WIA waivers during the transition to WIOA

CLASSIFICATION
  EMPLOYMENT AND TRAINING ADMINISTRATION                 WIA and WIOA waivers
              ADVISORY SYSTEM                            CORRESPONDENCE SYMBOL
         U.S. DEPARTMENT OF LABOR                        OWI
            Washington, D.C. 20210                       DATE
                                                          July 1, 2015

ADVISORY:       TRAINING AND EMPLOYMENT GUIDANCE LETTER WIOA NO. 1-15
                OPERATING GUIDANCE for the WORKFORCE INNOVATION AND
                OPPORTUNITY ACT (referred to as WIOA or the Opportunity Act)

TO:             STATE WORKFORCE AGENCIES
                STATE WORKFORCE ADMINISTRATORS
                STATE WORKFORCE LIAISONS
                STATE AND LOCAL WORKFORCE BOARD CHAIRS AND
                DIRECTORS
                STATE LABOR COMMISSIONERS

FROM:           PORTIA WU /s/
                Assistant Secretary

SUBJECT:        Operations Guidance Regarding the Impact of Workforce Innovation and
                Opportunity Act Implementation on Waivers Approved Under the Workforce
                Investment Act.

1. Purpose. The purpose of this guidance is to communicate the Employment and Training
   Administration’s (ETA) waiver policy for PY 2015 for Workforce Investment Act (WIA)
   waivers currently approved for many states. This guidance addresses the status of such
   waivers during Program Year (PY) 2015, when most provisions of the Workforce Innovation
   and Opportunity Act (WIOA) go into effect. This guidance also communicates ETA’s
   position on waivers under WIOA.

   WIOA was signed into law on July 22, 2014. WIOA is designed to help job seekers access
   employment, education, training, and support services to succeed in the labor market and to
   match employers with the skilled workers they need to compete in the global economy.
   WIOA supersedes Titles I and II of the Workforce Investment Act of 1998 and amends the
   Wagner-Peyser Act and the Rehabilitation Act of 1973. In general, the Act takes effect on
   July 1, 2015, the first full program year after enactment, unless otherwise noted.

   The Departments of Labor and Education published a set of regulations for implementing
   WIOA through the posting of five Notice of Proposed Rulemaking (NPRMs) documents.
   These NPRMs were open for public comment until June 15, 2015, and several hundred
   comments were received by both Departments. The Federal agencies will review, analyze
   and consider the comments received. The Final WIOA rules will be issued in 2016.

 RESCISSIONS                                             EXPIRATION DATE
 None                                                    Continuing

   In order to continue implementation prior to the final rule, a series of WIOA Operating
   Guidance documents are being issued in the form of Training and Employment Guidance
   Letters (TEGLs). These Operating Guidance documents on WIOA will inform the workforce
   system on how to begin the important planning and organizational work necessary to comply
   with the WIOA statutory requirements. The Operating Guidance TEGLs will provide a
   framework for program activities until the regulations are finalized. This TEGL is one in a
   series of WIOA Operating Guidance.

2. References. See Attachment I.

3. Background. Before the passage of WIOA, ETA approved WIA State Plans and waivers
   through either June 30, 2016 or June 30, 2017. Most WIOA provisions go into effect July 1,
   2015, and States must submit WIOA State Plans in March 2016 for PY 2016. The
   Secretary’s waiver authority under WIA and waivers approved under WIA do not extend to
   WIOA, which has its own waiver authority.

   ETA conducted a waiver-by-waiver analysis to determine which approved WIA waivers may
   remain in place for PY15 and which WIA waivers must be terminated on June 30, 2015 due
   to the effective date of the WIOA provisions. Section 503 of WIOA provides the Secretary
   of Labor with the authority to take such actions as the Secretary determines to be appropriate
   to provide for the orderly transition from WIA to WIOA, and ETA is exercising this authority
   in regard to waiver decisions articulated in this guidance.

   Furthermore, policy promulgated in TEGL 38-14, Operational Guidance to Support the
   Orderly Transition of Workforce Investment Act Participants, Funds, and Subrecipient
   Contracts to the Workforce Innovation and Opportunity Act of 2014, establishes the
   analytical framework for the continuation of certain WIA waivers into PY 15. In particular,
   the following provides the context for WIA waiver policy for PY 15:
       • For PY 2013 and 2014 funds which are already obligated as of June 30, 2015,
           grantees may liquidate those obligations in compliance with WIA requirements.
       • As of July 1, 2015, unobligated WIA funds carried into WIOA must only support
           WIOA activities and conform to WIOA reporting requirements.
       • On July 1, 2015, all WIA title I participants (including Adult, Dislocated Worker,
           Youth, NFJP, and INA participants) who were enrolled in a WIA title I program prior
           to July 1, 2015 must be grandfathered into WIOA, even if the participant would not
           otherwise be eligible for WIOA.
       • For performance reports, State formula grantees will continue reporting WIA and
           WIOA enrolled participants in the current Workforce Investment Act Standardized
           Record Data (WIASRD) until a new performance report is approved and the system is
           updated.

4. Status of Approved WIA Waivers in PY 15. Most waivers are organized into the
   following categories: those having to do with the flexibility and movement of funds,
   including youth waivers, waivers of performance, and waivers that impact State or local
   governance structures. The following summarizes the Department’s rationale for the status of

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WIA waivers in these categories. Please see Attachment II for a full list of waiver decisions.
Through the Secretary’s transition authority, States are not required to submit a WIA State
Plan modification to reflect these changes, nor will the Department issue waiver modification
letters outside of this guidance.

A. Funds Flexibility and Youth Waivers. Whether WIA Funds Flexibility and Youth
   Waivers remain in effect after July 1, 2015 varies based on whether WIA funds are
   obligated or unobligated as of June 30, 2015.

   Funds flexibility waivers (such as the waiver allowing a sliding employer reimbursement
   scale for on-the-job training) and Youth waivers (including the competitive procurement
   of youth elements waiver and the waiver to allow youth to receive ITAs) that support
   activities funded with obligated PY 2013 or 2014 funds may continue until such funds are
   liquidated. Unobligated PY 2013 and 2014 will become subject to WIOA requirements,
   effective July 1, 2015 and the WIA waivers must be discontinued. ETA intends to issue
   further guidance regarding competitive procurement of the youth elements.

    Note, participants enrolled under WIA prior to July 1, 2015 must be grandfathered into
    WIOA and must be allowed to complete the WIA services in their service plan whether
    using WIA or WIOA funds for those services.

B. Performance Waivers. WIOA performance reporting requirements do not take effect
   until PY 2016. Therefore, ETA will continue to honor all currently approved WIA
   performance waivers, including waivers that permit States to replace the performance
   measures at WIA Section 136(b) with the common measures until PY 2016. State
   formula grantees will continue reporting WIA and WIOA enrolled participants in the
   current Workforce Investment Act Standardized Record Data (WIASRD) until a new
   performance report is approved and the system is updated.

C. System Governance Waivers.

  i.   Waiver of 20 CFR 661.300(f) permitting the State Board to carry out the
       functions of the Local Board. The three States that are approved for this waiver
       may continue the waiver in PY 2015. Irrespective of the waiver, these States must
       develop policies concerning the identification of regions and the designation of local
       areas consistent with TEGL 27-14. States approved for this waiver must educate
       local chief elected officials of their statutory authority to request local area
       designation. ETA will entertain such a waiver under WIOA on a case-by-case basis
       where the State can provide compelling evidence that the continuation of this
       governance structure is necessary and appropriate. ETA intends to issue further
       guidance on the conditions and criteria for approval of this waiver under WIOA.

 ii.   Waiver of the provision at 20 CFR 663.530 that prescribes a time limit on the
       period of initial eligibility for training providers. This waiver allowed States to
       maintain initial eligibility requirements for training providers. The WIOA

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           requirements for training provider eligibility go into effect July 22, 2015, and this
           waiver may not be applied to the Section 122 provisions of WIOA. Therefore, this
           waiver is discontinued effective July 1, 2015. For information on training provider
           eligibility requirements under WIOA, refer to TEGL 41-14.

5. Waivers in PY 2016. In general, the Department does not envision a need for States to
   request waivers before the submission of the first WIOA State Plan in March of 2016. WIOA
   represents a significant opportunity for the transformation of the public workforce system, in
   part due to the unprecedented level of flexibility that the legislation provides State and Local
   stakeholders. We encourage States to work with, and test the flexibility of WIOA,
   particularly during PY 2015, the first year of implementation. However, where the State
   demonstrates that a proposed waiver would lead to a true innovation or improve service
   delivery beyond the improvements provided for in WIOA, the Department will entertain
   waiver requests prior to State Plan submission. The State must articulate how the proposed
   waiver would advance implementation of its prospective WIOA State Plan.

6. Action Requested. States must review this guidance against their approved WIA waivers,
   and adapt their use of WIA waivers accordingly. States are not required to submit a State
   Plan modification to reflect these changes.

7. Inquiries. States should address their inquiries to their ETA Regional Office.

8. Attachments.

   •   Attachment I: References
   •   Attachment II: Table of WIA Waiver Decisions for PY 2015

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Attachment 1

Official attachment: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2015/TEGL_01-15_Attachment_I_Acc.pdf

Attachment I: References

   •   Workforce Investment Act of 1998 (Pub. L. 105-220)
   •   Workforce Innovation and Opportunity Act of 2014 (Pub. L. 113-128)
   •   TEGL 27-14: Workforce Innovation and Opportunity Act Transition Authority for
       Immediate Implementation of Governance Provisions
   •   TEGL 38-14: Operational Guidance to Support the Orderly Transition of Workforce
       Investment Act Participants, Funds, and Subrecipient Contracts to the Workforce
       Innovation and Opportunity Act of 2014
   •   TEGL 41-14: Workforce Innovation and Opportunity Act (WIOA or Opportunity Act)
       Title I Training Provider Eligibility Transition

Attachment 2

Official attachment: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2015/TEGL_01-15_Attachment_II_Acc.pdf

Attachment II:
                                       Waiver Decisions for PY 2015

    WIA Waiver Name                             Description                         PY 2015 Waiver Decisions
Customized Training            Waiver of the required 50 percent employer        Waiver may continue when used
                               contribution for customized training at WIA       in support of activities funded
                               Section 101(8)(C)                                 through obligated WIA funds.

On-the-job Training Employer Waiver of WIA Section 101(31)(B) to                 Waiver may continue when used
Reimbursement Based on       increase the employer reimbursement for on-         in support of activities funded
Business Size                the-job training                                    through obligated WIA funds.

On-the-job Training Employer   Waiver of WIA Section 101(31)(B) to               Waiver may continue when used
Reimbursement Based on         increase the employer reimbursement for on-       in support of activities funded
Length of Participant          the-job training                                  through obligated WIA funds.
Unemployment
Adult/Dislocated Worker        Waiver of WIA Section 133(b)(4) to increase       Waiver may continue when used
Funds Transfer                 the allowable transfer amount between Adult       in support of activities funded
                               and Dislocated Worker funding streams             through obligated WIA funds.
                               allocated to a local area

Local funds for incumbent      Waiver of WIA Section 134(a) to permit            Waiver may continue when used
worker training                local areas to use a portion of local funds for   in support of activities funded
                               incumbent worker training                         through obligated WIA funds.

Rapid Response funds for       Waiver of WIA Section 134(a)(1)(A) to             Waiver may continue when used
incumbent worker training      permit a portion of the funds reserved for        in support of activities funded
                               rapid response activities to be used for          through obligated WIA funds
                               incumbent worker training

Youth ITAs                     Waiver of the prohibition at 20 CFR 664.510       Waiver may continue when used
                               on the use of Individual Training Accounts        in support of activities funded
                               for older and out-of-school youth                 through obligated WIA funds.
Competitive Procurement for    Waiver of WIA Section 123 that requires that      Waiver may continue when used
Youth Elements                 providers of Youth program elements be            in support of activities funded
                               selected on a competitive basis                   through obligated WIA funds.
Common Measures                Waiver to permit the State to replace the         Approved waivers remain in
                               performance measures at WIA Section               place since new WIOA reporting
                               136(b) with the common measures                   requirements will not be fully
                                                                                 implemented until June 30,
                                                                                 2016.

OJT Credential Attainment       Waiver of the WIA regulations at 20 CFR           Approved waivers remain in
                                666.100 to exempt the State from including        place since new WIOA reporting
                                credential attainment outcomes for                requirements will not be fully
                                participants enrolled in on-the-job training in   implemented until June 30,
                                the credential performance measure                2016.
                                calculations
Alternative Seasonal            Waiver to permit WIA participants who enter       Only applies to Alaska.
Performance Measure             seasonal employment occupations to be             Approved waiver will remain in
                                counted in an alternative format for              place since new WIOA reporting
                                performance measures at WIA Section               requirements will not be fully
                                136(b)(2)(A)(i)(II) and 20 CFR 666.140            implemented until June 30,
                                                                                  2016.
WIASARD Element for             Waiver to allow States to discontinue             Approved waivers remain in
Incumbent Worker Training       collection of 7 WIASRD data elements for          place since new WIOA reporting
                                incumbent workers                                 requirements will not be fully
                                                                                  implemented until June 30,
                                                                                  2016.
Local Area Performance          Waiver of WIA Section 136(c) to                   Approved waivers remain in
Measure Indicators and          allow greater flexibility when contracting        place since new WIOA reporting
Methodology                     performance measures with local workforce         requirements will not be fully
                                boards. The waiver permits the State to use       implemented until June 30,
                                Local Board-contracted measures that              2016.
                                support integration. Under this waiver, the
                                State continues to meet applicable State
                                performance requirements at WIA Section
                                136(b).
State Board as Local Board      Waiver of WIA regulations at 20 CFR               Waiver will continue through
                                661.300(f) to allow the State Board to carry      June 30, 2016.
                                out the roles of a Local Board
Board Membership                Waiver of the State Workforce Board               Only applies to Rhode Island.
                                membership requirements at WIA Section            Waiver no longer necessary.
                                111(b)                                            WIOA requires the appointment
                                                                                  of representatives from each
                                                                                  house of the State legislature in
                                                                                  accordance with State law.
ETPL Initial Eligibility        Waiver of the provision at 20 CFR 663.530         Waiver expires on June 30,
                                that prescribes a time limit on the period of     2015.
                                initial eligibility for training providers
One-Stop Intake                 Waiver of WIA regulations 20 CFR                  Waiver will continue through
                                662.240(b)(10) to allow One-Stop Career           June 30, 2016.
                                Center staff to perform intake and eligibility
                                determination for additional programs.
Required Statewide Activities   Waiver of WIA Sections 129(b)(2) and              Waiver expires on July 1, 2015.
                                134(b)(2) to exempt the State from some
                                statewide activities.

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Reallocation Waiver   Waiver of the reallocation provisions at WIA   Only applies to Texas. Waiver
                      Sections 128(c)(2) and 133(c)(2), and 20       will continue through June 30,
                      CFR 667.160(b). This waiver provides the       2016.
                      State with greater discretions when
                      reallocating recaptured funds.

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