TAA consequences of withdrawing from approved training

CLASSIFICATION
      EMPLOYMENT AND TRAINING ADMINISTRATION                       Office of Trade Adjustment Assistance
                  ADVISORY SYSTEM                                  CORRESPONDENCE SYMBOL
             U.S. DEPARTMENT OF LABOR                              OTAA
                Washington, D.C. 20210                             DATE
                                                                   January 7, 2021

ADVISORY:            TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 11-20

TO:                  STATE WORKFORCE AGENCIES
                     STATE WORKFORCE LIAISONS
                     AFFILIATE AMERICAN JOB CENTER MANAGERS
                     COMPREHENSIVE AMERICAN JOB CENTER MANAGERS
                     STATE WORKFORCE ADMINISTRATORS
                     STATE AND LOCAL WORKFORCE BOARD CHAIRS AND DIRECTORS
                     STATE LABOR COMMISSIONERS
                     STATE UI DIRECTORS
                     TRADE ADJUSTMENT ASSISTANCE LEADS

FROM:                JOHN PALLASCH
                     Assistant Secretary

SUBJECT:             Guidance on Trade-Affected Workers’ Withdrawal from Approved Training
                     under the Trade Adjustment Assistance (TAA) Program

1. Purpose. To bring attention to the requirements of the TAA Program regulations as they
   relate to the withdrawal of a trade-affected worker from approved training.

2. Action Requested. State Workforce Agencies (SWAs or states) are asked to distribute this
   information to the appropriate state and local staff; update policies and procedures to align
   with the requirements of the regulations described in this guidance; and advise trade-affected
   workers of the potential impacts of voluntarily withdrawing from approved training.
   Potential impacts include the loss of eligibility for Trade Readjustment Allowances (TRA),
   and the worker’s requirement to be financially liable for repayment of the portion of the
   approved training that was not completed.

3. Summary and Background.

      a. Summary – The TAA Program provides a wide array of reemployment services to trade-
         affected workers, including training. About fifty percent of TAA Program participants
         enroll in approved training each fiscal year (FY), however, in FY 2019, only seventy-five
         percent of participants completed their approved training. This means that nearly one in
         four participants that enrolled in training did not complete the training. Employment
         outcomes for participants that complete their approved training and receive a credential
         are significantly higher than those that do not complete their approved training.1
1
    Trade Adjustment Assistance for Workers Program FY 2019 Annual Report to Congress

    RESCISSIONS                                                    EXPIRATION DATE
    None                                                           Continuing

   b. Background – The Employment and Training Administration (ETA) published a Final
      Rule implementing the Trade Adjustment Assistance Reauthorization Act of 2015 on
      August 21, 2020, (85 FR 51896). The TAA Final Rule is codified at 20 CFR part 618
      and became effective on September 21, 2020. Voluntary withdrawal from approved
      training, covered at Section 618.645, requires that if certain conditions are met an
      overpayment must be established, and the participant must repay the costs of the non-
      completed portion of approved training. This requirement is not new, it was also
      contained in the previous regulations under 20 CFR part 617. However, during training
      provided by the Department on the TAA Final Rule, it became clear that many states
      were not familiar with or were not enforcing this requirement.

4. Withdrawal from Approved Training.

   a. Notification to Workers: States must advise a worker who chooses to withdraw from
      approved training that choosing to do so may result in the establishment of an
      overpayment under 20 CFR 618.832 of the TAA Program regulations if there is not good
      cause for the withdraw. If an overpayment is established and collection is not waived as
      outlined below, the participant would be financially liable for repayment of the portion of
      the approved training that was not completed. In addition, States must also advise such a
      worker that a withdrawal may also negatively impact their eligibility for TRA. For
      instance, a worker receiving Additional or Completion TRA would no longer be eligible
      for TRA since they are no longer participating in training.

   b. Exception for Uniformed Services: The TAA Program regulations, at 20 CFR
      618.645(b), provide an exception for trade-affected workers who performed a period of
      service in the Uniformed Services and had to withdraw from approved training to meet
      their service obligations. The regulations allow the worker to resume training or begin a
      new training program, if needed.

   c. Justifiable Cause: There are also provisions in the TAA Program regulations, at 20
      CFR 618.780(b)(3)(iii), where a worker may have justifiable cause for withdrawing from
      approved training. In general, these are situations where the worker, although having
      acted diligently, was unable to complete the training. A trade-affected worker might
      withdraw from training for reasons other than obtaining employment. Determinations of
      whether the worker had good cause to withdraw from training are made in compliance
      with applicable State law on a case-by-case basis.

   d. Job Search and Relocation Allowances: A worker who withdraws from approved
      training may receive job search and relocation allowances if they are otherwise eligible.

   e. Continuing Training After Obtaining Employment: A trade-affected worker who
      obtains suitable employment before training is completed may choose to continue in the
      approved training, but must continue to satisfactorily meet any training benchmarks
      established under 20 CFR 618.660. If a worker chooses to continue their approved
      training, the state must determine whether the training program needs to be amended, and

   must discuss with the worker whether continuing in the approved training furthers the
   worker’s employment goals.

f. Withdrawing from Training After Obtaining Employment: A trade-affected worker
   may decide to not continue or complete a training program if they become reemployed.
   For many workers, employment will limit the time available to attend training and
   therefore prevent the worker from completing training. In this scenario, the worker would
   likely have good cause – established at 20 CFR 618.730 – for not completing the training.
   However, determinations of the applicability of good cause are made on a case-by-case
   basis, and a state may find that good cause does not exist where circumstances support
   such a finding.

g. Overpayments: Rules and requirements of overpayments are established at 20 CFR
   618.832. States must waive repayment if the payment was made without fault of the
   participant and requiring repayment would cause a financial hardship. As provided at 20
   CFR 618.832(a)(3), “A financial hardship exists if recovery of the overpayment would
   result in the person’s (or the person’s household’s) loss of or inability to pay for ordinary
   and necessary living expenses.” If the conditions for a waiver of an overpayment are not
   met, the participant would be liable for repayment, which could be recovered from offsets
   of other payments under the TAA Program, Unemployment Insurance (UI), or other
   federal laws administered by the states, subject to the provisions at 20 CFR 618.832(e).

h. Importance of Quality Assessments and Labor Market Information: According to
   TAA Program data, 75 percent of workers who enroll in training complete their training.
   Quality assessments and a review of labor market information are vital to ensuring that a
   decision to approve a training plan meets the criteria established at 20 CFR 618.610 are
   essential to maximizing training completion. This includes the determination that there is
   no suitable employment available to the worker, as further discussed in TEGL No. 03-20
   Determining the Availability of Suitable Employment Under the Trade Adjustment
   Assistance (TAA) Program’s Final Rule to Return Trade-Affected Workers to
   Employment as Quickly as Possible. In some instances, it is later determined that a
   worker could have obtained the new employment without ever having received training.
   Although there are many reasons why a worker might become employed in an occupation
   different than that they were training for, high quality assessments combined with
   actionable labor market information will help reduce this. States should focus on the
   provision of quality assessments, case management, and a review of labor market
   information prior to the approval of training.

i. Ongoing Employment and Case Management Services: The regulations, at 20 CFR
   618.360, explicitly require the provision of employment and case managements services
   to workers enrolled in training. Part of the justification for this requirement is to require
   counselors to monitor the progress of workers enrolled in training, to determine if an
   amendment to the training program is needed, and to assist the worker in their work
   search efforts while still participating in training. Activities related to job search should
   increase as the worker nears the scheduled completion of training. This will help ensure
   that there is a limited gap – if any – between the completion of training and employment.

       These ongoing services will also determine if there is a need to modify the training
       program due to the benchmarks established under 20 CFR 618.660 and changing labor
       market conditions that might necessitate a change in occupational goals or industry focus.

   j. Program Monitoring by States: As established at 20 CFR 618.860(d)(2)(i), states must
      conduct regular oversight and monitoring of it’s the TAA program, determine that
      expenditures have been appropriate, and ensure compliance with the statute, the
      regulations, and administrative guidance. The Governor-Secretary Agreement executed
      under 20 CFR 618.804 requires that this review include “a sample of worker files to
      ensure effective and efficient operation and administration of the program.” If, during a
      review of these files, it is determined that a worker withdrew from training, the state must
      follow up to determine if a determination was made on whether the worker had good
      cause for withdrawing from the training and whether or not an overpayment should have
      been established. States should also use this opportunity to review the quality of
      employment and case management services – notably assessments – rendered by service
      providers. If the state determines that the quality of services do not meet the standards of
      the TAA Program, corrective action should be required and questioned costs established,
      if appropriate.

   k. Oversight by the Department: The Department, through the Regional Offices, also
      conducts oversight of the TAA Program. This oversight includes a review of
      administrative, financial, and programmatic information – including case files. From
      time to time, the Department also conducts a review of redeterminations and appeals
      rendered through the state unemployment insurance adjudication process. In its reviews,
      the Department will explore the quality of assessments and services, appropriateness of
      training and benefit determinations, and outcomes. If the Department determines that the
      state has not ensured the provision of quality services or if inappropriate determinations
      have been made, in addition to any findings that may be issued, the Department may also
      establish questioned costs.

5. Inquiries. Please direct inquiries to the appropriate Regional Office.

6. References.
    Chapter 2 of Title II of the Trade Act of 1974, as amended (Pub. L. 93-618) (Trade Act)
      (codified at 19 U.S.C. §§ 2271 et seq.);
    TAA Final Rule, 20 CFR Part 618, 85 FR 51896 (August 21, 2020);
    TEGL No. 03-20, Determining the Availability of Suitable Employment Under the Trade
      Adjustment Assistance (TAA) Program’s Final Rule to Return Trade-Affected Workers to
      Employment as Quickly as Possible
    Agreement Between the Governor and Secretary of Labor, United States Department of
      Labor, to Carry Out the Provisions of Subchapters A, B, and C of Chapter 2 of Title II of
      the Trade Act of 1974, as amended by the Trade Adjustment Assistance Reauthorization
      Act of 2015

7. Attachment(s). None