Dr. Ann Y. McGee
Executive Director
Governor's Employment and
Training Department
Theater Row Building, 9th Floor
760 E. Broad Street
Richmond, Virginia 23219
Dear Dr. McGee :
I am pleased to offer Job Training Partnership Act (JTPA) waiver approvals to the
Commonwealth of Virginia in response to Governor Allen'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 for your and your staff's hard work and patience.
The Commonwealth'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 Common- wealth'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 Commonwealth's official files. The effective date of this modification is
September 30, 1997.
We applaud the Commonwealth'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 Commonwealth 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,
Edwin G. Strong
Regional Administrator
Enclosures
OVERVIEW
The applicable JTPA Grant Agreements between the Commonwealth 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 Commonwealth 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 the Commonwealth. They do not
necessarily constitute an endorsement of the examples in Commonwealth'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. {VA-001} The Secretary will apply the definition of "family income" in 20 CFR
626.5 such that ". . . . The Governor may, for the purposes of determining income eligibility
for services under title II of the Act, exclude up to 50 percent of Social Security and Old Age
Survivors' Insurance benefit payments. . . from the definition of family income." This
administrative regulatory waiver is being granted under the provisions of 20 CFR 627.201 for
a period of four years from the effective date of this Grant Modification.
B. {VA 002} 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
under the provisions of 20 CFR 627.201 for a period of four years from the effective date of
this Grant Modification.
C. {VA-003} 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 title II-A (adults), title II-C (youth) and § 204(d) (older workers) has not
been granted. Consistency in terminology and in performance measurement is needed across
multiple programs under JTPA and with welfare reform. To ensure the widest range of
service to clients, including those that desire employment of less than 20 hours per week of
employment, the State has the option of using the Governor's adjustments to adjust the
performance standards to accommodate service to those groups(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).
D. {VA-004} 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), will remain in effect;
and the 15% limitation for title III, at JTPA § 315(c), as well as 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 the same 20%
administration limitation as for titles II-A and II-C, at JTPA § 108(b)(4)(A). The provisions at
JTPA § 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
20% 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.
E. {VA-005} It is not clear that the Secretary has authority to waive her statutory
responsibilities for formula allotment and reallotment, including the requirements under § 303
for the recapture and reallotment of unexpended Title III formula funds. However, except as
described below, the State's request to waive JTPA § 303(b) and 20 CFR 631.12(a) is not
approved for the following policy reasons:
It is noted that Virginia was earlier granted a four-year waiver to the regulatory
provision at 20 CFR 631.12(a)(1)(ii). This waiver permits the State to carry over prior year
funds contingent upon meeting the eighty percent expenditure requirement in the year of
allotment. DOL believes a State's policy for recapture and reallocation of unexpended title III
funds within a State can accommodate obligations to serve dislocated workers across program
years.
F. {VA-006} The Secretary waives JTPA 141(g)(2) and 20 CFR 627.240(b)(1), (2) and (3) which provides maximum time limits during on-the-job training, provided that the training time during the OJT is correctly determined, taking into consideration the necessary occupational skills and the time required to acquire such skills, for the participant to function in the job for which the OJT is contracted. The State agrees to develop a policy that addresses the circumstances under which the limit of 6 months may be exceeded and the maximum duration, if any, that will apply to on-the-job training
.
G. {VA-007, 008} The Secretary also waives that portion of 20 CFR 627.240(f)(3)
which precludes OJT with a participant's "current employer" in "an upgraded job" for title II
eligible participants. This waiver will permit OJT with a title II eligible participants' current
employer on condition that the OJT results in the acquisition of new skills and higher pay by
the participant. The remaining provisions at 20 CFR 627.240(f)(3) which preclude OJT with a
participant's "previous" employer in the same, a similar, or upgraded job is not waived.
The State's request to waive the prohibition on upgrade training as a component of on-the-job training with the current or layoff employer under title III at 20 CFR 627.240(f)(3) is
not granted. Further, the expansion of the definition of "eligible dislocated worker" at JTPA
§§ 301(a)(A), 314(h) and 20 CFR 631.3 to permit skills upgrade training for employees with
their current or layoff employers is not granted. The Appropriations Act does not give to the
Secretary the authority to waive these eligibility requirements. Furthermore, the request to
permit upgrade training for title III eligible dislocated workers with their current or layoff
employers is not granted for policy reasons, including--
H. {VA-009, 010} The Secretary waives the requirements at JTPA § 141(k) that
prohibit subsidized employment with private for-profit employers, to permit limited
internships, entry employment and tryout employment with private for-profit employers, in
cases where the objective assessment and individual service strategy indicate it is the
appropriate intervention when:
I. {VA-011} As requested, the Secretary waives the JTPA procurement requirements and the implementing regulations at §164(a)(3) and 20 CFR 627.420(a)(1), (2), (3), and (4), (b), (d)(1), (e)(1), (2), (3), and (5), (g) and (h). The Governor agrees to use State and local procurement procedures consistent with Office of Management and Budget (OMB) Circular
A-102, as codified in the DOL regulations at 29 CFR 97.36 (The Common Rule). The
Circular/Common Rule requires the State to follow the same policies and procedures it uses
for procurements from its non-Federal funds when procuring property and services under a
grant. References elsewhere in JTPA to § 164(a)(3) will be understood to apply to State and
local procurement provisions.
Section 627.420 of the JTPA regulations includes rules implementing statutory
provisions other than JTPA § 164(a)(3). As a result, the waiver of this section is not all
encompassing. Section 627.420 subsections which are not being waived follow (the sections
of JTPA which they implement, where applicable, are listed in brackets): (a)(5) [§141(h)],
(a)(6) [§107(a)], (c), (d)(2), (e)(4), (f) [§163], (i) [§144] and (j) [§107(e)(2)].
Subsection 627.420(c) of the regulations deals with conflict of interest. Even though
OMB Circular A-102 also has a section that deals with conflict of interest, it is a generic
requirement. 20 CFR 627.420(c) of the regulations was written specifically to cover the
unique relationships that JTPA created with the formation of Private Industry Councils.
Therefore, this subsection is not being waived.
Subsection 627.420(d)(2) provides the State and its SDAs/SSGs with pass through
authority to any unit of State or local government. This requirement is being retained for the
State, since the circular does not provide this authority.
Section 627.420(e)(4) is based on financial requirements contained in the Act and
requires that costs be charged according to the allowable cost provisions at 20 CFR 627.435.
Although JTPA §164(a)(3)(I) has been waived, the requirements contained in 20 CFR
627.450, Program Income, still apply. The section being waived requires that procurement
transactions between units of State or local government, SDAs/SSGs, et. al., be conducted on
a cost reimbursement basis. The Program Income section of the regulations, in summary,
requires that program income earned be used for purposes of the program.
J. {VA-012, 013} The Governor agrees to continue to require an objective assessment
and individual service strategy (ISS) at entry and on an on-going basis for all participants under
titles I, II, and III that is tailored to the background and needs of the participant and where
services identified in the ISS will be secured for the individual. The Secretary waives 20 CFR
628.515(a) and 628.520(a), and will apply JTPA §§ 204(a)(1) and 264(b)(1), and remaining
sections of 20 CFR 628.515 and 628.520 as providing non-binding guidance for the alternative
state policy that the Governor shall implement.
Until such time as the alternate policy is in place for title II adults and youth, the
requirements specified in the preceding sentence will continue to apply to any decision to provide
the stand-alone activities permitted in paragraph L.. (i.e., work experience, job search assistance,
job search skills training, job club for both youth and adults) which relies on the objective
assessment and ISS.
K. {VA-014} The State's request to waive the required services requirement at JTPA §
204(a)(1)(D) has not been granted. This provision ensures that when certain fundamental services
(i.e., basic and occupational skills training and supportive services) are determined to be
appropriate for a participant, based on an objective assessment and individual service strategy,
they shall be provided for a participant either directly or through arrangements with other
programs. The basis for the State's request is that "SDAs are prohibited from developing
programs that best meet participant needs" and that the provision "Prohibits SDAs from designing
programs which conform and support the requirements of welfare reform." In support of these
statements, the State's request refers to providing to participants only those services needed and
refers to job search assistance and stand-alone work experience for which specific waivers were
granted elsewhere. The State has not developed a compelling argument for the requested waiver,
and, with the waivers granted herein, we believe has substantially the authority it sought. We will
be happy to explore this area further with the State if additional flexibility is needed.
L. {VA-015} 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, as suggested in the request, this authority
will be used sparingly.
M. {VA-016} The State's request to waive the Ratio of Out-of-School to In-School
Youth service requirements at JTPA § 263(f)(1) and 20 CFR 628.803(h)(1) has not been
granted. It appears that this may be an eligibility requirement and, as such is, excepted under
the Secretary's waiver authority granted in the 1997 DOL Appropriations Act. In any event,
the Department believes that it is important to provide services to out-of-school youth, and the
ratio requirement is the only statutory provision that guarantees services to this target
population. Since funding for title II-C youth services has decreased in recent years, the
Secretary is not prepared to permit further reduction of services to out-of-school youth by
waiving the ratio requirement.
N. {VA-017, 018} As requested, 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.
O. {VA-019, 027} As requested, the Secretary will apply the provisions of needs-based payments at JTPA § 204(b)(2)(I) and (c)(3), and 20 CFR 627.305(b)(1) to title III
participants. However, in order to preserve the principle that training is most effective if
individuals are enrolled in training early in the adjustment process and pursuant to eligibility
requirement exclusion contained in the Appropriations Act of 1997, JTPA § 314(e)(1) and 20
CFR 631.20(b)(1) are not waived, and shall apply to dislocated workers in order to receive needs-based payments as well as needs-related payments. Therefore, in order to be eligible for needs-related payments or needs-based payments, a dislocated worker must be enrolled in training by
the end of the 13th week of the worker's initial unemployment compensation benefit period
(following title III qualifying layoff), or if later, the end of the 8th week after an employee is
informed that a short-term layoff will in fact exceed six months. This also means that JTPA §
314(e)(2) and 20 CFR 631.20 are not waived and the "unemployed" requirement (as defined at
JTPA § 4(25)) in the needs-related payment eligibility definition at JTPA § 314(e) is not waived.
The Secretary will, however, consider an alternative definition of "enrolled in training or
education" at 20 CFR 631.20(b)(2) to be used only in extraordinary circumstances if Virginia
wishes to propose such a policy. Any alternative policy should preserve the principle that training
is most effective if individuals are enrolled in training early in the adjustment process.
P. {VA-020} As requested, the Secretary shall apply the requirements in TEIN 26-96
transmitting the "Guide to JTPA Performance Standards for Program Years 1996 and 1997,"
such that title III performance standards calculations exclude participants terminating after
receiving objective assessment only, consistent with title II. However, participants who receive
other basic readjustment services prior to determining whether they will require retraining,
including those who terminate after receiving only such services, shall not be excluded from
performance standards calculations.
Q. {VA-021} The State's request to waive the definition of "unemployed" at JTPA §
4(25) has not been granted. In the Department's view this provision is a basic eligibility
requirement and, as such, is excepted from the Secretary's waiver authority under the 1997 DOL
Appropriations Act. Section (4)(25) also requires that the determination of whether individuals
are without jobs be made in accordance with criteria used by the Bureau of Labor Statistics (BLS)
in defining individuals as unemployed. Further, the Secretary's waiver authority extends only to
provisions of JTPA titles I-III, and provisions of sections 8-10 of the Wagner-Peyser Act, and the
Secretary may not adjust the BLS criteria under this kind of authority.
R. {VA-022} The State's request to allow the Governor's Employment and Training
Division in concert with SDAs and other stakeholders to define the parameters of the performance
measurement system is too broad and cannot be granted in its totality. To ensure that the JTPA
system is accountable, measures that are related to the basic purposes of the Act should be
defined in a standardized and demonstrable way. For this reason, the Secretary's core
performance standards will be retained and not waived. The State already has considerable
flexibility in defining its performance management system under current policy (see Guide to
JTPA Performance Standards for Program Years 1996 and 1997, transmitted by TEIN 26-96,
dated April 22, 1997). The State's roles include:
The Department is willing to consider additional waiver requests from the State that address particular aspects of the JTPA performance management system, but will not waive its entire role and responsibility for ensuring that there are adequate and appropriate results from the expenditure of funds allotted to recipients and subrecipients.
S. {VA-023} The State's request waive the provisions of JTPA § 141(g)(1), which limits
the reimbursement to employers for training costs to an average 50% of the wages paid by the
employer, has not been granted. The State's request simply states, without any supporting
documentation or justification, that this provision prohibits the ability to use OJT as an effective
strategy for job creation and in conjunction with Department of Social Services private sector
placement strategies. The Department believes that the rate of reimbursement for OJT at level of
50% compensation for extraordinary training cost and lower productivity is appropriate when
combined with the waiver of the duration of training limitation granted in paragraph F, and other
waivers granted which provide greater flexibility for OJT activities in paragraphs G. and N.,
above. Finally, there are other JPTA-funded interventions with employers available for hard-to-serve participants including work experience, tryout employment and internships for which
waivers have also been granted in paragraphs H. and L, above.
T. {VA-024} The State's request to waive the requirements at JTPA §§ 203(b) and
263(b) and (d) and 20 CFR 628.605(c) which requires that 65% of all title II-A and title II-C
participants meet the hard-to-serve definition has not been granted. It appears that these are
eligibility requirements and, as such, are excepted from the Secretary's waiver authority under the
1997 DOL Appropriations Act. The Secretary does not have authority to waive JTPA eligibility
requirements. Moreover, in the Department's view, it is important to spend JTPA resources on
the target population most in need of services.
U. {VA-025} The State's request to waive the requirements at JTPA §§ 203(c) and
263(e) and 20 CFR 628.605(b) and 628.803(f) which limits services to non-economically
disadvantaged individuals, with one or more serious barriers to employment, to 10% of all title II-A and title II-C, and increase the limit to 30% has not been granted. These are eligibility
requirements and, as such, are excepted from the Secretary's waiver authority under the 1997
DOL Appropriations Act. The Secretary does not have authority to waive JTPA eligibility
requirements.
V. {VA-026} The State's request for a waiver to consolidate the eligibility requirements
for JTPA titles II-A, II-B, II-C and III has not been granted. JTPA eligibility requirements are
excepted from the Secretary's waiver authority under the 1997 DOL Appropriations Act. The
Secretary does not have authority to waive any JTPA eligibility requirements. The Department is
amenable to working with the State to come up with a waiver to combine allowable services
available under the various JTPA titles, which the Department believes will achieve the results
desired by the State in requesting this particular waiver (i.e., permit the State to offer services
available under titles II-A, II-C and III to any eligible participant in the program, subject to certain
conditions).
W. 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.
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 TEGL No. 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.