employers to maintain

their cash flow. VA believes from its administrative experience that

employers with fewer than 75 employees may well find it burdensome to

be paid quarterly.

The Service Members Occupational Conversion and Training Act

provides that no periodic payment may be made to an employer until the

veteran certifies that he or she was employed full time in the training

program during the period to be certified, and the employer confirms

the certification and states the number of hours the employee worked.

However, Sec. 21.4832(a)(3) provides for an exception for the

employee's certification if the employee quit or died during the

payment period or is similarly unavailable to make the certification.

VA does not believe it equitable to withhold a payment which would

otherwise be due an employer if circumstances beyond the employer's

control make it difficult or impossible for the employer to obtain the

certification, particularly if the employee refuses to cooperate.

Similarly, the Service Members Occupational Conversion and Training

Act forbids reimbursement of an employer for expenses for tools and

other work-related materials until the employer and the employee

certify the need for the tools and work-related materials, that the

veteran bought them, and that the employer reimbursed the veteran for

them. Section 21.4832(c) contains two provisions not made explicit in

the Act. First, it provides for payment in certain circumstances if the

employee is unavailable to make the certification. Again VA does not

believe it is equitable to withhold payment to which an employer

otherwise would be entitled, if the employee is unavailable to make the

certification.

Second, the regulation requires the employer and veteran to submit

a copy of the receipt or other proof of purchase and cost which the

employer used to determine the amount for which the veteran was

reimbursed. Although not expressly required by the Service Members

Occupational Conversion and Training Act, VA believes that its

successful monitoring of this program requires documentation for this

certification.

Section 21.4832(d)(2) provides that if the employer reduces a

trainee's pay below that of his or her starting wage, reimbursement

will be made to the employer on the basis of the new lower wage rather

than on the basis of the starting wage. This is not stated specifically

in the Service Members Occupational Conversion and Training Act but it

is implicit in the law.

Occasionally, a trainee begins job training at a project where the

Davis-Bacon Act applies. The Davis-Bacon Act provides a two-tier system

of wages, a journeyman wage and a training wage, both of which may be

higher than the starting wage which the employer usually pays

employees. When the project is completed, the trainee may revert to the

usual starting wage. Section 21.4802(j) defines normal starting wage in

such a way that reimbursement to the employer in this situation would

be based on the Davis-Bacon training wage while such a wage was being

paid to the eligible person and would be based on the usual starting

wage when the eligible person's training wage was not governed by that

Act.

VA believes paying the employer at the Davis-Bacon training wage

rate even though the employer may be paying the journeyman rate is

implicit in the law. The Service Members Occupational Conversion and

Training Act provides that job training programs approved under 38

U.S.C. chapter 36 will be considered to meet the approval requirements

of the Act. These programs require a graduated wage scale. VA has

always considered that someone who has reached the journeyman wage rate

may not be considered to be a trainee entitled to educational

assistance for training.

The Service Members Occupational Conversion and Training Act

requires that employers keep records adequate to show the progress of

the veteran and make these records available to authorized

representatives of the government. However, that Act does not state the

length of time the records must be kept. Section 21.4850(b) would

require the employer to keep those records for 3 years following the

last month or quarter for which the employer received payment on behalf

of the veteran.

Another record retention period could be adopted. However, VA

believes that given the limited resources for program oversight, a

period of less than 3 years will make it difficult to monitor

compliance effectively. On the other hand, the department realizes that

retention of records for an indefinite time may well be unduly costly

for the employer. Accordingly, the interim rule requires a 3-year

retention as a compromise between VA's need to properly monitor

compliance and the need to minimize expenses for the employer.

Section 21.4832(b) would allow VA to pay an employer a lump-sum

incentive payment after the trainee had worked full-time for 4 months

in the job for which the training program was designed to provide

training or in a related job. A related job is defined in

Sec. 21.4820(m) as one which is found in the Dictionary of Occupational

Titles as being in the same occupational work group.

In permitting payment for employment in a related job, VA is

reacting to concerns that in some instances a trainee may be promoted

before the four months have expired or changing business conditions may

force an employer to place the eligible person in a related job. VA

believes that this is tantamount to placing the eligible person in the

job for which the training program is designed to provide training. The

employer should not be placed in a position of losing the payment for

essentially carrying out the purpose of the Service Members

Occupational Conversion and Training Act. Neither should the eligible

person be placed in [[Page 5852]] a position where she or he would have

to forgo a promotion.

Administrative Procedure Act

A substantial portion of the changes made by this interim final

rule merely consists of restatements of statutory material and, as

such, is not subject to rule making requirements. The rule making

changes consist of interpretative rules, general statements of policy,

and rules of agency organization, procedure, and practice. As such,

they are exempt from the notice and comment provisions of 5 U.S.C. 553.

The changes subject to rule making requirements are also made

effective immediately without a 30 day delay since, insofar as they

consist of substantive rules, they are interpretative rules and

statements of policy.

Regulatory Flexibility Act

Because no notice of proposed rule making was required in

connection with the adoption of this interim rule, no regulatory

flexibility analysis is required under the Regulatory Flexibility Act

(5 U.S.C. 601, et seq.).

No Catalog of Federal Domestic Assistance number has been

assigned to the program affected by these regulations.

List of Subjects

38 CFR Part 2

Authority delegation (Government agencies), Veterans Affairs

Department.

38 CFR Part 21

Civil rights, Claims, Education, Grant programs-education, Loan

programs-education, Reporting and recordkeeping requirements, Schools,

Veterans, Vocational education, Vocational rehabilitation.

Approved: November 29, 1994.

Jesse Brown,

Secretary of Veterans Affairs.

For the reasons set out in the preamble, 38 CFR Parts 2 and 21 are

amended as set forth below.

PART 2--DELEGATIONS OF AUTHORITY

1. The authority citation for Part 2 continues to read as follows:

Authority: 72 Stat. 1114; 38 U.S.C. 501, unless otherwise noted.

2. Sections 2.100 and 21.101 are added to read as follows:

Sec. 2.100 Delegation of authority to the Under Secretary for Benefits

or his or her designee to enter into Memoranda of Agreement with

authorized representatives of Department of Defense or Department of

Labor or both to implement programs authorized by Secs. 21.4800 through

21.4856.

This delegation is described in Sec. 21.4854 of this chapter.

(Authority: 38 U.S.C. 512)

Sec. 2.101 Delegation of authority to the Under Secretary for

Benefits, and to supervisory or adjudicative personnel within the

jurisdiction of the Veterans Benefits Administration designated by him

or her, to make findings and decisions of the Department of Veterans

Affairs under the Service Members Occupational Conversion and Training

Act, and the applicable regulations, precedents and instructions,

relating to programs authorized by Secs. 21.4800 through 21.4854.

This delegation is described in Sec. 21.4856 of this chapter.

(Authority: 38 U.S.C. 512)

PART 21--VOCATIONAL REHABILITATION AND EDUCATION

3. The authority citation for part 21 continues to read as follows:

Authority: 38 U.S.C. 501.

4. Subpart F-3 is added to read as follows:

Subpart F-3--Service Members Occupational Conversion and Training

Program

Sec.

General

21.4800 Service Members Occupational Conversion and Training

Program.

21.4801 [Reserved]

21.4802 Definitions.

21.4803-21.4809 [Reserved]

Eligibility

21.4810 Eligibility requirements for participation.

21.4811 [Reserved]

21.4812 Application and certification.

21.4813-21.4819 [Reserved]

Approval of Employer Programs

21.4820 Job training program approval.

12.4821 [Reserved]

21.4822 Employer applications for approval.

21.4823 Disapproval of entry into programs having unsatisfactory

completion rates.

21.4824 Withdrawal of approval.

21.4825-21.4829 [Reserved]

Payments

21.4830 Entrance into training.

21.4831 [Reserved]

21.4832 Payments to employers.

21.4833 [Reserved]

21.4834 Overpayments and forfeits.

21.4835--21.4839 [Reserved]

Counseling

21.4840 Employment counseling services.

21.4841-21.4843 [Reserved]

21.4844 Failure to cooperate.

21.4845-21.4849 [Reserved]

Administrative

21.4850 Inspection of records.

21.4851 [Reserved]

21.4852 Monitoring and investigations.

21.4853 [Reserved]

21.4854 Delegation of authority to the Under Secretary for

Benefits.

21.4855 [Reserved]

21.4856 Delegation of authority to the Veterans Benefits

Administration.

Subpart F-3--Service Members Occupational Conversion and Training

Program

Authority: Subtitle G , Pub. L. 102-484, 106 Stat. 2757-2769

General

Sec. 21.4800 Service Members Occupational Conversion and Training

Program.

Sections 21.4800 through 21.4856 regulate a Service Members

Occupational Conversion and Training Program. The purpose of this

program is to assist members of the Armed Forces who are forced or

induced to leave military service by reason of the drawdown of the

Armed Forces and to provide the Secretary of Defense with another tool

to manage that drawdown. The program assists eligible persons in

entering the civilian workforce through training for employment in a

stable and permanent position that involves significant training, VA

makes payments to employers who employ and train eligible veterans in

these jobs. The payments assist employers in defraying the costs of

necessary training.

(Authority: Subtitle G, Pub. L. 102-484, 106 Stat. 2757-2769,10

U.S.C. 1143 note)

Sec. 21.4801 [Reserved]

Sec. 21.4802 Definitions.

For the purpose of the Service Members Occupational Conversion and

Training Program described in Secs. 21.4800 through 21.4856 the

following definitions apply.

(a) Active duty. The term active duty means:

(1) Full-time duty in the Armed Forces, other than active duty for

training,

(2) Full-time duty (other than for training purposes) as a

commissioned officer of the Regular or Reserve Corps of the Public

Health Service;

(3) Full-time duty as a commissioned officer of the National

Oceanic and Atmospheric Administration;

(4) Service as a cadet at the United States Military, Air Force or

Coast Guard Academy, or as a midshipman at the United States Naval

Academy, and [[Page 5853]]

(5) Authorized travel to or from such service.

(Authority: 106 Stat. 2757, Pub. L. 102-484, sec. 4483(2), 10 U.S.C.

1143, note)

(b) Active duty for training. (1) The term active duty for training

means:

(i) Full-time duty in the Armed Forces performed by Reserves for

training purposes,

(ii) Full-time duty for training purposes performed as a

commissioned officer of the Reserve Corps of the Public Health Service,

(iii) In the case of members of the Army National Guard or the Air

National Guard of any State, full-time duty under section 316, 592,

593, 594 or 505 of title 32, U.S. Code,

(iv) Duty performed by a member of a Senior Reserve Officers'

Training Corps program when ordered to such duty for the purpose of

training or a practice cruise under chapter 103 of title 10, U.S. Code

for a period of not less than four weeks and which must be completed by

the member before the member is commissioned, and

(v) Authorized travel to or from such duty.

(2) The term does not include duty performed as a temporary member

of the Coast Guard Reserve.

(Authority: 106 Stat. 2757, Pub. L. 102-484, sec. 4483(2), 10 U.S.C.

1143, note)

(c) Active military, naval or air service. The term active

military, naval or air service includes active duty, any period of

active duty for training during which the individual concerned was

disabled from a disease or injury incurred or aggravated in line of

duty, and any period of inactive duty training during which the

individual concerned was disabled from an injury incurred or aggravated

in line of duty.

(Authority: 106 Stat. 2757, Pub. L. 102-484, sec. 4483(2), 10 U.S.C.

1143, note)

(d) Compensation. The term compensation means a monthly payment

made by the Department of Veterans Affairs to a veteran because of a

service-connected disability.

(Authority: 106 Stat. 2757, Pub. L. 102-484, sec. 4483(2), 10 U.S.C.

1143, note)

(e) Eligible person. The term eligible person means a veteran who--

(1) Was discharged after August 1, 1990, and

(2) Either--

(i) Served in the active military, naval or air service for a

period of more than 90 days, or

(ii) Was discharged or released from active duty because of a

service-connected disability.

(Authority: 106 Stat. 2758, Pub. L. 102-464, sec. 4485(a)(2), 10

U.S.C. 1143, note)

(f) Employer. The term employer means a person or business or other

entity which--

(1) Hires the veteran,

(2) Provides work, wages, and supervision,

(3) Either provides or arranges for training for the veteran, and

(4) Can make the certification required by Sec. 21.4822(a).

(Authority: 106 Stat. 2762, Pub. L. 102-484, sec. 4487, 10 U.S.C.

1143, note)

(g) Full-time employment. The term full-time employment means

employment which requires the employee to work a regular schedule of

hours per day and days per week established as the standard full-time

workweek at the employee's training establishment.

(Authority: 106 Stat. 2758, Pub. L. 102-484, sec. 4485(a)(3), 10

U.S.C. 1143, note)

(h) Inactive duty training. (1) The term inactive duty training

means:

(i) Duty (other than full-time duty) prescribed for Reserves

(including commissioned officers of the Reserve Corps of the Public

Health Service) by the Secretary concerned under section 206 of title

37 or any other provision of law;

(ii) Special additional duties authorized for Reserves (including

commissioned officers of the Reserve Corps of the Public Health

Service) by an authority designated by the Secretary concerned and

performed by them on a voluntary basis in connection with the

prescribed training or maintenance activities of the units to which

they are assigned,

(iii) Training (other than active duty for training) by a member

of, or applicant for membership (as defined in section 8140(g) of title

5, U. S. Code), in the Senior Reserve Officers' Training Corps

prescribed under chapter 103, of title 10, U. S. Code, and

(iv) In the case of a member of the Army National Guard or Air

National Guard of any State, such term means duty (other than full-time

duty) under sections 316, 502, 503, 504 or 505 of title 32, U. S. Code.

(2) The term does not include:

(i) Work or study performed in connection with a correspondence

course,

(ii) Attendance at an educational institution in an inactive

status, or

(iii) Duty performed as a temporary member of the Coast Guard

Reserve.

(Authority: 106 Stat. 2757, Pub. L. 102-484, sec. 4483(2), 10 U.S.C.

1143, note)

(i) Intermittent job. The term intermittent job means a less than

full-time job in which the employee is given no advance regular work

schedule due to the unpredictable and sporadic nature of the work

needed for the job.

(Authority: 106 Stat. 2760, Pub. L. 102-484, sec. 4486(b)(1), 10

U.S.C. 1143 note)

(j) Normal starting hourly wage. (1) The term normal starting

hourly wage means, except as provided in paragraph (j)(2) of this

section, the wage paid per hour (exclusive of overtime, premium pay or

fringe benefits) on the first day of the job training program to an

eligible person whose training program has not been shortened as a

result of the employer's evaluation of an eligible person's prior

training. This definition applies as to the eligible person whose job

training program actually has been shortened, and who, therefore,

begins training at a higher hourly wage.

(2) For any eligible person to whom the Davis-Bacon Act applies the

term normal starting hourly wage means:

(i) The training wage payable under the Davis-Bacon Act (exclusive

of overtime, premium pay or fringe benefits) to the eligible person on

days during the job training program when the Davis-Bacon Act applies,

and

(ii) On days when the Davis-Bacon Act does not govern the wages

paid to the eligible person, the wage as determined by paragraph (j)(1)

of this section.

(Authority: 106 Stat. 2762, Pub. L. 102-484, sec. 4487, 10 U.S.C.

1143 note)

(k) Part-time employment. The term part-time employment means

permanent employment in a position in which the employee works a

regularly scheduled number of hours each workweek that is less than the

number of hours customarily required for full-time employment in that

position.

(Authority: 106 Stat. 2758, Pub. L. 102-484, sec. 4485(a)(3), 10

U.S.C. 1143 note)

(l) Permanent employment. The term permanent employment means

employment which is clearly continuous in nature. Thus, the term does

not include employment which is seasonal, time-limited, or expected to

terminate upon completion of a particular product, task, obligation,

contract, or assignment.

(Authority: 106 Stat. 2758, Pub. L. 102-484, sec. 4485(a)(3), 10

U.S.C. 1143 note)

(m) Related job. The term related job means a job which has the

following characteristics when compared to another job.

(1) The Dictionary of Occupational Titles, 4th edition, revised

1991, shows that--

(i) Both jobs are in the same occupational group,

and [[Page 5854]]

(ii) The second job requires the same or higher specific vocational

preparation level as the job to which it is being compared, and

(2) The salary being paid to employees with comparable experience

and training in the second job is the same or greater than the salary

paid in the job to which it is being compared.

(Authority: 106 Stat. 2762, Pub. L. 101-484, sec. 4487(b)(3), 10

U.S.C. 1143, note)

(n) Seasonal job. The term seasonal job means a job which is

subject to a seasonal need or availability resulting in no work for the

employed person for 90 or more consecutive calendar days.

(Authority: 106 Stat. 2760, Pub. L. 102-484, sec. 4486(b)(1), 10

U.S.C. 1143 note)

(o) Secretary. The term Secretary means the Secretary of Veterans

Affairs unless otherwise indicated by the text of the sentence in which

the term appears.

(Authority: 106 Stat. 2760, Pub. L. 102-484, sec. 4486(b)(1), 10

U.S.C. 1143 note)

(p) Service-connected. The term service-connected means, with

respect to disability, that the disability was incurred or aggravated

in line of duty in the active military, naval or air service.

(Authority: 106 Stat. 2758, Pub. L. 102-484, sec. 4483(2), 10 U.S.C.

1143, note)

(q) State. The term State means each of the several States,

Territories, and possessions of the United States, the District of

Columbia and the Commonwealth of Puerto Rico.

(Authority: 106 Stat. 2758, Pub. L. 102-484, sec. 4483(2), 10 U.S.C.

1143, note)

(r) Temporary employment. The term temporary employment means

employment other than permanent employment.

(Authority: 106 Stat. 2759, Pub. L. 102-484, sec. 4485(a)(3), 10

U.S.C. 1143 note)

(s) Temporary job. The term temporary job means a time-limited job,

particularly one of known, expected, or intended short duration

(generally, not to exceed one year and, frequently, shorter).

(Authority: Pub. L. 102-484, sec. 4486(b)(1), 10 U.S.C. 1143 note)

(t) Unemployed. The term unemployed means that a person is without

full-time, permanent employment and wants and is available for full-

time, permanent employment.

(Authority: 106 Stat. 2760, Pub. L. 102-484, sec. 4485(a)(3): 10

U.S.C. 1143 note)

(u) Veteran. The term veteran means a person who--

(1) Served in the active military, naval or air service, as defined

in paragraph (c) of this section, and

(2) Was discharged or released therefrom under conditions other

than dishonorable.

(Authority: 106 Stat. 2757, Pub. L. 102-484, sec. 4483(2), 10 U.S.C.

1143 note, 38 U.S.C. 101(2))

Secs. 21.4803--21.4809 [Reserved]

Eligibility

Sec. 21.4810 Eligibility requirements for participation.

To establish eligibility for participation in the Service Members

Occupational Conversion and Training program, an eligible person, on

the date of application, must--

(a) (1) Be unemployed, and

(2) Have been unemployed for at least 8 of the 15 weeks immediately

preceding the date of his or her application for participation in a job

training program under this subpart, or

(b) Be separated from the active military, naval or air service and

must have had a primary or secondary occupational specialty in the

Armed Forces which (as determined under regulations prescribed by the

Secretary of Defense and in effect before the date of the eligible

person's separation) is not readily transferable to the civilian

workforce; or

(c) Be entitled to compensation (or but for the receipt of military

retired pay would be entitled to compensation) under laws administered

by VA for a service-connected disability rated at 30 percent or more.

(Authority: 106 Stat. 2758, Pub. L. 102-484, sec. 4485(a)(1)(B) and

(C) 10 U.S.C. 1143 note)

Sec. 21.4811 [Reserved]

Sec. 21.4812 Application and certification.

(a) Application. An individual must apply to a facility of the

Veterans Benefits Administration for participation in a job training

program using the form prescribed by VA.

(Authority: 106 Stat. 2759, Pub. L. 102-484, sec. 4485(b)(1), 10

U.S.C. 1143 note)

(b) Approval. VA will approve an application to participate in a

job training program if:

(1) The applicant is an eligible person who meets the participation

requirements of Sec. 21.4810, and

(2) Funds are available to pay employers under this subpart.

(Authority: 106 Stat. 2759, Pub. L. 102-484, sec. 4485(b)(2); 10

U.S.C. 1143 note)

(c) Certificates. (1) Upon approving an eligible person's

application, VA will furnish the eligible person with a certificate for

presentation to an employer with an existing approved job training

program or an employer who is willing to develop and seek approval for

a job training program. The certificate will state:

(i) The individual's eligibility to participate;

(ii) The date of the certificate's issuance to the eligible person

and the period of its validity, and

(iii) Approval of entrance into a job training program is subject

to the availability of funds.

(2) A certificate expires 180 days from the date on which it is

furnished to the eligible person. However, VA may renew a certificate

for an eligible person when the provisions of Sec. 21.4812(b) are met.

A renewed certificate expires 180 days from the date on which it is

furnished to the eligible person, and may itself be renewed.

(Authority: 106 Stat. 2759, Pub. L. 102-484, sec. 4485(b)(3), 10

U.S.C. 1143 note)

(d) Disapproval. If an individual's application is disapproved, VA

will give the individual written notice of the decision, including the

reasons therefor, a summary of the evidence considered and an

opportunity for a hearing. The individual may appeal VA's denial of his

or her application under the same process as is provided in Part 19,

Subpart B of this chapter.

(Authority: 106 Stat. 2759, Pub. L. 102-484, sec. 4485(b)(3), 10

U.S.C. 1143 note)

Secs. 21.4813--21.4819 [Reserved]

Approval of Employer Programs

Sec. 21.4820 Job training program approval.

(a) Eligible persons. An employer may be paid assistance on behalf

of a participating eligible person only for providing a program of job

training approved by VA as meeting the requirements of this section and

Sec. 21.4822.

(1) The training provided under an employer's job training program

must be in a field of employment providing a reasonable probability of

stable, long-term employment and, except as provided in paragraph

(a)(3)(ii) of this section, such training must be provided for a period

of not less than 6 nor more than 18 months.

(2) An employer may provide all or part of a job training program

under an agreement with an educational institution offering the

training through a course or courses which have been approved under

Sec. 21.4253 or Sec. 21.4254 for the enrollment of veterans.

(3) Notwithstanding the provision of paragraph (a)(1) that

prohibits a training program from being more than 18 months long--

[[Page 5855]]

(i) An apprenticeship or other on-job training program approved

under 38 U.S.C. 3687 will, upon the employer's submission of an

application in accordance with Sec. 21.4822 containing the

certification required by Sec. 21.4822(a)(3)(iii), be considered to

have met all requirements for approval under this subpart, and will be

approved unless found ineligible under paragraph (b) of this section,

and

(ii) If a job training program described in paragraph (a)(3)(i) of

this section requires more than 18 months of training to complete, the

period of training approvable for purposes of this subpart will be

limited to the first 18 months of training under the program, or a

period of training not to exceed 18 months from the point at which the

eligible person enters the program in the case where the employer

grants credit for prior training. (See Sec. 21.4832(a)(3)).

(Authority: 106 Stat. 2762, Pub. L. 102-484, sec. 4486(h); 10 U.S.C.

1143 note)

(b) Ineligible programs. VA will not approve a job training program

for employment--

(1) Which consists of seasonal, intermittent or temporary jobs,

(2) Under which commissions are the primary source of income,

(3) Which involves political or religious activities,

(4) With any department, agency, instrumentality or branch of the

Federal Government (including the United States Postal Service and the

Postal Rate Commission); or

(5) Which will not be performed in a State.

(Authority: 106 Stat. 2760, Pub. L. 102-484, sec. 4486(b); 10 U.S.C.

1143 note)

Sec. 21.4821 [Reserved]

Sec. 21.4822 Employer applications for approval.

(a) Applications for approval of job training programs. (1) The

employer must apply for approval of a job training program to the

Director of the VA facility having jurisdiction over the place where

the eligible person will be trained.

(2) The employer's application for approval of a job training

program under this subpart must be in the form prescribed by the

Secretary of Veterans Affairs and, except for a program of

apprenticeship or other on-job training approved under 38 U.S.C. 3687,

must include the employer's certification of the matters set forth in

paragraphs (a)(3) and (a)(4) of this section.

(3) The employer must make and submit the following general

certifications with the application.

(i) The employer plans that--

(A) Upon the eligible person's completion of the job training

program, the employer will employ the eligible person in the position

for which he or she has been trained, and

(B) This position will be a full-time, permanent employment

position available to the eligible person at the end of the training

period.

(ii) The wages and benefits to be paid to an eligible person

participating in the job training program--

(A) Will be the same as the wages and benefits normally paid to

other employees participating in the same or a comparable job training

program, and

(B) If there are no nonveterans training in the program, will be

comparable to wages paid in similar programs in the community in which

the employee will be trained.

(iii) Employment of the eligible person under the program--

(A) Will not result in the displacement of currently employed

workers (including partial displacement such as a reduction in the

hours of nonovertime work, wages, or employment benefits), and

(B) Will not be in a job while another person is laid off from the

same or substantially equivalent job, or will not be in a job the

opening for which was created as a result of the employer having

terminated the employment of any regular employee or otherwise having

reduced its workforce with the intention of hiring an eligible person

in the job.

(iv) The employer will not employ in the job training program an

eligible person already qualified by training and experience for the

job for which the training is to be provided.

(v) The job which is the objective of the job training program

involves significant training.

(vi) The training content of the job training program is adequate

to accomplish the training objective of the program considering--

(A) The nature of the occupation for which training is to be

provided, and

(B) The content of comparable, available training programs which

lead to the same occupation.

(vii) Each participating eligible person will be employed full-time

while in the job training program.

(viii) The training period of the program will not be longer than

the training periods that other employers in the community customarily

require new employees to complete in order to become competent in the

occupation or job for which the training is provided.

(ix) The training establishment or place of employment will have

available, as needed to accomplish the training objective of the

program, the following:

(A) Sufficient space,

(B) Equipment,

(C) Instructional material, and

(D) Instructor personnel.

(x) The employer will keep adequate records.

(A) To show the progress made by each eligible person participating

in the program, and

(B) To demonstrate compliance by the employer and eligible person

with all requirements of law governing the Service Members Occupational

Conversion and Training Act.

(xi) The employer, before the eligible person's entry into

training, will--

(A) Furnish the eligible person with a copy of the certification

described in this paragraph, and

(B) Obtain and retain the eligible person's signed acknowledgment

of having received the certification.

(xii) The employer will provide to each participating eligible

person for whom a case manager has been assigned by the Department of

Labor full opportunity to participate in one personal interview with

the case manager during the eligible person's normal work day.

(xiii) The employer will evaluate the eligible person's prior

training in the field for which he or she is being trained and will

shorten his or her training program appropriately.

(xiv) Whether tools or other work-related materials, or both, are

necessary for the eligible person's participation in the program of job

training, and if so, a list of those tools and work-related materials

which the eligible person and all other trainees in the program, both

eligible persons and others, will be required to purchase and for which

the employer will reimburse the eligible person.

(xv) The program meets such other criteria which are essential for

effective implementation of the Service Members Occupational Conversion

and Training Act and as to which VA, after having given notice to the

employer, requires the employer's certification.

(4) The employer must submit with the application on a form

prescribed by the VA, information concerning:

(i) The total number of hours of participation in the job training

program to be offered the eligible person,

(ii) The length of the job training program,

(iii) The starting hourly rate of wages to be paid to a participant

in the program,

(iv) The training content of the program, including the name and

address of the educational institution, if [[Page 5856]] any, with

which the employer has an agreement to provide all or part of the job

training program (supported by a copy of that agreement included with

the application);

(v) If all or part of a job training program is provided by an

educational institution, a statement that VA will have access to the

training records,

(vi) The objective of the program,

(vii) The address of the location where the records described in

paragraph (a)(3)(x) of this section will be kept, and

(viii) If the employer desires to be paid monthly, the number of

the training establishment's employees.

(5) The certifications required in paragraphs (a)(3)(i) through

(xi) shall be considered to be a requirement established under subtitle

G of the Service Members Occupational Conversion and Training Act, and

for purposes of Sec. 21.4832(c) regarding payment for tools and other

work-related materials and paragraphs (a)(3)(i) through (x) shall be

considered to be a requirement established under subtitle G of the

Service Members Occupational Conversion and Training Act.

(Authority: 106 Stat. 2760, Pub. L. 102-484, secs. 4486(e), 4487(b);

10 U.S.C. 1143 note)

(b) VA action upon receipt of the application. (1) Upon receipt of

the application, the Director of the VA facility of jurisdiction will

approve the job training program if:

(i) The application contains all requisite information and

certifications needed to enable the Director to determine whether the

proposed job training program meets the approval requirements of the

Service Members Occupational Conversion and Training Act.

(ii) The Director finds no basis for conducting an investigation

under Sec. 21.4852 that would warrant withholding approval of the

employer's proposed program of job training pending the outcome of that

investigation.

(2) In determining whether the certifications required in

paragraphs (a)(3) and (a)(4) of this section are complete and accurate,

the Director of the VA facility of jurisdiction--

(i) Will consider that the provisions have been met and that the

certification is accurate if the job training program for which the

employer is seeking approval has already been approved for training

under Sec. 21.4261 or Sec. 21.4262, or the entire job training program

consists of a course or courses offered at an educational institution

and approved under Sec. 21.4253 or Sec. 21.4254;

(ii) Will consider any information the Department of Labor or the

State Employment Security Agency may have concerning the employer and

the job training program;

(iii) Will consider any other evidence which may show whether or

not the certification is accurate and whether or not the provisions of

Sec. 21.4820(a) are met; and

(iv) May withhold approval pending an investigation.

(3) The Director of the VA facility will notify the employer in

writing of the approval or disapproval of the employer's program. If

the program is disapproved, the notice will state the reasons therefor

and the employer's right to seek review of the decision as provided in

paragraph (c) of this section. If no review is sought, the decision of

the Director of the VA facility of jurisdiction will be final.

(c) Review of a decision not to approve a program. (1) If an

employer disagrees with a decision of a Director of a VA facility not

to approve the program, the employer, within 60 days after receipt of

notice of the decision, may ask that the decision be reviewed by the

Director, Education Service.

(2) A review by the Director, Education Service, of a disapproval

decision of the Director of the VA field facility will be based upon

the evidence of record when the original decision not to approve a

program was made. It will not be de novo in nature and no hearing will

be held. The Director, Education Service, has the authority to affirm,

reverse, or remand the original decision. The reviewing official's

action, other than a remand, shall be the final Department decision on

the issue presented.

(Authority: 38 U.S.C. 512(a))

Sec. 21.4823 Disapproval of entry into programs having unsatisfactory

completion rates.

(a) Disapproval of payments on behalf of new participants. The

Director of a VA field facility may disapprove entry into an employer's

approved job training program under this subpart when the Director

finds that the rate of veterans' successful completion of the job

training program is disproportionately low as a result of deficiencies

in the quality of the job training program.

(Authority: 106 Stat. 2765, Pub. L. 102-484, sec. 4491(a), 10 U.S.C.

1143 note)

(b) Notice: effective date of disapproval. An eligible person who

has not begun a job training program to which a disapproval under

paragraph (a) of this section applies, will be barred from entering

that program effective on the date the employer receives the

notification provided pursuant to paragraph (e) of this section.

(Authority: 106 Stat. 2764; Pub. L. 101-484, sec. 4490(b); 10 U.S.C.

1143 note)

(c) Successful completion rate for job training programs. VA will

determine whether the successful completion rate for a job training

program is disproportionately low as follows.

(1) If fewer than five eligible persons either successfully

completed the particular job training program or terminated that

program (voluntarily or involuntarily) during the three-year period

immediately preceding the calculation, VA will consider that the

completion rate of the job training program is not disproportionately

low unless there is strong evidence to the contrary.

(2) If five or more eligible persons either successfully completed

the particular job training program or terminated that program, or if

the number is less than five and there is compelling evidence of

deficiencies in the quality of the program that may have adversely

affected the completion rate, VA will--

(i) Calculate a percentage by dividing the number of eligible

persons who have successfully completed the job training program during

the three-year period immediately preceding the calculation by the

number of eligible persons who have either successfully completed or

otherwise terminated that program during the three-year period

immediately preceding the calculation;

(ii) Calculate a second percentage by dividing the number of

eligible persons who have ever successfully completed any job training

program approved for veterans' training under the Service Members

Occupational Conversion and Training Act by the number of eligible

persons who have ever either successfully completed or otherwise

terminated such a job training program, and

(iii) Compare the two percentages. If the percentage determined in

paragraph (c)(2)(i) of this section is less than one-half the

percentage determined in paragraph (c)(2)(ii) of this section, the

successful completion rate of the job training program is

disproportionately low, and shall be considered with the data described

in paragraphs (b) through (d) of this section and the results of any

investigation VA or the Department of Labor may conduct in determining

whether the disproportionately low completion rate is a result of

deficiencies in the quality of the program.

(Authority: 106 Stat. 2764, Pub. L. 102-484, sec. 4490(b), 10 U.S.C.

1143 note)

[[Page 5857]] (d) Deficiencies in the quality of the job training

program. In determining whether any disproportionately low completion

rate of a job training program is the result of deficiencies in the

quality of the program, VA will take into account appropriate data,

including:

(1) Quarterly data provided by the Secretary of Labor with respect

to the number of veterans who:

(i) Receive counseling in connection with training under the

Service Members Occupational Conversion and Training Act.''

(ii) Are referred to employers under the Service Members

Occupational Conversion and Training Act,

(iii) Participate in job training under the Service Members

Occupational Conversion and Training Act, and

(iv) Complete that training or do not complete that training, and

the reasons for the noncompletion, and

(2) Data from the compliance surveys of the employer which indicate

the number of eligible persons who have undertaken a job training

program, the number of such persons who failed to complete it, and the

reasons for the noncompletion.

(Authority: 106 Stat. 2764, Pub. L. 102-484, sec. 4490(b); 10 U.S.C.

1143 note)

(e) Notification. If, after considering the data described in

paragraphs (c) and (d) of this section, the Director of the VA field

facility of jurisdiction determines that the completion rate for a job

training program is disproportionately low due to deficiencies in the

quality of the program, the Director will disapprove further initial

entry by eligible persons into the program and shall notify the

employer of that disapproval. The notice shall be by certified mail or

registered letter, return receipt requested, and shall include:

(1) A statement of the reasons for disapproval, including a summary

of the evidence considered,

(2) Notice of the opportunity to submit documentary evidence and to

have a hearing before the Director of the VA field facility of

jurisdiction or his or her designee, and

(3) Notice of the employer's right to request, within 60 days after

receipt of the notice, a review by the Director, Education Service, of

the disapproval decision by the Director of the VA field facility of

jurisdiction.

(4) A review by the Director, Education Service, of a disapproval

decision of the Director of the VA field facility will be based upon

the evidence of record when the original decision to disapprove new

program entrants was made. It will not be de novo in nature and no

hearing will be held. The Director, Education Service, has the

authority to affirm, reverse, or remand the original decision. The

reviewing official's action, other than a remand, shall be the final

Department decision on the issue presented.

(Authority: 106 Stat. 2765, Pub. L. 102-484, sec. 4491(b), 10 U.S.C.

1143 note)

(f) Period of disapproval. (1) A disapproval of further program

entry as described in paragraph (a) of this section shall remain in

effect until the Director of the VA field facility of jurisdiction

determines that the employer has remedied the program deficiencies

which resulted in the disapproval.

(2) Upon reinstatement of approval of program entry, payments will

be made on behalf of new participating eligible persons only for

training received after the date remedial action was taken, as

determined by the Director of the VA field facility.

(Authority: 106 Stat. 2765, Pub. L. 102-484, sec. 4491(b)(3), 10

U.S.C. 1143 note)

Sec. 21.4824 Withdrawal of approval.

(a) Approval may be withdrawn. The Director of a VA field activity

may immediately disapprove the further participation by all eligible

persons in a job training program which previously has been approved

when:

(1) The program ceases to meet any of the requirements of

Sec. 21.4820 or Sec. 21.4822.

(2) The Director finds that the employer's certification provided

pursuant to Sec. 21.4822(a) was false; or

(3) The employer, or an educational institution with which the

employer has contracted to provide all or part of the training, refuses

to make available to an authorized representative of the Federal

Government those records which the employer (and the educational

institution) is required to keep under Sec. 21.4850.

(b) Notification. The Director of the VA field facility of

jurisdiction shall notify the employer and all eligible persons

participating in the program that approval is being withdrawn. The

notices shall be by certified mail return receipt requested, and shall

include:

(1) A statement of the reasons for the withdrawal of approval,

including a summary of the evidence considered;

(2) Notice of the right of the employer or eligible person to

submit documentary evidence and have a hearing before the Director of

the VA field facility of jurisdiction or his or her designee concerning

the withdrawal of program approval;

(3) In the case of an employer notice of the employer's right to

request a review by the Director, Education Service, of the disapproval

decision by the Director of the VA field facility of jurisdiction. To

exercise that right, the employer must request within 60 days either

after the date of notice of the initial decision of the Director of the

VA field facility of jurisdiction or the date of notice of any

confirming decision by that Director following a timely requested

hearing or timely submission of new evidence, or both, and

(4) In the case of a notice sent to eligible persons, notice of the

right of the eligible person to appeal the decision to the Board of

Veterans Appeals and to have a hearing under the same process as is

provided in Part 19, Subpart B of this title.

(Authority: 106 Stat. 2761-2763, Pub. L. 102-484, sec. 4486, 4487,

38 U.S.C. 501(a); 10 U.S.C. 1143 note)

(c) Review of a decision to withdraw approval of a program. A

review by the Director, Education Service, of a disapproval decision of

the Director of the VA field facility will be based upon the evidence

of record when the original decision to disapprove new program entrants

was made. It will not be de novo in nature and no hearing on review

will be held. The Director, Education Service, has the authority to

affirm, reverse, or remand the original decision. The reviewing

official's action, other than a remand, shall be the final Department

decision on the issue presented, unless an adversely affected eligible

person prevails in an appeal of the decision to the Board of Veterans

Appeals.

(Authority: 38 U.S.C. 512(a))

Secs. 21.4825-21.4829 [Reserved]

Payments

Sec. 21.4830 Entrance into training.

(a) Notice of intent to hire before employee's entrance into

training. Before an eligible person enters an approved job training

program, the employer shall submit to the VA at the address on the form

prescribed by the VA information concerning whether the employer

intends to hire the eligible person.

(Authority: 106 Stat. 2764, Pub. L. 102-484, sec. 4488(a); 10 U.S.C.

1143 note)

(b) Lack of funds may prevent training. (1) If VA determines that

funds are not available to make payments to the employer on behalf of

the eligible person, VA may withhold or deny approval of the eligible

person's entry into a job training program.

(2) The eligible person may enter the job training program two

weeks after the [[Page 5858]] date of the notice of intent to hire

described in paragraph (a)(1) of this section, unless VA notifies the

employer, within that two-week period, by certified mail that approval

of the eligible person's entry into the job training program must be

withheld or denied due to lack of funds. The two-week period shall

begin on the date the employer's notice to VA is postmarked.

(Authority: 106 Stat. 2764, Pub. L. 102-484, sec. 4488(a); 10 U.S.C.

1143 note)

Sec. 21.4831 [Reserved]

Sec. 21.4832 Payments to employers.

Payments made to employers for training eligible persons and

employing them in the respective positions for which they trained shall

be made in accordance with the provisions of this section.

(a) Periodic wage reimbursement payments for training provided the

eligible person. Subject to the certification requirements of paragraph

(a)(3) of this section and the limitations and restrictions stated in

paragraphs (d) and (e) of this section, VA will make quarterly wage-

reimbursement payments to the employer based upon training provided to

an eligible person. An employer with fewer than 75 employees when the

eligible person enters training may, upon request, receive such

payments on a monthly basis.

(1) Amount of periodic payment. VA will determine the amount of

periodic payment to the employer by multiplying 50 percent of the

normal starting hourly wage paid by the employer to the eligible person

(without regard to overtime, premium pay or fringe benefits), by the

number of hours the veteran worked during the period for which payment

is due, withholding 25 percent of this amount to be paid to the

employer as an incentive payment as provided in paragraph (b) of this

section.

(2) Periods for which payments may be made. Payments may be made

for an eligible person's training through the last date of training

received in the training program but not after completion of the

eighteenth month of the training program.

(3) Certification of training. VA will issue no payments to an

employer for any period of training of an eligible person unless the

following certification requirements are met.

(i) Unless VA waives certification, the eligible person must

submit, and VA must receive, a certification that such person was

employed full-time by the employer in an approved job training program

during the applicable training period. VA will waive this certification

upon receipt of evidence that the eligible person is deceased, has

terminated employment and moved without a forwarding address, or

otherwise cannot or will not comply through no fault of the employer.

(ii) VA must receive from the employer on a form prescribed by the

VA a certification concerning the following:

(A) Employment of the eligible person during the period in an

approved job training program,

(B) Performance and progress of the eligible person during the

period were satisfactory,

(C) The number of hours the eligible person worked during the

period for which the certification is made, and

(D) For employer's first certification, the normal starting hourly

rate of wages paid to the veteran, without regard to overtime or

premium pay.

(Authority: 106 Stat. 2763, Pub. L. 102-484, sec. 4487, 10 U.S.C.

1143 note)

(b) Lump sum deferred incentive payment to employers. VA will make

a lump-sum incentive payment to the employer of the total amount

withheld from periodic payments made to the employer pursuant to

paragraph (a)(1) of this section provided the following conditions are

met.

(1) The incentive payment may be made only when VA determines, and

both the employer and (except as provided in paragraph (b)(2) of this

section) eligible person certify, that the eligible person was employed

full-time by that employer in the job for which the training program

was designed to provide training or in a related job, and that such

employment was for at least four continuous months beginning on the

date the eligible person completed training for which periodic payments

were made under this subpart.

(2) VA may waive the requirement that the eligible person certify

as provided in paragraph (b)(1) of this section if VA finds that the

requisite employment occurred and either the eligible person is

deceased or otherwise cannot or will not comply through no fault of the

employer.

(Authority: 106 Stat. 2782, Pub. L. 101-484, sec. 4487(b)(3); 10

U.S.C. 1143, note)

(1) A certification signed by the employer and the eligible veteran

stating that:

(i) The identified tools and other work-related materials are

necessary for the eligible person's participation in the job training

program;

(ii) The eligible person bought the tools and other work-related

materials, and

(iii) The employer reimbursed the eligible person for the cost of

the tools and other work-related materials, and

(2) A copy of the receipt or other proof of purchase which the

employer used to calculate the amount for which the veteran was

reimbursed.

(Authority: 106 Stat. 2762, Pub. L. 102-484, sec. 4487(c), 10 U.S.C.

1143 note)

(d) Limitations on amount of payments. (1) In no case will the sum

of the periodic payments and the lump-sum incentive payment made to an

employer on behalf of an eligible veteran exceed:

(i) $12,000 for a person with a service-connected disability rated

as 30 percent or more disabling, or

(ii) $10,000 for all other eligible veterans.

(2) If an employer reduces the wages paid to a trainee for a

portion of the training period so that the trainee is paid at a rate

less than the certified, normal starting wage rate, VA shall not make

periodic payments in excess of 50 percent of the wages (exclusive of

overtime and premium pay) paid to the trainee for that portion of the

training period less the 25 percent that must be withheld under

Sec. 21.4832(a).

(Authority: 106 Stat. 2762, Pub. L. 102-484, sec. 4487(a)(1)(B): 10

U.S.C. 1143 note)

(e) Restrictions on payments. (1) VA will not pay an employer:

(i) On behalf of any veteran who initially applies for a job

training program after September 30, 1995,

(ii) For any job training program which begins after March 31,

1996,

(iii) For any training given to the veteran before VA certifies the

individual is eligible to participate,

(iv) During any period of time for which the veteran receives

educational assistance under 38 U.S.C. chs. 30, 31, 32, 35 or 36 or 10

U.S.C. ch. 106;

(v) For any period during which the employer received any

assistance on account of the veteran's training or employment,

including:

(A) Assistance under the Job Training Partnership Act (29 U.S.C.

1501 et seq.),

(B) A credit under section 51 of the Internal Revenue Code of 1986,

or

(C) Employer's incentive payments under Sec. 21.256 of this part,

(vi) For any hours of training the veteran completes in excess of

the hours approved by VA for his or her job training program.

(2) VA will withhold payment to an employer who fails or refuses to

maintain records or fails to make them available to authorized

representatives of the Federal Government as required by Sec. 21.4850.

The withholding will [[Page 5859]] continue until VA determines that

the employer has fully complied with recordkeeping and disclosure

requirements.

(Authority: 106 Stat. 2757, Pub. L. 102-484, Subtitle G, 10 U.S.C.

1143 note)

Sec. 21.4833 [Reserved]

Sec. 21.4834 Overpayments and forfeits.

(a) False certification by employer. Whenever VA finds that an

overpayment has been made to an employer on behalf of a veteran as a

result of a certification or information contained in the employer's

application to VA which was false in any material respect--

(1) The amount of the overpayment shall constitute a liability of

the employer to the United States, and

(2) The employer shall forfeit any unpaid amounts withheld from

those payments for the purpose of making a lump-sum incentive payment

under Sec. 21.4832(b).

(Authority: 106 Stat. 2763, Pub. L. 102-484, sec. 4487(d)(1)(A), 10

U.S.C. 1143 note)

(b) Noncompliance by employer. Whenever VA finds that an employer

has failed in any substantial respect to comply for a period of time

with a requirement of Sec. 21.4820 or Sec. 21.4822 or both (unless the

employer's failure is the result of false or incomplete information

provided by the eligible person), each amount paid to the employer on

behalf of an eligible person for that period shall be considered an

overpayment.

(1) The amount of the overpayment shall constitute a liability of

the employer to the United States.

(2) The employer shall forfeit any unpaid amounts withheld from

those payments for the purpose of making a lump-sum incentive payment

under Sec. 21.4832(b).

(Authority: 106 Stat. 2763, Pub. L. 102-484, sec. 4487(d)(1)(B); 10

U.S.C. 1143 note)

(c) False certification by an individual. Whenever VA finds that an

overpayment has been made to an employer on behalf of an individual as

a result of certification by the individual, or as a result of

information provided to an employer or contained in an application

submitted by the individual to VA which was willfully or negligently

false in any material respect--

(1) The amount of the overpayment shall constitute a liability of

the individual to the United States, and

(2) The employer shall forfeit any unpaid amounts withheld from

those payments for the purpose of making a lump-sum incentive payment

under Sec. 21.4832(b).

(Authority: 106 Stat. 2763, Pub. L. 102-484, sec. 4487(d)(2); 10

U.S.C. 1143 note)

(d) Payment contrary to limitation or restriction. Whenever VA

finds that payment has been made to an employer on behalf of an

individual in an amount which exceeds or is otherwise contrary to the

limitations set forth in Sec. 21.4832 (d) or (e)--

(1) Such amount shall constitute an overpayment for which the

employer shall be liable to the United States,

(2) The employer shall forfeit any unpaid amounts withheld from

that overpayment for the purpose of making a lump-sum incentive payment

under Sec. 21.4832(b).

(Authority: 106 Stat. 2757, Pub. L. 102-484, Subtitle G, 10 U.S.C.

1143 note)

(e) Waivers of overpayments. VA may waive any overpayment

established under this section, in whole or in part, as provided by

Secs. 1.955 through 1.970 of this chapter. Any amount withheld for the

purpose of making a lump-sum incentive payment forfeited under this

section is not subject to waiver.

(Authority: 106 Stat. 2763, Pub. L. 102-484, sec. 4487(d)(4), 10

U.S.C. 1143 note)

(f) Recovery of overpayments. (1) Any overpayments referred to in

paragraph (a), (b), (c) or (d) of this section may be recovered in the

same manner as any other debt due the United States.

(2) To the extent that an individual and employer are found liable

to the United States under this section for the same overpayment, they

will be held jointly and severally liable.

(Authority: 106 Stat. 2762, Pub. L. 102-484, sec. 4487, 10 U.S.C.

1143 note)

(g) Disagreements concerning overpayments. (1) If an employer

disagrees with a decision of a Director of a VA facility to hold the

employer liable for all or part of an overpayment, the employer, within

60 days after receipt of notice of the decision, may ask that the

decision be reviewed by the Director, Education Service.

(2) A review by the Director, Education Service, of an overpayment

liability decision of the Director of the VA field facility will be

based upon evidence of record when the original decision not to approve

a program was made. It will not be de novo in nature and no hearing

will be held. The Director, Education Service, has the authority to

affirm, reverse, or remand the original decision. The reviewing

official's action, other than a remand, shall be the final Department

decision on the issue presented.

(3) If the eligible person is held liable for all or part of an

overpayment, he or she has the right of appeal to the Board of Veterans

Appeals and to have a hearing under the same process as is provided in

Part 19, Subpart B of this title.

(Authority: 38 U.S.C. 511(a))

Secs. 21.4835--21.4839 [Reserved]

Counseling

Sec. 21.4840 Employment counseling services.

(a) Eligibility. An eligible person who meets the requirements of

Sec. 21.4810 to participate in the Service Members Occupational

Conversion and Training Act program may ask VA to provide employment

counseling services to assist him or her in selecting a suitable job

training program under this subpart.

(Authority: 106 Stat. 2763, Pub. L. 102-484, sec. 4487(d)(4), 10

U.S.C. 1143 note, 38 U.S.C. 3697A)

(b) Purpose. The purpose of this counseling is to assist the

eligible person to select an employment objective likely to provide

satisfactory employment opportunities in light of his or her personal

circumstances,

(Authority: 106 Stat. 2763, Pub. L. 102-484, sec. 4487(d)(4), 10

U.S.C. 1143 note, 38 U.S.C. 3697A)

(c) Additional counseling services. To the extent feasible, VA and

the Department of Labor may provide an additional program of counseling

or other services designed to resolve difficulties that may be

encountered by eligible persons during training under this subpart. If

provided, the counseling or other services will be similar in nature

to:

(1) Outreach and assistance (38 U.S.C. 7723, 7724), readjustment

counseling (38 U.S.C. 1712A), and educational and vocational counseling

(38 U.S.C. 3696A) offered by VA, and

(2) Disabled veterans' outreach (38 U.S.C. 4103A), employment

assistance (38 U.S.C. 4104), and employment counseling, job training

counseling, and other transitional assistance (10 U.S.C. 1144) services

offered by the Department of Labor.

(Authority: 106 Stat. 2763, Pub. L. 102-484, sec. 4487(d)(4), 10

U.S.C. 1143 note, 38 U.S.C. 1712A, 3797A, 7723, 7724)

Secs. 21.4841--21.4843 [Reserved]

Sec. 21.4844 Failure to cooperate.

VA will take no further action on an eligible person's application

for assistance when he or she:

(a) Fails to report for his or her counseling appointment,

[[Page 5860]]

(b) Fails to cooperate in the counseling process,

(c) Does not complete counseling to the extent required under

paragraph Sec. 21.4840(c).

(Authority: 106 Stat. 2763, Pub. L. 102-16, Pub. L. 102-484)

Secs. 21.4845--21.4849 [Reserved]

Administrative

Sec. 21.4850 Inspection of records.

(a) Availability of records. The records and accounts of employers

pertaining to eligible persons on behalf of whom assistance shall be

paid, as well as other records that VA determines to be necessary to

ascertain compliance with the requirements established in Secs. 21.4820

through 21.4832 shall be available at reasonable times for examination

by authorized representatives of the Federal Government. If the records

are maintained by an educational institution training the employee on

behalf of the employer, the latter shall be responsible for insuring

their availability.

(Authority: 106 Stat. 2765, Pub. L. 102-484, sec. 4491(a), 10 U.S.C.

1143 note)

(b) Retention of records. (1) Except as provided in paragraph

(b)(2) of this section, an employer must keep the records mentioned in

paragraph (a) of this section intact and in good condition for at least

three years following:

(i) The last month or quarter for which the employer received a

periodic payment on behalf of the eligible person as described in

Sec. 21.4832(a), or

(ii) The date on which VA paid the employer a lump-sum incentive

payment provided that the employer received such a payment on behalf of

the eligible person.

(2) Retention of records for a period longer than that described in

paragraph (b)(1) of this section is not required unless the employer

receives a written request from the General Accounting Office or VA not

later than 30 days before the end of the 3-year period.

(Authority: 106 Stat. 2765, Pub. L. 102-484, sec. 4491(a), 10 U.S.C.

1143 note)

Sec. 21.4851 [Reserved]

Sec. 21.4852 Monitoring and investigations.

(a) Monitoring and investigations. VA with the assistance of the

Department of Labor may determine compliance with the provisions of

Secs. 21.4820 through 21.4832 by:

(1) Monitoring employers and eligible persons participating in job

training programs,

(2) Investigating any matter necessary to determine compliance, and

(3) Requiring the submission of information deemed necessary by the

Secretary of Veterans Affairs or by the Secretary of Labor before,

during or after training.

(Authority: 106 Stat. 2765, Pub. L. 102-484. sec. 4491(b), (c) and

(d), 10 U.S.C. 1143 note)

(b) Scope of investigations. VA, with the assistance of the

Department of Labor will carry out the monitoring and investigative

functions contained in paragraph (a) of this section by:

(1) Examining records (including making certified copies of

records),

(2) Questioning employees, and

(3) Entering into any premises or onto any site where:

(i) Any part of the job training program is conducted, or

(ii) Any of the employer's records are kept.

(Authority: 106 Stat. 2765, Pub. L. 102-484, sec. 4491(b), (c) and

(d), 10 U.S.C. 1143 note)

Sec. 21.4853 [Reserved]

Sec. 21.4854 Delegation of authority to the Under Secretary for

Benefits.

Authority is delegated by the Secretary to the Under Secretary for

Benefits of VA or his or her designee to enter into such agreements

with the Departments of Defense and Labor or either of those, as may be

necessary to implement the Service Members Occupational Conversion and

Training Act.

(Authority: 38 U.S.C. 512)

Sec. 21.4855 [Reserved]

Sec. 21.4856 Delegation of authority to the Veterans Benefits

Administration.

In a Memorandum of Agreement among the Departments of Defense,

Veterans Affairs, and Labor, the Secretary was designated as the

implementing official for the Service Members Occupational Conversion

and Training Act. In Sec. 2.101 of this title the Secretary has

delegated authority given to the Secretary in the Memorandum to the

Under Secretary for Benefits and to supervisory or adjudicative

personnel within the jurisdiction of the Veterans Benefits

Administration designated by him or her, to make findings and decisions

under the Service Members Occupational Conversion and Training Act and

the applicable regulation, precedents and instructions relating to

programs authorized by Secs. 21.4800 through 21.4852 of this part.

(Authority: 38 U.S.C. 512)

[FR Doc. 95-2229 Filed 1-30-95; 8:45 am]

BILLING CODE 8320-01-P