Apprenticeship Programs, Labor Standards for Registration, Amendment of Regulations
| Published date | 11 March 2020 |
| Record Number | 2020-03605 |
| Section | Rules and Regulations |
| Court | Labor Department |
Federal Register, Volume 85 Issue 48 (Wednesday, March 11, 2020)
[Federal Register Volume 85, Number 48 (Wednesday, March 11, 2020)]
[Rules and Regulations]
[Pages 14294-14392]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-03605]
[[Page 14293]]
Vol. 85
Wednesday,
No. 48
March 11, 2020
Part II Department of Labor-----------------------------------------------------------------------29 CFR Part 29----------------------------------------------------------------------- Apprenticeship Programs, Labor Standards for Registration, Amendment
of Regulations; Final Rule
Federal Register / Vol. 85, No. 48 / Wednesday, March 11, 2020 /
Rules and Regulations
[[Page 14294]]
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DEPARTMENT OF LABOR
29 CFR Part 29
RIN 1205-AB85
Apprenticeship Programs, Labor Standards for Registration,
Amendment of Regulations
AGENCY: Employment and Training Administration, Labor.
ACTION: Final rule.
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SUMMARY: To address America's skills gap and to rapidly increase the
availability of high-quality apprenticeship programs in sectors where
apprenticeship opportunities are not widespread, the U.S. Department of
Labor (DOL or the Department) is issuing this final rule under the
authority of the National Apprenticeship Act (NAA). This final rule
establishes a process for the DOL's Office of Apprenticeship (OA)
Administrator (Administrator), or any person designated by the
Administrator, to recognize qualified third-party entities, known as
Standards Recognition Entities (SREs), which will, in turn, evaluate
and recognize Industry-Recognized Apprenticeship Programs (IRAPs). This
final rule describes what entities may become recognized SREs; outlines
the responsibilities and requirements for SREs, as well as the
standards of the high-quality Industry-Recognized Apprenticeship
Programs the SREs will recognize; and sets forth how the Administrator
will oversee SREs.
DATES: This final rule is effective May 11, 2020.
FOR FURTHER INFORMATION CONTACT: John V. Ladd, Administrator, Office of
Apprenticeship, U.S. Department of Labor, 200 Constitution Avenue NW,
Room C-5311, Washington, DC 20210; telephone (202) 693-2796 (this is
not a toll-free number).
Individuals with hearing or speech impairments may access the
telephone number above via TTY by calling the toll-free Federal
Information Relay Service at 1-800-877-8339.
SUPPLEMENTARY INFORMATION:
Preamble Table of Contents
I. Background
A. Purpose of This Regulation
B. Legal Authority
C. General Comments Received on the Notice of Proposed
Rulemaking
II. Section-by-Section Analysis of the Final Rule
A. Subpart A--Registered Apprenticeship Programs
B. Subpart B--Standards Recognition Entities of Industry-
Recognized Apprenticeship Programs
III. Agency Determinations
A. Executive Orders 12866 (Regulatory Planning and Review) and
13563 (Improving Regulation and Regulatory Review)
B. Regulatory Flexibility Act, Small Business Regulatory
Enforcement Fairness Act of 1996, and Executive Order 13272 (Proper
Consideration of Small Entities in Agency Rulemaking)
C. Paperwork Reduction Act
D. Executive Order 13132 (Federalism)
E. Unfunded Mandates Reform Act of 1995
F. Executive Order 13175 (Indian Tribal Governments)
I. Background
A. Purpose of This Regulation
On June 25, 2019, the Department published a Notice of Proposed
Rulemaking (NPRM) in the Federal Register (84 FR 29970), proposing to
amend 29 CFR part 29 (Labor Standards for the Registration of
Apprenticeship Programs) by authorizing the Administrator to recognize
SREs who meet the criteria outlined herein. These SREs would, in turn,
evaluate and recognize IRAPs \1\ that satisfied the standards and
guidelines for program quality described in the NPRM. The NPRM invited
written comments from the public concerning this proposed rulemaking.
These comments may be viewed at http://www.regulations.gov by entering
docket number ETA-2019-0005.
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\1\ In the NPRM for this regulation, the Department also
referred to industry-recognized apprenticeship programs as
``Industry Programs.'' In the text of this final rule, however, the
Department has opted to utilize the acronym ``IRAP'' to refer to
this new apprenticeship model.
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After careful consideration of the comments received, the
Department is adopting this final rule, which supplements the existing
system of registered apprenticeships with a flexible, industry-led
model--one that will be capable of rapidly increasing the availability
of apprenticeships in emerging, high-growth sectors.
Since its enactment, the Department has implemented the NAA by
registering individual apprenticeship programs and apprentices. The
registration of programs and apprentices occurs either directly under
the auspices of the Department's OA, or through recognized State
Apprenticeship Agencies (SAAs). While registered apprenticeships have
been successful in certain sectors, in particular construction and its
allied trades, the existing registered apprenticeship model has not
increased the availability of apprenticeships in other rapidly-
expanding sectors of the economy. The proportion of apprentices
constitutes only about 0.2 percent of the U.S. workforce.\2\
Additionally, a 2017 Harvard Business School study identified nearly 50
occupations as ripe for apprenticeship expansion.\3\
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\2\ See Robert I. Lerman, ``Proposal 7: Expanding Apprenticeship
Opportunities in the United States,'' The Hamilton Project,
Brookings Institution, 2014, http://ow.ly/UlDmN.
\3\ Joseph B. Fuller and Matthew Sigelman, ``Room to Grow:
Identifying New Frontiers for Apprenticeships,'' Nov. 2017, 3,
https://www.hbs.edu/managing-the-future-of-work/Documents/room-to-grow.pdf.
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The United States is also experiencing an economic challenge: a
discrepancy between the occupational competencies that businesses need
and the job skills of aspiring workers. There were 6.4 million job
openings in the United States at the end of 2019.\4\ Some of these jobs
are going unfilled because employers have not been able to locate
enough workers with the skills required to perform them. This pervasive
skills gap has posed a serious impediment to job growth and
productivity.\5\ A recent report issued by the National Federation of
Independent Businesses reinforced that a shortage of qualified, skilled
workers is inhibiting small business hiring growth.\6\ Another recent
report produced jointly by Deloitte and the Manufacturing Institute
projected that the skills gap may leave an estimated 2.4 million
positions unfilled in the manufacturing sector between 2018 and 2028,
placing more than $2.5 trillion in U.S. manufacturing output at risk
during that period, if the skills shortage is not addressed
effectively.\7\
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\4\ U.S. Bureau of Labor Statistics (BLS), ``Job Openings and
Labor Turnover--December 2019,'' Feb. 11, 2020, https://www.bls.gov/news.release/archives/jolts_02112020.pdf.
\5\ See, e.g., Task Force on Apprenticeship Expansion, ``Final
Report to the President of the United States,'' May 10, 2018, 16
(citing 2018 report from National Federation of Independent
Business); Business Roundtable, ``Closing the Skills Gap,'' https://www.businessroundtable.org/policy-perspectives/education-workforce/closing-the-skills-gap (last visited Dec. 7, 2019); cf. Deloitte and
the Manufacturing Institute, ``2018 Deloitte and The Manufacturing
Institute Skills Gap and Future of Work Study,'' Nov. 2018, 2
(estimating manufacturing jobs that may go unfilled due to skills
gap), http://www.themanufacturinginstitute.org/~/media/
E323C4D8F75A470E8C96D7A07F0A14FB/
DI_2018_Deloitte_MFI_skills_gap_FoW_study.pdf.
\6\ See National Federation of Independent Businesses,
``September 2019 Jobs Report,'' Sept. 2019, https://www.nfib.com/foundations/research-center/monthly-reports/jobs-report/.
\7\ Deloitte and the Manufacturing Institute, ``2018 Deloitte
and The Manufacturing Institute Skills Gap and Future of Work
Study,'' Nov. 2018, 3-5.
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In their comments on the NPRM, several industry groups highlighted
that the skills gap has led to a lack of qualified candidates, which
has stalled business growth and undermined competitiveness in the
global marketplace. Another commenter stated
[[Page 14295]]
that failure to close the skills gaps ``risks ceding U.S. technology
leadership to other countries, with broad consequences for our nation's
economic [sic] and even national security.'' Other commenters stated
that they recognize the need for an expanded, well-crafted
apprenticeship program in order to address the skills gap in multiple
industries. A member of Congress also commented that IRAPs will equip
additional Americans with the necessary skills to contribute to and
benefit from a prosperous economy.
In light of these challenges, in January 2017--within days of
assuming office--President Donald J. Trump and his Administration began
promoting apprenticeships as a critical component of addressing the
skills gap. On June 15, 2017, President Trump signed Executive Order
(E.O.) 13801, ``Expanding Apprenticeships in America'' (82 FR 28229),
which charged the Secretary of Labor (Secretary) with considering the
issuance of regulations that promote the development of apprenticeship
programs by third parties. Specifically, the proposed regulations would
reflect an assessment of determining how qualified third parties may
provide recognition to high-quality apprenticeship programs.\8\
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\8\ E.O. 13801, Expanding Apprenticeships in America, 82 FR
28229 (June 15, 2017), sec. 4(a).
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Section 8 of the E.O. directed the Secretary to establish a Task
Force on Apprenticeship Expansion (Task Force), to identify strategies
and proposals to promote apprenticeships, especially in sectors where
they are insufficient. During its 6 months of deliberations, the Task
Force developed recommendations for improving the educational and
credentialing aspects of apprenticeship; attracting more businesses to
apprenticeship; expanding public awareness of, and access to,
apprenticeships; and developing administrative and regulatory
strategies to expand apprenticeship.\9\
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\9\ See Task Force on Apprenticeship Expansion, ``Final Report
to the President of the United States,'' May 10, 2018, 10-11.
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On May 10, 2018, the Task Force transmitted its final report to
President Trump. The report explained that many employers choose to
establish apprenticeship programs outside of the registered
apprenticeship program, in part because of the paperwork and process
involved in registering a program. In addition, the report noted that
there is insufficient flexibility in program requirements within the
registered apprenticeship program to meet the varying needs of
different industries. The report pointed out that IRAPs would provide a
new apprenticeship pathway that gives industry organizations and
employers more autonomy and authority to identify high-quality
apprenticeship programs and opportunities.\10\
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\10\ Id. at 34.
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The issuance of this final rule fulfills E.O. 13801's mandate
concerning IRAPs and implements key recommendations contained in the
Task Force report. The final rule also reflects input from the large
number of commenters who offered substantive recommendations for the
refinement and improvement of the proposed rulemaking.
In this final rule, the Department has modified 29 CFR part 29 by
creating two subparts--one governing the operation of registered
apprenticeship programs (subpart A), and the other establishing quality
guidelines for DOL-recognized SREs and IRAPs (subpart B). The existing
regulatory language of 29 CFR part 29, setting forth the labor
standards for the registration of apprenticeship programs, has been
fully retained within the new subpart A, with minor conforming edits to
accommodate the addition of the new subpart B. Subpart B establishes
the process for organizations to apply to become DOL-recognized SREs of
IRAPs. Once recognized by the Department, these SREs will work with
employers and other entities to establish, recognize, and monitor high-
quality IRAPs. The final rule includes measures and guidelines to
facilitate the recognition of these high-quality IRAPs, and it sets out
how the Department will oversee SREs. The final rule also adopts
changes suggested by commenters that increase the Department's role in
program oversight, clarify the requirements to become a recognized SRE,
and heighten SRE and IRAP program transparency.
The Department expects that the issuance of this final rule will
accelerate the expansion of quality apprenticeships by introducing a
flexible, market-based, industry-led model that is capable of expanding
apprenticeships in emerging, high-growth sectors while also reaching
underserved populations. By establishing a supplementary apprenticeship
pathway that addresses the varying needs of different industries, the
final rule seeks to address the skills gap in the U.S. labor force
while promoting the growth of high-quality, sustainable jobs for the
American workforce.
This final rule is considered an E.O. 13771 regulatory action.
Details on the estimated costs of this final rule can be found in the
rule's economic analysis.
B. Legal Authority
As relevant to this final rule, the NAA authorizes the Department
to: (1) Formulate labor standards to safeguard the welfare of
apprentices and to encourage their inclusion in apprenticeship
contracts; (2) bring together employers and labor for the formulation
of programs of apprentices; and (3) cooperate with State agencies
engaged in the formulation and promotion of standards of
apprenticeship. 29 U.S.C. 50.
This final rule implements the NAA's direction that the Secretary
``bring together employers and labor for the formulation of programs of
apprenticeship'' by creating a flexible, industry-driven model for
apprenticeship designed to bring together diverse groups of employers
and prospective apprentices in industries and occupations that do not
have a robust presence in the registered apprenticeship system. The
final rule further implements the NAA's direction by establishing
standards for this apprenticeship model that are designed to safeguard
the welfare of apprentices. As discussed in more detail below, all
IRAPs must comply with the standards for high-quality apprenticeships
contained in the regulation, and with their respective SRE's policies
and procedures, and must provide apprentices with a written
apprenticeship agreement outlining the conditions of employment and
training consistent with their respective SRE's requirements (which
would include those required by this regulation).
Several commenters contended that the NPRM was inconsistent with
the NAA, referring to the legislative history and purpose of the NAA.
Commenters highlighted congressional comments about Federal
intervention to halt manipulative and dishonest apprenticeship training
programs that failed to train apprentices.
The Department has determined that it has authority under the NAA
to establish this program. The NAA provides a general authorization and
direction for the Secretary to create and promote standards of
apprenticeship, including through contracts, and to interface with
employers, labor, and States to create apprenticeships and
apprenticeship standards. See 29 U.S.C. 50. This final rule does not
exceed or conflict with the broad authority granted by Congress in the
NAA. The NAA does not mandate or require that the current registered
apprenticeship system be the exclusive apprenticeship system
administered by the Department, nor does it suggest that the Department
[[Page 14296]]
is limited to one approach in executing the NAA.
One commenter stated that the NAA does not authorize the IRAP model
because the legislative history of the NAA indicates it was meant ``to
bring Government oversight to apprenticeship, and that it did so by
directing DOL, in concert with the states, to establish minimum
standards to protect apprentices from exploitation.'' Commenters argued
that the IRAP model does not match this history because it places trust
in private actors who could manipulate and mislead apprentices without
government oversight.
In response to these particular comments, the Department notes that
this regulation establishes the broad standards under which apprentices
will work and train, including the requirement that apprentices enter
into an apprenticeship agreement that discloses the terms and
conditions of the program. In addition, the Department maintains a
robust oversight role over SREs, and has a number of tools at its
disposal should it determine that a recognized SRE or an SRE's
recognized IRAP is not in compliance with the standards laid out in the
regulation.
The Department further notes that while the NAA establishes that
the Federal Government may help develop and encourage the adoption of
apprenticeship standards, the text of the NAA does not require that any
apprenticeship programs receive Department approval or use the
standards developed by the Department--participation in the IRAP model,
as with registered apprenticeship, is voluntary. Had Congress meant for
the Department to mandate standards for all U.S. apprenticeships, it
surely would have used stronger language than it did. Phrases like
``formulate and promote,'' ``encourage[e] the inclusion,'' ``bring
together,'' and ``cooperate,'' are not how Congress typically
establishes universal mandates. Cf., e.g., 29 U.S.C. 654(a) (``Each
employer . . . shall furnish to each of his employees employment and a
place of employment . . . free from recognized hazards that are causing
or likely to cause death or serious physical harm to his employees . .
. [and] shall comply with occupational safety and health standards
promulgated under this Act.''). This reading of the text is supported
by the NAA's legislative history. The NAA's legislative history states
that the Department has no authority ``to compel adherence to its
recommendations'' for apprenticeship standards but could encourage
their inclusion in contracts, as well as the provision of technical
assistance to employers and labor. See S. Rep. No. 75-1078, at 3. The
legislative history of the NAA further indicates that Congress intended
to give the Secretary multiple tools to improve the quality of American
apprenticeship. It speaks not only of the importance of formulating
standards for training and safety to ensure quality apprenticeship
opportunities, but the need for Federal assistance in expanding the
number of apprenticeship programs to fill the skills needs of industry.
See H. Rep. No. 75-945, at 2-3.
Commenters also argued that the statutory text prohibits the IRAP
model. One commenter argued that DOL could only create the IRAP model
if Congress passed a new law, because DOL cannot deviate from the
standards of registered apprenticeship. Another commenter stated that
DOL must comply with the authorizations and directions of the NAA at
the same time and that the proposed rule did not do so, because it did
not provide for the welfare of apprentices.
As noted, the NAA does not dictate the terms of how the Department
takes these steps or restrict the Department to only one particular
approach, nor does the NAA require the Department to establish one set
of standards. The NAA ``is written in very broad terms'' and ``contains
a wide grant of authority to the Secretary of Labor.'' Gregory Elec.
Co. v. U.S. Dep't of Labor, 268 F. Supp. 987, 991 (D.S.C. 1967). As
discussed below, the final rule sets out an extensive list of
requirements and protections in Sec. 29.22 that are designed to
safeguard the welfare of apprentices and to require quality training,
progressively-advancing skills, and industry-relevant credentials.
Further, unlike the commenter who suggested all provisions of the NAA
must be met at the same time, the Department reads the NAA as simply
listing the various activities that Congress has authorized and
directed the Department to engage in. The NAA authorizes the Department
to formulate and promote apprenticeship standards, to encourage the
inclusion of those standards in contracts of apprenticeship, to bring
employers and labor together, to cooperate with State agencies in the
formulation of State standards of apprenticeship, and to cooperate with
the Secretary of Education. As a practical matter, these activities may
be carried out independently of each other, and nothing in the statute
suggests that any particular activity engaged in by the Department must
include all five activities to be a valid activity under the NAA. With
that said, as discussed below, the final rule sets out an extensive
list of requirements and protections in Sec. 29.22 that are designed
to safeguard the welfare of apprentices and to require quality
training, progressively advancing skills, and industry-relevant
credentials.
Many commenters contended that the proposed rule was problematic
because it lacks specificity or does not involve States. Other
commenters argued that the NAA does not authorize the proposed rule,
because the rule did not provide as detailed or comprehensive a set of
requirements as the Department's registered apprenticeship regulations.
Several states submitted comments either opposed to the rule or urging
greater State involvement in the IRAP initiative.
The NAA does not require the Department to promulgate highly
specific apprenticeship standards, only those standards formulated by
the Department that are necessary to safeguard the welfare of
apprentices, which, as discussed above and below, the final rule
accomplishes. The Department disagrees that the rule lacks specificity,
as the final rule provides many requirements for IRAPs and SREs--
including detailed performance metrics not required of registered
apprenticeship programs. And while the NAA encourages cooperation with
States in the development of their standards of apprenticeship, there
is no requirement that DOL consult or operate its apprenticeship
initiatives through States, nor a requirement that States participate
directly in the development of this regulation or any other
apprenticeship standards the Department has or may develop. Many states
submitted comments on the proposed rule and the Department considered
these comments in developing this final rule.
C. General Comments Received on the Notice of Proposed Rulemaking
The Department received a total of 326,798 public comments, of
which 17,671 were unique. The majority of the remainder were letters
associated with 290 form-letter campaigns. Almost all of the form-
letter campaigns addressed the exclusion of the construction industry
from the Department's proposed approach to IRAPs. This issue is
discussed at length in the section-by-section discussion of Sec. 29.30
of this final rule (Sec. 29.31 in the proposed rule).
The commenters represented a range of stakeholders from the public,
private, and non-profit sectors. Public sector commenters included
Federal, State, and local government agencies and
[[Page 14297]]
elected officials. Private sector commenters included employers/
business owners, construction and building trades firms, and trade or
industry organizations. Non-profit sector commenters included national
and local labor unions, professional associations, and educational and
training organizations. The majority of public comments received in
response to the proposal were from private citizens, including current
and former apprentices.
General Support for and Opposition to the IRAP Framework
Many commenters expressed general support for the Department's
efforts in the proposed rule to establish a framework for IRAPs. Some
commenters noted that there is room for more than one pathway to
achieving successful apprenticeship programs. Another commenter stated
that IRAPs and registered apprenticeship programs can operate in
parallel, commenting that by allowing industry groups to recognize
IRAPs, DOL is empowering the private sector to create more
apprenticeship programs in a more efficient fashion. Commenters stated
that IRAPs will equip Americans with the necessary skills to contribute
to the booming economy and would allow workers to be trained for
flexibility in performing their jobs and other duties. One commenter
expressed support for the brevity and simplicity of the proposed rule.
Another commenter remarked that workers' choice to participate in
apprenticeship programs should not be restricted by the presence of a
union-sponsored program in the geographical location where they would
choose to attend an IRAP. Several commenters also stated that the
proposed rule is beneficial because it could help cut through
bureaucratic red tape to put businesses and employees at the center of
the conversation; allow businesses to meet labor-market needs; allow
small businesses to focus on serving program participants while also
protecting apprentices from discrimination; and help industries adjust
to and face changes, boost incomes, and curb student debt.
Other commenters contended that the IRAP model does not operate in
the best interests of the apprentice because the model has not adopted
minimum standards for IRAPs, such as formal apprentice contracts,
progressive wage increases, fair discipline and proper supervision,
standards for instructors' education, independent oversight, statewide
uniformity, safety standards, and protection of apprentices against
discrimination and harassment. Multiple commenters indicated that the
IRAP model ``takes a macroeconomic view of the industry and workforce
development and exhibits only a superficial investment in the interests
of the apprentice.'' A few commenters predicted that the IRAP model
would fail in a few years because the model enables ``profit-driven''
organizations to ``cut corners'' in order to boost profits at the
expense of their workers. A commenter stated that the market-driven
approach to scaling the apprenticeship model damages the skilled
workforce and apprenticeships by making industry less flexible and
resilient to economic downturns, and more susceptible to manipulation
by policymakers and diminishing economic growth. A commenter asserted
that IRAPs are not apprenticeships at all and, therefore, do not belong
in 29 CFR part 29.
The Department appreciates the comments recognizing the benefits of
IRAPs to the U.S. economy and workforce. The Department shares the view
of commenters who believe that there is room in the workforce for both
registered apprenticeship programs and IRAPs. The Department
acknowledges the concerns articulated by commenters doubting the
success of IRAPs and questioning the ability of the IRAP model to
adequately train and safeguard the welfare of apprentices. The
Department has responded to these concerns, as discussed in detail
below in the section-by-section analysis. In the final rule, the
Department has strengthened the standards of high-quality IRAPs to
provide more detailed training requirements and protections for
apprentices, enhanced Departmental oversight of SREs and--by
extension--IRAPs, and included additional requirements on SREs to
develop processes that support IRAPs, hold IRAPs accountable, and
provide greater protection to apprentices.
The Department disagrees with commenters who have suggested that
IRAPs will have a negative effect on the economy and the workforce and
would be less flexible during economic downturns. On the contrary, the
purpose of IRAPs is to increase high-quality apprenticeships in a
manner that ensures industry-relevant training and skills, appropriate
safeguards for apprentices, and a skilled, adaptable workforce. IRAPs
could provide additional opportunities for workers during economic
downturns and assist workers to achieve mobility and transferrable
skills through industry-relevant training and credentials.
Support for Registered Apprenticeship Programs
Many commenters expressed general concerns about IRAPs as an
alternative path to registered apprenticeship programs. Numerous
commenters urged the Department to withdraw the proposed IRAP model and
focus on supporting and improving registered apprenticeship programs in
order to achieve the goal of retaining skilled and qualified
tradespeople for long-term success. A commenter expressed the view that
IRAPs would divert resources from DOL that could be used to promote
registered apprenticeships and would reduce the capacity of DOL to
ensure high-quality standards in apprenticeship programs. Some
commenters stated that instead of developing a new program, the
Department should focus efforts on additional funding of registered
apprenticeship programs through Federal grants or tax credits. Multiple
commenters remarked on the significant growth of registered
apprenticeship and the number of active registered apprentices today as
compared to the 20-year national average. Other commenters remarked on
the success of registered apprenticeships in ``apprenticeable
occupations.'' Some commenters urged DOL to promote joint labor-
management apprenticeship programs rather than creating a system of
IRAPs. Many commenters asserted that robust, privately-funded
registered apprenticeship programs have helped millions of workers
obtain upward mobility and learn nationally-recognized skills and that
they have benefited employers by supplying a qualified and highly-
trained workforce, improving safety, and allowing greater productivity.
Many commenters also provided personal stories and examples of
professional success gained by completing a registered apprenticeship
that cultivates safety-oriented, high-performance apprentices in
middle-class careers. A commenter remarked that high-quality
apprenticeship programs boost the economy, while another commenter
stated that existing programs have one of the highest rates of return
on investment for employers.
A commenter asserted that, while the registered apprenticeship
system is in need of some improvements--such as streamlining the
program approval process, achieving greater diversity, and clarifying
misperceptions about how apprenticeship operates--the proposed rule
does not address issues to improve the registered apprenticeship
system. Some commenters disagreed with the notion that the current
registered
[[Page 14298]]
apprenticeship system is rigid, inflexible, cumbersome, or burdensome,
noting instead that their experience was to the contrary and that
registered apprenticeships are fully adaptable to business needs. Other
commenters included resolutions from their State apprenticeship
advisory bodies listing the important attributes of registered
apprenticeship programs and affirming their support for such programs.
The resolutions included statements of opposition to the proposed IRAP
model because of concerns that the new approach would undermine the
existing registered apprenticeship model.
The Department appreciates commenters' concerns about IRAPs' effect
on the registered apprenticeship program. The Department emphasizes,
however, that IRAPs are not intended to disrupt, supplant, or otherwise
negatively affect registered apprenticeship programs. The Department
views IRAPs and registered apprenticeship programs as operating in
parallel. It further views the market-driven approach with IRAPs as
designed to encourage growth in use of the apprenticeship model such
that quality IRAPs would succeed alongside registered apprenticeship
programs. Moreover, the need to rapidly increase apprenticeships in the
United States through a new apprenticeship model is evident when one
considers that the proportion of apprentices in the labor force in
other countries is considerably greater than in the United States.
While apprentices account for approximately 0.2 percent of the American
labor force, they constitute 2.2 percent of the labor force in Canada,
2.7 percent in the United Kingdom, and 3.7 percent in Germany and
Australia.\11\
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\11\ See Robert I. Lerman, ``Proposal 7: Expanding
Apprenticeship Opportunities in the United States,'' The Hamilton
Project, Brookings Institution, 2014, http://ow.ly/UlDmN.
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As discussed in more detail below in the Department's explanation
of Sec. 29.30, the Department has determined that programs that seek
to train apprentices to perform construction activities, as described
in Sec. 29.30, will not be recognized as IRAPs. The Department's goal
in this rulemaking is to expand apprenticeships to new industry sectors
and occupations. Registered apprenticeship programs are more widespread
and well-established in the construction sector than in any other
sector. Further, commenters raised concerns about allowing IRAPs in the
construction sector in particular. In light of the purpose of this
rulemaking, there is no need to take the risk, whatever the magnitude,
of disrupting or displacing registered construction programs.
The Department intends to continue to promote, improve, and
increase the availability of registered apprenticeship programs. The
Department appreciates commenters' support of registered apprenticeship
programs and, particularly, their view that registered apprenticeship
programs contain sufficient rigor without creating burdensome
requirements. The Department also appreciates the numerous success
stories shared by commenters, and the Department agrees that the earn-
and-learn model of apprenticeship provides numerous benefits to workers
and employers. Furthermore, the Department is well aware of the high
rates of return that employers receive from the investment in
apprenticeship programs. As for the comment that this rule does not
address improvements to the registered apprenticeship system, this rule
is not intended to make changes to the registered apprenticeship
program but rather to establish a separate system of apprenticeship.
This alternative pathway for apprenticeship is to provide additional
avenues for addressing the skills gap and creating apprenticeship
opportunities. The Department will continue to promote and improve the
registered apprenticeship model through streamlined processes and
development of electronic tools, among other things. Nevertheless, with
this rule, the Department is also acknowledging that an industry-led
alternative model may be better suited to some industries and has
determined that IRAPs are a valid, parallel option to increase
apprenticeship opportunities in the United States.
The Department intends to utilize funds appropriated for registered
apprenticeship to continue to improve and support registered
apprenticeship programs. The Department also notes that any available
grant funding for registered apprenticeships will be announced through
future funding opportunity announcements. Comments concerning tax
credits to support apprenticeship are outside the scope of this final
rule.
The Role of States in IRAPs
Commenters recommended that the Federal Government should empower
and appropriately fund all States to operate their own, federally-
approved registered apprenticeship programs. Another commenter
encouraged the Department to consider a role for States in engaging
with IRAPs within their State, in addition to the SREs recognizing
those IRAPs, and to support state-agency capacity for this engagement.
Multiple commenters expressed concern that IRAPs would bypass the SAA
system and States would not have oversight of the apprenticeship
programs operating within their borders. A commenter expressed concern
about creating a parallel system with no role for SAAs. Another
commenter stated that SAAs have been at the forefront of increasing
opportunities for apprenticeship in new industries, occupations, and
populations. A commenter asserted that the proposed rule could
jeopardize its State's history of success in maintaining superior
buildings, worksite safety, and family wage jobs in the construction
sector. Multiple commenters suggested that IRAPs would undermine their
States' longstanding registered apprenticeships in the building trades.
One commenter questioned the proposed funding scheme for IRAPs and
asked whether there would be any fiscal impact on State labor
departments.
The Department appreciates the role of SAAs in the registered
apprenticeship program and will continue to support and promote such
engagement. The Department also notes that this rule allows States and
local government agencies or entities to participate as SREs;
therefore, States may serve such a role if they so choose and fulfill
the regulatory requirements. The Department appreciates the concern
that a State may not have oversight of IRAPs within its borders. The
Department notes, however, that various parts of the rule require IRAPs
to abide by State and local laws, and State enforcement mechanisms
would apply to employers offering IRAPs as to other employers operating
within the State. The Department encourages SAA States to continue
supporting and promoting registered apprenticeships, and the Department
intends to continue to support and promote registered apprenticeships
in both SAA and non-SAA States. Concerning the comments about the
construction sector's superior buildings, worksite safety, family wage
jobs, and State registered apprenticeships in the building trades, the
Department has included in the final rule at Sec. 29.30 an exclusion
from this subpart for programs that seek to train apprentices to
perform construction activities. This means that SREs may not recognize
as IRAPs programs that seek to train apprentices to perform
construction activities as defined in Sec. 29.30. The Department does
not anticipate that this rule generally will have a fiscal impact on
State labor
[[Page 14299]]
departments, but the Department also notes that State labor
departments, or any other State agencies or entities, may choose to
become recognized SREs as set forth in Sec. Sec. 29.20 and 29.21.
Distinction Between Registered Apprenticeship Programs and IRAPs
Several commenters stated that the distinction between registered
apprenticeships and IRAPs should be emphasized given that, according to
the commenters, registered apprenticeships have rigorous standards and
are not profit-driven. Multiple commenters asserted that IRAP and
registered apprenticeship contractors would often be indistinguishable
to the public, who might choose less qualified personnel without
recognizing the difference. Multiple commenters recommended that the
terms ``apprentice'' or ``apprenticeship'' not be used for IRAPs to
prevent confusion with registered apprenticeships. A commenter
expressed support for DOL's statement in the NPRM that recognition as
an IRAP is different from registration as a Registered Apprenticeship
Program. Numerous commenters argued that a ``bright line distinction''
is warranted, particularly in the construction industry, because,
according to them, registered apprenticeship programs are rigorously
reviewed and operate at a higher level of commitment to training than
the proposed IRAPs would. Commenters also approved of a bright line
distinction as applied to the ability to apply for Federal funding
given that, in their view, IRAPs would not have the same requirements
for standards and quality of instruction and protection of apprentices.
Another commenter asserted that it is unrealistic to expect an IRAP to
invest the capital and resources that a labor union already ``invests
as part of its commitment to producing well and broadly trained''
employees ``with years of rigorous classroom, field, and on the job
preparation.''
The Department acknowledges commenters' statements that there
should be a bright-line distinction between registered apprenticeship
programs and IRAPs. The Department has determined that the IRAP model
sufficiently diverges from the registered apprenticeship model so that
a bright line distinction exists without a need for a regulatory
change. The Department disagrees with the premise that IRAPs are
inherently less safe or rigorous, given the detailed requirements set
forth below. Additionally, because construction activities are excluded
from the subpart, as discussed further below in the Department's
explanation of Sec. 29.30, there is no need for any bright-line
distinction for apprenticeships involving construction activities.
Regarding Federal funding for IRAPs, it is the Department's view
that in cases where Federal programs confer categorical eligibility,
exclusive funding, or special status to registered apprenticeship
programs, such benefits do not extend to IRAPs. Such benefits were
designed with the registered apprenticeship programs in mind, and it is
therefore appropriate to maintain preferential status only for
registered apprenticeships. In cases where high-quality apprenticeship
programs are generally eligible for funding, such as in the
Department's H-1B Job Training Grant Program, the Department maintains
that IRAPs should be eligible for such funding. With respect to the
comment that IRAPs may not invest in training to the same degree as
labor unions, the Department anticipates that employers that chose to
participate in IRAPs will have every reason to invest in job training.
The Department anticipates that the establishment of a new
apprenticeship pathway will incentivize employers to seek innovative
and high-quality methods for training their employees. This is because
an employer has every incentive to ensure that its apprenticing
employees gain the skills necessary to do the tasks the employer needs.
Presumably that is why an employer would offer an IRAP in the first
place. Additionally, employers have a market incentive to offer an
IRAP. It distinguishes these employers in the competition for talent
from other employers who do not offer an IRAP.\12\
---------------------------------------------------------------------------
\12\ The Department also believes it is overly simplistic to
state that registered apprenticeship programs are not profit-driven.
Many for-profit companies participate in registered programs.
---------------------------------------------------------------------------
Decision Not To Pursue IRAP Pilot Program
Multiple commenters stated that the proposed rule did not follow
the Task Force's Recommendation 14 to begin IRAP implementation with a
pilot program in an industry without well-established registered
apprenticeship programs. Several commenters said that there was no
empirical evidence supporting the decision not to implement a pilot
program. A commenter stated that a pilot program would have helped the
Department assess the effectiveness of IRAPs before issuing a rule and
requested that DOL explain the decision not to implement a pilot
program as well as provide evidence that supports IRAPs' effectiveness.
Several commenters requested that the Department implement a pilot
program in the final rule in order to test the program model narrowly
at first and make adjustments as needed to ensure proper implementation
and success before applying the program on a larger scale. Other
commenters opined that determining which occupations should be included
in a pilot project depends on which occupations are experiencing a
skills gap, which is hard to identify in any given industry that does
not already have a training program via registered apprenticeship. One
of these commenters further stated that, because of insufficient
reliable data to understand the scope of U.S. apprenticeships, the
proposed rule should be withdrawn until adequate data are obtained.
After due consideration of these comments, the Department maintains
that the large skills gap requires a more immediate response than a
pilot project would permit. The Department believes that the problems
posed by the current skills gap necessitate the comprehensive
implementation of IRAPs, and that a pilot program would by its very
nature be insufficient to address the current shortage of skilled
American workers at the scale required. Further, nothing in the NAA
requires that bringing together ``employers and labor for the
formulation of programs of apprenticeship'' be done first as a pilot
program. The Department has discretion under the broad language of the
NAA to establish the IRAP program as it is done here.
Industry-Driven Apprenticeship Model Framework
Several commenters suggested that the IRAP framework should
coordinate with State, local, and regional partners and stakeholders
(local businesses, workforce and education systems, human services
organizations, labor and labor-management partnerships, and other
community-based organizations) to ensure IRAPs are aligned with the
workforce, education, and human services programming in which Federal,
State, and local governments and the private sector currently invest.
One commenter argued that the proposed rule leaves many issues
unaddressed, such as challenges employers face in navigating the
apprenticeship system, lack of attention to reciprocity, and
uncertainty among apprentices about how to evaluate program quality.
Multiple commenters suggested that each SRE applicant and each IRAP
should be classified
[[Page 14300]]
according to the North American Industry Classification System (NAICS)
or Occupational Information Network (O*NET) codes, stating that to do
otherwise might disrupt the current registered apprenticeship system.
The Department anticipates that the IRAP model will strike the
appropriate balance between coordinating at the regional and national
levels, as will be more practical for large employers, and coordinating
with State and local governments, as may be more practical for many
smaller employers. The Department stresses that the IRAP model provides
flexibility for industries to set the training requirements, program
structure, and teaching curricula that strikes the ideal balance
between geographic and industry-wide concerns. This approach, which is
intended to minimize administrative burdens on adopters of the IRAP
model, should encourage a more rapid scaling of quality apprenticeships
across multiple industries where apprenticeships are currently
underutilized. With respect to NAICS and O*NET codes, the Department
will be requesting such information from each prospective SRE about the
IRAPs it will recognize and expects there to be a uniformity in
classification between IRAPs and registered apprenticeships. The
Department also acknowledges the concern that employers and prospective
apprentices may face difficulty in navigating and comparing potential
apprenticeship options. As discussed in more detail below, the
Department addressed such concerns by incorporating the enhanced
metrics listed in Sec. 29.22(h) as well as the reporting required by
Sec. 29.24 of the final rule.
Requests To Extend the Comment Period
Ten commenters submitted requests to extend the comment period for
the proposed rule. Seven commenters requested a 30-day extension of the
comment period, and three commenters requested a 60-day extension. In
general, commenters requesting an extension of the comment period cited
their desire to provide meaningful and comprehensive comments.
While the Department acknowledges these concerns, the Department
concluded that the 60-day comment period was reasonable and sufficient
to provide the public a meaningful opportunity to comment. This
conclusion is supported by the large volume of complex and thoughtful
comments received, including detailed comments from all 10 commenters
requesting an extension, which demonstrates that the public has had
adequate time to meaningfully participate in the rulemaking. For these
reasons, the Department declined to extend the 60-day public comment
period on the NPRM.
Other Suggestions About Public Participation
A commenter expressed concern that the proposed rule had been
developed with no consultation with, or input from, SAAs or the
Advisory Committee on Apprenticeship. Another commenter suggested that
the Department should work with previously-contracted intermediaries
for registered apprenticeships that have an understanding of the issues
within the current system to make changes needed to gain wider adoption
by the technology sector. A commenter suggested that the Department
offer the public an additional opportunity for public comment, because
the proposed rule lacked a discussion of the validity of IRAP-issued
credentials.
The Department believes that these concerns are overstated and
insubstantial. The Department benefitted from input from the Task Force
Report, which helped inform the development of the proposed rule. The
Task Force consisted of a wide range of stakeholders, including State
elected officials, major trade and industry groups, labor unions, and
concerned citizens. In addition, the Department received several
comments from SAAs subsequent to the publication of the proposed rule,
which were taken into consideration during development of the final
rule.
Administrative Procedure Act
A commenter raised concerns that the Department has already
established both the fact that SREs exist and that SREs may be approved
and awarded a favorable determination before the related regulation is
finalized. The commenter also asserted that the Department has no
intention of taking into serious consideration any critical comments
that will be submitted in response to the NPRM, which it is required to
do pursuant to the APA.
The Department notes that Training and Employment Notice (TEN) 3-18
and TEN 3-18, Change 1 (issued on July 27, 2018, and June 25, 2019,
respectively) were rescinded on October 22, 2019. Accordingly, the
Department withdrew the information collection request (ICR) package
associated with the TEN on October 22, 2019. The TEN provided that a
potential SRE could apply for a favorable determination from the
Department as to whether its policies and procedures met the hallmarks
outlined in the TEN. The favorable determination was not intended to
provide any benefit or formal recognition to an entity, nor was it
envisioned as a prerequisite to any activity. And regardless, the form
from which such a determination would be made was only proposed and
never went into effect. Conversely, this final rule establishes that a
potential SRE must apply for recognition by the Department to become a
recognized SRE. Moreover, the Department will not award a favorable
determination to an SRE prior to the publication of this final rule.
The Department takes seriously its obligation under the APA to review
and respond to all germane comments received from the public concerning
the NPRM, as amply demonstrated by this final rule release.
II. Section-by-Section Analysis
The analysis in this section provides the Department's responses to
public comments received on the proposed rule. The Department received
a number of comments on the proposed rule that were outside the scope
of the proposed regulations, and the Department offers no response to
such comments. The Department also has made some non-substantive
changes to the regulatory text to correct grammatical and typographical
errors, in order to improve the readability and conform the document
stylistically that are not discussed below.
A. Subpart A--Registered Apprenticeship Programs
Revisions to part 29 account for its division into two subparts.
Each subpart addresses a different type of apprenticeship program.
Accordingly, revisions to current part 29--now proposed subpart A--made
conforming edits to account for subpart B, and for how SREs and IRAPs
establish a new, distinct pathway for the expansion of apprenticeships.
The first type of conforming edit in subpart A replaces prior
references to part 29 with references to subpart A. Second, the final
rule adds the phrase ``[f]or the purpose of this subpart'' before
definitions provided in subpart A, Sec. 29.2. This revision clarifies
the distinction between the current registered apprenticeship system
and what new subpart B establishes.
DOL received no comments on conforming edits to subpart A. Revised
regulatory text will be implemented as proposed.
[[Page 14301]]
B. Subpart B--Standards Recognition Entities of Industry-Recognized
Apprenticeship Programs
Section 29.20 Standards Recognition Entities, Industry-Recognized
Apprenticeship Programs, Administrator, and Apprentices
Section 29.20 of the final rule explains that subpart B establishes
a new apprenticeship pathway distinct from the registered program
described in subpart A. This section also defines four key terms used
in subpart B. These terms are standards recognition entity (SRE),
Industry-Recognized Apprenticeship Program (IRAP), Administrator, and
Apprentice. The Department received comments on the definitions of an
SRE, IRAP, and Apprentice as well as recommendations to define other
terms used in the proposed rule. A discussion of these comments is
described in detail below. The Department received no comments on the
definition of Administrator.
Definition of SRE
Paragraph (a) of Sec. 29.20 in the final rule defines an SRE as an
entity that is qualified to recognize apprenticeship programs as IRAPs
under Sec. 29.21 and that the Department has recognized as an SRE. The
Department received a few comments related to the proposed definition
of an SRE in paragraph (a) of Sec. 29.20. Multiple commenters
requested that the Department propose a regulatory definition for an
SRE. Another commenter stated that the proposed definition lacked
defined qualifications to ensure SREs are recognizing programs that
protect apprentices and provide proper, uniform supervision and
instruction.
In response to the comments, the Department notes that it
established a definition for an SRE in the proposed rule. As stated in
the proposed rule, an SRE is defined as ``an entity that is qualified
to recognize apprenticeship programs as [IRAPs] under Sec. 29.21 and
that has been recognized by [DOL].'' The Department also notes that in
addition to establishing a definition for an SRE, the proposed rule
also had provisions for the types of entities that can become a
recognized SRE in Sec. 29.20(a)(1), the process and criteria in which
an entity becomes a recognized SRE in Sec. 29.21, and the
responsibilities and requirements of an SRE in Sec. 29.22 as a means
of providing the full scope of what being an SRE means.
The Department believes entities will have sufficient
qualifications to ensure that they are recognizing high-quality
programs, and more fully discusses the specific qualifications for SREs
to recognize high-quality apprenticeship programs in Sec. 29.21 of the
final regulation. Accordingly, the Department declines to revise the
definition of an SRE, and the final rule adopts the provision as
proposed.
The Department inadvertently designated the types of entities that
can become a recognized SRE in paragraphs (a)(1)(i) through (vii) under
Sec. 29.20 in the proposed rule. The Department has corrected this
designation and proposed Sec. 29.20(a)(1)(i) through (vii) has been
redesignated as Sec. 29.20(a)(1) through (9) in the final rule.
Paragraph (a)(1) of Sec. 29.20 in the proposed rule contained a
nonexhaustive list of the types of entities that can become recognized
SREs. These entities include but are not limited to: (1) Trade,
industry, and employer groups or associations; (2) educational
institutions, such as universities or community colleges; (3) State and
local government agencies or entities; (4) non-profit organizations;
(5) unions; (6) joint labor-management organizations; or (7) a
consortium or partnership of entities such as those above. In the final
rule, the Department has added two types of entities that can become a
recognized SRE in Sec. 29.20(a): (1) Corporations and other organized
entities; and (2) certification and accreditation bodies or entities
for a profession or industry, to align with the types of eligible
entities listed in the Industry-Recognized Apprenticeship Program
Standards Recognition Entity Application (Form ETA-9183). The final
rule now establishes that the types of entities that can become
recognized SREs under Sec. 29.20(a) include: (1) Trade, industry, and
employer groups or associations; (2) corporations and other organized
entities; (3) educational institutions, such as universities or
community colleges; (4) State and local government agencies or
entities; (5) non-profit organizations; (6) unions; (7) joint labor-
management organizations; (8) certification and accreditation bodies or
entities for a profession or industry; or (9) a consortium or
partnership of entities such as those above.
Although the application, as proposed in the NPRM, included
``companies'' and ``certification and accreditation bodies'' as a type
of eligible entity that can become a recognized SRE, the Department has
revised ``companies'' to be ``corporations and other organized
entities'' and ``certification and accreditation bodies'' to be
``certification and accreditation bodies or entities for a profession
or industry'' in the final rule. By revising this text, the Department
aims to provide greater specificity and additional clarity concerning
the types of entities that can act as an SRE.
As noted above, paragraphs (a)(1) through (9) of Sec. 29.20 in the
final rule contain a nonexhaustive list of the types of entities that
can serve as SREs. A consortium of these entities can also apply to
become a recognized SRE. By not limiting the types of entities that may
receive recognition, the Department aims to encourage the creation of
SREs in a broad range of industries and occupational areas.
Accordingly, the Department invited public comment on this approach in
the proposed rule.
Several commenters expressed support for establishing a wide list
of eligible entities that may become recognized SREs. One commenter
proposed that the types of entities that may become recognized SREs
should include both individuals and organizations in order to encourage
innovation. Other commenters argued that the types of entities that can
become a recognized SRE should be restricted to non-profit
organizations or exclude individual employers in order to mitigate
conflicts of interest.
The Department has considered the various comments received
pertaining to this section and maintains that retaining a nonexhaustive
list of the types of entities that can serve as an SRE will encourage
the development and expansion of apprenticeships, particularly in high-
growth and in-demand industries. A nonexhaustive list of eligible
entities can also enable building on existing partnerships and
cultivating new relationships within industries, which could be
instrumental in ensuring the success of an apprenticeship. To alleviate
the concerns expressed by commenters requesting that specific types of
entities be restricted from becoming a recognized SRE, the Department
has added a requirement in Sec. 29.21(b)(6) of the final rule
concerning mitigating conflicts. Under this provision, which is
discussed at greater length below, potential SREs are required to
demonstrate that they can effectively mitigate any potential or actual
conflicts of interest as part of their application to becoming a
recognized SRE. By adding this provision, the Department is taking the
necessary steps to ensure that each SRE applicant addresses any
inherent conflicts through specific policies, processes, procedures,
organizational structures, or a combination thereof, which will be
evaluated by the Department prior to its recognition as an SRE.
One commenter stated that the proposed rule does not explicitly
address strategies to encourage
[[Page 14302]]
organizations to consider forming SREs and may not necessarily motivate
entities that do not yet participate in apprenticeship partnerships to
begin doing so in the proposed IRAP framework.
Although the Department did not explicitly address strategies to
encourage organizations to consider establishing SREs in the proposed
rule, the Department recognizes the importance of engaging with
stakeholders and supports partnership development between employer and
labor organizations, education and training providers, and others to
promote and expand apprenticeship opportunities. The Department
believes that the successful implementation of the IRAP initiative will
require robust engagement and partnerships to foster the growth and
innovation of these types of apprenticeships, particularly in
industries lacking such opportunities.
Some commenters expressed concern that having multiple SREs within
an industry may generate significant fragmentation and confusion among
potential apprentices, employers, and sponsors. One commenter raised
several questions about how SREs will operate across State lines.
Specifically, the commenter asked how multiple SREs within a State or
industry would handle competition over limited resources, and how SREs
will count apprentices when they operate across States or regions.
Another commenter opined that SAAs should not be allowed to apply to be
an SRE, because SAAs are authorized by the Department to recognize
registered apprenticeship programs, and it would lead to apprentices in
the same industry receiving inconsistent training, affecting their
skill level and marketability. In contrast, a different commenter
provided specific language to amend the proposed regulations to allow
SAAs to serve as an SRE. The commenter expressed its belief that SAAs
should be at the forefront of those entities considered as potential
SREs.
The Department does not share the concerns raised by commenters
questioning how multiple SREs within an industry or State would
function. If apprenticeships are to thrive in emerging industries and
spread to new and innovative occupational areas, then having multiple
SREs within any given industry or State would result in an increase in
the number of apprenticeship programs that are able to effectively
train individuals for industries and occupations most in need of
skilled workers. In addition, the presence of multiple SREs will
provide prospective IRAPs and employers with an opportunity to assess
and determine which SRE is best suited to meet the needs of their
program.
The Department disagrees with the commenter who opined that SAAs
should not be allowed to apply to become a recognized SRE. The
Department understands the importance of SAAs and believes that they
are well positioned to be recognized as an SRE due to their level of
expertise and experience with identifying quality apprenticeships, not
only in the private sector but also in the public sector. The
Department envisions that SAAs and other State and local government
entities that are recognized by the Department as SREs may decide to
develop and recognize IRAPs in the public administration sector. The
Department believes this will result in the expansion of public
administration apprenticeships, thereby building talent pipelines for
employers, which will lead to the creation of career opportunities for
apprentices in State and local government and to future economic growth
in the United States. The Department also disagrees with another
commenter's recommendation to amend the regulation so that SAAs are
specifically added as an eligible entity, as SAAs already fall within
the scope of ``State and local government agencies or entities.''
Definition of IRAP
The Department has replaced the term ``Industry Programs'' that was
used in paragraph (b) of Sec. 29.20 in the proposed rule with
``IRAPs'' in paragraph (b) of Sec. 29.20 in the final rule. The
Department made this change in Sec. 29.20(b) (and throughout the final
rule) to limit confusion among stakeholders since the term ``Industry
Program'' is used widely in both the public and private sectors. For
that reason, an employer could potentially establish an apprenticeship
program on an independent basis and refer to it as an ``Industry
Program.'' By making this change, the Department will make clear to
stakeholders that ``IRAP'' is a Department-specific term for an
apprenticeship model established in accordance with the NAA.
Paragraph (b) of Sec. 29.20 in the final rule defines IRAPs as
high-quality apprenticeship programs that are recognized by an SRE,
wherein an individual obtains workplace-relevant knowledge and
progressively advancing skills, that include a paid-work component and
an educational or instructional component, and that result in an
industry-recognized credential. Under Sec. 29.20(b), an IRAP is
developed or delivered by entities such as those outlined in Sec.
29.20(a).
Many commenters warned that the term ``IRAP'' is defined in a vague
and overbroad manner and does not provide any meaningful guidance or
protection for apprentices. One commenter suggested amending the
definition of ``IRAP'' to add language stating that an apprentice's
compensation cannot be less than the minimum wage, and that wages must
increase as work and training benchmarks are achieved. The commenter
also recommended that the term ``industry-recognized credential'' be
defined in the final rule since it is referenced in the definition of
``IRAP.''
The Department did not make changes in response to the comments
suggesting that the definition of ``IRAP'' is vague or broadly written.
In the proposed rule, the Department required in Sec. 29.22(a)(4) that
a program seeking recognition as an IRAP adhere to standards of high
quality in order to obtain and maintain recognition by an SRE. The
standards of high-quality apprenticeships outlined in Sec. 29.22(a)(4)
served to supplement the definition of ``IRAP'' as proposed in Sec.
29.20(b). The SRE, in accordance with the parameters established under
this regulation, is charged with establishing the standards for
training, structure, and curricula that an IRAP must conform to. The
Department has determined that refining the definition of ``IRAP'' to
include wage requirements, other requirements concerning the welfare of
an apprentice, and the parameters of an industry-recognized credential
is unnecessary, because these topics are addressed in this final rule
at Sec. 29.22. Accordingly, the final rule substantively adopts the
definition as proposed, with nonsubstantive textual edits for clarity
and to reflect an update to a regulatory citation in accordance with
the provisions outlined in 29.22(a)(4).
Definition of Administrator
Paragraph (c) of Sec. 29.20 in the final rule clarifies that the
``Administrator'' is the Administrator of OA, or any person
specifically designated by the Administrator. The Department did not
receive any comments related to the proposed definition of
``Administrator'' in paragraph (c) of Sec. 29.20 in the proposed rule.
Accordingly, the final rule adopts the provision as proposed.
Definition of Apprentice
Paragraph (d) of Sec. 29.20 in the final rule defines an
``apprentice'' as an individual training in an IRAP under an
apprenticeship agreement. The Department received some comments
recommending the revision of the definition of ``apprentice'' in Sec.
29.20(d) of the proposed rule. One commenter
[[Page 14303]]
stated that the proposed definition of ``apprentice'' should be revised
by substituting the term ``training'' in place of the term
``participating.'' Other commenters stated that the definition of
``apprentice'' should be revised either to align with the definition of
``apprentice'' in subpart A or should be written in a manner that is as
robust as the subpart A definition. These commenters asserted that
aligning the definitions of ``apprentice'' would provide additional
clarity on the rights and responsibilities of an apprentice and the
protections that safeguard the welfare of an apprentice, thereby
ensuring that underage workers are prohibited from participating in an
IRAP.
The Department agrees with the commenter's suggestion to revise the
definition of ``apprentice'' to clarify that an apprentice is an
individual ``training'' in an IRAP, and accordingly, has revised the
definition in the final rule. The use of the term ``training'' in place
of the term ``participating'' in the definition could eliminate
potential ambiguity, since mentors and related instruction providers
may also be deemed participants in an IRAP.
The Department acknowledges the other commenters' recommendation to
revise the definition of ``apprentice'' so that it aligns with the
subpart A definition of ``apprentice,'' which references the standards
of apprenticeship. Although the Department declines to adopt this
recommendation, the Department has made additional refinements to the
definition beyond replacing the term ``participating'' with the term
``training'' as noted above. As discussed below in Sec. 29.22(a)(4)(x)
of the final rule, IRAPs are now required to have an apprenticeship
agreement with each apprentice. Accordingly, the Department has added
the phrase ``under an apprenticeship agreement'' to the definition of
``apprentice'' in the final rule. Because an apprenticeship agreement
establishes the conditions of employment between an IRAP and an
apprentice, and this final rule establishes parameters to protect the
welfare of all IRAP apprentices as described below in Sec. 29.22, the
Department does not think it is necessary to revise this definition
further to create alignment with the subpart A definition. The
definition comports with the broad discretion the Department possesses
under the NAA. In addition, IRAPs must comply with all employment and
age-related laws that apply to their employers, thereby conferring upon
apprentices the same protections afforded other employees.
Recommendations for Additional Terminology Definitions
Several commenters recommended adding definitions for other terms.
These terms include ``accessibility,'' ``accreditation,'' ``categorical
eligibility,'' ``complex task,'' ``consensus-based process,''
``construction,'' ``consultative services,'' ``employer engagement,''
``high-quality,'' ``industry-essential skills,'' ``industry expertise/
expert,'' ``industry-recognized credential/credential,'' ``paid work,''
``recognition decision/recognize,'' ``sector,'' ``significant
opportunities,'' ``structured mentorship,'' ``structured work
experience,'' and ``Universal Design for Learning.'' A commenter
specifically urged that the proposed rule's lack of definitions in
proposed subpart B requires a ``re-proposal'' to provide the
opportunity for comment.
Of the recommended terms that commenters requested definitions,
five terms--``accessibility,'' ``categorical eligibility,'' ``employer
engagement,'' ``industry expertise,'' and ``Universal Design for
Learning''--were not used in the proposed regulatory text; \13\ two
terms--``consultative services'' and ``recognition decisions''--were
used in Sec. 29.22(f) of the proposed regulatory text, but were not
carried over into the final regulatory text as discussed below in Sec.
29.22 (under the ``Conflicts of Interest'' heading); and one term--
``significant opportunities''--was used in Sec. 29.31 of the proposed
regulatory text, but was not carried over into the final regulatory
text. The Department has determined that these terms do not require
definitions, because they are not included in the final rule's
regulatory text. Although the term ``construction'' was not used in the
proposed regulatory text, the proposed rule incorporated a long-
standing definition of the building and construction industry from case
law as part of the Department's approach in determining which entities
and programs are eligible to participate in the IRAP framework.
However, after reviewing many comments concerning the need to define
``construction,'' the Department has revised its construction exclusion
in Sec. 29.30 of this final rule, as discussed in detail below.
---------------------------------------------------------------------------
\13\ Three terms did not appear in the preamble discussion of
the proposed rule either: ``accessibility,'' ``employer
engagement,'' and ``Universal Design for Learning.''
---------------------------------------------------------------------------
With regards to the terms that were used in the proposed rule and
are carried over into the final rule, the Department has determined
that these terms are either discussed in the relevant section of the
regulation below and can be understood in the context of the
appropriate section or according to their plain and ordinary meaning.
Accordingly, defining these terms in this section is not necessary. In
addition, the Department disagrees with the commenter's assertion that
the rule would require a reproposal due to a lack of definitions in
subpart B. The Department has identified the key terms that warrant a
definition and given sufficient notice and opportunity for comment with
respect to these definitions, and believes these definitions are
sufficient for public understanding.
Section 29.21 Becoming a Standards Recognition Entity
Section 29.21 outlines the process by which an entity may apply for
Departmental recognition as an SRE, as well as the criteria against
which the Department will assess applications. The Department will
recognize entities that show they have the expertise to set standards
for high-quality apprenticeship programs that result in industry-
recognized credentials and equip apprentices with competencies needed
for proficiency in specified industries or occupational areas, as would
be demonstrated through components of the entity's application
(described in more detail below).
Several commenters provided suggestions relating to the
Department's proposed process for reviewing an entity's application to
serve as an SRE contained in the preamble of the proposed rule. One
commenter suggested that the proposed panel of reviewers either be
broadened to include industry training experts from companies and
schools, or that it be narrowed to include only Department personnel
who possess the experience in apprenticeship programs necessary to
adjudicate the application. Another commenter stated that the
Department should not delegate its decision-making to Federal
contractors, especially considering that the specific expertise and
performance standards for the contractors are not defined. A commenter
expressed concern that the Department's use of contractors to review an
entity's application could present conflicts of interest. Another
commenter proposed that DOL instead establish a national advisory
committee to review and make recommendations regarding SRE applications
and to serve as a forum for discussion about issues related to the
recognition of SREs.
Commenters also suggested that DOL's proposed review of entities'
applications appeared to be too limited. The commenter noted that
concerns
[[Page 14304]]
regarding the initial review would also apply to resubmitted
applications. One commenter expressed concern about the proposed
panel's limited review of SRE applications in light of the estimate of
over 200 SREs approved in the first year. Several commenters expressed
concern that the Department lacks the staffing and funding to review
the expected number of SRE applications, with one commenter adding that
the Department struggles to oversee the registered apprenticeship
system.
The Department determined that, for at least the first year of its
evaluating SRE applications, a panel of two contractors and one full-
time federal employee will conduct these evaluations. After reviewing
the comments received, the Department concluded that limiting SRE
application review panels to only industry experts or only Department
staff could lead to a lack of capacity that could be critical in
translating the needs of industry into this new apprenticeship
recognition process under the NAA. The Department has concluded that
this mix of federal, industry, and credentialing experts would be
essential to implementing this rulemaking as quickly and effectively as
possible. The Department may adjust the ratio of federal staff,
industry experts, and credentialing experts as it continues to
implement and refine the review process.
As with all of its programs, the Department will continuously
review this process to find the best, most-efficient way of
implementing these rules. Additionally, the Department may alter the
composition of the panel depending on the nature and breadth of sectors
and occupations covered by a particular application, although it
expects that three will be the minimum number of reviewers for the
initial stages of the evaluation to include Departmental expertise,
industry expertise, and credentialing expertise. The Department agrees
that the panel of reviewers should include industry experts, rather
than consistently relying on two contractors from the credentialing
community as proposed. The Department otherwise anticipates following
the process outlined in the proposed rule to review entity's
applications.
The Department will take all steps necessary to prevent contractors
from reviewing applications for which they have a stake in the outcome;
furthermore, regardless of the composition of the panel, the
Administrator or the Administrator's designee will make the final
decision on recognition. In response to comments calling for a national
advisory committee review of SRE applications, the Department
determined that assembling such a committee and coordinating its review
would be difficult and could impose unnecessary burdens on entities
applying to be SREs. Accordingly, it will not take this approach for
reviewing applications. The Department made no change to the regulatory
text in response to these comments, and it has not included regulatory
text addressing the composition of an evaluation panel to maintain
flexibility to find the best, most efficient way to handle SRE
applications.
Regarding the concern that application review appears limited, the
Department notes that its proposed process provides for multiple layers
of review. The Department also notes that it has made every effort to
reduce the burden of applying to be an SRE without sacrificing quality.
The Department notes that review of an initial application and an
application for re-recognition are based on the same criteria and thus
will necessarily follow similar review processes. The Department
acknowledges that its staffing and resources are limited, but it
anticipates being able to utilize available appropriated funds to
review SRE applications.
Application Process--Sec. 29.21(a)
Paragraph (a) of Sec. 29.21 states that an entity must submit an
application to the Administrator to become a recognized SRE. The
Department will review the application to determine whether the entity
is qualified to be an SRE. This determination will depend in large part
on the scope and nature of the IRAPs the SRE seeks to recognize.
Accordingly, the application would give the Department information
about the industry(ies) and occupational area(s) for which programs
would train apprentices.
Numerous commenters suggested that applications should be required
to go through notice and comment before receiving approval. Commenters
stated that requiring notice and comment on entities' applications may
provide for transparency and ensure that the needs of apprentices and
industry are met. Commenters also suggested that notice-and-comment
review of applications would increase the efficacy, credibility, and
appropriateness of the standards that SREs recognize. One commenter
suggested that public comment from a wide range of sources would ensure
that SREs have the expertise necessary to ensure the creation of high-
quality IRAPs and to ensure that apprentices receive sought-after
competencies and industry-recognized credentials. The commenter
suggested that confidential business information not be shared, but
that other portions of an entity's application be made available for
public comment. Another commenter suggested that an SRE's standards
should be required to go through a notice-and-comment process.
Other commenters proposed that applications be shared with industry
groups so that these groups may raise concerns or provide input to the
Department as part of the application process. Many commenters
expressed concern that allowing multiple SREs with differing standards
to operate in the same occupations and the same geographic area would
lead to confusion. A commenter characterized such potential for
confusion as ``massive'' and representative of a major change to
apprenticeship. One commenter proposed that the rule should incorporate
a standard of reasonable consistency to ensure that training results in
transferable skills. The commenter suggested that reasonable
consistency could be achieved by allowing industry groups to object to
an SRE's training and structures if they are not reasonably consistent
with the training and requirements of programs in the same occupation
and same area. Another commenter stated that SREs should be required to
coordinate with any registered apprenticeship programs in their
industry or occupations in which they are certifying programs in order
to ensure the programs and standards are complementary and do not
undercut each other.
The Department determined that requiring SRE applications to
undergo a notice-and-comment period would be a large and unnecessary
burden and would not be the best use of Department resources. Such a
process would require additional Departmental staff resources to post
applications for public comment; review, reconcile, and consider
comments; and compare comments concerning an entity's application. The
Department further believes that the time required to perform such a
process for each entity's application would produce a backlog of
applications. In response to the comment proposing that an entity's
standards should go through notice and comment, the Department
determined that such a requirement would be likely to produce a similar
strain on Departmental resources, and a similar potential for delays
and backlogs. The Department is confident its expertise combined with
the expertise of the panelists will enable the
[[Page 14305]]
Administrator or the Administrator's designee to assess an entity's
application to determine whether the entity will be able to serve as an
effective SRE. Notably, many of the application requirements, such as
possessing sufficient financial resources and not being debarred from
conducting business with the Federal Government, are criteria that turn
on data not readily available to members of the public.
Similarly, the Department determined that sharing applications with
industry groups would present unnecessary burdens and potential delays
similar to those described above. To become recognized SREs, entities
must demonstrate that they have the expertise to set standards through
a consensus-based process involving industry experts, and the
Department thus expects that entities will demonstrate broad-based
support from industry. This places the burden on applicants to
demonstrate that they have consensus on how to train apprentices in a
way appropriate to the industry. It does not mean, however, that SREs
must demonstrate that they have adopted the only approach for training
apprentices in an industry. Accordingly, the Department has determined
it unnecessary for it to identify and consult industry experts on an
applicant's qualifications, as the application must demonstrate, in the
Department's evaluation, that an applicant has built consensus and
garnered expertise to set training standards in an industry. A
successful SRE application will contain all the information necessary
for the Department to independently determine whether a prospective SRE
developed its curricula and requirements through a consensus-based
approach. Requiring that entities share their applications with other
industry groups that may include potential competitors could also raise
issues of privacy and confidentiality. To the extent that the
Department requires outside expertise to assess an entity's
application, the Department may rely on the expertise of credentialing
experts and industry experts as explained above. The Department's
review will be limited to only the application, and the Department will
not approve applications that are ambiguous.
The Department does not anticipate that multiple SREs operating in
the same industry or occupational area will lead to confusion. The
Department notes that standards and training plans associated with
IRAPs in the same industry or occupational area may understandably vary
depending on the industry-recognized credentials obtained by
apprentices. The Department determined that requiring reasonable
consistency between IRAPs operating in the same occupation and area
would be unworkable and would unnecessarily restrict employer choice
Such a standard could stifle apprenticeship expansion by requiring SREs
to achieve ``reasonable consistency'' in areas or occupations where
such consistency does not exist. Similarly, while SREs are welcome to
coordinate with registered apprenticeship programs in the same
occupation, the Department determined that it would be most appropriate
to allow SREs the flexibility to choose with whom to consult.
Several commenters stated that the attestation-based model of
certification is neither rigorous nor transparent. According to one
commenter, the H-2B Temporary Worker Visa program demonstrated that an
attestation-based process invites fraud. The commenter suggested that
the rule be amended to require on-site review in-line with the
Nationally Recognized Testing Laboratory program. A different commenter
proposed that the application process mirror that of the American
National Standards Institute (ANSI), which the commenter characterized
as the ``gold standard'' for private industry. This process involves a
detailed application, opportunity for public comment, and a multi-
layered review that involves both Department of Education staff and an
advisory committee of industry professionals. Another commenter noted
that the rule incorporates no method by which the Department will
independently verify the information and supporting documentation
contained in an entity's application. Even if an application is
rejected, the commenter noted that the entity could seemingly correct
its application, reapply, and be approved in two business days.
A few commenters suggested that, in addition to the Administrator,
SAAs also should be permitted to assess entities' applications. One
commenter noted that under a newly-passed state law, SREs must be
certified to operate in-state, and the commenter requested that the
rule be amended to allow the Administrator to delegate to SAAs the
authority to approve SRE applications. One commenter noted that the
lack of a role for States makes this subpart unique among education and
workforce development programs and could lead to significant confusion
for both training providers and businesses if training is not aligned
with State priorities under other workforce and education plans. A
commenter recommended that the Department coordinate with other Federal
agencies including the Bureau of Land Management, the Bureau of
Reclamation, the National Park Service, the Fish and Wildlife Service,
and the U.S. Forest Service to encourage unique public-private
partnership. A commenter proposed that third-party accreditors such as
ANSI should review and assess entities' applications rather than the
Department.
The Department notes that the application process provided for is
not solely attestation-based, because paragraph (b) of Sec. 29.21
requires that the applicant demonstrate its qualifications by
submitting various required documents that include processes and
procedures. Paragraph (a) of Sec. 29.21 was also amended to require a
prospective SRE to provide a written attestation that all information
and documentation provided is true and accurate. Notably, many or all
of the attestations in the proposed rule were contained in the proposed
form, which was eliminated from the final rule, as explained below. The
Department determined that conducting on-site assessments of SREs would
offer few insights into an SRE's application while requiring
significant time and resources from the Department. The process for
reviewing entities' applications involves multiple layers, including
processing by program analysts, panel review, a panel meeting, and
review by the Administrator or the Administrator's designee. Though
this process does not involve the same layers as the ANSI process, the
Department is confident that it will result in effective assessment
given the rigorous review.
The Department does not anticipate independently verifying all
information submitted in conjunction with entities' applications, as
proposed by one commenter. However, the Department will be able to
identify errors in applications through careful review. The Department
will request clarifying information from entities if portions of an
entity's application seem to contain potential errors because of
unclear or inconsistent information included in the application. In
addition, willfully making materially false statements or
representations to the Federal Government in an application may
constitute a crime under 18 U.S.C. 1001. If an entity were to correct
an error and resubmit its application, the Department sees it as a
potential benefit that the application may be timely reviewed and
approved. Indeed, the Department expressly encourages such resubmission
in Sec. 29.21(d)(2). The Department notes, of course, that not every
deficiency in an application may be readily corrected. The Department
will exercise particular
[[Page 14306]]
care in evaluating applications that contradict previously-provided
financial information or descriptions of an entity's subsidiaries, as
one example.
The final rule does not permit the Administrator to delegate the
approval of SREs to States or SAAs. Given the nature of the
applications and the possibility that SREs operate on a regional or
national scale, the Department is in the best position to assess
applications from entities given its national reach and expertise. For
this same reason, the Department declined to provide for the assessment
of applications by third parties. The Department notes that State and
local government agencies or entities are eligible under Sec.
29.21(a)(1) to apply to become recognized SREs. No change to the rule
was made in response to these comments.
Several commenters requested that the Department work to minimize
the burdens in the application approval process. Multiple commenters
suggested that the process to be recognized as an SRE appeared more
burdensome than the registration process under subpart A. A commenter
suggested that the application process imposes unnecessary and
unjustified requirements, including the requirements to establish a
consensus-based process, demonstrate capacity and quality assurance
processes, and the requirement to apply for re-recognition. The
commenter described such burdens as disincentives to apprenticeship
expansion.
In response to comments, the Department has made every effort to
minimize burdens while still ensuring that the Department collects the
information necessary to recognize high-quality IRAPs. The Department
determined that the information required to be provided to the
Department by Sec. 29.21 is needed to accurately assess SREs. As part
of this effort, the Department revised the proposed form to better
align the information collected with the information required. The
Department determined that the form had the potential to cause
confusion, because some parts of the proposed form contained language
that varied slightly from the substantive requirements in proposed
Sec. 29.21. The Department, therefore, deleted the form from the
regulatory text. The Department also revised paragraph (a) of Sec.
29.21 to clarify that the application must be in a form prescribed by
the Administrator.
Required Qualifications To Become a Recognized SRE--Sec. 29.21(b)
Paragraph (b) of Sec. 29.21 describes the criteria against which
an SRE application will be assessed. The Department received no
comments relating directly to the first sentence in paragraph (b) that
as proposed read, ``[a]n entity is qualified to be a[n] [SRE] if it
demonstrates in its application that . . .'' The Department edited
Sec. 29.21(b) to remove the words ``in its application that'' to align
paragraph (b) of this section with the clarification in paragraph (a)
of Sec. 29.21 that the application is in a form prescribed by the
Administrator.
The proposed rule set forth the requirements to become a recognized
SRE in three paragraphs that were numbered Sec. 29.21(b)(1) through
(3). In response to the comment received, this final rule has been
revised so that there are eight paragraphs numbered Sec. 29.21(b)(1)
through (8), integrating some requirements that were previously in the
form included in the proposed rule.
Paragraph (b)(1) of Sec. 29.21 of the proposed rule provided that
an entity must demonstrate that it has the expertise to set standards,
through a consensus-based process involving industry experts, for the
requisite training, structure, and curricula for apprenticeship
programs in the industry(ies) or occupational area(s) in which the
entity seeks to be an SRE. An SRE should demonstrate sufficient support
and input from industry authorities to give confidence in the SRE's
expertise, given where its IRAPs will operate. This standards-setting
process will, in turn, inform and guide the IRAPs the SRE recognizes,
so that those programs impart the competencies and skills apprentices
need to operate successfully in their respective industries or
occupational areas.
A number of commenters responded to the Department's request for
comments on whether SREs should set competency-based standards for
training, structure, and curricula, rather than focus on potentially
superficial requirements such as seat time. Many commenters expressed
support for empowering SREs to set competency-based standards.
Commenters noted benefits of competency-based standards, including
those focusing on competency-based standards will allow IRAPs to train
apprentices in the most efficient manner possible, and that some
apprentices receive proficiency on an accelerated timeline using
competency-based standards. A commenter also warned that
apprenticeships need flexibility to maximize positive results for both
apprentices and employers, meaning that apprentices should not be bound
to a certain number of hours, but instead progress through the program
to gain a specific skill set and then perform these skills in a real
industry setting. Other commenters expressed concern that traditional
time-based programs are well established and that SREs are likely to
use time-based standards. Also, some credentials may be tied to a
minimum amount of seat time. One commenter proposed that the Department
impose a minimum competency baseline, while another requested that the
Department impose transparency requirements with respect to the
competencies that will be attained.
The Department agrees with numerous commenters who noted the
various benefits of competency-based programs, and paragraph (b)(1) of
Sec. 29.21 is accordingly revised to expressly require that entities
have the expertise to set competency-based standards, through a
consensus-based process involving industry experts, for the requisite
training, structure, and curricula for apprenticeship programs in the
industry(ies) or occupational area(s) in which it seeks to be an SRE.
The Department has concluded that requiring SREs to develop competency-
based standards that measure an apprentice's skill acquisition through
the apprentice's successful demonstration of acquired skills and
knowledge is consistent with ensuring that IRAPs offer innovative and
high-quality training.
Though the Department is requiring competency-based standards, the
Department does not intend to restrict SREs in using their expertise in
designing those standards, and SREs are not precluded from including
time-based requirements as a function of or in addition to competency-
based standards. For example, an SRE might determine that time-based
requirements are necessary for apprentices to achieve competency.
Accordingly, SREs will retain the flexibility to decide how competency
is achieved, which may include the utilization of time-based measures.
Requiring SREs to set competency-based standards will ensure that
IRAPs and apprentices benefit as much as possible from the knowledge of
each SRE's industry experts. Requiring that standards be competency
based will further ensure that apprentices gain a specific skill set
and perform such skills in a real industry setting, as proposed by one
commenter. In addition, requiring SREs to develop competency-based
standards is consistent with
[[Page 14307]]
Recommendations 1 and 5 of the Task Force on Apprenticeship Expansion
Final Report to the President of the United States. Included in
Recommendation 5 was the suggestion that technical instruction be
competency-based, not seat-time based, and that technical instruction
be directly aligned with the knowledge, skills, and abilities needed on
the job. The Department does not intend for the requirement that
standards be competency-based to preclude SREs from tracking time
towards any minimum requirements that must be met to receive a
particular industry-recognized credential. The Department agrees that
transparency regarding competencies is important and notes that
language was added in Sec. 29.22(a) that requires IRAPs to provide
apprentices with a written training plan.
The Department determined not to set a minimum time requirement for
IRAPs, because the standards developed by SREs are required to be
competency-based and may include any time-based requirements the SREs
deem necessary for apprentices to achieve competency.
A commenter requested clarification regarding how the Department
will review standards. One commenter proposed that if competency-based
standards are developed using Federal funding, then SREs should be
required to release such competency-based standards to the public so
that they become part of the public domain. The commenter suggested
that spending taxpayer money on multiple competing competency-based
standards would be an example of wasteful spending.
The Department will use the combined expertise of Department staff
and outside contractors to review entities' applications to assess the
expertise and the sufficiency of the process by which the entities
would develop standards. The Department declines to require that
standards be made part of the public domain. In the event that the
Department enters into grants, contracts, or cooperative agreements to
use Federal funding for the creation of standards, the ownership of
such standards will be addressed in such agreements. No changes were
made to the regulatory text in response to these comments.
Several commenters responded to DOL's question in the preamble to
the proposed rule regarding whether additional requirements are needed
in paragraph (b)(1) to guarantee that the standards-setting processes
of SREs will align the skills that apprentices receive to the needs of
employers in a given region. One commenter proposed that DOL should
weigh an applicant's history of developing and operating under the
workforce development model using data collected under the Workforce
Innovation and Opportunity Act (WIOA). Conversely, the commenter
suggested that when considering SRE applications from entities with
existing standards-setting processes, the Department should consider
how the processes may increase employment outcomes for those with
barriers to employment. Another commenter proposed that SREs be
required to consult with both industry experts and State Workforce
Development Boards, which the commenter suggested are well-suited to
identify the industry-recognized credentials needed to meet labor-
market demand. Several commenters suggested that allowing multiple
entities to act as SREs, each with their own unique standards, would
create confusion. A commenter proposed that SREs must demonstrate
significant industry engagement at national and local levels and
evaluate whether industry programs align with activities of industries.
A commenter recommended focusing on the continuity of standards.
Without continuity, the commenter suggested, there would be significant
risk for apprentices in finding employment outside of the first
sponsoring employer.
Other commenters requested that no geographic approach be
incorporated into the final rule. One commenter noted that a small
hotel chain might operate in multiple States but still require one
comprehensive solution to the hotel chain's workforce needs. Several
commenters suggested that this subpart might be interpreted at a local
level with no consistency from state to state or even city to city,
creating varying levels of IRAP program quality.
Some commenters also suggested that ``expertise'' and ``experts,''
as used in this paragraph, was vague and should be more specific or
should be defined. A proposed clarification was that expertise could be
demonstrated by having the support, commitment, and buy-in from
multiple employers. Other commenters proposed that the Department
specify the qualifications necessary to demonstrate such expertise. A
different commenter proposed that the Department attempt to ensure that
industry experts are truly representative of their industries, rather
than leaving the selection of experts up to the SRE. A commenter
suggested that unless the term ``expert'' were defined, the
Department's review panel would have little basis by which to make a
consistent assessment, thereby leading to the inclusion of experts of
any stripe. Another commenter requested that the Department provide
additional clarification regarding how SRE applicants will be expected
to show their expertise in setting standards, impartiality, and
credentialing in establishing IRAPs.
Other commenters proposed alternatives to demonstrating expertise.
One commenter proposed that the paragraph be amended to allow for an
SRE to have the expertise to set standards through a consensus-based
process involving industry experts, or that it ``possesses the ability
to convene a body of industry experts.'' Several commenters suggested
that an applicant's history with workforce development programs should
be a possible alternative to demonstrating input from industry experts.
A group of commenters noted that ``consensus-based process'' is vague
and undefined. One commenter proposed that the Department define the
concept of consensus standards and also questioned whether consensus
standards for a given industry are any different from a work process
schedule required in Sec. 29.5 of subpart A.
A commenter requested that quantitative and qualitative measures
carry equal weight in an entity's application.
The Department agrees that weighing an entity's experience
operating under the workforce development system would be relevant
information that should be provided in an entity's application if the
entity possesses such experience. However, the Department has
determined that requiring all applicants provide metrics measured under
WIOA may exclude potentially qualified entities from applying. As
discussed below, the Department declines to establish minimum
experience requirements for entities to apply to become recognized
SREs. The Department agrees that a proven track record of positive
outcomes for those with barriers to employment would be a relevant and
persuasive point of discussion in an entity's application for entities
that have such experience. However, the Department declines to require
that entities demonstrate the likelihood of expanding opportunities for
those with barriers to employment in their applications as it would
create a different application standard for applicants experienced in
handling such issues. Additionally, the final rule maintains
flexibility to allow entities to design programs most responsive to
their workforce and economic needs. Additionally, while WIOA is
directed in large part toward those with barriers to employment as
defined by that statute, the NAA is directed toward apprentices
[[Page 14308]]
broadly and generally; consistent with the NAA, the industry-led
apprenticeship model envisioned by this rule is intended to serve
apprentices in a variety of industries and with a variety of
backgrounds, not just those who are currently experiencing barriers to
employment as that term is used in WIOA. While input from one or more
State Workforce Development Boards could demonstrate valuable knowledge
and expertise on the part of an applicant, the Department declines to
require that every applicant consult with every relevant State
Workforce Development Board.
As discussed above, the Department does not share the concern that
a variety of SREs will lead to confusion and inconsistent IRAP program
quality. To the contrary, the Department expects that any SREs
complying with the requirements of this subpart will only recognize
IRAPs that provide high-quality training. The Department views slight
variations in approach that will occur between SREs as a net benefit
that will provide apprentices and employers with increased options to
meet the training needs of their workforce. Furthermore, the Department
anticipates that many entities that may be interested in becoming
recognized SREs already have standards-setting processes that reflect
well-established and high-quality training, and the Department does not
anticipate that expanding access to such programs will lead to
confusion.
In response to the comment that SREs must be able to demonstrate
significant industry engagement at national and local levels, the
Department notes that coordination with industry experts is an existing
requirement in paragraph (b)(1) of Sec. 29.21. The Department also
notes that it would be difficult and burdensome for SREs to list in
their applications every local area in which it anticipates recognizing
IRAPs.
The Department appreciates the concern with focusing on the
continuity of standards to ensure the employability of completing
apprentices. Notably, as discussed above, apprentices will train
according to competency-based standards that reflect the consensus of
experts and thereby convey consistency and employability. In addition,
as discussed below, SREs will report on credential attainment and
employment outcomes of their IRAPs, thereby demonstrating continuity of
training and employability.
The Department disagrees with the concern that allowing SREs to
adjust their practices for each State and city in which they certify
programs could lead to varying levels of certification quality, and
therefore, has declined to prohibit such an approach. To the contrary,
the Department envisions that SREs will make these adjustments as a
matter of necessity to successfully operate in a State or region. For
example, an apprentice working in automotive body repair in the
southwestern United States may not need to achieve competency in
repairing damage caused by road salt that may be common in other
regions of the country. The Department notes, however, SREs must ensure
that IRAPs lead to apprentices receiving industry-recognized
credentials, and some State by State credentialing and licensing
requirements are inevitable and will need to be considered by SREs.
The Department intends for the term ``expert'' as used in Sec.
29.21(b)(1) to mean a person who has comprehensive knowledge of a
particular area. The Department declines to set minimum experience or
qualification requirements as such qualifications may necessarily vary
across industries. A worker with in-depth knowledge of his or her
occupation or related occupations and an instructor with extensive
knowledge in credentialing may both bring valuable expertise to an SRE
and could conceivably be included among the SRE's experts. The
selection of experts must necessarily be left up to the SRE as the
Department would not be in a position to require consultation with
specific industry experts. The Department declines to adopt suggested
alternative approaches to demonstrating expertise, such as possessing
experience with workforce development, as that would impinge on the
flexibility the Department believes SREs should be given.
The ability to set competency-based standards through a consensus-
based process involving industry experts is essential to ensuring that
the SRE recognizes only high-quality IRAPs. The requirement that
standards be the result of a consensus-based process is intended to
ensure that an SRE's experts agree that the standards will result in
high-quality IRAPs that convey industry-recognized credentials
consistent with the requirements in this subpart. Entities are required
to identify in their applications the industry expertise on which they
will rely and the processes by which the entity will develop standards.
Once recognized, the SRE must rely on the opinion of experts as
described in the entity's application, but need not rely on any
particular expert(s) identified on the application. The Department
anticipates that the ability to convene a body of industry experts
could serve as part, though not all, of an entity's consensus-based
process. The Department therefore declines to make the ability to
convene a body of experts an alternative to establishing a consensus-
based process. Although a history of working with the workforce
development system could potentially demonstrate an entity's expertise,
the Department does not consider such experience as an alternative to
establishing a consensus-based process.
The Department intends for the term ``consensus-based process'' to
require that the competency-based standards developed are the product
of agreement by experts in the fields. Regarding the comment
questioning whether consensus standards are the same as a ``work
process schedule'' as those terms are used in subpart A, the Department
agrees that the two concepts are comparable. The Department expects
that SREs will organize their competency-based standards such that
IRAPs and apprentices will clearly understand the skills and knowledge
that must be demonstrated in order to complete the program. Although
the idea of a work process schedule is a common method of describing
knowledge and skill attainment under subpart A, the Department is not
requiring the establishment of work process schedules under this
subpart.
The Department anticipates that qualitative measures of
demonstrating qualifications may be more common in entities'
applications as the applications must demonstrate expertise and
describe competencies. Quantitative measures will be relevant for
entities with extensive experience in training apprentices and such
measures will also be assessed in the re-recognition process as
described in Sec. 29.21(c)(1)(ii). No change was made in the
regulatory text in response to these comments.
Paragraph (b)(1)(i) of Sec. 29.21 clarifies that the requirements
in Sec. 29.21(b)(1) may be met by an entity's past or current
standard-setting activities, and need only engender new activity if
necessary to comply with this rule. This paragraph accounts for how
some prospective SREs already have standards-setting processes that
reflect well-established, industry-, occupation-, and employer-specific
needs and skills. Rather than requiring those prospective SREs to alter
their approach to setting standards, the Department seeks to clarify
its expectation that such entities' processes for setting standards
likely meet the requirements of this proposed rule, and need only
change if necessary to comply with it.
One commenter suggested that this paragraph as drafted would
properly
[[Page 14309]]
account for an entity's past efforts in standard setting. A different
commenter questioned whether DOL anticipated grandfathering in existing
standards-setting entities and suggested such a practice would be
inappropriate. The Department agrees that the paragraph as proposed
appropriately accounts for entities already setting standards based on
the consensus of industry experts; the text is adopted as proposed. The
Department does not intend to grandfather in existing standards-setting
entities--such entities still must apply to become recognized SREs and
will need to alter their processes and procedures as necessary to
comply with this subpart.
Although paragraph (b)(1)(ii) of Sec. 29.21 is reserved, one
commenter proposed that text be added at this paragraph to clarify that
SAAs in good standing receive automatic recognition as SREs. While
State entities are eligible to apply to become recognized SREs, the SAA
evaluation process is significantly different than the process the
Department has designed for evaluating SREs. Accordingly, the
Department has determined it necessary that any SAA that seeks SRE
recognition to goes through the application process prescribed in this
subpart to ensure it has the processes and procedures in place to
recognize high-quality IRAPs. This paragraph remains reserved as
proposed.
Paragraph (b)(2) of Sec. 29.21 states that the entity must
demonstrate that it has the capacity and quality assurance processes
and procedures sufficient to comply with paragraph Sec. 29.22(a)(4),
given the scope of the IRAPs to be recognized. That paragraph
authorizes SREs to recognize and maintain recognition of only high-
quality apprenticeship programs.
Paragraph (b)(3) of Sec. 29.21, as proposed, noted that
prospective SREs must demonstrate they meet the other requirements of
the subpart, in particular those outlined in Sec. 29.22. The
Department received no comments on this proposed paragraph. However,
the paragraph was renumbered as (b)(8) to account for the additional
application requirements as follows. The final text was changed from
``[i]t meets the other requirements of this subpart'' to ``[i]t meets
any other applicable requirements of this subpart.'' The change was
made to clarify that not every requirement of this subpart would be an
eligibility requirement at the time of application.
The new paragraph (b)(3) of Sec. 29.21 in the final rule
incorporates a requirement that an entity indicate that it has the
resources to operate as an SRE for a 5-year period, and to report any
bankruptcies during the previous five years. This requirement is taken
from the proposed form that required an entity to demonstrate its
ability to operate for the next five years and provide a financial
statement. The form is not included in the final rule for the reasons
discussed above. The text of the final rule is intended to ensure the
future financial stability of an SRE to the greatest extent possible.
The Department's recognition signals to prospective IRAP sponsors about
the operational health of an SRE and thus a sense of security in the
sustainability of the SRE. Additionally, this approach minimizes the
burden on applicants as requested by several commenters.
A commenter noted that, in its view, a financially unstable
training program will not safeguard the welfare of apprentices.
Multiple commenters noted, in their view, the importance of verifying
that the credential provider remains financially viable. One such
commenter added that apprentices may not receive the benefit of
industry-recognized credentials if the credential issuer later becomes
defunct. Another commenter suggested that measures to ensure the
financial viability of SREs be strengthened to ensure that SREs have
sufficient financial contributions from IRAPs to operate successfully.
One commenter noted that the proposed form seemed to indicate that the
Department lacks confidence in prospective SREs, because it asked
prospective SREs to address their financial stability over the next
five years.
Several commenters pointed to the potential for financial
conflicts. Multiple commenters suggested that SREs will have a
financial incentive to recognize as many IRAPs as possible. One such
commenter suggested that SREs provide a plan for how they will sustain
losses from reduced fees if the SRE must derecognize IRAPs. The
commenter suggested that such a financial tension has been a central
challenge for the higher education accreditation system.
The Department agrees that an SRE's financial viability is crucial
to ensuring safety and ensuring the long-term value of industry-
recognized credentials, and the Department has included the new
paragraph (b)(3) of Sec. 29.21 in the final rule in response to these
comments. The bankruptcy or dissolution of an SRE could also disrupt
apprentices' training, as the SRE's IRAPs would have to apply for
recognition from a different SRE. The Department has determined that an
entity should demonstrate its financial viability for five years, which
is intended to capture at least one full recognition cycle for the SRE.
SREs are in the best position to determine whether to charge fees, and
if so, to set the fees necessary to support their operations. As
explained in more detail below, the Department has not set minimum or
maximum levels of fees that SREs may charge.
The Department also agrees that demonstrating financial stability
at the application stage will ensure that SREs' financial viability is
not based on recognizing as many IRAPs as possible without heeding to
program quality, and that SREs will be able to absorb lost fees if some
IRAPs must be derecognized.
New paragraph (b)(4) of Sec. 29.21 requires that an entity
disclose relationships with subsidiaries or other related entities that
could reasonably impact its impartiality. The requirement is taken from
the proposed form, which requested lists of related bodies, such as
parent or subordinate organizations, as well as a list of confirmed or
potential partners. The Department received one comment related to this
paragraph, which was that conflict of interest provisions related to an
SRE offering consultative services should be extended to related
entities or subsidiaries.
The Department agrees that potential conflicts of interest
involving subsidiaries or related entities could be imputed to the SRE,
and paragraph (b)(4) of Sec. 29.21 has been added in part to address
such concerns. Proposed 29.22(e) and (f) have also been amended in
response to this and other comments, as explained below. Paragraph
(b)(4) also requires that the entity describe the roles of confirmed or
potential partners. In addition, such information may provide context
related to an entity's ability to perform the required functions of an
SRE.
Paragraph (b)(5) of Sec. 29.21 has been added to the final rule
and requires entities to demonstrate that they are not currently
suspended or debarred from conducting business with the U.S. Federal
Government. The debarment restriction is intended to exclude entities
that have carried out bad acts that would call into serious doubt their
ability to effectively function as an SRE. The debarment restriction is
taken from the proposed form, which requested that entities affirm they
have no relevant injunctions, debarments, or other restrictions that
would prevent them from doing business with the Federal Government or
members of their industry sector. The final text has been changed from
the language in the proposed form to clarify that relevant debarments
are those that would prevent the entity from conducting
[[Page 14310]]
business with the U.S. Federal Government, as the term ``debarment'' is
commonly understood. The Department received no comments related to the
debarment question in the proposed form that is carried forward in this
paragraph.
Paragraph (b)(6) of Sec. 29.21 has been added to the final rule
and requires entities to mitigate any actual or potential conflicts of
interest, including, but not limited to, conflicts that may arise from
the entity recognizing its own apprenticeship programs and conflicts
relating to providing services to actual or prospective IRAPs. Such
actual or potential conflicts must be addressed through specific
policies, processes, procedures, structures, or a combination thereof.
The requirements in this paragraph are replacing those proposed in
paragraphs (e) and (f) of Sec. 29.22 in the proposed rule. As
discussed in greater detail in the Sec. 29.22 discussion below, this
revision is meant to strengthen the conflict of interest provisions by
moving the requirement from Sec. 29.22 of the proposed rule to Sec.
29.21 of the final rule. By moving the requirements to Sec.
29.21(b)(6), every entity is required to address potential conflicts of
interest through specific policies, procedures, organizational
structures, or a combination thereof that will be assessed by the
Department before the entity may be recognized as an SRE. This change
was made in response to numerous commenters who suggested the proposed
rule insufficiently addressed conflicts of interest. The Department
also has broadened the requirement to include recognizing an SRE's own
IRAPs or offering services to actual or prospective IRAPs as non-
exhaustive examples of the types of actual or potential conflicts that
must be addressed. This change was made in response to several
commenters who noted that other conflicts may exist. The comments on
conflicts of interest are addressed in the Sec. 29.22 discussion
below, because that is the provision in which those requirements were
initially proposed (as Sec. 29.22(e) and (f)). Relatedly, as discussed
in further detail below, proposed Sec. 29.22 also requires that an
SRE's recognition procedures assure that IRAPs receive equitable
treatment and are evaluated based on their merits, and this requirement
was carried forward in Sec. 29.22(d) of the final rule.
Paragraph (b)(7) of Sec. 29.21 was added to the final rule and
requires that an entity demonstrate that it has the appropriate
knowledge and resources to recognize IRAPs in the sectors and
occupations in the intended geographic area, which may be nationwide or
limited to a region, State, or local area. This requirement was taken
from the proposed form that in Section I asked entities where they
planned to recognize IRAPs. Obtaining such information is necessary to
ensure that the Department can refer prospective apprentices or IRAPs
to nearby SREs or IRAPs in the relevant sector or occupation. As noted
in the final regulatory text, the knowledge and expertise that an
entity would need to demonstrate would necessarily vary if the entity
is interested in recognizing IRAPs in a single State versus nationwide.
Consideration of Commenters' Suggestions for Additional SRE Eligibility
Requirements
A few commenters proposed additional eligibility requirements for
entities to become recognized SREs. One commenter proposed that the
Department limit SRE eligibility to well-established, industry-
recognized associations or non-profit organizations. Another commenter
suggested that entities should have experience in the area in which
they are seeking recognition in order to set standards. The commenter
suggested that a community college, for-profit institution, or non-
profit organization should not be able to set standards for a trade in
which the entities do not perform such work. A commenter proposed that
the Department consider requiring that agencies have a minimum of two
years of experience to demonstrate that the entity is effective in
assessing the quality of workforce programs. Alternatively, the
commenter suggested that the Department limit the scope of operations
of SREs that lack such experience. One commenter suggested that
applicants with accreditation experience should receive priority
processing, because such experience would help to maintain consistency
across IRAPs.
The Department declines to set minimum experience requirements for
entities to apply to become recognized SREs. Notably, Sec. 29.20
addresses the eligibility of a partnership or consortia of entities
applying to become recognized SREs in light of the diverse expertise
required of SREs. The Department declined to limit eligibility to well-
established entities, as a start-up SRE or a new partnership or
consortium of entities may be equally well-positioned to serve as
effective SREs. Furthermore, it would disadvantage cutting-edge
industries and stifle the expansion of apprenticeship to require that
all SREs be well established. The Department similarly declined to
require that SREs perform the work of an industry or occupation. The
Department notes that SREs must possess a variety of abilities beyond
establishing training plans and recognizing standards. SREs must also
perform quality-control functions, receive and address complaints, and
collect and report data. Moreover, universities and community colleges
may possess expertise in classroom instruction and credentialing and
licensing that is also required by the subpart. Although an entity
possessing actual experience ensuring the quality of workforce programs
would be well-positioned to meet the requirements of this paragraph,
the Department also anticipates that many entities may not possess such
experience but may, nevertheless, be able to demonstrate that they
possess the required capacity. For example, an entity without such
experience may be able to demonstrate its capacity and quality
assurance processes by hiring quality assurance personnel or by
implementing industry best-practices. The Department decided not to
make SRE approval conditional or limited at the outset. Notably, SREs
are expected to comply with the requirements of this subpart
immediately upon recognition. The Department made no changes in
response to the comments.
Applications for Re-Recognition--Sec. 29.21(c)(1)
Paragraph (c) of Sec. 29.21 indicates that the Administrator will
recognize an entity as an SRE if the applicant is qualified, and also
provides additional details about recognition. This paragraph ensures
that the Administrator undertakes adequate review of SREs, both over
time and following any significant changes that would affect the SRE's
qualification or ability to recognize IRAPs.
Section 29.21(c)(1) indicates that SREs will be recognized for 5
years. An SRE must reapply if it seeks continued recognition. The
Department proposed a 5-year time period to be consistent with best
practices in the credentialing industry and to ensure that already-
recognized SREs continue to account for the development and evolution
in competencies needed within their industries. Changes were also made
in response to comments to clarify that an SRE must reapply at least 6
months before its recognition is set to expire.
Numerous commenters stated that, in their view, a 5-year
recognition period is too long. Several commenters suggested that SREs
should be recognized for a 1-year probationary period and then be
reassessed as part of a process that would be similar to
[[Page 14311]]
Sec. 29.3(g) in subpart A. A commenter argued that it would be unfair
for SREs to receive 5-year approval whereas a registered apprenticeship
program could only be registered provisionally for 1 year. One
commenter suggested that the criteria for approval are not stringent
enough to result in recognition for 5 years. Another commenter
questioned why an entity with no proven track record of high-quality
training would be recognized for 5 years. One commenter urged that
approval for a shorter period would allow SREs to better keep pace with
rapid changes in industry. Conversely, multiple commenters agreed that
approval for 5 years is consistent with the practices in the
credentialing industry.
A commenter suggested that SREs should be recognized for 5 years,
but that they should be required to apply for re-recognition before the
5-year period ends in order to ensure that IRAPs not be approved and
monitored by SREs with expired recognition. A different commenter
proposed that an SRE should be recognized for 5 years, unless the SRE
is an SAA, in which case the recognition should last indefinitely.
Another commenter proposed that re-recognition should take into
consideration a measure of employer uptake. The commenter explained
that employer uptake would measure the extent to which employers in a
given sector emulate or adopt the standards recognized by an SRE.
As discussed above, the Department strengthened the recognition
requirements by adding five new paragraphs to paragraph (b) of Sec.
29.21. During the approval period, the Department has broad discretion
to conduct both compliance assistance reviews under Sec. 29.23 as well
as reviews under Sec. 29.26 that may lead to suspension or
derecognition. Such reviews may be conducted at any time, including
before the 1-year mark after initial recognition. This oversight
ability will allow the Department to monitor SREs for compliance with
its regulations. Further, SREs will be able to adapt to rapid changes
in industry by amending their recognition process and notifying the
Administrator as required under paragraph (c)(2) of Sec. 29.21,
discussed below. These measures are more than sufficient to meet the
broad and general directives of the NAA, which do not require the
Department to adopt precisely the same procedures used in the
Registered Apprenticeship program for other programs, nor establish
specific time periods of any sort. Rather, the Department is only
directed to ``bring together employers and labor for the formulation of
programs of apprenticeship'' and to ``formulate and promote the
furtherance of labor standards necessary to safeguard the welfare of
apprentices,'' which this regulation does.
The Department agrees that allowing SREs to apply for re-
recognition on the date of expiration could lead to confusion during
the time in which the Department is adjudicating the SRE's application.
In response to this comment, the Department amended Sec. 29.21(c)(1)
to require an SRE to apply for re-recognition at least 6 months before
its current recognition is set to expire. In response to the comment
suggesting that SAAs should receive indefinite recognition if they are
recognized as SREs, the Department declines to establish different
recognition periods for different types of entities because of the
potential for confusion.
Paragraph (c)(1)(i) of Sec. 29.21 was added to clarify that an SRE
must apply for re-recognition by submitting an updated application to
the Administrator in a form prescribed by the Administrator. This
paragraph was added to mirror the changes made to paragraph Sec.
29.21(a) that explain the initial application process.
Paragraph (c)(1)(ii) of Sec. 29.21 was added to establish the
standard against which an application for re-recognition is assessed.
It provides that the information contained in the application will be
evaluated for compliance with Sec. 29.21(b)(1) through (8) in much the
same manner as an initial application. In addition, the paragraph
recognizes that the SRE will have reported data pursuant to Sec.
29.22(h) that will reflect the outcomes of the IRAPs the SRE has
recognized.
An SRE applying for re-recognition must submit its quality
assurance processes and procedures that will ensure compliance with
Sec. 29.22(a)(4), as required by Sec. 29.21(b)(2). The Department
will also review data provided by the SRE to ensure that the
quantifiable requirements of this subpart were and are being achieved.
The Department does not intend for Sec. 29.21(c)(1)(ii) to establish
minimum benchmarks that SREs must meet to receive re-recognition.
Rather, the Department intends to use all available relevant data to
enhance quality assurance and ensure that the processes and procedures
submitted as required by Sec. 29.21 are resulting in the recognition
of high-quality IRAPs that meet the requirements of Sec. 29.22(a)(4).
Thus, for example, the SRE's application for re-recognition must
demonstrate policies and procedures that will ensure its IRAPs will
provide apprentices with a safe working environment and industry-
recognized credential(s) during participation or upon completion of the
program, among other requirements. If, however, the same SRE's data
submitted pursuant to Sec. 29.22(h) indicated that apprentices are
completing the SRE's requirements and are not earning industry-
recognized credentials, such data may well reveal that an SRE's quality
assurance processes and procedures are and were inadequate.
Obligation To Notify the Administrator of Substantive Change--Sec.
29.21(c)(2)
Paragraph (c)(2) of Sec. 29.21 requires that an SRE notify the
Administrator and provide all related material information about any
major change that could affect the operations of the recognition
program. The requirement that an SRE notify the Administrator if the
SRE makes a substantive change to its recognition processes was not
carried forward in the final rule in light of the requirement added to
Sec. 29.22(p), discussed below, that requires an SRE to notify the
Administrator when an SRE makes a significant change to its policies or
procedures. Changes under Sec. 29.21(c)(2) would include involvement
in lawsuits that materially affect the SRE; changes in legal status; or
any other change that materially affects the SRE's ability to function
in its recognition capacity. Likewise, the SRE must notify the
Administrator and provide all related material information if it seeks
to recognize apprenticeship programs in new sectors or occupations.
Paragraph (c)(3) of Sec. 29.21 further states an SRE must notify the
Administrator of major changes that could affect its recognition
program, prior to their implementation. Such changes include seeking to
recognize IRAPs in new sectors or geographical areas. In light of the
information received, the Administrator will evaluate whether the SRE
remains qualified for recognition under Sec. 29.21(b).
The Department received one comment on this paragraph. The
commenter suggested that language be added stating that conflicts of
interest arising after recognition should be considered substantive
changes that must be submitted to the Administrator. In addition, the
commenter suggested that major expansions of programs, major changes to
the type of program offered, or changes to the type of credential
offered should be considered substantive changes.
The Department appreciates the concern that a conflict of interest
could constitute a material change. The Department addressed this
concern by
[[Page 14312]]
moving the conflict of interest requirement to Sec. 29.21(b)(6) and
thus requiring all SREs to submit processes, procedures, organizational
structures, or a combination thereof that mitigate actual or potential
conflicts of interest. Once recognized by the Department, SREs must
comply with their own policies and procedures as stated in Sec.
29.22(p), discussed below. Notably, as explained, Sec. 29.22(p)
contains a requirement that the Administrator be notified if the SRE
makes significant changes to its processes or procedures, which would
require the SRE to notify the Department about changes in procedures
that address conflicts of interest.
The Department agrees that changes to the type of credential
offered would constitute major changes that affect the operation of the
SRE and thus require notification to the Administrator.
Because all SREs are required to develop competency-based
standards, changes from one type of apprenticeship program to another,
such as a change from a time-based program to a competency-based
program, are no longer permissible. Thus, an SRE could revise its
competency-based standards without notifying the Department if the SRE
developed the standards using its existing processes and procedures.
If, however, the SRE changed its processes and procedures for setting
competency-based standards, Sec. 29.22(p) would require that the
Administrator be notified of the change in process.
The Department made no changes to this paragraph in response to the
comment. The Department did, however, add the word ``calendar'' to
Sec. 29.21(c)(2)(iii) to clarify that days are calculated as calendar
days. This change was made throughout the rule.
Denials of Recognition--Sec. 29.21(d)
Paragraph (d) of Sec. 29.21 outlines the requirements associated
with any denials of recognition after the Department receives a
prospective SRE's application. The Administrator's denial must be in
writing and must state the reason(s) for denial. The denial must also
specify the remedies that must be undertaken prior to consideration of
a resubmitted application and must state that a request for
administrative review may be made within 30 calendar days of receipt of
the notice. Under the final rule, the denial must also explain that a
request for administrative review made by the applicant must comply
with 29 CFR part 18's service requirements. Additionally, the final
rule clarifies that the appeal procedures in Sec. 29.29 apply to
appeals under Sec. 29.21(d).
The Department received no comments on this paragraph and added
clarifying language to the first sentence stating that the requirements
for denials of recognition ``are as follows.'' The Department also
edited Sec. 29.21(d)(2) to clarify that notice to the Office of
Administrative Law Judges must comply with the service requirements
contained in 29 CFR part 18. This change is intended to account for any
future change to the regulations promulgated by the Office of
Administrative Law Judges.
Section 29.22 Responsibilities and Requirements of Standards
Recognition Entities
Section 29.22 describes the responsibilities of and requirements
for SREs, including recognizing high-quality IRAPs, developing policies
and procedures on a range of issues, reporting data to the Department
and the public, and giving notice to the public of complaints and fees.
The Department received many comments on this section, as described in
detail below, and made several changes in response to those comments.
In particular, the Department clarified some of the standards of high-
quality apprenticeship programs in Sec. 29.22(a)(4) and strengthened
the SRE's requirement that an SRE validate and attest, in Sec.
29.22(b), both at initial recognition and on an annual basis, that its
IRAPs meet the standards of Sec. 29.22(a)(4) and any other SRE
requirements. The Department also included a requirement in Sec.
29.22(d) that the SRE disclose to the Administrator its policies and
procedures for ensuring consistent assessments of IRAPs for recognition
and compliance with subpart B.
As explained in the earlier discussion of Sec. 29.21, the
Department moved paragraphs (e) and (f) concerning conflicts of
interest from Sec. 29.22 to Sec. 29.21 and relettered the paragraphs
in Sec. 29.22 accordingly. Therefore, within Sec. 29.22 of the final
rule, paragraph (g) regarding 5-year recognition of IRAPs is now
paragraph (e); paragraph (h) regarding the quality-control relationship
between the SRE and its IRAPs is now paragraph (f); paragraph (i)
regarding joint employer status is now paragraph (g); paragraph (j)
regarding SRE reporting of IRAP data is now paragraph (h); and
paragraph (k) regarding equal employment opportunity (EEO) policies and
procedures is now paragraph (i).
The Department also added two additional requirements to the
quality-control relationship between the SRE and the IRAP in Sec.
29.22(f) (previously (h)) and included additional reporting
requirements in Sec. 29.22(h) (previously (j)), requiring information
to be made publicly available and reported to the Department. The
Department received comments to other sections of the rule concerning
complaints against SREs and IRAPs and derecognition of SREs. These
comments resulted in the Department's decision to add paragraphs (j)
through (m) to Sec. 29.22. Among other things, these paragraphs
clarify the notice an SRE must give of the right to file a complaint
against an SRE or an IRAP and of SRE derecognition. The Department also
added Sec. 29.22(n) to require that the SRE make publicly available
any fees that it charges to IRAPs, Sec. 29.22(o) to ensure that
records relating to IRAP recognition and compliance are maintained, and
Sec. 29.22(p) to clarify that the SRE must follow its own policies and
procedures and notify the Administrator when it makes significant
changes to either.
SRE Requirements for Recognizing High-Quality IRAPs
Paragraph (a) of Sec. 29.22 describes various obligations of SREs
and identifies the characteristics of high-quality apprenticeship
programs. The Department received numerous comments about this
paragraph, particularly regarding the characteristics of high-quality
apprenticeships set forth in Sec. 29.22(a)(4). Many commenters
contrasted the requirements of paragraph (a) of Sec. 29.22 with the
requirements for registered apprenticeship programs. Others detailed
the successes of their registered apprenticeship programs and the
importance of safeguarding the welfare of apprentices. Some commenters
faulted the rule for providing the SREs with too much discretion,
stating that the rule did not provide adequate protection against
exploitation because IRAPs would admit ``apprentices'' yet provide
limited or inadequate training and pay them less than the prevailing
wage rates. Commenters expressed concern about industry providing
inadequate training and substandard working conditions to create a low-
skilled, low-wage labor pool.
Other commenters expressed support for the rule's flexibility and
for allowing SREs to set industry-relevant requirements. They praised
the rule's approach of ensuring high-quality apprenticeships and
adequate protection for apprentices while at the same time providing
flexibility to allow for increasing apprenticeships and promoting
innovation in industries that may not yet have robust apprenticeship
programs. Commenters favorably remarked that IRAPs would create
[[Page 14313]]
healthy competition with registered programs, would not be restricted
by the presence of union-sponsored programs, and would encourage
modernization of and investment in training by SREs, IRAPs, and
registered apprenticeships.
These comments and the Department's responses and changes to the
final rule are detailed in the paragraph-by-paragraph section below.
Among other things, the Department's changes enhance its oversight of
SREs by adding additional reporting requirements for SREs and quality
assurance measures. The changes also strengthen the requirements for
the quality-control relationship between an SRE and its IRAPs, the
protections for apprentices by enhancing the requirements for high-
quality IRAPs, the SREs' oversight of IRAPs, and further adding
measures concerning SRE responsibilities. The Department also received
comments that it deemed not applicable or appropriate to address in
this rule, such as a suggestion to require employers to use e-Verify
for the employment eligibility of apprentices and a suggestion to
specify whether SREs would be eligible for State-specific funding or
benefits.
Timeliness of SRE Recognition
Paragraph (a)(1) of Sec. 29.22 provides that SREs must recognize
or reject apprenticeship programs seeking recognition in a timely
manner. The Department received comments suggesting that IRAP
applications be subject to a public comment period of 60 days before an
SRE's recognition of the IRAP. Commenters noted that this would ensure
transparency and the quality of the IRAPs by allowing industry
participation before IRAP recognition. Commenters also stated that a
notice-and-comment period would allow the public to verify that the
IRAP is not for an occupation in the construction industry. Other
commenters suggested that the Department require a firm deadline by
which IRAPs would be notified of their recognition status, noting that
the Department imposes such a deadline on SRE recognition. A commenter
also recommended requiring SREs to provide a clear reason for rejecting
an IRAP.
The Department acknowledges the comments about ensuring
transparency and high quality. The Department has determined, however,
that public notice and an opportunity to comment on the recognition of
IRAPs is not necessary. SREs are best positioned to determine whether
an IRAP meets the standards of a high-quality apprenticeship program,
in accordance with the parameters of this rule. The Department has
prescribed the standards of a high-quality apprenticeship program in
Sec. 29.22(a)(4) and has taken steps elsewhere in the rule to
strengthen existing oversight measures. SREs are responsible for
ensuring that IRAPs meet the standards of a high-quality apprenticeship
program established by the Department, and both SREs and IRAPs are
subject to the quality-control requirements established in this rule.
The SRE is responsible for ensuring that its IRAPs continue to meet the
requirements of this rule, and this SRE responsibility, coupled with
the Department's oversight of SREs, provides the apprentices with
protection against low-quality or exploitative IRAPs. The SRE may
derecognize IRAPs that fail to meet the requirements of a high-quality
apprenticeship program set forth in Sec. 29.22(a)(4), and the
Department may derecognize SREs for failure to comply with the
requirements of this subpart.
Further, the Department determined that a notice-and-comment period
for the recognition of each IRAP is not necessary as the SRE itself
must conduct a thorough vetting process to ensure that potential IRAPs
meet the requirements of Sec. 29.22(a)(4). As discussed in Sec. 29.21
above, SREs must demonstrate that they have the expertise to set
standards for apprenticeship programs in the industries or occupational
areas for which they seek recognition, and SREs must also demonstrate
that they have the capacity and quality assurance processes and
procedures to comply with the requirements of Sec. 29.22(a)(4). SREs'
responsibilities as contemplated by this rule require due diligence and
thorough vetting of prospective IRAPs.
With respect to concerns about IRAPs in the construction sector, as
discussed in greater detail below, the Department has revised proposed
Sec. 29.31 (finalized as Sec. 29.30). The Department will not
recognize SREs that recognize IRAPs engaged in any construction
activities as described in Sec. 29.30, and the Department prohibits
SREs from recognizing as IRAPs programs that train apprentices in
construction activities as described in Sec. 29.30. The Department has
determined the responsibilities of both the Department and the SRE are
sufficient to prevent the recognition of IRAPs that would train
apprentices in construction activities as defined in Sec. 29.30,
obviating the need for a public notice-and-comment period for IRAP
recognition.
The Department notes the requirement in Sec. 29.22(d) that the SRE
must disclose to the Administrator its policies and procedures for
ensuring consistent assessment of IRAPs for recognition. The Department
anticipates such policies and procedures will include the timeframe for
IRAP recognition and how the SRE will notify prospective IRAPs of
recognition or rejection. The Department declines to require a certain
timeframe or requirement for SRE notice to prospective IRAPs given the
different types and needs of SREs and IRAPs.
The Department has revised several other sections of Sec. 29.22 to
incorporate concerns about the quality and transparency of IRAPs. For
example, as explained in detail below, the Department added language to
strengthen some of the components of high-quality programs, such as a
training plan, a mentorship program with experienced mentors, and an
apprenticeship agreement. The Department also added sections concerning
the quality-control relationship between SREs and IRAPs, the
Department's oversight of SREs, and the Department's ability to collect
and evaluate data concerning the performance of IRAPs and SREs. The
Department added the phrase ``as an IRAP'' to clarify that the program
is seeking recognition as an IRAP from the SRE. Otherwise, the final
rule adopts paragraph (a)(1) of Sec. 29.22 as proposed.
Informing the Administrator of IRAP Recognition
Paragraph (a)(2) of Sec. 29.22 requires an SRE to inform the
Administrator within 30 calendar days if it has recognized a new IRAP
or suspended or derecognized an existing IRAP. The SRE must also inform
the Administrator of the name and contact information of the IRAP. This
information will assist the Administrator in fulfilling his or her
obligations under Sec. 29.24 (Publication of Standards Recognition
Entities and Industry-Recognized Apprenticeship Programs).
The Department changed the phrase ``terminated the recognition of''
to ``derecognized'' for clarity and consistency. Finally, the
Department added the term ``calendar'' to the requirement for the SRE
to inform the Administrator within 30 calendar days to clarify the
relevant timeframe.
Some commenters asked about transparency regarding SRE decisions to
decline to recognize or terminate the recognition of an IRAP. One
commenter suggested that an SRE be required to inform the Administrator
when the SRE declines to recognize a new IRAP, in addition to giving
notice to the Administrator of approval or termination of approval. The
commenter also suggested that the SRE be required to inform the
Administrator of the
[[Page 14314]]
reason for declining to recognize or terminating the recognition of an
existing IRAP. The commenter stated that the Administrator would
benefit from such information to determine the effect on the safety and
welfare of apprentices and to ensure objective and impartial decision-
making with respect to recognition of IRAPs. Commenters also raised
concerns that the public would not be aware of IRAP recognition until
months after recognition because the SRE is required to notify only the
Administrator within 30 calendar days of the recognition. Otherwise,
the SRE is only required to inform the public about the IRAPs it
recognizes on an annual basis under paragraph (h) of Sec. 29.22.
The Department acknowledges commenters' concerns about SRE
transparency in its decisions concerning IRAP recognition. However, as
explained below in the discussion of Sec. 29.22(d), the Department
decided to require each SRE to submit to the Department its policies
and procedures for assessing IRAPs in a consistent manner. The
Department will have the opportunity to review these policies and
procedures during the SRE recognition process. The Department declines
to require additional information concerning an SRE's decision not to
recognize an IRAP or the reasons for an SRE's derecognition of an IRAP.
Rather, the Administrator can rely on Sec. 29.23 to request such
information if needed. If, for example, the Department receives
complaints about an SRE's conduct with respect to recognition of IRAPs
or if a compliance assistance review reveals irregularities in the
SRE's processes or procedures, the Department may request further
information as necessary. Further, the Department may initiate
suspension or derecognition proceedings, if warranted.
Regarding the concern that the public would not be aware of the
existence of IRAPs in a timely manner, the Department notes that, as
discussed in further detail in Sec. 29.24, it plans to regularly
update its publicly available list of SREs and IRAPs. Thus, the public
will have access to timely information on the Department's website. The
Department also expects that SREs and IRAPs will themselves publicize
the existence of new IRAPs in order to inform the public and recruit
prospective apprentices.
SRE Requirement To Provide Information to Administrator
Paragraph (a)(3) of Sec. 29.22 requires SREs to provide to the
Administrator any data or information the Administrator is expressly
authorized to collect under this subpart. This rule identifies the
specific circumstances under which the Administrator is authorized to
collect from SREs any information related to the requirements of this
subpart, including the documentation identified in this subpart or
required to be maintained under this subpart. This provision will
enable the Administrator to request information, as needed, to
ascertain SREs' conformity to the subpart under Sec. 29.23 (Quality
Assurance). The Department did not receive any substantive comments on
this section. The final rule adopts the provision as proposed.
Standards for High-Quality IRAPs
Paragraph (a)(4) of Sec. 29.22 states that SREs may only recognize
and maintain the recognition of IRAPs that meet certain requirements,
which the Department determined are standards of high-quality
apprenticeship programs. These standards of high quality include paid
work; work-based learning; mentorship; education and instruction;
obtaining industry-recognized credentials; a written training plan and
apprenticeship agreement; safety and supervision; and adherence to EEO
obligations. In addition to the requirements that IRAPs must meet,
SREs, in consultation with their industry experts, must set competency-
based standards for the training, structure, and curricula of the
industries or occupational areas in which they are recognized.
General Discussion About High-Quality IRAPs
The Department received a number of comments asking for additional
clarity as to what constitutes a ``high-quality'' IRAP generally.
Commenters suggested specific changes to the rule, such as further
defining certain terms as addressed above in the discussion of Sec.
29.20; including a progressive wage structure; enhancing safety and
welfare protections; and requiring evaluation and enhanced quality
control. Some commenters disagreed with the Department's proposal that
SREs be responsible for recognizing IRAPs, suggesting that the
Department is abdicating its responsibility to safeguard apprentices
under the NAA. Other commenters expressed concern about the possibility
that multiple, diverse training standards would exist within a single
industry, which would lead to a ``balkanization'' of credentials that
would confuse the markets. Some commenters remarked that the lack of
clarity and specificity of requirements would discourage the
development of IRAPs and worker participation in them. Commenters also
expressed concern that IRAPs seem similar to internships that already
exist in industries such as the technology industries.
Other commenters expressed support for greater flexibility for
industry participation and an industry-driven apprenticeship model that
can both expand apprenticeship in new industries while also tailoring
apprenticeship programs to best serve industries' needs for a skilled
workforce. A commenter suggested that the Department set standards for
IRAPs that parallel the registered apprenticeship system and include:
(1) Written classroom and on-the-job training requirements; (2)
established wage progressions; (3) journeyworker to apprentice ratios;
(4) mandatory safety training for apprentices; (5) instructors who are
subject matter experts trained in educational methods; and (6)
nondiscrimination in the operation of the program.
The Department made changes to certain paragraphs in Sec.
29.22(a)(4), as described in further detail below, to clarify some of
the high-quality requirements for IRAPs that satisfy the NAA's
direction that the Department formulate and promote labor standards
that safeguard the welfare of apprentices. The Department also made
changes to other sections of Sec. 29.22 to address comments about the
quality-control relationship between SREs and the IRAPs they recognize,
data collection by the Department and the SREs, and assessment of
performance. As for the industry-driven model envisioned by this rule,
the Department has determined that empowering SREs to recognize IRAPs
allows the flexibility necessary to encourage more apprenticeships in
new industry sectors while also ensuring that apprenticeships meet the
standards of high quality determined by the Department. Further, this
rule intentionally diverges from the registered apprenticeship program
requirements. The Department considers IRAPs separate and distinct from
registered apprenticeship programs because of the industry-driven
characteristics of the programs, as determined by SREs rather than the
Department. Although the Department has drawn from some of the
characteristics of the registered apprenticeship model, it declines
commenters' suggestions to model IRAPs after registered apprenticeship
programs. Rather, as reflected in the discussion of specific sections
below, the Department has established a rigorous framework for SRE and
IRAP recognition while at the same time providing the needed
flexibility to allow industry-driven innovation. The
[[Page 14315]]
Department acknowledges commenters' concerns about the possibility of
varying standards within industries, but views SREs and their industry
experts as best-positioned to set standards consistent with the
requirements in this rule in accordance with market conditions. The
Department views variances in standards and programs to be a benefit in
increasing the competitiveness and utility of IRAPs.
The Department has addressed several of the commenters' concerns in
various parts of the final rule. As discussed below, the Department
added language to proposed Sec. 29.22(a)(4)(ii), (v), (vi), and (vii)
to clarify the standards of a high-quality apprenticeship program and
strengthen requirements to better safeguard the welfare of apprentices.
The Department has also added Sec. 29.22(a)(4)(x), which requires
IRAPs to have an apprenticeship agreement with each apprentice that
establishes the employment relationship and sets forth the terms and
conditions of the apprentice's employment and training. The Department
has also added measures concerning quality assurance (Sec. Sec.
29.22(f), 29.23), data collection (Sec. 29.22(h)), and performance
assessment (Sec. Sec. 29.22(h), 29.23). The changes are discussed in
further detail in each paragraph below. It bears repeating that the NAA
is written in general and discretionary terms, and directs that the
Department only formulate and promote labor standards that safeguard
the welfare of apprentices. The Department has used its expertise and
policy judgment in making these particular changes, which it believes
well-exceed the NAA's standard.
A commenter suggested that the Department make IRAP recognition
contingent upon a process for the IRAP to use data to identify program
strengths and necessary improvements.
The Department has declined to affirmatively require that IRAP
recognition by an SRE be contingent upon a process for the IRAP to use
data to identify program strengths and necessary improvements. However,
this could be required by an SRE, as the Department anticipates that
the SRE would make a decision about any such requirements through its
own processes and procedures and its quality-control relationship with
its IRAPs, as provided in Sec. 29.22(f). The Department notes that
there is no such requirement on registered apprenticeship programs.
Further, the Department's data and reporting requirements set forth in
Sec. 29.22(h) include program-level data and performance outcomes for
IRAPs, which allows the Department, the SREs, the IRAPs, and the public
to review and assess IRAP performance.
Commenters suggested that Universal Design for Learning (UDL) \14\
be included as a core component of high-quality industry-recognized
apprenticeships. A commenter observed that UDL could ensure that more
people successfully transition to well-paying and meaningful
occupations through apprenticeship training because of UDL's focus on
designing training and employment opportunities for a broader range of
learners. Two commenters suggested adding to Sec. 29.22(a)(4) a
requirement that an IRAP ``ensure[ ] digital material and technology
accessibility in work experiences and classroom or related instruction,
including information and communication technology (ICT) and
websites.'' The commenters noted that the Department has already
adopted UDL as a requirement for Trade Adjustment Assistance Community
College and Career Training grant funds. They also noted that the
Department selected a pilot site focused on universally designing
apprenticeship pathways in advanced manufacturing as part of the
Apprenticeship Inclusion Models grant and provided funding for
YouthBuild, which uses UDL to increase young people's engagement in
STEM careers.
---------------------------------------------------------------------------
\14\ UDL is defined in 20 U.S.C. 1003 as:
[A] Scientifically valid framework for guiding educational
practice that--
(A) provides flexibility in the ways information is presented,
in the ways students respond or demonstrate knowledge and skills,
and in the ways students are engaged; and
(B) reduces barriers in instruction, provides appropriate
accommodations, supports, and challenges, and maintains high
achievement expectations for all students, including students with
disabilities and students who are limited English proficient.
---------------------------------------------------------------------------
Under this rule, SREs and IRAPs would be free to include UDL in
their apprenticeship programs, and the Department expects some may
choose to do so to the extent UDL is useful and allows them to reach a
broader pool of potential apprentices. The Department also notes that
IRAPs are required to adhere to Federal, State, and local EEO laws and
that SREs are required to have policies and procedures that reflect
comprehensive outreach strategies to reach diverse populations.
However, the Department declines to make UDL a requirement for IRAPs.
The Department views the SREs as better positioned to determine the
appropriate training models and approaches for their programs and to
provide the necessary support to their IRAPs in implementation.
Other comments submitted on this section are discussed in the
paragraph-by-paragraph discussion below. The Department changed Sec.
29.22(a)(4) to clarify that SREs must only recognize ``as IRAPs'' and
maintain ``such'' recognition of ``apprenticeship programs'' that meet
the requirements set forth in (i)-(x). The Department made a change
throughout Sec. 29.22(a)(4) to use the term ``program'' rather than
``Industry Program'' or ``IRAP'' to refer to an apprenticeship program
that is seeking recognition as an IRAP from an SRE.
1. IRAP Training Requirements--Sec. 29.22(a)(4)(i)
Paragraph (a)(4)(i) of Sec. 29.22 states that a program must train
apprentices for employment in jobs that require specialized knowledge
and experience and involve the performance of complex tasks. The
Department sought comments on these requirements and on whether it
should set a minimum skill level or competency baseline for IRAPs
similar to the registered apprenticeship program's requirement that
apprentices gain ``manual, mechanical, or technical'' skills.
Several commenters saw the need for the Department to include
defined apprenticeship durations in IRAP training requirements to
ensure the necessary time and support to gain mastery of key
competencies. Commenters also stated a need for a minimum skill level
or competency baseline for training requirements akin to the registered
apprenticeship program requirements. Some commenters argued that the
lack of uniform standards for competencies by the Department could
result in exploitation of apprentices, a lack of meaningful and
substantive work experiences, and confusion about industry standards.
In contrast, other commenters recommended that there be no minimum-
skill or competency levels set for IRAPs because of the varying needs
of diverse and growing industries.
The Department has determined that the proposed text struck a
permissible balance, containing sufficient detailed requirements while
allowing flexibility for the needs of specific industries. The
Department has considered and determined to not set minimum-skill or
baseline-competency standards because they would not be uniformly
applicable within or across industries. The requirement that IRAPs
``must train apprentices for employment in jobs that require
specialized knowledge and experience and involve the performance of
complex tasks'' sets a functional yet sufficiently rigorous standard by
which IRAPs gain recognition.
[[Page 14316]]
Though there are no prescriptive requirements to provide a certain
baseline of skills or competency, the rule sets the overall framework
within which IRAPs may structure their apprenticeship programs. This is
to ensure that IRAPs do not simply provide training for roles that
require only general knowledge and minimal or no skill. In other words,
an IRAP should provide apprentices with training beyond general skills
and knowledge that most or all potential workers would already have
(e.g., rudimentary computer literacy or basic job etiquette such as
promptness). Rather, the purpose is to equip the apprentice with
marketable skills that are sought by employers. Though there is freedom
within this framework to create innovative IRAPs, the requirement
remains that these apprenticeship programs be designed to impart
specialized skills that are industry-essential and meet the high-
quality requirements set forth in this subpart.
The requirements of specialized knowledge and the performance of
complex tasks are reinforced by Sec. 29.22(a)(4)(ii). That provision
requires IRAPs to be high quality and to provide apprentices with
progressively advancing and industry-essential skills. For example, an
IRAP that trains an apprentice to become a water treatment technician
would not only impart the basic scientific knowledge but also train the
apprentice on the methods for water treatment, safe working practices,
water testing, data analysis, and other specialized skills necessary to
perform such testing in various settings and for various purposes.
The Department views the SRE as best positioned to decide any
minimum-skill and baseline-competency requirements for each particular
industry or occupational area in which it is recognized, in a manner
that best suits the needs and characteristics of the industry or
occupational area. Similarly, and as discussed in the preamble, the
Department has determined that the SRE is best suited to set the
requisite standards for its industry(ies) or occupational area(s).
Thus, the final rule adopts the provision as proposed.
2. IRAP Training Plan--Sec. 29.22(a)(4)(ii)
Paragraph (a)(4)(ii) of Sec. 29.22 states that a program must have
a written training plan, consistent with its SRE's requirements and
standards as developed pursuant to the process set forth in Sec.
29.21(b)(1). The written training plan must detail the program's
structured work experiences and appropriate related instruction, be
designed so that apprentices demonstrate competency and earn
credential(s), and provide apprentices progressively advancing
industry-essential skills.
The final rule departs from the proposed rule's original language
that the apprenticeship program has ``structured work experiences, and
appropriate classroom or related instruction adequate to help
apprentices achieve proficiency and earn credential(s); involves an
employment relationship; and provides apprentices progressively
advancing industry-essential skills.'' As discussed below, the
Department has changed this paragraph to address suggestions by
commenters for further clarity for both IRAPs and apprentices. The
training plan must be provided to an apprentice prior to beginning an
IRAP. While the proposed language was more than sufficient under the
NAA, this change better protects the welfare of the apprentice by
making it clear to the apprentice exactly what the apprenticeship
program entails, what skills the apprentice should be mastering through
the program, and the ultimate outcome of the apprenticeship program.
Several commenters suggested that this section include a
requirement for a written training plan describing each program's in-
class and on-the-job training requirements. A number of commenters
requested that an apprenticeship agreement be required to ensure that
IRAPs and apprentices are in an ``employment relationship'' with clear
and specific terms, and some commenters argued that an apprenticeship
agreement would allow SREs to monitor IRAPs more effectively.
The Department agrees with the comments that it would be beneficial
to require apprenticeship agreements and to provide additional
specificity regarding training opportunities for apprentices. The
Department has revised the text to include a requirement for the
program to have a written training plan, consistent with the
requirements set by the SRE and with the standards developed or adopted
by the SRE. The written training plan must also ``detail the program's
structured work experiences and appropriate related instruction, be
designed so that apprentices demonstrate competency and earn
credential(s), and provide apprentices progressively advancing
industry-essential skills.'' Because the program's training plan must
be consistent with its SRE's requirements and standards set for the
industry or occupational area, the Department anticipates that the
requirement for a training plan will create industry consistency while
providing apprentices valuable information about the training and work
components of the apprenticeship program. Further, the finalized
regulatory text clarifies that the training plan must be designed so
that the apprentice both demonstrates competency and earns one or more
credentials. As discussed above, the Department has determined that
SREs should set competency-based standards for their IRAPs; therefore,
the Department has included the requirement that the training plan be
designed so that apprentices demonstrate competency.
The Department has revised this section by striking the language
``classroom or'' from the phrase ``classroom or related instruction.''
The Department does not intend to create a separate classroom
instruction requirement apart from ``related instruction'' and views
the inclusion of this term as unnecessary, because classroom
instruction is a type of related instruction. The exact form of the
related instruction will depend on the nature of the industry or
occupation and will be dictated by how the program uses related
instruction to complement structured work experiences and develop an
apprentice's progressively advancing skills.
The Department also removed the phrase ``involves an employment
relationship'' and instead added a new requirement, in Sec.
29.22(a)(4)(x), that IRAPs have an apprenticeship agreement with each
apprentice, consistent with the requirements of this subpart. The
apprenticeship agreement sets forth the terms and conditions of the
employment and training of the apprentice. The Department expects that
apprenticeship agreements will include the duration of the
apprenticeship, wages and any wage progression, any costs or expenses
charged to apprentices, and the competencies and industry-recognized
credential(s) to be attained during the program or by completion. The
Department has concluded that having a separate requirement regarding
the apprenticeship agreement will provide greater clarity about the
``employment relationship'' requirement previously included in this
paragraph.
A commenter suggested that apprenticeships should include
structured, supervised training in addition to work-based training.
Commenters remarked that the absence of required standards related to
minimum related instruction hours, minimum on-the-job training hours,
test validations, and progressive wage steps would cause a ``race to
the bottom'' for
[[Page 14317]]
employers and industries without meaningful and helpful training for
the trainees. Similarly, other commenters requested that the Department
establish minimum on-the-job learning and related technical instruction
requirements. Some commenters proposed that training content should
include interpersonal and soft skills in addition to technical skills.
A commenter cautioned against training apprentices in occupations that
may become obsolete in the near future due to technology and
automation. Others questioned the meaning of certain phrases, such as
``progressively advancing'' and ``industry-essential'' skills, as vague
and needing definition. A commenter expressed concern that, in the
commenter's view, the rule does not ensure that apprentices gain
proficiency in all aspects of their trade, rather than training on a
specific task within their trade. A commenter questioned how ``related
instruction'' would be monitored and evaluated. Another commenter noted
that there was no requirement for the ``structured work experience'' to
be full-time employment. Commenters also expressed concern that there
were no requirements regarding the qualifications of IRAP instructors
or trainers. One commenter suggested that the Department emulate a
State model of using ``training agents'' to provide training and
supervision to apprentices and subject such agents to sanctions, such
as an inability to train apprentices or bid on public construction
projects, if they fail to meet certain requirements. Other commenters
faulted the rule for not containing apprentice-to-journeyworker ratios
and suggested a one-to-one or two-to-one ratio for on-the-job training.
Other commenters cautioned against adding further requirements on
IRAPs in order to allow flexibility to make industry- and occupation-
specific decisions. Commenters suggested that any progressively
advancing skills requirement should be consistent with industry
determinations, rather than set by the Department, because of evolving
workplaces and the differing skills needed across industries. A
commenter stated that including Department-set standards requirements
would be duplicative, because SREs must already engage in a process to
ensure that the programs they recognize impart the skills and
competencies apprentices need to succeed in their industry. Some
commenters expressed support for the proposed language's balance of
ensuring high-quality programs while also providing flexibility for
SREs and employers to develop apprenticeship programs for a wide
variety of jobs and occupational areas. Some commenters also supported
the Department's proposal to have industry-set standards for IRAPs,
because such standards would be tailored to the specific occupations
and industries.
The Department has prescribed the standards for high-quality
apprenticeship programs that IRAPs must meet in order to obtain and
maintain recognition. The standards are specific and rigorous, and SREs
are responsible for ensuring that their IRAPs meet each of the
standards at initial recognition and on an ongoing basis. In addition
to the Department's standards for IRAP recognition, SREs are required
to set standards, in consultation with industry experts, for the
requisite training, structure, and curricula for apprenticeship
programs as set forth in Sec. 29.21(b)(1). The Department has
determined that SREs are in the best position to set industry-specific
skills-attainment levels or competency standards within the parameters
of this rule. Within the framework prescribed by the Department, SREs
may establish standards for their IRAPs.
The Department similarly declines to set minimum requirements for
``progressively advancing'' and ``industry-essential'' skills, because
of the flexibility needed to determine what is appropriate for each
industry and occupational area. The Department is concerned that
definitions in regulatory text--which would need to be both fixed and
short--could lack flexibility, fail to accommodate particular
industries, and become outdated. Accordingly, the Department intends
the common meaning of the words found in ``progressively advancing
industry-essential skills'': That the skills taught build upon one
another such that they lead to an advanced level of skills that are
relevant in the particular industry of the IRAP and for which the
credential(s) will be granted. Consistent with that common meaning, the
rule gives SREs the latitude to set standards for ``progressively
advancing'' and ``industry-essential'' skills. The Department expects
that SREs' standards will further develop these terms in a manner that
is relevant to the particular industry or occupational area. Similarly,
the Department anticipates that SREs will apply the concept of
``progressively advancing'' skills based on the characteristics of the
industry and occupation, such that apprentices build skills throughout
the program that will result in the competencies necessary for them to
operate as independent workers in their fields. As discussed above, the
Department anticipates that adding the requirement of a training plan
consistent with the SRE's requirements and standards will address many
of the concerns about the lack of certain standards of apprenticeship
in the rule. In this regard, the Department notes that subpart A,
pertaining to registered apprenticeships, similarly does not contain
occupation- and industry-specific standards or require such highly
specific standards regarding the training content, test validation, or
full-time structured work experience that some commenters requested.
The training plan required by this paragraph, in conjunction with the
other requirements set forth in Sec. 29.22(a)(4), strikes an
appropriate balance. It sets forth parameters of IRAPs to make sure
that apprentices are receiving valuable education and skills training
in a safe environment without overly prescribing programmatic
requirements.
Regarding the concerns about adequate training and supervision and
apprentice-to-journeyworker ratios, the Department has strengthened the
mentorship requirement at Sec. 29.22(a)(4)(vi) to require ``ongoing,
focused supervision and training by experienced instructors and
employees.'' The Department declines to prescribe further requirements
concerning trainers or instructors, with the expectation that IRAPs
will provide the necessary training and supervision needed to meet the
standards of high-quality apprenticeship in Sec. 29.22(a)(4). The
Department further emphasizes that the quality-control relationship
between the SRE and the IRAP, as well as the quality-control
relationship between the SRE and DOL, as set forth in this subpart,
will provide an appropriate check on the quality of the instruction and
training. The SRE must ensure that its IRAPs continue to meet the
requirements of Sec. 29.22(a)(4), which provides oversight to protect
against low-quality programming or actions that may harm apprentices.
The Department also notes that Sec. 29.22(a)(4)(v) requires the IRAPs
provide a work environment consistent with Federal, State, and local
safety laws and with any additional safety requirements of the SREs,
which may include measures concerning ratios. The Department decided
not to prescribe ratios for mentors or trainers, because ratios would
not be uniformly applicable across industries. SREs have the ability to
set ratios for supervision, training, mentorship, or safety purposes if
they deem such ratios appropriate, and the Department expects SREs to
determine whether ratios would serve a
[[Page 14318]]
useful function in the industries or occupational areas in which they
recognize IRAPs.
Two commenters suggested adding to Sec. 29.22(a)(4)(ii) a
requirement that classroom or related instruction incorporate UDL. The
commenters described the policy considerations for UDL and suggested
these changes to encourage the participation and retention of
individuals with disabilities in apprenticeship programs.
As discussed below, IRAPs are required to abide by applicable EEO
laws and SREs must have policies and procedures that reflect
comprehensive outreach strategies in order to reach diverse
populations. The Department anticipates that some SREs and IRAPs may
adopt additional measures regarding the inclusion and retention of
individuals with different learning abilities, and would welcome such
efforts, but the Department declines to impose UDL requirements in the
final rule for the same reasons it has elsewhere declined to
incorporate UDL.
Commenters inquired about the absence of any requirements
concerning probationary periods for apprentices and faulted the
proposed rule for not including parameters or limitations on any
probationary period. Commenters specifically pointed to the registered
apprenticeship requirements at Sec. 29.5(b)(8) that a probationary
period not exceed 25 percent of the program or one year, whichever is
shorter. A commenter expressed concern that IRAPs would have lengthy
probationary periods in order to ``skew'' completion rates and program
outcomes. Commenters also suggested that the rule should prohibit IRAPs
from terminating apprentices without cause after the end of their
probationary periods and instead only allow termination ``for good
cause,'' after notice to the apprentice and a reasonable opportunity
for corrective action. Some commenters also noted that the rule did not
include any disciplinary standards to ensure a fair work environment.
Other commenters faulted the rule for lacking protections for
apprentices against arbitrary termination or suspension.
The Department acknowledges comments calling for specific
requirements for probationary periods as in the registered
apprenticeship program. The Department has decided, however, not to
prescribe a requirement for a probationary period or the length of
probationary periods in the requirements of Sec. 29.22(a)(4), nor to
impose specific requirements regarding disciplinary standards. The
Department has determined that probationary periods would not be
suitable for all IRAPs because IRAPs will vary in duration and content.
For example, a shorter IRAP program that results in a certificate of
completion should not be required to have a probationary period that a
multi-year IRAP with multiple credentials may choose to include as a
part of its program. The Department anticipates that some IRAPs will
choose to have probationary periods for apprentices while others will
not include probationary periods as a part of their programs. IRAPs
must comply with any specific requirements their SREs may require
concerning probationary periods, termination for cause, or allowing for
notice and a period of corrective action. The same is true for any SRE
requirements regarding disciplinary standards and requirements for
suspensions and termination of apprentices. Given the varying needs of
IRAPs, the size and nature of the employers offering IRAPs, and the
possibility that IRAPs will vary greatly by duration, content, and
other qualities, the Department has determined to allow SREs the
flexibility of deciding whether additional requirements are industry
appropriate, what requirements to impose (if any), and how to apply any
such requirements to their IRAPs.
3. Credit for Prior Knowledge and Experience--Sec. 29.22(a)(4)(iii)
Paragraph (a)(4)(iii) of Sec. 29.22 requires programs to ensure
that, where appropriate, apprentices receive credit for prior knowledge
and experience relevant to the instruction of the program. Such credit
should be reflected in progress through the program itself, or in any
coursework, as appropriate.
Some commenters recommended that credits be granted through written
tests, practical exams, or demonstrations of competency levels. A
commenter cautioned about the risk for fraud, and another commenter
recommended that any prior knowledge should be verified before an
individual is granted credit. A commenter faulted the rule for failing
to provide requirements to assess baseline skill level or previously
learned skills the worker may have gained to reduce instructional
redundancy. A commenter stated that allowing each SRE to determine how
to award credit for prior learning could lead to inconsistencies within
an industry.
The Department acknowledges the comments asking for greater
specificity regarding credit for prior knowledge or experience.
Nevertheless, the Department declines to add specificity because SREs
and their IRAPs are best positioned to decide how to assess prior
knowledge and experience and what type of credit to grant each
individual. Because of the individualized assessment necessary, and the
varying needs of IRAPs, the Department has concluded that the rule as
written contains sufficient parameters without overly prescribing
requirements that would not be generally applicable. The Department
also notes that subpart A similarly does not impose a more prescriptive
requirement. Thus, the final rule adopts the provision as proposed.
4. Industry-Recognized Credentials--Sec. 29.22(a)(4)(iv)
Paragraph (a)(4)(iv) of Sec. 29.22 requires programs to provide
apprentices with one or more credentials that are industry-recognized
during participation in or upon completion of the program. The
Department received comments in support of this paragraph. A commenter
agreed with the Department's assessment that IRAP credentials will have
``demonstrable consumer and labor-market value.'' One commenter
commended the Department's efforts and recommended integration of
higher education into IRAPs to create for-credit transferable
credentials and dual enrollment opportunities for high school students
through the apprenticeship model. A commenter expressed support for
digital badges in online learning courses as ``portable, verifiable and
secure.'' Some commenters commended the rule for setting appropriate
standards for IRAPs without overly prescribing other requirements that
could inhibit their development or expansion. A commenter also
expressed that training would be simpler and less time-consuming
because of the concentration on relevant job skills.
On the other hand, the Department received several comments
suggesting that some credentials might be relevant only on a local or
regional level and could hinder ``journey-level'' status and career
mobility. Some expressed further concern that certain credentials could
be of limited utility, because they would be specific to the employer
only and not recognized by other employers within the industry. A
commenter recommended that the Department require credentials to be
``competency-based, industry-recognized, and portable,'' contending
that industry recognition and portability requirements are both
essential for industries to attract and retain talent. Another
commenter suggested that the Department require IRAPs to consult with
labor-market information entities and State or Local Workforce
Development Boards, as applicable, in
[[Page 14319]]
developing credentials. Another commenter faulted the proposed rule
for, in the commenter's view, allowing multiple SREs to set their own
criteria without regard for the level of respect of the credential or a
timely, accurate way to measure its value.
The Department appreciates comments in support of its proposed
approach to credentials. The Department also acknowledges the comments
calling for nationally recognized credentials and anticipates that some
IRAP credentials will achieve clear national recognition. The
Department does anticipate that IRAPs will provide credentials that are
portable. For example, an IRAP may require apprentices to pass a
nationally recognized exam that measures competencies necessary for the
apprentice's occupation. By requiring that credentials reflect the
specific competencies needed for any given industry or occupational
area the Department believes that IRAPs will enhance apprentices'
mobility. In other words, even if the credential itself includes the
licensing requirements of a specific area or reflects training specific
to certain geographic conditions or even the requirements of a specific
employer, the mastery of the competencies upon which the credential is
based would result in industry-specific skills that likely could be
transferred to a new workplace.
The Department notes that the SRE's role is important with respect
to credentials, both in recognizing IRAPs that provide credentials that
are industry-recognized and in its oversight of IRAPs. The Department
also has oversight of SREs, and by extension their IRAPs, and it will
collect information from each SRE about each credential offered by its
IRAPs. These measures address the commenters' concerns that IRAPs may
simply offer employer-specific credentials that have no broader value
to other employers. The Department does not share commenters' concerns
about IRAPs providing credentials with limited value, particularly
because of the requirements that competency-based standards be set by
SREs and that credentials be industry-recognized. Additionally, the
Department is responsible for evaluating each SRE's expertise to set
competency-based standards, each SRE is responsible for overseeing its
IRAPs' compliance with this subpart, and each IRAP is responsible for
meeting the requirements of both the Department and its SRE to provide
high-quality apprenticeship programs. As for the commenters' suggestion
that the Department require credentials to be portable by modifying the
text of the final rule, as discussed above, the Department believes
that since the credentials are competency-based they will provide value
regardless of an apprentice's geographic location. The Department
agrees with the commenters who suggested that IRAPs would benefit from
consultation with Workforce Development Boards and other entities in
developing credentials. The Department anticipates that some IRAPs may
engage in such consultation to ensure that the credentials offered are
industry-recognized. The Department notes, however, that SREs will
likely fulfill such a role through their own expertise and engagement
with industry partners and experts. Thus, the Department declines to
impose such a consultation requirement upon IRAPs.
Some commenters suggested specific characteristics as necessary for
a successful credential program. A commenter remarked that a credential
as contemplated by this rule does not nearly match the rigor of
credentials that are certified by third-party organizations. This
commenter identified, in its view, four characteristics, echoed by
other commenters, of a successful credential program: (1) Oversight by
an independent national accrediting body; (2) standards that ensure
that the program curriculum is comprehensive enough to cover the broad
range of tasks needed to perform at an entry-level in the field
anywhere in the country; (3) national recognition to ensure credential
portability; and (4) continuing education. Another commenter stated
that a credential should be empirically based, derived from industry
needs, and include a structured process to identify the knowledge,
skills, and attributes for a specific job/function. The commenter also
noted the importance of a valid assessment process that measures an
individual's knowledge and skills necessary for practice. Another
commenter contrasted its rigorous certification process, including
independent third-party testing as an aspect of credentialing, with the
lack of established processes or standards in the IRAP model. Several
commenters questioned how the Department would assure the quality of
credentials. A commenter cautioned that a skills gap does not equate to
a credentials gap and that the market would dictate the value of the
credential rather than the IRAP. Other commenters expressed concern
that a ``certificate of completion'' would result in narrow, employer-
specific training that would not result in a career pathway or economic
security. One commenter suggested adding that the process for attaining
credentials ``include front-end, diagnostic assessments for credentials
that verify an individual's foundational knowledge and skills needed to
succeed in the industry program.'' A commenter stated that the
Department should explain that IRAP credentials are not equivalent to
those issued by an independent body that administers a valid and
reliable assessment that may include written and practical tests.
The Department appreciates the insight and efforts of employers
regarding portable credentials in their industries and successful
registered apprenticeship programs. The Department has determined that
SREs should decide how to structure their programs for imparting
industry-relevant credential(s), and put in place the requirements for
IRAPs' apprentices achieving such credential(s). The Department's
requirement that the credential must be industry-recognized is
specifically designed to ensure that the credentials are relevant
beyond any individual employer. The Department further disagrees that
national recognition is required for a credential to be portable. An
employer in one corner of the country might place value on a credential
issued by an SRE serving only another portion of the country. The
Department appreciates suggestions about accrediting or certification
bodies that would provide a third-party evaluation and assessment of
credentials and assessment tools that would measure an apprentice's
knowledge and skills necessary for practice. The Department agrees that
this may be a useful model for some SREs and IRAPs and envisions that
SREs may rely upon or provide such structures for their IRAPs. The
Department declines to mandate such requirements, however, because the
Department does not view them as broadly applicable to all potential
IRAPs. The Department also agrees with the comment that some IRAPs may
have a process for attaining credentials that would include front-end,
diagnostic assessments to ascertain baseline skills and knowledge but
does not perceive a need to revise the rule to account for such
assessments. The Department disagrees with the comment that IRAP
credentials would not be equivalent to those issued by an independent
body. As stated above, some SREs may provide for such a credentialing
process for the IRAPs they recognize.
Regarding the concerns about the value of credentials, whether it
be a certificate or any other credential, this
[[Page 14320]]
rule provides SREs with an important role in evaluating credentials in
order to determine initial and continued recognition for IRAPs. The
Department notes that certain data and performance metrics elsewhere in
the rule, including credential attainment and post-apprenticeship
employment rates, enhance oversight of various aspects of IRAPs as it
relates to the credentials they provide. Additionally, the Department
has strengthened the quality-control relationship between the SRE and
the IRAP, as discussed in Sec. 29.22(f), and the quality-assurance
mechanisms of the Department, as discussed in Sec. 29.23. Therefore,
the Department has concluded that the flexibility provided for in this
paragraph, combined with the enhanced oversight and performance
assessment in other parts of the rule, would lead to meaningful
assessment of such programs and the credentials they offer and would
result in industry adjustments of the IRAP model, and credentials in
particular, to better suit both industries and apprentices.
A commenter recommended that the Department offer the public an
additional opportunity to comment on any subsequent Department
standards to ensure credential validity. The Department is not issuing
standards regarding credentials other than what is in the existing
requirements of this rule.
Commenters suggested that the absence of a recording requirement
with a registration agency that would track individuals' credentials
would mean that the credential would lose its value if the SRE ceased
to exist. Similarly, a commenter noted that apprentices in registered
programs receive formal written recognition of their credentials by the
Federal or State apprenticeship agency, in contrast to the current
rule.
The Department understands the concerns expressed by commenters but
disagrees that a credential would lose its value if an SRE ceases to
exist. First, the credential is not the only measure of attainment that
an IRAP will provide, as the IRAP must use competency-based standards
to equip the apprentice with industry-essential skills. As a result,
simply completing an IRAP could demonstrate an apprentice's competency
in the relevant industry or occupation. Second, credentials are not
tied solely to an SRE. An SRE may provide the credential, but so could
an IRAP or a third-party certification provider. The credential is
required to reflect specific competencies needed for any given
occupation and would continue to be a relevant measure of attainment.
The Department acknowledges that there is not a State- or Department-
based recognition of the credential, but that is neither the purpose of
the rule nor a desired outcome, because of this rule's focus on
industry-driven, not government-driven, measures. Third, as stated
throughout this preamble, the NAA does not obligate the Department to
mirror all standards used in the registered program, but only to follow
the NAA's broad and general direction to formulate and promote
apprenticeship standards and bring together employers and labor for the
formulation of programs of apprenticeship. The credentialing provision
of this rule is within the Department's discretion in implementing the
NAA.
A commenter recommended that the Department create a public
national database of IRAPs, their associated credentials, and the
portability of those credentials in order to monitor credential value
on a national level.
The Department declines to adopt such a specific requirement in the
rule. The Department notes that it is already required to publish a
list of SREs and IRAPs under Sec. 29.24. The Department also notes
that it included a requirement in Sec. 29.22(h) that the SRE make
publicly available certain data about IRAPs and performance outcomes,
which it must also submit to the Department. Among the required data
are the industry-recognized credentials attained by apprentices for
each IRAP. The Department may decide to centralize and make publicly
available this information but has determined that it is not necessary
to revise the language of this rule to do so. Finally, the Department
notes that portability is not a concept that likely could be identified
in the manner the commenter suggested, because even credentials
facially associated with a specific geographic region could be relevant
to and valued by an employer outside of that region.
For these reasons, the final rule adopts the provision as proposed.
5. Working Environment Adherence to Safety Laws--29.22(a)(4)(v)
Paragraph (a)(4)(v) of Sec. 29.22 requires that programs provide a
working environment for apprentices that adheres to all applicable
Federal, State, and local safety laws and regulations. The final rule
adds a requirement that programs must also comply with any additional
safety requirements of the SRE. The final rule deletes the word
``safe'' as a modifier for ``working environment'' because the
Department intends this provision to require programs to provide a
workplace that adheres to all applicable safety laws, and SRE
requirements.
Several comments expressed concern about this paragraph and called
for increased safety standards, such as a requirement for a
journeyworker-to-apprentice ratio, regular safety trainings, and other
safety measures. A commenter questioned how a ``safe working
environment'' would be defined, who would enforce that standard,
whether that standard would include a ratio of apprentices to journey-
level workers, and what the methods of investigation and discipline for
violations would be. Other commenters provided citations connecting
increased workplace accidents to higher apprentice-to-journeyworker
ratios. Several commenters expressed concern that SREs and IRAPs would
be motivated more by profit than safety, in contrast to the registered
apprenticeship programs. Commenters expressed concerns about increased
injury to apprentices and lower quality work that would thereby
increase risk and injuries to the public. One such example was a
comment about individuals providing energy or water to the public
without proper certified training requirements. There were several
comments from the construction industry concerning the need for
rigorous safety standards, including curriculum, hands-on training, and
safety courses. Some commenters stated that, in their view, the
Department was not carrying out what they characterized as a statutory
duty to safeguard the welfare of apprentices. A commenter also
suggested that worksites be warranted for safety and that worksites be
required to adhere to environmental standards. Another commenter noted
that certain Occupational Safety and Health Administration (OSHA)
trainings are not mandatory; thus, IRAPs may decide not to offer
apprentices certain introductory safety training before assignment to a
job site, to the detriment of the apprentices, yet still be in
compliance with Federal law.
The Department agrees that apprenticeships should have adequate
safety requirements. For this reason, the Department's proposal
included a requirement that IRAPs provide a working environment for
apprentices that adheres to all applicable Federal, State, and local
safety laws and regulations. The Department notes that, in addition to
any applicable general Federal OSHA standards, OSHA industry-specific
standards as well as State and local standards may also apply. OSHA
regulations contain detailed industry-specific standards for industries
such as maritime (29 CFR parts 1915, 1917-19) and agriculture (29
[[Page 14321]]
CFR part 1928), in addition to its general industry standards (29 CFR
part 1910). OSHA also has numerous compliance assistance manuals for
industries that detail how OSHA standards apply to a particular
industry. The Department's OSHA website contains information for
employers about the standards that are applicable to them and how to
obtain compliance assistance. It is incumbent on all employers,
including employers offering IRAPs, to both know and comply with any
legally required safety standards applicable to their industry.
In addition, the Department has changed the proposed text to add a
requirement to the final rule that IRAPs comply ``with any additional
safety requirements'' established by their SREs. This requirement
permits SREs to determine whether additional safety requirements are
warranted for each of their industries or occupational areas, what
those requirements should be, and how to best implement them for each
of their industries and occupational areas.
The Department has determined in its discretion that this
additional requirement that IRAPs adhere to any additional safety
requirements of their SREs is an effective and appropriate way of
ensuring safety standards that are industry-specific and enforceable
without imposing requirements across all industries that may not be
universally applicable, relevant, or necessary. The Department expects
that SREs will create additional safety measures for industries or
occupations for which such measures are reasonable to help ensure the
safety of apprentices and to ensure that IRAPs are aware of any
industry-specific safety standards that go beyond those imposed by law.
SREs may develop policies and procedures that include safety
requirements similar to those found in registered apprenticeships, such
as journeyworker-to-apprentice ratios, regular safety training, and
required safety skills-building in the training plan or curriculum.
Requiring SREs and IRAPs to maintain a working environment that adheres
to safety laws while giving SREs the option of requiring additional
safety measures allows SREs to make individualized assessments of the
characteristics and needs of the IRAPs they recognize without imposing
requirements that are not relevant or reasonable for the industry. The
Department expects that SREs associated with new industries and
occupations, for example, may consider imposing safety requirements
beyond those required by existing law.
SREs are best positioned to create additional relevant and
industry-specific safety requirements, as warranted, which they can
monitor through their quality-control relationship with their IRAPs.
Additionally, the Department's quality assurance role allows the
Department to evaluate the SRE's ability to fulfill its
responsibilities to ensure that their IRAPs continue to satisfy the
standards of high-quality apprenticeships, including ensuring a work
environment for apprentices that adheres to safety laws.
6. Structured Mentorship Opportunities--Sec. 29.22(a)(4)(vi)
Paragraph (a)(4)(vi) of Sec. 29.22 requires that the program
provide structured mentorship opportunities so that apprentices have
guidance on the progress of their training and their employability.
Mentors support apprentices during their work-based learning
experience, and can provide guidance on company culture, specific
position functions, and workplace policies and procedures. Mentors can
also help develop learning objectives for apprentices, and assist in
measuring apprentices' progress and proficiency.
Several commenters suggested that additional language be included
regarding the characteristics of mentorships. A commenter questioned
whether mentors would be required to have any direct experience or
training in adult education. Other commenters compared this paragraph
to the requirements for registered apprenticeships, noting that it
lacked similar instructor qualification requirements or periodic
reviews of apprentices' performance. One commenter suggested that
mentorship include ``on-going, focused supervision and training by
experienced instructors and employees.''
The Department agrees generally with the commenters' suggestions to
add more specific guidelines for mentorships. The Department has
included language in this provision describing structured mentorship
opportunities as ``involving ongoing, focused supervision and training
by experienced instructors and employees.'' The Department envisions
that mentors will also play a role in measuring an apprentice's
progress and providing relevant, timely feedback about an apprentice's
work. The Department has added this language to ensure that apprentices
receive quality supervision and feedback by individuals experienced in
the relevant industry and occupation, such as those who have attained a
mastery of industry-essential skills and competencies. The level of
experience may vary widely--for example, a mentor in an emerging
industry or occupation may have a different level or type of experience
than a mentor in a well-established industry or occupation. The
Department also expects that the mentorship opportunities may vary by
industry but intends for ``ongoing'' mentorship to mean that IRAPs will
have to establish and maintain mentorship opportunities throughout the
duration of the apprenticeship program that provide consistent and
meaningful mentorship for apprentices by individuals who are
experienced in their industries. The Department added clarifying
regulatory text to confirm this intent.
7. Apprentice Wages--Sec. 29.22(a)(4)(vii)
Paragraph (a)(4)(vii) of Sec. 29.22 requires that programs ensure
apprentices are paid at least the applicable Federal, State, or local
minimum wage. The program must also provide a written notice to
apprentices of what wages apprentices will receive and under what
circumstances apprentices' wages will increase. The final rule added
the requirement that the program's charging of costs or expenses to
apprentices ``must comply with all applicable Federal, State, or local
wage laws and regulations, including but not limited to the Fair Labor
Standards Act [(FLSA)] and its regulations.'' It also added the
following language: ``This rule does not purport to alter or supersede
an employer's obligations under any such laws and regulations.''
Some commenters expressed concern with the IRAP's ability to charge
costs to apprentices, as suggested in paragraph (a)(4)(ix), and thereby
either saddle apprentices earning minimum wage with debt or reduce
wages to below minimum wage, or both. A commenter noted that there is
nothing in the rule preventing an IRAP from charging apprentices costs
or expenses and then closing their operations before the apprentices
have the opportunity to earn the sought-after credential(s). One
commenter urged the Department to prohibit ``that any membership,
periodic dues or other fees be payable to any private organization such
as a [sic] labor unions or trade associations as a condition of
continuing training in the IRAP or securing a post-program job.''
The Department added language to the final rule to make clear that
any ``costs or expenses,'' such as the ``costs related to tools or
educational materials'' referenced in paragraph (a)(4)(ix) of Sec.
29.22, that are charged to apprentices must comply ``with all
applicable Federal, State, or local wage laws and regulations,
including but not
[[Page 14322]]
limited to [FLSA] and its regulations.'' The revised language further
provides, ``This rule does not purport to alter or supersede an
employer's obligations under any such laws and regulations.'' When
applicable, the FLSA restricts costs that employers may pass along to
their employees. In general, if a cost is primarily for the benefit or
convenience of the employer, the employer may not charge the employee
for such costs if doing so would decrease the employee's wages below
minimum wage or allow the employer to avoid overtime obligations.
Because of the fact-specific nature of this inquiry, the Department
expects SREs and IRAPs to scrutinize any costs or expenses charged to
apprentices for compliance with the FLSA, where applicable. For
example, FLSA regulations state that ``tools of the trade'' are
primarily for the benefit of the employer. Therefore, the costs of
purchasing or renting tools used in the employee's work may not reduce
an employee's wage below the minimum wage for all hours worked in a
workweek. See 29 CFR 531.3(d) and 531.32(c). Whether ``educational
materials'' would primarily benefit the employer or employee would be a
fact-based inquiry depending on the nature of the education and the
materials. In addition to the FLSA, State and local minimum wage laws
may have their own additional restrictions. Accordingly, the language
added to the final rule clarifies that employers charging costs or
expenses to apprentices must comply with applicable Federal, State, and
local wage laws. And notably, workplaces that employ apprentices,
including those under IRAPs, are subject to government and private
enforcement for violations of wage-and-hour laws. This rule does not
affect those generally applicable and enforceable obligations. The
Department declines to add any other requirements regarding dues,
memberships, or other fees, as they may vary by industry or
unnecessarily limit potential apprentices' choice of IRAPs.
In addition to the legal considerations, the Department also
anticipates that SREs and IRAPs will consider market forces and the
competitiveness of their program offerings, which will serve as checks
against unnecessarily passing along costs to apprentices. The
Department expects SREs to conduct appropriate quality control with
regard to any costs or expenses charged to apprentices. Further, both
the quality-control relationship between the SRE and the IRAP and the
apprenticeship agreement between the IRAP and the apprentice provide
protection to the apprentice against an IRAP charging costs or expenses
and then failing to deliver on its program.
Several commenters suggested the rule should require apprentices be
paid prevailing wage rather than minimum wage. Many commenters
expressed concern about the lack of a progressive wage requirement and,
in their words, potential exploitation of apprentices. A commenter
described the benefits of a progressive wage structure in attracting
higher quality craftworkers to the field, giving apprentices an
incentive to improve their skills, and ensuring that contractors are
paying what they termed a fair wage commensurate with the increasing
skills of more advanced apprentices. Another commenter expressed
concern that requiring adherence only to the minimum wage would drive
down area wage rates and weaken the middle class. The same commenter
remarked that the lack of a progressive wage structure would result in
cheap and fast training and industries flooded with low-wage workers
moonlighting as ``apprentices.'' A commenter similarly remarked that
substandard wages without a guarantee of benefits could create a
spiraling effect and eventual ``race to the bottom'' across industry.
Another commenter urged the Department to require wage increases
commensurate with skill attainment. A commenter noted the importance of
appropriately incentivizing continued participation in the program with
a predictable wage and increasing wages on pace with actual or
anticipated skill development. The commenter expressed concern that the
absence of a progressive wage could leave apprentices financially
unable to complete their programs and therefore at a disadvantage in
the labor market. Another commenter noted that substandard contractors
would avoid paying apprentices prevailing wages in order to be more
competitive in their bids on construction projects.
Other commenters expressed support for the Department's proposal. A
commenter stated that other factors might outweigh wage progression in
certain industries. The commenter offered the examples of retention,
career advancement, and access to increased benefits programs, such as
tuition subsidies. The commenter also noted that the wages of
apprentices may vary based on geographic location and the size of the
employer. Another commenter also expressed support for empowering IRAPs
to determine ``what wages apprentices will receive and under what
circumstances apprentices' wages will increase.'' The commenter noted
that having the IRAPs be in control of wages is important to scaling
the apprenticeship model. The commenter also noted that various
factors, including geography, would make a standardized wage
progression model difficult to adopt and would serve as a barrier to
apprenticeship expansion.
The Department acknowledges commenters' concerns about the lack of
a wage progression as a hallmark of a high-quality IRAP. As clearly
articulated in the rule, IRAPs must ensure that apprentices are paid at
least the applicable Federal, State, or local minimum wage and must
notify apprentices of circumstances under which wages will increase.
Thus, apprentices will have the information necessary to make informed
decisions about IRAPs and compare wage offerings of different IRAPs.
The Department anticipates that some IRAPs will choose to implement a
progressive wage structure for their apprentices--for example, in a
multi-year apprenticeship program. As commenters noted, there could be
benefits to the IRAP and the apprentice in clearly delineating a wage
structure that would allow apprentices to earn more as they advance in
skill. The Department has determined, however, that SREs and IRAPs are
more closely attuned to market conditions in their industries and
geographic areas and therefore better positioned to make decisions
about how to structure their wages. Further, in order for IRAPs to be
competitive and attract talent to their programs, they will want to
incentivize apprentice participation by distinguishing their programs
from others and offering wages and the possibility for wage increases
that are both competitive in the relevant market and attractive to
apprentices.
The Department declines to require a progressive wage structure,
primarily because of the expectation that IRAPs will vary in duration
and will represent a broad spectrum of industries with different market
wage trends. Further, a progressive wage structure could limit employer
participation in IRAPs, particularly for employers that would offer
IRAPs that are limited in duration. This, by extension, could reduce or
eliminate choices for individuals seeking apprenticeship opportunities.
The Department expects SREs will be able to determine the contours of a
progressive wage structure, if any, as it specifically relates to the
industries in which it will be recognizing IRAPs. The Department
anticipates that any consideration of a progressive wage structure will
take into account local market industry wages, employer size,
[[Page 14323]]
and other benefits offered by IRAPs. The Department emphasizes that
there is a requirement in Sec. 29.22(a)(4)(ix) that the IRAP disclose
to the apprentices any costs or expenses prior to the apprentice's
agreement to participate in the program. This information will allow
apprentices to make informed choices about which IRAPs to consider and
to consider market wages as compared to what the IRAP is offering in
their decision-making. Also, as discussed further below, the Department
has added Sec. 29.22(a)(4)(x) to require apprenticeship agreements
that will set forth the terms and conditions of employment, to include
wages and any wage progression and any costs or expenses charged to
apprentices. Finally, with respect to concerns about the potential for
unfair competition in the construction sector due to lower apprentice
wages, such concerns are moot given that the Department has decided for
other reasons to exclude construction activities from this subpart, as
explained in detail in this preamble's discussion of Sec. 29.30.
Some commenters suggested that the Department clarify that IRAP
participants are not ``apprentices'' for purposes of meeting the Davis-
Bacon Act's wage requirements. Commenters cited 29 CFR 5.5(a)(4)(i),
which refers to a narrow exception to the prevailing wage requirement
for apprentices, whereby apprentices working on a Federal construction
contract may be paid less than the Davis-Bacon prevailing wage if they
are in a registered apprenticeship program, and only if the program's
apprentice-to-journeyworker ratios are maintained. The commenters urged
the Department to exclude IRAPs from the Davis-Bacon apprentice
exception. Commenters also questioned how State prevailing wage laws
would apply to apprentices. Commenters also expressed concerns about
the different requirements for IRAP wages, EEO, and safety as compared
to the registered apprenticeship programs. Another commenter further
expressed concern about unfair competition for those contractors that
have already invested heavily in creating first-rate registered
apprenticeship programs. The commenter requested that the final rule
clearly specify that IRAP apprentices are not eligible for the
exception from Davis-Bacon and State prevailing wages as recommended by
Task Force Recommendation 17. The commenter further stated that
ineligibility should also extend to any IRAP that applies for and is
subsequently granted official status as a registered apprenticeship
program under the expedited process set forth in proposed Sec. 29.25.
The Department acknowledges the concerns raised by commenters with
respect to the Davis-Bacon exception. The Department is confident,
however, that the text of the regulation at issue, 29 CFR 5.5(a)(4)(i),
is sufficiently clear that it only applies to registered apprenticeship
programs registered by OA or by an SAA recognized to register programs
for Federal purposes (and not state agencies acting as SREs). See 29
CFR 5.5(a)(4)(i) (restricting the exception to apprentices who are
employed ``in a bona fide apprenticeship program registered with the
U.S. Department of Labor, Employment and Training Administration,
Office of Apprenticeship Training, Employer and Labor Services, or with
a State Apprenticeship Agency recognized by the Office''). IRAPs are,
by definition, not registered apprenticeship programs. The regulation
further states that ``[t]he allowable ratio of apprentices to
journeymen on the job site in any craft classification shall not be
greater than the ratio permitted to the contractor as to the entire
work force under the registered program,'' which also helps clarify
that 29 CFR 5.5(a)(4)(i) is not applicable to IRAPs. Given that 29 CFR.
Sec. 5.5(a)(4)(i) clearly only applies to registered apprenticeship
programs, the Department sees no need to insert language in this rule
that the Davis-Bacon exception does not apply to IRAPs.\15\
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\15\ Likewise, apprentices in IRAPs do not fit within the
``trainee'' exception to the Davis-Bacon prevailing wage
requirement. 29 CFR 5.5(a)(4)(ii). A trainee must be ``registered
and receiving on-the-job training in a construction occupation under
a program which has been approved in advance by [ETA] as meeting its
standards for on-the-job training programs and which has been so
certified by that Administration.'' 29 CFR 5.2(n)(2). Although the
Administrator will recognize SREs under this final rule, IRAPs
themselves will not be recognized or approved by the Administrator
and apprentices under such programs therefore do not qualify for the
``trainee'' exception. No regulatory changes are necessary to
clarify this point.
---------------------------------------------------------------------------
Additionally, the Department declines to opine on the applicability
of State prevailing wage laws to IRAP apprentices because whether an
IRAP apprentice would qualify as an apprentice under a State prevailing
wage law depends on the specific State law at issue and the extent to
which such laws track the Federal Davis-Bacon Act varies. Finally, as
discussed below, the Department has removed from the final rule
proposed Sec. 29.25, which allowed for expedited registration for
IRAPs to become registered apprenticeship programs. However, any IRAP
that subsequently registers its program under subpart A would qualify
as a registered program for purposes of the Davis-Bacon Act.
Thus, other than clarification regarding compliance with the FLSA
and all other applicable Federal, State, or local wage laws and
regulations with respect to any costs or expenses charged to
apprentices, the final rule adopts the provision as proposed.
8. EEO Requirements--Sec. 29.22(a)(4)(viii)
Paragraph (a)(4)(viii) of Sec. 29.22 requires that programs affirm
their adherence to all applicable Federal, State, and local laws and
regulations pertaining to EEO. Many commenters expressed concern that
the Department did not propose a similar requirement for IRAPs as for
registered apprenticeships, as set forth in 29 CFR part 30. These
commenters stated that, in their view, the proposed rule would create
two vastly different sets of EEO standards for apprenticeships and
suggested that the Department require IRAPs to comply with 29 CFR part
30. Others argued that certain parts of 29 CFR part 30, such as the
requirement for Uniform Guidelines on Employee Selection Procedures in
29 CFR 30.10, should apply to IRAPs. Many commenters stated that the
Department's proposal would lead to fewer apprenticing women, veterans,
and minorities, because of inherent gaps in EEO laws and the failure to
include robust affirmative action requirements. Some commenters
suggested that the adherence to EEO laws would not protect apprentices
against discrimination on the bases of age, disability, sexual
orientation, and genetic information. Other commenters expressed
concern that Title VII of the Civil Rights Act of 1964 would only apply
to apprentices/training programs controlled by joint labor-management
committees. Several commenters pointed out specific differences between
the proposed rule for IRAPs and the requirements of 29 CFR part 30,
such as an EEO pledge, anti-harassment training, and affirmative action
plans. Commenters also expressed concern that not holding IRAPs to the
same 29 CFR part 30 requirements would hurt women, minorities,
veterans, and people with disabilities.
On the other hand, a commenter agreed with the Department's general
approach to EEO requirements. The commenter suggested that IRAPs should
be held responsible for their noncompliance with EEO requirements,
rather than the SREs, because SREs should not be expected to enforce
human resources policies and Federal laws. Another commenter cautioned
[[Page 14324]]
against the ``mission creep'' of subjecting SREs and IRAPs to a regime
similar to EEO oversight performed by the Department's Office of
Federal Contract Compliance Programs (OFCCP). The commenter supported
the Department's decision to give SREs the responsibility of ensuring
that EEO requirements are met to allow small business to focus on
serving program participants while at the same time protecting
apprentices from discrimination.
The Department has determined that requiring compliance with
Federal, State, and local EEO laws is a reasonable means of formulating
and promoting standards to safeguard the welfare of apprentices. And by
referencing legal requirements generally, rather than codifying
particular steps and requirements, this regulation seamlessly
accommodates future developments in EEO laws while providing clear
guidelines in the present. This approach is a policy choice that
accords with the final rule's aim to encourage a flexible yet rigorous
apprenticeship model.
As discussed in the preamble, apprentices are employees that
benefit from the same protections during the employment relationship as
any other employees of the employer offering the IRAP. The Department
notes that Federal EEO laws are not limited to title VII and include
all Federal anti-discrimination laws enforced by the Equal Employment
Opportunity Commission (EEOC), including the Age Discrimination in
Employment Act, the Americans with Disabilities Act, the Equal Pay Act,
and the Genetic Information Nondiscrimination Act. Many States and
local jurisdictions have additional EEO requirements, with enforcement
mechanisms similar to the EEOC. SREs, IRAPs, employers, and educational
institutions are also free to implement EEO policies that go beyond
legal requirements. Further, EEO protections are not limited to
apprentices in programs controlled by joint labor-management
committees; any ``covered'' employer, as defined by applicable Federal,
State, and local EEO laws, would be required to adhere to those laws
during the employment relationship with the apprentice. Additionally,
if an IRAP is a Federal contractor or subcontractor covered by
Executive Order 11246, section 503 of the Rehabilitation Act, or the
Vietnam Era Veterans' Readjustment Assistance Act, then it is also
subject to the nondiscrimination and affirmative action provisions
enforced by OFCCP. Requiring IRAPs to adhere to well-established anti-
discrimination laws also provides apprentices statutory remedies for
EEO violations.
Additionally, as discussed in the preamble, the Department has
clarified its oversight responsibilities for SREs and strengthened the
requirements for the quality-control relationship between the SRE and
its IRAPs. This means that the Department has a mechanism to
derecognize an SRE, and an SRE has a mechanism to derecognize an IRAP,
for violations of this subpart, including EEO violations. The statutory
remedies provided by existing EEO laws, in conjunction with oversight
of SREs and IRAPs, thus provide the necessary framework for both
individual remedies and institutional accountability.
The Department's approach to affirmative action is set forth in
Sec. 29.22(i), which creates the requirement for SREs to ensure a
comprehensive outreach strategy to prospective apprentices. The
Department has concluded that this is a useful approach, permitted but
not mandated by the NAA, because smaller IRAPs would benefit from the
SRE's capacity for such outreach. An SRE can structure its policies and
procedures to ensure comprehensive outreach strategies that are
consistent with and tailored to its nature, size, network, and
geographic reach, as well as the nature and size of the recognized
IRAPs and the scope of the SRE's relationships with those IRAPs. The
Department recognizes the comments requesting additional affirmative
action provision akin to those in 29 CFR part 30. The Department also
recognizes comments cautioning against additional requirements similar
to those in 29 CFR part 30. The Department declines to add any
additional requirements beyond what is in Sec. 29.22(i) as discussed
further below. The Department views the requirements to adhere to
Federal, State, and local EEO laws and regulations to be both
sufficient and clear. Thus, the final rule adopts this provision as
proposed.
9. IRAP Disclosure of Costs and Expenses to Apprentices--Sec.
29.22(a)(4)(ix)
Paragraph (a)(4)(ix) of Sec. 29.22 requires that the programs
disclose to apprentices, before they agree to participate in the
program, any costs or expenses that will be charged to them (such as
costs related to tools or educational materials). Disclosure of such
costs is necessary before apprentices agree to begin a program so that
apprentices can accurately calculate their anticipated earnings. The
final rule clarified that such disclosure must be ``to apprentices''
and ``before they agree to participate in the program.''
Several commenters opposed charging costs and expenses to
apprentices. A commenter asserted that passing on such costs to
apprentices defeated the purpose of the NAA and urged the Department to
require that any expenses be limited such that they would not
effectively reduce apprentices' hourly pay below the minimum wage.
Another commenter argued that the prospect of unregulated costs is
contrary to apprenticeships' basic nature as ``earn and learn
programs.'' A commenter asked whether there would be a cap on costs and
requested clarification about when in the process IRAPs would be
required to disclose them to apprentices. Commenters also suggested
that IRAPs be required to disclose all costs and expenses to
apprentices rather than only ``ancillary'' costs and expenses.
The Department agrees with the commenters' suggestions to require
disclosure of all costs and expenses, rather than only ``ancillary''
costs and expenses. The Department has struck the term ``ancillary''
from the final rule.
Regarding the concerns about charging any costs or expenses to
apprentices, as discussed in Sec. 29.22(a)(4)(vii) above, the
Department has explicitly stated that any costs and expenses must
comply with all applicable Federal, State, or local wage laws and
regulations. The Department also has clarified the language of Sec.
29.22(a)(4)(ix) to require that an IRAP must disclose the costs and
expenses ``to apprentices, before they agree to participate in the
program,'' thereby protecting the apprentice from being subjected to
onerous fees without his or her prior knowledge. The Department
anticipates that the additional requirement for an apprenticeship
agreement, discussed below, will result in further disclosure of costs
and expenses charged to apprentices, if any, throughout the course of
the apprenticeship program. The Department neither requires nor
prohibits IRAPs from charging costs or expenses to apprentices, except
that, as noted, the final rule prohibits the charging of such costs or
expenses if doing so would violate any applicable Federal, State, or
local wage laws or regulations. The Department does, however, expect
SREs and IRAPs would consider carefully whether to impose such costs,
given the nature of the relevant industries and occupations. The
Department also expects that market forces and competition for
apprentices will keep costs down.
[[Page 14325]]
10. Apprenticeship Agreement--Sec. 29.22(a)(4)(x)
As discussed above, and in response to several comments on the
topic, the Department has added a new paragraph in Sec.
29.22(a)(4)(x), that requires programs to maintain a written
apprenticeship agreement for each apprentice that outlines the terms
and conditions of the apprentice's employment and training. The
apprenticeship agreement must be consistent with its SRE's
requirements.
In addition to many comments urging the Department to consider
requiring apprenticeship agreements, commenters provided specific
suggestions regarding the content of such agreements. The Department
received comments requesting that an apprenticeship agreement
incorporate the requirements for registered apprenticeships, such as
the number of hours to be spent in related instruction in technical
subjects related to the occupation; a statement setting forth a
schedule of the work processes in the occupation or industry divisions
in which the apprentice is to be trained and the approximate time to be
spent at each process; a statement of the wages to be paid to the
apprentice and whether the required related instruction is compensated;
a statement regarding the duration of a probationary period; a
statement concerning the circumstances under which an apprenticeship
agreement may be canceled, to include termination for good cause,
notice to the apprentice, and an opportunity for corrective action; an
equal opportunity statement; ratios of apprentices-to-journey level
workers; and information about dispute resolution concerning the
apprenticeship agreement. A commenter also suggested adding a statement
concerning safe equipment, facilities, and training, and adding a
request for demographic data, to include the apprentice's race, sex,
and ethnicity, in addition to disability status.
The Department agrees with the suggestion of many commenters that
an apprenticeship agreement between the apprentice and the program will
clearly set out expectations for both, consistent with the requirements
of this subpart. Accordingly, an apprenticeship agreement must contain
the terms and conditions of the apprentice's employment and training,
which the Department expects will include topics such as the duration
of the apprenticeship, wages and any wage progression, costs or
expenses charged to the apprentice, and the competencies and industry-
recognized credential(s) to be attained by completion. The Department
expects this provision to take the place of the phrase ``involves an
employment relationship'' that was previously in Sec. 29.22(a)(4)(ii),
because the apprenticeship agreement will contain the specific
parameters of the employment relationship in a way that provides
structure and clarity to the IRAP and the apprentice. Further, the
Department anticipates that this provision will complement the
requirement in Sec. 29.22(a)(4)(ii) for a written training plan that
describes structured work experience and related instruction, leads to
competencies and credential(s), and provides progressively advancing
industry-essential skills, and that some IRAPs may choose to
incorporate the training plan into the apprenticeship agreement either
explicitly or by reference.
The Department expects that specifics of the apprenticeship
agreement will vary, based on the SRE's requirements and the particular
circumstances of each IRAP. Therefore, the Department declines to
specify the content of apprenticeship agreements. This provision is not
intended to, nor is it required to, mirror the requirements for an
apprenticeship agreement set forth in subpart A. Rather, the agreement
required by this section is intended to be a written agreement defining
the employment relationship and containing the terms and conditions of
employment that would memorialize the understanding and expectations of
both the IRAP and the apprentice, similar to how employers and other
types of workers engage in written contracts. This will allow
prospective apprentices to understand what they are signing up for
before joining an IRAP.
The Department also declines to require that certain demographic
data be a part of the apprenticeship agreement and notes that it has
added an SRE reporting requirement on this point at Sec. 29.22(h)(10).
With respect to other comments about adding to apprenticeship
agreements statements regarding a safe working environment and EEO
protections, the Department notes that these are mandatory requirements
for IRAPs under Sec. 29.22(a)(4). IRAPs may choose to include such
statements in their apprenticeship agreements, and the Department views
such statements as beneficial to give apprentices notice of their
rights in the workplace. Employers offering IRAPs, however, would be
bound by these requirements regardless of whether they explicitly
mention them in an apprenticeship agreement. The Department further
notes that employers must comply with all mandatory workplace-notice
requirements set forth in Federal, State, and local laws.
SRE Validation of High-Quality Programs
Paragraph (b) of Sec. 29.22 states that an SRE must validate that
IRAPs it recognizes comply with paragraph (a)(4). This means that the
SRE must in fact validate IRAP compliance, and affirm to the
Administrator that an IRAP it recognizes is a high-quality program, as
reflected by its conformity to what (a)(4) and the SRE require.
Validation under Sec. 29.22(b) should be conducted at initial
recognition and prior to the attestation provided to the Administrator
under Sec. 29.22(a)(2), when an SRE informs the Administrator that it
has recognized an IRAP. Validation under Sec. 29.22(b) should also be
conducted on an annual basis after recognition, with an attestation
provided to the Administrator annually.
Multiple commenters questioned the Department's use of the term
``validate'' in the context of this section. Although not specifically
tied to this section, and as described in various other parts of the
preamble, several commenters also questioned the Department's oversight
of SREs and expressed that, in their view, the proposed rule did not
containing sufficient requirements to safeguard the welfare of
apprentices.
In the context of this paragraph, the requirement that the SRE must
``validate'' its IRAPs' compliance with paragraph (a)(4) of Sec. 29.22
and the requirements of its SRE means that the SRE must affirm to the
Administrator that an IRAP it recognizes is a high-quality program as
reflected by its conformance to the requirements of Sec.
29.22(a)(4)(i) through (x) and any other requirements of the SRE. In
response to the concerns regarding the term ``validate'' and comments
received generally about the need for ongoing oversight, the Department
included a requirement that the SRE validate compliance and provide a
written attestation of the IRAP's compliance with the requirements of
Sec. 29.22(a)(4), both at the time of recognition and on an annual
basis thereafter. This enhances the requirement to ``validate,'' which
some commenters remarked was insufficiently vague, and also adds an
ongoing requirement to ensure continued compliance with Sec.
29.22(a)(4) and the SRE's requirements. The Department anticipates that
the quality-control relationship between the SRE and its IRAPs as
required by Sec. 29.22(f), will consist of an ongoing assessment of
the IRAP's compliance with Sec. 29.22(a)(4) that would facilitate an
annual attestation to the Department.
[[Page 14326]]
The Department has determined that requiring an SRE to attest to IRAP
compliance annually creates additional protection of apprentices and
Departmental monitoring of SRE oversight of IRAPs. Finally, as with
other provisions, if the Administrator determines that an SRE's IRAPs
are not in compliance despite the SRE's attestation, the Administrator
has the option to take appropriate action against the SRE under this
subpart.
SRE Disclosure of Credential(s) To Be Attained
Paragraph (c) of Sec. 29.22 requires SREs to publicly disclose the
credentials that apprentices will earn during their participation in or
upon completion of an IRAP, as is the norm in the private sector. An
SRE could disclose these credentials on its website, for example. The
Department received a comment suggesting that the credential be
disclosed to the apprentice in an apprenticeship agreement. The
Department acknowledges this comment and anticipates that an
apprenticeship agreement, added to the final rule at Sec.
29.22(a)(4)(x), could include the credential(s) attained during or at
the completion of the program. The Department also notes that the
training plan in Sec. 29.22(a)(4)(ii) will likely include the
credential(s) to be attained. The Department removed the word
``successful'' as a modifier for ``participation'' to make this
paragraph consistent with Sec. 29.22(a)(4)(iv). The Department has
also added the word ``publicly'' to clarify that the SRE must disclose
the credentials to the public so that the public has a way to assess
what IRAPs are offering. Otherwise, the Department has adopted this
provision as proposed.
SRE Policies and Procedures for Recognizing IRAPs
Proposed paragraph (d) of Sec. 29.22 stated that SREs' ``policy
and procedures for recognizing Industry Programs must be sufficiently
detailed that programs will be assured of equitable treatment, and will
be evaluated based on their merits. A Standards Recognition Entity must
ensure that its decisions are based on objective criteria, and are
impartial and confidential.'' The Department has revised this paragraph
for clarity and included a requirement that SREs provide to the
Administrator its policies and procedures at the time of application.
The final rule provides: ``An SRE must establish policies and
procedures for recognizing, and validating compliance of, programs that
ensure that SRE decisions are impartial, consistent, and based on
objective and merit-based criteria; ensure that SRE decisions are
confidential except as required or permitted by this subpart, or
otherwise required by law; and are written in sufficient detail to
reasonably achieve the foregoing criteria. An SRE must submit these
policies and procedures to the Administrator.'' The Department has
clarified that SREs are required to have sufficiently detailed policies
and procedures in place for recognition of IRAPs and validating their
compliance with this subpart. This is to ensure that the decisions of
SREs are based on the quality of entities' programs, not other factors.
By requiring confidentiality, this provision also respects the privacy
of entities seeking recognition, since seeking recognition could entail
providing confidential business information.
A commenter questioned the confidential nature of the decisions,
stating that the Department or the public could benefit from learning
about the reasons for the SRE's decision-making without a disclosure of
confidential business information. Another commenter faulted the rule
for the lack of specificity in the SRE's recognition of IRAPs other
than the requirement that policies and procedures are ``sufficiently
detailed'' so IRAPs ``will be assured of equitable treatment'' and
evaluated ``based on their merits.''
The Department acknowledges the commenters' concerns and has added
the requirement that the SRE submit its policies and procedures to the
Administrator at the time of application. This is intended to add
transparency and accountability in crafting impartial merit-based
policies and procedures. It allows the Department to evaluate, both at
initial recognition and re-recognition, these policies and procedures
for fair evaluation based on the merits. Though the NPRM's proposed
regulatory text did not explicitly contain the requirement that these
policies and procedures be submitted to the Administrator with the
SRE's application, the form embedded in the NPRM specifically requested
descriptions of policies and procedures related to IRAP recognition and
assessment. The Department intends for such policies and procedures to
be reviewed prior to recognition as an SRE because SREs must
demonstrate that they are capable of recognizing IRAPs and fairly
assessing IRAPs for compliance with this subpart. The Department also
notes that the SRE must notify the Administrator of any significant
changes to these policies or procedures, in accordance with Sec.
29.22(p). For example, a change in the evaluation criteria would
constitute a significant change, and an SRE would need to notify the
Administrator when it makes these changes.
As for the concern about the confidentiality of the process, the
Department does not intend for any statement about confidentiality to
inhibit the Department from seeking or obtaining necessary information
to discharge its own obligations under this subpart but rather to
protect confidential business information from unnecessary disclosure.
Thus, the Department has clarified the limitations on confidentiality
to provide that that SRE decisions are confidential ``except as
required or permitted by this subpart, or otherwise required by law.''
SRE Recognition of an IRAP
The Department has redesignated Sec. 29.22(g) in the proposed rule
as Sec. 29.22(e) in the final rule. In addition, paragraphs (e) and
(f) of Sec. 29.22 in the proposed rule concerning conflicts of
interest were not adopted as part of Sec. 29.22 of the final rule. To
streamline the final rule, the Department has determined that the
provisions contained in paragraphs (e) and (f) of Sec. 29.22 in the
proposed rule should be revised and relocated to Sec. 29.21 in the
final rule. This realignment was adopted because Sec. 29.21 of the
final rule focuses on whether a potential SRE would be qualified to act
in the capacity of an SRE as recognized by the Department, while Sec.
29.22 of the final rule focuses on an SRE's oversight duties with
respect to an IRAP once the SRE has been recognized. Paragraph (e) of
Sec. 29.22 of the final rule requires that SREs must not recognize
IRAPs for longer than 5 years at a time, and prohibits SREs from
automatically renewing recognition.
Some commenters argued that, in their view, the proposed rule did
not require a formal, clear, rigorous process for recognition or
monitoring of IRAPs. Two commenters expressed that the 5-year timeframe
for an IRAP's recognition may be too long. One commenter stated that
permitting ``hundreds of untested SREs and thousands of untried and
unproven IRAPs to be created and operate for five years is an
abrogation of the Department's responsibility to protect apprentices.''
But a different commenter agreed with the Department's assessment that
a 5-year time period ``is appropriate for ensuring that already-
recognized SREs continue to account for the development and evolution
in competencies needed within the industries and occupations to which
their standards relate.'' Some commenters suggested that IRAP
[[Page 14327]]
recognition be provisional, for a period of 1 year, after which the SRE
would evaluate the IRAP for continued recognition.
A commenter stated that there were no pathways in the proposed rule
to transfer an apprentice to another comparable program if the IRAP is
not re-recognized or goes out of business before the apprentice
completes and receives a credential. Two commenters argued that the
proposed rule did not address how SREs would monitor their IRAPs or how
SREs would be held accountable for programs that do not achieve
positive results for apprentices. A commenter supported the flexibility
granted to SREs in the design, policies, and procedures for monitoring
IRAPs because SREs are knowledgeable about their industries.
The Department acknowledges the suggestions provided by the
commenters concerning the oversight and monitoring of IRAPs but has
opted not to include these in the final rule. The Department believes
the rule strikes an appropriate balance between required SRE oversight
and flexibility to choose how to operate. Under Sec. 29.22(a)(4) of
the final rule, the SRE is charged with only recognizing and
maintaining the recognition of IRAPs that meet the specific
requirements in Sec. 29.22(a)(4)(i) through (x). Given these
requirements, the Department maintains that 5 years is a reasonable
amount of time for an IRAP's recognition. The 5-year time period
provides the SRE with a comprehensive body of longitudinal data
concerning the IRAP's consistency in maintaining minimum standards for
each apprentice's safety and welfare. In addition, the 5-year timeframe
seeks to balance factors such as the transactional costs of IRAP re-
recognition, the rapidly changing nature of industries and occupations,
the value of occupational credentials, and the need to monitor and
assess IRAP operations on a regular basis.
In addition, the Department declines to mandate a provisional
recognition period of 1 year for IRAPs. SREs are required to attest
annually to an IRAP's compliance with the requirements set forth in
this final rule, as discussed in Sec. 29.22(b). SREs are also required
to make publicly available and report to the Department certain IRAP-
related data and outcomes on an annual basis, as discussed in Sec.
29.22(h) of the final rule. These requirements, as well as the quality-
control relationship between the SRE and its IRAP, provide SREs with
the necessary information to determine whether to derecognize an IRAP
or provide additional support and guidance in an effort to bring the
IRAP into compliance. Although the Department does not require a
provisional recognition period, the SRE may decide to provisionally
recognize an IRAP, or provide additional monitoring or assistance
during this period.
Accordingly, apart from the redesignation of this provision as
Sec. 29.22(e) in the final rule and the addition of nonsubstantive
textual edits for clarity, the Department adopts this provision as
proposed.
Quality Control Relationship Between the SRE and Its IRAPs
Paragraph (f) of Sec. 29.22, which was proposed as Sec. 29.22(h),
requires that SREs and IRAPs be in an ongoing quality-control
relationship and provides general guidelines for that requirement. The
specific means and nature of the relationship between the SRE and an
IRAP will be defined by the SRE, provided that the relationship: (1)
Results in reasonable and effective quality control that includes as
appropriate, consideration of apprentices' credential attainment,
program completion, retention rates, and earnings; (2) does not prevent
the IRAP from receiving recognition from another SRE; and (3) does not
conflict with this subpart or violate any applicable law. The final
rule added two more requirements to the quality-control relationship:
That it involve periodic compliance reviews and include policies and
procedures for suspension or derecognition of IRAPs.
Several commenters argued that the proposed rule should have
included specific quality-control requirements for SREs to oversee
IRAPs effectively. Some commenters requested that there be precise
monitoring requirements, such as annual or biannual compliance reviews.
A commenter questioned whether SREs are expected to conduct site
visits, require documentation from their IRAPs, or provide technical
assistance to their IRAPs and under what circumstances an SRE would
place an IRAP on an improvement plan. Another commenter argued that the
key to effective quality control is a program standard approved by the
Department or a State. A commenter recommended that the Department
delineate requirements for the quality-control relationship, such as
using the SRE's assessment of apprentices' post-program earnings, job
placement, test scores, or apprentice or employer satisfaction as
useful data points for evaluating programs. The same commenter also
encouraged the Department to explore enforcement and monitoring
mechanisms for the SRE's quality-control relationship with the IRAPs it
recognizes.
The Department appreciates the comments received on this topic and
has further clarified the quality-control relationship between the SRE
and the IRAPs it recognizes. The Department has added two requirements
to the quality-control relationship between the SRE and the IRAP. The
quality-control relationship must involve ``periodic compliance reviews
by the SRE of its IRAP to ensure compliance with the requirements of
[Sec. 29.22(a)(4)] and the SRE's requirements'' and must include
``policies and procedures for the suspension or derecognition of an
IRAP that fails to comply with the requirements of [Sec. 29.22(a)(4)]
and its SRE's requirements.'' Although the Department declines to
prescribe the frequency with which an SRE must conduct compliance
reviews, the Department anticipates that SRE compliance reviews will
occur on at least an annual basis. SREs have an annual data reporting
requirement under Sec. 29.22(h) and are required to submit an annual
attestation under Sec. 29.22(b) that the IRAPs they recognize continue
to meet the requirements of Sec. 29.22(a)(4), and the Department
anticipates that the SRE will take all steps necessary to accurately
report this information to the Department given the consequences if it
does not do so. The Department anticipates that SREs will engage in a
combination of quality-control measures, such as requiring
documentation and providing technical assistance. Although the
Department has not prescribed the situations under which an IRAP would
be suspended or derecognized, the Department instead requires that the
SRE develop policies and procedures to take such actions. The SRE may
also develop policies and procedures for performance improvement plans
or corrective action plans if it deems appropriate. The Department
views these additions to the quality-control relationship as enhancing
IRAPs' accountability for providing high-quality training and
safeguarding the welfare of apprentices.
One commenter suggested that many IRAPs may have a single
individual in charge of quality assurance and the quality of the IRAP
could potentially suffer if the individual leaves the program.
The Department recognizes that smaller IRAPs may be unable to
maintain multiple individuals tasked with quality-assurance
responsibilities, but the Department has determined that an IRAP is
responsible for its personnel, including personnel turnover that may
occur, and is responsible for continuing
[[Page 14328]]
to comply with the requirements of a high-quality apprenticeship
program. The Department declines to attempt to regulate IRAPs'
personnel matters and expects that IRAPs will continue to fulfill their
obligations under this subpart regardless of personnel changes. The
Department notes that an IRAP may seek assistance from its SRE and
utilize the SRE's expertise to comply with its responsibilities under
this subpart. If the IRAP does not continue to fulfill its obligations,
the SRE will hold the IRAP accountable as appropriate under the
framework established by the Department.
Joint Employment Relationship
The Department has redesignated Sec. 29.22(i) in the proposed rule
as Sec. 29.22(g) in the final rule. In addition, paragraphs (e) and
(f) of Sec. 29.22 in the proposed rule concerning conflicts of
interest were not adopted as part of Sec. 29.22 of the final rule. As
noted above, paragraphs (e) and (f) of Sec. 29.22 in the proposed rule
were revised and relocated to Sec. 29.21 in the final rule to
streamline the rule. Accordingly, the Department has redesignated Sec.
29.22(g), Sec. 29.22(h), and Sec. 29.22(i) in the proposed rule as
Sec. 29.22(e), Sec. 29.22(f), and Sec. 29.22(g) in the final rule,
respectively. Paragraph (g) of Sec. 29.22 in the final rule makes
clear that an entity's participation as an SRE of an IRAP does not make
the SRE a joint employer with the entity(ies) that develop or deliver
IRAPs.
The Department did not receive any comments related to paragraph
(i) of Sec. 29.22 in the proposed rule. Accordingly, the final rule
retains the provision as proposed. However, as noted above, this
provision has been redesignated as paragraph (g) of Sec. 29.22 in the
final rule.
SRE Data Publication and Reporting
Sec. 29.22(h)--General Overview
Proposed Sec. 29.22(j) of the NPRM (now redesignated as Sec.
29.22(h) in this final rule) stipulated that an SRE must make publicly
available on an annual basis the following information on each IRAP it
recognizes: (1) Up-to-date contact information for each program; (2)
the total number of apprentices annually enrolled in each program; (3)
the total number of apprentices who successfully completed the program
annually; (4) the annual completion rate for apprentices; (5) the
median length of time for program completion; and (6) the post-
apprenticeship employment rate of apprentices at completion. The
preamble of the NPRM explained that the publication of this information
would provide employers and prospective apprentices the details
necessary to make informed decisions about IRAPs. However, the preamble
also invited public comment on which performance measures would be most
helpful in assessing IRAP impact and quality assurance, and
specifically stated that ``the Department is considering setting
performance measures related to post-apprenticeship employment and
wages and employer retention.'' The preamble also emphasized that
``[t]he Department has a keen interest in minimizing burden [sic] on
SREs and [IRAPs], and therefore also solicits comment on the most
efficient approach to data collection.''
In response to its request for public comments concerning the
addition of performance measures to evaluate the success of IRAPs
recognized by SREs, the Department received substantial input from a
wide range of commenters. None of the comments received specifically
advocated the deletion or modification of the information initially
proposed by the Department in the NPRM at Sec. 29.22(j)(1) (IRAP
contact information), Sec. 29.22(j)(2) (the total number of
apprentices annually enrolled in each IRAP), Sec. 29.22(j)(3) (annual
total of apprentices who successfully completed an IRAP), or Sec.
29.22(j)(5) (the median length of time for IRAP completion). While
there was broad support for retaining the six initial provisions on
IRAPs proposed in Sec. 29.22(j) of the NPRM, a number of commenters
expressed support for refining or expanding the number of data and
outcomes metrics in order to better assess the size, scope, and
effectiveness of IRAPs, while others expressed concern that the
collection of additional data from SREs and IRAPs would impose
unwarranted burdens on these parties.
In discussing the preamble text for Sec. 29.22(h) of this final
rule, the Department first describes the addition of a reporting
requirement in the introductory clause of Sec. 29.22(h); it then
discusses (in order of appearance) those paragraphs of Sec. 29.22(h)
where changes were adopted based on comments received (Sec.
29.22(h)(6), (7), (8), (9) and (10)); it proceeds to discuss those
sections of Sec. 29.22(h) where changes were made to the text
administratively (Sec. 29.22(h)(2) and (4)); and it then refers to the
paragraphs of Sec. 29.22(h) where no changes were made to the text as
it appeared in the NPRM (Sec. 29.22(h)(1), (3), and (5)). The final
paragraphs of the Sec. 29.22(h) preamble discussion summarize those
comments and suggestions that the Department has declined to adopt in
this final rule.
The Department notes that both SREs and the IRAPs they recognize
are free to collect and publish data relating to program outcomes
beyond the specific metrics that are stipulated in Sec. 29.22(h) of
this final rule; indeed, such additional voluntary collection
initiatives could provide the chief beneficiaries of these programs
(i.e., potential apprentices and employers) with valuable performance
information that may encourage broader participation by these parties
in IRAPs. The Department believes that employer participation in IRAPs
will be a key indicator of success showing that the program is
beneficial to both employers and apprentices. As participation in IRAPs
increases, the Department may consider additional performance measures.
1. Adding an SRE Reporting Requirement to DOL on IRAP Outcomes at Sec.
29.22(h)
Multiple commenters suggested that the Department require SREs to
submit outcomes data on the IRAPs they recognize directly to the agency
on a regular basis, in addition to making it publicly available. One of
these commenters opined that the requirement in the NPRM that SREs
``make publicly available'' certain information about an IRAP was
``insufficient to rigorously assess the size, scope, and
effectiveness'' of these programs, while another commenter maintained
that the Department cannot hope to provide meaningful quality assurance
without requiring SREs to collect information on the outcomes of the
IRAPs they oversee. However, another commenter took the position that
the Department should not require SREs to provide specific information
as part of a reporting requirement, but rather should require SREs to
simply submit a plan for such reporting in their applications for
recognition by the Department. One commenter argued that the Department
should consider the potential burdens and negative ramifications of a
performance and reporting system for IRAPs, while another commenter
expressed the view that the Department should refrain from requiring
SREs to meet overly burdensome reporting and data requirements similar
to those of the current registered apprenticeship system. A commenter
reasoned that, in their view, because SREs may tailor their programming
to distinct populations for industries with which they have a strong
relationship, the Department should refrain from setting specific
performance measures for IRAPs.
[[Page 14329]]
The Department agrees with those commenters who suggested that
requiring SREs to report IRAP data and outcomes directly to the
Department on a regular basis will help the Department monitor and
evaluate these programs and entities. Accordingly, in addition to
retaining the requirement that SREs make publicly available certain
outcomes information concerning the IRAPs they recognize, the provision
of the final rule that addresses program data and outcomes (which has
been redesignated as Sec. 29.22(h) in the final rule) has been
modified to stipulate that SREs must also report this same information
directly to the Department. The final rule also clarifies that SREs
must both publish this IRAP data and report it to the Department on an
annual basis. The format for SREs to publish and report industry
program data will be prescribed by the Administrator in subsequent sub-
regulatory guidance; the Department anticipates that the prescribed
format will allow electronic publishing and reporting to reduce SREs'
time and paperwork burdens. The Department also intends to work with
SREs to explore the use of administrative data sources to collect
required outcome information. Such sources offer the chance to collect
information in a more valid, consistent manner and at a lower cost. In
determining what types of IRAP data and outcomes are most appropriate
for collection, reporting, and publication by SREs, this final rule
balances the potential benefits to the public of gaining access to
additional program-level data against the legitimate concerns raised by
some commenters that requiring SREs and IRAPs to provide outcomes data
beyond that specified in the NPRM could impose undue burdens.
Subsequent to the publication of this final rule, the Department
intends to issue a Federal Register notice requesting public comment on
the information collections required under Sec. 29.22(h) and submit an
ICR to the Office of Management and Budget (OMB) for review and
approval in accordance with the PRA. This ICR will provide further
details concerning the IRAP outcomes and metrics that are stipulated in
Sec. 29.22(h).
2. Sec. 29.22(h)(6)--Post-Apprenticeship Employment and Retention
Rates
As previously noted, Sec. 29.22(j)(6) of the NPRM proposed that
SREs should make publicly available ``[t]he post-apprenticeship
employment rate of apprentices at completion.'' One commenter suggested
that the Department expand the list of outcomes metrics in the final
rule to include post-program employment rates at the second and fourth
quarters following a former apprentice's completion of an IRAP; this
commenter further suggested that the post-employment data be
disaggregated by race, ethnicity, gender, disability status, and other
characteristics to measure equitable impact across these populations.
Two other commenters agreed that the Department should require SREs to
collect information on the post-program employment status of former
apprentices who completed IRAPs. One of these commenters recommended
that the text of the NPRM's proposed Sec. 29.22(j)(6) should be
refined so that SREs would collect information on the post-
apprenticeship employment rate of former apprentices at 6- and 12-month
intervals after IRAP completion. This commenter further opined that the
collection of this data would facilitate performance comparisons
between IRAPs, registered apprenticeship programs, and other work-based
learning models.
A number of commenters recommended that IRAPs should be assessed
according to their retention rates. One of these commenters expressed
its view that it would be reasonable for Department to require SREs to
collect information from the IRAPs they recognize concerning ``the
post-completion hire rate at the sponsoring company.'' A commenter also
opined that the collection of both employment and retention data
(measured up to 6 months after learners exit a training program) are
two of the four core outcomes metrics for measuring the success of
workforce programs under WIOA. However, another commenter stated that
retention rates after defined periods of time post-completion are more
likely to be subject to circumstances beyond the apprenticeship
program's control and less likely to reflect on the quality and
effectiveness of the program and, therefore, should be excluded.
As noted above, the Department expressed its willingness to
consider post-apprenticeship retention rates as an additional
performance metric in the preamble of the NPRM. After considering the
comments proposing the addition of a new data point to assess an
employer's retention of the apprentices they trained, the Department
has concluded that the inclusion of such outcomes information in the
final rule would be useful to potential apprentices in evaluating the
quality of IRAPs. Accordingly, the Department is modifying the outcomes
metric contained in this provision (now redesignated as Sec.
29.22(h)(6) of the final rule) to require that SREs make publicly
available--and also report to the Department on an annual basis--the
post-apprenticeship employment retention rate, calculated at 6- and 12-
month intervals after program completion.
3. Attainment of Industry-Recognized Credentials--Sec. 29.22(h)(7)
Several commenters suggested that the Department should expand the
program outcome data in the final rule to include information on the
attainment of industry-recognized credentials for each IRAP. One of
these commenters noted that credential attainment is one of the four
core outcomes metrics for measuring the success of workforce programs
under WIOA. Another commenter opined that the Department should require
SREs to make public the number of credentials attained per year by IRAP
apprentices, and the success rates of apprentices on final
examinations, including the overall success rate, first attempt success
rate, and second attempt success rate. A commenter further suggested
that SREs should require IRAPs to disclose data on credential status
and the acceptance by employers of credentials received, along with
information on the value of being credentialed as opposed to being un-
credentialed.
After considering the relative value of these credential-related
data points to potential apprentices in assessing the relative quality
of IRAPs, the Department agrees with the inclusion of some, but not
all, of the outcome metrics recommended by the commenters. Accordingly,
the Department has revised the text of the final rule (at Sec.
29.22(h)(7)) to require that SREs make publicly available--and also
report to the Department on an annual basis--information about the
attainment of industry-recognized credentials by apprentices in each of
the IRAPs that they have recognized. The final rule also stipulates
that SREs must, on an annual basis, make publicly available and report
to the Department data on the number of industry-recognized credentials
that are conferred by each of the IRAPs they have recognized. However,
the Department declines to adopt the suggestions made by various
commenters requesting the collection, reporting, and publication of
data on apprentice success rates on IRAP examinations, on the
acceptance by employers of credentials attained, or on the relative
value of being credentialed or un-credentialed. The Department is
concerned that the procurement of such
[[Page 14330]]
outcomes data by SREs and IRAPs would prove unduly burdensome, and may
discourage such programs and entities from participating in this
initiative while providing minimal benefit to the Department and
prospective apprentices.
4. Post-Program Wages--Sec. 29.22(h)(8)
A wide range of commenters suggested that the Department should
require the collection of the average wage rates of former apprentices
upon program completion as an additional outcomes metric in the final
rule. As noted above, the Department expressed its willingness to
consider post-apprenticeship wages as an additional program performance
metric in the preamble of the NPRM. One of the commenters observed that
the collection of wage data (measured up to 6 months after learners
exit a training program) is one of the four core outcomes metrics for
measuring the success of workforce programs under WIOA. Another
commenter further proposed that the Department collect wage rates paid
to IRAP graduates upon completion, as well as the employment and wage
rates of such individuals at 1- and 5-year intervals after program
completion. However, a commenter expressed the view that the Department
should not include post-completion wage rates as a performance measure,
because wage rates do not include overtime hours and benefits, and
because wage information is often embedded in the confidential terms of
an employment contract.
After considering the relevancy and value of this post-program wage
information to potential IRAP participants, the Department agrees
substantially with those commenters who advocated for the collection of
this key outcomes data point. Accordingly, the Department has included
in the final rule (at Sec. 29.22(h)(8)) a requirement that SREs make
publicly available--and also report to the Department on an annual
basis--information about the average wage rates of an IRAP's former
apprentices, calculated 6 months after program completion. However, the
Department takes the position that requiring the collection of wage
data at 1- and 5-year intervals after IRAP completion--as one of the
commenters suggested--does not align with WIOA data-collection
requirements, and would also impose lengthy and burdensome collection,
reporting, and publication duties upon SREs and the IRAPs that they
recognize. The Department is also concerned that that the imposition of
more protracted administrative requirements with respect to the
collection of post-completion wage data could discourage the
participation of potential SREs and IRAPs in this initiative.
5. Training Cost per Apprentice--Sec. 29.22(h)(9)
In recommending that the Department not set a program-wide average
fee for SREs, a commenter opined that each industry, occupation, and
SRE will have different costs. However, another commenter expressed
concern that the NPRM did not contain cost estimates for the training
component of IRAPs. This commenter expressed the view that with the
substantial recent growth in registered apprenticeships, there is a
large body of data available from such programs concerning yearly
training costs.
After considering the comments received pertaining to IRAP training
costs, the Department has determined to include an additional outcomes
metric (at Sec. 29.22(h)(9) of the final rule) for SREs to collect,
report, and publish information about the training cost per apprentice
for each of the IRAPs that the SRE recognizes. The Department believes
that the availability of such data would be useful to the public in
evaluating the efficiency and cost-effectiveness of private-sector
IRAPs relative to other workforce training and development programs
that are taxpayer-funded. Such information also may help employers
considering the IRAP model decide to participate, given the
efficiencies and expertise that SREs are expected to bring.
6. Basic Demographic Information on IRAP Participants--Sec.
29.22(h)(10)
Multiple commenters suggested that DOL should require the
collection of demographic data on IRAP apprentices. After considering
these comments, the Department has decided to include an additional
reporting requirement (at Sec. 29.22(h)(10) of the final rule) for
SREs to collect, report, and publish basic demographic information
about the apprentices participating in the IRAP that the SRE recognizes
(which may include, for example, the voluntary provision of data on the
sex, race, and ethnicity of apprentices). The Department believes that
the availability of such demographic data--which SREs must publish on
an aggregated basis to protect the privacy of apprentices--will be
useful to the public in evaluating whether IRAPs have been successful
in attracting populations that have historically been underrepresented
in apprenticeship programs. In this regard, the Department has
determined that the potential benefits to consumers of gaining access
to such data outweigh the potential administrative burden associated
with the collection of such data by SREs and IRAPs.
7. Technical Modifications to Sec. 29.22(h)(2) and (4)
In addition to incorporating an IRAP program outcomes data
reporting requirement for SREs and adding to (or modifying) the
outcomes metrics originally listed in the NPRM, the Department has made
minor technical adjustments to certain other program measures that are
now contained in Sec. 29.22(h) of the final rule. For example, Sec.
29.22(j)(2) of the NPRM proposed that SREs make publicly available
``[t]he total number of apprentices annually enrolled in each
program''; in the corresponding provision of the final rule at Sec.
29.22(h)(2), the Department has added language clarifying that, in
tallying the number of apprentices in an IRAP, both new and continuing
apprentices should be counted. In addition, the word ``enrolled'' in
Sec. 29.22(j)(2) of the NPRM has been deleted in the corresponding
provision of the final rule at Sec. 29.22(h)(2) and replaced with the
word ``training'' to more accurately reflect the nature of an
apprentice's experience in an IRAP.
In addition, Sec. 29.22(j)(4) of the NPRM proposed an SRE make
publicly available ``[t]he annual completion rate for apprentices'' for
each IRAP it recognizes; in the corresponding provision of the final
rule at Sec. 29.22(h)(4), the requirement for SREs to report and
publish the annual completion rate for apprentices in the IRAPs that
they recognize has been modified to include a mathematical formula for
calculating this rate. While the Department did not receive any
comments suggesting this particular textual modification, one commenter
suggested that any future Federal funding for IRAPs should be made
contingent on such programs meeting certain minimum standards,
including a minimum completion rate. The Department was also concerned
that the absence of a clear definition of the term ``completion rate''
could lead to the reporting and publication by SREs of IRAP completion
rates that are not readily comparable, because they may have been
computed differently across IRAPs (e.g., apprentices that withdrew from
an IRAP could be treated differently than apprentices that transferred
between IRAPs). In addition, because the term ``completion rate'' is
already defined with respect to its application to registered
apprenticeship programs in subpart A of the final rule, providing a
clear definition for that
[[Page 14331]]
same term in the context of IRAPs is warranted under the circumstances.
It should also be noted that the original proposed text contained
in Sec. 29.22(j)(1), (3), and (5) of the NPRM (which correspond to
Sec. 29.22(h)(1), (3), and (5) of the final rule) has not been amended
in the final rule.
8. Other Comments Received Concerning Sec. 29.22(h)
Several commenters also recommended a variety of additional
outcomes metrics that the Department should adopt to evaluate the
effectiveness of SREs and the IRAPs that they recognize. For example, a
commenter recommended adding measures for the IRAP participation of
members of special populations to bring the regulation into conformity
with the Strengthening Career and Technical Education for the 21st
Century Act, Public Law 115-224 (2018) (as codified at 20 U.S.C. 2301
et seq.). A commenter urged DOL to encourage SREs to make use of
existing State longitudinal data systems and/or other such sources of
labor-market information to make determinations on the IRAPs they
recognize. Multiple commenters recommended that DOL promote integration
at the State level of information about incomes with such State
longitudinal data systems. Several other commenters suggested that DOL
should consider aligning publicly reported information collections with
core indicators of performance under WIOA.
After considering these comments, the Department takes the view
that requiring SREs to utilize State labor-market information or
longitudinal data systems in making determinations on IRAP
recognitions, or adjusting the final rule to require SREs and IRAPs to
align publicly reported information collections with core indicators of
performance under WIOA, would impose unnecessary or unworkable
administrative burdens on these parties, and may discourage them from
pursuing the IRAP option for apprenticeship expansion. Accordingly, the
Department declines to adopt these recommendations.
A commenter suggested that SREs and IRAPs should be required to
collect and make publicly available the same program and apprentice
information as the DOL Registered Apprenticeship Partners Information
Data System (RAPIDS) database does, including the collection of
individual and aggregated data on apprentice demographic information,
education level, current apprenticeship program enrollment status
(including information concerning participation in and duration of on-
the-job learning and related instruction), the employer identification
number (EIN) of the entity employing the apprentice, apprentice wage
rates at enrollment and completion of the IRAP, apprenticeship
completion rates, attainment of industry-recognized credentials, and
complaints and grievances filed (e.g., EEO complaints). Another
commenter opined that RAPIDS or a similar system should be used to
ensure that States know which programs are available to participants,
which will help States oversee the SREs and programs operating within
their borders. Other commenters urged DOL to align any data collection
protocols established for IRAPs with the data collection and evaluation
requirements of registered apprenticeship programs. Multiple commenters
recommended that SREs and IRAPs should be required to publicly
disclose, at a minimum, the information required of American
Apprenticeship Initiative (AAI) grant recipients.
In response to these comments, the Department observes that many
aspects of the new and more flexible IRAP model of apprenticeship are
distinctive; these features do not align closely with the requirements
of the existing registered apprenticeship framework, nor are they
required to do so. As noted previously, requiring SREs to report IRAP
data and outcomes directly to the Department on a regular basis will
help the Department effectively monitor and evaluate these new programs
and entities. Accordingly, the Department declines to adopt these
suggestions with respect to data alignment.
Multiple commenters recommended that the Department maintain a
public, online database with information about SREs and the IRAPs they
recognize. One of these commenters recommended that this database
include the complete application submitted by entities seeking to be
recognized as SREs, all submissions to the Administrator by SREs
regarding the recognition of IRAPs, and the complete performance data
submitted to the Administrator regarding each IRAP recognized by the
SRE. Another commenter advised that the database include information
about the credentials offered by IRAPs, and the portability of these
credentials. A commenter recommended that, in addition to disclosing
performance metrics, IRAPs should be required to use these performance
metrics to conduct self-evaluations, and that these self-evaluations
should be made public. A commenter suggested that DOL should require
SREs to assess apprentices' post-program earnings, along with pre-
program earnings.
After considering these comments, the Department takes the view
that the Department need not establish an online database of IRAP
program information when the final rule (at Sec. 29.24) already
provides that SREs will make information on IRAPs publicly available.
The Department also believes that it would be unnecessarily intrusive
to require SREs to make public their applications for recognition,
along with information concerning the SRE's recognition of IRAPs.
Similarly, the Department believes that requiring IRAPs to utilize
their performance data to conduct and publicize self-evaluations, or to
collect information on an apprentice's pre-program earnings, would
discourage many employers from establishing such programs. And as noted
above, portability is not a concept that likely could be identified in
the manner the commenter suggested, because even credentials facially
associated with a specific geographic region could be relevant to and
valued by an employer outside of that region.
A commenter encouraged the conduct of additional research about
IRAP programs' returns on investment. Another commenter opined that the
Department should allow room for variation in required performance
measures among industries. A commenter suggested that multiple ways to
report performance data, including an online form, should be instituted
in order to minimize the data collection burden on SREs as well as
IRAPs.
The Department is committed to reducing paperwork burdens on SREs
and IRAPs by making available electronic methods for the reporting and
transmittal of data concerning these programs. Accordingly, the
Department intends to develop an online reporting form for use by SREs
to facilitate the transmittal of the IRAP program information described
in Sec. 29.22(h) of the final rule. The Department also intends to
work with SREs to explore the use of administrative data sources to
collect required outcome information. Such sources offer the chance to
collect information in a more valid, consistent manner and at a lower
cost. The Department is also interested in conducting research studies
after the publication of this final rule to assess the effectiveness
and cost effectiveness of IRAPs, particularly when compared with
publicly financed workforce training and development programs.
[[Page 14332]]
SRE Policies and Procedures for IRAPs' EEO Requirements
Paragraph (i) of Sec. 29.22, which was proposed as Sec. 29.22(k),
generally requires SREs to have policies and procedures that would
require IRAPs to protect apprentices from discrimination, as well as
assist in recruiting for and maximizing participation in
apprenticeships. The SRE must also assign responsibility to an
individual to assist IRAPs with matters relating to this provision.
Commenters questioned whether apprentices and their mentors,
trainers, and others working with them during the IRAP would be
required to have anti-harassment training similar to the requirements
of 29 CFR part 30. Many commenters urged the Department to apply the
anti-harassment requirements of 29 CFR part 30 to IRAPs. Commenters
noted that registered apprenticeship programs are required to implement
procedures for addressing complaints of harassment and intimidation.
Other commenters suggested that SREs and IRAPs be required to have
policies and procedures, modeled by the Department, for: Anti-
harassment training in compliance with 29 CFR part 30, HIPAA
compliance, whistleblower protections, conflicts of interest,
intellectual property, complaints, lobbying, expenses, investments, and
gifts and entertainment. Another commenter attached sample policies and
procedures regarding discrimination and harassment.
The Department has carefully considered these comments. The NAA
does not expressly mandate any particular EEO or outreach requirements.
Rather, the NAA's directions are broad, general, and purposely leave a
great deal to the Department's discretion. The final rule's EEO
provisions--both what they include and what the Department has declined
to include--reflect the Department's policymaking judgment and
expertise based on weighing numerous factors, detailed below, including
already existing legal protections, additional measures that may be
helpful to apprentices and employers, sensitivity to administrative
burdens, the need to preserve SREs' and IRAPs' flexibility, and the
recognition of differences in industries and geographic areas.
As discussed in relation to Sec. 29.22(a)(4)(viii), above, the
Department has determined that adopting the EEO protections codified in
applicable Federal, State, and local laws are appropriate for IRAPs--
which protect apprentices just as other types of workers--is a
reasonable way to formulate and promote standards safeguarding the
welfare of apprentices. The Department notes that the SRE is
responsible for developing policies and procedures that both require
IRAP adherence to applicable Federal, State, and local EEO laws and
facilitate such adherence. Regarding the latter, the Department intends
SREs to develop policies and procedures that take into account their
IRAPs' needs for compliance assistance and complaints resolution. In
the rule, the Department lists the requirement that SREs have policies
and procedures regarding potential harassment, intimidation, and
retaliation, such as the provision of anti-harassment training and a
process for handling EEO and harassment complaints from apprentices.
The Department has determined that this is an appropriate role for SREs
and in line with both its compliance-assistance function and SREs'
quality-control relationships with IRAPs. By explicitly identifying
anti-harassment training in the rule, the Department requires SREs to
ensure that such training is provided, whether the training is provided
by the SRE, by an SRE partner, or by the employer offering the IRAP.
Similarly, the Department requires the SRE or the employer to have a
complaint mechanism for addressing discrimination and harassment
complaints. For example, an SRE may assist a smaller employer offering
an IRAP by providing centralized anti-harassment training and
establishing a mechanism for receiving complaints from apprentices
concerning discrimination. Larger employers with well-established EEO
processes and procedures may not need such SRE assistance. By not
prescribing specific processes, the Department seeks to maximize an
SRE's ability to satisfy this provision in ways that best serve the
IRAPs and employers that the SRE works with.
The Department declines commenters' suggestions for additional
requirements on SREs and IRAPs for policies and procedures related to
HIPAA, whistleblower protections, conflicts of interest, intellectual
property, complaints, lobbying, expenses, investments, and gifts and
entertainment. As an initial matter, conflicts of interest and
complaints are already addressed in this rule. Additionally, IRAPs are
required to comply with any Federal, State, or local laws applicable to
them, including HIPAA and whistleblower protections, regardless of any
specific requirement in this rule. The Department notes that subpart A
does not include such provisions, and declines to include such
provisions in subpart B.
Many commenters questioned the Department's departure from the
affirmative action requirements of 29 CFR part 30. A commenter remarked
that the Department is providing a weak requirement to recruit
underserved groups and contrasted it with the robust requirements for
registered apprenticeships. The commenter urged the Department to apply
the same set of requirements to IRAPs as to registered apprenticeship
programs. Many other commenters similarly argued that the Department
should apply the affirmative action requirements of 29 CFR part 30 to
IRAPs. Several commenters provided statistics about the numbers of
women, veterans, and minorities in apprenticeship programs and
highlighted their intentional and sustained efforts to increase
diversity through affirmative action plans. Another commenter similarly
noted it requires sustained and aggressive effort to recruit women,
minorities, and individuals with disabilities to apprenticeships in
some industries. One commenter observed that SREs are only required to
have policies for outreach strategies, but IRAPs are under no
obligation to implement such strategies. A commenter stated that the
Department's NPRM did not require that the SRE approve an IRAP's
selection procedure for apprentices or require that any selection
procedure comply with the Uniform Guidelines on Employee Selection
Procedures. The same commenter stated that, in its view, there was no
required analysis by the SRE or the IRAP to determine if any part of
the recruitment and selection process is creating a barrier to the
entry of qualified women and minorities into the apprenticeship
program.
A commenter argued that innovation is not necessary in Federal
civil rights protections, urging the Department to provide more
proactive education and assistance to IRAPs on outreach to diverse
populations. Another commenter noted that there are no requirements for
an SRE to report on the demographic characteristics of IRAP
apprentices. A commenter encouraged the Department to task SREs with
verifying that IRAP programs conduct outreach and recruitment
activities to all potential workers in a program's region, consistent
with 29 CFR 30.3(b)(3). The commenter stated that this would improve
alignment between IRAPs and the workforce system by empowering local
workforce stakeholders to leverage WIOA-funded referral services. The
commenter also
[[Page 14333]]
argued that requiring SREs to ensure IRAPs engage in this same
recruitment and outreach as in 29 CFR 30.3(b)(3) would ensure
efficiency in workforce investments in a local area, bolstering access
to work-based learning programs for a diverse set of workers and
ensuring businesses have the broadest pipeline of potential candidates
to fill open positions.
The Department acknowledges the comments asking for additional
affirmative action requirements. Nevertheless, the Department has
determined that the requirements in this section, in conjunction with
the EEO requirements at Sec. 29.22(a)(4)(viii), impose sufficient
obligations on both IRAPs and SREs to ensure compliance with EEO laws
and further impose an obligation on SREs to have policies and
procedures that reflect comprehensive outreach strategies. The
Department views SREs as better positioned than the Department to
decide how to structure their policies and procedures to ensure
comprehensive outreach strategies, which could depend on the nature and
size of the SREs, their networks and geographic reach, the nature and
size of the IRAPs they recognize, and the SREs' relationship with their
IRAPs. The Department declines to incorporate the affirmative action
provisions of 29 CFR part 30 into this subpart.
The Department disagrees with the commenter's concern about IRAPs
not being required to implement SRE outreach strategies. The rule is
drafted so as to place the responsibility on the SRE to have policies
and procedures that reflect comprehensive outreach strategies to reach
diverse populations that may participate in IRAPs--this includes
articulating what role, if any, the IRAPs will play in such outreach
strategies. IRAPs would then be required to follow the policies and
procedures of the SRE, should the SRE deem it appropriate to impose
specific requirements on IRAPs. Paragraphs 29.22(f)(4) and (5)
regarding the quality-control relationship between the SRE and the IRAP
make clear that an SRE must ensure the IRAP's compliance with the SRE's
requirements and must have policies and procedures for suspension or
derecognition of an IRAP that fails to comply with the SRE's
requirements.
The Department acknowledges that it is not requiring SREs to
monitor IRAPs' apprentice selection processes or to apply the Uniform
Guidelines on Employee Selection Procedures. The SRE may develop
policies and procedures to address apprentice selection processes if it
so chooses. The Department declines to impose specific requirements
because IRAPs must follow Federal, State, and local EEO laws, which
prohibit discrimination in hiring, and because SREs must have policies
and procedures in place to ensure that IRAPs do so. Similarly, though
the Department is not requiring SREs to conduct barrier analyses for
women and minorities, an SRE may choose to do so. Further, as discussed
in Sec. 29.22(h), the Department is requiring SREs both to report to
the Department and to make publicly available aggregate demographic
information (such as sex, race, ethnicity) about participants. By
collecting, reporting, and publishing such information, SREs will
benefit from understanding the populations they are reaching through
their outreach efforts and can adjust their efforts accordingly,
including by providing additional support to IRAPs if they opt to do
so. The Department may also request any information under Sec. 29.23
that it deems necessary to determine whether the requirements of this
paragraph are met. The Department has determined that these
requirements, in conjunction with the quality-control and quality-
assurance processes set forth in this rule, are sufficiently robust to
ensure that IRAPs have additional support and assistance to understand
and comply with their legal obligations--though regardless of
participation as IRAPs these employers should already be complying with
applicable laws. Simultaneously, IRAPs will benefit from an SRE's
ability to conduct more extensive outreach efforts to diverse
populations and to offer any needed support and assistance.
With respect to requiring SREs to verify that IRAPs conduct
outreach and recruitment activities to all potential workers in a
program's region, as mandated by 29 CFR 30.3(b)(3), the Department
declines to impose such a requirement. As discussed above, the SRE is
the entity primarily responsible for determining in what manner
comprehensive outreach will be conducted and by whom. The SRE itself
may decide to be responsible for outreach, rather than placing such
responsibility on its IRAPs.
Additionally, the Department declines to apply the language of 29
CFR 30.3(b)(3) to SREs because the prescriptive nature of 29 CFR
30.3(b)(3)'s requirements for universal outreach and recruitment may
not be universally applicable to or feasible for SREs given the
potential diversity of SREs in terms of size, the industry(ies) in
which they will be recognizing IRAPs, how many IRAPs they will be
recognizing, and their geographic reach. The Department determined that
the exact requirements for recruitment and outreach are best determined
by the SRE within the framework and requirements set forth by the
Department.
A State Agency commented that it is in a better position than SREs
to provide training and outreach to promote IRAPs, noting that the
responsibility placed on SREs could be burdensome and potentially pose
a conflict of interest for an entity focused on approving IRAPs.
Similarly, a commenter stated that Workforce Development Boards could
serve a brokering role in helping SREs establish relationships and
referral processes with existing community-based providers. The
commenter supported the Department's position to require SREs to engage
in recruitment, stating that SRE outreach would increase the chances
that IRAPs result in apprenticeship programs that reflect the
communities in which they are located. Another commenter also supported
the Department's decision to make SREs responsible for ensuring that
EEO requirements are met, noting the Department's approach allows small
businesses to focus on serving apprentices while also ensuring that
their apprentices are protected from discrimination. Other commenters
urged outreach to community-based organizations and education
providers.
The Department agrees with commenters' observations that SREs can
partner with others, such as States, networks, community partners, and
industry partners, to create and implement comprehensive outreach
strategies to reach diverse populations that may participate in IRAPs.
The rule allows for such flexibility, and the Department encourages
SREs to draw upon their relationships to conduct broad outreach and
thereby increase participation in apprenticeships, especially in light
of the skills gap and the opportunity it presents to involve previously
sidelined workers. The Department anticipates that SREs' policies and
procedures would largely reflect the needs of the employers offering
IRAPs. For example, an SRE that primarily works with large corporations
may devolve requirements for outreach to the extent fulsome recruiting
programs already exist at these corporations. An SRE that works with
smaller employers may itself create promotional materials and circulate
opportunities within its network, schools, community organizations, and
other membership groups that have not historically considered
apprenticeships. With respect to the concern that SREs are not as well-
positioned to be tasked with outreach responsibilities, the Department
anticipates that SREs will
[[Page 14334]]
structure their policies and procedures in a way that utilizes their
existing partnerships and resources.
A commenter recommended that the Department not impose any outreach
requirements on the SRE. Rather, the commenter recommended that the SRE
impose such requirements on the IRAPs by requiring them to attest or
provide written documentation that they are adhering to Federal, State,
and local laws pertaining to EEO, are proactively seeking ``to reach
diverse populations that may participate'' in the IRAP program, and
have established policies against ``harassment, intimidation, and
retaliation.'' The commenter urged the Department to place the
responsibility for compliance with EEO requirements on the IRAP rather
than the SRE because the SRE should serve a compliance and assistance
role rather than function as an enforcer of human resources policies
and EEO laws. The commenter expressed concern about SREs bearing
liability for the conduct of their IRAPs. Another commenter also
cautioned the Department against prescribing any additional EEO
requirements in this rule.
The Department intentionally placed outreach obligations on the
SRE, because it anticipates that the SRE may have a broader reach and
more resources to provide outreach to diverse populations on behalf of
all of its IRAPs, which would be especially beneficial for smaller
employers. The Department emphasizes that SREs bear the responsibility
for complying with this paragraph, including having policies and
procedures that require IRAPs' adherence to applicable Federal, State,
and local laws pertaining to EEO. The SRE must facilitate such
adherence through its policies and procedures regarding potential
harassment, intimidation, and retaliation. Regarding the concern that
SREs will be held responsible for their IRAPs' actions, the Department
notes that the employer offering the IRAP, not the SRE, has the
employment relationship with the apprentice, as discussed in Sec.
29.22(a)(4)(x) and (g). Depending on relevant law, the employer would
incur liability for violations of any applicable EEO laws just as it
might for other types of workers. The Department emphasizes, however,
that it could take action to suspend or derecognize an SRE if it deems
that the SRE has failed to substantially comply with its
responsibilities under this subpart, as discussed in Sec. 29.27,
including any failure to comply with the requirements of Sec.
29.22(i). The Department intends that an SRE tailor its assistance to
IRAPs based on the reasonably known needs of the employers offering
IRAPs recognized by the SRE.
Finally, the SRE is also required to assign responsibility to an
individual to assist IRAPs with matters relating to this paragraph. For
example, an SRE could designate a staff member in its human resources
department to address questions from employers participating in its
IRAPs. The Department did not receive any specific comments on this
clause other than comments already discussed above. Thus, the
Department has adopted Sec. 29.22(i) as proposed.
SRE Policies and Procedures for Addressing Complaints Against IRAPs
Paragraph (j) of Sec. 29.22 was added to the final rule. This
paragraph requires that an SRE have policies and procedures for
addressing complaints against IRAPs. Complaints may be filed by
apprentices, prospective apprentices, an apprentice's authorized
representative, a personnel certification body, or an employer. SREs
must make publicly available a list of the aggregated number of
complaints pertaining to each IRAP in a format and frequency prescribed
by the Administrator.
Several commenters suggested that the rule be amended to allow
complaints to be filed against IRAPs. One commenter noted that there is
no reason that an apprentice would have a basis to file a complaint
against the SRE, and that complaints are much more likely to concern
IRAPs. Another commenter stated that an apprenticeship program requires
an evolving environment, which is often driven by complaints from
apprentices and training agents. Another commenter raised concerns that
an apprentice would have no recourse to resolve a complaint against an
IRAP if the SRE were improperly influenced by bribes or other
inducements. The commenter suggested that procedures be implemented to
allow apprentices to file complaints against an IRAP in a manner that
parallels Sec. 29.12(c) in subpart A. Several commenters proposed that
a process similar to proposed Sec. 29.26 (finalized as Sec. 29.25) be
implemented that would allow for apprentices to file complaints
regarding an IRAP with the Department. A commenter proposed that the
Department publish a description of all complaints filed against IRAPs
and the result of the complaint.
The proposed form contained a requirement for SREs to have a
complaint and appeals process, but the proposed form was removed from
the final rule for the reasons described above. The Department agrees
with commenters that the final rule should include a process to file
complaints against an IRAP, and therefore has added Sec. 29.22(j) to
the final rule. The Department also agrees with the commenters who
noted that apprentices are more likely to have complaints against IRAPs
than SREs, and that apprenticeship programs may improve on the basis of
complaints filed and feedback given. The Department weighed these
concerns in adding paragraph (k) to the final rule. The Department
determined, however, that SREs would be in the best position to resolve
complaints involving IRAPs, because SREs recognize IRAPs and are
responsible for remaining in a quality-control relationship with the
IRAP consistent with the requirements of this rule. The Department has
no reason to believe that bribes or inducements would be offered to
SREs to impact the outcome of complaints against IRAPs. An allegation
of improper conduct on the part of an SRE would be addressed through
the complaint and review process against SREs in Sec. Sec. 29.25 and
29.26.
The Department has determined that publishing a description of all
complaints and their outcomes would be particularly difficult to
administer. Many complaints may involve personal identifying
information or sensitive details. However, the Department agrees that
the existence of complaints against an IRAP is a useful measure that
apprentices may weigh in electing to participate in a particular IRAP.
For that reason, the Department has elected to require that SREs
publish the aggregated number of complaints against each IRAP in a form
and frequency prescribed by the Administrator.
Providing Notice of the Right To File Complaints
Paragraph (k) of Sec. 29.22 has been added the final rule. It
requires an SRE to notify the public about the right to file a
complaint with the SRE according to the process provided for in Sec.
29.22(j) above. This paragraph reincorporates the list of entities in
paragraph (j) that may file a complaint, as well as the requirement
that any complainant be associated with the IRAP against which the
complaint is filed. This requirement has been added to increase
transparency and to inform the public about who has the right to file a
complaint.
One commenter proposed that SREs be required to proactively inform
apprentices, employers, and others about their rights to file a
complaint. The Department agrees with the comment and therefore added
paragraphs (k) and (l) of Sec. 29.22 to the
[[Page 14335]]
final rule. The Department decided to require notification to the
public to emphasize that complaint procedures should be broadly
disclosed. As with Sec. 29.22(j) above, an SRE's actual complaint
processes and procedures must only extend to apprentices, prospective
apprentices, an apprentice's authorized representative, a personnel
certification body, or employers that are associated with the IRAP for
the reasons explained above.
Paragraph (l) of Sec. 29.22 was added to the final rule. It
requires that an SRE notify the public about the right to file a
complaint against it with the Administrator as set forth in Sec.
29.25. The requirement was added because SREs were determined to be in
the best position to publicize the right to file such complaints.
SRE Notice of Derecognition
Paragraph (m) of Sec. 29.22 is a new paragraph that was added to
the final rule. This paragraph requires an SRE that has received notice
of derecognition pursuant to Sec. 29.27(c)(1)(ii) or (3) to inform
IRAPs and the public of its derecognition status. As discussed below in
Sec. 29.28, Derecognition's Effect on Industry-Recognized
Apprenticeship Programs, a few commenters expressed concern over lack
of specific notification to IRAPs and impacted apprentices when the
Department derecognizes an SRE. One commenter suggested that the
Department should notify not just the SRE but also the IRAPs and
associated apprentices under the SRE of this action.
The Department shares commenters' general concerns regarding
notification to IRAPs and impacted apprentices when an SRE has been
derecognized. As discussed below in Sec. 29.28, Derecognition's Effect
on Industry-Recognized Apprenticeship Programs, the final rule requires
the Administrator to update the publicly available list of SRE status
to include derecognition, and to notify impacted IRAPs. Additionally,
to maximize opportunities for impacted IRAPs and the public to learn
about an SRE's derecognition status, the Department has added
requirements for SREs regarding notification about derecognition. Final
Sec. 29.28(m) requires SREs to notify impacted IRAPs and to inform the
public of their derecognition status. The Department may issue
instructions that provide operational details for an SRE's notification
of IRAPs and the public. Any such instructions will be available on a
Departmental website so that SREs, IRAPs, and the general public can
easily access the information.
SRE Notice of Fees Charged to IRAPs
Paragraph (n) of Sec. 29.22 was added to the final rule. This
paragraph requires an SRE to publicly disclose any fees it charges to
IRAPs. The fee information should be in an electronic format that is
easily accessible to the public; for example, an SRE could provide this
information on its website. This requirement was not in the proposed
rule. In the proposed rule, the Department stated in the economic
analysis that it anticipates that SREs may charge a fee to IRAPs to
help offset their costs, and that such a fee is ``neither required nor
prohibited.''
Multiple commenters expressed concern about the lack of
transparency and oversight of SREs and urged the Department to include
stronger transparency and oversight provisions in the final rule.
The Department took the recommendations for greater transparency
under advisement, and under paragraph (n) is requiring SREs to publicly
disclose their fee information because this information will increase
transparency and help IRAPs make informed decisions. Information about
SRE fees should help potential IRAPs decide whether to participate in
the program, and if so, from which SRE to seek recognition.
One commenter expressed appreciation for the Department's
introduction of a ``fee structure'' and recommended that the Department
not set a program-wide average fee because each industry, occupation,
and SRE will have different costs. Another commenter stated that the
lack of a requirement for IRAPs to make a financial contribution to the
operation of SREs ``raises serious concerns regarding the long-term
viability of this system.'' In contrast, a commenter encouraged the
Department to prohibit SREs from charging fees, arguing that such fees
may lead to a ``pay to play'' apprenticeship system. Two commenters
questioned why the Department proposed an apprenticeship system that
will allow SREs to charge fees, thereby creating a significant burden
for employers, when OA charges no fees for the same services. A
commenter argued that SRE fees might block participation by employers
in distressed areas with fewer resources. Several commenters expressed
concern that, in their view, allowing SREs to charge fees would create
a potential access barrier for small businesses. A commenter similarly
expressed concern that some associations are unlikely to ask their
members to pay an additional application fee that would fall outside
other membership costs, thereby resulting in substantially higher costs
for such entities should they choose to participate as SREs.
In light of the wide variety of entities that may become recognized
SREs and the wide variation in costs SREs will incur, the Department
has maintained its stance in the final rule of neither requiring nor
prohibiting SRE fees and allowing each SRE to set its own fees. The
IRAP is designed to be a market-driven program. In the credentialing
industry, many credentialing entities charge an application fee, an
annual fee, or both to recoup their expenses. Likewise, some SREs may
find it necessary to charge fees to recoup their expenses. In contrast,
some SREs may already charge a membership fee unrelated to this
program, and therefore choose not to charge an additional fee directly
tied to the recognition of IRAPs. Since participation in the IRAP is
not compulsory, any costs incurred by SREs and IRAPs will be incurred
voluntarily.
A commenter questioned ``the ethics'' of requiring local partners
such as community colleges, high schools, and non-profit organizations,
to pay fees to SREs for program approval.
Given that this is designed to be a market-driven program, the
Department is neither requiring nor prohibiting SRE fees. Accordingly,
an SRE may choose not to charge a fee to any IRAP or it may choose to
waive its fees for educational institutions or non-profit
organizations. And, based on the presence or absence of SRE fees, an
educational institution or non-profit organization may seek recognition
from a different SRE or may choose not to participate at all. The
Department believes this level of flexibility is likely to result in
higher quality apprenticeships, and in more entities participating in
IRAP initiatives and seeking to address the skills gap.
Several commenters expressed concern about potential conflicts of
interest related to fees and their effect on an SRE's decisions about
which programs to recognize or derecognize.
To alleviate concerns about conflicts of interest, the Department
has added a provision in Sec. 29.21(b)(6) that requires prospective
SREs to demonstrate in their application that they can effectively
mitigate any potential or actual conflicts of interest. As explained
above, the Department added this provision in an effort to ensure that
each SRE applicant addresses any potential conflicts of interest
through specific policies, processes, procedures, structures, or a
combination thereof that will be assessed by the Department before the
entity may be recognized as an SRE.
[[Page 14336]]
One commenter recommended that the Department require SREs to
submit information on their business plans, including how they will
finance the costs of conducting quality assurance activities.
As described above, paragraph (b)(3) of Sec. 29.21 was amended to
incorporate a requirement for an entity to indicate in its application
that it has the financial resources to operate as an SRE. The
Department anticipates that requiring a prospective SRE to address its
financial resources at the application stage will help ensure the
future financial stability of an SRE. In its application, a prospective
SRE is welcome to mention whether it plans to rely on fees to recoup
its expenses, and the Department expects that many SREs would rely on
such fees.
SRE Records Retention Responsibilities
Paragraph (o) of Sec. 29.22 has been added to the final rule. This
paragraph requires SREs to ensure that records regarding each IRAP,
including whether the IRAP has met all applicable requirements of this
subpart, are maintained for a minimum of 5 years.
Many commenters argued that the Department lacks authority under
the NAA to create the IRAP model. The basis for some of these concerns
is the need for government oversight of apprenticeship. Several
commenters expressed concern that the proposed rule does not provide
adequate quality assurance of SREs and IRAPs. While commenters
generally agree that it is necessary for information to be collected
for the Department to effectively perform its functions with respect to
IRAPs, some commenters expressed concerns about establishment of overly
burdensome reporting or data collection requirements.
The Department has considered the various comments received and
agrees that the final rule should clarify the Department's oversight of
SREs and strengthen the regulatory requirements pertaining to SRE
record retention. For this reason, the Department made changes to Sec.
29.22 by adding this paragraph. In the proposed rule, the SRE record
retention requirement was included in the Industry-Recognized
Apprenticeship Program Standards Recognition Entity Application Form.
This record maintenance requirement, in conjunction with the provision
in Sec. 29.23(c) specifying that the Administrator may use information
described in Sec. 29.22 to discharge recognition, review, suspension,
and derecognition duties, clarifies and strengthens the Administrator's
oversight role with respect to quality assurance. In addition, it helps
demonstrate that the Department is promoting standards of
apprenticeship, consistent with the directions in the NAA, by requiring
additional accountability from SREs. Requiring SREs to retain records
will significantly aid the Administrator in ensuring that SREs are
recognizing apprenticeship programs that adhere to the standards of
high-quality apprenticeships. Similarly, this record retention
requirement complements and strengthens the reporting requirements
described in Sec. 29.22(h). As explained earlier in this preamble, the
Department has broad discretion and authority under the NAA in
formulating and encouraging apprenticeship standards and programs. The
record retention requirement is not expressly mandated by the NAA. The
Department views the record retention requirement, among many other
requirements promulgated by this final rule, as complying with and
exceeding the open-ended standards in the NAA.
SRE Requirement To Follow Policies and Procedures and Notify
Administrator of Significant Changes
Paragraph (p) of Sec. 29.22 was added to the final rule. This
paragraph requires SREs to follow any policy or procedure submitted to
the Administrator or otherwise required by this subpart, and to notify
the Administrator when it makes significant changes to its policies or
procedures.
Many commenters argued that the Department lacks authority under
NAA to create the IRAP model. The basis for some of these concerns is
the need for government oversight of apprenticeship. In addition, many
commenters expressed concern that the proposed rule does not provide
adequate quality assurance of SREs and IRAPs. Some commenters
encouraged the Department to coordinate with other Federal agencies to
align policies and procedures. Moreover, some commenters suggested that
the Department identify specific policies and procedures. Other
commenters expressed support for allowing SREs flexibility to customize
their approach to changing industry needs.
The Department has considered the various comments received and
agrees that the final rule should clarify the Department's oversight of
SREs and strengthen the regulatory requirements pertaining to SRE
policies and procedures. For this reason, the Department made changes
to Sec. 29.22 by adding this paragraph. In the proposed rule, the SRE
policy and procedure requirements were included in the Industry-
Recognized Apprenticeship Program Standards Recognition Entity
Application Form. The Department agrees with commenter concerns about
SREs maintaining flexibility to establish policies and procedures.
Thus, specific requirements were not added to the final rule. Paragraph
(p)'s policies and procedures requirement, in conjunction with the
provision in Sec. 29.23(c) specifying that the Administrator may use
information described in Sec. 29.22 to discharge recognition, review,
suspension, and derecognition duties, clarifies and strengthens the
Administrator's oversight role with respect to quality assurance. These
measures are consistent with and an appropriate way for Department to
follow the NAA's directive to promote standards of apprenticeship and
bring together employers and labor for the formulation of programs of
apprenticeship. By enhancing oversight and accountability of SREs,
these measures help the Department ensure that SREs are recognizing
apprenticeship programs that adhere to the standards of high-quality
apprenticeship.
Conflicts of Interest
Proposed paragraph (e) of Sec. 29.22 was not carried forward into
the final rule. As proposed, it would have prohibited SREs from
recognizing their own apprenticeship programs unless they provide for
impartiality and mitigate conflicts of interest via specific policies,
processes, procedures, structures, or a combination thereof. The
proposed paragraph was revised and moved to Sec. 29.21(b)(6) in
response to comments, as explained below.
Numerous commenters suggested that SREs should not be allowed to
recognize their own programs as IRAPs. One commenter argued that doing
so would lead to fraud, waste, and abuse, and would compromise program
integrity. Multiple commenters questioned whether an accreditation
entity could ever accredit its own programs without introducing bias,
with one commenter suggesting that the American Bar Association or
Accreditation Council for Graduate Medical Education would never be
allowed to own or consult for law or medical schools, respectively. A
second entity suggested that accreditation bodies should never be in a
position to regulate their own products. Other commenters argued that
the proposed rule's suggestion that SREs establish firewalls would be
insufficient to address conflicts. A commenter stated that an
apprentice aggrieved by an IRAP may have no recourse other than to file
a complaint with an SRE that, in some
[[Page 14337]]
cases, could effectively be the same entity.
Other commenters suggested that the prohibition on an SRE
recognizing its own IRAPs needed to be strengthened. One commenter
proposed that Section V.E. of the proposed form needed strengthening
because it allowed entities to attest that no conflicts were present. A
different commenter requested that the Department identify the ``bright
lines'' in relation to the roles of SREs versus employers, institutions
of higher education, and other partners that are necessary to develop
high-quality apprenticeships. Several commenters proposed that
officers, directors, and managers of SREs should be prohibited from
owning or controlling any entities offering IRAPs. Still other
commenters requested that the Department impose clear standards
regarding impartiality and conflict minimization.
One commenter proposed that in light of proposed Sec. 29.25, an
SRE could recognize its own program to receive expedited registration
and benefits under subpart A, including Davis-Bacon wage rates and
funding under WIOA.
Several commenters expressed a concern that proposed paragraph (e)
seemed to allow SREs to approve apprenticeship programs over other
sponsors who may be competitors. One commenter suggested that allowing
a self-interested entity to regulate a competitor violates due process.
Still other commenters suggested that the conflict of interest
approach in the proposed rule was reasonable. One commenter suggested
that the approach struck the appropriate balance between putting in
place meaningful measures to mitigate conflicts while simultaneously
minimizing burdens. One commenter noted that the Department's
provisions for demonstrating impartiality appeared similar to those in
ANSI 17024. Another commenter noted the importance of allowing SREs to
offer consultative services in order to expand apprenticeship
opportunities, and the commenter urged the Department to take a
reasonable approach to meeting the SRE impartiality requirements.
The Department agrees that an SRE recognizing its own programs
presents actual or potential conflicts of interest, so the Department
has decided to require that all SREs demonstrate that they can
effectively mitigate such conflicts of interest. To accomplish this,
proposed Sec. 29.22(e) was moved to Sec. 29.21(b)(6) where other
application requirements to become a recognized SRE are addressed. The
Department has decided not to prohibit SREs from recognizing their own
IRAPs, because the Department has found such a prohibition unnecessary
if an SRE mitigates the inherent conflicts of interest according to the
policies and procedures submitted with its application for recognition.
In addition, many types of companies, such as professional services
firms, routinely mitigate conflicts of interest.
As part of the application process, the Department intends to
require, at a minimum, that each entity disclose potential conflicts
and provide a firewall between SRE and prospective IRAP staff, or
assign key tasks to an independent third party. The Department expects
that a firewall would prohibit program designers from involvement in
recognition decisions and would prohibit SRE personnel who receive
complaints from reporting through the same supervisory channels as IRAP
managers. To ensure that SREs are recognizing apprenticeship programs
that adhere to the standards of high-quality apprenticeships, the
Department envisions that SREs' processes would further require that
the recognition, quality-control, and suspension and derecognition
processes and procedures are designed and administered to treat any
nonaffiliated IRAPs equitably. DOL intends to enforce such processes,
procedures, or structures involving potential conflicts of interest
through the quality assurance process in 29.23 and the review process
in 29.26.
The Department shares the concern that the right of an apprentice
to file a complaint under Sec. 29.22(j) and (k) could be jeopardized
where the IRAP and the SRE are related entities. The Department
anticipates that SREs' conflict of interest policies and procedures
will address this possibility, guarantee fairness, and guarantee an
apprentice the right to file a complaint without being subject to
retaliation. An apprentice may also file a complaint against an SRE, in
accordance with Sec. 29.25, that could lead to the Administrator's
review of the SRE under Sec. 29.26. Additionally, certain Federal,
State, and local laws, such as EEO laws, prohibit retaliation for
filing a complaint and, if applicable, provide apprentices another
avenue of relief.
The Department agrees that the conflict-of-interest provisions in
proposed Sec. 29.22(e) needed strengthening, which the Department has
accomplished by requiring every SRE to address conflicts of interest in
their applications. The Department has also eliminated the form in the
proposed rule that contained an attestation relating to conflicts of
interest, and has replaced the attestation with the substantive
requirements now contained in Sec. 29.21(b)(6). The Department agrees
that officers, directors, and managers of SREs that own or control
prospective IRAPs would present a potential conflict of interest. The
Department expects that such conflicts would be disclosed and mitigated
as part of the application requirement imposed by the final text of
Sec. 29.21(b)(6).
In response to the comment concerned with an SRE's ability to
recognize its own program to receive expedited registration and
benefits under subpart A, the Department notes that proposed Sec.
29.25 was not carried forward into the final rule, as explained below.
Accordingly, IRAPs will not be able to receive expedited registration
under subpart A.
The Department does not share the concern that an SRE's ability to
recognize its own programs would somehow allow SREs to regulate
competitors. Seeking recognition as an IRAP is a voluntary process, and
any employer may decide to meet its workforce training needs by using
registered apprenticeship under subpart A, industry-recognized
apprenticeship under subpart B, or any other model of the employer's
choosing. In fact, even without this regulation, the Department expects
that various entities could--and would, given the nature of the skills
gap and the opportunities it represents--develop relationships and
apprenticeship programs to help equip America's workers with the skills
they need.
The Department appreciates the opinion of commenters who found the
Department's proposed approach to put in place meaningful but not
burdensome protections and who found the Department's proposed approach
to be similar to impartiality requirements in ANSI 17024. The
Department has revised the text of proposed Sec. 29.22(e) in the final
rule, as discussed above, in order to strike a balance between
minimizing burdens while mitigating conflicts of interest.
Paragraph (f) of proposed Sec. 29.22 would have required that an
SRE either not offer services, including consultative and educational
services for example, to IRAPs that would impact the impartiality of
the SRE's recognition decisions, or the SRE must provide for
impartiality, and mitigate any potential conflicts of interest via
specific policies, processes, procedures, structures, or a combination
thereof. This proposed paragraph was amended and moved to Sec.
29.21(b)(6) in response to comments, as explained below.
Numerous commenters suggested that SREs should be prohibited from
offering
[[Page 14338]]
consultative services. One commenter suggested that the prohibition on
offering consultative services should be extended to related entities
or subsidiaries of the SRE. One commenter proposed that consultative
services be further defined to make the paragraph clearer. A different
commenter questioned who would be able to provide consultative services
to IRAPs, other than SREs.
One commenter proposed that a conflict of interest that develops
after an SRE's recognition should constitute a substantive change that
must be submitted to the Administrator. Several commenters proposed
that the potential conflicts and the mitigation processes, procedures,
or structures be subject to a public disclosure requirement. One
commenter suggested that best practices for preventing conflicts be
collected in an online repository. Another commenter proposed that all
communications between SREs and IRAPs be made publicly available.
Other commenters suggested that evidence of conflicts should
trigger heightened scrutiny from the Department. A commenter questioned
how often the Department would identify conflicts of interest.
Numerous commenters suggested that conflicts beyond those discussed
in proposed Sec. 29.22(e) and (f) could be present. Several commenters
pointed to the potential for financial conflicts. Multiple commenters
suggested that SREs will have a financial incentive to recognize as
many IRAPs as possible. One such commenter suggested that SREs provide
a plan for how they will sustain losses from reduced fees if the SRE
must derecognize IRAPs. The commenter suggested that such a financial
tension has been a central challenge for the higher education
accreditation system. A different commenter suggested that subpart B
may develop into a pay-to-play apprenticeship system whereby only
employers with significant resources are able to afford recognition. A
commenter suggested that the financial incentive to seek fees throws
into question the impartiality and objectivity of an SRE's processes,
procedures, or structures.
One commenter suggested that the Department establish conflict of
interest mitigation requirements specific to the type of organization
identified in Sec. 29.20(a)(1). One commenter proposed an extensive
list of proposed revisions to the rule for addressing conflicts of
interest. Among the proposals were that only non-profit organizations
should be eligible to become recognized SREs, that all SRE expenses
related to standards-setting and training be paid by a trust, that SREs
and IRAPs be required to provide to the Department any documentation
relating to compliance, and that the Department should develop model
polices to address anti-harassment, whistleblower protections, HIPAA
compliance, conflicts of interest, complaints, intellectual property,
lobbying, expenses, and gifts and entertainment.
Still other commenters suggested that the conflict of interest
approach in the proposed rule was reasonable. One commenter suggested
that the approach strikes the appropriate balance between putting in
place meaningful measures to mitigate conflicts while simultaneously
minimizing burdens. One commenter noted that the Department's
provisions for demonstrating impartiality appeared similar to those in
ANSI 17024. Another commenter noted the importance of allowing SREs to
offer consultative services in order to expand apprenticeship
opportunities, and the commenter urged the Department to take a
reasonable approach to meeting the SRE impartiality requirements.
The Department agrees that SREs are likely to be in the best
position to offer consultative services to IRAPs and therefore decided
not to prohibit the practice in the final rule. Were SREs to be
prohibited from offering such services to employers or prospective
IRAPs, the restriction could stifle the expansion of high-quality
apprenticeships. In order to strengthen the provisions in proposed
Sec. 29.22(f), the Department has moved the requirement to Sec.
29.21(b)(6), thereby requiring every SRE to address conflicts of
interest arising from offering services in the SRE's application.
Proposed Sec. 29.22(e) and (f) have been combined into one paragraph
in Sec. 29.21(b)(6) because proposed Sec. 29.22(e) and (f) addressed
different potential conflicts, but imposed the same substantive
requirement of mitigating such conflicts through policies, procedures,
structures, or a combination thereof. The text of proposed Sec.
29.22(f) has also been amended to clarify that an SRE certifying its
own IRAPs or offering consultative services are nonexclusive examples
of the types of conflicts that an entity applying to be an SRE must
address. The language in proposed Sec. 29.22(f) has been further
broadened by clarifying that providing services to actual or
prospective IRAPs may present a conflict of interest.
While the Department has determined that related entities or
subsidiaries need not be prevented from offering services, the
Department agrees that the actions of entities related to the SRE could
lead to potential conflicts of interest. To address this concern, the
Department has added Sec. 29.21(b)(4) to the final rule. This
paragraph requires entities applying to become recognized SREs to
disclose relationships with subsidiaries or related entities that could
impact the SRE's impartiality. The Department intends that such actual
or potential conflicts would be mitigated by providing processes,
procedures, structures, or a combination thereof as required by Sec.
29.21(b)(6).
The Department agrees that ambiguity existed in the term
``consultative services.'' The final rule deletes the term
``consultative'' and instead requires that an SRE address its
processes, procedures, structures, or a combination thereof for
providing services to actual or prospective IRAPs. The Department has
determined that any compensated service that SREs offer to actual or
prospective IRAPs that is not required by this subpart and not
described in the SRE's processes and procedures could present a
potential conflict. The Department intends for ``services'' to be
broader than ``consultative services'', and to apply to any type of
advice, assistance, or consultation not required by this subpart for
which the SRE seeks compensation. Services required by this subpart
include, for example, recognizing or rejecting applications from IRAPs,
collecting data from its IRAPs, and remaining in an on-going quality-
control relationship with its IRAPs, as well as any services included
in the SRE's policies and procedures submitted to the Department. If,
however, an SRE were to offer employers advice regarding credentialing
or offer training courses to non-IRAPs, such services would fall within
Sec. 29.21(b)(6), unless they were required by the processes and
procedures submitted to the Department.
The Department agrees with the commenter who suggested that a
conflict of interest that develops after an SRE is recognized should
constitute a substantive change that would result in the SRE updating
its policies and procedures and notifying the Administrator. The
language in proposed Sec. 29.22(e) and (f) required an SRE to either
not recognize its own programs and not offer consultative services, or,
that it describe in detail in its application how it would mitigate any
potential conflicts of interest. The Department anticipates that some
SREs may not know during the application process whether an affiliated
employer, local, or other related entity may wish to apply for
recognition or request services. The Department resolved this comment
by requiring that all entities
[[Page 14339]]
mitigate conflicts of interest in their applications to become
recognized SREs. In addition, the Department added Sec. 29.22(p) to
the final rule, which requires that SREs follow all policies and
procedures submitted to the Department and that SREs notify the
Administrator when they make significant changes to their policies or
procedures. Accordingly, an SRE could notify the Department in its
application that the SRE will not recognize any related entity or
subsidiary as an IRAP. If the SRE unexpectedly received an application
for recognition from a related entity, but did not have policies and
procedures in place sufficient to mitigate the conflict of interest,
the SRE would not be allowed to recognize the prospective IRAP unless
updated policies and procedures were provided to the Administrator.
The Department has determined that requiring SREs to publicly
disclose their conflict of interest procedures for compilation in a
publicly available repository would be difficult to administer for a
variety of reasons. The Department anticipates that such policies and
procedures would be highly individualized such that a State agency's
procedures would be of little benefit to a non-profit organization.
Furthermore, such procedures would normally include potentially
sensitive information about business operations as well as employees or
officers that would be burdensome to redact on a rolling basis. The
Department has similarly determined that requiring all communications
between SREs and IRAPs to be publicly disclosed would constitute an
immense and unnecessary burden.
The Department agrees that conflicts of interest may require
heightened scrutiny of applicants, and the Department strengthened the
conflict of interest requirements related to the application, as
explained above. The Department did not establish a cycle for
identifying conflicts of interest. Most Departmental review of
potential conflicts of interest subsequent to an SRE's recognition
would likely occur because an SRE provided updated processes and
procedures under Sec. 29.22(p), as part of the quality assurance
processes provided for in Sec. 29.23, and through the review process
under Sec. 29.26.
The Department agrees that potential or actual conflicts of
interest could arise beyond an SRE recognizing its own IRAPs or
offering services to current or prospective IRAPs. The Department,
therefore, has amended the regulatory text of the final rule to make
the list of conflicts that must be addressed nonexhaustive. Regarding
potential financial conflicts, the Department notes that entities must
demonstrate their ability to be financially stable for the next 5 years
under Sec. 29.21(b)(3). The Department will ensure that an entity's
application accounts for the possibility of having to suspend or
derecognize IRAPs if necessary, thereby ensuring that its financial
viability is not based on certifying as many IRAPs as possible at the
expense of recognizing only high-quality programs.
The Department removed the attestation in Section V.E. of the
proposed Industry-Recognized Apprenticeship Program Standards
Recognition Entity Application Form that would have addressed conflicts
of interest by requiring an attestation. By replacing the attestation
in the proposed form with the application requirement in Sec.
29.21(b)(6), the Department is requiring that entities must address
actual or potential conflicts of interest in their applications or be
ineligible for recognition from the Department. In addition, the
Department requires in Sec. 29.21(a) that all entities attest that
information provided is true and accurate. Thus, an entity that makes a
false statement regarding conflicts of interest in its application may
still be subject to potential criminal penalties under 18 U.S.C. 1001.
The Department agrees that different types of entities that are
eligible to become recognized SREs could present different potential
conflicts of interest. The Department anticipates that applicants will
be in the best position to identify and mitigate actual or potential
conflicts of interest that may be unique to the type of entity
applying. No change to the text has been made in response to this
comment.
The Department agrees that SREs should be required to provide
requested materials to the Administrator, so the wording in Sec.
29.23(b) has been changed from should to must. However, no change to
the text has been made to require IRAPs to share information with the
Department, because the Department collects no information directly
from IRAPs. The Department declines to limit SRE eligibility to non-
profit organizations or to require that operating expenses be paid from
a trust. The Department envisions that model policies will necessarily
be situation-specific and that a model policy for a consortia of
private entities may not meet the needs of model policies for an
educational institution or community colleges. Model policies would
necessarily be dependent on the type of entity, the variety of actual
and potential conflicts present, and the geographic scope of the
entity. The Department cannot provide model policies tailored to each
type of organization and each type of potential conflict in the
preamble to the final rule.
Section 29.23 Quality Assurance
Section 29.23 provides that the Administrator may request and
review materials from an SRE to determine whether the SRE is in
conformity with the requirements of the subpart and may conduct
periodic compliance assistance reviews. It also states that SREs must
provide requested materials, consistent with Sec. 29.22(a)(3), and
clarifies that the Administrator may use the information described in
this subpart to recognize, review, suspend, or derecognize SREs.
Many commenters expressed concern that the proposed rule did not
provide adequate monitoring and quality assurance of SREs and IRAPs.
Commenters also warned that the proposed rule did not provide
sufficient authority to the Department to take action when IRAPs fail
to protect apprentices. A few commenters stated that the proposed rule
lacked quality assurance mechanisms to hold IRAPs or SREs accountable
for poor program outcomes. Other commenters faulted the Department for
not including a quality assurance mechanism for direct review of IRAPs.
The Department has made changes to Sec. 29.23(a) and (b) and added
a new paragraph (c), as discussed further below, to strengthen its
oversight of SREs. The Department acknowledges commenters' concerns
about oversight of IRAPs. Nevertheless, the Department declines to add
additional measures in this section for Departmental oversight of
IRAPs. The Department believes that SREs, following all the
requirements of this rule, are best situated to directly monitor IRAPs,
especially given SREs' responsibilities for recognizing IRAPs,
developing and implementing policies and procedures applicable to the
industries and occupational areas in which they will be recognizing
IRAPs, and ensuring that the IRAPs they recognize continue to meet the
standards of high-quality apprenticeships as set forth by the
Department. It is also worth noting that the Department will be
collecting and assessing data about the performance of IRAPs, as
discussed in Sec. 29.22(h). Further, as discussed in Sec.
29.22(a)(4), the Department's standards of high-quality apprenticeship
set forth the requirements for safeguarding the welfare of apprentices
and ensuring quality training, progressively advancing skills, and
industry-relevant credentials. As the rule makes clear, an
[[Page 14340]]
IRAP must comply with the requirements of high-quality apprenticeships
and with its SRE's policies and procedures. The SRE must also establish
a quality-control relationship with its IRAPs that meets the
requirements of Sec. 29.22(f). This rule gives the responsibility of
monitoring IRAP compliance to the SREs in the first instance; the
Department then exercises its oversight authority to ensure that SREs
and, by extension, the IRAPs they recognize are meeting the
requirements of this subpart. Thus, the Department retains ultimate
oversight authority of the IRAP program through its oversight of SREs.
In response to several comments, discussed below, the Department has
added language to Sec. 29.23 to clarify its quality assurance role.
Commenters recommended that the Department require regular reviews
and assessments of SREs and IRAPs by the Administrator. One commenter
recommended that the Department conduct such assessments on a quarterly
basis. Another commenter compared SREs to SAAs in the registered
apprenticeship context and suggested that the Department similarly
conduct assessments through on-site reviews, self-assessments, and
reviews of SREs' policies and procedures.
The Department agrees with commenters' suggestions regarding the
Administrator's ability to conduct reviews of SREs, but not the
mandated frequency, and has added that the Administrator ``may conduct
periodic compliance assistance reviews of [SREs]'' to Sec. 29.23(a).
The Department intends that these reviews be an assessment of the SRE's
compliance with this subpart and an opportunity to provide assistance
that the SRE may need to come into compliance with this subpart. The
Department envisions engaging in a collaborative process with the SRE,
as appropriate, to assist the SRE in achieving compliance prior to
initiating any further review under Sec. 29.26. The Department also
notes, however, that the results of a compliance assistance review
could lead to a formal review under Sec. 29.26.
The Department disagrees with the recommendation to mandate
quarterly reviews of SREs. The Department believes that the quality
assurance set forth in this section, including the Administrator's
ability to request information when necessary, is sufficient. Quarterly
reviews of SREs would be unduly burdensome, unnecessary, and unlikely
to yield useful information. Rather, the yearly SRE reporting
requirements in Sec. 29.22(h), combined with the Department's
authority under this section to conduct periodic reviews of SREs and
request information as needed is the most efficient manner for the
Department to obtain relevant information and monitor compliance. The
Department may also initiate a review of an SRE under Sec. 29.26 if it
receives information indicating that the SRE is not in substantial
compliance with this subpart or that it is no longer capable of
continuing as an SRE.
The Department has also made a minor modification to Sec. 29.23(a)
to improve readability by changing ``to ascertain [SREs]' conformity''
to ``to ascertain their conformity.''
Several commenters noted that the proposed rule only requires that
the SRE ``should'' provide materials requested by the Administrator,
suggesting an aspirational goal rather than a requirement to comply
with the Administrator's requests. The Department has changed the
language in Sec. 29.23(b) from ``should'' to ``must'' and added ``to
the Administrator'' to clarify that SREs are required to provide any
program information to the Administrator upon request.
Another commenter recommended adding a provision to Sec. 29.23
requiring that the Administrator regularly evaluate IRAPs using the
performance data provided by SREs. Other commenters made similar
suggestions about using data and performance metrics to monitor and
evaluate IRAPs and SREs. The Department agrees with the commenters'
recommendation to add an additional provision to Sec. 29.23 concerning
data and performance information. To address this, the Department has
added a new provision at paragraph (c): ``The information that is
described in this subpart may be utilized by the Administrator to
discharge the recognition, review, suspension, and derecognition duties
outlined in Sec. 29.21(c)(1), Sec. 29.26, and Sec. 29.27 of this
subpart.'' The Department has added this provision to clarify that any
information collected under this subpart, which includes information
provided to the Department under Sec. 29.22(h), may be used to monitor
and evaluate SREs at the recognition phase, as a part of the
Administrator's review of the SRE, or as a part of suspension or
derecognition. The data and performance requirements detailed in
29.22(h) also allow the Department to collect and review program-level
outcomes. In performing quality assurance activities, the Administrator
may learn or otherwise come into the possession of commercial or
financial information of SREs, IRAPs, and any other entities serviced
by these entities. FOIA exemption (b)(4) exempts from mandatory
disclosure under FOIA trade secrets and certain commercial or financial
information. The Trade Secrets Act prohibits the disclosure of trade
secrets and confidential business information without legal authority.
The Department will keep as private and confidential, and will not
disclose, unless required by law, any information provided to the
Department under this section that is ``both customarily and actually
treated as private by'' the SRE or IRAP. Food Mktg. Inst. v. Argus
Leader Media, 139 S. Ct. 2356, 2366 (2019).
As for the comment about regularly assessing the data, the
Department notes that it will utilize the data at SRE re-recognition,
every 5 years. Otherwise, the Department may also assess data annually
upon receipt of the required information from SREs, in response to a
complaint against an SRE, or upon review of an SRE under Sec. 29.26.
The Department has determined that there is no additional need to
specify how frequently the Administrator will be assessing data and
performance metrics.
Section 29.24 Publication of Standards Recognition Entities and
Industry-Recognized Apprenticeship Programs
Section 29.24 requires the Administrator to make publicly available
a list of SREs and the IRAPs they recognize. Section 28.28 requires the
Administrator to include an SRE's suspension on this list. As discussed
below, final Sec. 29.28 now requires the Administrator to include
derecognized SREs on this publicly available list mandated by Sec.
29.24.
A few commenters discussed Sec. 29.24. Commenters primarily sought
clarification relating to implementation and maintenance of this list.
Others recommended the Department make publicly available on a website
many other types of documents associated with the SRE recognition
process and performance data for IRAPs. Some commenters suggested more
specificity with regard to how the Department will collect information
necessary for the list, and the frequency and method by which the
Department will make this list publicly available.
The Department added information to expand the usefulness and
purpose of the list. As discussed below, final Sec. 29.28(b) requires
the Administrator to update this public list to reflect recognition,
suspension, and derecognition of SREs and IRAPs. Accordingly, the
Department has modified Sec. 29.24 to include SREs suspended and
derecognized under Sec. 29.27, not just SREs favorably
[[Page 14341]]
recognized, as well as IRAPs that an SRE has suspended or derecognized
under Sec. 29.22. The Department's publication of a list of SREs and
IRAPs now serves two purposes: To inform the public, including
apprentices and potential apprentices, of IRAPs that have been
recognized by an SRE; and to apprise the public and IRAPs of any
changes to an SRE's recognition status, including suspension and
derecognition.
The Department plans to provide SRE and IRAP recognition
information in an easy-to-access, user-friendly format on the
Department website. As SRE applications are reviewed and granted
recognition, the Department will refresh this recognition information
periodically, clearly noting the date of the most recent update. As
discussed in Sec. 29.22(h), the Department agrees with commenters'
concerns about additional transparency and is now requiring performance
reporting directly to the Department. As for SRE application
information, the Department responded to a number of concerns from
commenters regarding the SRE application process in Sec. 29.21 by
strengthening the required submissions for consideration by the
Department.
The Department encourages interested parties to check the
Department's website frequently for the current list of SREs and IRAPs.
Any clarifications about this list of SREs and IRAPs will be issued via
the Department's website.
Proposed Sec. 29.25 (Expedited Process for Recognizing Industry
Programs as Registered Apprenticeship Programs)
In the NPRM, Sec. 29.25 proposed a process for the Administrator
to consider IRAPs for expedited registration under subpart A's
registered apprenticeship program whereby recognized IRAPs could have
requested that OA register it within 60 calendar days of the
Administrator's receiving all information necessary to make a decision.
In this final rule, the NPRM's proposed provisions are not carried
forth and are deleted. Accordingly, Sec. Sec. 29.26 through 29.31 of
the NPRM have been redesignated in this final rule as Sec. Sec. 29.25
through 29.30.
While the Department received no comments supporting the proposed
expedited registration process, some commenters questioned the purpose
of the expedited registration proposal.
One commenter asserted that the proposed rule provided no
explanation as to why, if an IRAP seeks approval to become a registered
apprenticeship program, it receives special treatment and is handled
more expeditiously than any other apprenticeship program. Another
commenter suggested that the final regulations should specify,
explicitly and clearly, the ineligibility of IRAP participants from
Davis-Bacon and State prevailing-wage coverage. Other commenters
asserted that an expedited process for IRAPs would be insufficient to
ensure IRAPs meet the same quality standards as registered
apprenticeships, put organizations seeking registration under subpart A
at a disadvantage, and lessen the apprenticeship opportunities for
women, minorities, and other protected classes. Other commenters
suggested that an expedited registration process could interfere with
registered apprenticeship program management, integrity, and operations
in States where an SAA is the registration agency for programs
registered under subpart A. Another commenter suggested that SAAs
should have the opportunity to approve or reject IRAPs based on
existing State standards for registered apprenticeships. Numerous
commenters suggested that the Department should remove the proposal for
expedited registration.
E.O. 13801 directed the Department to assess whether proposed
regulations might provide IRAPs recognized under subpart B with
expedited and streamlined registration under the Department's
registered apprenticeship program. Accordingly, the NPRM included
proposed regulatory text that would permit such an expedited and
streamlined registration. The NPRM also included some operational
parameters specifically authorizing the Administrator to request
additional information and requiring the Administrator to make a
decision within 60 days of receiving all necessary information. None of
the public comments supported the proposal permitting the Administrator
to use an expedited and streamlined process for registration of IRAPs
to become registered apprenticeship programs. Given this lack of public
support, and upon consideration of the comments either opposing or
raising questions about the need for expedited registration, Department
agrees with the commenters' concerns and is not finalizing the proposal
regarding expedited registration. As noted in the NPRM's preamble, DOL
does not expect many, if any, apprenticeship programs to seek
recognition by an SRE and registration under subpart A. The Department
has determined that requirements, and associated processes and
procedures, established under subpart A continue to be appropriate and
useful in the administration of the registered apprenticeship system by
the Department and its partners in recognized SAAs.
Section 29.25 Complaints Against Standards Recognition Entities
Section 29.25 of this final rule (designated as Sec. 29.26 in the
NPRM) establishes the procedure for reporting complaints against SREs
arising from SREs' compliance with the subpart. This section provides
an avenue for the Administrator to learn of relevant information that
might impact the SRE's continued qualification under Sec. 29.21(b) and
for potential consideration for any actions taken under Sec. 29.26,
Sec. 29.27, or both.
Paragraph (a) of Sec. 29.25 in this final rule provides that a
complaint arising from an SRE's compliance with this subpart may be
submitted by an apprentice, the apprentice's authorized representative,
a personnel certification body, an employer, a Registered Program
representative (someone authorized to speak on behalf of a registered
apprenticeship program), or an IRAP. Some commenters suggested that the
complaint process against an SRE should be open to any interested party
to ensure that any party with information in regard to an SRE has an
opportunity to submit information to the Administrator. One commenter
supported the proposal whereby only the apprentice, the apprentice-
authorized representative, an employer, or an IRAP would be eligible to
initiate a complaint about an SRE in order to avoid possible conflicts
of interest that may arise with other entities.
The Department's position is that an apprentice, an apprentice's
authorized representative, a personnel certification body, an employer,
or an IRAP are in the best position to identify potential noncompliance
on the part of an SRE. While other individuals or entities may seek to
gain the Department's attention and express interest in the matter, the
Department may not be able to readily confirm their expertise,
experience, or association with the SRE, or their particular relevance
to the filing of a complaint. Nothing precludes these individuals or
entities from providing the Department with information, if they
believe it has relevance and usefulness to a complaint against an SRE.
It is the Department's purview to assess that information and determine
propriety and relevance. Therefore, the Department declines to expand
the list of individuals or entities who may file a complaint against an
SRE.
Additionally, the final rule deletes ``a registered apprenticeship
representative'' from the list of individuals or entities that can file
a
[[Page 14342]]
complaint against an SRE under this section. As detailed above in
discussion of proposed Sec. 29.25, the Department is removing from the
final rule the proposal for an expedited registration process for IRAPs
recognized by an SRE seeking registration under subpart A. Therefore, a
Registered Program representative will not automatically be in a
position of knowledge, experience, or expertise with an SRE in the
context of the IRAP initiative established under subpart B, and for the
reasons discussed above, cannot file a complaint. Accordingly, Sec.
29.25(a) of this final rule carries forward the provisions proposed in
the NPRM as Sec. 29.26(a) but removes references to a Registered
Program representative.
Proposed paragraph (b) described the requirements for complaints
submitted to the Administrator. The proposed language required, among
other things, that the complaint be in writing and be submitted within
60 days of the circumstances giving rise to the complaint, contains
relevant information, and has what is needed to determine whether the
complaint warrants review under proposed Sec. 29.27 (finalized as
Sec. 29.26). Numerous commenters stated that the proposal was unduly
restrictive, because complaints must be filed within 60 days of the
incident the complaint arises from, not within 60 days of when the
complainant acquires actual knowledge of the circumstances giving rise
to the complaint. Some commenters requested the time limit for filing a
complaint be extended to at least 180 days, which aligns with the time
limit for filing a discrimination complaint at the EEOC. Another
commenter suggested a 90-day timeframe for filing a complaint. Finally,
one commenter recommended the Department provide instructions for
complaints submission via online portals or specific mailing addresses.
The Department agrees with concerns that the time period for filing
a complaint should be expanded and that more specificity is needed. The
Department has adopted in the final rule two changes recommended by
commenters. In the final rule the time period is changed from 60 days
to 180 calendar days, and the starting point for the time period is the
complainant's actual or constructive knowledge of the circumstances
giving rise to the complaint, not simply when the circumstances
occurred. The Department has also removed from paragraph (b) the
proposed requirement for copies of pertinent documents and
correspondence to accompany the complaint submission to the
Administrator. The Administrator can request relevant parties provide
copies of these documents during the Department's review of the
complaint. The Department has removed this sentence due to the
potential legal issues regarding complainants' ability to possess and
disclose proprietary information. The Department has adjusted final
Sec. 29.25(b) accordingly. The Department has not adopted the
recommendation to include instructions for complaint submission via
online portals or specific mailing addresses into the regulatory text.
Website and mailing addresses may change and are easier to update on
the Department's website and in technical assistance materials.
Paragraph (c) of Sec. 29.25 in this final rule clarifies that the
Department will address complaints submitted to the Department only
through the review process outlined in Sec. 29.26. One commenter
recommended that the process outlined in proposed Sec. 29.26
(finalized as Sec. 29.25) should not be the only means to resolve a
complaint against an SRE under this subpart. As discussed below, the
review of an SRE established by Sec. 29.26 is thorough and ensures a
fulsome process for hearing and addressing complaints against SREs.
Adhering to this singular process, rather than permitting the
possibility of alternative options for handling complaints, will
maintain uniformity, consistency, and transparency in the Department's
oversight of SREs and administration of the IRAP program. Additionally,
the Department notes that complaints or matters regarding SRE conduct
that are beyond the scope of Sec. 29.25 (such as adherence to
applicable Federal, State, and local laws for EEO) should be handled by
the appropriate, applicable authority. Therefore, the Department has
determined that for the purposes of complaints brought against SREs
under Sec. 29.25, the Administrator's review of SREs following
requirements outlined in Sec. 29.26 is adequate and appropriate for
SREs. No change was made in the regulatory text in response to this
comment.
In the NPRM, proposed Sec. 29.26(d) (redesignated as Sec.
29.25(d) in the final rule) provided that nothing in the section would
preclude a complainant from pursuing any remedy authorized under
Federal, State, or local law. The Department did not receive any
comments on paragraph (d). The final rule adopts the section as
proposed with the exception of the two changes discussed above in Sec.
29.25(a) and (b).
Section 29.26 Review of a Standards Recognition Entity
Section 29.26 of this final rule (designated as Sec. 29.27 in the
NPRM) outlines the process for the Administrator's review of SREs. It
allows the Administrator to initiate a review that may ultimately
result in suspension of the SRE, if the Administrator receives
information indicating that an SRE is either not in substantial
compliance with this subpart or may no longer be capable of continuing
as an SRE. This section also provides an SRE with the opportunity to
respond to the Administrator with relevant information, which could
include information showing the SRE has acknowledged and taken steps to
resolve any deficiency, making suspension unnecessary. The Department
has made clarifying edits to this section.
One commenter suggested that proposed Sec. 29.27 (Review of a
Standards Recognition Entity) would be more accurately titled ``SRE
application and review process.'' The Department did not change the
title of proposed Sec. 29.27 (finalized as Sec. 29.26) as suggested
because a formal review under this section would involve an already-
recognized SRE and not a review of an initial application for
recognition. The application process to become a recognized SRE is
addressed in Sec. 29.21.
Another commenter suggested that complaints about SREs need to be
heard and appropriately addressed and that a mechanism is needed for
forcing immediate derecognition of an IRAP found in violation.
The Department appreciates the concern that complaints against an
SRE need to be heard and appropriately addressed. The Department has
determined that this section, with the clarifying edits noted below,
will ensure that complaints against SREs are heard and appropriately
addressed. The Department did not incorporate changes into this section
that would require immediate derecognition of an IRAP found to be in
violation. The Department notes that this section addresses complaints
against SREs and not the IRAPs that they recognize. A review under this
section could be initiated based on an SRE's failure to ensure that its
IRAPs comply with this subpart. DOL anticipates that SREs would
ultimately derecognize IRAPs that remain in violation of the SRE's
requirements or this subpart after appropriate fact-finding is
conducted. If an SRE allows IRAPs to remain out of compliance with
Sec. 29.22 or other provisions of this subpart, the SRE itself
[[Page 14343]]
may be suspended or derecognized. No change was made in the regulatory
text in response.
Paragraph (a) of Sec. 29.26 in this final rule explains that an
Administrator may initiate review of an SRE if it receives information
indicating that the SRE is not in substantial compliance with this
subpart, or that the SRE is no longer capable of continuing as an SRE.
For example, the Administrator may learn of such information through an
SRE's notification of a substantive change under Sec. 29.21(c)(2), a
complaint under Sec. 29.25, or an SRE's reports under Sec. 29.22(h),
among other methods. The Department does not intend for the receipt of
information to be limited to formal channels such as mail or email. The
Department may initiate reviews if evidence indicating that an SRE may
not be in substantial compliance is available in the public domain.
Several commenters suggested that, to be allowed to operate, SREs
should be required to remain in full compliance with applicable laws
and regulations, rather than being allowed to be substantially
compliant. A commenter suggested that full compliance would be in the
best interest of apprentices. Alternatively, the commenter proposed
that SREs be permitted to remain in substantial compliance for a
limited period of time. One commenter proposed that substantial
compliance be further defined to explain whether the Department
considers some regulatory requirements to be more important than
others. The commenter characterized substantial compliance as affording
leeway, and suggested that the Department is bound to make arbitrary
decisions if it does not further explain the types of noncompliance
that will not result in suspension or derecognition.
A commenter proposed that the Department clarify how it would
determine that an SRE is no longer capable of functioning. Another
commenter suggested that reviews should be mandatory and ongoing,
rather than left to the discretion of the Administrator.
The Department has determined that it would be most appropriate to
carry forward the standard of substantial compliance in the final rule.
However, the Department anticipates that SREs generally will be able to
achieve full compliance with this subpart. The standard of substantial
compliance allows the Administrator to suspend or derecognize an SRE
for failure to fulfill any requirement of this subpart, except for
minor technical, mathematical, or clerical errors that can in all
likelihood be corrected by the SRE once brought to the SRE's attention.
Suspending or derecognizing SREs for minor technical, mathematical, or
clerical errors that do not impact the quality of training delivered by
IRAPs may not be in the best interest of apprentices because it could
result in an IRAP having to apply to a different SRE for recognition.
The standard of substantial compliance is not intended to suggest that
certain provisions in this subpart are less important than others. The
Department has determined that emphasizing certain standards over
others in the review, suspension, and derecognition process would be
unworkable and has determined it to be appropriate to instead focus on
the underlying violation and its potential impact on apprentices. For
example, the Administrator would not suspend an SRE for omitting a
digit in an IRAP's address resulting in a failure to report up-to-date
contact information. If, however, an SRE chose not to report updated
contact information as required, the SRE would have failed to fulfill
the requirements of this subpart in a manner not based on a minor
technical, mathematical, or clerical error. The standard of substantial
compliance is carried over from the NPRM and text in Sec. 29.26(a) is
adopted without changes.
The Department has similarly decided not to limit the period for
which an SRE can be substantially compliant. The Department expects
that full compliance will be achieved by SREs and, as discussed above,
it has determined that certain minor deficiencies may be more
appropriately addressed through the procedures provided for in Sec.
29.23 in the first instance. However, the Department has determined
that such a timeframe is not susceptible to precise definition and,
even if it were, such instances can and should be handled on a case-by-
case basis.
The Department intends ``no longer capable of continuing'' to be
interpreted to encompass scenarios in which the SRE becomes unable to
perform most or all required functions. Such scenarios might include an
SRE no longer being financial solvent or unable to continue as a going
concern, as well as the SRE's being debarred. The Department has
included this second standard to minimize the uncertainty for IRAPs and
apprentices in the limited, sudden situations where circumstances make
it immediately evident that an SRE is no longer capable of functioning,
even if a lack of substantial compliance is not immediately evident.
For example, a natural disaster could irreparably damage SRE's
resources and infrastructure, and as a result, its leadership announces
that it is no longer a going concern. This separate basis provides a
clear basis for derecognition in this situation rather than going
through the administratively inefficient process of generating a basis
for derecognition based on a lack of substantial compliance.
Additionally, it is conceivable that an SRE could have met all
requirements of this subpart, including its reporting requirements, up
until a sudden traumatic event and decision to stop operating, which
could lengthen the derecognition process and create unnecessary
uncertainty for IRAPs recognized by that SRE.
The Department declines to make reviews mandatory and ongoing.
Reviews are intended to be in response to the Department's being made
aware of an SRE's potential failure to remain substantially compliant.
Moreover, the Department will also offer compliance assistance reviews
under Sec. 29.23 to any SREs that request such assistance. No changes
were made to the text in response to these comments.
Paragraph (b) of Sec. 29.26 describes the notice of review SREs
would receive, and procedures the Administrator would follow in
carrying out such a review. The Administrator would provide the SRE
written notice of the review by certified mail, with return receipt
requested. The notice would describe the basis for the Administrator's
review, including potential areas in which the SRE is not in
substantial compliance with the subpart and a detailed description of
the information supporting review. The notice will provide the SRE with
an opportunity to provide information for the Administrator's review,
thereby helping to ensure that the Administrator is fully and fairly
informed as the Administrator seeks to evaluate the SRE in light of
paragraph (a) of this section. This opportunity also provides the SRE
with the option of providing information that would show that no
deficiency exists or that the identified deficiency was cured, making
suspension unnecessary.
The Department did not receive any comments on this paragraph, and
the final rule substantively adopts the paragraph as proposed. However,
the Department has corrected the language in the proposed rule that
would have required that the Administrator include potential areas of
``substantial noncompliance'' with a requirement that the Administrator
identify potential areas in which the SRE is not in substantial
compliance. The change is consistent with the Department's intention,
as noted above, to require that SREs remain in substantial compliance
with this subpart or risk suspension.
[[Page 14344]]
Referring to the standard as substantial compliance in paragraph (b)
also serves to align paragraph (b) with paragraph (a).
Paragraph (c) of Sec. 29.26 in this final rule provides that on
conclusion of the Administrator's review, the Administrator will give
written notice of the decision either to take no action or to suspend
the SRE as provided under Sec. 29.27. The Department did not receive
any comments on this section. The final rule adopts the provision as
proposed.
Section 29.27 Suspension and Derecognition of a Standards Recognition
Entity
Section 29.27 of this final rule (designated as Sec. 29.28 in the
NPRM) describes the means by which the Administrator can suspend and,
if necessary, derecognize an SRE. Such a process is necessary to ensure
that an Administrator can address an SRE's failure to remain
substantially compliant with this subpart or its inability to continue
as an SRE. It also provides the SRE with an additional opportunity to
work with the Administrator to address failures to remain in
substantial compliance. Overall, these steps preserve the integrity of
the recognition process necessary for high-quality IRAPs. To clarify
and better align this section with the bases for review in Sec.
29.26(a), the Department has added ``or circumstances that render it no
longer capable of continuing as an SRE, or both'' to Sec. 29.27(b),
(c)(1), (c)(1)(i), and (c)(1)(ii) to this final rule. This indicates
that both bases for review under Sec. 29.26(a) can result in
suspension or derecognition.
Paragraph (a) of Sec. 29.27 in this final rule begins by
explaining that the Administrator may suspend an SRE for 45 calendar
days based on the Administrator's review and determination that any of
the situations described in Sec. 29.26(a)(1) (the SRE is not in
substantial compliance with the subpart) or (a)(2) (the SRE is no
longer capable of continuing as an SRE) exist.
If, after the review required by Sec. 29.26, the Administrator has
determined that suspension is appropriate, (a) requires that the
Administrator must provide notice of suspension in accordance with
Sec. 29.21(d)(2) and (3). The notice must state that a request for
administrative review may be made within 45 calendar days of receipt of
the notice. No comments were received on this paragraph and the text is
adopted as proposed.
Paragraph (b) of Sec. 29.27 in this final rule requires that the
notice set forth an explanation of the Administrator's decision,
including identified areas in which the SRE is not in substantial
compliance and necessary remedial actions. It also requires that the
notice explain that the Administrator will derecognize the SRE in 45
calendar days unless remedial action is taken or a request for
administrative review is made.
Several commenters stated that the proposed rule lacks criteria by
which DOL should determine the suspension or derecognition of SREs. In
addition, a commenter proposed that the final rule ``address the
situation where a nascent occupation actually evolves along the
continuum of becoming a bona fide profession, and determine at what
point the SRE should be suspended or derecognized such that oversight
can properly transition to an entity more akin to a professional
association.''
The Department has provided criteria for suspension or
derecognition--whether the SRE is not in substantial compliance or
incapable of continuing to act as an SRE. The Department will notify
SREs of potential areas in which the SRE is not substantially compliant
at the outset of a review, as required by Sec. 29.26(b). The
Department therefore expects that any SRE would know that the
Department considers a violation of this subpart to be grounds for
suspension if left uncorrected.
In response to the comment proposing that an SRE be derecognized if
a nascent occupation evolves into a bona fide profession, the
Department does not intend to establish procedures by which an SRE
would be derecognized as a result of its success in developing a new
and innovative occupation into a bona fide profession. As discussed
above, an SRE would be suspended or derecognized only if the
Administrator determines that the SRE is not in substantial compliance
with this subpart or is no longer capable of acting as an SRE. The
Department made one change to paragraph (b), which was to replace the
reference in the proposed rule to substantial noncompliance with
substantial compliance to align final Sec. 29.27(b) with final Sec.
29.26(a).
Paragraph (c) of Sec. 29.27 in this final rule outlines the
various outcomes that could follow the notice of suspension. Each
outcome depends on the SRE's response to the notice. Under Sec.
29.27(c)(1), if the SRE responds by specifying its proposed remedial
actions and commits itself to remedying the identified areas in which
the SRE is not in substantial compliance, the Administrator will extend
the 45-day period to allow a reasonable time for the SRE to implement
remedial actions. If at the end of that time the Administrator
determines that the SRE has remedied the identified deficiencies, the
Administrator must notify the SRE, and the suspension will end. In the
alternative, if at the end of that time the Administrator determines
that the SRE has not remedied the identified deficiencies, the
Administrator will derecognize the SRE and must notify the SRE in
writing and specify the reasons for its determination. Such notice must
comply with Sec. 29.21(d)(2) through (3).
A commenter suggested that proposed Sec. 29.28(c)(1)(ii)
(redesignated as Sec. 29.27(c)(1)(ii) in the final rule) should be
expanded to require that DOL notify not just the SRE, but also the
IRAPs and associated apprentices under the SRE, of the SRE's
derecognition. DOL agrees with the suggestion that notice be provided
to IRAPs, and the final rule incorporates such a requirement. However,
for reasons of readability and clarity, the Department has added the
requirement to Sec. 29.28 of this final rule (designated as Sec.
29.29 in the NPRM), which addresses other impacts of derecognition on
IRAPs. The Department notes that SREs are not required to collect
personally identifiable information relating to apprentices or to
provide such information to DOL, and DOL would thus be unable to
reliably provide notice of an SRE's derecognition to individual
apprentices. However, Sec. 29.28 of this final rule has also been
amended to clarify that the Administrator will work with SREs and IRAPs
to notify all apprentices in those programs. The Department anticipates
that the Administrator's notice to IRAPs would request that the IRAPs
take all actions necessary to notify impacted apprentices. In addition,
the Department has added a requirement that DOL publish notice of the
derecognition on the public list described in Sec. 29.24.
Another commenter suggested that all action pertaining to
suspension and derecognition be made publicly available, but the
Department declines to make all actions relating to suspension or
derecognition publicly available. Notably, the Administrator will
provide notice to the public of an SRE's suspension pursuant to Sec.
29.27(d)(2) and an SRE's derecognition pursuant to Sec. 29.28(b), as
explained above. The Department has determined, however, that providing
notice of other actions relating to suspension or derecognition, such
as the initiation of a review, would be of limited benefit to the
public, as many reviews may not result in suspension or derecognition.
Under Sec. 29.27(c)(2), if the SRE responds to the notice by
making a
[[Page 14345]]
request for administrative review within the 45-day period, the
Administrator must refer the matter to the Office of Administrative Law
Judges to be addressed in accordance with Sec. 29.29. The Department
determined that an appeal right is appropriate given the significant
impact of suspension on SREs under paragraph (d) of Sec. 29.27, which
bars the SRE from recognizing new programs during suspension and
requires the Administrator to publish the SRE's suspension publicly as
described in Sec. 29.24.
Under Sec. 29.27(c)(3), if the SRE does not act in response to the
notice under paragraphs (c)(1) or (c)(2) of this section, the
Administrator will derecognize the SRE, as indicated in the notice
already given to the SRE under paragraph (b) of this section. Absent
recognition, an entity is no longer and may not function as an SRE
under this subpart. This means the former SRE could neither recognize
apprenticeship programs, nor remain listed as a recognized SRE on the
Administrator's website under Sec. 29.24. The Department received no
comments on this paragraph. One grammatical change was made to replace
``accord'' with ``accordance'' in paragraphs (a) and (c)(2) of Sec.
29.27.
Paragraph (d) of Sec. 29.27 in this final rule explains what will
take place during an SRE's suspension. Paragraph (d)(1) of this section
explains that an SRE is barred from recognizing new programs during the
suspension period. Paragraph (d)(2) of Sec. 29.27 explains that the
suspension will be published on the public list referenced in Sec.
29.24.
The Department received one comment on this paragraph, suggesting
that the Department clarify who will oversee IRAPs recognized by an SRE
that is subsequently suspended or derecognized. The Department's
response to this comment was addressed in final Sec. 29.28, as
discussed below.
An SRE that is suspended may not recognize or re-recognize IRAPs
during the suspension period. Unless otherwise noted in the
Department's notice to an SRE, the Department expects that an SRE would
continue to perform other functions required by this subpart during any
suspension period, including, for example, continuing to comply with
the responsibilities provided for in Sec. 29.22. Paragraph (d)(2) of
Sec. 29.27 explains that the Administrator will publish notice of the
SRE's suspension on the public list described in Sec. 29.24. No
changes were made to the regulatory text in response to this comment.
Section 29.28 Derecognition's Effect on Industry-Recognized
Apprenticeship Programs
Section 29.28 of this final rule (designated as Sec. 29.29 in the
NPRM) explains the effects an SRE's derecognition would have on IRAPs
that it recognized. Under Sec. 29.28(a), an IRAP would maintain its
status until 1 year after the Administrator's decision derecognizing
the IRAP's SRE becomes final, including any appeals. At the end of that
time, the IRAP would lose its status unless it is already recognized by
another SRE. A few commenters, including a State government agency and
an advocacy organization, requested clarification in the final rule
regarding the impact of SRE derecognition. These requests included:
What happens if the SRE appeals the derecognition decision; who manages
the IRAP during the appeal; who monitors the IRAP during this 1-year
period; and what is the fate of the apprentices if the IRAP loses its
status. An advocacy organization noted that the proposal ``lacks
information about how apprentices will be protected'' if an IRAP loses
its recognition and recommended that DOL ``outline protections for
learners in derecognized programs and outline DOL's role in protecting
workers, especially youth and students.'' One of the commenters, an
industry group, raised additional questions as to why an IRAP retains
its status for 1 year after its SRE is derecognized, including what the
basis for a 1-year time allotment is, whether another SRE would be
available in rural areas or less popular trades, and what happens if
the IRAP finds another SRE, but that SRE has a competing IRAP already
in place. Some State government agencies expressed concern that
allowing programs to receive recognition from multiple SREs could
result in programs shopping around for approval following denial.
The Department shares commenters' general concerns regarding SRE
derecognition and the impact on IRAPs and apprentices due to
derecognition. In this final rule, the Department has significantly
strengthened the recognition process and the requirements for
maintaining recognition, including new operational, reporting, and
performance requirements contained in Sec. Sec. 29.21, 29.22, and
29.23. This final rule adds transparency regarding the significant
responsibilities SREs are undertaking with their recognition, and more
clearly puts potential SREs on notice regarding the Department's
expectations for high-quality, high-performing programs. Additionally
and importantly, along with new Sec. 29.28(b) discussed below, these
provisions strengthen the Department's role in holding SREs
accountable. From the outset, the Department believes these changes
will serve as an increased deterrent against unqualified or subpar
entities seeking to become recognized SREs.
With the standards the Department is putting into place in this
final rule, it is possible that derecognition may need to occur. The
Department intends to work closely with any SREs that need assistance
to avoid that outcome. However, should derecognition occur, the
Department has maintained the 1-year transition period for IRAPs to
find recognition with another SRE. The Department will, to the extent
practicable, assist with this process, and notes the commenters'
concerns that special attention needs to be paid to rural areas. As
stated in the NPRM, the Department anticipates that the IRAP will
continue to adhere to the SRE's rules even if the SRE ceases to exist.
That is, the final rule's requirements to become a recognized SRE, as
established in Sec. 29.21, and the detailed responsibilities and
requirements of SREs set forth in Sec. 29.22, mean that SREs will, in
effect, set up a ``blueprint'' for how IRAPs are built and maintained.
IRAPs built around such a blueprint are likely to retain their nature
and structure for some period of time, even if the SRE ceases to exist.
Lastly, recognizing the concerns raised here and elsewhere, the
Department strengthened notification requirements after derecognition
in Sec. 29.22(m) above and Sec. 29.28(b) below. The Department has
made no changes to this provision and adopts Sec. 29.28(a) as
proposed.
In the NPRM, paragraph (b) of proposed Sec. 29.29 provided that if
an IRAP is also registered under subpart A in the registered
apprenticeship program, the derecognition of its SRE would not impact
its registration status.
Although the Department received no comments on the provision, the
Department has determined that this provision is not necessary since
the two programs are clearly distinct. To avoid unnecessary text and
potential confusion, the final rule does not carry forward this
provision.
The final rule instead inserts a new provision in paragraph (b) of
Sec. 29.28 establishing two new requirements for the Administrator.
First, the Administrator must update the public list of SREs required
in Sec. 29.24 to reflect derecognition status for SREs that have been
derecognized. Second, the Administrator must notify the IRAPs impacted
by this derecognition. These
[[Page 14346]]
additional notifications, both on the publicly available list of SRE
status and the individualized notification from the Department, provide
the impacted IRAP(s) with information that, if it wishes to continue
operations as an IRAP, it should seek to be recognized by another SRE
recognized under this subpart if it has not already done so.
Additionally, the Department intends for the Administrator to work with
the derecognized SRE and the impacted IRAPs to notify all apprentices
in those impacted programs.
Section 29.29 Requests for Administrative Review
Section Sec. 29.29 of this final rule (designated as Sec. 29.30
in the NPRM) describes procedures and requirements for requests for
administrative review under this subpart. A prospective SRE may request
review of the Administrator's denial of recognition as provided under
Sec. 29.21(d). Likewise, an SRE may appeal the Administrator's
decisions under Sec. 29.27. The process for requesting administrative
review exists to ensure that prospective and recognized SREs have an
adequate opportunity to express their positions and to ensure that
their rights are protected. The provisions are generally modeled after
the process outlined in current 29 CFR 29.13(g), which outlines the
requirement for OA's denial of SAA recognition under subpart A.
Paragraph (a) of Sec. 29.29 in this final rule provides that,
within 30 calendar days of the filing of a request for administrative
review, the Administrator should prepare an administrative record for
submission to the Administrative Law Judge designated by the Chief
Administrative Law Judge. Paragraph (b) of Sec. 29.29 in this final
rule provides that the procedural rules contained in 29 CFR part 18
apply to the disposition of requests for administrative review, with
two exceptions. Paragraph (c) of Sec. 29.29 in this final rule
provides that the Administrative Law Judge should submit proposed
findings, a recommended decision, and a certified record of the
proceedings to the Administrative Review Board, SRE, and Administrator
within 90 calendar days after the close of the record. The Department
added the term ``calendar'' to Paragraph (d) of Sec. 29.29 in this
final rule to clarify that that days are calculated as calendars days
for the provisions where, within 20 calendar days of the receipt of the
recommended decision, any party may file exceptions to it, and where,
any party may file a response to the exceptions filed by another party
within 10 calendar days of receipt of the exceptions. All exceptions
and responses must be filed with the Administrative Review Board with
copies served on all parties and amici curiae. Paragraph (e) of Sec.
29.29 in this final rule provides that after the close of the period
for filing exceptions and responses, the Administrative Review Board
may issue a briefing schedule or may decide the matter on the record
before it. The Department added the term ``calendar'' to Sec. 29.29(e)
to clarify the relevant timeframe for the requirement for the
Administrative Review Board to issue a decision in any case it accepts
for review within 180 calendar days of the close of the record. If the
Administrative Review Board does not act, the Administrative Law
Judge's decision constitutes final agency action. The Department
previously established systems of discretionary secretarial review over
the decisions of the ARB to ensure that the Secretary has the ability
to properly supervise and direct the actions of the Department, and
thereby fulfill his duty to take care that the laws be faithfully
executed. Under this system, the Secretary would not exercise review
over ARB cases until after a decision has been rendered. This final
rule reflects these changes by requiring the ARB to ``issue a
decision'' and removes the conclusion that such a decision
``constitutes final agency action.'' Finally, the final rule includes a
standard of review in a new paragraph (f) to provide procedural clarity
to Administrative Law Judges and the Administrative Review Board when
considering appeals. This paragraph states that Administrator's
decision under this subpart will be upheld ``unless the decision is
arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with the law.'' This standard of review is common under the
Administrative Procedure Act and other appeals under statutes
implemented by ETA.
Two commenters recommended two considerations for proposed Sec.
29.30, Requests for Administrative Review (redesignated as Sec. 29.29,
Requests for Administrative Review, in the final rule). First, the
commenters asserted that Administrator's decisions to find
noncompliance issues and derecognize an SRE should be subject to
internal review by the Administrator before the matter is referred to
an Administrative Law Judge. Second, the commenters recommended time
limits for such appeals should match those of the 29 CFR part 29
subpart A.
The Department notes that the first recommendation--internal review
before making a decision to suspend and, if warranted, derecognize an
SRE--appears duplicative of the review procedures in Sec. 29.26,
Review of a Standards Recognition Entity, and Sec. 29.27, Suspension
and Derecognition of a Standards Recognition Entity, which allow SREs
to provide additional information for the Administrator's consideration
before suspending or derecognizing an SRE. According to these
procedures, the Administrator would weigh available evidence carefully
before reaching the determination that an SRE should be suspended or
derecognized. The Department therefore determined that no additional
internal review is necessary beyond the procedures provided for in
Sec. Sec. 29.26 and 29.27.
Regarding the second recommendation for appeals process timeframes
in Sec. 29.29, the Department notes that these subpart B provisions
are generally modeled on Sec. 29.13(g), denial of SAA recognition, and
include similar time limits.
Section 29.30 Scope of Industry-Recognized Apprenticeship Programs
Recognition by Standards Recognition Entities
Section 29.30 of this final rule (designated as Sec. 29.31 and
titled ``Scope and Deconfliction between Apprenticeship Programs under
Subpart A of this Part and This Subpart B'' in the NPRM) excludes the
construction sector from the scope of the final rule. The section
provides that the Administrator will not recognize as SREs entities
that intend to recognize as IRAPs programs that seek to train
apprentices to perform construction activities, consisting of: The
erecting of buildings and other structures (including additions); heavy
construction other than buildings; and alterations, reconstruction,
installation, and maintenance and repairs. It also provides that SREs
that obtain recognition from the Administrator are prohibited from
recognizing as IRAPs programs that seek to train apprentices to perform
construction activities, consisting of the erecting of buildings and
other structures (including additions); heavy construction other than
buildings; and alterations, reconstruction, installation, and
maintenance and repairs.
This description of construction tracks the short description of
the sector in the North American Industry Classification System (NAICS)
Manual. See Executive Office of the President, Office of Management and
Budget, North American Industry Classification System 16 (2017). As
discussed below, many commenters asserted that the NAICS Manual's
description of Sector
[[Page 14347]]
23--Construction best captures construction activities for the purpose
of this regulation. Accordingly, in interpreting and applying Sec.
29.30, the Department will use the NAICS Manual to determine whether an
activity falls within the construction sector. In particular, the
Department will draw upon the manual's description of Sector 23 as a
whole as well as its descriptions of its subsectors. See id. at 123-41.
However, it will do so only to determine whether the activities in
which programs train apprentices fall within the definition of
construction in Sec. 29.30. DOL will not rely alone on job titles or
job classifications referenced in NAICS 23 or be bound strictly by
O*NET codes in determining whether Sec. 29.30 prohibits recognition of
an SRE or IRAP; rather, DOL will look holistically at all information
in the SRE's application to determine whether an SRE seeks to train in
construction activities.
This is a change from the proposed rule, which would have excluded
sectors from the scope of the rule through a formula that was intended
to capture those sectors that have significant registered
apprenticeship opportunities. The Department explained in the NPRM that
it expected that the formula would at least initially prohibit the
Department from accepting applications from entities seeking to
recognize apprenticeship programs in the U.S. military or in
construction. The vast majority of the 326,000 comments received by the
Department addressed this section of the proposed rule, with many
calling for an express exclusion of construction from the final rule.
After reviewing and analyzing the comments on this section, the
Department has determined that a complete exclusion of construction,
but no other sector, is most consistent with the goal of encouraging
more apprenticeships in new industry sectors that lack widespread and
well-established registered apprenticeship opportunities. The
Department's use of the NAICS Manual description of construction
activities is also different than the NPRM's suggestion for how to
define the construction sector. The Department agrees with commenters
that adopting the NAICS Manual's description is more consistent with
the Department's economic analysis of the rule and is likely the
simplest to apply.
The remainder of this section is a topic-by-topic review and
analysis of the comments received on proposed Sec. 29.31 (redesignated
as Sec. 29.30 in the final rule).
The Deconfliction Formula Proposed in the NPRM
Commenters--both those opposed to and in support of the exclusion
of construction--nearly uniformly opposed the proposed deconfliction
formula. The formula was intended to capture--and exclude--those
sectors with significant registered apprenticeship opportunities. Under
the formula, a sector with significant registered apprenticeship
opportunities was one that has had more than 25 percent of all federal
registered apprentices per year on average over the prior 5-year
period, or that has had more than 100,000 federal registered
apprentices per year on average over the prior 5-year period, or both,
as reported through the prior fiscal year by the Office of
Apprenticeship.
Several commenters argued there were flaws in the NPRM's proposed
alternative thresholds for determining well-established opportunities
in registered apprenticeship in a sector. Many commenters argued that
these figures were too low; many other commenters argued the figures
were too high. For example, one commenter recommended that, in the
absence of a blanket exclusion of construction, the Department use a
threshold of 30,000 apprentices per year on average over the prior 5-
year period to identify sectors where registered apprenticeship
opportunities are already significant. On the other hand, one commenter
argued that the exclusion standard unfairly blocks the
``supermajority'' of nonunion construction training programs from
participating in IRAPs because of significant union involvement in
registered apprenticeships. This commenter argued that the Department
could not assert that registered apprenticeships had adequately
occupied a sector if the number of apprentices in that sector was fewer
than 50 percent. Other commenters stated that the formula was illogical
and unnecessary, and should be eliminated.
Several commenters stated that it was unclear from the preamble
what precise method the Department would use in calculating the number
of registered apprentices in a sector. These commenters questioned why
the NPRM stated that the Department ``expects'' the exclusion will
apply ``at least initially'' to construction and military
apprenticeships. In evaluating the provision creating the formula, one
commenter said the basis of the formula was ``questionable'' and
described the provision as a whole as ``nebulous.'' Another commenter
stated that the NPRM was unclear on how the Department would apply the
exclusion--including at what time of the year and with what notice to
the public--and what the scope of the deconfliction provision was.
Commenters also criticized the implication that the industry sectors
covered by the exclusion could change, potentially annually.
Commenters further argued that the Department's deconfliction
formula was untenable because the data used by the Department is
incomplete. Commenters contended that because the Department relied on
data from only the 25 non-SAA States, this data did not provide a
complete or appropriate description of whether certain sectors have
adequate opportunities in registered apprenticeship and that the
Department's methodology effectively dismissed registered
apprenticeship programs in SAA States. Numerous commenters stated that
the limited scope of the data available to the Department would result
in significant undercounting of apprenticeships in construction in
particular. Some of these commenters relied on their own data
collections on construction training programs to argue that the
Department's data is vague, incomplete, or inaccurate. One commenter
independently secured data from the SAAs in 13 States revealing more
than 75,000 additional construction industry apprentices in fiscal year
(FY) 2018 in those States, and the commenter pointed out
inconsistencies between RAPIDS and the Federal data contained in the
NPRM.
Commenters also questioned the NPRM's discussion of the United
Services Military Apprenticeship Program (USMAP) as support for the
application of the formula's criteria. These commenters argued that
there is great variance in how the Department and other agencies track
participation in military apprenticeships as compared to civilian
registered apprenticeships. A commenter maintained that USMAP mainly
documents skills that service members acquire based on their ordinary,
day-to-day military training and experience, as opposed to civilian
registered apprenticeships, which provide trainees with skills that
they may not develop otherwise. Some of the commenters also noted that
the military is not a sector similar or comparable to construction and
argued that USMAP programs do not align with the industry-driven focus
of the IRAP model.
One commenter proposed a hybrid approach that would include both a
formula and two express exclusions. The commenter suggested that the
Department revise its deconfliction
[[Page 14348]]
formula to define ``a sector with significant registered apprenticeship
opportunities'' as: (1) Construction; (2) the military; and (3) any
other sector that meets a proportional or numerical threshold.
After reviewing these comments, the Department has decided to
eliminate the deconfliction formula. The Department agrees that hard
numerical thresholds are flawed means to determine the sectors in which
registered apprenticeships are significantly established. The use of
strict numerical thresholds suggests a level of precision that is
currently unattainable with the data available from RAPIDS, which does
not cover the entire United States. The Department also agrees that
applying a formula would create significant uncertainty regarding
whether any given sector would be excluded from year to year. The
development of IRAPs could be chilled by that uncertainty alone; SREs
and IRAP sponsors need certainty in investing in this new
apprenticeship model.
Construction Exclusion
The vast majority of the over 326,000 comments that the Department
received expressed opposition to the use of IRAPs in construction.
These commenters called on the Department to expressly exclude
construction from the IRAP rule and to make the construction exclusion
permanent.
Numerous commenters asserted that the registered apprenticeship
model was most appropriate for construction and expressed concern that
new IRAPs would undermine the existing, effective registered
apprenticeship model in the construction sector, which was described as
being widespread and supported by substantial existing investment. As
noted above, commenters in favor of a construction exclusion emphasized
that registered apprenticeship programs serving the construction sector
are well-established and that the construction sector boasts by far the
highest number of apprentices. The registered apprenticeship system in
the construction sector was described as the ``gold-standard.''
Numerous commenters praised the high standards for training, safety,
and wage progression associated with the registered apprenticeship
programs these commenters support or use, warning that the introduction
of IRAPs in construction would reduce these standards and would not
serve the interests of apprentices. Commenters also contended that
construction IRAPs would force the erosion of the quality of registered
programs by introducing a lower-quality alternative.
Generally, these commenters opposed the deconfliction formula in
proposed Sec. 29.31 (discussed above) as well as a sunset of an
exclusion of construction. Many commenters expressed concern that the
deconfliction formula could allow construction IRAPs in the future.
Some commenters argued that permanently excluding construction was the
surest way for the Department to accomplish its goal of expanding
apprenticeships to sectors where it is underused.
In contrast, some commenters opposed the exclusion of construction,
arguing that IRAPs would help fill skilled-training needs in the
sector. Commenters argued that excluding construction contradicted the
``expansive purpose'' of the proposal to increase the number and use of
apprenticeships. Commenters stated that the recognition of alternative
IRAPs in the construction industry would expand the training pool
without weakening or detracting from registered apprenticeship
programs, and that, conversely, exclusion of construction would prolong
the skills shortage in the construction industry. Commenters argued
that apprenticeship is underused in the construction sector, stating
that there are 144,000 apprentices in registered construction programs
but several million people working in the sector. Another commenter
argued that the data indicates that registered apprenticeships supply
only 4 percent of the needed construction workers, demonstrating that
registered apprenticeship programs alone cannot fill the industry's
labor needs and skills gap. Others argued that the exclusion, and the
Department's broad definition of construction, showed the Department's
lack of understanding of the construction industry and its skilled-
training needs. It was suggested that existing registered programs feed
workers predominantly to employers on the commercial construction side
of the sector, but not employers on the residential construction side.
Other commenters urged the Department to be impartial in considering
which sectors or industries should be included or excluded from the
IRAP rule. These commenters stated that IRAPs were a new workforce
development tool that employers from all industries would be eager to
use.
Additionally, many commenters opposed to the exclusion noted, in
their view, the difficulty in recruiting young people into construction
trades and argued the construction sector needs an alternative such as
IRAPs to improve recruitment and retention. Some commenters argued that
the construction sector needs IRAPs as an alternative in the
construction industry because registering a program with the Department
or SAA can be difficult and the requirements of registered
apprenticeship are too prescriptive and complicated.
Many commenters opposing the exclusion complained about registered
apprenticeship programs being sponsored by or involving unions. Several
commenters in the construction industry stated that they typically do
not use union apprenticeship programs and asserted these programs are
ineffective, overly detailed, and overlong, necessitating the need for
an alternative such as IRAPs. Commenters also discussed segmentation in
the construction labor market between union and nonunion workers, with
union workers more likely to work on the commercial side of the sector
than the residential, and cited BLS data showing that only a fraction
of construction workers belonged to labor unions. Commenters suggested
that IRAPs are necessary to prevent monopolization by unions of
training in certain construction fields, especially those on the
commercial construction side of the sector. Commenters argued that
union-dominated registered programs could not address the existing
labor shortage, especially in residential construction.
Commenters urged the Department not to exclude the construction
sector, or (more specifically) not to exclude the residential
construction sector, or (alternatively) to include a sunset provision
to eventually allow competition between the registered program and IRAP
models. Another commenter said union apprenticeships had
``monopolized'' the elevator trade in its State and urged the
Department to allow IRAPs in elevator construction.
The Department has carefully reviewed these comments and has
decided to expressly exclude the construction sector from the IRAP
rule.
As explained in the NPRM, the Department's goal in this rulemaking
is to expand apprenticeships to new industry sectors and occupations.
That approach is consistent with the focus of the President's Task
Force on ``sectors where apprenticeship programs are insufficient.''
This rulemaking's purpose is to expand apprenticeship in industries
where apprenticeships are emerging or underutilized.
Construction is not a new industry sector when it comes to
apprenticeships. Although the data available does not allow the
Department to apply strict numerical thresholds, as discussed above, it
does clearly
[[Page 14349]]
demonstrate that apprenticeships are more established in the
construction sector than in any other.\16\ According to RAPIDS data
from February 2020, a greater proportion of construction workers are
currently apprentices in registered programs than in any other sector
and the ratio of current construction apprentices to the construction
workforce is many times the ratio for the American economy as a
whole.\17\ Moreover, construction apprenticeship programs are simply
more widespread and train more apprentices than in other sectors.
Indeed, the construction sector accounts for over half of all current
participants in registered apprenticeship programs according to RAPIDS
data and accounted for nearly half over the five year period preceding
publication of the NPRM. Notably, commenters opposed to excluding the
construction sector did not provide persuasive evidence that
contradicted the Department's conclusion that registered apprenticeship
programs are more widespread in the construction sector than in other
sectors.
---------------------------------------------------------------------------
\16\ Although the Department does not have data from all SAA
states, no persuasive reason has been given to doubt that the data
is not broadly representative of the state of registered
apprenticeship programs across the nation as a whole.
\17\ According to RAPIDS data, only the utilities sector and the
educational services sector come at all close to the construction
sector in terms of the proportion of workers that are currently
apprentices. However, the utilities and educational services sectors
combined have less than half the number of apprentices than the
construction sector. Separately, the NPRM suggested that the U.S.
military had a large fraction of registered apprentices. As
discussed elsewhere, commenters pointed out that the military is not
a sector similar or comparable to construction or other industry
sectors.
---------------------------------------------------------------------------
Many commenters raised significant concerns that allowing IRAPs in
the construction sector would have an adverse impact on registered
construction programs. Commenters expressed their belief that
construction IRAPs' introduction would reduce the quality and safety of
construction jobs.
As an initial matter, the Department disagrees with commenters who
contended that IRAPs will be inherently unsafe or inequitable, create a
lower-skilled lower-paid workforce, or endanger any American by
constructing less-safe infrastructure. The Department's requirements
for SRE recognition, standards of high-quality IRAPs, and oversight
measures, discussed at length above, provide the necessary safeguards,
protections, and oversight to allay such concerns. The Department also
has increased its oversight and the requirements of these standards in
this final rule to better ensure quality and safe apprenticeship
opportunities that properly instruct apprentices on how to carry out
skilled work.
However, the Department acknowledges that it is possible that
construction IRAPs could compete to some extent with registered
construction programs. Some employer funding that currently supports
registered programs might be diverted to new IRAPs or participants who
otherwise would likely participate in a registered program might
instead choose an IRAP, perhaps because the registered program is of
longer duration than an IRAP that trains on similar activities. Because
the purpose of this rulemaking is to expand the apprenticeship model
into new frontiers, the Department has concluded that taking the risk,
whatever its magnitude, of disrupting or displacing registered
construction programs is not warranted at this time. The Department
believes it is prudent to exclude the construction sector in light of
the concerns raised by so many commenters about allowing IRAPs in that
specific sector and because the construction sector in fact plainly
stands out as the industry sector with the greatest existing
utilization of registered apprenticeship programs.
The Department appreciates the arguments against excluding the
construction sector, but ultimately disagrees with those commenters'
conclusions. To begin, that union registered programs might predominate
over non-union registered programs is not itself a compelling reason
for or against the exclusion. Employers and employer associations can
sponsor registered programs, and unions can sponsor IRAPs or become
SREs. And even assuming it is true that registered programs tend to
feed workers to commercial builders rather than residential builders,
the Department believes that the best rule is to exclude the entire
sector rather than to require the Administrator and SREs to attempt to
distinguish between commercial and residential programs. Although the
NAICS Manual includes residential-specific subsectors, it is far from
clear that the Administrator and SREs would be able to identify
programs as training in activities and skills that are applicable to
only residential construction and not other construction subsectors,
given the overlap in skills necessary for activities in both
residential and other types of construction, much less make the
distinction as consistently and fairly as required by Sec. 29.22(d).
Some commenters further complained that union-backed programs can take
too long and are overly detailed. These comments are beside the point
of whether there should be construction IRAPs--registered
apprenticeships can be union or non-union supported and their program
design can be long or short, detailed or less-detailed. The Department
is adopting the construction exclusion because it sees no reason to
take the risk, whatever the magnitude, of disrupting the registered
programs in light of the Department's stated purpose to create an
alternative pathway for developing apprenticeship programs in new
industry sectors and occupations.
The Department agrees with commenters opposed to the exclusion that
the market for apprentices in the construction sector is not saturated
and even that demand might be much greater than supply. But, as
discussed above, the Department disagrees that excluding the
construction sector from the scope of the IRAP rule is inconsistent
with the purpose of this rulemaking. The Department's goal is to expand
apprenticeships broadly to new industry sectors and occupations. The
Department may, and has chosen to, proceed incrementally. The
Department's focus is on increasing apprenticeship opportunities in
sectors of the economy which have not seen nearly the same level of
apprenticeship programs and opportunities as the construction sector.
The Department also has determined that the exclusion of the
construction sector from IRAP eligibility should not ``sunset,'' i.e.,
expire after a certain date. The Department agrees that it conceivably
could be appropriate in the future to reconsider its decision not to
allow IRAPs in the construction sector. Among other things, that
reconsideration could be based on new and compelling evidence showing,
for example, that IRAPs have worked so well in other sectors that
repealing the exclusion is worth risking disruption or displacement of
established registered construction programs, or that registered
construction programs have materially faltered either in terms of
prevalence or quality. But no compelling argument was made for
automatically repealing the exclusion after a particular period of
time. Accordingly, no such time limitation has been added to Sec.
29.30 of this final rule.
Describing the Construction Sector
Several commenters requested that the Department clarify its
definition of ``the construction industry.''
In particular, it was suggested that the Department's definition--
``to provide labor whereby materials and constituent
[[Page 14350]]
parts may be combined on a building site to form, make, or build a
structure,'' 84 FR 29981 & n.22--was too narrow. To ensure that the
proposed construction exclusion fulfills the Department's goal of
preserving well-established registered apprenticeship programs in
construction, a commenter urged the Department to use the definition of
construction sector (NAICS Code 23) activities that is included in the
2017 version of the NAICS Manual at page 16: ``Activities of this
sector are erecting buildings and other structures (including
additions); heavy construction other than buildings; and alterations,
reconstruction, installation, and maintenance and repair.'' This
definition, according to the commenter, would more clearly convey the
industry's breadth. As the commenter points out, the Department
actually used the NAICS code for construction in estimating the cost
impact of the proposed rule (see 84 FR at 29999, nn.48-49, and exhibit
28 (construction) at 30009), and in determining the significant number
of apprenticeship opportunities provided by the construction sector (84
FR at 29980--percentage based on NAICS code). The commenter further
argued that the Department did not need to rely on an applicant-
supplied NAICS code, as the NPRM explained was a concern. See 84 FR
29981 n.22. The commenter pointed out that the Department (and,
presumably, SREs) could look at the occupations that apprentices are
actually trained for.
Numerous other commenters endorsed using the definition of
construction sector activities that appears in the NAICS Manual.
Several commenters said the language from the NAICS Manual was a more
comprehensive definition encompassing the ``real-world meaning'' of the
construction industry. A commenter requested that DOL use the NAICS
Manual's definition of construction because it is the standard used by
Federal statistical agencies in classifying business establishments.
Multiple commenters discussed various cases, including the National
Labor Relations Board's decision in Carpet, Linoleum, and Soft Tile
Local Union No. 1247 (Indio Paint), 156 NLRB 951 (1966), which grappled
with broad definitions of the construction industry, and they stated
that the NAICS Manual's language describing the construction industry
has been affirmed by industry stakeholders as a comprehensive,
workable, and accurate definition. Several commenters cited Indio Paint
as legal precedent to substantiate the claim that ``construction''
should encompass additional activities like repairs or the replacement
of parts in an immovable structure. These commenters suggested that the
NAICS Manual's definition was an appropriately broad and comprehensive
definition, and they urged DOL to adopt such a definition. Several
commenters opined that a broader definition of construction,
specifically the NAICS Manual's definition, was necessary to protect
the widespread and effective apprenticeship programs already in place
in their industries. Several comments requested that the definition be
amended to ensure coverage for specific industries, activities, or
occupations. One commenter took issue with the NPRM's invocation of
case law using the NPRM's proffered definition while interpreting
section 8(f) of the National Labor Relations Act (NLRA), arguing that
pre-hire agreements had nothing to do with apprenticeship. This
commenter said it was inappropriate to resort to NLRA case law to
define the scope of the construction industry.
In contrast, multiple commenters defended the definition used in
the NPRM preamble, arguing that it is consistent with case law applying
statutes that are administered by the Department, such as the
Employment Retirement Income Security Act and the Taft-Hartley Act. One
commenter requested that the Department retain the NPRM's definition of
construction because it accurately describes the industry. Yet, some of
these commenters opined the Department would be better served by
adopting the definition of construction in the Department's regulations
implementing the Davis-Bacon Act at 29 CFR 5.2(j). These commenters
said that the definition of the term ``construction'' in the Davis-
Bacon Act regulations offers a more comprehensive description of the
scope of construction activities, and is a well-established
definitional framework that the Department already utilizes.
After considering these comments, the Department has decided to
adopt a suggestion offered by numerous commenters, and noted in the
NPRM, to use the NAICS Manual to determine activities in the
construction sector. The Department agrees that the NAICS Manual
description--``[a]ctivities of this sector are erecting buildings and
other structures (including additions); heavy construction other than
buildings; and alterations, reconstruction, installation, and
maintenance and repair''--is more comprehensive and more suitable than
the more limited definition of the sector that appeared in the NPRM (at
84 FR 29981), which stated that an apprenticeship program would be in
construction ``if it equips apprentices to provide labor whereby
materials and constituent parts may be combined on a building site to
form, make, or build a structure.'' The text of Sec. 29.30
incorporates the above description from the NAICS Manual. As noted
above, in considering whether an SRE application falls within the
construction sector, the Department will draw upon the manual's
description of Sector 23 as a whole as well as its descriptions of its
subsectors. However, it will do so only to determine whether the
activities in which programs train apprentices fall within the
definition of construction in Sec. 29.30. The focus on activities is
intended to prevent artificially circumscribing the outer bounds of
what qualifies as a construction program. Similarly, the Department
will not rely alone on job titles or job classifications referenced in
NAICS 23 or be bound strictly by O*NET codes in determining whether
Sec. 29.30 prohibits recognition of a SRE or IRAP; rather, as
discussed above, the Department will consider all information in the
application to determine whether an SRE seeks to train in construction
activities.
Military Exclusion
The NPRM stated that, based on the deconfliction formula, SREs
would not be allowed to recognize apprenticeship programs in the U.S.
military.
Commenters noted that the military is not analogous to economic
sectors, such as construction, manufacturing, or mining, quarrying, and
oil and gas extraction, and that USMAP does not correspond to training
in any particular industry or occupation. Thus, excluding
apprenticeship programs in the U.S. military would not align with the
Department's stated goal of encouraging more apprenticeships in new
industry sectors that lack widespread and well-established registered
apprenticeship opportunities.
Commenters also contended that USMAP generally documents skills
that members of the armed forces learn during their ordinary, day-to-
day military training and experience, as opposed to during a distinct
occupation-focused training program. The raw number of participants in
USMAP thus likely overstates the number of military apprentices whose
experiences are comparable to those in civilian programs. Similarly, a
commenter discussed how it is challenging to retain military
apprentices in the civilian workforce.
The Department agrees with the thrust of these comments and has
decided not to exclude military apprenticeships
[[Page 14351]]
from the scope of the IRAP rule. However, any military apprenticeships
in construction activities, as defined in the NAICS Manual, are
prohibited under Sec. 29.30 of the final rule.
Distinguishing Between Recognition of SREs and IRAPs
Section 29.31 of the proposed rule provided that the Department
would not recognize SREs that seek to recognize programs in certain
sectors as IRAPs. Section 29.31 did not expressly prohibit SREs from
recognizing as IRAPs programs that seek to train apprentices for those
sectors. The Department has revised Section 29.30 of the final rule to
clarify that SREs are prohibited from recognizing as IRAPs programs
that seek to train apprentices to perform construction activities. If
an SRE does recognize a program that trains apprentices to perform
construction activities, it would be subject to derecognition.
Section 29.31 Severability
The Department has decided to include a severability provision as
part of this final rule. To the extent that any provision of subpart B
of this final rule is declared invalid by a court of competent
jurisdiction, the Department intends for all other provisions of
subpart B that are capable of operating in the absence of the specific
provision that has been invalidated to remain in effect.
Removal of Proposed Appendix A to Subpart B--IRAP SRE Application Form
(ETA Form 9183)
The NPRM included an appendix A to subpart B (Industry-Recognized
Apprenticeship Program Standards Recognition Entity Application Form)
containing the proposed form that would be utilized by potential SREs
in applying for recognition from the Department. In developing this
final rule, however, the Department determined that the retention of
this form within the body of the rule could make administration of this
program challenging. As a practical matter, the Department is concerned
that embedding the form in the rule would prevent the Department from
making minor modifications in the future without regulatory action.
Accordingly, the Department has decided to remove the form from the
body of the final regulation and has developed an updated version of
the form to collect relevant information from potential SREs seeking
recognition from the Department (see Paperwork Reduction Act discussion
below for additional details).
III. Agency Determinations
A. Executive Orders 12866 (Regulatory Planning and Review) and 13563
(Improving Regulation and Regulatory Review)
Under E.O. 12866, OMB's Office of Information and Regulatory
Affairs determines whether a regulatory action is significant and,
therefore, subject to the requirements of the E.O. and review by OMB.
See 58 FR 51735 (Oct. 4, 1993). Section 3(f) of E.O. 12866 defines a
``significant regulatory action'' as an action that is likely to result
in a rule that: (1) Has an annual effect on the economy of $100 million
or more, or adversely affects in a material way a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or communities
(also referred to as economically significant); (2) creates serious
inconsistency or otherwise interferes with an action taken or planned
by another agency; (3) materially alters the budgetary impacts of
entitlement grants, user fees, or loan programs, or the rights and
obligations of recipients thereof; or (4) raises novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the E.O. Id. This final rule is an
economically significant regulatory action, under sec. 3(f) of E.O.
12866.
E.O. 13563 directs agencies to propose or adopt a regulation only
upon a reasoned determination that its benefits justify its costs; the
regulation is tailored to impose the least burden on society,
consistent with achieving the regulatory objectives; and in choosing
among alternative regulatory approaches, the agency has selected those
approaches that maximize net benefits. E.O. 13563 recognizes that some
benefits are difficult to quantify and provides that, where appropriate
and permitted by law, agencies may consider and discuss qualitatively
values that are difficult or impossible to quantify, including equity,
human dignity, fairness, and distributive impacts.
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Office of Information and Regulatory Affairs designated this rule
as a ``major rule,'' as defined by 5 U.S.C. 804(2).
1. Public Comments
A commenter stated that the proposed rule would help address the
current shortage of skilled workers in craft and trade industries, as
well as the costly and lengthy delays in the current apprenticeship
approval process. The commenter stated that while 90 percent of
apprenticeship program participants will have a job after their program
concludes and a $300,000 increase in lifetime earnings without the
burden of student loan debt, only 0.3 percent of the workforce has
taken part in registered apprenticeship programs, partly due to the
lack of flexibility under the registered apprenticeship model.
The Department concurs that this new program offers many new
benefits, which will harness industry expertise and encourage private
industry to determine the skills that workers need to acquire through
apprenticeship programs. This industry-led, market-driven approach will
provide employers with flexibility to develop customized programs that
serve their specialized business requirements.
A commenter expressed concern that the combination of significant
and quantifiable costs with broad non-quantified benefits may lead to
low participation rates among companies in the IRAP program.
The Department agrees that quantifiable benefits would be ideal to
include in the economic analysis. However, this is a new program, so
data do not yet exist on its effectiveness. The Department would need
to make numerous untested assumptions to attempt to quantify the
benefits; therefore, the Department has maintained a qualitative
discussion of the benefits in the final rule.
A commenter stated that the advantages of IRAPs discussed in the
proposed rule are actually those of registered apprenticeship programs
and will not accrue to IRAPs because they avoid many of the
requirements of registered apprenticeship programs that give rise to
those benefits to society. Another commenter stated that every dollar
of public investment in registered apprenticeship programs yields a $27
return to the economy, while IRAPs are ``unproven'' and ``unneeded.''
Multiple commenters cited the substantial return on investment
associated with registered apprenticeship and expressed concern that
the registered apprenticeship system is under threat from the proposed
rule.
The Department agrees that the Mathematica study citation in the
proposed rule pertains to the effectiveness of registered
apprenticeship: Individuals who successfully complete an apprenticeship
program are estimated to amass career-long earnings (including employee
benefits) that are greater than the earnings of similarly situated
individuals who did not enroll in such
[[Page 14352]]
programs.\18\ The IRAP system is a new program, so data do not yet
exist on its effectiveness. Through the public comment process, the
Department did not receive recommendations for relevant data, which
likely reflects the fact that this is a new program, so the Department
was unable to quantify the benefits in the final rule. In any case, the
Department does not expect the expansion of apprenticeships under this
rule to come at the expense of existing registered apprenticeship
programs. Instead, the Department anticipates that this parallel
apprenticeship system will encourage the expansion of apprenticeships
in additional industries and occupations. We agree that the registered
apprenticeship system works well for its participants--and the
Department is working to increase their numbers--but historically the
number of those participants has been limited, especially compared to
apprenticeship in other countries. This rule is intended to reach new
and emerging sectors of the economy where apprenticeship has been
underused.
---------------------------------------------------------------------------
\18\ Mathematica Policy Research, ``An Effectiveness Assessment
and Cost-Benefit Analysis of Registered Apprenticeship in 10 States:
Final Report,'' July 25, 2012, https://www.mathematica.org/our-publications-and-findings/publications/an-effectiveness-assessment-and-costbenefit-analysis-of-registered-apprenticeship-in-10-states.
---------------------------------------------------------------------------
One commenter asserted that the proposed rule is likely to be
considered economically significant under E.O. 12866 and, therefore, a
``major rule'' under the Congressional Review Act because the
activities the Department quantified represent only a small fraction of
an IRAP's responsibilities under the rule. The commenter stated that
the Department based its estimate of the rule's overall costs almost
entirely on the discrete actions it anticipates the SREs' and IRAPs'
Training and Development Managers will take, but it declined to
quantify numerous costs related to the actual development and operation
of IRAPs. Further, the commenter stated that the Department failed to
use its experience with registered apprenticeship programs to quantify
the development, staffing, and operations costs of IRAPs, and asserted
that the costs and impact on the economy would increase if the
Department quantified these costs. Specifically, the commenter claimed
that if the Department attributed a cost-per-apprentice of only $5,000
(20 percent of the Department of Commerce's lower estimate in its 2016
study of 13 businesses and intermediaries \19\) for 10 apprentices per
IRAP, the costs and impact on the economy would increase by more than
$100 million in the first year. Further, the commenter claimed that if
the Department assumed each IRAP would hire one full-time employee
(based on the Department of Commerce's 2016 study in which most of the
firms dedicated at least one staff member to manage their programs),
the cost of the rule to IRAPs alone would increase to over $190 million
per year.
---------------------------------------------------------------------------
\19\ Susan Helper, Ryan Noonan, Jessica R. Nicholson, and David
Langdon, ``The Benefits and Costs of Apprenticeship: A Business
Perspective,'' Nov. 2016, https://files.eric.ed.gov/fulltext/ED572260.pdf.
---------------------------------------------------------------------------
As the Department explained in the proposed rule, the 2016 study
published by the Department of Commerce found that apprenticeship
programs vary significantly in length and cost. The shortest program in
the study lasted 1 year, while the longest lasted more than 4 years.
Importantly, the Commerce report was a case study of only 13 programs,
so it is not a representative sample. Moreover, the variety of
apprenticeship programs is expected to grow dramatically under this
rule, with an even greater variety of sizes, durations, occupations,
and industries. Furthermore, compensation costs for apprentices were
the major cost of the programs in the Commerce report and compensation
is typically considered a ``transfer'' rather than a ``cost'' in
regulatory impact analyses. It is also important to note that many of
the costs of an apprenticeship program would still be incurred if the
company filled the job through another method, such as hiring an
already-trained worker, contracting a temporary worker, or increasing
the hours of existing staff. For these reasons, the Department
continues to maintain that the estimated cost-per-apprentice of $25,000
to $250,000 in the Commerce study is not a reasonable basis for
estimating IRAP costs, nor is using a share of that study's cost-per-
apprentice as the commenter did.
Another commenter expressed concern that there were no cost
estimates for the training component of IRAPs and remarked that these
estimates could prove to be in the hundreds of millions of dollars. The
commenter claimed that with the substantial growth of registered
apprenticeship, there is a large amount of available data from existing
programs about yearly training costs.
The Department does not track cost-per-program data nor cost-per-
participant data under the registered apprenticeship program. Although
program sponsors may track such data, cost per participant and cost per
program are not required performance measures under the registered
apprenticeship system, so the Department has no way to capture or track
such data. Moreover, even if such data did exist, it would not be
suitable for this analysis because IRAPs are likely to differ
substantially from registered apprenticeship programs in size, nature,
scope, duration, industry, and occupational area. In the economic
analysis, the Department acknowledges the cost of apprenticeship
programs; however, due to data limitations, the costs are described
qualitatively in section III.A.7 (Nonquantifiable Costs).
A commenter stated that, if the Department does not exclude the
construction industry, the rule is likely to have an economic impact on
the construction industry of at least $100 million per year because
IRAPs in the construction industry would displace more than 10 percent
of the private investment made in registered apprenticeship programs.
Several commenters stated that the proposed rule failed to take into
account the devaluing effect that IRAPs would have on registered
apprenticeship program apprentices' credentials because of lower
standards associated with the new program versus the registered
apprenticeship program.
The Department does not expect the expansion of apprenticeships
under this rule to come at the expense of existing registered
apprenticeship programs. Instead, the Department anticipates that this
parallel apprenticeship system will encourage the expansion of
apprenticeships beyond those industries where registered
apprenticeships already are effective and substantially widespread.
With respect to the construction industry in particular, the
Administrator will not recognize SREs that recognize IRAPs that seek to
train apprentices in construction activities as defined in Sec. 29.30,
mooting these concerns as to the construction sector.
A commenter stated that deregulation would not decrease the costs
of purchasing facilities and equipment, developing curriculum, hiring
instructors and administrators, and other amounts that are required to
finance first-class programs. Another commenter stated that without the
ability to reasonably estimate a quantitative value for participating
in an IRAP, most companies will either use the registered
apprenticeship system or proceed with an unregistered apprenticeship
program to avoid the costs associated with IRAPs.
[[Page 14353]]
The Department anticipates that a wide variety of entities across
numerous industries and occupations will opt to participate in this new
program. As such, the Department expects the size, duration, staff
levels, overhead costs, capital expenditures, and other elements of
IRAPs to vary widely. Consequently, the Department is unable to
accurately quantify all of the potential costs IRAPs may incur.
Several commenters stated that the AAI grant program is not the
best guidepost for estimating the number of SRE applications because
the standards for IRAPs are lower than those for registered
apprenticeship programs and AAI grants are limited to H-1B occupations
and have more requirements than IRAPs do. Another commenter suggested
that the Department should consider that millions of dollars were
awarded to each successful AAI grant application and no similar award
is forthcoming for designation as an SRE, potentially reducing the
number of applicants for SRE designation. Another commenter also
expressed concern with the use of historical projections based on the
AAI grant program and questioned whether there are significant numbers
of potential SREs beyond those that already received Federal grants,
and if so, whether there will be a sustainable 5-percent growth rate
over 10 years.
The Department acknowledges that estimating the number of SRE
applicants using the AAI grant program is subject to data limitations
and uncertainties. However, in the absence of an alternative data
source suggested during the public comment process, the Department has
maintained its methodology and data source for estimating the number of
SRE applicants. With respect to the 5-percent growth rate, the
Department maintains that it is a reasonable estimate given that as
many as 50 occupations are ripe for apprenticeship expansion \20\ and
that this regulation is intended to expand the apprenticeship model
broadly--including to employers and workers that might not previously
have considered participating.
---------------------------------------------------------------------------
\20\ [thinsp]Joseph B. Fuller and Matthew Sigelman, ``Room to
Grow: Identifying New Frontiers for Apprenticeships,'' Nov. 2017, 7-
8, https://www.hbs.edu/managing-the-future-of-work/Documents/room-to-grow.pdf.
---------------------------------------------------------------------------
A commenter stated that the Department is forecasting tepid initial
demand and rapidly declining future demand for the program, reaching
only 32 recognized IRAPs per SRE through the first 10 years, and that
these estimates, if accurate, are likely to deter many organizations
from pursuing recognition as an SRE.
To address America's skills gap, the Department welcomes all
interested entities to submit an application to become a recognized SRE
and encourages SREs to recognize as many qualified programs as
feasible. The Department agrees with the commenter that it is difficult
to accurately forecast future demand for a new program. As such, the
numbers of SREs in the economic analysis are the Department's best
estimation of future demand.
A commenter stated that the 2-hour time estimate for SRE rule
familiarization is low and lacks the executive decision time to
undertake this project. Another commenter stated that the 1-hour time
estimate for IRAP rule familiarization is unrealistic; similarly, a
commenter stated that an IRAP would likely need more time for rule
familiarization than an SRE would.
The Department acknowledges that some entities may take longer than
2 hours to read the rule and become familiar with its requirements, and
that some IRAPs may take longer than 1 hour to do so. On the other
hand, some entities may simply rely on industry-produced fact sheets or
information on the Department's website to familiarize themselves with
the rule, which could take less time than the estimates. The time
burden estimates are assumed to be averages; some entities may take
more time, while others may take less. Furthermore, the commenters did
not provide data for the Department to use to improve its estimates.
Accordingly, the Department has maintained the 2 hours for SRE rule
familiarization and 1 hour for IRAP rule familiarization in the final
rule.
A commenter stated that the time estimate for SREs to complete the
application process assumes that organizations applying for SRE status
already possess all of the policies, procedures, and systems required
in the application form. Another commenter stated that the 2-hour
estimate for completing Section I of the application form would have to
assume an existing program with a Federal EIN and a website in place.
The same commenter contended that the 2-hour estimate for completing
Section II of the application form fails to recognize that some of the
tasks would have to be developed for a new program prior to completing
this section, and that interaction with other departments such as
finance is not accounted for. With respect to Sections III and IV, the
same commenter stated that there are at least 20 tasks per section, but
the estimates do not account for the time to create many of the items
being reported. The same commenter also contended that 5 minutes is
inadequate for completing Sections V and VI.
The final rule's time estimates for completing the SRE application
differ from the time estimates in the NPRM because the Department has
made changes to the application form in an effort to improve and
streamline the process for prospective SREs. The Department anticipates
that a wide variety of entities across numerous industries and
occupational areas will opt to participate in this new program. As
such, the Department expects the nature and experience of applicants to
vary widely. For example, many prospective SREs may already have an
EIN, have systems and procedures in place, and plan to recognize only
one or two small IRAPs; therefore, the Department expects the time
burden for such entities to be lower than the estimates in the
analysis. The time burden estimates in the economic analysis are
assumed to be averages; some entities may take more time to complete
the application, while others may take less.
In response to public comments, the Department increased the time
burden estimates for completing Sections III and IV of the application
to account for an SRE's development of the policies and procedures
required under this rule. Specifically, SREs must develop policies and
procedures related to the following paragraphs: 29.21(b)(6), which
pertains to mitigating conflicts of interest; 29.22(d), which pertains
to consistency in assessing prospective IRAPs; 29.22(f)(5), which
pertains to the suspension or derecognition of an IRAP; 29.22(i), which
pertains to requiring IRAPs to adhere to applicable Federal, State, and
local EEO laws; and 29.22(j), which pertains to addressing complaints
against IRAPs.
A commenter stated that a 70-percent success rate for initial
applicants is too high, that half of rejected applicants reapplying is
too low, and that 1 percent requesting administrative review is too
low.
The Department did not receive a specific estimate or a data source
to substantiate the commenter's statements, so the Department has
continued to rely on its experience with other workforce development
programs and has maintained its estimates in the final rule.
A commenter stated that the 10-percent estimate for the share of
SREs that will be required to supply data or information to the
Administrator under Sec. 29.22(a)(3) seems low.
[[Page 14354]]
The Department acknowledges that the share may be lower or higher
than 10 percent, but without receiving a specific estimate or data
source during the public comment process, the Department has maintained
the 10-percent estimate in the final rule.
A commenter stated that the 80-hour time estimate for SREs' quality
control of IRAPs is not only too low, but should be based on the
estimated number of IRAPs rather than on the estimated number of SREs.
Likewise, the same commenter stated that the 30-hour time estimate for
an SRE to make publicly available performance data from each of its
IRAPs is not only too low, but should be based on the estimated number
of IRAPs rather than on the estimated number of SREs.
The Department took these recommendations under advisement and
revised these two calculations by basing them on the estimated number
of IRAPs rather than on the estimated number of SREs because the time
burden will vary by SRE, depending on the number of IRAPs it
recognizes. Moreover, the estimated time burdens have increased due to
additional requirements in the final rule: (1) SREs must conduct
periodic compliance reviews of IRAPs; (2) SREs must not only publicize
performance data, but also provide performance data to DOL; and (3)
SREs must provide additional performance data, namely attainment of
industry-recognized credentials, average earnings of completers,
training cost per apprentice, and demographic information.
A commenter stated that the 5-minute estimate for disclosure of
wages to apprentices is inadequate because IRAPs will first need to
establish a starting pay structure, and then periodically review and
update the wage scale. Similarly, the same commenter stated that
disclosure of ancillary costs to apprentices will take longer than 5
minutes because IRAPs will have to determine those costs. Moreover, the
commenter stated that both of these disclosure calculations should
apply to 100 percent (rather than 10 percent) of IRAPs because this is
a new program.
The Department expects the nature and experience of IRAPs to vary
widely. For example, some IRAPs may already have a pay structure in
place, have predetermined costs for educational materials, or plan to
train only one or two apprentices. Accordingly, the Department expects
the time burdens to vary widely. The time burden estimates in the
economic analysis are assumed to be averages; some IRAPs may take more
time, while others may take less. That being said, the Department took
a different approach in the final rule in light of the new requirement
at Sec. 29.22(a)(4)(x) for IRAPs to provide a written apprenticeship
agreement. Given that the written apprenticeship agreement will likely
include the disclosure of wages and costs, the Department combined the
three activities into two costs: Develop written apprenticeship
agreements (8 hours per new IRAP) and sign the written apprenticeship
agreements (10 minutes per apprentice).
Several commenters stated that the 1-hour estimate for Step 1 in
the Department's review of applications (i.e., processing by Program
Analysts) seems too low. Furthermore, a commenter stated that the time
estimates for Step 2 (i.e., panel review) and Step 3 (i.e., panel
meeting) do not include additional supervision of the panelists by the
Administrator and assume no conflicting opinions or negotiations over
applications. Commenters also contended that 15 minutes for Step 4
(i.e., review by the Administrator) is inadequate.
The Department acknowledges that the time for reviewing
applications may be higher or lower than the estimates in the economic
analysis, depending on the complexity of the responses, qualifications
of the prospective SRE, quality of the application, etc. The time
burden estimates are assumed to be averages; some applications may take
more time to review, while others may take less. Furthermore, the
commenters did not provide data for the Department to use to improve
its estimates; therefore, the Department maintains that its estimates
in the proposed rule were reasonable averages.
A commenter stated that the costs for review by an Administrative
Law Judge, and all other legal costs, would increase as the number of
appeals increases, and the costs do not include Administrator time
needed to facilitate this review.
The Department agrees that the legal costs would increase as the
number of appeals increases and accounted for this by multiplying the
estimated time burdens by the hourly compensation rates and by the
estimated number of applicants that would request administrative review
in each year of the 10-year analysis period. The estimates were based
on the input of an Administrative Law Judge at the Department. With
respect to the Administrator's time to facilitate this review, that
cost was captured in the subsection titled ``DOL Preparation of
Administrative Record When a Denied Entity Requests Review.'' The
estimated time to prepare an administrative record is 6 hours by a
Program Analyst.
A commenter noted that the annualized costs over the 10-year
analysis period for three activities (i.e., rule familiarization,
completing Section I of the application form, and completing Section II
of the application form) were different although the estimated time (2
hours) and the hourly compensation rate ($113.16) were the same for all
three activities.
The reason for the difference is that SREs must undergo the
Department's process for continued recognition every 5 years; however,
the Department assumes SREs will only need to familiarize themselves
with the rule one time. Accordingly, the same number of entities is
used for both calculations in Years 1-5 (270 in Year 1, 14 in Year 2,
14 in Year 3, 15 in Year 4, and 16 in Year 5) but the numbers differ in
Years 6-10. For rule familiarization, the number of entities is
estimated at 44 in Year 6, 19 in Year 7, 20 in Year 8, 21 in Year 9,
and 22 in Year 10. For the application form, the number of entities is
estimated at 226 in Year 6, 28 in Year 7, 29 in Year 8, 31 in Year 9,
and 32 in Year 10.
A commenter questioned whether SREs have Title VII Uniform
Guidelines on Employee Selection Procedures responsibility for written
test job requirements and, if so, why it is not included the cost
analysis.
This rule does not add a burden to employers related to the Uniform
Guidelines on Employee Selection Procedures under Title VII.
With respect to the IRAP costs that the Department addressed
qualitatively in the proposed rule, a commenter stated that the claim
from the 2016 Department of Commerce study \21\ that many of the costs
of an apprenticeship program would still be incurred if a company
filled the job through another method is ``incorrect'' because the
company would carry none of the training, mentorship, or nonproductive
paid hours that an apprenticeship must assume.
---------------------------------------------------------------------------
\21\ Susan Helper, Ryan Noonan, Jessica R. Nicholson, and David
Langdon, ``The Benefits and Costs of Apprenticeship: A Business
Perspective,'' Nov. 2016, https://files.eric.ed.gov/fulltext/ED572260.pdf.
---------------------------------------------------------------------------
The Department acknowledges that apprenticeships include training,
mentorship, and other costs that hiring an already-trained worker,
contracting a temp worker, or increasing the hours of existing staff
would not entail; however, the Department also recognizes that already-
trained workers, temporary workers, and existing staff are likely to be
paid at a higher rate than
[[Page 14355]]
apprentices, mitigating some of the costs referenced by the commenter.
Without data to substantiate the commenter's claims or provide reliable
estimates of IRAP costs, the Department has retained a qualitative
discussion in the final rule.
A commenter suggested that rather than calling the IRAP model
``apprenticeship,'' the Department should achieve the goal of providing
funding to companies for long-term, on-the-job training through various
other methods such as expanding WIOA or a separate discretionary
funding stream. Another commenter suggested that the Department propose
a policy that leads to higher journeyman wage rates in industries where
the government wants to encourage apprenticeships. Another commenter
remarked that the best way to address ``softness'' in the construction
industry would be a dramatic, 10-year investment in infrastructure. A
fourth commenter cited the annual cost of administering the proposed
rule, remarked that OA does not have enough professional staff to carry
out its mission effectively, and suggested that the Department expand
the resources devoted to traditional apprenticeship instead.
The Department is unable to act on these suggestions as they are
legislative proposals that fall under the purview of the legislative
branch of government (i.e., Congress).
A commenter suggested that, given current U.S. Treasury rates, the
Department should use a 3-percent discount rate rather than a 7-percent
discount rate.
As the commenter noted, the Department is constrained in its
selection of the discount rates by OMB Circular A-4, which instructs
agencies to ``present annualized benefits and costs using real discount
rates of 3 and 7 percent.'' \22\ Accordingly, the Department estimated
the costs of the rule over 10 years at discount rates of both 3 percent
and 7 percent. The Department narrowed its analysis to the 7-percent
discount rate only in the Regulatory Flexibility Analysis because
including two additional columns in each of the 18 industry tables
would be cumbersome and have little impact on the results.
Specifically, the first year cost per IRAP is estimated at $17,796 at a
discount rate of 7 percent, compared to $18,487 at a discount rate of 3
percent. The annualized cost per IRAP is estimated at $9,379 at a
discount rate of 7 percent, compared to $9,049 at a discount rate of 3
percent. Moreover, according to OMB Circular A-4, ``[a]s a default
position, OMB Circular A-94 states that a real discount rate of 7
percent should be used as a base-case for regulatory analysis.''
---------------------------------------------------------------------------
\22\ OMB, ``Circular A-4,'' Sept. 17, 2003, https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf.
---------------------------------------------------------------------------
2. Summary of the Economic Analysis
The Department anticipates that the final rule will result in
benefits and costs for SREs, IRAPs, apprentices, and society. The
benefits of the final rule are described qualitatively in section
III.A.3 (Benefits). The estimated costs are explained in sections
III.A.4 (Quantitative Analysis Considerations), III.A.5 (Subject-by-
Subject Analysis), and III.A.6 (Summary of Costs). The nonquantifiable
costs are described qualitatively in section III.A.7 (Nonquantifiable
Costs). The nonquantifiable transfer payments are described
qualitatively in section III.A.8 (Nonquantifiable Transfer Payments).
Finally, the regulatory alternatives are explained in section III.A.9
(Regulatory Alternatives).
The costs of the final rule for SREs include rule familiarization,
completing the application form, and remaining in an ongoing quality-
control relationship with IRAPs. The costs of the final rule for IRAPs
include rule familiarization and providing performance information to
the SRE. The costs of the final rule for the Federal Government are
associated with development and maintenance of an online SRE
application form, reviewing applications, and development and
maintenance of an online list of SREs and IRAPs.
Exhibit 1 shows the total estimated costs of the final rule over 10
years (2020-2029) at discount rates of 3 percent and 7 percent. The
final rule is expected to have first year costs of $42.3 million in
2018 dollars. Over the 10-year analysis period, the annualized costs
are estimated at $46.5 million at a discount rate of 7 percent in 2018
dollars. In total, over the first 10 years, the final rule is estimated
to result in costs of $326.8 million at a discount rate of 7 percent in
2018 dollars.
[GRAPHIC] [TIFF OMITTED] TR11MR20.000
When the Department uses a perpetual time horizon to allow for cost
comparisons under E.O. 13771, the perpetual annualized cost is
$38,738,885 at a discount rate of 7 percent in 2016 dollars.\23\
---------------------------------------------------------------------------
\23\ To comply with E.O. 13771 accounting, the Department
multiplied the annual cost for Year 10 ($59,248,016) by the GDP
deflator (0.9582) to convert the cost to 2016 dollars ($56,769,601).
The Department used this result for a long-term pattern totaling
$601,417,957 over 20 years with a 7-percent discount rate. The
Department then calculated the present value ($725,411,079) and
perpetual annualized cost ($50,778,776) in 2016 dollars. Assuming
the rule takes effect in 2020, the Department divided $50,778,776 by
1.07\4\, which equals $38,738,885.
---------------------------------------------------------------------------
3. Benefits
This section provides a qualitative description of the anticipated
benefits
[[Page 14356]]
associated with the final rule. The Department expects this regulation
to have a net benefit overall.
Through this regulation, and as explained in the rule's Background
section, above, the Administration seeks to address a persistent and
serious long-term challenge to American economic leadership in the
global marketplace: A significant mismatch between the occupational
competencies that businesses require and the job skills that aspiring
employees possess. While there were 6.4 million job openings in the
United States at the end of 2019,\24\ some openings go unfilled because
there are not enough workers with needed skills.\25\ This pervasive
skills gap poses a serious impediment to job growth and productivity
throughout the economy.
---------------------------------------------------------------------------
\24\ BLS, ``Job Openings and Labor Turnover--December 2019,''
Feb. 11, 2020, https://www.bls.gov/news.release/archives/jolts_02112020.pdf.
\25\ See, e.g., Task Force on Apprenticeship Expansion, ``Final
Report to the President of the United States,'' May 10, 2018, 16
(citing 2018 report from National Federation of Independent
Business); Business Roundtable, ``Closing the Skills Gap,'' https://www.businessroundtable.org/policy-perspectives/education-workforce/closing-the-skills-gap (last visited Dec. 7, 2019).
---------------------------------------------------------------------------
The promotion and expansion of quality apprenticeships can play a
key role in alleviating the skills gap by providing individuals
including young people, women, and other populations with relevant
workplace skills and a recognized credential. This proven workforce
development technique not only helps individuals to move into decent,
family-sustaining jobs, but also assists businesses with finding the
workers they need to maintain their competitive edge. Individuals who
successfully complete an apprenticeship program are estimated to amass
career-long earnings (including employee benefits) that are greater
than the earnings of similarly situated individuals who did not enroll
in such programs.\26\
---------------------------------------------------------------------------
\26\ See, e.g., Mathematica Policy Research, ``An Effectiveness
Assessment and Cost-Benefit Analysis of Registered Apprenticeship in
10 States: Final Report,'' July 25, 2012, https://www.mathematica.org/our-publications-and-findings/publications/an-effectiveness-assessment-and-costbenefit-analysis-of-registered-apprenticeship-in-10-states.
---------------------------------------------------------------------------
The final report of the Task Force noted that ``[w]hile the Federal
Government can establish the framework for a successful apprenticeship
program and provide support, substantial change must begin with
industry-led partnerships playing the pivotal role'' of creating,
recognizing, and managing apprenticeship programs.\27\ Underlying this
approach is the conviction that private industry--rather than
government--is best suited to determine the occupational skills that
workers need to acquire through apprenticeship programs. Such an
industry-led approach will provide employers the flexibility they need
to devise customized programs that serve their specialized business
requirements.
---------------------------------------------------------------------------
\27\ Task Force on Apprenticeship Expansion, ``Final Report to
the President of the United States,'' May 10, 2018, 19.
---------------------------------------------------------------------------
Accordingly, the Department is issuing this regulation, which will
supplement the current system of registered apprenticeships with a
parallel system of IRAPs, thereby enabling the rapid expansion of
quality apprenticeships across a wide range of industries and
occupational areas. This regulation requires SREs to recognize and
maintain recognition of only high-quality IRAPs, which will benefit
apprentices and encourage the expansion of the apprenticeship model.
4. Quantitative Analysis Considerations
The Department estimated the costs of the final rule relative to
the existing baseline (i.e., no IRAPs). In accordance with the
regulatory analysis guidance articulated in OMB Circular A-4 and
consistent with the Department's practices in previous rulemakings,
this regulatory analysis focuses on the likely consequences of the
final rule (i.e., the costs that are expected to accrue to the affected
entities). The analysis covers 10 years to ensure it captures the major
costs that are likely to accrue over time. The Department expresses the
quantifiable impacts in 2018 dollars and uses discount rates of 3 and 7
percent, pursuant to Circular A-4.
a. Estimated Number of Applications and SREs
To calculate the annual costs, the Department first needed to
estimate the number of applications and SREs over the 10-year analysis
period. The Department believes a reliable guidepost for estimating the
number of SRE applications is the number of entities that submitted
grant applications in FY 2016 under OA's AAI grants program. As noted
earlier, commenters did not supply alternative data sources for the
Department to estimate SRE participation.
Like IRAPs, the AAI grant program was designed to encourage
innovative approaches to the development of apprenticeship programs by
a wide cross-section of groups, including private sector employers,
labor unions, educational institutions, and not-for-profit
organizations. In the 4 months during which AAI grant applications were
accepted, OA received 191 applications for grants from the intended
cross-section of program sponsors and innovators. The 191 AAI
applicants were diverse in terms of geography, industry sector, and
apprenticeship-program design. The Department anticipates that the
diversity in AAI applicants will be replicated in the context of this
final rule.
Starting with 191 AAI grantee applicants as a reasonably analogous
baseline, the Department rounded this figure slightly upwards to 200 to
provide for ease of estimation. The Department then reduced this number
by 10 percent to 180 to account for how some entities in industries
that applied for AAI grants may choose not to seek to participate as
IRAPs. The Department then adjusted this figure 50 percent higher to
account for its planned efforts to promote IRAPs in the private sector,
resulting in an estimate of 270 SRE applications in Year 1 (= 180 x
1.5). The Department further estimates that it will recognize
approximately 75 percent of applicants as SREs, either during their
initial submission or their resubmission as permitted under paragraph
29.21(d)(1). Accordingly, the Department estimates that there will be
203 SREs (= 270 x 75%) in Year 1.
To estimate the number of applications and SREs in Years 2-10, the
Department began by assuming that the total number of SREs will
increase by 5 percent per year based on historic growth in the
registered apprenticeship program. For example, in Year 2 the total
number of SREs is estimated to be 213 (= 203 SREs in Year 1 x 1.05).
The last column in Exhibit 2 shows the total number of SREs each year
based on the Department's 5-percent growth rate assumption.
Next, the Department calculated the number of new SREs. For Years
1-5, the estimated number of new SREs is simply the difference between
the total number of SREs each year. For example, in Year 5 the number
of new SREs is estimated to be 12 (= 247 total SREs in Year 5--235
total SREs in Year 4).\28\ But in Year 6, the calculation has an
additional component because SREs will be recognized for 5 years, so
SREs that wish to be recognized for another 5 years will need to
undergo the Department's process for continued recognition. For
purposes of this analysis, the Department estimates that
[[Page 14357]]
90 percent of SREs will undergo the Department's process for continued
recognition. Thus, 183 SREs (= 203 new SREs in Year 1 x 90%) will
submit applications for continued recognition in Year 6. The Department
estimates that there will be 33 new SREs in Year 6, which reflects the
5-percent growth between Year 5 and Year 6 (259-247 = 12),\29\ plus new
SREs that will supplant the 10 percent of Year 1 SREs that do not
submit applications for continued recognition in Year 6 (203-183 =
20).\30\ This same calculation was used for Years 7-10.
---------------------------------------------------------------------------
\28\ Note: 12 / 235 = 5 percent, which is the estimated growth
rate for total SREs.
\29\ Note: 12 / 247 = 5 percent, which is the estimated growth
rate for total SREs.
\30\ The numbers do not sum to the total due to rounding. After
calculating the estimated numbers of applications and SREs, the
Department rounded the numbers to integers to use in the remaining
calculations in this analysis.
---------------------------------------------------------------------------
Then, the Department estimated the number of new applications in
Years 2-10 by dividing the number of new SREs each year by 75 percent
since 75 percent of applicants are assumed to become recognized as
SREs. For example, in Year 6, the number of new applications is
estimated to be 44 (= 33 new SREs / 75%).
The number of applications for continued recognition was calculated
by multiplying the number of new SREs 5 years prior by 90 percent since
the Department assumes that 90 percent of SREs will undergo the
Department's process for continued recognition. For example, the
Department estimates that 183 SREs (= 203 new SREs in Year 1 x 90%)
will submit applications for continued recognition in Year 6, and that
9 SREs (= 10 new SREs in Year 2 x 90%) will submit applications for
continued recognition in Year 7.
Finally, the number of total applications each year was estimated
by summing the estimated number of new applications and the estimated
number of applications for continued recognition each year. For
example, in Year 1 the total number of applications is estimated to be
270 (= 270 new applications + 0 applications for continued
recognition), while in Year 6 the total number of applications is
estimated to be 226 (= 44 new applications + 183 applications for
continued recognition).\31\
---------------------------------------------------------------------------
\31\ The numbers do not sum to the total due to rounding.
---------------------------------------------------------------------------
Exhibit 2 presents the projected number of applications and SREs
for each year of the analysis period.
[GRAPHIC] [TIFF OMITTED] TR11MR20.001
b. Estimated Number of IRAPs
To estimate the number of IRAPs, the Department looked at the
number of programs in the registered apprenticeship system in relevant
contexts and, based on those data and related considerations, estimated
that each SRE will recognize approximately 32 IRAPs. The recognition of
all 32 IRAPs is not likely to occur immediately after an SRE is
recognized by the Department; rather, an SRE will probably recognize
additional programs each year so that by the end of its tenth year, the
SRE will have recognized 32 programs. For purposes of this analysis,
the Department estimates that an SRE will recognize 10 new IRAPs in its
1st year as an SRE, 8 new IRAPs in its 2nd year, 5 new IRAPs in its 3rd
year, 3 new IRAPs in its 4th year, and 1 new IRAP per year in its 5th
through 10th years.
Based on these assumptions, the number of new IRAPs in Year 1 is
estimated to be 2,030 (= 203 new SREs in Year 1 x 10 new IRAPs per
SRE). The number of new IRAPs in Year 2 is estimated to be 1,724 [=
(203 new SREs in Year 1 x 8 new IRAPs per SRE) + (10 new SREs in Year 2
x 10 new IRAPs per SRE)]. As explained above, the Department assumes
that 90 percent of SREs will undergo the Department's process for
continued recognition, so in Year 6 the estimated number of new Year 1
SREs will shrink to 183 (= 203 new SREs in Year 1 x 90%). Accordingly,
the number of new IRAPs in Year 6 is estimated to be 707 [= (183 Year 1
SREs with continued recognition x 1 new IRAPs per SRE) + (10 new SREs
in Year 2 x 1 new IRAPs per SRE) + (11 new SREs in Year 3 x 3 new IRAPs
per SRE) + (11 new SREs in Year 4 x 5 new IRAPs per SRE) + (12 new SREs
in Year 5 x 8 new IRAPs per SRE) + (33 new SREs in Year 6 x 10 new
IRAPs per SRE)].
The total number of IRAPs per SRE equals the cumulative total of
new IRAPs per SRE. So, a new SRE in Year 1 is estimated to have
recognized a total of 18 IRAPs in Year 2 (= 10 new IRAPs in Year 1 + 8
new IRAPs in Year 2). Therefore, the total number of IRAPs in Year 2 is
estimated to be 3,754 [= (203 new SREs in Year 1 x 18 total IRAPs per
[[Page 14358]]
SRE) + (10 new SREs in Year 2 x 10 total IRAPs per SRE)]. As explained
above, the estimated number of new Year 1 SREs is expected to shrink to
183 in Year 6. Accordingly, the total number of IRAPs in Year 6 is
estimated to be 6,479 [= (183 Year 1 SREs with continued recognition x
28 total IRAPs per SRE) + (10 new SREs in Year 2 x 27 total IRAPs per
SRE) + (11 new SREs in Year 3 x 26 total IRAPs per SRE) + (11 new SREs
in Year 4 x 23 total IRAPs per SRE) + (12 new SREs in Year 5 x 18 total
IRAPs per SRE) + (33 new SREs in Year 6 x 10 total IRAPs per SRE)].
Exhibit 3 presents the projected number of IRAPs over the 10-year
analysis period.
[GRAPHIC] [TIFF OMITTED] TR11MR20.002
c. Estimated Number of Apprentices
To estimate the number of apprentices, the Department looked at the
number of apprentices in the registered apprenticeship system and,
based on those data and related considerations, estimated that each
IRAP will have an average of 35 apprentices. Also, given that the
duration of programs may vary widely (from weeks to years), the
Department used an average duration of 1 year in its calculations.
Exhibit 4 presents the projected number of apprentices over the 10-
year analysis period.
[GRAPHIC] [TIFF OMITTED] TR11MR20.003
d. Compensation Rates
The Department anticipates that the bulk of the workload for
private sector workers will be performed by employees in occupations
similar to those associated with the following SOC codes: SOC 11-3131
(Training and Development Managers) and SOC 43-0000 (Office and
Administrative Support Occupations).
According to BLS, the mean hourly wage rate for Training and
Development Managers in May 2018 was $58.53.\32\ For this analysis, the
Department used a fringe benefits rate of 46 percent \33\ and an
overhead rate of 54 percent,\34\
[[Page 14359]]
resulting in a fully loaded hourly compensation rate for Training and
Development Managers of $117.06 [= $58.53 + ($58.53 x 46%) + ($58.53 x
54%)].
---------------------------------------------------------------------------
\32\ BLS, ``Occupational Employment and Wages, May 2018,''
https://www.bls.gov/oes/current/oes113131.htm.
\33\ BLS, ``Employer Costs for Employee Compensation,'' https://www.bls.gov/ncs/data.htm (last visited Dec. 7, 2019). Wages and
salaries averaged $24.86 per hour worked in 2018, while benefit
costs averaged $11.52, which is a benefits rate of 46 percent.
\34\ U.S. Department of Health and Human Services (HHS),
``Guidelines for Regulatory Impact Analysis,'' 2016, https://aspe.hhs.gov/system/files/pdf/242926/HHS_RIAGuidance.pdf. In its
guidelines, HHS states, as ``an interim default, while HHS conducts
more research, analysts should assume overhead costs (including
benefits) are equal to 100 percent of pre-tax wages.'' HHS explains
that 100 percent is roughly the midpoint between 46 and 150 percent,
with 46 percent based on ECEC data that suggest benefits average 46
percent of wages and salaries, and 150 percent based on the private
sector ``rule of thumb'' that fringe benefits plus overhead equal
150 percent of wages. To isolate the overhead costs from HHS's 100-
percent assumption, the Department subtracted the 46-percent
benefits rate that HHS references, resulting in an overhead rate of
approximately 54 percent.
---------------------------------------------------------------------------
According to BLS, the mean hourly wage rate for Office and
Administrative Support Occupations in May 2018 was $18.75.\35\ The
Department used a fringe benefits rate of 46 percent and an overhead
rate of 54 percent, resulting in a fully loaded hourly compensation
rate for Office and Administrative Support Occupations of $37.50 [=
$18.75 + ($18.75 x 46%) + ($18.75 x 54%)].
---------------------------------------------------------------------------
\35\ BLS, ``Occupational Employment and Wages, May 2018,''
https://www.bls.gov/oes/current/oes430000.htm.
---------------------------------------------------------------------------
The compensation rate for the Administrator of OA is based on the
salary of a Federal employee at Level IV of the Senior Executive
Service, which is $166,500 per annum;\36\ the corresponding hourly base
pay for an SES at this level is $80.05 (= $166,500 / 2,080 hours). The
Department used a fringe benefits rate of 69 percent \37\ and an
overhead rate of 54 percent, resulting in a fully loaded hourly
compensation rate for the Administrator of $178.51 [= $80.05 + ($80.05
x 69%) + ($80.05 x 54%)].
---------------------------------------------------------------------------
\36\ Office of Personnel Management, ``Rates of Basic Pay for
the Executive Schedule,'' https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2019/EX.pdf (last visited
Dec. 7, 2019).
\37\ Congressional Budget Office, ``Comparing the Compensation
of Federal and Private-Sector Employees, 2011 to 2015,'' Apr. 25,
2017, https://www.cbo.gov/publication/52637. The wages of Federal
workers averaged $38.30 per hour over the study period, while the
benefits averaged $26.50 per hour, which is a benefits rate of 69
percent.
---------------------------------------------------------------------------
The compensation rate for a Program Analyst in OA was estimated
using the midpoint (Step 5) for Grade 13 of the General Schedule, which
is $53.85 in the Washington, DC, locality area.\38\ The Department used
a fringe benefits rate of 69 percent and an overhead rate of 54
percent, resulting in a fully loaded hourly compensation rate for
Program Analysts of $120.09 [= $53.85 + ($53.85 x 69%) + ($53.85 x
54%)].
---------------------------------------------------------------------------
\38\ Office of Personnel Management, ``General Schedule (GS)
Locality Pay Tables,'' https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2019/DCB_h.pdf (last
visited Dec. 7, 2019).
---------------------------------------------------------------------------
The compensation rate for an Administrative Law Judge is based on
the salary of a Federal Administrative Law Judge at AL-3 Rate F, which
is $176,900 per annum; \39\ the corresponding hourly base pay for an
Administrative Law Judge at this level is $85.05 (= $174,500 / 2,080
hours). The Department used a fringe benefits rate of 69 percent and an
overhead rate of 54 percent, resulting in a fully loaded hourly
compensation rate for an Administrative Law Judge of $189.66 [= $85.05
+ ($85.05 x 69%) + ($85.05 x 54%)].
---------------------------------------------------------------------------
\39\ Office of Personnel Management, ``Administrative Law Judges
Locality Rates of Pay,'' https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2019/ALJ_LOC.pdf (last
visited Dec. 7, 2019).
---------------------------------------------------------------------------
The compensation rate for a Staff Attorney in the Department's
Office of Administrative Law Judges was estimated using the highest
level (Step 10) for Grade 15 of the General Schedule, which is $79.78
in the Washington, DC, locality area.\40\ The Department used a fringe
benefits rate of 69 percent and an overhead rate of 54 percent,
resulting in a fully loaded hourly compensation rate for Staff
Attorneys of $177.91 [= $79.78 + ($79.78 x 69%) + ($79.78 x 54%)].
---------------------------------------------------------------------------
\40\ Office of Personnel Management, ``General Schedule (GS)
Locality Pay Tables,'' https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2019/DCB_h.pdf (last
visited Dec. 7, 2019).
---------------------------------------------------------------------------
The compensation rates for a Legal Assistant and Law Clerk in the
Department's Office of Administrative Law Judges were estimated using
the midpoint (Step 5) for Grade 11 of the General Schedule, which is
$37.79 in the Washington, DC, locality area.\41\ The Department used a
fringe benefits rate of 69 percent and an overhead rate of 54 percent,
resulting in a fully loaded hourly compensation rate for Legal
Assistants and Law Clerks of $84.27 [= $37.79 + ($37.79 x 69%) +
($37.79 x 54%)].
---------------------------------------------------------------------------
\41\ Id.
---------------------------------------------------------------------------
The compensation rate for a Paralegal in the Department's Office of
Administrative Law Judges was estimated using the midpoint (Step 5) for
Grade 7 of the General Schedule, which is $25.53 in the Washington, DC,
locality area.\42\ The Department used a fringe benefits rate of 69
percent and an overhead rate of 54 percent, resulting in a fully loaded
hourly compensation rate for Paralegals of $56.93 [= $25.53 + ($25.53 x
69%) + ($25.53 x 54%)].
---------------------------------------------------------------------------
\42\ Id.
---------------------------------------------------------------------------
The Department used the hourly compensation rates presented in
Exhibit 5 throughout this analysis to estimate the labor costs for each
provision.
[GRAPHIC] [TIFF OMITTED] TR11MR20.004
[[Page 14360]]
5. Subject-by-Subject Analysis
The Department's subject-by-subject analysis covers the estimated
costs of the final rule. The hourly time burdens and other estimates
used to quantify the costs are largely based on the Department's
experience with the registered apprenticeship program.
a. Costs
(1) Rule Familiarization
When the final rule takes effect, prospective SREs will need to
familiarize themselves with the new regulation, thereby incurring a
one-time cost. To estimate the cost of rule familiarization for the 10-
year period of this analysis, the Department multiplied the projected
number of new SRE applications in each year by the estimated time to
review the rule (2 hours) and by the hourly compensation rate for
Training and Development Managers ($117.06 per hour). For example, the
projected number of new SRE applications in Year 1 is 270, so the
estimated Year 1 cost is $63,212 (= 270 new SRE applications x 2 hours
x $117.06 per hour). The annualized cost over the 10-year analysis
period is estimated at $11,413 at a discount rate of 3 percent and
$12,475 at a discount rate of 7 percent. The total cost over the 10-
year analysis period is estimated at $97,353 at a discount rate of 3
percent and $87,617 at a discount rate of 7 percent.
In addition, prospective IRAPs will need to familiarize themselves
with elements of the new rule. To estimate the cost of rule
familiarization for IRAPs, the Department multiplied the projected
number of new IRAPs in each year by the estimated time to review the
rule (1 hour) and by the hourly compensation rate for Training and
Development Managers ($117.06 per hour). For example, the projected
number of new IRAPs in Year 1 is 2,030, so the estimated Year 1 cost is
$237,632 (= 2,030 new IRAPs x 1 hour x $117.06 per hour). The
annualized cost over the 10-year analysis period is estimated at
$117,700 at a discount rate of 3 percent and $123,119 at a discount
rate of 7 percent. The total cost over the 10-year analysis period is
estimated at $1,004,009 at a discount rate of 3 percent and $864,738 at
a discount rate of 7 percent.
(2) SRE Applications
To become a recognized SRE, an entity will need to submit an
application to the Department, and then the Administrator will
determine whether the entity is qualified to be an SRE. The application
titled ``Industry-Recognized Apprenticeship Program Standards
Recognition Entity Application'' contains five sections. The estimated
costs for completing each section are detailed below.
(i) Section I--Standards Recognition Entity Identifying Information
The estimated average response time for a prospective SRE to
provide the identifying information requested in Section I is
approximately 2 hours, which includes the time to gather and attach the
documentation for this section. To estimate the costs for completing
Section I over the 10-year analysis period, the Department multiplied
the projected number of SRE applications in each year by the estimated
time to complete Section I (2 hours) and by the hourly compensation
rate for Training and Development Managers ($117.06 per hour). For
example, the projected number of SRE applications in Year 1 is 270, so
the estimated Year 1 cost is $63,212 (= 270 SRE applications x 2 hours
x $117.06 per hour). The annualized cost over the 10-year analysis
period is estimated at $16,407 at a discount rate of 3 percent and
$17,229 at a discount rate of 7 percent. The total cost over the 10-
year analysis period is estimated at $139,951 at a discount rate of 3
percent and $121,012 at a discount rate of 7 percent.
(ii) Section II--Capabilities and Experience of the Standards
Recognition Entity
The estimated average response time for a prospective SRE to
describe its operations, capabilities, experience, and qualifications
to be an SRE is approximately 5 hours, including the time to gather the
necessary documentation. To estimate the costs for completing Section
II over the 10-year analysis period, the Department multiplied the
projected number of SRE applications in each year by the estimated time
to complete Section II (5 hours) and by the hourly compensation rate
for Training and Development Managers ($117.06 per hour). For example,
the projected number of SRE applications in Year 1 is 270, so the
estimated Year 1 cost is $158,031 (= 270 SRE applications x 5 hours x
$117.06 per hour). The annualized cost over the 10-year analysis period
is estimated at $41,016 at a discount rate of 3 percent and $43,074 at
a discount rate of 7 percent. The total cost over the 10-year analysis
period is estimated at $349,877 at a discount rate of 3 percent and
$302,531 at a discount rate of 7 percent.
(iii) Section III--Evaluating and Monitoring Elements of a High-Quality
Apprenticeship Program
The estimated average response time for a new SRE applicant to
provide information regarding the elements of the IRAPs it will
recognize is 60 hours, including the time to develop the pertinent
policies and procedures. Because an SRE applying for continued
recognition will already have policies and procedures in place, the
estimated average response time for an SRE applying for continued
recognition in Years 6-10 is 6 hours. To estimate the costs for
completing Section III over the 10-year analysis period, the Department
multiplied the projected number of new SRE applications in each year by
the estimated time to complete Section III (60 hours) and by the hourly
compensation rate for Training and Development Managers ($117.06 per
hour). Then, the Department added the product of the projected number
of SRE applications for continued recognition in each year and the
estimated time to complete Section III (6 hours) and the hourly
compensation rate for Training and Development Managers ($117.06 per
hour). For example, the projected number of new SRE applications in
Year 6 is 44 and the projected number of SRE applications for continued
recognition is 183, so the estimated Year 6 cost is $437,570 [= (44 new
SRE applications x 60 hours x $117.06 per hour) + (183 SRE applications
for continued recognition x 6 hours x $117.06 per hour)]. The
annualized cost over the 10-year analysis period is estimated at
$357,558 at a discount rate of 3 percent and $388,682 at a discount
rate of 7 percent. The total cost over the 10-year analysis period is
estimated at $3,050,043 at a discount rate of 3 percent and $2,729,943
at a discount rate of 7 percent.
(iv) Section IV--Policies and Procedures
The estimated average response time for a new SRE applicant to
provide information concerning its proposed policies and procedures for
recognizing and quality control of IRAPs is 40 hours, including the
time to develop the pertinent policies and procedures. Because an SRE
applying for continued recognition will already have policies and
procedures in place, the estimated average response time for an SRE
applying for continued recognition in Years 6-10 is 4 hours. To
estimate the costs for completing Section IV over the 10-year analysis
period, the Department multiplied the projected number of new SRE
applications in each year by the estimated time to complete Section IV
[[Page 14361]]
(40 hours) and by the hourly compensation rate for Training and
Development Managers ($117.06 per hour). Then, the Department added the
product of the projected number of SRE applications for continued
recognition in each year and the estimated time to complete Section IV
(4 hours) and the hourly compensation rate for Training and Development
Managers ($117.06 per hour). For example, the projected number of new
SRE applications in Year 6 is 44 and the projected number of SRE
applications for continued recognition is 183, so the estimated Year 6
cost is $291,714 [(= 44 new SRE applications x 40 hours x $117.06 per
hour) + (183 SRE applications for continued recognition x 4 hours x
$117.06 per hour)]. The annualized cost over the 10-year analysis
period is estimated at $238,372 at a discount rate of 3 percent and
$259,122 at a discount rate of 7 percent. The total cost over the 10-
year analysis period is estimated at $2,033,362 at a discount rate of 3
percent and $1,819,962 at a discount rate of 7 percent.
(v) Section V--Attestation
The Department estimates that it will take 10 minutes for each
prospective SRE to review the application for completeness and to sign
it. To estimate the costs for completing Section V over the 10-year
analysis period, the Department multiplied the projected number of SRE
applications in each year by the estimated time to complete Section V
(10 minutes) and by the hourly compensation rate for Training and
Development Managers ($117.06 per hour). For example, the projected
number of SRE applications in Year 1 is 270, so the estimated Year 1
cost is $5,373 (= 270 SRE applications x 10 minutes x $117.06 per
hour). The annualized cost over the 10-year analysis period is
estimated at $1,395 at a discount rate of 3 percent and $1,465 at a
discount rate of 7 percent. The total cost over the 10-year analysis
period is estimated at $11,896 at a discount rate of 3 percent and
$10,286 at a discount rate of 7 percent.
(3) Resubmitting an Application
If a prospective SRE is denied recognition, it may resubmit its
application after remedying any deficiencies. For purposes of this
analysis, the Department estimates that approximately 30 percent of
applications will be denied on the first attempt, and that 50 percent
of the denied applications will be resubmitted after the deficiencies
have been addressed, which means 15 percent of all applications will be
resubmitted. The Department estimates that remedying the deficiencies
and resubmitting the application will take approximately 16 hours. To
estimate these costs over the 10-year analysis period, the Department
multiplied the projected number of SRE applications in each year by 15
percent, and then multiplied that product by the estimated time to
resubmit the application (16 hours) and by the hourly compensation rate
for Training and Development Managers ($117.06 per hour). For example,
the projected number of SRE applications in Year 1 is 270, so the
estimated Year 1 cost is $75,855 (= 270 SRE applications x 15% x 16
hours x $117.06 per hour). The annualized cost over the 10-year
analysis period is estimated at $19,688 at a discount rate of 3 percent
and $20,675 at a discount rate of 7 percent. The total cost over the
10-year analysis period is estimated at $167,941 at a discount rate of
3 percent and $145,215 at a discount rate of 7 percent.
(4) Request for Administrative Review of Denial
If a prospective SRE is denied recognition, it may request
administrative review by the Department's Office of Administrative Law
Judges. For purposes of this analysis, the Department estimates that
approximately 1 percent of all applications will request administrative
review and that filing a request for administrative review will take
approximately 60 hours. To estimate these costs over the 10-year
analysis period, the Department multiplied the projected number of SRE
applications in each year by 1 percent, and then multiplied that
product by the estimated time to file a request for administrative
review (60 hours) and by the hourly compensation rate for Training and
Development Managers ($117.06 per hour). For example, the projected
number of SRE applications in Year 1 is 270, so the estimated Year 1
cost is $18,964 (= 270 SRE applications x 1% x 60 hours x $117.06 per
hour). The annualized cost over the 10-year analysis period is
estimated at $3,717 at a discount rate of 3 percent and $4,029 at a
discount rate of 7 percent. The total cost over the 10-year analysis
period is estimated at $31,705 at a discount rate of 3 percent and
$28,300 at a discount rate of 7 percent.
(5) Notification of Right To File Complaint Against IRAP
Pursuant to Sec. 29.22(k), an SRE must notify the public about the
right of an apprentice, a prospective apprentice, the apprentice's
authorized representative, a personnel certification body, or an
employer, to file a complaint with the SRE against an IRAP and the
requirements for filing a complaint. For example, the SRE could provide
the information online, on a poster, or in a handbook. The Department
estimates that it will take 1 hour for a Training and Development
Manager to comply with this provision. To estimate the costs over the
10-year analysis period, the Department multiplied the projected number
of new SREs in each year by the estimated time to notify the public (1
hour) and by the hourly compensation rate for Training and Development
Managers ($117.06 per hour). For example, the projected number of new
SREs in Year 1 is 203, so the estimated Year 1 cost is $23,763 (= 203
new SREs x 1 hour x $117.06 per hour). The annualized cost over the 10-
year analysis period is estimated at $4,267 at a discount rate of 3
percent and $4,669 at a discount rate of 7 percent. The total cost over
the 10-year analysis period is estimated at $36,402 at a discount rate
of 3 percent and $32,790 at a discount rate of 7 percent.
(6) Notification of Right To File Complaint Against SRE
Pursuant to Sec. 29.22(l), an SRE must notify the public about the
right to file a complaint against it with the Administrator. For
example, the SRE could provide the information online, on a poster, or
in a handbook. The Department estimates that it will take 1 hour for a
Training and Development Manager to comply with this provision. To
estimate the costs over the 10-year analysis period, the Department
multiplied the projected number of new SREs in each year by the
estimated time to notify the public (1 hour) and by the hourly
compensation rate for Training and Development Managers ($117.06 per
hour). For example, the projected number of new SREs in Year 1 is 203,
so the estimated Year 1 cost is $23,763 (= 203 new SREs x 1 hour x
$117.06 per hour). The annualized cost over the 10-year analysis period
is estimated at $4,267 at a discount rate of 3 percent and $4,669 at a
discount rate of 7 percent. The total cost over the 10-year analysis
period is estimated at $36,402 at a discount rate of 3 percent and
$32,790 at a discount rate of 7 percent.
(7) Notification of Substantive Changes by SRE
In accordance with Sec. 29.21(c)(2), an SRE will need to notify
the Administrator and provide all related material if it makes a
substantive change to its processes or seeks to recognize IRAPs in
additional industries, occupational areas, or geographical
[[Page 14362]]
areas. The Department estimates that approximately 50 percent of SREs
will make a substantive change each year and that complying with this
provision will take approximately 10 hours. To estimate these costs
over the 10-year analysis period, the Department multiplied the
projected number of SREs in each year by 50 percent, and then
multiplied that product by the estimated time to comply with this
provision (10 hours) and by the hourly compensation rate for Training
and Development Managers ($117.06 per hour). For example, the projected
number of SREs in Year 1 is 203, so the estimated Year 1 cost is
$118,816 (= 203 SREs x 50% x 10 hours x $117.06 per hour). The
annualized cost over the 10-year analysis period is estimated at
$147,719 at a discount rate of 3 percent and $145,478 at a discount
rate of 7 percent. The total cost over the 10-year analysis period is
estimated at $1,260,072 at a discount rate of 3 percent and $1,021,779
at a discount rate of 7 percent.
(8) Recognition or Rejection of Apprenticeship Programs Seeking
Recognition
In accordance with paragraph 29.22(a)(1), an SRE will need to
recognize or reject a prospective IRAP in a timely manner. Moreover, in
accordance with Sec. 29.22(b), an SRE will need to validate its IRAPs'
compliance with the requirements listed in Sec. 29.22(a)(4) when the
SRE provides the Administrator with notice of recognition of an IRAP.
The Department estimates that complying with these two provisions will
take approximately 12 hours per program seeking recognition per year.
The Department used the estimated number of new IRAPs as a proxy for
this calculation, anticipating that the vast majority of programs
seeking recognition will be recognized. To estimate these costs over
the 10-year analysis period, the Department multiplied the projected
number of new IRAPs in each year by the estimated time to comply with
this provision (12 hours) and by the hourly compensation rate for
Training and Development Managers ($117.06 per hour). For example, the
projected number of new IRAPs in Year 1 is 2,030, so the estimated Year
1 cost is $2,851,582 (= 2,030 IRAPs x 12 hours x $117.06 per hour). The
annualized cost over the 10-year analysis period is estimated at
$1,412,406 at a discount rate of 3 percent and $1,477,430 at a discount
rate of 7 percent. The total cost over the 10-year analysis period is
estimated at $12,048,109 at a discount rate of 3 percent and
$10,376,853 at a discount rate of 7 percent.
(9) Inform Administrator of IRAP Recognition, Suspension, or
Derecognition
In accordance with Sec. 29.22(a)(2), an SRE will need to inform
the Administrator when it has recognized, suspended, or derecognized an
IRAP. The Department estimates that complying with this provision will
take approximately 30 minutes per year. To estimate these costs over
the 10-year analysis period, the Department multiplied the projected
number of SREs in each year by the estimated time to comply with this
provision (30 minutes) and by the hourly compensation rate for Training
and Development Managers ($117.06 per hour). For example, the projected
number of SREs in Year 1 is 203, so the estimated Year 1 cost is
$11,882 (= 203 SREs x 30 minutes x $117.06 per hour). The annualized
cost over the 10-year analysis period is estimated at $14,772 at a
discount rate of 3 percent and $14,548 at a discount rate of 7 percent.
The total cost over the 10-year analysis period is estimated at
$126,007 at a discount rate of 3 percent and $102,178 at a discount
rate of 7 percent.
(10) Provision of Data or Information to the Administrator
In accordance with Sec. 29.22(a)(3), an SRE will need to provide
to the Administrator any data or information the Administrator is
expressly authorized to collect. The Department estimates that
approximately 10 percent of SREs will need to provide additional data
or information each year and that complying with this provision will
take approximately 2 hours per year. To estimate these costs over the
10-year analysis period, the Department multiplied the projected number
of SREs in each year by 10 percent, and then multiplied that product by
the estimated time to comply with this provision (2 hours) and by the
hourly compensation rate for Training and Development Managers ($117.06
per hour). For example, the projected number of SREs in Year 1 is 203,
so the estimated Year 1 cost is $4,753 (= 203 SREs x 10% x 2 hours x
$117.06 per hour). The annualized cost over the 10-year analysis period
is estimated at $5,909 at a discount rate of 3 percent and $5,819 at a
discount rate of 7 percent. The total cost over the 10-year analysis
period is estimated at $50,403 at a discount rate of 3 percent and
$40,871 at a discount rate of 7 percent.
(11) Provision of Written Attestation to the Administrator
In accordance with Sec. 29.22(b), an SRE must provide the
Administrator an annual written attestation that its IRAPs meet the
requirements of Sec. 29.22(a)(4) and any other requirements of the
SRE. The Department estimates that complying with this provision will
take SREs approximately 10 minutes per IRAP. To estimate these costs
over the 10-year analysis period, the Department multiplied the
projected number of IRAPs in each year by 10 minutes and by the hourly
compensation rate for Training and Development Managers ($117.06 per
hour). For example, the projected number of IRAPs in Year 1 is 2,030,
so the estimated Year 1 cost is $40,397 (= 2,030 IRAPs x 10 minutes x
$117.06 per hour). The annualized cost over the 10-year analysis period
is estimated at $119,607 at a discount rate of 3 percent and $115,230
at a discount rate of 7 percent. The total cost over the 10-year
analysis period is estimated at $1,020,268 at a discount rate of 3
percent and $809,325 at a discount rate of 7 percent.
(12) SREs' Disclosure of Credentials That Apprentices Will Earn
In accordance with Sec. 29.22(c), an SRE will need to disclose the
credential(s) that apprentices will earn during their successful
participation in or upon completion of an IRAP. An SRE could disclose
these credentials on its website, for example. The Department estimates
that complying with this provision will take approximately 30 minutes
per year. To estimate these costs over the 10-year analysis period, the
Department multiplied the projected number of SREs in each year by the
estimated time to comply with this provision (30 minutes) and by the
hourly compensation rate for Training and Development Managers ($117.06
per hour). For example, the projected number of SREs in Year 1 is 203,
so the estimated Year 1 cost is $11,882 (= 203 SREs x 30 minutes x
$117.06 per hour). The annualized cost over the 10-year analysis period
is estimated at $14,772 at a discount rate of 3 percent and $14,548 at
a discount rate of 7 percent. The total cost over the 10-year analysis
period is estimated at $126,007 at a discount rate of 3 percent and
$102,178 at a discount rate of 7 percent.
(13) SREs' Quality Control of IRAPs
In accordance with Sec. 29.22(f), an SRE will need to remain in an
ongoing quality-control relationship with the IRAPs it has recognized,
including periodic compliance reviews of its
[[Page 14363]]
IRAPs. The Department estimates that complying with this provision will
take an SRE approximately 4 hours per IRAP. To estimate these costs
over the 10-year analysis period, the Department multiplied the
projected number of IRAPs in each year by the estimated time to comply
with this provision (4 hours) and by the hourly compensation rate for
Training and Development Managers ($117.06 per hour). For example, the
projected number of IRAPs in Year 1 is 2,030, so the estimated Year 1
cost is $950,527 (= 2,030 IRAPs x 4 hours x $117.06 per hour). The
annualized cost over the 10-year analysis period is estimated at
$2,814,272 at a discount rate of 3 percent and $2,711,287 at a discount
rate of 7 percent. The total cost over the 10-year analysis period is
estimated at $24,006,312 at a discount rate of 3 percent and
$19,042,948 at a discount rate of 7 percent.
(14) Performance Data Reporting
In accordance with Sec. 29.22(h), an SRE must report to the
Administrator performance data for each IRAP it recognizes. Assuming
the SRE will submit the information via the online portal that will be
developed by OA, the Department estimates that complying with this
provision will take an SRE approximately 4 hours per IRAP. To estimate
these costs over the 10-year analysis period, the Department multiplied
the projected number of IRAPs in each year by the estimated time to
comply with this provision (4 hours) and by the hourly compensation
rate for Training and Development Managers ($117.06 per hour). For
example, the projected number of IRAPs in Year 1 is 2,030, so the
estimated Year 1 cost is $950,527 (= 2,030 IRAPs x 4 hours x $117.06
per hour). The annualized cost over the 10-year analysis period is
estimated at $2,814,272 at a discount rate of 3 percent and $2,711,287
at a discount rate of 7 percent. The total cost over the 10-year
analysis period is estimated at $24,006,312 at a discount rate of 3
percent and $19,042,948 at a discount rate of 7 percent.
In accordance with Sec. 29.22(h), an SRE must also make publicly
available performance data for each IRAP it recognizes. The Department
estimates that complying with this provision will take an SRE
approximately 2 hours per IRAP. To estimate these costs over the 10-
year analysis period, the Department multiplied the projected number of
IRAPs in each year by the estimated time to comply with this provision
(2 hours) and by the hourly compensation rate for Training and
Development Managers ($117.06 per hour). For example, the projected
number of IRAPs in Year 1 is 2,030, so the estimated Year 1 cost is
$475,264 (= 2,030 IRAPs x 2 hours x $117.06 per hour). The annualized
cost over the 10-year analysis period is estimated at $1,407,136 at a
discount rate of 3 percent and $1,355,644 at a discount rate of 7
percent. The total cost over the 10-year analysis period is estimated
at $12,003,156 at a discount rate of 3 percent and $9,521,474 at a
discount rate of 7 percent.
In order for an SRE to comply with these provisions, the IRAPs it
recognizes will need to provide the pertinent performance data. The
Department estimates that it will take IRAPs approximately 25 hours per
year to collect and provide the relevant data. To estimate these costs
over the 10-year analysis period, the Department multiplied the
projected number of IRAPs in each year by 25 hours and by the hourly
compensation rate for Training and Development Managers ($117.06 per
hour). For example, the projected number of IRAPs in Year 1 is 2,030,
so the estimated Year 1 cost is $5,940,795 (= 2,030 IRAPs x 25 hours x
$117.06 per hour). The annualized cost over the 10-year analysis period
is estimated at $17,589,201 at a discount rate of 3 percent and
$16,945,546 at a discount rate of 7 percent. The total cost over the
10-year analysis period is estimated at $150,039,452 at a discount rate
of 3 percent and $119,018,422 at a discount rate of 7 percent.
(15) SREs' Public Notification of Fees
Pursuant to Sec. 29.22(n), an SRE must publicly disclose any fees
it charges to IRAPs. An SRE could disclose its fees on its website, for
example. The Department estimates that complying with this provision
will take approximately 1 hour per year. To estimate these costs over
the 10-year analysis period, the Department multiplied the projected
number of SREs in each year by the estimated time to comply with this
provision (1 hour) and by the hourly compensation rate for Training and
Development Managers ($117.06 per hour). For example, the projected
number of SREs in Year 1 is 203, so the estimated Year 1 cost is
$23,763 (= 203 SREs x 1 hour x $117.06 per hour). The annualized cost
over the 10-year analysis period is estimated at $29,544 at a discount
rate of 3 percent and $29,096 at a discount rate of 7 percent. The
total cost over the 10-year analysis period is estimated at $252,014 at
a discount rate of 3 percent and $204,356 at a discount rate of 7
percent.
(16) SREs' Recordkeeping
Pursuant to Sec. 29.22(o), an SRE must ensure that its records
regarding each IRAP that the SRE recognized are maintained for a
minimum of 5 years. The Department estimates that complying with this
provision will take an SRE approximately 20 hours per IRAP. To estimate
these costs over the 10-year analysis period, the Department multiplied
the projected number of IRAPs in each year by the estimated time to
comply with this provision (20 hours) and by the hourly compensation
rate for Office and Administrative Support Occupations ($37.50 per
hour). For example, the projected number of IRAPs in Year 1 is 2,030,
so the estimated Year 1 cost is $1,522,500 (= 2,030 IRAPs x 20 hours x
$37.50 per hour). The annualized cost over the 10-year analysis period
is estimated at $4,507,740 at a discount rate of 3 percent and
$4,342,785 at a discount rate of 7 percent. The total cost over the 10-
year analysis period is estimated at $38,451,935 at a discount rate of
3 percent and $30,501,902 at a discount rate of 7 percent.
(17) IRAPs' Development of Written Training Plan
In accordance with Sec. 29.22(a)(4)(ii), an IRAP must have a
written training plan that details the structured work experiences and
appropriate related instruction, is designed so that apprentices
demonstrate competency and earn credential(s), and provides apprentices
progressively advancing industry-essential skills. The Department
estimates that it will take IRAPs approximately 80 hours per year to
comply with this provision. To estimate these costs over the 10-year
analysis period, the Department multiplied the projected number of new
IRAPs in each year by the estimated time to comply with these
provisions (80 hours) and by the hourly compensation rate for Training
and Development Managers ($117.06 per hour). For example, the projected
number of new IRAPs in Year 1 is 2,030, so the estimated Year 1 cost is
$19,010,544 (= 2,030 new IRAPs x 80 hours x $117.06 per hour). The
annualized cost over the 10-year analysis period is estimated at
$9,416,040 at a discount rate of 3 percent and $9,849,537 at a discount
rate of 7 percent. The total cost over the 10-year analysis period is
estimated at $80,320,727 at a discount rate of 3 percent and
$69,179,023 at a discount rate of 7 percent.
[[Page 14364]]
(18) IRAPs' Development of Written Apprenticeship Agreement
In accordance with Sec. 29.22(a)(4)(x), an IRAP must include a
written apprenticeship agreement outlining the terms and conditions of
the employment and training with each apprentice. For purposes of this
analysis, the Department assumes the written apprenticeship agreement
will disclose the wages apprentices will receive and under what
circumstances apprentices' wages will increase pursuant to Sec.
29.22(a)(4)(vii), as well as any costs or expenses that will be charged
to apprentices pursuant to Sec. 29.22(a)(4)(ix). The Department
estimates that it will take IRAPs approximately 8 hours per year to
comply with these three provisions. To estimate these costs over the
10-year analysis period, the Department multiplied the projected number
of new IRAPs in each year by the estimated time to comply with these
provisions (8 hours) and by the hourly compensation rate for Training
and Development Managers ($117.06 per hour). For example, the projected
number of new IRAPs in Year 1 is 2,030, so the estimated Year 1 cost is
$1,901,054 (= 2,030 new IRAPs x 8 hours x $117.06 per hour). The
annualized cost over the 10-year analysis period is estimated at
$941,604 at a discount rate of 3 percent and $984,954 at a discount
rate of 7 percent. The total cost over the 10-year analysis period is
estimated at $8,032,073 at a discount rate of 3 percent and $6,917,902
at a discount rate of 7 percent.
(19) IRAPs' Preparation and Signing of Written Apprenticeship Agreement
In addition to developing a written apprenticeship agreement, which
may be applicable to multiple apprentices, an IRAP must prepare and
sign an apprenticeship agreement with each individual apprentice. The
Department estimates that it will take IRAPs approximately 10 minutes
per apprentice to prepare and sign a written apprenticeship agreement.
To estimate these costs over the 10-year analysis period, the
Department multiplied the projected number of apprentices in each year
by the estimated time to comply with these provisions (10 minutes) and
by the hourly compensation rate for Training and Development Managers
($117.06 per hour). For example, the projected number of apprentices in
Year 1 is 71,050, so the estimated Year 1 cost is $1,413,909 (= 71,050
apprentices x 10 minutes x $117.06 per hour). The annualized cost over
the 10-year analysis period is estimated at $4,186,230 at a discount
rate of 3 percent and $4,033,040 at a discount rate of 7 percent. The
total cost over the 10-year analysis period is estimated at $35,709,390
at a discount rate of 3 percent and $28,326,384 at a discount rate of 7
percent.
(20) DOL Development of Online Application Form and Internal Review
System
Before an entity could submit an application to become a recognized
SRE, the Department will first need to develop an online application
form and a system for managing the internal review process. In addition
to the first-year software and labor costs, the Department will also
incur annual maintenance costs.
The Department estimates that the first-year software and labor
costs to develop the online system will total $546,462. Contractor
labor for developing the program and the application form will account
for 20 percent of the total cost, contractor labor for developing a
public website that will accept the applications and a private system
for managing the internal review of the applications will account for
77 percent of the total cost, and material costs for software hosting
and licensing will account for 3 percent of the total cost. The
annualized cost over the 10-year analysis period is estimated at
$62,196 at a discount rate of 3 percent and $72,714 at a discount rate
of 7 percent. The total cost over the 10-year analysis period is
estimated at $530,546 at a discount rate of 3 percent and $510,712 at a
discount rate of 7 percent.
With respect to annual maintenance, the Department estimates that
the total for software and labor will be $125,000. Contractor labor to
support maintenance of the online application form and case management
system will account for 68 percent of the total cost, while material
costs for software hosting and licensing fees will account for 32
percent of the total cost. The total cost over the 10-year analysis
period is estimated at $1,066,275 at a discount rate of 3 percent and
$877,948 at a discount rate of 7 percent.
(21) DOL Development of Online Resource for Performance Measures
Another online tool that will need to be developed by the
Department will be an online resource for receiving performance data
from SREs. In addition to the first-year software and labor costs, the
Department will also incur annual maintenance costs.
The Department estimates that the first-year software and labor
costs to develop the online system will total $1,163,085. Contractor
labor for developing the online system will account for 20 percent of
the total cost, contractor labor for developing a public website that
will accept the performance data and a private system for managing the
internal review of the performance data will account for 77 percent of
the total cost, and material costs for software hosting and licensing
will account for 3 percent of the total cost. The annualized cost over
the 10-year analysis period is estimated at $132,378 at a discount rate
of 3 percent and $154,764 at a discount rate of 7 percent. The total
cost over the 10-year analysis period is estimated at $1,129,209 at a
discount rate of 3 percent and $1,086,995 at a discount rate of 7
percent.
With respect to annual maintenance, the Department estimates that
the total for software and labor will be $245,909. Contractor labor to
support maintenance of the online performance system will account for
68 percent of the total cost, while material costs for software hosting
and licensing fees will account for 32 percent of the total cost. The
total cost over the 10-year analysis period is estimated at $2,097,654
at a discount rate of 3 percent and $1,727,162 at a discount rate of 7
percent.
(22) DOL Development of Online Resource for List of SREs and IRAPs
Another online tool that will need to be developed by the
Department will be an online resource for the list of SREs and IRAPs.
In addition to the first-year software and labor costs, the Department
will also incur annual maintenance costs.
The Department estimates that the first-year software and labor
costs to develop the online system will total $92,000. Contractor labor
for developing the online resource will account for 98 percent of the
total cost, while material costs for software hosting and licensing
will account for 2 percent of the total cost. The annualized cost over
the 10-year analysis period is estimated at $10,471 at a discount rate
of 3 percent and $12,242 at a discount rate of 7 percent. The total
cost over the 10-year analysis period is estimated at $89,320 at a
discount rate of 3 percent and $85,981 at a discount rate of 7 percent.
With respect to annual maintenance, the Department estimates that
the total for software and labor will be $18,000. Contractor labor to
support maintenance of the online list of SREs and IRAPs will account
for 68 percent of the total cost, while material costs for software
hosting and licensing fees will account for 32 percent of the total
cost. The total cost over the 10-year analysis period is
[[Page 14365]]
estimated at $153,544 at a discount rate of 3 percent and $126,424 at a
discount rate of 7 percent.
(23) DOL Review of SRE Applications
The following steps summarize the estimated costs that will be
borne by OA in connection with processing and reviewing the application
information provided by prospective SREs.
(i) Step 1: Processing by Program Analysts
The Department anticipates that the initial intake, review, and
analysis of the information in the application form will be conducted
by a Program Analyst in OA. The Department estimates that a Program
Analyst will take an average of 1 hour to review and analyze the
information. To estimate these costs over the 10-year analysis period,
the Department multiplied the projected number of total SRE
applications each year by the estimated time to process each
application (1 hour) and by the hourly compensation rate for Program
Analysts ($120.09 per hour). For example, the projected number of total
SRE applications in Year 1 is 270, so the estimated Year 1 cost is
$32,424 (= 270 SRE applications x 1 hour x $120.09 per hour). The
annualized cost over the 10-year analysis period is estimated at $8,416
at a discount rate of 3 percent and $8,838 at a discount rate of 7
percent. The total cost over the 10-year analysis period is estimated
at $71,787 at a discount rate of 3 percent and $62,072 at a discount
rate of 7 percent.
(ii) Step 2: Panel Review
Applications that pass the initial review process by a Program
Analyst will then be forwarded to a review panel. For purposes of this
analysis, the Department estimated the labor costs for a panel
consisting of one Program Analyst and two Federal contractors who are
Training and Development Managers. The three panelists will review each
application and make a recommendation for recognition or denial to the
Administrator. For purposes of this analysis, the Department estimates
that 90 percent of applications will pass the initial review process by
a Program Analyst and will be forwarded to the review panel.
The Department estimates that the Program Analyst on the review
panel will take 8 hours to conduct a complete review of each
application. To estimate these costs over the 10-year analysis period,
the Department multiplied the projected number of total SRE
applications each year by 90 percent, and then multiplied this product
by the estimated time to review each application (8 hours) and by the
hourly compensation rate for Program Analysts ($120.09 per hour). For
example, the projected number of total SRE applications in Year 1 is
270, so the estimated Year 1 cost is $233,455 (= 270 SRE applications x
90% x 8 hours x $120.09 per hour). The annualized cost over the 10-year
analysis period is estimated at $60,592 at a discount rate of 3 percent
and $63,631 at a discount rate of 7 percent. The total cost over the
10-year analysis period is estimated at $516,864 at a discount rate of
3 percent and $446,921 at a discount rate of 7 percent.
The Department estimates that the Training and Development Managers
on the review panel will take 8 hours each to conduct a complete review
of each application. To estimate these costs over the 10-year analysis
period, the Department multiplied the projected number of total SRE
applications each year by 90 percent, and then multiplied this product
by the estimated time to review each application (8 hours) and by the
hourly compensation rate for Training and Development Managers ($117.06
per hour) and by 2 to account for both Training and Development
Managers on the review panel. For example, the projected number of
total SRE applications in Year 1 is 270, so the estimated Year 1 cost
is $455,129 (= 270 SRE applications x 90% x 8 hours x $117.06 per hour
x 2 Training and Development Managers). The annualized cost over the
10-year analysis period is estimated at $118,127 at a discount rate of
3 percent and $124,052 at a discount rate of 7 percent. The total cost
over the 10-year analysis period is estimated at $1,007,646 at a
discount rate of 3 percent and $871,289 at a discount rate of 7
percent.
(iii) Step 3: Panel Meeting
The Department expects that the panel members will meet on a
consistent basis to discuss their review findings for each application.
The Department estimates that the Program Analyst on the review panel
will spend 1 hour per application in meetings with the other panelists.
To estimate these costs over the 10-year analysis period, the
Department multiplied the projected number of total SRE applications
each year by 90 percent, and then multiplied this product by the
estimated time for meetings (1 hour) and by the hourly compensation
rate for Program Analysts ($120.09 per hour). For example, the
projected number of total SRE applications in Year 1 is 270, so the
estimated Year 1 cost is $29,182 (= 270 SRE applications x 90% x 1 hour
x $120.09 per hour). The annualized cost over the 10-year analysis
period is estimated at $7,574 at a discount rate of 3 percent and
$7,954 at a discount rate of 7 percent. The total cost over the 10-year
analysis period is estimated at $64,608 at a discount rate of 3 percent
and $55,865 at a discount rate of 7 percent.
The Department estimates that the two Training and Development
Managers on the review panel will each spend 1 hour per application in
meetings with the other panelists. To estimate these costs over the 10-
year analysis period, the Department multiplied the projected number of
total SRE applications each year by 90 percent, and then multiplied
this product by the estimated time for meetings (1 hour) and by the
hourly compensation rate for Training and Development Managers ($117.06
per hour) and by 2 to account for both Training and Development
Managers on the panel. For example, the projected number of total SRE
applications in Year 1 is 270, so the estimated Year 1 cost is $56,891
(= 270 SRE applications x 90% x 1 hour x $117.06 per hour x 2 Training
and Development Managers). The annualized cost over the 10-year
analysis period is estimated at $14,766 at a discount rate of 3 percent
and $15,506 at a discount rate of 7 percent. The total cost over the
10-year analysis period is estimated at $125,956 at a discount rate of
3 percent and $108,911 at a discount rate of 7 percent.
(iv) Step 4: Review by the Administrator
After the three panelists review the applications, the satisfactory
applications will be forwarded to the Administrator for final review
and approval. The Administrator will reach a final determination as to
whether the entities should be recognized as SREs. The Department
estimates that 70 percent of applications will be forwarded to the
Administrator and that the Administrator will spend 15 minutes per
application making a final decision. To estimate these costs over the
10-year analysis period, the Department multiplied the projected number
of total SRE applications each year by 70 percent, and then multiplied
this product by the estimated time for review by the Administrator (15
minutes) and by the hourly compensation rate for the Administrator
($178.51 per hour). For example, the projected number of total SRE
applications in Year 1 is 270, so the estimated Year 1 cost is $8,435
(= 270 SRE applications x 70% x 15 minutes x $178.51 per hour). The
annualized cost over the 10-year analysis period is estimated at $2,189
at a discount rate of
[[Page 14366]]
3 percent and $2,299 at a discount rate of 7 percent. The total cost
over the 10-year analysis period is estimated at $18,674 at a discount
rate of 3 percent and $16,147 at a discount rate of 7 percent.
(v) Notification of Recognition or Denial of Recognition
Finally, OA will notify each applicant of the results of the review
process. Each applicant will either be recognized as an SRE or be
denied recognition. The Department estimates that a Program Analyst
will spend an average of 1 hour notifying each applicant. To estimate
these costs over the 10-year analysis period, the Department multiplied
the projected number of total SRE applications each year by the
estimated time for notification (1 hour) and by the hourly compensation
rate for Program Analysts ($120.09 per hour). For example, the
projected number of total SRE applications in Year 1 is 270, so the
estimated Year 1 cost is $32,424 (= 270 SRE applications x 1 hour x
$120.09 per hour). The annualized cost over the 10-year analysis period
is estimated at $8,416 at a discount rate of 3 percent and $8,838 at a
discount rate of 7 percent. The total cost over the 10-year analysis
period is estimated at $71,787 at a discount rate of 3 percent and
$62,072 at a discount rate of 7 percent.
(24) DOL Review of Resubmitted SRE Applications
For purposes of this analysis, the Department estimates that
approximately 30 percent of applications will be denied on the first
attempt, and that 50 percent of the denied applications will be
resubmitted after the deficiencies have been addressed, which means 15
percent of all applications will be resubmitted. The Department will
then follow the same five steps for reviewing the resubmitted
applications.
(i) Resubmission Step 1: Processing by Program Analysts
The Department estimates that a Program Analyst will take 1 hour to
process the information in a resubmitted application. To estimate the
costs over the 10-year analysis period for Step 1 of the resubmission
review process, the Department multiplied the projected number of total
SRE applications each year by 15 percent, and then multiplied this
product by the estimated time to process each application (1 hour) and
by the hourly compensation rate for Program Analysts ($120.09 per
hour). For example, the projected number of total SRE applications in
Year 1 is 270, so the estimated Year 1 cost is $4,864 (= 270 SRE
applications x 15% x 1 hour x $120.09 per hour). The annualized cost
over the 10-year analysis period is estimated at $1,262 at a discount
rate of 3 percent and $1,326 at a discount rate of 7 percent. The total
cost over the 10-year analysis period is estimated at $10,768 at a
discount rate of 3 percent and $9,311 at a discount rate of 7 percent.
(ii) Resubmission Step 2: Panel Review
The Department estimates that the Program Analyst on the review
panel will take 8 hours to conduct a complete review of each
resubmitted application. To estimate these costs over the 10-year
analysis period, the Department multiplied the projected number of
total SRE applications each year by 15 percent, and then multiplied
this product by the estimated time to review each application (8 hours)
and by the hourly compensation rate for Program Analysts ($120.09 per
hour). For example, the projected number of total SRE applications in
Year 1 is 270, so the estimated Year 1 cost is $38,909 (= 270 SRE
applications x 15% x 8 hours x $120.09 per hour). The annualized cost
over the 10-year analysis period is estimated at $10,099 at a discount
rate of 3 percent and $10,605 at a discount rate of 7 percent. The
total cost over the 10-year analysis period is estimated at $86,144 at
a discount rate of 3 percent and $74,487 at a discount rate of 7
percent.
The Department estimates that the two Training and Development
Managers on the review panel will take 8 hours each to conduct a
complete review of each resubmitted application. To estimate these
costs over the 10-year analysis period, the Department multiplied the
projected number of total SRE applications each year by 15 percent, and
then multiplied this product by the estimated time to review each
application (8 hours) and by the hourly compensation rate for Training
and Development Managers ($117.06 per hour) and by 2 to account for
both Training and Development Managers on the panel. For example, the
projected number of total SRE applications in Year 1 is 270, so the
estimated Year 1 cost is $75,855 (= 270 SRE applications x 15% x 8
hours x $117.06 per hour x 2 Training and Development Managers). The
annualized cost over the 10-year analysis period is estimated at
$19,688 at a discount rate of 3 percent and $20,675 at a discount rate
of 7 percent. The total cost over the 10-year analysis period is
estimated at $167,941 at a discount rate of 3 percent and $145,215 at a
discount rate of 7 percent.
(iii) Resubmission Step 3: Panel Meeting
The Department estimates that the Program Analyst on the review
panel will spend 1 hour per resubmitted application in meetings with
the other panelists. To estimate these costs over the 10-year analysis
period, the Department multiplied the projected number of total SRE
applications each year by 15 percent, and then multiplied this product
by the estimated time for meetings (1 hour) and by the hourly
compensation rate for Program Analysts ($120.09 per hour). For example,
the projected number of total SRE applications in Year 1 is 270, so the
estimated Year 1 cost is $4,864 (= 270 SRE applications x 15% x 1 hour
x $120.09 per hour). The annualized cost over the 10-year analysis
period is estimated at $1,262 at a discount rate of 3 percent and
$1,326 at a discount rate of 7 percent. The total cost over the 10-year
analysis period is estimated at $10,768 at a discount rate of 3 percent
and $9,311 at a discount rate of 7 percent.
The Department estimates that the two Training and Development
Managers on the review panel will each spend 1 hour per resubmitted
application in meetings with the other panelists. To estimate these
costs over the 10-year analysis period, the Department multiplied the
projected number of total SRE applications each year by 15 percent, and
then multiplied this product by the estimated time for meetings (1
hour) and by the hourly compensation rate for Training and Development
Managers ($117.06 per hour) and by 2 to account for both Training and
Development Managers on the panel. For example, the projected number of
total SRE applications in Year 1 is 270, so the estimated Year 1 cost
is $9,482 (= 270 SRE applications x 15% x 1 hour x $117.06 per hour x 2
Training and Development Managers). The annualized cost over the 10-
year analysis period is estimated at $2,461 at a discount rate of 3
percent and $2,584 at a discount rate of 7 percent. The total cost over
the 10-year analysis period is estimated at $20,993 at a discount rate
of 3 percent and $18,152 at a discount rate of 7 percent.
(iv) Resubmission Step 4: Review by the Administrator
For purposes of this analysis, the Department estimates that one-
third of resubmitted applications will be forwarded to the
Administrator, which equates to 5 percent of the total number of
applications (= 15% of all applications x \1/3\ forwarded to the
Administrator). The Department further
[[Page 14367]]
estimates that the Administrator will spend 15 minutes per resubmitted
application making a final decision. To estimate these costs over the
10-year analysis period, the Department multiplied the projected number
of total SRE applications each year by 5 percent, and then multiplied
this product by the estimated time for review by the Administrator (15
minutes) and by the hourly compensation rate for the Administrator
($178.51 per hour). For example, the projected number of total SRE
applications in Year 1 is 270, so the estimated Year 1 cost is $602 (=
270 SRE applications x 5% x 15 minutes x $178.51 per hour). The
annualized cost over the 10-year analysis period is estimated at $156
at a discount rate of 3 percent and $164 at a discount rate of 7
percent. The total cost over the 10-year analysis period is estimated
at $1,334 at a discount rate of 3 percent and $1,153 at a discount rate
of 7 percent.
(v) Notification of Recognition or Denial of Recognition for
Resubmitted Applications
The Department estimates that a Program Analyst will spend an
average of 1 hour notifying each entity that resubmitted an
application. To estimate these costs over the 10-year analysis period,
the Department multiplied the projected number of total SRE
applications each year by 15 percent, and then multiplied this product
by the estimated time for notification (1 hour) and by the hourly
compensation rate for Program Analysts ($120.09 per hour). For example,
the projected number of total SRE applications in Year 1 is 270, so the
estimated Year 1 cost is $4,864 (= 270 SRE applications x 15% x 1 hour
x $120.09 per hour). The annualized cost over the 10-year analysis
period is estimated at $1,262 at a discount rate of 3 percent and
$1,326 at a discount rate of 7 percent. The total cost over the 10-year
analysis period is estimated at $10,768 at a discount rate of 3 percent
and $9,311 at a discount rate of 7 percent.
(25) DOL Preparation of Administrative Record When a Denied Entity
Requests Review
As explained earlier in this section, the Department estimates that
approximately 1 percent of all applications will request administrative
review of a denial. Within 30 calendar days of the filing of the
request for administrative review, the Administrator will have to
prepare an administrative record for submission to the Office of
Administrative Law Judges. Based on its program experience, the
Department estimates that preparing an administrative record will take
a Program Analyst approximately 6 hours. To estimate these costs over
the 10-year analysis period, the Department multiplied the projected
number of SRE applications in each year by 1 percent, and then
multiplied that product by the estimated time to prepare an
administrative record (6 hours) and by the hourly compensation rate for
Program Analysts ($120.09 per hour). For example, the projected number
of SRE applications in Year 1 is 270, so the estimated Year 1 cost is
$1,945 (= 270 SRE applications x 1% x 6 hours x $120.09 per hour). The
annualized cost over the 10-year analysis period is estimated at $381
at a discount rate of 3 percent and $413 at a discount rate of 7
percent. The total cost over the 10-year analysis period is estimated
at $3,253 at a discount rate of 3 percent and $2,903 at a discount rate
of 7 percent.
(26) Review of Administrator's Denial by Office of Administrative Law
Judges
In accordance with Sec. 29.29, a prospective SRE that is denied
recognition may file a request for administrative review by an
Administrative Law Judge. The Department estimates that it will take 8
hours for an Administrative Law Judge to review the administrative
record submitted by OA and conduct a hearing. To estimate these costs
over the 10-year analysis period, the Department multiplied the
projected number of SRE applications in each year by 1 percent, and
then multiplied that product by the estimated time for an
Administrative Law Judge to conduct a review (8 hours) and by the
hourly compensation rate for Administrative Law Judges ($189.66 per
hour). For example, the projected number of SRE applications in Year 1
is 270, so the estimated Year 1 cost is $4,097 (= 270 SRE applications
x 1% x 8 hours x $189.66 per hour). The annualized cost over the 10-
year analysis period is estimated at $803 at a discount rate of 3
percent and $870 at a discount rate of 7 percent. The total cost over
the 10-year analysis period is estimated at $6,849 at a discount rate
of 3 percent and $6,114 at a discount rate of 7 percent.
Next, a Law Clerk in the Office of Administrative Law Judges will
draft the proposed findings and the recommended decision based on the
hearing. The Department estimates that this step of the process will
take approximately 2 hours. To estimate these costs over the 10-year
analysis period, the Department multiplied the projected number of SRE
applications in each year by 1 percent, and then multiplied that
product by the estimated time for a Law Clerk to draft the proposed
findings and the recommended decision (2 hours) and by the hourly
compensation rate for Law Clerks ($84.27 per hour). For example, the
projected number of SRE applications in Year 1 is 270, so the estimated
Year 1 cost is $455 (= 270 SRE applications x 1% x 2 hours x $84.27 per
hour). The annualized cost over the 10-year analysis period is
estimated at $89 at a discount rate of 3 percent and $97 at a discount
rate of 7 percent. The total cost over the 10-year analysis period is
estimated at $761 at a discount rate of 3 percent and $679 at a
discount rate of 7 percent.
In addition, a Paralegal in the Office of Administrative Law Judges
will handle the tasks related to placing the matter on the docket of
cases. The Department estimates that this step of the process will take
approximately 2 hours. To estimate these costs over the 10-year
analysis period, the Department multiplied the projected number of SRE
applications in each year by 1 percent, and then multiplied that
product by the estimated time for a Paralegal to place the matter on
the docket (2 hours) and by the hourly compensation rate for Paralegals
($56.93 per hour). For example, the projected number of SRE
applications in Year 1 is 270, so the estimated Year 1 cost is $307 (=
270 SRE applications x 1% x 2 hours x $56.93 per hour). The annualized
cost over the 10-year analysis period is estimated at $60 at a discount
rate of 3 percent and $65 at a discount rate of 7 percent. The total
cost over the 10-year analysis period is estimated at $514 at a
discount rate of 3 percent and $459 at a discount rate of 7 percent.
(27) Review of Administrator's Denial by Administrative Review Board
In accordance with Sec. 29.29, any party may file exceptions to
the Administrative Law Judge's recommended decision in the prior step.
If the Administrative Review Board accepts a case for review, the
three-judge panel of Administrative Law Judges will review the proposed
findings and the recommended decision provided by the Administrative
Law Judge in the prior step, and then render a decision on the record.
The Department estimates that the review and decision will take
approximately 2 hours per Administrative Law Judge. To estimate these
costs over the 10-year analysis period, the Department multiplied the
projected number of SRE applications in each year by 1 percent, and
then multiplied that product by the
[[Page 14368]]
estimated time for each Administrative Law Judge to conduct the review
(2 hours) and by the hourly compensation rate for Administrative Law
Judges ($189.66 per hour) and by 3 Administrative Law Judges. For
example, the projected number of SRE applications in Year 1 is 270, so
the estimated Year 1 cost is $3,073 (= 270 SRE applications x 1% x 2
hours x $189.66 per hour x 3 Administrative Law Judges). The annualized
cost over the 10-year analysis period is estimated at $602 at a
discount rate of 3 percent and $653 at a discount rate of 7 percent.
The total cost over the 10-year analysis period is estimated at $5,137
at a discount rate of 3 percent and $4,585 at a discount rate of 7
percent.
Next, a Staff Attorney for the Administrative Review Board will
draft a decision for the Board. The Department estimates that this step
of the process will take approximately 6 hours. To estimate these costs
over the 10-year analysis period, the Department multiplied the
projected number of SRE applications in each year by 1 percent, and
then multiplied that product by the estimated time for a Staff Attorney
to draft a decision (6 hours) and by the hourly compensation rate for
Staff Attorneys ($177.91 per hour). For example, the projected number
of SRE applications in Year 1 is 270, so the estimated Year 1 cost is
$2,882 (= 270 SRE applications x 1% x 6 hours x $177.91 per hour). The
annualized cost over the 10-year analysis period is estimated at $565
at a discount rate of 3 percent and $612 at a discount rate of 7
percent. The total cost over the 10-year analysis period is estimated
at $4,819 at a discount rate of 3 percent and $4,301 at a discount rate
of 7 percent.
In addition, a Legal Assistant will perform docket filing and other
administrative tasks associated with the issuance of the Administrative
Review Board's decision. The Department estimates that this step of the
process will take approximately 2 hours. To estimate these costs over
the 10-year analysis period, the Department multiplied the projected
number of SRE applications in each year by 1 percent, and then
multiplied that product by the estimated time for a Legal Assistant to
perform administrative duties (2 hours) and by the hourly compensation
rate for Legal Assistant ($84.27 per hour). For example, the projected
number of SRE applications in Year 1 is 270, so the estimated Year 1
cost is $455 (= 270 SRE applications x 1% x 2 hours x $84.27 per hour).
The annualized cost over the 10-year analysis period is estimated at
$89 at a discount rate of 3 percent and $97 at a discount rate of 7
percent. The total cost over the 10-year analysis period is estimated
at $761 at a discount rate of 3 percent and $679 at a discount rate of
7 percent.
(28) Administrator's Compliance Assistance Reviews
Pursuant to Sec. 29.23(a), the Administrator may conduct periodic
compliance assistance reviews of SREs to assist with their conformity
to the requirements of this rule. For purposes of this analysis, the
Department estimates that OA will perform a compliance assistance
review of 5 percent of SREs per year, and that such a review will take
approximately 10 hours per SRE. To estimate these costs over the 10-
year analysis period, the Department multiplied the projected number of
SREs in each year by 5 percent, and then multiplied this product by the
estimated time to comply with this provision (10 hours) and by the
hourly compensation rate for Program Analysts ($120.09 per hour). For
example, the projected number of SREs in Year 1 is 203, so the
estimated Year 1 cost is $12,189 (= 203 SREs x 5% x 10 hours x $120.09
per hour). The annualized cost over the 10-year analysis period is
estimated at $15,154 at a discount rate of 3 percent and $14,924 at a
discount rate of 7 percent. The total cost over the 10-year analysis
period is estimated at $129,269 at a discount rate of 3 percent and
$104,823 at a discount rate of 7 percent.
b. Payments From IRAPs to SREs
The Department anticipates that SREs may charge a fee to the IRAPs
that they recognize, though such a fee is neither required nor
prohibited under this final rule. Such a fee will help SREs offset the
costs described earlier in this section.
SREs' fees will likely vary widely, so the Department explored
different ways to estimate those fees. The Department began by looking
at the application and annual fees charged by entities that focus
primarily on setting standards, thinking it would make sense to base
its estimate on the fees currently charged by such entities. However,
after further reflection, the Department decided that such entities are
not representative of the full range of potential SREs, which may
include but are not limited to trade, industry, and employer groups or
associations; educational institutions; State and local government
agencies or entities; non-profit organizations; unions; joint labor-
management organizations; and partnerships of multiple entities.
Entities that focus primarily or exclusively on standards-setting are
not representative of the variety of entities likely to apply to become
recognized SREs, so the fees charged by such entities would not be
representative of the fees that may (or may not) be charged by other
types of entities.
Therefore, the Department decided that a better approach to
estimating SRE fees would be to develop an estimate based on the
quantified costs in this analysis. To approximate a break-even point
between SRE costs and SRE fees under this final rule, the Department
estimates an average initial application fee of $3,000 and an average
annual fee of $2,000. The remaining difference between SRE costs and
SRE fees reflects the unquantified costs under this final rule.
Since the payment of SRE fees by IRAPs will help SREs recoup their
costs under this final rule, and since those costs have already been
quantified in the economic analysis above, the potential payments from
IRAPs to SREs are not included in Exhibits 1 or 6.
6. Summary of Costs
Exhibit 6 presents a summary of the quantifiable costs associated
with this final rule.
[[Page 14369]]
[GRAPHIC] [TIFF OMITTED] TR11MR20.005
7. Nonquantifiable Costs
This section addresses the nonquantifiable costs of the final rule.
a. SRE Costs
Under Sec. 29.22(j), an SRE must make publicly available the
aggregated number of complaints pertaining to each IRAP. This is a new
program, and in the absence of useful comparable data or other readily
applicable information, the Department does not have a reasonable way
to estimate the number of complaints that will be filed against each
IRAP. Consequently, there is insufficient information to quantify the
potential costs of this provision.
Further, under Sec. 29.26, the Administrator may initiate a review
of an SRE after receiving a complaint about the SRE or information
indicating that the SRE is no longer capable of continuing in its role.
If a review is initiated, the SRE will have an opportunity to provide
information to the Department. Since this is a new program, the
Department does not have a reasonable way to estimate the number of
complaints it may receive or reviews it may initiate. Consequently,
there is insufficient information to quantify the potential costs of
this provision.
Additionally, Sec. 29.27 explains the process through which the
Administrator may suspend or derecognize an SRE. A suspended SRE will
have an opportunity to implement remedial action or request
administrative review. If an SRE does not implement remedial action or
request administrative review and is derecognized by the Administrator,
the SRE must inform its IRAPs and the public of its derecognition in
accordance with Sec. 29.22(m). Since this is a new program, the
Department does not have a reasonable way to estimate the number of
SREs that will be suspended, nor the percentage of suspended SREs that
will implement remedial action or make a request for administrative
review, nor the share that will be derecognized. For these reasons, the
Department is unable to quantity the potential costs of these
provisions.
b. IRAP Costs
A 2016 study published by the Department of Commerce found that
apprenticeship programs vary significantly in length and cost. The
shortest program in the study lasted 1 year, while the longest lasted
more than 4 years. The costs of the programs in the study ranged from
$25,000 to $250,000 per apprentice. Importantly, compensation costs for
apprentices were the major cost of the programs. Other costs included
program start-up, educational materials, mentors' time, and overhead.
The authors noted that the ultimate goal of an apprenticeship program
is for companies to fill skilled jobs, and apprenticeships are only one
way to do so. Many of the costs of an apprenticeship program would
still be incurred if the company filled the job through another method,
such as hiring an already-trained worker, contracting a temporary
worker, or increasing the hours of existing staff.\43\ In analyzing the
costs of an apprenticeship program, it is essential to consider how an
employer would fill the position in the absence of apprentices. The
costs of an apprenticeship program should be assessed within the
context of the employer's alternative hiring options. The Department
notes that such options may be limited given the skills gap that this
regulation seeks to help address. Yet, data are not available for the
Department to conduct such an analysis. Consequently, the Department
was unable to quantify the potential costs of apprenticeship programs
that will be established under this final rule.
---------------------------------------------------------------------------
\43\ Susan Helper, Ryan Noonan, Jessica R. Nicholson, and David
Langdon, ``The Benefits and Costs of Apprenticeship: A Business
Perspective,'' Nov. 2016, https://files.eric.ed.gov/fulltext/ED572260.pdf.
---------------------------------------------------------------------------
c. Government Costs
In addition to the SRE and IRAP costs that cannot be quantified,
the final rule is also expected to incur costs to the Department. To
begin with, Sec. 29.26 requires the Administrator to follow specific
steps if the Administrator decides to initiate a review of an SRE after
receiving a complaint or information indicating that the SRE is no
longer capable of continuing in its
[[Page 14370]]
role. Those steps include notifying the SRE of the review, conducting
the review, and notifying the SRE of the decision to either take no
action against the SRE or suspend the SRE. Since this is a new program,
the Department does not have a reasonable way to estimate the number of
complaints it may receive or reviews it may initiate. Hence, there is
insufficient information to quantify the potential costs of this
section.
Similarly, Sec. 29.27 requires the Administrator to take certain
actions if the Administrator decides to suspend an SRE. For example,
the Administrator must publish the SRE's suspension on the Department's
publicly available list of SREs and IRAPs. If the SRE commits itself to
remedial actions, the Administrator must determine whether the SRE has
remedied the identified areas of nonconformity. If the SRE makes a
request for administrative review, the Administrator must prepare an
administrative record for submission to the Office of Administrative
Law Judges. Finally, if the SRE does not commit itself to remedial
action or request administrative review, the Administrator will
derecognize the SRE. Since this is a new program, the Department does
not have a reasonable way to estimate the proportion of SREs that will
be suspended by the Administrator. Consequently, there is insufficient
information to quantify the potential costs of this provision.
Under Sec. 29.29(a), the Administrator must prepare an
administrative record for submission to the Administrative Law Judge
after receiving a suspended SRE's request for administrative review.
Without a reasonable way to estimate the number of suspended SREs or
the share of suspended SREs that will request administrative review,
the Department is unable to quantify this cost.
In addition to the costs borne by OA, costs will also be borne by
the Office of Administrative Law Judges and the Administrative Review
Board. The Chief Administrative Law Judge must designate an
Administrative Law Judge to review a suspended SRE's request for
administrative review. Within 20 calendar days of the receipt of the
Administrative Law Judge's recommended decision, any party may file
exceptions with the Administrative Review Board, which must issue a
decision in any case it accepts within 180 calendar days of the close
of the record. The Department does not have a reasonable way to
estimate the number of suspended SREs nor the share that will request
administrative review; therefore, the Department is unable to quantify
this cost.
8. Nonquantifiable Transfer Payments
As mentioned above, a major cost of apprenticeship programs is the
compensation costs of apprentices.\44\ For the purposes of a Regulatory
Impact Analysis, an increase in wages is not considered a cost; rather,
an increase in wages is considered a ``transfer payment.'' According to
OMB Circular A-4, transfers occur when wealth or income is
redistributed without any direct change in aggregate social
welfare.\45\ Therefore, an increase in wages is categorized as a
transfer payment from the employer to the worker rather than a cost to
the employer or a benefit to the worker.
---------------------------------------------------------------------------
\44\ Susan Helper, Ryan Noonan, Jessica R. Nicholson, and David
Langdon, ``The Benefits and Costs of Apprenticeship: A Business
Perspective,'' Nov. 2016, https://files.eric.ed.gov/fulltext/ED572260.pdf.
\45\ OMB, ``Circular A-4,'' Sept. 17, 2003.
---------------------------------------------------------------------------
Data are not available for the Department to quantify the transfer
payment from employers to apprentices. Some jobs filled by apprentices
would likely be filled by non-apprentices in the absence of an IRAP.
The transfer payment may be more than $100 million per year; therefore,
this rule has been designated as an economically significant regulatory
action under section 3(f) of E.O. 12866.
9. Regulatory Alternatives
OMB Circular A-4, which outlines best practices in regulatory
analysis, directs agencies to analyze alternatives if such alternatives
best satisfy the philosophy and principles of E.O. 12866. Accordingly,
the Department considered two regulatory alternatives related to
paragraph 29.22(h). Under the first alternative, SREs would be required
to make performance data publicly available every 5 years rather than
annually. Under the second alternative, SREs would be required to make
performance data publicly available every quarter rather than annually.
Both alternatives are discussed in more detail below.
For the first alternative, the Department considered requiring SREs
to report to the Administrator and make publicly available the
performance data for each IRAP it recognizes on a 5-year reporting
cycle rather than on an annual reporting cycle as proposed in paragraph
29.22(h). To estimate the reduction in costs under this alternative,
the Department adjusted three of the calculations described in the
Subject-by-Subject Analysis. First, the Department decreased from 4
hours to 48 minutes (= 4 hours / 5 years) the time burden for an SRE to
report to the Administrator the performance information for each IRAP
it recognizes. Second, the Department decreased from 2 hours to 24
minutes (= 2 hours / 5 years) the time burden for an SRE to make
publicly available the performance information for each IRAP it
recognizes. Third, the Department decreased from 25 hours to 5 hours (=
25 hours / 5 years) the time burden for an IRAP to provide performance
information to its SRE since the information would only need to be
provided once every 5 years under this alternative. Exhibit 7 shows the
estimated costs of the proposed rule under this alternative. Over the
10-year analysis period, the annualized costs are estimated at $29.7
million at a discount rate of 7 percent. In total, this alternative is
estimated to result in costs of $208.7 million at a discount rate of 7
percent.
[[Page 14371]]
[GRAPHIC] [TIFF OMITTED] TR11MR20.006
The Department decided not to pursue this alternative because a
longer reporting cycle would be inconsistent with the annual reporting
cycles for other workforce investment programs, such as those
authorized by WIOA. Furthermore, a longer reporting cycle would be less
transparent and provide less accountability to the public.
The second alternative considered by the Department would require
SREs to report to the Administrator and make performance data publicly
available on a quarterly reporting cycle rather than on an annual
reporting cycle. To estimate the growth in costs under this
alternative, the Department adjusted three of the calculations
described in the Subject-by-Subject Analysis. First, the Department
increased from 4 hours to 16 hours (= 4 hours x 4 quarters) the time
burden for an SRE to report to the Administrator the performance
information for each IRAP it recognizes. Second, the Department
increased from 2 hours to 8 hours (= 2 hours x 4 quarters) the time
burden for an SRE to make publicly available the performance
information for each IRAP it recognizes. Third, the Department
increased from 25 hours to 100 hours (= 25 hours x 4 quarters) the time
burden for an IRAP to provide performance information to its SRE.
Exhibit 8 shows the estimated costs of the proposed rule under this
alternative. Over the 10-year analysis period, the annualized costs are
estimated at $109.6 million at a discount rate of 7 percent. In total,
this alternative is estimated to result in costs of $769.6 million at a
discount rate of 7 percent.
[GRAPHIC] [TIFF OMITTED] TR11MR20.007
The Department decided not to pursue this alternative because it
would be unduly burdensome for SREs and IRAPs. Moreover, the additional
data that would be collected would not justify the onerousness of the
quarterly reporting requirement.
The Department considered these two regulatory alternatives in
accordance with the provisions of E.O. 12866 and chose to balance
flexibility and opportunity for innovation by SREs and IRAPs, while
providing for reasonable reporting cycles that demonstrate transparency
and accountability.
B. Regulatory Flexibility Act, Small Business Regulatory Enforcement
Fairness Act of 1996, and Executive Order 13272 (Proper Consideration
of Small Entities in Agency Rulemaking)
The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA) imposes
certain requirements on Federal agency rules that are subject to the
notice-and-comment requirements of APA, 5 U.S.C. 553(b),\46\ and that
are likely to have a significant economic impact on a substantial
number of small entities. The RFA requires agencies promulgating final
rules to prepare a Final Regulatory Flexibility Analysis, and to
develop alternatives whenever possible, when drafting regulations that
will have a significant economic impact on a substantial number of
small entities. The RFA requires the consideration of the impact of a
final regulation on a wide range of small entities, including small
businesses, not-for-profit organizations, and small governmental
jurisdictions.
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\46\ The RFA, as amended, governs ``any rule for which [a
Federal] agency publishes a general [NPRM] pursuant to section
553(b) of [APA], or any other law.'' 5 U.S.C. 601(2) (defining
``rule'' for purposes of RFA).
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The Department believes that this final rule will have a
significant economic impact on a substantial number of small entities
and is therefore publishing this Final Regulatory
[[Page 14372]]
Flexibility Analysis as required. It should be noted, however, that
this initiative is voluntary; therefore, only small entities that
choose to participate will experience an economic impact--significant
or otherwise. The Department anticipates that small businesses will
participate only if they believe it is cost effective to do so.
1. Statement of the Need for and Objectives of the Final Rule
The Department is issuing this final rule to establish IRAPs, a new
form of apprenticeships intended to harness industry expertise and
leadership in order to address the national shortage of skilled
workers. The objective of this final rule is to facilitate the
establishment of SREs and IRAPs in order to address the ongoing skills
gap that faces our nation.
Congress enacted NAA, 29 U.S.C. 50, in 1937, authorizing the
Secretary of Labor ``to formulate and promote the furtherance of labor
standards necessary to safeguard the welfare of apprentices,'' as well
as ``to bring together employers and labor for the formulation of
programs of apprenticeship.'' In June 2017, President Trump issued E.O.
13801, ``Expanding Apprenticeships in America,'' directing the
Secretary of Labor, in consultation with the Secretaries of Education
and Commerce, to consider regulations to promote the establishment of
apprenticeships developed by trade and industry groups, companies, non-
profit organizations, unions, and joint labor-management organizations,
and to provide the framework under which these entities could recognize
high-quality apprenticeship programs.
Consistent with NAA and E.O. 13801, the Department considers it
imperative to move forward with implementing regulations that will
assist and complement the rapid scaling of high-quality apprenticeships
in the United States. Also, this final rule will facilitate the
efficient and effective operation of SREs and IRAPs. Such regulations
will provide stakeholders with information necessary to evaluate the
outcomes of this new initiative.
2. Public Comments
A commenter stated that the significant costs incurred by joint
programs required to establish, administer, and sponsor open-shop
program training can prove to be especially difficult for smaller
employers. Several commenters expressed concern that including the
construction industry in the proposed rule would threaten small
businesses.
This is a voluntary program. The Department anticipates that small
businesses will participate only if they think it is cost effective to
do so. With respect to the construction industry in particular, the
Administrator will not recognize SREs that seek to train apprentices in
construction activities as defined in Sec. 29.30.
Several commenters stated that, in their view, IRAP costs were
understated in the proposed rule because SREs will require a higher
annual fee to adequately monitor and enforce quality, performance, and
compliance of IRAPs.
A wide variety of entities may become recognized SREs and they will
incur a wide variation in costs, which will affect any fees they may
charge. The Department's estimates for the application fee and annual
fee are intended to approximate a break-even point between SRE costs
and SRE fees. Some SREs will incur higher costs, while others will
incur lower costs, and any fees they charge may reflect these
differences. The commenters did not specify how much higher the
Department's estimates should be nor did they provide data for the
Department to use to improve its estimates. In the final rule, the
Department maintained its approach of estimating SRE fees by
approximating a break-even point between SRE costs and SRE fees.
3. Comments From the Chief Counsel for the U.S. Small Business
Administration
The Department did not receive comments from the U.S. Small
Business Administration during the public comment period.
4. Description and Estimate of the Small Entities Affected by the Final
Rule
This final rule will primarily affect two types of entities: SREs
and IRAPs. SREs may include industry associations, employer groups,
labor-management organizations, educational organizations, and
consortia of these or other organizations. IRAPs may be developed by
entities such as trade and industry groups, companies, non-profit
organizations, unions, and joint labor-management organizations.
As explained in the ``Payments from IRAPs to SREs'' subsection
above, the Department anticipates that SREs may charge an application
fee, an annual fee, or both to the IRAPs they recognize. Such a fee
would help SREs recoup their expenses. Therefore, the Department did
not include SREs in this Final Regulatory Flexibility Analysis.
Instead, this analysis focuses on the small entities that choose to
develop IRAPs. As explained in the E.O. 12866 analysis above, the
Department anticipates that each SRE will recognize approximately 32
IRAPs, beginning with 10 new IRAPs in its 1st year as an SRE, and then
8 new IRAPs in its 2nd year, 5 new IRAPs in its 3rd year, 3 new IRAPs
in its 4th year, and 1 in its 5th through 10th years. Based on this
assumption, the number of new IRAPs in Year 1 is estimated to be 2,030
(= 203 new SREs in Year 1 x 10 new IRAPs per SRE). The number of new
IRAPs in Year 2 is estimated to be 1,724 [= (203 new SREs in Year 1 x 8
new IRAPs per SRE) + (10 new SREs in Year 2 x 10 new IRAPs per SRE)].
As explained in the E.O. 12866 analysis above, the Department estimates
that 90 percent of SREs will undergo the Department's process for
continued recognition, so in Year 6 the estimated number of new Year 1
SREs will shrink to 183 (= 203 new SREs in Year 1 x 90%). Accordingly,
the number of new IRAPs in Year 6 is estimated to be 707 [= (183 Year 1
SREs with continued recognition x 1 new IRAPs per SRE) + (10 new SREs
in Year 2 x 1 new IRAPs per SRE) + (11 new SREs in Year 3 x 3 new IRAPs
per SRE) + (11 new SREs in Year 4 x 5 new IRAPs per SRE) + (12 new SREs
in Year 5 x 8 new IRAPs per SRE) + (33 new SREs in Year 6 x 10 new
IRAPs per SRE)].
To estimate the total number of IRAPs in each year of the analysis
period, the Department first calculated the cumulative total of new
IRAPs per SRE. For example, a new SRE in Year 1 is estimated to have
recognized a total of 18 IRAPs in Year 2 (= 10 new IRAPs in Year 1 + 8
new IRAPs in Year 2). So, the total number of IRAPs in Year 2 is
estimated to be 3,754 [= (203 new SREs in Year 1 x 18 total IRAPs per
SRE) + (10 new SREs in Year 2 x 10 total IRAPs per SRE)]. As explained
above, the estimated number of new Year 1 SREs is expected to shrink to
183 in Year 6. Accordingly, the total number of IRAPs in Year 6 is
estimated to be 6,479 [= (183 Year 1 SREs with continued recognition x
28 total IRAPs per SRE) + (10 new SREs in Year 2 x 27 total IRAPs per
SRE) + (11 new SREs in Year 3 x 26 total IRAPs per SRE) + (11 new SREs
in Year 4 x 23 total IRAPs per SRE) + (12 new SREs in Year 5 x 18 total
IRAPs per SRE) + (33 new SREs in Year 6 x 10 total IRAPs per SRE)].
[[Page 14373]]
Exhibit 9 presents the projected number of new and total IRAPs over
the 10-year analysis period.\47\
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\47\ These numbers are identical to the numbers in Exhibit 3.
[GRAPHIC] [TIFF OMITTED] TR11MR20.008
Given that this is a new initiative, the Department has no way of
knowing what size these IRAPs will be. Therefore, the Department
assumes that the IRAPs will have the same size distribution as the
firms in each of the 18 major industry sectors.\48\ This assumption
allows the Department to conduct a robust analysis using data from the
Census Bureau's Statistics of U.S. Businesses,\49\ which include the
number of firms, number of employees, and annual revenue by industry
and firm size. Using these data allows the Department to estimate the
per-program costs of the final rule as a percent of revenue by industry
and firm size.
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\48\ Construction is the 19th major industry sector; it is not
included in this analysis pursuant to Sec. 29.30.
\49\ See U.S. Census Bureau, ``Statistics of U.S. Businesses,''
http://www.census.gov/programs-surveys/susb/data.html (last visited
Dec. 7, 2019).
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5. Compliance Requirements of the Final Rule
The E.O. 12866 analysis above quantifies several types of labor
costs that will be borne by IRAPs: (1) Rule familiarization, (2)
submission of performance data to the SRE, (3) development of written
training plan; and (4) development and signing of written
apprenticeship agreement. Additional costs that may be incurred but
could not be quantified due to a lack of data include program start-up
expenses, educational materials, and mentors' time. In addition, the
final rule will result in transfer payments from IRAPs to apprentices
in the form of compensation, but the Department does not expect a
measurable transfer payment on aggregate because, in the absence of an
IRAP, the jobs filled by apprentices will likely be filled by non-
apprentices paid a similar rate or will be addressed by other means.
The final rule may also result in payments from IRAPs to SREs in
the form of an application fee, an annual fee, or both charged by SREs.
Such fees, which are neither required nor prohibited under this final
rule, will help SREs offset their costs. For the Regulatory Flexibility
Analysis, these types of fees are considered costs to IRAPs because the
analysis estimates the impact on small entities, not on society at
large. Accordingly, the SRE's fees are categorized as costs in this
analysis.
The Department anticipates that the bulk of the workload for the
labor costs in this analysis will be performed by employees in
occupations similar to the occupation titled ``Training and Development
Managers'' in the SOC system. As with the E.O. 12866 analysis, the
Department used a fully loaded hourly compensation rate for Training
and Development Managers of $117.06.\50\
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\50\ The mean hourly wage rate for Training and Development
Managers in May 2018 was $58.53. (See BLS, ``Occupational Employment
and Wages, May 2018,'' https://www.bls.gov/oes/current/oes113131.htm.) For this analysis, the Department used a fringe
benefits rate of 46 percent and an overhead rate of 54 percent,
resulting in a fully loaded hourly compensation rate for Training
and Development Managers of $117.06 (= $58.53 + ($58.53 x 46%) +
($58.53 x 54%)).
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In addition to the number of IRAPs and the hourly compensation rate
of Training and Development Managers, the following estimates were used
to calculate the quantified costs:
Rule familiarization (one-time cost): 1 hour.
Provision of performance data to the SRE (annual
cost): 25 hours.
Development of Written Training Plan (one-time
cost): 80 hours.
Development of Written Apprenticeship Agreement
(one-time cost): 8 hours.
Preparation and Signing of Written
Apprenticeship Agreement (annual cost): 10 minutes.
SRE's application fee (one-time cost): $3,000.
SRE's annual fee (annual cost): $2,000.
Exhibit 10 shows the estimated cost per IRAP for each year of the
analysis period. The first year cost per IRAP is estimated at $17,796
at a discount rate of 7 percent. The annualized cost per IRAP is
estimated at $9,379 at a discount rate of 7 percent. The estimated cost
per IRAP is highest in the first year because all IRAPs will be new, so
the Department's first-year estimate includes both a $3,000 application
fee and $2,000 annual fee for all IRAPs; in later years, ongoing IRAPs
will only be charged a $2,000 annual fee under this analysis. These
estimates are average costs, meaning that some IRAPs will have higher
costs while other IRAPs will have lower costs, regardless of firm size.
[[Page 14374]]
[GRAPHIC] [TIFF OMITTED] TR11MR20.009
6. Estimated Impact of the Final Rule on Small Entities
The Department used the following steps to estimate the cost of the
final rule per IRAP as a percentage of annual receipts. First, the
Department used the Small Business Administration's Table of Small
Business Size Standards to determine the size thresholds for small
entities within each major industry.\51\ Next, the Department obtained
data on the number of firms, number of employees, and annual revenue by
industry and firm size category from the Census Bureau's Statistics of
U.S. Businesses.\52\ Then, the Department divided the estimated first
year cost and the annualized cost per IRAP (discounted at a 7-percent
rate) by the average annual receipts per firm to determine whether the
final rule will have a significant economic impact on IRAPs in each
size category.\53\ Finally, the Department divided the number of firms
in each size category by the total number of small firms in the
industry to determine whether the final rule will have a significant
economic impact on a substantial number of small entities.\54\ The
results are presented in the following 18 tables. In short, the first
year cost or annualized cost per IRAP could have a significant economic
impact on a substantial number of small entities in 15 out of 18
industries. It should be noted, however, that this initiative is
voluntary; therefore, only small entities that choose to participate
will experience an economic impact--significant or otherwise.
---------------------------------------------------------------------------
\51\ U.S. Small Business Administration, ``Table of Small
Business Size Standards,'' Aug. 19, 2019, http://www.sba.gov/content/small-business-size-standards. The size standards, which are
expressed either in average annual receipts or number of employees,
indicate the maximum allowed for a business in each subsector to be
considered small.
\52\ U.S. Census Bureau, ``Statistics of U.S. Businesses,''
http://www.census.gov/programs-surveys/susb/data.html (last visited
Dec. 7, 2019).
\53\ For purposes of this analysis, the Department used a 3-
percent threshold for ``significant economic impact.'' The
Department has used a 3-percent threshold in prior rulemakings. See,
e.g., 79 FR 60633 (Oct. 7, 2014) (Establishing a Minimum Wage for
Contractors).
\54\ For purposes of this analysis, the Department used a 15-
percent threshold for ``substantial number of small entities.'' The
Department has used a 15-percent threshold in prior rulemakings.
See, e.g. 79 FR 60633 (Oct. 7, 2014) (Establishing a Minimum Wage
for Contractors).
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As shown in Exhibit 11, the first year and annualized costs for
IRAPs in the agriculture, forestry, fishing, and hunting industry are
estimated to have a significant economic impact (3 percent or more) on
small entities with receipts under $500,000, and those firms constitute
a substantial number of small entities in the agriculture, forestry,
fishing, and hunting industry (58.1 percent). The first year costs are
estimated to be 35.4 percent of the average receipts per firm and the
annualized costs are estimated to be 18.6 percent of the average
receipts per firm for firms with revenue below $100,000. The first year
costs are estimated to be 7.1 percent of the average receipts per firm
and the annualized costs are estimated to be 3.7 percent of the average
receipts per firm for firms with revenue from $100,000 to $499,999.
[[Page 14375]]
[GRAPHIC] [TIFF OMITTED] TR11MR20.010
As shown in Exhibit 12, the first year and annualized costs for
IRAPs in the mining industry are not expected to have a significant
economic impact (3 percent or more) on small entities of any size.
[GRAPHIC] [TIFF OMITTED] TR11MR20.011
As shown in Exhibit 13, the first year and annualized costs for
IRAPs in the utilities industry are not expected to have a significant
economic impact (3 percent or more) on small entities of any size.
[[Page 14376]]
[GRAPHIC] [TIFF OMITTED] TR11MR20.012
As shown in Exhibit 14, the first year costs for IRAPs in the
manufacturing industry are expected to have a significant economic
impact (3 percent or more) on small entities with 4 or fewer employees,
and those firms constitute a substantial number of small entities in
the manufacturing industry (41.7 percent). The first year costs are
estimated to be 4.1 percent of the average receipts per firm with 0-4
employees.
[GRAPHIC] [TIFF OMITTED] TR11MR20.013
As shown in Exhibit 15, the first year and annualized costs for
IRAPs in the wholesale trade industry are not expected to have a
significant economic impact (3 percent or more) on small entities of
any size.
[GRAPHIC] [TIFF OMITTED] TR11MR20.014
As shown in Exhibit 16, the first year and annualized costs for
IRAPs in the retail trade industry are estimated to have a significant
economic impact (3 percent or more) on small entities with receipts
under $500,000, and those firms constitute a substantial number of
small entities in the retail trade industry (47.7 percent). The first
year costs are estimated to be 34.1 percent of the average receipts per
firm and the annualized costs are estimated to be
[[Page 14377]]
18.0 percent of the average receipts per firm for firms with revenue
below $100,000. The first year costs are estimated to be 6.6 percent of
the average receipts per firm and the annualized costs are estimated to
be 3.5 percent of the average receipts per firm for firms with revenue
from $100,000 to $499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.015
As shown in Exhibit 17, the first year and annualized costs for
IRAPs in the transportation and warehousing industry are estimated to
have a significant economic impact (3 percent or more) on small
entities with receipts under $500,000, and those firms constitute a
substantial number of small entities in the transportation and
warehousing industry (61.2 percent). The first year costs are estimated
to be 36.7 percent of the average receipts per firm and the annualized
costs are estimated to be 19.4 percent of the average receipts per firm
for firms with revenue below $100,000. The first year costs are
estimated to be 7.3 percent of the average receipts per firm and the
annualized costs are estimated to be 3.8 percent of the average
receipts per firm for firms with revenue from $100,000 to $499,999.
[[Page 14378]]
[GRAPHIC] [TIFF OMITTED] TR11MR20.016
As shown in Exhibit 18, the first year and annualized costs for
IRAPs in the information industry are estimated to have a significant
economic impact (3 percent or more) on small entities with receipts
under $500,000, and those firms constitute a substantial number of
small entities in the information industry (57.7 percent). The first
year costs are estimated to be 36.7 percent of the average receipts per
firm and the annualized costs are estimated to be 19.4 percent of the
average receipts per firm for firms with revenue below $100,000. The
first year costs are estimated to be 7.2 percent of the average
receipts per firm and the annualized costs are estimated to be 3.8
percent of the average receipts per firm for firms with revenue below
from $100,000 to $499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.017
As shown in Exhibit 19, the first year and annualized costs for
IRAPs in the finance and insurance industry are estimated to have a
significant economic impact (3 percent or more) on small entities with
receipts under $500,000, and those firms constitute a substantial
number of small entities in the finance and insurance industry (68.5
percent).
[[Page 14379]]
The first year costs are estimated to be 36.1 percent of the average
receipts per firm and the annualized costs are estimated to be 19.0
percent of the average receipts per firm for firms with revenue below
$100,000. The first year costs are estimated to be 7.1 percent of the
average receipts per firm and the annualized costs are estimated to be
3.7 percent of the average receipts per firm for firms with revenue
from $100,000 to $499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.018
As shown in Exhibit 20, the first year and annualized costs for
IRAPs in the real estate and rental and leasing industry are estimated
to have a significant economic impact (3 percent or more) on small
entities with receipts under $500,000, and those firms constitute a
substantial number of small entities in the real estate and rental and
leasing industry (69.2 percent). The first year costs are estimated to
be 35.3 percent of the average receipts per firm and the annualized
costs are estimated to be 18.6 percent of the average receipts per firm
for firms with revenue below $100,000. The first year costs are
estimated to be 7.3 percent of the average receipts per firm and the
annualized costs are estimated to be 3.8 percent of the average
receipts per firm for firms with revenue from $100,000 to $499,999.
[[Page 14380]]
[GRAPHIC] [TIFF OMITTED] TR11MR20.019
As shown in Exhibit 21, the first year and annualized costs for
IRAPs in the professional, scientific, and technical services industry
are estimated to have a significant economic impact (3 percent or more)
on small entities with receipts under $500,000, and those firms
constitute a substantial number of small entities in the professional,
scientific, and technical services industry (69.5 percent). The first
year costs are estimated to be 36.0 percent of the average receipts per
firm and the annualized costs are estimated to be 19.0 percent of the
average receipts per firm for firms with revenue below $100,000. The
first year costs are estimated to be 7.4 percent of the average
receipts per firm and the annualized costs are estimated to be 3.9
percent of the average receipts per firm for firms with revenue from
$100,000 to $499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.020
As shown in Exhibit 22, the first year and annualized costs for
IRAPs in the management of companies and enterprises industry are
estimated to have a significant economic impact (3 percent or more) on
small entities with
[[Page 14381]]
receipts under $2.5 million, and those firms constitute a substantial
number of small entities in the management of companies and enterprises
industry (33.5 percent). The first year costs are estimated to be 58.2
percent of the average receipts per firm and the annualized costs are
estimated to be 30.7 percent of the average receipts per firm for firms
with revenue below $100,000. The first year costs are estimated to be
8.6 percent of the average receipts per firm and the annualized costs
are estimated to be 4.5 percent of the average receipts per firm for
firms with revenue from $100,000 to $499,999. The first year costs are
estimated to be 4.6 percent of the average receipts per firm for firms
with revenue from $500,000 to $999,999. The first year costs are
estimated to be 3.8 percent of the average receipts per firm for firms
with revenue from $1,000,000 to $2,499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.021
As shown in Exhibit 23, the first year and annualized costs for
IRAPs in the administrative and support, waste management and
remediation services industry are estimated to have a significant
economic impact (3 percent or more) on small entities with receipts
under $500,000, and those firms constitute a substantial number of
small entities in the administrative and support, waste management and
remediation services industry (69.8 percent). The first year costs are
estimated to be 37.9 percent of the average receipts per firm and the
annualized costs are estimated to be 20.0 percent of the average
receipts per firm for firms with revenue below $100,000. The first year
costs are estimated to be 7.3 percent of the average receipts per firm
and the annualized costs are estimated to be 3.9 percent of the average
receipts per firm for firms with revenue from $100,000 to $499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.022
[[Page 14382]]
As shown in Exhibit 24, the first year and annualized costs for
IRAPs in the educational services industry are estimated to have a
significant economic impact (3 percent or more) on small entities with
receipts under $500,000, and those firms constitute a substantial
number of small entities in the educational services industry (65.3
percent). The first year costs are estimated to be 37.9 percent of the
average receipts per firm and the annualized costs are estimated to be
20.0 percent of the average receipts per firm for firms with revenue
below $100,000. The first year costs are estimated to be 7.3 percent of
the average receipts per firm and the annualized costs are estimated to
be 3.8 percent of the average receipts per firm for firms with revenue
from $100,000 to $499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.023
As shown in Exhibit 25, the first year and annualized costs for
IRAPs in the health care and social assistance industry are estimated
to have a significant economic impact (3 percent or more) on small
entities with receipts under $500,000, and those firms constitute a
substantial number of small entities in the health care and social
assistance industry (56.4 percent). The first year costs are estimated
to be 37.3 percent of the average receipts per firm and the annualized
costs are estimated to be 19.7 percent of the average receipts per firm
for firms with revenue below $100,000. The first year costs are
estimated to be 6.6 percent of the average receipts per firm and the
annualized costs are estimated to be 3.5 percent of the average
receipts per firm for firms with revenue from $100,000 to $499,999.
[[Page 14383]]
[GRAPHIC] [TIFF OMITTED] TR11MR20.024
As shown in Exhibit 26, the first year and annualized costs for
IRAPs in the arts, entertainment, and recreation industry are estimated
to have a significant economic impact (3 percent or more) on small
entities with receipts under $500,000, and those firms constitute a
substantial number of small entities in the arts, entertainment, and
recreation industry (66.6 percent). The first year costs are estimated
to be 37.0 percent of the average receipts per firm and the annualized
costs are estimated to be 19.5 percent of the average receipts per firm
for firms with revenue below $100,000. The first year costs are
estimated to be 7.2 percent of the average receipts per firm and the
annualized costs are estimated to be 3.8 percent of the average
receipts per firm for firms with revenue from $100,000 to $499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.025
As shown in Exhibit 27, the first year and annualized costs for
IRAPs in the accommodation and food services industry are estimated to
have a significant economic impact (3 percent or more) on small
entities with receipts under $500,000, and those firms constitute a
substantial number of small entities in the accommodation and food
services industry (61.3 percent). The first year costs are estimated to
be 35.6 percent of the average receipts per firm and the annualized
costs are estimated to be 18.8 percent of the average receipts per firm
for firms with revenue below
[[Page 14384]]
$100,000. The first year costs are estimated to be 6.8 percent of the
average receipts per firm and the annualized costs are estimated to be
3.6 percent of the average receipts per firm for firms with revenue
from $100,000 to $499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.026
As shown in Exhibit 28, the first year and annualized costs for
IRAPs in the other services industry are estimated to have a
significant economic impact (3 percent or more) on small entities with
receipts under $500,000, and those firms constitute a substantial
number of small entities in the other services industry (73.5 percent).
The first year costs are estimated to be 35.8 percent of the average
receipts per firm and the annualized costs are estimated to be 18.9
percent of the average receipts per firm for firms with revenue below
$100,000. The first year costs are estimated to be 7.3 percent of the
average receipts per firm and the annualized costs are estimated to be
3.8 percent of the average receipts per firm for firms with revenue
from $100,000 to $499,999.
[GRAPHIC] [TIFF OMITTED] TR11MR20.027
[[Page 14385]]
7. Alternatives to the Final Rule
The RFA directs agencies to assess the impacts that various
regulatory alternatives would have on small entities and to consider
ways to minimize those impacts. Accordingly, the Department considered
a regulatory alternative related to the second cost component:
Provision of performance data to the SRE. Under this alternative, IRAPs
would need to provide performance data once every 5 years rather than
annually. To estimate the reduction in costs under this alternative,
the Department decreased from 25 hours to 5 hours (= 25 hours / 5
years) the time burden for IRAPs to provide performance information to
their SREs.
Exhibit 29 shows the estimated cost per IRAP for each year of the
analysis period. The first year cost per IRAP is estimated at $15,608
at a discount rate of 7 percent. The annualized cost per IRAP is
estimated at $7,038 at a discount rate of 7 percent.
[GRAPHIC] [TIFF OMITTED] TR11MR20.028
The Department decided not to pursue this alternative because a
longer reporting cycle would be inconsistent with the annual reporting
cycles for other workforce investment programs, and would provide less
useful information to the public. Transparency is vital to the success
of IRAPs. An annual reporting cycle will provide stakeholders with the
uniform information necessary to evaluate the outcomes of this new
initiative. Moreover, an annual reporting cycle will provide IRAPs and
SREs with valuable information that will enable them to assess the
effectiveness of their programs and make improvements.
C. Paperwork Reduction Act
The purposes of the Paperwork Reduction Act of 1995 (PRA), 44
U.S.C. 3501 et seq., include minimizing the paperwork burden on
affected entities. The PRA requires certain actions before an agency
can adopt or revise a collection of information, including publishing
for public comment a summary of the collection of information and a
brief description of the need for and proposed use of the information.
As part of its continuing effort to reduce paperwork and respondent
burden, the Department conducts a preclearance consultation program to
provide the public and Federal agencies with an opportunity to comment
on proposed and continuing collections of information in accordance
with PRA. See 44 U.S.C. 3506(c)(2)(A). This activity helps to ensure
that the public understands the Department's collection instructions,
respondents can provide the requested data in the desired format,
reporting burden (time and financial resources) is minimized,
collection instruments are clearly understood, and the Department can
properly assess the impact of collection requirements on respondents.
In accordance with the requirements of PRA the proposed regulation
solicited comments on the information collections included therein. The
Department also submitted an ICR to OMB in accordance with 44 U.S.C.
3507(d), contemporaneously with the publication of the proposed
regulation, for OMB's review. OMB issued a notice of action asking the
Departments to resubmit the ICR after considering public comments, at
the final rule stage.
Although no public comments were received that specifically
addressed the paperwork burden analysis of the information collections,
the comments that were submitted, and which are described earlier in
this preamble, contained information relevant to the costs and
administrative burdens attendant to the proposals. As discussed
throughout this final rule, the Department took into account such
public comments in connection with making changes to the final rule,
especially when analyzing the economic impact of the rule and
developing the revised paperwork burden analysis summarized below.
Industry-Recognized Apprenticeship Program Standards Recognition Entity
Regulation and Application
As discussed above, E.O. 13801 directed the Department to determine
how qualified entities may provide recognition to ``industry-recognized
apprenticeship programs,'' and to ``establish guidelines or
requirements that qualified third parties should or must follow to
ensure that the apprenticeship programs they recognize meet quality
standards.''
To obtain the information necessary for the Department to determine
whether a prospective SRE has satisfied the criteria outlined in the
final rule, the Department proposed the information collection titled
``Industry-Recognized Apprenticeship Program Standards Recognition
Entity Regulation and Application.''
Agency: DOL-ETA.
Title of Collection: Industry-Recognized Apprenticeship Program
Standards Recognition Entity Regulation and Application.
OMB Control Number: 1205-0536.
Affected Public: State and Local Governments; Private Sector--
businesses or other for-profits and not-for-profit institutions.
Total Estimated Number of Respondents: 3,794.
Total Estimated Number of Responses: 141,819.
Total Estimated Annual Time Burden: 285,310 hours.
Total Estimated Annual Other Costs Burden: $0.
[[Page 14386]]
Regulations Sections: 29 CFR 29.21(a), 29.21(b)(6), 29.21(c)(2),
29.22(a)(1), 29.22(a)(2), 29.22(a)(4)(ii), 29.22(a)(4)(vii),
29.22(a)(4)(ix), 29.22(a)(4)(x), 29.22(b), 29.22(c), 29.22(d),
29.22(f)(5), 29.22(h), 29.22(i), 29.22(j), 29.22(k), 29.22(l),
29.22(m), 29.22(n), and 29.22(o).
The PRA provides that a Federal agency generally cannot conduct or
sponsor a collection of information, and the public is generally not
required to respond to an information collection, unless it is approved
by OMB under PRA and displays a currently valid OMB Control Number. In
addition, notwithstanding any other provisions of law, no person shall
generally be subject to penalty for failing to comply with a collection
of information that does not display a valid Control Number. See 5 CFR
1320.5 and 1320.6(a).
Section 29.22(h) provides that SREs must annually report to the
Administrator and make publicly available certain information the
Department considers important for providing employers and prospective
apprentices the details necessary to make informed decisions about
IRAPs. Affected parties do not have to comply with the information
collection requirements in Sec. 29.22(h) until the Department
publishes in the Federal Register the control numbers assigned by the
OMB to these information collection requirements. Publication of the
control numbers notifies the public that OMB has approved these
information collection requirements under PRA. The Department will
publish a Federal Register notice requesting public comment on the
collections required by Sec. 29.22(h) and submit an ICR to the OMB for
review and approval in accordance with PRA prior to requiring or
accepting any data collections. A copy of that ICR, with applicable
supporting documentation--including a description of the likely
respondents, proposed format and frequency of responses, and estimated
total burden--will be available on the RegInfo.gov website.
Interested parties may obtain a copy free of charge of the current
and future ICRs submitted to the OMB on the reginfo.gov website at
http://www.reginfo.gov/public/do/PRAMain. From the Information
Collection Review tab, select Information Collection Review. Then
select Department of Labor from the Currently Under Review dropdown
menu and look up the Control Number. You may also request a free copy
of an ICR by contacting the person named in the ADDRESSES section of
this preamble.
D. Executive Order 13132: Federalism
As with the NPRM, the Department reviewed the final rule in
accordance with E.O. 13132, Federalism, and has determined that it has
does not have federalism implications because it has does not have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government.
Two commenters questioned the Department's conclusion in the NPRM
that the rule does not have federalism implications. One commenter
cited a lack of clarity for how State prevailing wage laws would apply
to apprentices in IRAPs as grounds for questioning the Department's
conclusion on federalism. As discussed above in the section-by-section
analysis for Sec. 29.22(a)(4)(vii), the Department acknowledges the
concerns raised by commenters and is confident, however, that the text
of the Federal prevailing wage regulations at issue, 29 CFR
5.5(a)(4)(i), is sufficiently clear. These Federal prevailing wage
regulations only apply to registered apprenticeship programs that are
either registered by OA or an SAA. Additionally, the Department
declines to opine on the applicability of State prevailing wage laws to
IRAP apprentices because whether an IRAP apprentice would qualify as an
apprentice under a State prevailing wage law depends on the specific
State law at issue and the extent to which such laws track the Federal
Davis-Bacon Act varies.
The other commenter asserted concerns about the Department's
adherence to ``due process'' under NAA, interpreting the statute's
requirement for the Secretary of Labor to ``cooperate with State
agencies engaged in the formulation and promotion of standards of
apprenticeship'' as requiring specific consultation with State Agencies
to during the development of the NPRM. As discussed above in the Legal
Authority section, NAA does not dictate the terms of how the Department
consults with States, and it does not require that DOL consult or
operate its apprenticeship initiatives through States. Therefore,
Department maintains its conclusion that the rulemaking has no
federalism implications, and no further agency action or analysis are
required under E.O. 13132.
E. Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (see 2
U.S.C. 1532), requires each Federal agency to prepare a written
statement assessing the effects of any Federal mandate in a proposed
agency rule that may result in $100 million or more in expenditures
(adjusted annually for inflation) in any 1 year by State, local, and
tribal governments, in the aggregate, or by the private sector.
This final rule does not exceed the $100 million expenditure in any
1 year when adjusted for inflation, and this rulemaking does not
contain such a mandate. The requirements of title II of UMRA,
therefore, do not apply, and the Department has not prepared a
statement under UMRA.
F. Executive Order 13175 (Indian Tribal Governments)
The Department has reviewed this final rule in accordance with E.O.
13175 and has determined that it does not have tribal implications. The
final rule does not have substantial direct effects on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.
List of Subjects in 29 CFR Part 29
Apprenticeship programs, Apprentice agreements and complaints,
Apprenticeability criteria, Program standards, Registration and
deregistration, Sponsor eligibility, State apprenticeship agency
recognition and derecognition.
For the reasons stated in the preamble, the Department amends 29
CFR part 29 as follows:
PART 29--LABOR STANDARDS FOR THE REGISTRATION OF APPRENTICESHIP
PROGRAMS; STANDARDS RECOGNITION ENTITIES OF INDUSTRY-RECOGNIZED
APPRENTICESHIP PROGRAMS
0
1. The authority citation for part 29 continues to read as follows:
Authority: Section 1, 50 Stat. 664, as amended (29 U.S.C. 50; 40
U.S.C. 276c; 5 U.S.C. 301) Reorganization Plan No. 14 of 1950, 64
Stat. 1267 (5 U.S.C. App. P. 534).
Sec. Sec. 29.1 through 29.14 [Designated as Subpart A]
0
2. Designate Sec. Sec. 29.1 through 29.14 as Subpart A and add a
subpart heading to read as follows:
Subpart A--Registered Apprenticeship Programs
0
3. Amend Sec. 29.1 by revising the section heading and paragraph (b)
to read as follows:
[[Page 14387]]
Sec. 29.1 Purpose and scope for the Registered Apprenticeship
Program.
* * * * *
(b) The purpose of this subpart is to set forth labor standards to
safeguard the welfare of apprentices, promote apprenticeship
opportunity, and to extend the application of such standards by
prescribing policies and procedures concerning the registration, for
certain Federal purposes, of acceptable apprenticeship programs with
the U.S. Department of Labor, Employment and Training Administration,
Office of Apprenticeship. These labor standards, policies and
procedures cover the registration, cancellation and deregistration of
apprenticeship programs and of apprenticeship agreements; the
recognition of a State agency as an authorized agency for registering
apprenticeship programs for certain Federal purposes; and matters
relating thereto.
0
4. Amend Sec. 29.2 by adding introductory text and revising the
definitions of ``Apprenticeship program,'' ``Registration agency,'' and
``Technical assistance'' to read as follows:
Sec. 29.2 Definitions.
For the purpose of this subpart:
* * * * *
Apprenticeship program means a plan containing all terms and
conditions for the qualification, recruitment, selection, employment
and training of apprentices, as required under 29 CFR part 29 subpart
A, and part 30, including such matters as the requirement for a written
apprenticeship agreement.
* * * * *
Registration agency means the Office of Apprenticeship or a
recognized State Apprenticeship Agency that has responsibility for
registering apprenticeship programs and apprentices; providing
technical assistance; conducting reviews for compliance with 29 CFR
part 29 subpart A, and part 30; and quality assurance assessments.
* * * * *
Technical assistance means guidance provided by Registration Agency
staff in the development, revision, amendment, or processing of a
potential or current program sponsor's Standards of Apprenticeship,
Apprenticeship Agreements, or advice or consultation with a program
sponsor to further compliance with this subpart or guidance from the
Office of Apprenticeship to a State Apprenticeship Agency on how to
remedy nonconformity with this subpart.
* * * * *
0
5. Amend Sec. 29.3 by revising paragraph (b)(1), paragraph (g)
introductory text, and paragraph (h) to read as follows:
Sec. 29.3 Eligibility and procedure for registration of an
apprenticeship program.
* * * * *
(b) * * *
(1) It is in conformity with the requirements of this subpart and
the training is in an apprenticeable occupation having the
characteristics set forth in Sec. 29.4; and
* * * * *
(g) Applications for new programs that the Registration Agency
determines meet the required standards for program registration must be
given provisional approval for a period of 1 year. The Registration
Agency must review all new programs for quality and for conformity with
the requirements of this subpart at the end of the first year after
registration. At that time:
* * * * *
(h) The Registration Agency must review all programs for quality
and for conformity with the requirements of this subpart at the end of
the first full training cycle. A satisfactory review of a provisionally
approved program will result in conversion of provisional approval to
permanent registration. Subsequent reviews must be conducted no less
frequently than every 5 years. Programs not in operation or not
conforming to the regulations must be recommended for deregistration
procedures.
* * * * *
0
6. Amend Sec. 29.6 by revising paragraph (b)(2) to read as follows:
Sec. 29.6 Program performance standards.
* * * * *
(b) * * *
(2) Any additional tools and factors used by the Registration
Agency in evaluating program performance must adhere to the goals and
policies of the Department articulated in this subpart and in guidance
issued by the Office of Apprenticeship.
* * * * *
0
7. Amend Sec. 29.10 by revising paragraph (a)(2) to read as follows:
Sec. 29.10 Hearings for deregistration.
(a) * * *
(2) A statement of the provisions of this subpart pursuant to which
the hearing is to be held; and
* * * * *
0
8. Amend Sec. 29.11 by revising the introductory text to read as
follows:
Sec. 29.11 Limitations.
Nothing in this subpart or in any apprenticeship agreement will
operate to invalidate:
* * * * *
0
9. Amend Sec. 29.13 by revising paragraphs (a)(1), (b)(1), (c), (e)
introductory text, and (e)(4) to read as follows:
Sec. 29.13 Recognition of State Apprenticeship Agencies.
(a) * * *
(1) The State Apprenticeship Agency must submit a State
apprenticeship law, whether instituted through statute, Executive
Order, regulation, or other means, that conforms to the requirements of
29 CFR part 29 subpart A, and part 30;
* * * * *
(b) * * *
(1) Establish and maintain an administrative entity (the State
Apprenticeship Agency) that is capable of performing the functions of a
Registration Agency under 29 CFR part 29 subpart A;
* * * * *
(c) Application for recognition. A State Apprenticeship Agency
desiring new or continued recognition as a Registration Agency must
submit to the Administrator of the Office of Apprenticeship the
documentation specified in paragraph (a) of this section. A currently
recognized State desiring continued recognition by the Office of
Apprenticeship must submit to the Administrator of the Office of
Apprenticeship the documentation specified in paragraph (a) of this
section within 2 years of the effective date of the final rule. The
recognition of a currently recognized State shall continue for up to 2
years from the effective date of this regulation and during any
extension period granted by the Administrator. An extension of time
within which to comply with the requirements of this subpart may be
granted by the Administrator for good cause upon written request by the
State, but the Administrator shall not extend the time for submission
of the documentation required by paragraph (a) of this section. Upon
approval of the State Apprenticeship Agency's application for
recognition and any subsequent modifications to this application as
required under paragraph (b)(9) of this section, the Administrator
shall so notify the State Apprenticeship Agency in writing.
* * * * *
(e) Compliance. The Office of Apprenticeship will monitor a State
Registration Agency for compliance
[[Page 14388]]
with the recognition requirements of this subpart through:
* * * * *
(4) Determination whether, based on the review performed under
paragraphs (e)(1), (2), and (3) of this section, the State Registration
Agency is in compliance with part 29 subpart A. Notice to the State
Registration Agency of the determination will be given within 45 days
of receipt of proposed modifications to legislation, regulations,
policies, and/or operational procedures required to be submitted under
paragraphs (a)(1), (a)(5) and (b)(9) of this section.
* * * * *
0
10. Amend Sec. 29.14 by revising the introductory text and paragraphs
(e)(1) and (i) to read as follows:
Sec. 29.14 Derecognition of State Apprenticeship Agencies.
The recognition for Federal purposes of a State Apprenticeship
Agency may be withdrawn for the failure to fulfill, or operate in
conformity with, the requirements of part 29 subpart A, and part 30.
Derecognition proceedings for reasonable cause will be instituted in
accordance with the following:
* * * * *
(e) * * *
(1) The Office of Apprenticeship may grant the request for
registration on an interim basis. Continued recognition will be
contingent upon its finding that the State apprenticeship program is
operating in accordance with the requirements of this subpart and of 29
CFR part 30.
* * * * *
(i) A State Apprenticeship Agency whose recognition has been
withdrawn under this subpart may have its recognition reinstated upon
presentation of adequate evidence that it has fulfilled the
requirements established in Sec. Sec. 29.13(i) and 29.14(g) and (h)
and is operating in conformity with the requirements of this subpart.
0
11. Add Subpart B, Standards Recognition Entities of Industry-
Recognized Apprenticeship Programs, to read as follows:
Subpart B--Standards Recognition Entities of Industry-Recognized
Apprenticeship Programs
Sec.
29.20 Standards Recognition Entities, Industry-Recognized
Apprenticeship Programs, Administrator, and Apprentices.
29.21 Becoming a Standards Recognition Entity.
29.22 Responsibilities and requirements of Standard Recognition
Entities.
29.23 Quality assurance.
29.24 Publication of Standards Recognition Entities and Industry-
Recognized Apprenticeship Programs.
29.25 Complaints against Standards Recognition Entities.
29.26 Review of a Standards Recognition Entity.
29.27 Suspension and derecognition of a Standards Recognition
Entity.
29.28 Derecognition's effect on Industry-Recognized Apprenticeship
Programs.
29.29 Requests for administrative review.
29.30 Scope of Industry-Recognized Apprenticeship Programs
Recognition by Standards Recognition Entities.
29.31 Severability.
Sec. 29.20 Standards Recognition Entities, Industry-Recognized
Apprenticeship Programs, Administrator, and Apprentices.
For the purpose of this subpart, which establishes a new
apprenticeship pathway distinct from the registered apprenticeship
programs described in subpart A:
(a) A Standards Recognition Entity (SRE) of Industry-Recognized
Apprenticeship Programs (IRAPs) is an entity that is qualified to
recognize apprenticeship programs as IRAPs under Sec. 29.21 and that
has been recognized by the Department of Labor. The types of entities
that can become SREs include:
(1) Trade, industry, and employer groups or associations;
(2) Corporations and other organized entities;
(3) Educational institutions, such as universities or community
colleges;
(4) State and local government agencies or entities;
(5) Non-profit organizations;
(6) Unions;
(7) Joint labor-management organizations;
(8) Certification and accreditation bodies or entities for a
profession or industry; or
(9) A consortium or partnership of entities such as those above.
(b) IRAPs are high-quality apprenticeship programs, wherein an
individual obtains workplace-relevant knowledge and progressively
advancing skills, that include a paid-work component and an educational
or instructional component, and that result in an industry-recognized
credential. An IRAP is developed or delivered by entities such as trade
and industry groups, corporations, non-profit organizations,
educational institutions, unions, and joint labor-management
organizations. An IRAP is an apprenticeship program that has been
recognized as a high-quality program by an SRE pursuant to Sec.
29.22(a)(4)(i) through (x).
(c) The Administrator is the Administrator of the Department of
Labor's Office of Apprenticeship, or any person specifically designated
by the Administrator.
(d) An apprentice is an individual training in an IRAP under an
apprenticeship agreement.
Sec. 29.21 Becoming a Standards Recognition Entity.
(a) To apply to be recognized as an SRE, an entity (or consortium
or partnership of entities) must complete and submit an application to
the Administrator for recognition as an IRAP SRE. Such application must
be in a form prescribed by the Administrator, which will require the
applicant's written attestation that the information and documentation
provided is true and correct. This application must include all
policies and procedures required by this subpart or addressing
requirements in this subpart, which will be reviewed by the
Administrator when making a recognition determination.
(b) An entity is qualified to be recognized as an SRE if it
demonstrates:
(1) It has the expertise to set competency-based standards, through
a consensus-based process involving industry experts, for the requisite
training, structure, and curricula for apprenticeship programs in the
industry(ies) or occupational area(s) in which it seeks to be an SRE.
(i) The requirements in paragraph (b)(1) of this section may be met
through an SRE's past or current standard-setting activities and need
only engender new activity if necessary to comply with this rule.
(ii) [Reserved]
(2) It has the capacity and quality assurance processes and
procedures sufficient to comply with Sec. 29.22(a)(4), given the scope
of the IRAPs to be recognized.
(3) It has the resources to operate as an SRE for a 5-year period.
As part of its application, an entity must report any bankruptcies from
the past 5 years.
(4) Its disclosure of any confirmed or potential partner who will
be engaged in the recognition activities and describes their roles,
including relationships with subsidiaries or other related entities
that could reasonably impact its impartiality.
(5) It is not suspended or debarred from conducting business with
the U.S. Federal Government.
(6) It mitigates--via any specific policies, processes, procedures,
or structures--any actual or potential conflicts of interest,
including, but not limited to, conflicts that may arise from the entity
recognizing its own apprenticeship program(s) and conflicts relating to
the entity's provision of services to actual or prospective IRAPs.
[[Page 14389]]
(7) It has the appropriate knowledge and resources to recognize
IRAPs in the industry(ies) or occupational areas in the intended
geographical area, that may be nationwide or limited to a region,
State, or local area.
(8) It meets any other applicable requirements of this subpart.
(c) The Administrator will recognize an entity as an SRE if it is
qualified under paragraph (b) of this section.
(1) An SRE will be recognized for 5 years, and must reapply at
least 6 months before the date that its current recognition is set to
expire if it seeks re-recognition.
(i) To reapply to continue serving as an SRE, an entity must
complete and submit an updated application to the Administrator for re-
recognition as an IRAP SRE that is in a form prescribed by the
Administrator.
(ii) To determine whether re-recognition should be granted, the
Administrator will evaluate the information provided by the SRE in the
updated application and the data provided pursuant to Sec. 29.22(h),
to verify that the SRE's quality assurance processes and procedures
were and continue to be sufficient to effect compliance with Sec.
29.22(a)(4).
(2) An SRE must notify the Administrator and must provide all
related material information if:
(i) It makes any major change that could affect the operations of
the program, such as involvement in lawsuits that materially affect the
SRE, changes in legal status, or any other change that materially
affects the SRE's ability to function in its recognition capacity; or
(ii) It seeks to recognize apprenticeship programs in additional
industries, occupational areas, or geographical areas.
(3) An SRE must submit changes as described in paragraph (c)(2)(ii)
of this section to the Administrator for evaluation prior to the SRE
implementing the changes. In light of the information received, the
Administrator will evaluate whether the SRE remains qualified for
recognition under paragraph (b) of this section, including its
qualification to recognize programs in the new industries, occupational
areas, or geographical areas identified under paragraph (c)(2)(ii) of
this section.
(d) The requirements for denials of recognition are as follows:
(1) A denial of recognition must be in writing and must state the
reason(s) for denial. The notice must tell the applicant what it needs
to do differently before resubmitting its application.
(2) The notice must state that a request for administrative review
may be made within 30 calendar days of receipt of the notice.
(3) The notice must explain that a request for administrative
review must comply with the service requirements contained in 29 CFR
part 18. The Administrator will refer any requests for administrative
review to the Office of Administrative Law Judges to be addressed in
accordance with Sec. 29.29.
Sec. 29.22 Responsibilities and requirements of Standards Recognition
Entities.
(a) An SRE must:
(1) Recognize or reject an apprenticeship program seeking
recognition as an IRAP in a timely manner;
(2) Inform the Administrator within 30 calendar days when it has
recognized, suspended, or derecognized an IRAP, and include the name
and contact information of the program;
(3) Provide the Administrator any data or information the
Administrator is expressly authorized to collect under this subpart;
and
(4) Only recognize as IRAPs and maintain such recognition of
apprenticeship programs that meet the following requirements:
(i) The program must train apprentices for employment in jobs that
require specialized knowledge and experience and involve the
performance of complex tasks.
(ii) The program has a written training plan, consistent with its
SRE's requirements and standards as developed pursuant to the process
set forth in Sec. 29.21(b)(1). The written training plan, which must
be provided to an apprentice prior to beginning an IRAP, must detail
the program's structured work experiences and appropriate related
instruction, be designed so that apprentices demonstrate competency and
earn credential(s), and provide apprentices progressively advancing
industry-essential skills.
(iii) The program ensures that, where appropriate, apprentices
receive credit for prior knowledge and experience relevant to the
instruction of the program.
(iv) The program provides apprentices industry-recognized
credential(s) during participation in or upon completion of the
program.
(v) The program provides a working environment for apprentices that
adheres to all applicable Federal, State, and local safety laws and
regulations and complies with any additional safety requirements of its
SRE.
(vi) The program provides apprentices structured mentorship
opportunities throughout the duration of the apprenticeship that
involve ongoing, focused supervision and training by experienced
instructors and employees, to ensure apprentices have additional
guidance on the progress of their training and their employability.
(vii) The program ensures apprentices are paid at least the
applicable Federal, State, or local minimum wage. The program must
provide a written notice to apprentices of what wages apprentices will
receive and under what circumstances apprentices' wages will increase.
The program's charging of costs or expenses to apprentices must comply
with all applicable Federal, State, or local wage laws and regulations,
including but not limited to the Fair Labor Standards Act and its
regulations. This rule does not purport to alter or supersede an
employer's obligations under any such laws and regulations.
(viii) The program affirms its adherence to all applicable Federal,
State, and local laws pertaining to Equal Employment Opportunity (EEO).
(ix) The program discloses to apprentices, before they agree to
participate in the program, any costs or expenses that will be charged
to them (such as costs related to tools or educational materials).
(x) The program maintains a written apprenticeship agreement for
each apprentice that outlines the terms and conditions of the
apprentice's employment and training. The apprenticeship agreement must
be consistent with its SRE's requirements.
(b) An SRE must validate its IRAPs' compliance with paragraph
(a)(4) of this section when it provides the Administrator with notice
of recognition under paragraph (a)(2) of this section, and on an annual
basis thereafter, and must at that time provide the Administrator a
written attestation that its IRAPs meet the requirements of paragraph
(a)(4) of this section and any other requirements of the SRE.
(c) An SRE must publicly disclose the credential(s) that
apprentices will earn during their participation in or upon completion
of an IRAP.
(d) An SRE must establish policies and procedures for recognizing,
and validating compliance of, programs that ensure that SRE decisions
are impartial, consistent, and based on objective and merit-based
criteria; ensure that SRE decisions are confidential except as required
or permitted by this subpart, or otherwise required by law; and are
written in sufficient detail to reasonably achieve the foregoing
criteria. An SRE must submit these policies and
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procedures to the Administrator with its application.
(e) An SRE's recognition of an IRAP may last no longer than 5
years. An SRE may not re-recognize an IRAP without the IRAP seeking re-
recognition.
(f) An SRE must remain in an ongoing quality-control relationship
with the IRAPs it has recognized. The specific means and nature of the
relationship between the IRAP and SRE will be defined by the SRE,
provided the relationship:
(1) Does in fact result in reasonable and effective quality control
that includes, as appropriate, consideration of apprentices' credential
attainment, program completion, retention rates, and earnings;
(2) Does not prevent the IRAP from receiving recognition from
another SRE;
(3) Does not conflict with this subpart or violate any applicable
Federal, State, or local law;
(4) Involves periodic compliance reviews by the SRE of its IRAP to
ensure compliance with the requirements of paragraph (a)(4) of this
section and the SRE's requirements; and
(5) Includes policies and procedures for the suspension or
derecognition of an IRAP that fails to comply with the requirements of
paragraph (a)(4) of this section and its SRE's requirements.
(g) Participating as an SRE under this subpart does not make the
SRE a joint employer with entities that develop or deliver IRAPs.
(h) Each year, an SRE must report to the Administrator, in a format
prescribed by the Administrator, and make publicly available the
following information on each IRAP it recognizes:
(1) Up-to-date contact information for each IRAP;
(2) The total number of new and continuing apprentices annually
training in each IRAP under an apprenticeship agreement;
(3) The total number of apprentices who successfully completed the
IRAP annually;
(4) The annual completion rate for apprentices. Annual completion
rate must be calculated by comparing the number of apprentices in a
designated apprenticeship cohort who successfully completed the IRAP
requirements and attained an industry-recognized credential with the
number of apprentices in that cohort who initially began training in
the IRAP;
(5) The median length of time for IRAP completion;
(6) The post-apprenticeship employment retention rate, calculated 6
and 12 months after program completion;
(7) The industry-recognized credentials attained by apprentices in
an IRAP, and the annual number of such credentials attained;
(8) The annualized average earnings of an IRAP's former
apprentices, calculated over the 6 month period after IRAP completion;
(9) Training cost per apprentice; and
(10) Basic demographic information on participants.
(i) An SRE must have policies and procedures that require IRAPs'
adherence to applicable Federal, State, and local laws pertaining to
EEO, and must facilitate such adherence through the SRE's policies and
procedures regarding potential harassment, intimidation, and
retaliation (such as the provision of anti-harassment training, and a
process for handling EEO and harassment complaints from apprentices);
must have policies and procedures that reflect comprehensive outreach
strategies to reach diverse populations that may participate in IRAPs;
and must assign responsibility to an individual to assist IRAPs with
matters relating to this paragraph.
(j) An SRE must have policies and procedures for addressing
complaints filed by apprentices, prospective apprentices, an
apprentice's authorized representative, a personnel certification body,
or an employer against each IRAP the SRE recognizes. An SRE must make
publicly available the aggregated number of complaints pertaining to
each IRAP in a format and frequency prescribed by the Administrator.
(k) An SRE must notify the public about the right of an apprentice,
a prospective apprentice, the apprentice's authorized representative, a
personnel certification body, or an employer, to file a complaint with
the SRE against an IRAP the complainant is associated with, and the
requirements for filing a complaint.
(l) An SRE must notify the public about the right to file a
complaint against it with the Administrator as set forth in Sec.
29.25.
(m) If an SRE has received notice of derecognition pursuant to
Sec. 29.27(c)(1)(ii) or (c)(3), the SRE must inform each IRAP it has
recognized and the public of its derecognition.
(n) An SRE must publicly disclose any fees it charges to IRAPs.
(o) An SRE must ensure that records regarding each IRAP recognized,
including whether the IRAP has met all applicable requirements of this
subpart, are maintained for a minimum of 5 years.
(p) An SRE must follow any policy or procedure submitted to the
Administrator or otherwise required by this subpart, and an SRE must
notify the Administrator when it makes significant changes to its
policies or procedures.
Sec. 29.23 Quality assurance.
(a) The Administrator may request and review materials from SREs,
and may conduct periodic compliance assistance reviews of SREs to
ascertain their conformity with the requirements of this subpart.
(b) SREs must provide requested materials to the Administrator,
consistent with Sec. 29.22(a)(3).
(c) The information that is described in this subpart may be
utilized by the Administrator to discharge the recognition, review,
suspension, and derecognition duties outlined in Sec. Sec.
29.21(c)(1), 29.26, and 29.27.
Sec. 29.24 Publication of Standards Recognition Entities and
Industry-Recognized Apprenticeship Programs.
The Administrator will make publicly available a list of
recognized, suspended, and derecognized SREs and IRAPs.
Sec. 29.25 Complaints against Standards Recognition Entities.
(a) A complaint arising from an SRE's compliance with this subpart
may be submitted by an apprentice, the apprentice's authorized
representative, a personnel certification body, an employer, or an IRAP
to the Administrator for review.
(b) The complaint must be in writing and must be submitted within
180 calendar days from the complainant's actual or constructive
knowledge of the circumstances giving rise to the complaint. It must
set forth the specific matter(s) complained of, together with relevant
facts and circumstances.
(c) Complaints under this section are addressed exclusively through
the review process outlined in Sec. 29.26.
(d) Nothing in this section precludes a complainant from pursuing
any remedy authorized under Federal, State, or local law.
Sec. 29.26 Review of a Standards Recognition Entity.
(a) The Administrator may initiate review of an SRE if it receives
information indicating that:
(1) The SRE is not in substantial compliance with this subpart; or
(2) The SRE is no longer capable of continuing as an SRE.
(b) As part of the review, the Administrator must provide the SRE
written notice of the review and an opportunity to provide information
for the review. Such notice must include a statement of the basis for
review, including potential areas in which the SRE is not in
substantial compliance or
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why the SRE may no longer be capable of continuing as an SRE and a
detailed description of the information supporting review under
paragraphs (a)(1) or (2) of this section, or both.
(c) Upon conclusion of the Administrator's review, the
Administrator will give written notice to the SRE of its decision to
either take no action against the SRE, or to suspend the SRE as
provided under Sec. 29.27.
Sec. 29.27 Suspension and derecognition of a Standards Recognition
Entity.
The Administrator may suspend an SRE for 45 calendar days based on
the Administrator's review and determination that any of the situations
described in Sec. 29.26(a)(1) or (2) exist.
(a) The Administrator must provide notice in writing and state that
a request for administrative review may be made within 45 calendar days
of receipt of the notice.
(b) The notice must set forth an explanation of the Administrator's
decision, including identified areas in which the SRE is not in
substantial compliance or an explanation why the SRE is no longer
capable of continuing as an SRE, or both, and necessary remedial
actions, and must explain that the Administrator will derecognize the
SRE in 45 calendar days unless remedial action is taken or a request
for administrative review is made.
(c) If, within the 45-day period, the SRE:
(1) Specifies its proposed remedial actions and commits itself to
remedying the identified areas in which the SRE is not in substantial
compliance or the circumstances that render is no longer capable of
continuing as an SRE, or both, the Administrator will extend the 45-day
period to allow a reasonable time for the SRE to implement remedial
actions.
(i) If the Administrator subsequently determines that the SRE has
remedied the identified areas in which the SRE is not in substantial
compliance or the circumstances that render is no longer capable of
continuing as an SRE, or both, the Administrator must notify the SRE,
and the suspension will end.
(ii) If the Administrator subsequently determines that the SRE has
not remedied the identified areas in which the SRE is not in
substantial compliance or the circumstances that render is no longer
capable of continuing as an SRE, or both, after the close of the 45-day
period and any extensions previously allowed by the Administrator, the
Administrator will derecognize the SRE and must notify the SRE in
writing and specify the reasons for its determination. The
Administrator must state that a request for administrative review may
be made within 45 calendar days of receipt of the notice.
(2) Makes a request for administrative review, then the
Administrator will refer the matter to the Office of Administrative Law
Judges to be addressed in accordance with Sec. 29.29.
(3) Does not act under paragraph (c)(1) or (2) of this section, the
Administrator will derecognize the SRE.
(d) During the suspension:
(1) The SRE is barred from recognizing new programs.
(2) The Administrator will publish the SRE's suspension on the
public list described in Sec. 29.24.
Sec. 29.28 Derecognition's effect on Industry-Recognized
Apprenticeship Programs.
(a) Following its SRE's derecognition, an IRAP will maintain its
status until 1 year after the Administrator's decision derecognizing
the IRAP's SRE becomes final, including any appeals. At the end of 1
year, the IRAP will lose its status unless it is already recognized by
another SRE recognized under this subpart.
(b) Upon derecognizing an SRE, the Administrator will update the
public list described in Sec. 29.24 to reflect the derecognition, and
the Administrator will notify the SRE's IRAP(s) of the derecognition.
Sec. 29.29 Requests for administrative review.
(a) Within 30 calendar days of the filing of a request for
administrative review, the Administrator must prepare an administrative
record for submission to the Administrative Law Judge designated by the
Chief Administrative Law Judge.
(b) The procedures contained in 29 CFR part 18 will apply to the
disposition of the request for review except that:
(1) The Administrative Law Judge will receive, and make part of the
record, documentary evidence offered by any party and accepted at the
hearing. Copies thereof will be made available by the party submitting
the documentary evidence to any party to the hearing upon request.
(2) Technical rules of evidence will not apply to hearings
conducted under this subpart, but rules or principles designed to
assure production of the most credible evidence available and to
subject testimony to test by cross-examination will be applied, where
reasonably necessary, by the Administrative Law Judge conducting the
hearing. The Administrative Law Judge may exclude irrelevant,
immaterial, or unduly repetitious evidence.
(c) The Administrative Law Judge should submit proposed findings, a
recommended decision, and a certified record of the proceedings to the
Administrative Review Board, SRE, and Administrator within 90 calendar
days after the close of the record.
(d) Within 20 calendar days of the receipt of the recommended
decision, any party may file exceptions. Any party may file a response
to the exceptions filed by another party within 10 calendar days of
receipt of the exceptions. All exceptions and responses must be filed
with the Administrative Review Board with copies served on all parties
and amici curiae.
(e) After the close of the period for filing exceptions and
responses, the Administrative Review Board may issue a briefing
schedule or may decide the matter on the record before it. The
Administrative Review Board must issue a decision in any case it
accepts for review within 180 calendar days of the close of the record.
If a decision is not so issued, the Administrative Law Judge's decision
constitutes final agency action.
(f) The Administrator's decision must be upheld unless the decision
is arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with the law.
Sec. 29.30 Scope of Industry-Recognized Apprenticeship Programs
Recognition by Standards Recognition Entities.
(a) The Administrator will not recognize as SREs entities that
intend to recognize as IRAPs programs that seek to train apprentices to
perform construction activities, consisting of: The erecting of
buildings and other structures (including additions); heavy
construction other than buildings; and alterations, reconstruction,
installation, and maintenance and repairs.
(b) SREs that obtain recognition from the Administrator are
prohibited from recognizing as IRAPs programs that seek to train
apprentices to perform construction activities, consisting of: The
erecting of buildings and other structures (including additions); heavy
construction other than buildings; and alterations, reconstruction,
installation, and maintenance and repairs.
Sec. 29.31 Severability.
Should a court of competent jurisdiction hold any provision(s) of
this subpart to be invalid, such action will
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not affect any other provision of this subpart.
John Pallasch,
Assistant Secretary for Employment and Training.
[FR Doc. 2020-03605 Filed 3-10-20; 8:45 am]
BILLING CODE 4510-FR-P
