Corrected WIOA Program Year 2015 allotment guidance

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                                                       CLASSIFICATION
         EMPLOYMENT AND TRAINING                       WIOA/Wagner-Peyser
      ADMINISTRATION ADVISORY SYSTEM                   CORRESPONDENCE SYMBOL
         U.S. DEPARTMENT OF LABOR                      OWI
              Washington, D.C. 20210                   DATE
                                                       September 1, 2015

ADVISORY: TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 29-14,
          CHANGE 2

TO:               STATE WORKFORCE AGENCIES
                  ALL STATE WORKFORCE LIAISONS

FROM:             PORTIA WU /s/
                  Assistant Secretary

SUBJECT:          Update to Workforce Innovation and Opportunity Act (WIOA) Adult,
                  Dislocated Worker and Youth Activities Program Allotments for Program
                  Year (PY) 2015; Final PY 2015 Allotments for the Wagner-Peyser Act
                  Employment Service Program Allotments; and Workforce Information
                  Grants to States Allotments for PY 2015.

1. Purpose. To inform the workforce investment system of changes to previous guidance to
   TEGL 29-14, Change 1. One change corrects the Executive Level II salary cap to $183,300
   and is in the Background section on page 2. The second change makes four corrections to
   Attachment A and is underlined on the Attachment. The remainder of the TEGL remains
   unchanged.

2. References.
    • Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L. 113-235)
    • Balanced Budget and Emergency Deficit Control Act, as amended (Title II of Pub. L.
       99-177)
    • Budget Control Act of 2011 (Pub. L. 112-25)
    • TEGL 21-12, Updated Economically Disadvantaged Youth and Adult Data for use in
       Program Year (PY) 2013 and future Workforce Investment Act (WIA) Youth and Adult
       Within-State Allocation Formulas
    • Workforce Innovation and Opportunity Act of 2014, Public Law 113-128, as amended
    • Wagner-Peyser Act, as amended (29 U.S.C. 49 et seq.)
    • LAUS Technical Memorandum No. S-14-22.

     RESCISSIONS                                     EXPIRATION DATE
     None                                            Continuing

                                               2

3. Background. On December 16, 2014, the Consolidated and Further Continuing
   Appropriations Act, 2015, Pub. L. 113-235 was signed into law (from this point forward,
   referred to as “the Act”). The Act, Division G, Title I, Section 107, allows the Secretary of
   Labor to set aside up to 0.5 percent of most operating funds. The evaluation provision is
   consistent with the Federal government’s priority on evidence-based policy and
   programming and provides important opportunities to expand evaluations and
   demonstrations in the Department to build solid evidence about what works best. In the past,
   funds for the Employment and Training Administration (ETA) evaluations and
   demonstrations were separately appropriated and managed by ETA. Like last year, that
   separate authority has been replaced by the set aside provision. Funds are transferred to the
   Department’s Chief Evaluation Office to implement formal evaluations and demonstrations
   in collaboration with ETA. For 2015, the Secretary set aside .25 percent of the Training and
   Employment Services (TES) and State Unemployment Insurance and Employment Services
   Operations (SUIESO) appropriations. ETA spread the amount to be set aside for each
   appropriation among the programs funded by that appropriation with more than $100 million
   in funding. This includes WIOA Adult, Youth and Dislocated Worker and Wagner-Peyser
   Employment Service program budgets.

   The WIOA Youth grants are funded through a single appropriation and the evaluation
   reductions were applied to the PY 2015 appropriated level. The 2015 Youth activities funds
   became available for obligation on April 1, 2015. However, the Act funds the WIOA Adult
   and Dislocated Worker programs in two separate appropriations. The first becomes available
   for obligation on July 1, 2015; this portion is commonly referred to as the “base” funds. The
   second becomes available for obligation on October 1, 2015; this portion is commonly
   referred to as “advance” funds because they are provided in the appropriations act passed
   during the fiscal year immediately before the fiscal year when the funds are available. For
   example, funds for PY 2015 that will be made available on October 1, 2015 were
   appropriated during FY 2015, but not made available until FY 2016, and are called the FY
   2016 “advance.” Like last year, the reductions for evaluations from the WIOA Adult and
   Dislocated Worker programs were applied to the FY 2016 “advance” funding levels; “base”
   funding will be disseminated at the full amount appropriated in the Act.

   The Act also specifies the following provisions, which are applicable to utilization of the
   funds appropriated:
      • The Secretary may reserve not more than 10 percent of the Dislocated Worker
          National Reserve funds to provide technical assistance and carry out additional
          activities related to the transition to the WIOA.
      • Notwithstanding section 128(a)(1) of WIOA, the amount available for the Governor
          for Statewide workforce investment activities must not exceed 10 percent of the
          amount allotted to the State from each of the WIOA Youth, Adult, and Dislocated
          Worker, PY 2015 appropriations.
      • Salary caps are imposed under Pub. L.113-235, Division G, Title I, Section 105. No
          funds under the header “Employment and Training Administration” shall be used by a
          recipient or sub-recipient to pay the salary and/or bonus of an individual, either as
          direct costs or indirect costs, at a rate in excess of Executive Level II, currently
          $183,300. States also may establish lower salary caps. See TEGL 5-06.

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WIOA included the following additional change:
  • Per WIOA Section 133(b)(4), a local board may now transfer up to 100 percent of
     funds between the Adult and Dislocated Worker funding streams if approved by their
     Governor.

While the WIOA allotments for States are based on formula provisions contained in WIOA
(see Attachment A for WIOA and Wagner-Peyser formula descriptions), the WIOA
allotments for the outlying areas (e.g., American Samoa, Guam, Northern Marianas, Palau,
and the Virgin Islands) are now based on a competitive grant process (see WIOA sections
127(b)(1)(B)(ii), 132(b)(1)(A)(ii), and 132(b)(2)(A)(ii)). Using the transition authority
provided in WIOA Section 503(b), ETA will delay implementation of a competitive grant
process for outlying areas until PY 2016. For PY 2015, outlying area grant amounts will be
based on the administrative formula determined by the Secretary that was used under WIA.
The Marshall Islands and Micronesia receive funding from the Department of Education’s
appropriation rather than WIOA Title 1 funding (see WIOA section 512(g)(1) updates to the
Compact of Free Association Amendments of 2003, Pub. L. 108-188 (December 17, 2003),
codified at 48 U.S.C. 1921d(f)(1)(B)(iii)(the “Compact”). WIOA also updated the Compact
so that the Republic of Palau remained eligible for WIOA Title I funding. See 48
U.S.C.1921d(f)(1)(B)(ix). The Consolidated and Further Continuing Appropriations Act,
2015 (Division G, Title III, Section 306 of Pub. L. 113-235) authorized WIOA Title I
funding to Palau through FY 2015.

In addition to this TEGL, allotments and descriptions of the allotment formulas will be
published in the Federal Register.

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                                                                                                                                   Attachment A
                                                        U. S. Department of Labor
                                                  Employment and Training Administration

Workforce Innovation and Opportunity Act (WIOA) and Wagner-Peyser Act Statutory Formulas for State Allotments

State Allotment Formula Descriptions
WIOA Youth Activities
   Formula:
   1/3: State relative share of total unemployed in areas of substantial unemployment (ASU) (average 12 months ending 6/30)
   1/3: State relative share of excess unemployed (average 12 months ending 6/30)
   1/3: State relative share of economically disadvantaged youth (American Community Survey 2006-2010)
   Minimums:
   (a) If total amount available for States is $1 billion or less:
        State allotment cannot be less than
        (1) 90 percent of State relative share of prior year funding
        (2) 0.25 percent of total available funds for States
   (b) If total amount available for States exceeds $1 billion:
        State allotment cannot be less than
        (1) 90 percent of State relative share of prior year funding
        (2) 2014 allotment amount (Not applicable for Adult minimum)
        (3) 0.3 percent of first $1 billion plus 0.4 percent of amount over $1 billion
   Maximum:
   130% of State relative share of prior year funding
WIOA Adult Activities
   Same as Youth Activities, except
   (a) Formula uses economically disadvantaged ADULTS instead of YOUTH
   (b) Threshold for selecting minimum provisions is $960 million instead of $1 billion
WIOA Dislocated Workers
   Formula:
   1/3: State relative share of total unemployed (average 12 months ending 09/30)
   1/3: State relative share of excess unemployed (average 12 months ending 09/30)
   1/3: State relative share of long-term unemployed (average 12 months ending 09/30)
   Minimum: none in PY 2015
   Maximum: none in PY 2015
Employment Service (Wagner-Peyser Act)
    Formula for 97% of funds:
          2/3: State relative share of civilian labor force (average 12 months ending 9/30 (preliminary) or 12/31 (final))
          1/3: State relative share of total unemployment (average 12 months ending 9/30 (preliminary) or 12/31 (final))
          Minimums:
               (a) 90 percent of State relative share of prior year funding
               (b) 0.28 percent of total available funds for States
          Maximum:
    Distribution of 3% of funds:
          (1) States with civilian labor force below 1 million and under the national median civilian labor force density receive an amount
               which, when added to their share of the 97 percent portion, will result in an amount equal to 100 percent of their relative share of
               the prior year funding
          (2) Remaining States losing in relative share receive a share of the remaining funds prorated based on the amount needed to achieve
               100 percent of their relative share of prior year funding.

Formula Data Factor Definitions

WIOA Youth and Adults Programs
   ASU: contiguous areas with unemployment rate of 6.5 percent or more
   Excess unemployed: higher of:
      (1) excess unemployed (unemployment in excess of 4.5 percent) in ASU's; or
      (2) excess unemployed (unemployment in excess of 4.5 percent) in all areas
   Economically disadvantaged adults: individuals, age 22-72, meeting (or member of family meeting):
      Census poverty level or
       70 percent of lower living standard income level (LLSIL).
   Economically disadvantaged youth: individuals, age 16-21, meeting (or member of family meeting):
      Census poverty level or
       70 percent of lower living standard income level (LLSIL).

WIOA Dislocated Workers Program
   Excess unemployed: unemployment in excess of 4.5 percent
   Long-term unemployed: number unemployed 15 or more weeks

Employment Service (Wagner-Peyser) - Self-explanatory