OJT and Customized Training Qs and As

Local Board Policies on OJT and Customized Training
(Items to be Considered)
Updated 9/11/02

1. Q How does the Workforce Investment Act define OJT?

A OJT refers to training by an employer that is provided to a paid participant while engaged in productive work in a job that: provides knowledge or skills essential to the full and adequate performance of the job; provides reimbursement to the employer of up to 50% of the wage rate of the participant for the extraordinary costs of providing the training and additional supervision related to the training; is limited in duration as appropriate to the occupation for which the participant is being trained taking into account the content of the training, the prior work experience of the participant, and the service strategy of the participant, as appropriate.

2. Q How does the Workforce Investment Act define Customized Training?

A Customized Training means training: that is designed to meet the special requirements of an employer or group of employers; is conducted with a commitment by the employer to employ an individual on successful completion of the training; for which the employer pays for not less than 50% of the cost of the training.

3. Q What are the requirements for OJT contracts for employed workers?

A OJT contracts may be written for eligible employed workers when: the employee is not earning a self-sufficient wage as determined by Local Board policy; the employer has not previously exhibited a pattern of failing to provide OJT participants with continued long term employment with wages, benefits, and working conditions equal to regular employees doing similar work for a similar length of time; the OJT relates to the introduction of new technologies, introduction to new production or service procedures, upgrading to new jobs that require additional skills, workplace literacy, or other appropriate purposes identified by the Local Board. The OJT contract should take into consideration the skill requirements of the occupation, the academic and occupational skill level of the participant, prior work experience, and the participant's individual employment plan. All workers will not have the same skills, therefore, their individual OJT contracts should not have the same curriculum or duration.

4. Q What are the requirements for customized training for employed workers?

A Customized Training of an eligible employed individual may be provided for an employer or group of employers when: the employee is not earning a self-sufficient wage as determined by Local Board policy; the requirements described in the definition of Customized Training under WIA are met; the customized training relates to the introduction of new technologies, introduction to new production or service procedures, upgrading to new jobs that require additional skills, workplace literacy, or other appropriate purposes identified by the Local Board.

5. Q What additional guidance has the State given regarding OJT and Customized Training?

A Workforce Development System Technical Advisory 01-5 provides guidance to local areas on the types of costs that may be covered as part of a program of customized training. The guidance indicates that the 50% share of the cost of the training could include such elements as: cost of the instruction, cost of the instructor, cost of curriculum development associated with the training course, training materials and books as needed for the course, etc. The wages of the employees being trained while they are participating in customized training may be used towards meeting the match requirement for the training but may not be paid for with WIA funds. The purchase of equipment, administration and the renovation of facilities are not allowable costs.

6. Q What is the Local Board's definition of “Self-Sufficiency” and how does that impact its' ability to develop OJT and Customized Training programs?

A A Local Board may need to re-think the manner in which it has defined “self-sufficiency” to allow it to meet the local economic development needs and the needs of its business customers. Self-sufficiency standards that are set too low or that are tied into family income levels may preclude the ability to provide needed training based on the need of the business. A policy which is tied directly to a wage rate for the individual participant and is set sufficiently high to allow businesses to address the needs of their incumbent workers may go farther towards meeting the economic development needs of the local area. The Department is not advocating one method over another, rather we seek to point out that a Local Board needs to think through its objectives and how this ties to the nine policy questions (i.e. a board could spend all of its resources on customized training and OJT and thus not be spending anything on pre-employment and that too has implications).

7. Q What requirements should the Local Board address with respect to the type and length of training for OJT and Customized Training contracts?

A There is no one size fits all answer to this question. A Local Board may want to set varying lengths based on the occupation and type of training involved. While training should be specific to the needs of the employer, it should also include skills that are transferable to other work settings. Training is intended to enable participants to enter high skill, demand occupations that will contribute to economic stability and self-sufficiency.

8. Q Does the Board want to target specific industry sectors or focus on skills common across various industry sectors?

A Again this is question that must be answered in light of the local area's economic development policies. The Local Board must determine whether there exists a strong need to target funds to specific industries and occupations. The Local Board will also need to determine what level of resources (both WIA and non-WIA) will be available to support these efforts. Depending on the level of need for WIA funds to support the other services (core, intensive, supportive, ITA training) and costs of the system, the availability of WIA funds for OJT and Customized Training programs may be severely limited. The leveraging of other partner's funds is needed to support these efforts. Part of the Local Board's job is to create a system in which the Local Board develops policies in conjunction with the partners and the partners resources being able to support the policies.

9. Q What performance requirements may the Local Board want to consider for its OJT and Customized Training programs?

A The Local Board may want to consider minimum starting wage rates for individuals to be trained under OJT and Customized Training programs. This type of training may not be appropriate for entry level/minimum wage type positions unless there is a wage gain guaranteed after completion of training or a career ladder is being established. For incumbent workers, the Board may want to adopt minimum wage gain levels (either dollar or percentage increases) for participants upon successful completion of training. The Board may also wish to adopt retention requirements for these programs.

10. Q What dollar limits (if any) should the Local Board consider for individuals and companies participating in these programs?

A The Local Board will need to determine if it wants to set specific dollar limits on the cost of training that can be provided per individual participant and whether to limit the amount of training related dollars a company may receive during the year. For Customized Training programs, does the Local Board want to establish dollar limits on cost categories such as supplies and materials, costs of instructors or training consultants, etc…

11. Q What other requirements related to the companies participating in these programs should the Local Board consider adopting?

A Companies participating in OJT programs must have a positive track record if they have utilized these services in prior periods. Companies should be able to demonstrate continued employment for individuals previously provided training in this manner. Temporary Employment Agencies should not be the employer of record for a company's training participants.

12. Q Will these services be actively marketed and if so, by whom?

A The Local Board will need to decide whether to publicize these services to the community at large or targeted sectors of the community. The roles of the Local Board, its staff, the One-Stop Operators and partner staff must be clearly articulated in this process.

13. Q What processes need to be in place to review and approve requests for OJT and Customized Training programs?

A The Local Board or its staff may want to have a role in the review and approval of applications for these services or delegate this authority to the One-Stop Operator. Individuals to be provided these services utilizing WIA formula funds must be registered in WIA and must receive a core and an intensive service and be determined to still need the proposed training to attain or retain employment that leads to self-sufficiency. The Local Board should develop a specific process for the One-Stop Operator to follow for each participant in these programs and the types of core and intensive services that should initially be provided.

14. Q What core and intensive services are required to be provided to a WIA funded individual prior to their participation in an OJT program.

A Since the goal of an OJT is to bridge the gap between a trainee's qualifications and the normal hiring criteria for an occupation, the customer must have a complete assessment of their skills documented in an IEP. Likewise, the potential OJT occupation must be analyzed for the skills required to do the job, through a task analysis. There must be a specific identification of the skills discrepancy between what skills the customer currently has and what the job requires.

15. Q What are the procurement requirements regarding the development of OJT and Customized Training contracts with businesses and individuals?

A Each local area has its own local procurement guidelines and limits that it must adhere to. A local area may choose to develop an RFP/RFA that continually seeks proposals from the business community at large or specific segments or industries within the community. A local area may also choose to narrow the types of occupations and establish requirements for certain wage levels or career ladders within this same RFP/RFA. Under this type of arrangement, the local area could establish a pool of funding and fund eligible applicants who meet the minimum criteria established on a first come first serve basis. The local area may choose to conduct a more traditional RFP that seeks to fund projects through a one-time competitive process. The local area may also be able to establish contracts directly with companies and individuals within their own locally established dollar limits for non-competitive contracts.

16. Q What are the requirements regarding the development of OJT and Customized Training contracts with businesses that have recently relocated into a local area?

A WIA funds may not be used for OJT and Customized Training contracts with businesses that have relocated from any location in the United States, until the company has operated at that new location for 120 days, if the relocation has resulted in any employee losing his or her job at the original location.

17. Q How does a local area demonstrate adherence with the above requirement for their OJT and Customized Training contracts?

A To verify that a business is not relocating employment from another area, a pre-award review must be undertaken and documented by the local area. The review must include the names under which the establishment conducts business, including predecessors and successors in interest; the name, title and address of the company official certifying the information, and whether WIA assistance is being sought in connection with past or impending job losses at other facilities. The pre-award review should also include a review of whether WARN notices relating to the employer have been filed. The review may also include consultations with labor organizations and others in the affected local area(s).

1.	Q	How does the Workforce Investment Act define OJT?
	A	OJT refers to training by an employer that is provided to a paid participant while engaged in productive work in a job that: provides knowledge or skills essential to the full and adequate performance of the job; provides reimbursement to the employer of up to 50% of the wage rate of the participant for the extraordinary costs of providing the training and additional supervision related to the training; is limited in duration as appropriate to the occupation for which the participant is being trained taking into account the content of the training, the prior work experience of the participant, and the service strategy of the participant, as appropriate.

2.	Q	How does the Workforce Investment Act define Customized Training?
	A	Customized Training means training: that is designed to meet the special requirements of an employer or group of employers; is conducted with a commitment by the employer to employ an individual on successful completion of the training; for which the employer pays for not less than 50% of the cost of the training.

3.	Q	What are the requirements for OJT contracts for employed workers?
	A	OJT contracts may be written for eligible employed workers when: the employee is not earning a self-sufficient wage as determined by Local Board policy; the employer has not previously exhibited a pattern of failing to provide OJT participants with continued long term employment with wages, benefits, and working conditions equal to regular employees doing similar work for a similar length of time; the OJT relates to the introduction of new technologies, introduction to new production or service procedures, upgrading to new jobs that require additional skills, workplace literacy, or other appropriate purposes identified by the Local Board. The OJT contract should take into consideration the skill requirements of the occupation, the academic and occupational skill level of the participant, prior work experience, and the participant's individual employment plan. All workers will not have the same skills, therefore, their individual OJT contracts should not have the same curriculum or duration.

4.	Q	What are the requirements for customized training for employed workers?
	A	Customized Training of an eligible employed individual may be provided for an employer or group of employers when: the employee is not earning a self-sufficient wage as determined by Local Board policy; the requirements described in the definition of Customized Training under WIA are met; the customized training relates to the introduction of new technologies, introduction to new production or service procedures, upgrading to new jobs that require additional skills, workplace literacy, or other appropriate purposes identified by the Local Board.

5.	Q	What additional guidance has the State given regarding OJT and Customized Training?
	A	Workforce Development System Technical Advisory 01-5 provides guidance to local areas on the types of costs that may be covered as part of a program of customized training. The guidance indicates that the 50% share of the cost of the training could include such elements as: cost of the instruction, cost of the instructor, cost of curriculum development associated with the training course, training materials and books as needed for the course, etc. The wages of the employees being trained while they are participating in customized training may be used towards meeting the match requirement for the training but may not be paid for with WIA funds. The purchase of equipment, administration and the renovation of facilities are not allowable costs.

6.	Q	What is the Local Board's definition of “Self-Sufficiency” and how does that impact its' ability to develop OJT and Customized Training programs?
	A	A Local Board may need to re-think the manner in which it has defined “self-sufficiency” to allow it to meet the local economic development needs and the needs of its business customers. Self-sufficiency standards that are set too low or that are tied into family income levels may preclude the ability to provide needed training based on the need of the business. A policy which is tied directly to a wage rate for the individual participant and is set sufficiently high to allow businesses to address the needs of their incumbent workers may go farther towards meeting the economic development needs of the local area. The Department is not advocating one method over another, rather we seek to point out that a Local Board needs to think through its objectives and how this ties to the nine policy questions (i.e. a board could spend all of its resources on customized training and OJT and thus not be spending anything on pre-employment and that too has implications).

7.	Q	What requirements should the Local Board address with respect to the type and length of training for OJT and Customized Training contracts?
	A	There is no one size fits all answer to this question. A Local Board may want to set varying lengths based on the occupation and type of training involved. While training should be specific to the needs of the employer, it should also include skills that are transferable to other work settings. Training is intended to enable participants to enter high skill, demand occupations that will contribute to economic stability and self-sufficiency.

8.	Q	Does the Board want to target specific industry sectors or focus on skills common across various industry sectors?
	A	Again this is question that must be answered in light of the local area's economic development policies. The Local Board must determine whether there exists a strong need to target funds to specific industries and occupations. The Local Board will also need to determine what level of resources (both WIA and non-WIA) will be available to support these efforts. Depending on the level of need for WIA funds to support the other services (core, intensive, supportive, ITA training) and costs of the system, the availability of WIA funds for OJT and Customized Training programs may be severely limited. The leveraging of other partner's funds is needed to support these efforts. Part of the Local Board's job is to create a system in which the Local Board develops policies in conjunction with the partners and the partners resources being able to support the policies.

9.	Q	What performance requirements may the Local Board want to consider for its OJT and Customized Training programs?
	A	The Local Board may want to consider minimum starting wage rates for individuals to be trained under OJT and Customized Training programs. This type of training may not be appropriate for entry level/minimum wage type positions unless there is a wage gain guaranteed after completion of training or a career ladder is being established. For incumbent workers, the Board may want to adopt minimum wage gain levels (either dollar or percentage increases) for participants upon successful completion of training. The Board may also wish to adopt retention requirements for these programs.

10.	Q	What dollar limits (if any) should the Local Board consider for individuals and companies participating in these programs?
	A	The Local Board will need to determine if it wants to set specific dollar limits on the cost of training that can be provided per individual participant and whether to limit the amount of training related dollars a company may receive during the year. For Customized Training programs, does the Local Board want to establish dollar limits on cost categories such as supplies and materials, costs of instructors or training consultants, etc…

11.	Q	What other requirements related to the companies participating in these programs should the Local Board consider adopting?
	A	Companies participating in OJT programs must have a positive track record if they have utilized these services in prior periods. Companies should be able to demonstrate continued employment for individuals previously provided training in this manner. Temporary Employment Agencies should not be the employer of record for a company's training participants.

12.	Q	Will these services be actively marketed and if so, by whom?
	A	The Local Board will need to decide whether to publicize these services to the community at large or targeted sectors of the community. The roles of the Local Board, its staff, the One-Stop Operators and partner staff must be clearly articulated in this process.

13.	Q	What processes need to be in place to review and approve requests for OJT and Customized Training programs?
	A	The Local Board or its staff may want to have a role in the review and approval of applications for these services or delegate this authority to the One-Stop Operator. Individuals to be provided these services utilizing WIA formula funds must be registered in WIA and must receive a core and an intensive service and be determined to still need the proposed training to attain or retain employment that leads to self-sufficiency. The Local Board should develop a specific process for the One-Stop Operator to follow for each participant in these programs and the types of core and intensive services that should initially be provided.

14.	Q	What core and intensive services are required to be provided to a WIA funded individual prior to their participation in an OJT program.
	A	Since the goal of an OJT is to bridge the gap between a trainee's qualifications and the normal hiring criteria for an occupation, the customer must have a complete assessment of their skills documented in an IEP. Likewise, the potential OJT occupation must be analyzed for the skills required to do the job, through a task analysis. There must be a specific identification of the skills discrepancy between what skills the customer currently has and what the job requires.

15.	Q	What are the procurement requirements regarding the development of OJT and Customized Training contracts with businesses and individuals?
	A	Each local area has its own local procurement guidelines and limits that it must adhere to. A local area may choose to develop an RFP/RFA that continually seeks proposals from the business community at large or specific segments or industries within the community. A local area may also choose to narrow the types of occupations and establish requirements for certain wage levels or career ladders within this same RFP/RFA. Under this type of arrangement, the local area could establish a pool of funding and fund eligible applicants who meet the minimum criteria established on a first come first serve basis. The local area may choose to conduct a more traditional RFP that seeks to fund projects through a one-time competitive process. The local area may also be able to establish contracts directly with companies and individuals within their own locally established dollar limits for non-competitive contracts.

16.	Q	What are the requirements regarding the development of OJT and Customized Training contracts with businesses that have recently relocated into a local area?
	A	WIA funds may not be used for OJT and Customized Training contracts with businesses that have relocated from any location in the United States, until the company has operated at that new location for 120 days, if the relocation has resulted in any employee losing his or her job at the original location.

17.	Q	How does a local area demonstrate adherence with the above requirement for their OJT and Customized Training contracts?
	A	To verify that a business is not relocating employment from another area, a pre-award review must be undertaken and documented by the local area. The review must include the names under which the establishment conducts business, including predecessors and successors in interest; the name, title and address of the company official certifying the information, and whether WIA assistance is being sought in connection with past or impending job losses at other facilities. The pre-award review should also include a review of whether WARN notices relating to the employer have been filed. The review may also include consultations with labor organizations and others in the affected local area(s).

Local Board Policies on OJT and Customized Training (Items to be Considered)Updated 9/11/02

Local Board Policies on OJT and Customized Training
(Items to be Considered)
Updated 9/11/02