Workforce Investment Act of 1998

SUMMARY: The purpose of this notice is to obtain comments on the

Department of Labor's draft White Paper on the implementation of the

Workforce Investment Act (WIA or Act ), Public Law 105-220 (August 7,

1998). The paper sets forth in general terms the approach the

Department is taking to implement title I, III and V of the Act. The

implementation of title V will be conducted in conjunction with the

Department of Education. This paper is only one of a series of

documents and other materials that will guide the implementation of the

Act. It is not intended to answer all questions relating to

implementation, but rather to provide the general philosophy and

approach to implementation. Other documents will address more specific

issues. While the Department does not plan to revise this paper, all

comments received by the closing date will be considered in future

aspects of the implementation process. This notice is not a proposed

rule. The Department will consider comments on regulations throughout

the rulemaking process.

DATES: The Department invites written comments on this notice. Comments

received on or before December 1, 1998 will be considered in the

development of regulations and policy guidance as well as the overall

implementation strategy. Statute requires regulations to be promulgated

by February 1999.

ADDRESSES: Submit written comments to Mr. Eric Johnson, Workforce

Investment Implementation Taskforce Office, U.S. Department of Labor,

200 Constitution Avenue, NW., Room S5513, Washington, DC 20210. All

comments will be available for public inspection and copying during

normal business hours at the address above. Copies of the draft White

Paper are available at the address above, as well as on the WIA web

site at http://usworkforce.org. Comments may be submitted

electronically to that web address. Commenters wishing acknowledgment

of receipt of their comments must submit them by certified mail, return

receipt requested.

FOR FURTHER INFORMATION CONTACT: Mr. Eric Johnson, Workforce Investment

Implementation Taskforce Office, U.S. Department of Labor, 200

Constitution Avenue, NW., Room S5513, Washington, DC 20210, Telephone:

(202) 219-0316 (voice) (This is not a toll-free number), or 1-800-326-

2577 (TDD).

SUPPLEMENTARY INFORMATION: Signed into law on August 7, 1998, the

Workforce Investment Act provides the framework for a unique national

workforce preparation and employment system designed to meet the needs

of job seekers, individuals who want to further their career, as well

as the nation's businesses. The Act encourages States to reform

existing employment and training programs and to think broadly about

how Federal, State and local resources can be integrated into a

comprehensive workforce investment system. The Act builds on the most

successful elements of previous Federal legislation. Just as important,

its key components are based on local and State input and extensive

research and evaluation studies of successful training and employment

innovations over the past decade. The Act makes changes to the current

funding streams, target populations, delivery systems, accountability

systems, labor market information systems, and governance structures.

The White Paper is attached.

Signed at Washington, D.C., this 5th day of November, 1998.

Raymond L. Bramucci,

Assistant Secretary of Labor.

Message From the Secretary of Labor

With an economy more vibrant than any we've seen in 30 years,

America is looking forward to a new century filled with endless

possibilities for growth and opportunity. Just this year, millions of

new jobs have been created. Unemployment is at an all-time low, and

wages are on the rise.

But with new high-skill jobs growing at nearly three times the rate

of other jobs, many employers are having a hard time attracting

qualified workers. And millions of workers with few or no skills feel

trapped in jobs leading nowhere.

As Secretary of Labor, one of my chief goals is bridging the gap

between job opportunities and the pool of workers who are qualified to

fill them. I want to equip every American worker with skills that will

not only secure a good job, but guarantee every step up the workforce

ladder leads to even greater opportunities.

That is why the Department of Labor worked with Congress to create

the historic Workforce Investment Act, signed into law this year. Five

years in the making, the Workforce Investment Act represents a total

overhaul of our country's job-training system--a customer-driven

overhaul that will help employers get the workers they need and empower

job seekers to meet the challenges of the new century by getting the

training they need for the jobs they want.

The Workforce Investment Act makes this possible through an

innovative ``One-Stop'' system designed to provide a full menu of job

training, education and employment services at a single neighborhood

location where adults, veterans, dislocated workers and youth will

receive skills assessment services, information on employment and

training opportunities, unemployment, services, job search and

placement assistance, and up-to-date information on job vacancies--all

at one center specifically tailored to meet the needs of the community

it serves.

Best of all, job seekers will control their own careers by choosing

the training programs and services that fit their needs. And they'll

keep that control for life. So when it's time to make another move up

the career ladder, sharpen a skill, learn a new one, or just get

information, workers will be able to continue to rely on their local

One-Stop Center.

The Workforce Investment Act also provides for increased

accountability. The performance of states, localities and training

providers will be monitored against goals set by the Act --including

job placement rates, earnings, retention in employment, and skill

gains. Failure to meet the goals will lead to sanctions, while

exceeding them will lead to incentive funds.

But the Workforce Investment Act is more than a new job training

system. It's a strong network of interlinked programs designed to

provide wide choices to Americans seeking new opportunities and

valuable information. And, it's a chance for us to harness today's

opportunities for success and invest them in the workforce of tomorrow.

I am immensely proud that 15 million young out of school Americans

will not be left out of this system. The law focuses on the needs of

kids in left-out communities to ensure they are pulled into the inner

circle of opportunity offering all of us a pool of talent for the

future. That is why I am inviting everyone--government, business, labor

and communities to work together to prepare America's workforce for the

challenges of the 21st Century.

Implementing the Workforce Investment Act of 1998

(10/8/98 DRAFT)

The Workforce Investment Act will empower all workers--young and

old--

[[Page 63375]]

with the skills and knowledge to build better lives for themselves and

their families as we enter the new century.

Secretary of Labor Alexis Herman

August 8, 1998.

Purpose

This paper sets forth in general terms the approach the Department

of Labor is taking to implement titles I, III, and V of the Workforce

Investment Act. The implementation of title V will be conducted in

conjunction with the Department of Education. Implementation is guided

by the goals and specific requirements of the new law, as well as by

the Act's legislative history, the bipartisan ``reform'' principles

that have been articulated by the President and Members of Congress,

the views of workforce investment system stakeholders, and specific

Departmental and Administration principles that affect implementation

(such as regulatory reform).

This paper is only one of a series of documents and other

materials--including regulations, questions and answers, technical

assistance guides, etc.--that will guide implementation of the Act. It

is not intended to answer all questions relating to implementation, but

rather to provide the general philosophy and approach to

implementation.

Other documents will address more specific issues. Comments on this

paper and other implementation materials are welcome and should be sent

to the address at the end of this paper.

Introduction

The Workforce Investment Act of 1998 represents the first major

reform of the nation's job training system in over 15 years. The

enactment of this legislation is the culmination of a four year

bipartisan effort on the part of the Administration and Congress to

design, with States and local communities, a revitalized system that

provides workers with the information, advice, job search assistance,

and training they need to get and keep good jobs--and provides

employers with skilled workers.

This reform comes at an opportune time. The American economy is

stronger than it has been in a generation, and it is increasingly

driven by creativity, innovation and technology. New high-skill jobs

are growing at nearly three times the rate of other jobs. Many

employers are finding it increasingly difficult to locate and attract

qualified workers for high-skilled, high-paying jobs--as well as

qualified workers for entry-level jobs. At the same time, millions of

workers with little or no skills feel trapped in low-wage, dead end

jobs. Reforms under the Workforce Investment Act will permit us to

build a delivery system in which any adult interested in advancing his

or her career--regardless of income--can keep on learning, and where

job seekers--such as low-income adults including welfare parents,

disadvantaged youth, unemployed or displaced workers, and others

willing to learn and work--can access high quality information and

services. This delivery system should be designed with the

participation of employers, labor, education and community groups which

have a large stake in its success.

The enactment of the Workforce Investment Act provides

unprecedented opportunity for major reforms that will result in a

reinvigorated, integrated workforce investment system. States and local

communities should seize this historic opportunity by thinking

expansively and designing a customer-focused, comprehensive delivery

system. New, strong, business-led local boards can contribute fresh

thinking about the labor market and its needs--as well as about quality

and continuous improvement--in a way that earns sustained support by

local business leaders. We will know if we have successfully

implemented this legislation if in less than five years, businesses

actively use the workforce investment system to fill their labor force

needs, ``graduates'' increase their skills and earnings, and more and

more Americans seek access to the system's services.

States and communities will be able to strengthen ongoing reforms

that have been supported by the Department of Labor through the One-

Stop initiative, the School-to-Work Opportunities initiative which is

administered jointly with the Department of Education, and through

flexibility provided through waivers and Work-Flex. By eliminating many

of the administrative and regulatory barriers that have previously

existed, this Act provides States and local communities with the tools

they need to finally build the comprehensive systems they have been

striving towards.

Background

The current patchwork of Federal job training programs has taken

shape over the last six decades, each element responding to a

particular concern at a specific time, but never fully brought into

alignment with the other components of the ``system''. The effects of

this approach include:

Limited choice. In most programs, choices about job

training are made through bureaucratic processes. Men and women seeking

new opportunities must settle for what the system has available rather

than being permitted to search the market to select the job training

that is right for them.

Lack of quality information. Good choices call for

reliable data about what jobs are available, what skills they require,

and which training institutions offer the best value and performance.

But, the current system too often does not provide this type of

information to individual job seekers and employers.

Weak strategies. Confronted with splintered and

disorganized programs, States and local communities have found it

challenging to devise effective strategies for deploying Federal

resources, or for effectively integrating Federal efforts with one

another and with their own resources. As a result, the private sector

has questioned the value of the system.

Absence of strong accountability. The quality of training

and related services is highly uneven. Institutions can continue to get

Federal funds regardless of performance. Too often, rewards are not

targeted to the best programs.

By integrating numerous Federal education, training and employment

programs into a comprehensive, streamlined system, the Workforce

Investment Act strives to overcome these and other shortcomings of the

nation's job training system.

Principles

The Workforce Investment Act gives American workers the chance to

equip themselves with the skills and information needed to compete in

the new economy, and helps workers take responsibility for building a

better future for themselves and their families. To accomplish the

goals of the new legislation, the new workforce investment system will

be built around several key principles:

Streamlining services. Multiple employment and training

programs will be integrated at the ``street level'' through the One-

Stop delivery system. By building on One-Stop implementation efforts

already underway in the vast majority of States, this integrated system

will simplify and expand access to services for job seekers and

employers.

Empowering individuals. Individuals will be empowered to

obtain the services and skills they need to enhance their employment

opportunities. This empowerment will be accomplished through Individual

Training Accounts which will enable eligible participants to choose the

[[Page 63376]]

qualified training program that best meets their needs. The development

of ``consumer reports'' containing information for each training

provider will allow individuals to make informed training choices.

Universal access. Through the One-Stop system, every

individual will have access to core employment-related services.

Customers can obtain job search assistance as well as labor market

information about job vacancies, the skills needed for occupations in

demand, wages paid, and other relevant employment trends in the local,

regional and national economy.

Increased accountability. States, localities and training

providers will be held accountable for their performance. The Act

identifies core indicators of performance--including job placement

rates, earnings, retention in employment, skill gains, and credentials

earned--that States and local areas would have to meet. Failure to meet

the performance goals will lead to sanctions, while exceeding the

levels could lead to the receipt of incentive funds. Training providers

will have to meet performance goals to remain eligible to receive funds

under the Act.

Strong role for local boards and the private sector. Local

boards will become business-led ``Boards of Directors'' for the local

areas. By relieving them from ``nitty-gritty'' operational details, the

Act ensures they will be able to focus on strategic planning, policy

development and oversight of the local system.

State and local flexibility. States and localities will

have exceptional flexibility to build on existing reforms in order to

implement innovative and comprehensive workforce investment systems.

Through such mechanisms as unified planning, waivers, and Work-Flex--as

well as through the Act's grandfathering provisions which allow States

to continue innovative practices--States and their local partners have

the flexibility to tailor delivery systems to meet the particular needs

of individual communities.

Improved youth programs. Youth programs will be linked

more closely to local labor market needs and the community as a whole,

and will provide a strong connection between academic and occupational

learning. In addition, traditional employment and training services

will be augmented by an array of youth development activities. The

establishment of a youth council in every local area will raise the

visibility of youth programs and facilitate coordination and strategic

design. The Act also authorizes Youth Opportunity Grants that are

designed to provide funding to increase job opportunities for youth in

high poverty areas. In addition, the Act reforms the Job Corps program

by strengthening linkages among Job Corps centers, the State workforce

investment systems, the local communities in which they are located,

and employers.

A fundamental reform of Federal programs and policies based on

these principles will permit communities and States to craft a

workforce investment system that respects individual choices, reflects

local conditions, and delivers results.

Goals

Through the establishment of comprehensive State and local

workforce investment systems that are constructed around the basic

principles described above, the Act strives to increase the employment,

retention, and earnings of participants, and increase occupational

skills attainment by participants. In achieving these goals, the new

system will also:

1. Improve the quality of the workforce. Finding workers to sustain

America's economic growth is becoming one of the most crucial concerns

of business owners and managers across the United States. Changing job

requirements and the resulting demand for new skills, the desire for

reliable worker credentials, and shifting company and industry

structures mean continuing intense demand for high-quality services

that enable workers to meet the needs of the labor market. The Act was

developed with the recognition that, as the 21st century approaches, we

have to develop training opportunities that respond to market needs and

provide consumer choices.

2. Enhance the productivity and competitiveness of the Nation. The

world of work is continuously changing. Economic progress greatly

benefits many American workers and American businesses, but it poses

important challenges as well. New technologies, changes in

international trade, deregulation, and greater competition have led to

structural changes in the U.S. labor markets. Research suggests that

rapid technological progress, fierce competition, further integration

of the U.S. economy with other economies, and significant demographic

changes will continue. This Act will create a system that can quickly

respond to such changes, and that is intended to efficiently prepare

workers to meet the needs of the labor market, provide key labor market

information, and help provide businesses with the resources to remain

competitive. An integrated, highly accountable workforce investment

system is critical if American workers and businesses are to keep pace

in this rapidly changing economic environment.

3. Reduce welfare dependency. Working with the hardest to serve is

a major challenge in welfare reform despite reduced caseloads. This Act

aims to reduce welfare dependency and provide the tools to do so

through the One-Stop system that includes the Welfare-to-Work program,

and is able to integrate TANF and other programs that serve the welfare

customer--in order to invest in the employment and job retention of the

hardest to serve. In areas where adult funding is limited, welfare

recipients and other low wage individuals will receive priority for

intensive and training services. Collaboration between the workforce

investment and welfare systems is important for several reasons. Both

systems now focus on helping clients become employed. In addition, the

two systems serve many of the same customers. Common customers also

include employers who hire clients of the two systems. Finally, given

scarce resources, strong collaboration will ensure that efforts are not

duplicated.

Fundamental Change in Service Delivery

This bill is tailored to meet the local needs of both workers and

business for years to come. It will help all Americans who want to take

advantage of the new high paying jobs that our economy is creating. It

will provide business with the skilled employees they need to compete

in the global high-tech economy. Above all it will make sure that as

our economy moves into the 21st century, our job training system does

too.

Secretary of Labor Alexis Herman

July 31, 1998.

One-Stop Service Delivery

The cornerstone of the new workforce investment system is One-Stop

service delivery which will unify numerous training, education and

employment programs into a single, customer-friendly system. The

underlying notion of ``One-Stop'' is the integration of programs,

services and governance structures. The Employment Service plays a

critical role in One-Stop service delivery as the primary job finding

source, especially for unemployment insurance (UI) claimants. It

provides quality information to the public about jobs, the dynamics of

the labor market, available training and education opportunities, and

the links to other public and private services.

[[Page 63377]]

It is envisioned that each State could use common intake and case

management systems in order to take full advantage of the One-Stops'

potential for efficiency and effectiveness. A wide range of services

from multiple training and employment programs will be available to

meet the needs of a variety of customers--employers and job seekers. In

addition, these local One-Stop centers will be places where all

Americans can access high quality local information on available jobs,

skill requirements, and training provider performance.

The Act requires the establishment of a One-Stop system in each

local area. The local board, in collaboration with the local elected

official, is responsible for overseeing the One-Stop system in their

local area. While the Act establishes certain minimum requirements for

the structure of the local system, it allows local communities

significant flexibility in the design and implementation of their One-

Stop systems.

Each local One-Stop system will be comprised of numerous partners

that will provide core services through the One-Stop system. It is

envisioned that every local system will represent true collaboration

between all of the One-Stop partners. Partners will provide such

services in a way that is consistent with their authorizing

legislation.

Required Partners

Adult, Dislocated Worker, and Youth Activities.

Employment Service.

Adult Education.

Postsecondary Vocational Education.

Vocational Rehabilitation.

Welfare-to-Work.

Title V of the Older Americans Act.

Trade Adjustment Assistance.

NAFTA Transitional Adjustment Assistance.

Veterans Employment and Training Programs.

Community Services Block Grant.

Employment and training activities carried out by the U.S.

Department of Housing and Urban Development.

Unemployment Insurance.

The Act specifies several Federal programs and activities that are

required to participate in each local One-Stop system. The local area

may also include other appropriate Federal, State or local programs--as

well as private sector initiatives--as partners in the One-Stop system.

Ultimately, a local community could have dozens of designated partners

in their system.

Each One-Stop partner is required to enter into a Memorandum of

Understanding (MOU) with the local board. The MOU will describe: (1)

the services to be provided through the One-Stop system; (2) how the

costs of the services and the operating costs of the system will be

funded; (3) methods of referral of individuals between the One-Stop

Operator and the One-Stop partners; (4) the duration of the MOU; and

(5) the procedures for amending the MOU. The MOU may also be used to

address such other issues as the parties determine are appropriate.

One-Stop partners also are required members of the local board --in

order to provide them with an integral role in policy development and

overall system evaluation

A One-Stop operator will be designated to manage the day-to-day

functioning of the local One-Stop system. One-Stop operators may be

designated or certified through a competitive process or in accordance

with an agreement reached between the local board and a consortium of

entities that, at a minimum, includes three or more of the mandatory

One-Stop partners. A wide range of organizations and entities--such as

postsecondary educational institutions, local Employment Service

offices, community-based organizations, private for-profit entities, or

government agencies--are eligible to be designated or certified as a

One-Stop operators. However, a local board may only be designated or

certified as a One-Stop operator with the agreement of the chief local

elected official and the Governor.

Each local area is required to have at least one physical ``full

service'' center at which customers can access services from each of

the One-Stop partners. This comprehensive center can be augmented by

additional ``full service'' centers and through a network of affiliated

sites, or a network of One-Stop partners that can consist of physical

sites or electronic access points.

Regardless of the design that a local area chooses, it must be

based on a ``no wrong door'' approach which will assure customers that

information all of the core services will be available regardless of

where the individuals initially enter the system. This means it does

not matter whether an individual enters the system as a UI claimant or

as a job seeker seeking information through the Employment Service--in

either case, he or she will have access to the full range of services

available through the local system.

Adults and Dislocated Workers--A Continuum of Services. It is

envisioned that One-Stop centers will offer a wide spectrum of

services--ranging from self-service activities such as using a computer

to get information from America's Job Bank, to intensive staff-assisted

services such as group counseling, and include access to training and

other services for which the individual may be eligible. While this

range of services is to be made available, the levels to be offered are

not prescribed in the Act. Individuals with special needs--for example,

persons with disabilities, non-English speaking persons, or those who

lack computer skills--will be accommodated so that they can access all

services offered for which they are eligible.

There are separate funding streams for adults and dislocated

workers. For both, the Act provides for three levels of services: core

services; intensive services; and training. These levels of services

are to be accessed sequentially--that is the more extensive levels of

services are provided when the individual is unable to obtain

employment with the more basic services.

In the new system, ``placement'' no longer needs to be immediately

followed by ``termination.'' This will result in a shift from short-

term ``episodic'' fixes to a system where individuals can access

information and services continuously throughout their lifetime. This

focus will provide new opportunities for low-wage workers to benefit

from the workforce investment system. For example, former welfare

recipients who are placed in a job through the Welfare-to-Work

initiative will be able to remain in the workforce investment system

and continue to obtain the information and services they need in order

to progress through the labor market.

Core Services. In the new workforce investment system, all

Americans will see the One-Stop Centers as a community resource they

can use throughout their lifetime to enhance their job skills as they

move up the career ladder--rather than just a place to go in times of a

crisis, such as when they lose their jobs. Previously, only Wagner-

Peyser funds could be used to provide labor market information and

labor exchange services for any employer or job seeker without regard

to specific program eligibility. This Act expands the concept of

universal access to all core services provided through the One-Stop

Centers. By integrating the services offered through multiple programs

and using available technology, the One-Stop system will be able to

offer customers--job seekers and employers--a choice of any or all core

services and information. The combination of Wagner-Peyser funds, funds

from the Workforce Investment

[[Page 63378]]

Act, and funds from other One-Stop partners should result in a dramatic

expansion of accessability to core services.

Core Services

Determination of eligibility of services.

Outreach, intake (which may include worker profiling), and

orientation to the One-Stop system.

Initial assessment.

Job search and placement assistance, and career

counseling.

Provision of labor market information.

Provision of information on:

Eligible training providers;

Local performance outcomes;

One-stop activities;

Filing claims for Unemployment Insurance;

Supportive services.

Assistance in establishing eligibility for Welfare-to-Work

and financial aid assistance.

Follow-up service.

Consistent with the MOU and the legal requirements applicable to

each One-Stop partner, the core services in the centers and One-Stop

system may be provided by the partners, the operator, or through other

arrangements. Local boards cannot directly provide core services unless

the chief local elected official and the Governor agree to allow the

board to provide such services.

It is important to note that the Employment Service has been and

will continue to be an essential component of any One-Stop system. The

Act requires that all basic Wagner-Peyser-funded labor exchange

services be provided as part of the One-Stop system. Similarly, the

One-Stop system is intended to maintain close linkages to the

unemployment insurance system. In addition to providing information on

filing for UI as a core service, the system would also be the provider

of reemployment services to UI claimants who are ``profiled'' as

needing these services to become reemployed. The UI program may be co-

located in the centers, the centers may be a source for filing

telephone claims for UI assistance, or other arrangements may be made.

Finally, through the Employment Service component of the One-Stop, the

system will continue to assist the UI program in verifying that UI

claimants are actively seeking employment.

Intensive Services. Intensive services may be provided to adults

and dislocated workers who are unemployed and are unable to obtain

employment through core services, if the One-Stop operator determines

that the individual is in need of more intensive services in order to

obtain employment. Adults and dislocated workers who are employed, but

who are determined by the One-Stop operator to be in need of intensive

services in order to obtain or retain employment that allows for self-

sufficiency are also eligible to receive intensive services.

Intensive Services

Comprehensive and specialized assessments of skill levels

(i.e. diagnostic testing);

Development of an individual employment plan;

Group counseling;

Individual counseling and career planning;

Case management;

Short-term prevocational services.

Intensive services may be provided by One-Stop operators or through

contracts with service providers, including contracts with public,

private for-profit and private nonprofit service providers, approved by

the local board. Local boards cannot directly provide intensive

services unless the chief local elected official and the Governor agree

to allow the board to provide such services. If the local board and the

Governor determine that there is a shortage of adult funds in the local

area, they will direct the One-Stop operator to give priority in the

use of these funds for intensive services to welfare recipients and

other low-income individuals.

Training Services. Individuals who have met the eligibility

requirements for intensive services, and are unable to obtain or retain

employment through intensive services may receive training services.

Through the One-Stop system, these individuals will be evaluated to

determine whether or not they are in need of training and if they

possess the skills and qualifications needed to participate

successfully in the training program in which they express an interest.

Training services must be directly linked to occupations that are in

demand in the local area, or in another area to which the individual

receiving services is willing to relocate. As with intensive services,

in areas where the local board and the Governor determine that adult

funds are limited, welfare recipients and other low-income individuals

shall receive priority in the use of such funds for training services.

The underlying principle of the provision of training services

under the Act is customer choice. One-Stop centers will provide access

to consumer information relating to training providers that can assist

individuals in gaining relevant skills--including information on the

performance of such providers in placing graduates in employment.

Through local boards, each State will compile a list of eligible

training providers that meet performance levels as set by the Governor,

and adjusted upward, as appropriate, by local boards. Individuals may

choose any provider from the list of approved providers, whether or not

the provider is located in the local area where the individual resides.

In addition, States may enter into agreements on a reciprocal basis

which allow individuals to access training in another State.

The Act creates a market-based system for training services, and

will provide ``a level-playing field'' for a wide array of providers--

large and small, public and private. Those who provide training

services under the Act will have to meet the test private businesses

face every day. They will have to deliver value to their customers, or

risk losing them. With individuals making their choices based on past

performance, ineffective training providers will not survive.

With limited exceptions, training services will be provided through

the use of Individual Training Accounts (ITAs). States and local boards

will determine how to structure the ITA system in their local areas.

For example, an ITA could take a variety of forms such as a voucher,

credit, debit card, or even a repository for training funds from other

programs. In addition, the law does not prescribe a limit on the amount

that may be provided to assist an individual in obtaining training, but

does not preclude a State or locality from establishing such limits.

Training services may be provided through a contract for services

instead of an ITA only if: (1) such services are on-the-job training

provided by an employer or customized training; (2) the local board

determines there are an insufficient number of eligible providers of

training services in the local area (such as rural areas) to accomplish

the purposes of the ITA system; or (3) the local board determines that

there is a training program of demonstrated effectiveness offered in

the local area by a community-based organization or another private

organization to serve special participant populations that face

multiple barriers to employment (e.g. individuals with substantial

language or cultural barriers, offenders, homeless individuals, or

other hard-to-serve populations as determined by the Governor). Local

boards may not directly provide training services unless they receive a

waiver from the Governor. Since the intent of the Act is to reform the

local service delivery system, and to move away from the

[[Page 63379]]

current practice of contracting for blocks of services, and then

finding participants to fill them--these exceptions are meant to be

limited.

Youth Programs. Through the reform of the current youth training

system and the Job Corps program, and the authorization of the Youth

Opportunity Area initiative, the Act provides a variety of activities

that will prepare youth for academic and employment success. The youth

programs authorized under this Act are designed to create youth systems

that are closely linked to the labor market and are designed to provide

participants with a comprehensive set of service strategies.

Formula Youth Program. Through the combination of the Year-Round

Youth Training funding stream and the Summer Youth Employment Program

funding stream into a single youth funding stream, local areas will

have greater discretion in determining how to allocate resources to

serve youth. The new single youth program fuses youth development

activities (i.e. leadership growth opportunities such as community

service) with traditional employment and training activities. It is

based upon several key elements: integrated academic and vocational

education; integrated work-based and classroom-based instruction;

effective connections to intermediaries with strong links to the job

market and employers; and intensive private-sector involvement.

A Youth Council will be established as a subgroup of the local

board in each local area and will include representatives of: youth

service agencies; parents; public housing authorities; Job Corps;

former youth program participants; and other appropriate individuals.

The Youth Council will be responsible for developing portions of the

local plan relating to youth, recommending the providers of youth

activities to be awarded grants by the local board, conducting

oversight of these providers, and coordinating youth activities in the

local area. The creation of these councils will be an unprecedented

opportunity for a broad range of entities to play an integral role in

the development and oversight of the youth development and training

system, and facilitate the enhanced coordination of youth services.

Youth services are to be delivered by entities that are competitively

awarded a grant or contract by the local board to provide such

services. Such entities may or may not be the same as those providing

services under the One-Stop system in the local area. Each local area

can determine the extent to which they want to integrate youth services

with the adult and dislocated worker delivery system based in the One-

Stop. It is envisioned that States and localities would make

connections to the adult system through relationships with the private

sector and higher education institutions, and through their streamlined

administrative structure.

In order to be eligible for services, a youth must be ages 14-21,

low income, and meet at least one of the six specified barriers to

employment. Five percent of the youth served in a local area may be

non-low-income if they experience one or more specified barriers to

school completion or employment. In addition, in an attempt to focus

resources on those most in need, thirty percent of funds in each local

area must be expended on out-of-school youth. Youth that do not meet

the eligibility requirements must be referred to the One-Stop or

another appropriate program for further assessment in order to meet the

basic skills and training needs of the individual.

Eligible Youth--Barriers to Employment

Basic skills deficient;

A school dropout;

Homeless, a runaway, or a foster child;

Pregnant or a parent;

An offender;

An individual who requires additional assistance to

complete an educational program, or to secure and hold employment.

The new law requires an individual assessment of skill levels and

service needs and the development of a service strategy for each youth

participant. The Act also outlines the required elements of the youth

program. These elements are to include such activities as: tutoring,

study skills training and instruction; alternative secondary school

services; summer employment opportunities; paid and unpaid work

experiences; occupational skill training; leadership development

activities; supportive services; adult mentoring; and comprehensive

guidance and counseling. An emphasis is placed on longer-term service

through the provision of adult mentoring both during and after

participation, for a total of not less than one year, and follow up

services for not less than one year after the completion of

participation. In addition, each participant must be provided

information on the full array of appropriate services that are

available through the local One-Stop system.

Youth Opportunity Grants The Act authorizes the Youth Opportunity

Grants initiative to direct resources to Empowerment Zones, Enterprise

Communities, and other high-poverty areas, to provide comprehensive

services designed to increase employment and school completion rates of

youth. Through a national competitive grant process, the initiative

will provide employment and training services to all disadvantaged

youth in high-poverty areas for an extended period to change the

culture of joblessness and high unemployment. Local boards will be the

recipients of these grants, thus ensuring a strong linkage between

these targeted investments and the formula youth program. The funds

provided are to be used for the youth activities required under the

formula program, and youth development activities such as leadership

development, community service, and recreation activities. In addition,

the program must provide intensive placement services and follow-up

services for not less than two years after a youth has completed

participation in other activities.

Job Corps The Act contains several changes designed to strengthen

the Job Corps program and to ensure that it functions as an integral

part of the workforce investment system. The new provisions will ensure

strong linkages among Job Corps centers, State workforce investment

systems, employers, and local communities. It also assures that

applicants are assigned to centers nearest to their homes.

Due to the size and scope of the Job Corps investment, the Act

holds the program and individual Job Corps centers accountable to

additional requirements. The Act identifies core indicators of

performance including vocational completion and placement rates of

students, earnings and retention in employment. It also requires the

provision of continued services to graduates for one year after

completion of the program.

The Act requires Job Corps centers to have a business and community

liaison and an industry council to enhance cooperation with business.

These requirements ensure connections between local labor markets and

Job Corps centers, that the vocational training offered is relevant to

labor market needs, and that participants learn occupational skills

that are in demand in their home communities.

National Programs

Native Americans. Grants to support employment and training

activities for Indian, Alaska Native, and Native Hawaiian individuals

are authorized in order: (1) to develop more fully the academic,

occupational, and literacy

[[Page 63380]]

skills of such individuals; (2) to make such individuals more

competitive in the workforce; and (3) to promote the economic and

social development of Indian, Alaska Native, and Native Hawaiian

communities in accordance with the goals and values of these

communities. Provisions are similar to those contained in the Job

Training Partnership Act. The Native American Employment and Training

Council is retained to provide the Secretary of Labor with advice on

program operations and administration. In addition, authority was added

allowing the Secretary to waive statutory or regulatory requirements of

this program (other than labor standards) pursuant to a request from a

grantee.

Migrant and Seasonal Farmworkers. Similar to provisions in the Job

Training Partnership Act, grants to support migrant and seasonal

farmworkers and their dependents are authorized to: (1) strengthen the

ability of the eligible individuals to obtain or retain unsubsidized

employment or stabilize their unsubsidized employment; and (2) provide

supportive services and related assistance. The Act adds specific

eligibility criteria for migrant and seasonal farmworkers. In addition,

funds are specifically earmarked for migrant youth activities.

Veterans. The Act retains the current law veterans' employment

program (JTPA title IV-C) and expands the eligibility for the program

to include, in addition to veterans with service-connected disabilities

and recently separated veterans, veterans who have significant barriers

to employment and veterans who served on active duty in the armed

forces during a war or in which a campaign badge has been authorized

(e.g. the Persian Gulf War).

National Activities

The Act requires the Secretary to conduct a wide variety of

national activities. Every two years the Secretary must publish a plan

that describes the national activity priorities for the next five-

years. This plan, which will be published in the Federal Register and

shared with Congress, will ensure that investments are planned in a

strategic manner. The Act also requires the Secretary to conduct a

study on improving the formulas for allocating funds contained in Act.

National Activities

Technical Assistance.

Dislocated Worker Technical Assistance.

Pilot, Demonstration, Multiservice, Multistate and

Research projects.

Dislocated Worker Pilot, Demonstration, Multiservice,

Multistate and Research projects.

Evaluation.

National Emergency Grants.

Through this broad range of authorized activities, the Department

will develop and implement techniques and approaches, and demonstrate

the effectiveness of specialized methods, of addressing employment and

training needs of individuals. Funds will also be used to evaluate the

impact of workforce investment activities. In a change from current

law, most awards are subject to competitive requirements, matching

requirements, peer review, and time limits. These provisions will

ensure the continued integrity of these investments.

Holding States and Localities Responsible for Results

Consistent with the performance-based approach provided in the

Government Performance and Results Act (GPRA), the Department is

placing a special emphasis on the area of program performance. This

includes a focus on: outcomes rather than inputs; results rather than

process; and continuous improvement rather than management control. The

performance provisions contained in the Act reflect this emphasis, and

provide increased flexibility in service delivery in exchange for

increased accountability for results. Through these provisions, the Act

strives to establish a comprehensive performance accountability system

in order to optimize the return on investment of Federal funds in State

and local workforce investment activities. This accountability system

will assess the effectiveness of States and local areas in achieving

positive results as well as the continuous improvement of their

workforce investment systems.

Core Indicators of Performance. The Act establishes core indicators

of performance for all adult, dislocated worker, and youth programs to

be applied to States as well as local areas. The core indicators of

performance for adult and dislocated worker activities (except for

self-service and informational activities) and for youth participants

age 19-21 include:

1. Entry into unsubsidized employment;

2. Retention in unsubsidized employment 6 months after entry into

employment;

3. Earnings received in unsubsidized employment 6 months after

entry into the employment; and

4. Attainment of a recognized credential relating to achievement of

educational or occupational skills for individuals who enter

employment. (For youth age 19-21, educational and skill attainment is

measured for all individuals who enter postsecondary education,

advanced training, or employment.)

The core indicators of performance for youth age 14-18 include:

1. Attainment of basic skills and, as appropriate, work readiness

or occupational skills;

2. Attainment of secondary school diplomas and their recognized

equivalents; and

3. Placement and retention in postsecondary education or advanced

training, or placement and retention in military service, or

employment--including qualified apprenticeship.

In addition, a customer satisfaction indicator must be established

that measures employers' and participants' satisfaction with the

services received under this Act. The inclusion of a customer

satisfaction indicator is important because securing employment is not

the sole concern when job-seekers enter the workforce investment

system. Customers are also concerned with their access to quality

information, their treatment by program staff, and their access to

services--in short, how well they feel that the system met their needs.

Recent research suggests that satisfaction with these other aspects of

a system are important to individuals whether or not they find a stable

job as a result of a training program or other service.

States also have the ability to identify additional indicators of

performance, and must report annually on a number of other indicators

specified in the Act, including employment, retention and earnings (12

months after entry into employment) and performance information on

specific population groups.

Negotiated Levels of Performance. For each core indicator, and the

customer satisfaction indicator, the State will negotiate its expected

levels of performance for the State as a whole with the Secretary.

These levels must be included in the State Workforce Investment Plan

and the negotiation must be completed before a State receives any funds

under the Act. Several factors are to be taken into account in this

negotiation process: (1) the extent to which the levels will assist the

State in attaining a high level of customer satisfaction; (2) how the

levels compare with the levels for other States--taking into account

differences in economic conditions, characteristics of participants,

and the services to be provided; and (3) the extent to which

[[Page 63381]]

the levels promote continuous improvement in performance and ensure

optimal return on the investment of Federal funds.

The State will carry out a similar negotiation with the local areas

within their State--taking into account specific economic, demographic

and other characteristics of the areas--to establish their expected

levels of performance for each core indicator.

Incentives, Sanctions and Technical Assistance: In an effort to

drive positive results and continuous improvement, the Act contains

strong ties between performance and funding. If a State fails to meet

its expected levels of performance in any year, it can request

technical assistance from the Department of Labor. If a State continues

to fail to meet its agreed-upon performance levels for a second year--

or if a State fails to report its performance information in any year--

its funding can be reduced by up to five percent. If a State exceeds

its expected levels of performance--as well as its levels of

performance under Adult Education and Vocational Education--it will

receive an incentive grant which must be used to finance innovative

workforce investment projects within the State. The linking of

performance for these three programs--workforce investment, adult

education, and vocational education--illustrates the importance of

collaboration of those systems.

New Roles and Flexibility

Partnerships at all levels--local, State and Federal--and across

the system is the hallmark of the new workforce investment system. All

levels will be required to coordinate and collaborate with agencies and

entities that have not been a part of the ``traditional'' workforce

development system. The incorporation of programs and activities

administered by agencies other than the Department of Labor into the

One-Stop system will require enhanced coordination between Labor,

Education, Housing and Urban Development, Transportation, Health and

Human Services, and Agriculture--and will require these entities to

develop collaborative strategies for service delivery and work towards

common goals. In addition, it is envisioned that business, labor

organizations, community organizations, school, and other interested

entities will be fully involved in the design and quality assurance of

the new system. Dialogue with customers, partners, stakeholders, and

Congress will be ongoing and consistent--at every level, and between

levels.

Accountability and responsibility for outcomes at all levels of the

system will exist, with each level having unique and integral roles and

responsibilities. This will result in high quality, effective services

for customers.

Local: In the new system, the local level remains key for policy

and administrative decisions. It is where customers access services and

where the design for the new One-Stop system and the consumer-driven

training system will be implemented. Local Workforce Investment Boards

will have important roles in the new system. Some of these roles

include the development of a 5-year local plan, the identification of

eligible providers of training services, and coordination of activities

across programs. Through the local plan, the operation of the workforce

investment system can be tailored to meet local needs.

The chief local elected officials continue to have a central role

in the administration of workforce investment activities. Specifically,

the chief local elected official:

Appoints the members of the local board, which is

responsible for establishing workforce investment policies in the local

area;

Develops, in collaboration with the local board, the local

workforce investment plan, which specifies the types of services that

will be provided, such as summer youth employment and training;

Serves, or designates an entity to serve, as the grant

recipient for job training funds provided under the Act, which includes

the responsibility for receiving and disbursing formula grant funds;

Works with the local board to conduct oversight of the

One-Stop customer service system in the local area, designates and

certifies One-Stop operators, appoints One-Stop partners (i.e.,

participating programs) and develops and approves the memoranda of

understanding under which the One-Stop system will be administered; and

Works with the local board to negotiate with the Governor

the performance levels that will be applicable to local areas and that

could result in incentive funds or sanctions.

Additionally, representatives of chief elected officials are

members of the State board that develops the State plan and carries out

other statewide activities.

State: The Act includes numerous features designed to provide

States with increased flexibility in designing and implementing

workforce investment systems. It also prescribes new roles for

Governors. For example, the Workforce Investment Act:

Eliminates mandatory set-asides for education coordination

grants and older worker programs, and combines the year-round and

summer youth programs into a single funding stream--resulting in far

fewer funding constraints.

Requires that each State establish a business-led State

Workforce Investment Board, consisting of the Governor and appointees

of the Governor representing business, education, labor, local elected

officials and others, to develop a comprehensive 5-year strategic State

plan for all workforce investment activities, and monitor the operation

of the workforce investment system.

Allows Governors to submit a single ``unified'' State plan

covering numerous Federal education, training and employment programs.

This provision also includes a requirement for joint planning and

coordination through which the entities responsible for planning or

administering such programs will review and comment on all components

of the plan.

Allows, through the inclusion of grandfathering

provisions, features of State laws enacted prior to December 31, 1997

relating to designation of service areas and sanctioning of local areas

for poor performance that are inconsistent with the Act. In addition,

all States may retain their existing State councils and local boards

created under JTPA if they substantially meet the requirements of the

Act and were in existence on December 31, 1997.

Assures that States retain any existing waivers that they

have received from the Department of Labor and codifies the Secretary

of Labor's waiver authority that previously only existed in annual

Appropriations language. In addition, the Act expands eligibility for

``Work-Flex'' to all States--flexibility that is currently limited to a

six State demonstration.

Increases, significantly, the Governor's flexibility in

using State reserve funds to finance activities that are State

priorities. Under the Act, the State reserves fifteen percent from each

of the three funding streams and may merge those funds and use them for

an array of workforce investment activities--including incumbent worker

projects.

Provides the Governor with a significant new role in

developing performance measures. They will have an important new

opportunity to affect the measures that will be used to evaluate the

effectiveness of the workforce investment system in their State.

[[Page 63382]]

State Workforce Investment Boards will also play an important role

in the design and implementation of State systems. For example, the

Board will assist the Governor to develop a 5-year strategic plan,

continuously improve the system, designate local workforce investment

areas, develop State performance measures, and develop allocation

formulas.

Federal: The Federal role also is changing. The Federal role in the

new workforce investment system will be one of a leader and an

enabler--with a focus on ensuring overall accountability for results

rather than adherence to administrative process. The Federal role can

be separated into the following areas that range from the most ``hands-

on'' activities, to facilitating progress, to the administrative and

support functions needed in this new system:

Strategic planning and policy formulation which defines

and focuses the direction of the public system.

Performance accountability to ensure that States and

localities meet program performance requirements and provide the

highest level of service to customers.

Knowledge development which provides important research

and evaluation findings to the workforce investment system to

facilitate better ways of delivering workforce investment-related

activities.

Technical assistance which provides expert assistance to

State and local partners and other stakeholders.

Administration and oversight to ensure financial

accountability of programs and compliance with legal requirements.

Prototype information systems which design and support

national information and communication needs.

Transition Efforts

The Department is in the process of organizing for the transition

to the new workforce investment system. An implementation task force

has been appointed, and a number of workgroups have been established to

focus on a wide variety of transition issues. The following workgroups

have been established: (1) Policy Development; (2) Performance

Accountability; (3) Outreach and Communications; (4) Administration and

Close-Out; (5) Program Services; and (6) Technical Assistance.

Although States are not required to fully implement all of the

requirements of the Act until July 1, 2000--the Department encourages

States that are ready to implement early, beginning July 1, 1999. In

order to enable States to implement beginning in July of 1999--the

Department intends to work quickly to develop planning guidance. The

Department intends to publish interim final regulations in the Federal

Register by early February 1999.

The Department recognizes that flexibility is key to implementing

the legislation. The Act is not the status quo; and a ``do it this

way'' approach dictated by the Federal government will not work. States

and local areas must be able to work in partnership to address the

needs of workers and employers by designing systems that make sense for

local labor markets and produce results. We can help as a partner, but

the most important linkages will be ones forged at State and local

levels.

Consultation Process. The transition can only be enhanced by

tapping into established networks to draw on the broadest possible

participation and contribution to the planning, implementation and

follow up of the Workforce Investment Act by the organizations and

people who will be the ones to make it happen. The Department of Labor

is taking an all inclusive approach to engaging the system in the

implementation of the Act. A variety of strategies will be used to

ensure continuous, two-way communication between the Federal, State,

and local partners, stakeholders, and other interested organizations

and individuals.

Information will be openly shared throughout the planning and

implementation process. Input will be sought on a continuous basis to

ensure that this process is truly a collaborative one. Various meetings

of workforce investment partners, customers, and other stakeholders

will be used as an arena to share current information on proposed

implementation policies/strategies as well as seek input from the

system. In addition, various roundtables and policy forums will be held

in each of the Department's ten regions to facilitate and encourage a

continuous face-to-face dialogue throughout the planning and

implementation process.

A workforce investment website (http://usworkforce.org) has been

established to provide a vehicle for continuous, ongoing

communications. The website is intended to function as an open forum

for dialogue between federal, state, local partners, stakeholders and

other interested individuals and organizations. This website will

enable implementation plans to be shared as they are developed,

questions to be raised, issues to be surfaced, and solutions to be

proposed. A question and answer system is being developed to provide a

medium through which the Department can respond to questions raised by

State and local partners and individual stakeholders. Once answers are

developed, they will be posted promptly on the website. Hard copies of

questions and answers will be prepared and distributed to the system on

a periodic basis.

Regulations. The Department intends to publish interim final

regulations by early February 1999, with final regulations scheduled to

be issued by the end of 1999. The Department has developed a set of

principles to guide the regulations writing process. These principles

include:

Customer First. The first consideration in writing

regulations will be to consider how they may impact on service to the

customers--participants and employers.

Consistency. The regulations will be internally

consistent, in terms of the message, tone, length and quality, and

written in a style that conveys information in a manner that is easy to

read and understand.

Input on Key Issues. Input will be sought from the

workforce investment community as a whole through various media and

through individual workgroups, as appropriate, on issues which need to

be addressed in regulations before and during regulation writing.

Minimal Regulations. Regulations will be prepared only

when:--clarifications are needed to implement legislative provisions;--

explanations on how the agency intends to interpret the Act are

necessary;--specific issues are not addressed in the legislation

requiring a rule to fill gaps in the legislation; and--policy guidance

would be insufficient to allow grantees to ensure that critical

provisions are implemented.

Flexibility. All regulations will permit the maximum

flexibility to customers as well as State and local governments in

terms of service and implementation of legislative provisions.

Administrative Feasibility. Regulations will be written in

a manner which permits persons at State and local levels to use them

under a variety of circumstances.

Technical Assistance: By early 1999, a comprehensive technical

assistance strategy will be in place. It is envisioned that the

technical assistance effort will focus on three areas: (1) Assisting

States and localities in closing-out the JTPA system; (2) assisting

``early implementers''-- States that will begin operating under the Act

in 1999; and (3) assisting States that will not begin

[[Page 63383]]

implementing the new requirements until the year 2000.

Initial Implementation Timeline

The Department intends to meet the following timeline for the

implementation of the new system:

Begin Consultations on Planning/Program/Policy Guidance, September 1998

Regions and States Identify Closeout Issues, October 1998

Publish Planning Guidance, November 1998

Publish Interim Final Regulations, February 1, 1999

Early States Submit Plans, April 1, 1999

Early State Implementation and Operation, July 1, 1999

Publish Final Regulations, December 31, 1999

All States Implementing Workforce Investment Act, July 1, 2000

For Further Information Contact: Workforce Investment Act

Implementation Taskforce Office, U.S. Department of Labor, 200

Constitution Ave. NW, Room S5513, Washington, D.C. 20210, Telephone:

(202) 219-0316 (voice), 1-800-326-2577 (TDD), Fax: (202) 219-0323, E-

mail: [email protected], Website: http://usworkforce.org.

[FR Doc. 98-30228 Filed 11-10-98; 8:45 am]

BILLING CODE 4510-30-P