Mr. James T. Dillon
Acting Commissioner
New York State Department
of Labor
State Office Building Campus
Building 12, State Campus
Albany, New York 12240

Dear Mr. Dillon:

I am pleased to offer JTPA waiver approvals to the State of New York in response to Governor Pataki's request. This could not have been done without the vision, strategy and planning that was produced by the local, State, and Federal (national and regional staff) partnership, of which it has been our pleasure to be a part. I thank you and your staff's hard work and patience.

The State's request was considered under the special appropriations act provision granting the Secretary of Labor authority to waive certain requirements of Titles I-III of JTPA, and Sections 8-10 of the Wagner-Peyser Act. This authority was granted to the Secretary in the Department of Labor's (DOL) Appropriation Act for 1997 (Pub. L. 104-208, section 101(e)).

This is a one-year authority and applies only to JTPA funds available for expenditure during the period July 1, 1997 through June 30, 1998, and, therefore, could affect the JTPA Grant Agreements for Program Year (PY) 1997, 1996 and 1995 funds, depending on fund availability during the waiver period. Enclosed you will find an overview and our disposition with regard to each of your requests, as well as copies of our formal response to the Governor. Enclosed also is a grant modification (3 copies) that will require signature by the Governor or the State's JTPA signatory official. Please check off the applicable JTPA grant agreements (PY 97, 96, 95) that the statutory waiver modification will affect. We ask that the documents be signed by the appropriate official and returned to the Grant Officer at the address indicated below:

Mr. James C. De Luca
U.S. Department of Labor - ETA
Office of Grants and Contract
Management - DAA
200 Constitution Avenue, N.W,
Room - South 4203
Washington, D.C. 20210

Upon execution by the appropriate USDOL grant officer, we will return an executed copy for the State's official files. This modification is effective September 30, 1997.

-2-




We applaud New York's efforts to focus on a workforce vision and the development of a strategy to meet that vision. Waivers, of course, are only a small part of this strategy. We will continue to work with the State to reach these goals. We expect that these reforms will continue to reflect the Department of Labor's guiding principles: individual opportunity and customer choice; leaner government; greater accountability; State and local flexibility; and strong private sector roles.

This is a living document. As we continue our partnership be sure to let us know if additional waivers or other action would be beneficial.

Sincerely,



Marilyn Shea
Regional Administrator

Enclosures


OVERVIEW

The applicable JTPA Grant Agreements between the State and the Department will be modified upon execution of the enclosed Modification. Unless specified otherwise these waivers are authorized for the period beginning July 1, 1997 and ending June 30, 1998. In exchange for these waivers the State is expected to meet the agreed upon performance improvements.

Requests to waive program design components were honored except in the case where the request conflicted with the Secretary's statutory waiver authority, the Department's guiding principles for waivers and the One-Stop Career Centers and School-to-Work Systems principles. Administrative waivers were granted in such a manner as to maintain fiscal responsibility and accountability.

These waivers are based upon the Governor's request, meetings and discussions among staff, and the Department's familiarity with the program in New York. They do not necessarily constitute an endorsement of the examples in New York's waiver request. In several instances, the Department would recommend against the interventions proposed. For example, most research would caution against general use of stand-alone work experience, job search or on-the job training interventions, particularly for youth without a high school diploma or its equivalent. The Department continues to strongly encourage educational components for youth participants.

WAIVERS

A. The State's request for a waiver to combine allowable program services available to participants under JTPA titles II-A, II-C and III is approved, subject to the conditions described below. As we understand the request, the State seeks a waiver to permit the provision of any service listed among the authorized services in JTPA titles II-A, II-C and III for an eligible applicant regardless of the title in which the individual is enrolled. In effect, the State seeks to create a single array of authorized services to be available to any eligible individual under JTPA titles II-A, II-C and III. The Secretary agrees to approve such a waiver. However, some of the authorized services contain certain conditions and/or limitations (e.g., the prohibition on subsidized employment with private for-profit employers, etc.). Unless otherwise waived by the Secretary, these conditions/limitations shall still apply to the provision of services under this waiver.

Accordingly, in response to the State's request, the Secretary shall apply the authorized services provisions of JTPA §§ 204(b), 264(c) and 314(a) - (e) in such a manner as to permit the State to offer services available under JTPA titles II-A, II-C and III to any participant in the program, subject to the following conditions:



  1. All individuals who receive services under this waiver shall meet the eligibility criteria of one of the programs under JTPA titles II-A, II-C and III;

  2. All funds allotted to the State under JTPA shall be spent only on the provision of services to individuals who meet the criteria for JTPA eligibility. Participants shall be reported under the program in which they are enrolled and all costs shall be charged to that program and the appropriate cost category;

  3. All statutory limitations on requirements that apply to any individual services provided under this waiver shall continue to apply unless such limitations are specifically waived by the Secretary; and

  4. The appropriateness of providing a particular service to an eligible individual under this waiver shall be based on an objective assessment and the individual service strategy.


B. The State's request to waive the definition of "employment" for performance standards purposes at JTPA § 106(k) to include employment of less than 20 hours per week for individuals with disabilities, youth, and older workers has not been granted. Consistent definition of this term and these standards is needed across the multiple programs under JTPA and with welfare reform. The State may be able to address this situation using the Governor's adjustments to the performance standards models (see Guide to JTPA Performance Standards for Program Years 1997 and 1997, transmitted by Training and Employment Information Notice (TEIN) No. 26-96, dated April 22, 1997.

C. As requested, the Secretary will apply the definition of "family income" in 20 CFR 626.5 such that ". . . such income shall also exclude Social Security Disability Income for an individual with a disability,. . . ." This administrative regulatory waiver is being granted for a period of four years from the effective date of this Grant Modification.

D. As requested, the Secretary waives the prohibition on stand-alone work experience, job search assistance, job search skills training, and job club, for both youth and adults, in instances when an individual service strategy substantiates its use as appropriate, by waiving JTPA § 204(c)(2)(B)(ii) and 20 CFR 628.535(b)(2) and (c)(1)(ii) and applying JTPA § 264(d)(3)(A) and (B) as if they read ". . . shall be accompanied by . . . additional services . . . unless the individual service strategy demonstrates such additional services are not warranted." Additionally, the title III prohibition on work experience at 20 CFR 627.245(e), where such strategy is supported by an individual assessment, and the combination requirements at 20 CFR 627.245(d) and 628.804(e) and (f), are waived. We wish to point out to the State that there is research suggesting that work experience provided in a stand-alone mode is not as effective as when combined with other needed services and that this authority should be used sparingly.



E. The State's request to expand the definition of eligible dislocated workers at JTPA §§ 301(a)(1)(A), 314(h) and 20 CFR 631.3 to permit skills upgrade training for employees with current (or layoff) employers is not approved. In addition to the eligibility exception in the Appropriations Act which does not grant the Secretary the authority to waive eligibility requirements, the request is not granted for policy reasons because the Department believes that it is important that limited title III resources not be used to replace employers' responsibilities for upgrading the skills of their current employees. In addition, safeguards must be maintained to ensure that employers do not receive federal funding for training/retraining laid off and subsequently recalled/rehired employees. For those workers not likely to remain employed with the same employer or to retire, the Department encourages the initiation of allowable services for eligible dislocated workers pursuant to JTPA § 314(h) or as soon as a worker receives a notice of layoff consistent with JTPA § 301(a)(1)(A). Research shows that training is most effective if workers are enrolled early in the adjustment process, and DOL believes effective early intervention strategies such as authorized under title III are critical elements of such effectiveness.

F. The Secretary waives the youth OJT wage requirement at JTPA § 264(d)(3)(C)(i)(I) and the related regulations at 20 CFR 628.804(j)(1)(i) and the participation requirement at JTPA § 264(d)(3)(C)(iii) and the related regulation at 20 CFR 628.804(j)(2), when indicated as appropriate in the objective assessment and individual service strategy for youth on-the-job training. The State shall assure that the OJT positions for youth have substantial training content and that the training time is correctly determined. In addition, the State should issue policies to assure that youth OJT opportunities reflect positions with career potential and avoid the introduction of the abuses in the development of youth OJT slots in low wage, low skill positions which precipitated the enactment of the provisions for which this waiver is requested.

G. For titles II and III, current authority permits participants to continue to receive services following placement so long as the participants have not been terminated. Instead of terminating at placement, termination occurs at the completion of planned services. ETA encourages such a policy and is willing to work with New York to develop reporting procedures to take credit for job placements occurring prior to termination.

Nevertheless, as requested, the Secretary will apply JTPA § 204(b)(2)(J) and (c)(4) and 20 CFR 627.310(e) to title III to enable title III participants to receive post-termination services, excluding financial assistance, for up to one year consistent with title II. Additionally, as requested, the Secretary will apply JTPA §§ 204(b)(2)(J) and (c)(4), 264(c)(2) and (d)(5), 314(c)(15), and 20 CFR 627.310(e) to authorize training as a post-termination service contingent upon the Governor:

i. Developing a record keeping system that will track post-termination training provided and
outcomes achieved for any post-termination training provided.

ii. Maintaining current safeguards to ensure that employers do not receive federal funding for
training/retraining laid off and subsequently recalled/rehired employees.

However, the provision within 20 CFR 627.310(e) which prohibits the use of financial assistance as a post-termination service is not waived. Therefore, needs-based and needs-related payments are not post-termination options under this waiver for both titles II and III.

H. The State's request to waive the requirement at JTPA § 204(d)(5)(B)(i), that a person must be facing "serious barriers to employment," be an older individual (age 55 or older), and meet the income eligibility criteria under title V of the Older Americans Act in order to be eligible for services under the 10 percent window for non-economically disadvantaged older individuals at JTPA § 204(d)(5)(B)(ii), has not been granted. This is an eligibility issue, and, as such, is excepted from the Secretary's statutory waiver authority under the 1997 DOL Appropriations Act, and cannot be waived.

I. As requested, the Secretary waives JTPA §§ 108(b)(4)(B) and 315(a), and (b) and 20 CFR 627.445(a)(1)(i), and (a)(2)(i) and 631.14(a) and (b), eliminating the non-administration cost limitations for titles II and III [except for national reserve account (NRA) grants]; the 20% administration limitation for titles II-A and II-C, at JTPA § 108(b)(4)(A), the 15% limitation for title III, at JTPA § 315(c), and the 15% limitation for title II-B at JTPA § 253(a)(3) and 20 CFR 627.445(b)(3) will be waived and replaced by a uniform 25% administration limitation for titles II-A, II-B, II-C, and III [except for NRA grants]. The provisions at § 108(b)(1) and (c), and all references in the JTPA regulations that address the cost limitations under titles II-A, II-B, II-C, and III [except for NRA grants] shall refer only to the approved 25% administration cost limitation. The Secretary will apply JTPA § 108(b)(2) and (3) and 20 CFR 627.440(b), (c)(1) and (d) and 631.13(a)(1) to reduce the number of cost categories to two: Administration and Program Costs. The costs of Administration shall be those defined at 20 CFR 627.440(d)(5) for title II and 631.13(f) for title III. Program Costs will consist of all other costs including those defined at 20 CFR 627.440(d)(1), (2), (3), and (4) for title II and at 631.13(c), (d), and (e) for title III. The costs of Rapid Response activities identified at JTPA § 314(b) and 20 CFR 631.13(b) shall continue to be separately reported. Reporting instructions for the two cost category reporting method have been developed and are attached for use by the State.

J. The State has requested that the provisions at 20 CFR 627.440(d)(1)(B)(ii)-(iv) be waived. These provisions simply state that the costs of books, instructional material, equipment, classroom space, etc. are to be classified as direct training services under title II-A. Based on the granted cost category waiver, these costs are now included under the program category. As such, this provision will not be waived. However, the text of the State's request indicates that it desires a waiver of the use requirements under 20 CFR 627.465 for property used in a one-stop center. Outside of a one-stop operation, ETA has taken and still holds the position that when JTPA property is used for other than JTPA purposes, then JTPA needs to be compensated for the non-JTPA use. This is normally accomplished through a use allowance.

It is our belief that the collaboration envisioned under the concept of a one-stop operation involves bringing various organizations to the table who bring with them more than minimal funding or other tangible resources. Where JTPA, the Employment Service, the Unemployment Insurance system, the Vocational-Educational system, and others collaborate as members of a one-stop partnership, they all bring monies, property and other assets to the table. ETA is willing to agree with the notion that property and supplies that JTPA brings to a one-stop arrangement are properly usable for the one-stop center and are not restricted to JTPA use only. Therefore, the Secretary agrees to waive the property use requirements at 20 CFR 627.465 for supplies and equipment used in a one-stop center only.

K. In consideration of the waivers contained in this grant modification, the State agrees to a performance improvement of four percent (4%) at the State level measured at the conclusion of Program Year 1997 using actual performance in PY 1996 as the baseline for improvement. This means that the 4% improvement will be an average of SDA/SSA performance statewide. Performance improvements will apply to all the Secretary's performance measures or to their approved equivalents, for titles II-A, II-C, and III. In order to meet this performance improvement, the State is expected to require that each SDA/SSG make some improvement in performance and that those SDAs/SSGs which demonstrate comparatively lower levels of performance be required to make greater performance improvements. States will take into account the SDA's performance improvement targets in determining the receipt of title II incentive grant awards for PY 1997. In considering whether the State has attained the agreed- upon performance improvement for PY 1997, the Department will apply the Secretary's Adjustment Models, exclusive of Governor's Adjustments, to the performance improvement goals. Program Year 1996 and Program Year 1997 performance will be calculated in the same way for both years.

The Standardized Program Information Report (SPIR) instructions in Training and Employment Information Notice 5-93, Change 1 (dated June 23, 1994), as modified by Training and Employment Information Notice 5-93, Change 2 (dated January 24, 1997), remain in effect where not specifically waived or modified in this Agreement. Also in effect unless specifically waived are the Performance Standards Status Summary Report requirements put forth in Training and Employment Guidance Letter 2-95 (dated August 10, 1995). This requires Governors to report each SDA's final standard and actual performance for each of the Secretary's title II core standards, with required technical assistance plans and reorganization plans attached.

These waivers are open for modification and the Department will also entertain additional requests for waivers during this program year. These waivers apply to the title II and the title III formula programs. However, ETA will consider requests to apply specific waivers to individual title III Secretary's NRA grants which are active during Program Year 1997. In addition, ETA will consider requests to incorporate specific waivers into new individual NRA grants, as appropriate.