Apprenticeship Programs, Labor Standards for Registration, Amendment of Regulations

Cited as:85 FR 14294
Court:Labor Department
Publication Date:11 Mar 2020
Record Number:2020-03605
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
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                29 CFR Part 29
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                 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.
                ---------------------------------------------------------------------------
                 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\
                ---------------------------------------------------------------------------
                 \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.
                ---------------------------------------------------------------------------
                 \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).
                ---------------------------------------------------------------------------
                 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\
                ---------------------------------------------------------------------------
                 \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.
                ---------------------------------------------------------------------------
                 \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).
                ---------------------------------------------------------------------------
                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\
                ---------------------------------------------------------------------------
                 \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%)).
                ---------------------------------------------------------------------------
                 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).
                ---------------------------------------------------------------------------
                 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
                [[Page 14390]]
                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
                [[Page 14391]]
                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
                [[Page 14392]]
                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