Wagner-Peyser Act Staffing Flexibility
| Published date | 06 January 2020 |
| Citation | 85 FR 592 |
| Record Number | 2019-27260 |
| Section | Rules and Regulations |
| Court | Employment And Training Administration,Labor Department |
Federal Register, Volume 85 Issue 3 (Monday, January 6, 2020)
[Federal Register Volume 85, Number 3 (Monday, January 6, 2020)]
[Rules and Regulations]
[Pages 592-630]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27260]
[[Page 591]]
Vol. 85
Monday,
No. 3
January 6, 2020
Part IIIDepartment of Labor-----------------------------------------------------------------------Employment and Training Administration-----------------------------------------------------------------------20 CFR Parts 651, 652, 653, et al.Wagner-Peyser Act Staffing Flexibility; Final Rule
Federal Register / Vol. 85 , No. 3 / Monday, January 6, 2020 / Rules
and Regulations
[[Page 592]]
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DEPARTMENT OF LABOR
Employment and Training Administration
20 CFR Parts 651, 652, 653, and 658
[Docket No. ETA-2019-0004]
RIN 1205-AB87
Wagner-Peyser Act Staffing Flexibility
AGENCY: Employment and Training Administration (ETA), Labor.
ACTION: Final rule.
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SUMMARY: The U.S. Department of Labor (Department or DOL) is issuing
this final rule to give States increased flexibility in their
administration of Employment Service (ES) activities funded under the
Wagner-Peyser Act (the Act). This flexibility includes the grants
allocated to the States for the traditional labor exchange and related
services, and for the foreign labor certification program, including
the placement of employer job orders, inspection of housing for
agricultural workers, and the administration of prevailing wage and
practice surveys.
DATES: This final rule is effective February 5, 2020.
FOR FURTHER INFORMATION CONTACT: Heidi Casta, Deputy Administrator,
Office of Policy Development and Research, U.S. Department of Labor,
200 Constitution Avenue NW, Room N-5641, Washington, DC 20210,
Telephone: (202) 693-3700 (voice) (this is not a toll-free number) or
1-800-326-2577 (TDD).
SUPPLEMENTARY INFORMATION:
I. Executive Summary
This final rule reflects changes made in response to public
comments received on the Notice of Proposed Rulemaking (NPRM) that was
published on June 24, 2019, at 84 FR 29433. The Department received
many comments from the public, States, and advocates for Migrant and
Seasonal Farmworker (MSFW) populations. The Department took into
account these comments in reaching this final rule, and the changes
made to the regulatory text are detailed below in the Department's
responses to related comments.
The regulatory changes made in this final rule modernize the
regulations implementing the Wagner-Peyser Act \1\ to align them with
the flexibility allowed under the Workforce Innovation and Opportunity
Act (WIOA), and to allow States to choose the service delivery model
that can best meet their goals for the ES program. This could include a
focus on services for individuals with barriers to employment, improved
employment opportunities for Unemployment Insurance (UI) recipients and
other job seekers, better services for employers, and improved outreach
to individuals in rural areas. The changes also give States the
flexibility to staff employment and farmworker-outreach services in
what each State finds is the most effective and efficient way, using a
combination of State employees, local government employees, service
providers, and other staffing models in a way that makes the most sense
for them. This, in turn, may leave more resources to help employers
find employees and to help employees find the work they need. The
changes are also consistent with Executive Order (E.O.) 13777, which
requires the Department to identify outdated, inefficient, unnecessary,
or overly burdensome regulations that should be repealed, replaced, or
modified.
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\1\ This statute was originally titled the Act of June 6, 1933.
Section 16 of the statute instructs that it may be called the
Wagner-Peyser Act.
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The modifications made in this final rule require conforming
amendments \2\ to the specific Wagner-Peyser Act references in 20 CFR
678.630, 34 CFR 361.630, and 34 CFR 463.630 of the U.S. Departments of
Labor and Education's joint WIOA regulations (Workforce Innovation and
Opportunity Act; Joint Rule for Unified and Combined State Plans,
Performance Accountability, and the One-Stop System Joint Provisions
Final Rule, 81 FR 55792 (Aug. 19, 2016)). Neither this conforming
change nor any of the changes discussed in this final rule will affect
other programs' staffing requirements, such as those for the Vocational
Rehabilitation (VR) program, because all changes discussed in this
final rule, including these conforming changes, apply only to the ES
programs authorized under the Wagner-Peyser Act which includes the
Monitor Advocate System activities.
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\2\ Although this final rule requires that conforming amendments
be made to 20 CFR 678.630, 34 CFR 361.630, and 34 CFR 463.630, these
amendments are not contained in this final rule. DOL and the U.S.
Department of Education will make these conforming amendments in a
separate regulatory action.
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The Wagner-Peyser Act does not mandate specific staffing
requirements. Section 3(a) of the Wagner-Peyser Act requires the U.S.
Secretary of Labor (Secretary) to assist in coordinating the ES offices
by developing and prescribing minimum standards of efficiency.
Historically, the Department has used the authority in this provision
to require States to provide labor exchange services with State merit
staff, i.e. State staff employed according to the merit system
principles in 5 CFR part 900, subpart F--Standards for a Merit System
of Personnel Administration.\3\ However, this is not the only
reasonable interpretation of this provision and, in finalizing this
rule, the Department is adopting an interpretation that allows States
the flexibility to use staffing arrangements that best suit their
needs. This flexibility will allow States to provide Wagner-Peyser Act
services through State merit staff, other State staff, subawards to
local governments or private entities, a combination of these
arrangements, or other allowable staffing solutions under the Uniform
Administrative Requirements, Cost Principles, and Audit Requirements
for Federal Awards (Uniform Guidance). Consistent with the Uniform
Guidance, all of these staffing arrangements, other than using State-
employee staff, would be considered subawards and the entities
providing services would be considered subrecipients. The Department
received comments on the NPRM asserting that the Department did not
have the authority to provide this flexibility under the Wagner-Peyser
Act. The Department has responded to those comments, and others, below.
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\3\ Throughout this rule the Department uses the term ``merit
staff'' and similar phrases to refer to staff that are part of a
merit personnel system that complies with 5 CFR part 900, subpart F.
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This final rule is not subject to the requirements of E.O. 13771
because this rule results in no more than de minimis costs.
II. General Comments Received on the Notice of Proposed Rulemaking
The Wagner-Peyser Act Staffing Flexibility NPRM proposed changes to
20 CFR parts 651, 652, 653, and 658. The Department received 126
comments within the 30-day comment period. Of these, the Department
received comments expressing general support for the changes proposed
in the NPRM, as well as several comments expressing opposition to these
changes. Additionally, the Department received one untimely comment
that pertained to issues also raised by timely commenters. Some
commenters requested the Department to extend the comment period, but
after considering their requests, the Department determined that the
original 30-day comment period provided adequate time for the public to
comment on the proposed rule. The Department appreciates the input from
all commenters.
Multiple commenters, including private individuals, local workforce
[[Page 593]]
development boards, and several States, supported the flexibility in
the rule because, they stated, it would allow for staffing flexibility
and that ``privatization,'' as some commenters characterized it, at the
State and local levels would help agencies address local needs.
Multiple commenters also supported the allowance for what they termed
``privatization'' as enabling the alignment of WIOA title I and ES
staffing. One commenter agreed with the proposed rule's assessment that
staffing flexibility could result in savings that could be reinvested
elsewhere in ES activities. Another commenter wrote that, in the
commenter's State, staffing flexibility could help integrate services
and ensure that local job centers have sufficient onsite staff. Some
commenters, including a local workforce development board, stated that
Michigan has operated a pilot program that allocates funding to local
workforce development boards, and that further flexibility would be
beneficial. Some commenters supported the flexibility because, they
wrote, the private sector would better provide employment services due
to its adaptability to modern technologies and circumstances, including
tracking job placements.
The Department appreciates these comments and agrees that staffing
flexibility puts States in the best position to determine what is the
most effective, efficient, and cost-effective way to provide the
services under the Wagner-Peyser Act. The Department recognizes the
value of the three State pilot projects, which provided important
information on the use of alternative staffing models. With the
staffing flexibility provided to the programs covered by this final
rule, States will now have significant discretion and flexibility to
tailor their service-delivery models to their local needs and
circumstances.
Many commenters described this rule's new flexibilities for States
as ``privatization.'' That is not an accurate term. This rule does not
privatize Wagner-Peyser Act services. States retain responsibility to
provide Wagner-Peyser Act services, and this rule provides flexibility
to States to offer these services using the best staffing approach
available to them.
Similarly, many commenters used the term ``contractors.'' As
explained more fully below, the word ``contractor'' is a defined term
under the Uniform Guidance, which governs how States can expend their
Wagner-Peyser Act grant funds. To allay confusion, the Department has
used the term ``contractor'' only where appropriate in this preamble,
such as when describing the content of a comment.
Several commenters opposed the proposed staffing flexibility
because, they wrote, the proposed rule lacks support demonstrating the
effectiveness of non-merit-staffing alternatives for ES activities and
claimed that available evidence indicates that merit-staffing is the
most efficient way of staffing ES programs. In support of these views,
several commenters referenced Jacobson et al., ``Evaluation of Labor
Exchange Services in a One-Stop Delivery System Environment''
(2004),\4\ as a study showing the benefits of maintaining a merit-
staff-based ES program. According to several commenters, this study
concludes that the demonstration States for alternative staffing models
(Colorado, Massachusetts, and Michigan) did not improve ES operations
compared to the merit-staffing model as studied in Oregon, North
Carolina, and Washington. Several commenters stated that the study
demonstrates that merit-staffing was highly cost-efficient.
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\4\ Louis Jacobson, Ian Petta, Amy Shimshak, and Regina Yudd,
``Evaluation of Labor Exchange Services in a One-Stop Delivery
System Environment,'' prepared by Westat for the U.S. Department of
Labor, Employment and Training Administration Occasional Paper 2004-
09 (Feb. 2004).
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The Department appreciates the comments citing the Jacobson study
related to the Wagner-Peyser Act ES. However, the Department disagrees
with the characterization of the study's results. In particular, the
Department does not agree that the study found a strong correlation
between merit-staffing and the study's conclusions, as the Jacobson
study did not focus on merit-staffing.
The Jacobson study assessed how public labor exchanges funded under
the Wagner-Peyser Act have evolved with the development of one-stop
centers (also known as ``American Job Centers'' or ``AJCs''). Parts of
the study compared the performance of ``traditional'' public labor
exchanges, which maintained State-level control of ES programs, with
``non-traditional'' public labor exchanges, which devolved control of
ES programs to local or county governments. The study identified three
States that modified their public exchange structure substantially by
devolving State control and staffing to local areas (Jacobson et al.,
101-08). Colorado devolved responsibility for ES activity to the
counties through workforce development boards (called workforce
investment boards at the time), while one-stop centers in Michigan were
run by a mix of State and local government agencies. Only one of the
States (Massachusetts) ultimately permitted individual workforce
development boards to opt out of the traditional State-run public labor
exchange system and devolve service delivery to local government, non-
profit, or for-profit entities. See Jacobson et al, at 45-46. The
limited findings--which did not specifically focus on merit-staffing--
should not be used to draw conclusions regarding merit-staffing systems
nationwide.
The study concluded that in the States evaluated, State-controlled
one-stop centers helped many UI claimants rapidly return to work;
however, one-stop centers controlled by non-State entities tended to
focus on serving economically disadvantaged populations, tailored job
listings to the specific skills of those in most need, and effectively
used the case management approach to service.
It is also important to note that this study evaluated service
delivery under the Workforce Investment Act (WIA). Its successor, WIOA,
made significant reforms to the federally funded workforce development
programs and provides States greater flexibility to achieve their
goals, making the study less relevant to the current rulemaking than
suggested by the commenters.
The Jacobson study can be informative when viewed holistically. One
of the goals of providing staffing flexibility is to give States more
options in designing their workforce development systems, including the
ES program, to more closely align with other WIOA partner programs. The
results of this study show that it is possible to more closely align
services provided by the ES program with WIOA's focus on serving
individuals with barriers to employment, which is a key goal of this
rulemaking. While the Department acknowledges the commenters' concerns
about whether particular staffing arrangements would be optimal in any
individual State, the Department considers States to be in the best
position to determine whether to implement the staffing flexibility
provided in this regulation. States are able to determine the most
effective, efficient, and cost-effective way to provide the services
under the Wagner-Peyser Act.
Several commenters referenced a 2012 study from Michaelides et al.,
``Impact of the Reemployment and Eligibility Assessment (REA)
Initiative in Nevada,'' as an additional study showing the benefits of
maintaining a merit-staff-
[[Page 594]]
based ES program.\5\ According to commenters, this study found that, in
the Reemployment and Eligibility Assessment (REA) evaluation in Nevada,
the merit-staffed REA program led to UI claimants collecting fewer
benefits. The Department recognizes the value of evaluations and
encourages States to consider any relevant research or to conduct their
own evaluations or pilot projects to best determine their staffing
approaches.
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\5\ Marios Michaelides, Eileen Poe-Yamagata, Jacob Benus, and
Dharmendra Tirumalasetti, ``Impact of the Reemployment and
Eligibility Assessment (REA) Initiative in Nevada,'' prepared by
IMPAQ for the U.S. Department of Labor (Jan. 2012).
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The objective of the Michaelides et al. study was to address
specific questions related to the efficacy of the Nevada REA program,
including whether REA reduced UI benefit duration and benefit amounts
received, whether it expedited reemployment of UI claimants, and
whether REA led to UI Trust Fund savings exceeding REA program costs.
The study was not measuring the efficacy of merit staff delivering the
services. While State merit staff provided the services analyzed in the
study, the study did not specifically look at the staffing model, but
rather it evaluated the services provided. The study never analyzed or
determined whether the positive results were attributable to State
merit-staffed employees providing the services. Therefore, the study's
findings cannot be viewed as illustrative of the relative benefits of
merit-staffing for this rulemaking.
The Department notes that this regulation does not require States
to change their staffing structure for providing services under the
Wagner-Peyser Act, but rather it provides much needed flexibility in
developing their staffing structure to staff these services. The
Department considers States to be in the best position to determine
whether to implement the staffing flexibility provided in this
regulation. States may review this and other studies in making such a
decision. States are able to determine the most effective, efficient,
and cost-effective way to provide the services under the Wagner-Peyser
Act.
Two commenters recommended the Department conduct an independent
assessment showing the effectiveness of alternative staffing models
before implementing the rule. The Department recognizes the value of
evaluations in helping States determine the most effective, efficient,
and cost-effective way to provide ES activities and encourages States
to consider all available data in determining their staffing
strategies.
For example, there is no merit-staffing requirement in the WIOA
title I Adult and Dislocated Worker programs. As explained in the NPRM,
when crafting this flexibility, the Department considered the results
and outcomes for WIOA title I programs, which do not have a merit-
staffing requirement, to show that career services, including labor
exchange services, can be provided effectively through non-merit staff
employees.
The Department sponsored the Workforce Investment Act Adult and
Dislocated Worker Programs Gold Standard Evaluation, which found that
intensive services (now called individualized career services under
WIOA) were an effective service intervention for job seekers. States
can use their ES funds to provide individualized career services,
similar to the ones evaluated in this study. Therefore, the Department
has concluded that it is not necessary to have State merit-staffing to
provide effective ES activities.
The Department considers States to be in the best position to
determine whether to implement the staffing flexibility provided in
this regulation. The Department encourages States to consider any
relevant research or to conduct their own evaluations or pilot projects
when determining whether to implement the staffing flexibility provided
for in this regulation. It should be noted that the Department was not
and is not required to conduct the assessment suggested by the
commenter.
Several commenters stated that the NPRM failed to describe the
contracting process and would leave ES open to potential conflicts of
interest. The Department makes grants to the States to carry out the
Wagner-Peyser Act requirements, making the States the Department's
grantees. The Department and the States are subject to the Uniform
Guidance at 2 CFR part 200, as well as the Department's implementing
regulations at 2 CFR part 2900. If a State determines it will use the
flexibility offered by this final rule to obtain a service provider to
deliver the State's ES activities, this service provider will be
characterized as a subrecipient, as defined in 2 CFR 200.93, under the
Uniform Guidance. See 2 CFR 200.330. This makes the agreement between
the State and the service provider to deliver Wagner-Peyser Act
activities a subaward. See 2 CFR 200.92. While States have the
flexibility to characterize their agreements with any ES providers as
``contracts,'' the service provider cannot be considered a contractor
as that term is defined and used in the Uniform Guidance, as the
service provider does not have the characteristics of a contractor
described in 2 CFR 200.330(b). See also 2 CFR 200.22. Because the
Wagner-Peyser Act service provider will be a subrecipient, the service
provider will be subject to the requirements of the Uniform Guidance,
including the financial and program management, monitoring, and cost
principle requirements.
The Uniform Guidance does not impose any particular process or
procedure States must use when making a subaward to a subrecipient.
Therefore, to give the States the maximum flexibility in choosing the
staffing method that is the most efficient for each State, the
Department declines, at this time, to prescribe a particular process or
procedure that States must use in determining who will provide ES
activities in the State.
The Department does not agree that the staffing flexibility would
leave the ES open to potential conflicts of interest. 2 CFR 200.112
requires the Department to establish conflict of interest policies for
the use of Wagner-Peyser Act grant funds. Consistent with this
requirement, the Department promulgated 20 CFR 683.200(c)(5)(iii),
which governs ES activities and requires States to disclose any
potential conflicts of interest to the Department and the State's
subrecipients to disclose any potential conflicts of interest to the
State. 20 CFR 683.200(c)(5)(iii) requires that States, as Federal award
recipients, disclose in writing any potential conflict of interest to
the Department. The Department considers potential conflicts of
interest to include conflicts of interest that are real, apparent, or
organizational. Therefore, whether or not a State uses the flexibility
in this final rule to provide ES activities, the State and its
subrecipients will be required to disclose potential conflicts of
interest.
The Department also notes that, consistent with 20 CFR 683.400, the
Department will continue to conduct monitoring to ensure States are
complying with all of the requirements of the Wagner-Peyser Act, its
implementing regulations, and 2 CFR parts 200 and 2900. This will
include monitoring to ensure States are complying with all applicable
requirements on conflicts of interest.
Some commenters opposed the rule, contending that a private entity
would be less likely to provide assistance to rural areas and customers
who are less comfortable with technology, noting the time and
investment that staff need to devote to these job seekers and
employers. One commenter stated that a
[[Page 595]]
private entity would be less willing to devote that time because the
profit incentives would dictate their service delivery strategy.
The Department appreciates the commenter's concern regarding access
for job seekers in rural areas and those customers with technological
barriers. Under this regulation, States will be given the flexibility
to select the best service delivery strategy to meet their unique needs
and requirements, including the needs of a State's rural residents and
residents with technological barriers. The Department does not agree
that job seekers in rural areas and those with technological barriers
would necessarily receive worse services if a State takes advantage of
the staffing flexibility provided in this final rule. The ES program is
a universal access program requiring certain services be available to
all employers and job seekers, which includes the customers identified
by the commenter. States, even if they take advantage of staffing
flexibility, still must meet the universal access requirement found at
20 CFR 652.207.
Additionally, the Department notes there is no evidence that State
merit staff are better suited to serving rural areas or specific
populations than others. Notably, many local areas are wholly or partly
located in rural areas and deliver WIOA title I-funded career services
to a range of job seekers under a variety of staffing models; the
Department anticipates States would adopt similar strategies for ES
activities. Additionally, the Department notes that States have the
flexibility to structure their agreements with their Wagner-Peyser Act
service providers in a way that ensures all job seekers and employers
receive effective services from the ES program.
Regarding the commenter's concern that private entities would be
less motivated to serve rural areas and individuals who require more
time or assistance because of a profit motive, the Department does not
agree that private entities necessarily will be less willing to provide
quality services to individuals who may require more time. States have
flexibility to create agreements with their ES service providers that
encourage serving those who may have technological barriers, may need
additional time or assistance, or who live in rural areas. States are
ultimately accountable for ensuring universal access to all job
seekers, including those in rural areas and those who require more time
and assistance.
States are required to oversee all operations of the Wagner-Peyser
Act in their States, whether or not they ultimately decide to exercise
this final rule's staffing flexibility, and States are still subject to
Federal monitoring under 20 CFR part 683, subpart D--Oversight and
Resolution of Findings. Consistent with 20 CFR 683.400, the Department
will continue to conduct monitoring to ensure States are complying with
all of the requirements of the Wagner-Peyser Act, its implementing
regulations, and 2 CFR parts 200 and 2900.
Some commenters stated that a uniform, federally mandated service
delivery-staffing model helps prevent inconsistency in service
delivery. The Department has concluded that a uniform staffing model
does not necessarily ensure consistency of services, and the Department
encourages States to establish policies on service delivery to improve
quality and consistency regardless of staffing model. The Department
notes that, regardless of how States staff their ES program, they are
still obligated to provide all of the services the Wagner-Peyser Act
requires and uniformity of service is still ensured by other Wagner-
Peyser Act rules found in 20 CFR parts 651, 652, 653, and 658. For
example, 20 CFR 652.3 establishes minimum requirements for public labor
exchange systems and 20 CFR 653.101 establishes minimum requirements
for the provision of services to MSFWs. Additionally, the ES program is
a mandatory one-stop partner program, and consistency across service
locations is supported by the one-stop center certification
requirements in the WIOA regulations at 20 CFR 678.800.
In addition, States, as Wagner-Peyser Act grantees, are still
required to oversee all operations of the Wagner-Peyser Act, regardless
of whether or not they ultimately decide to take advantage of the
staffing flexibility provided by this final rule. Consistent with 20
CFR 683.400, the Department will continue to conduct monitoring to
ensure States are complying with all of the requirements of the Wagner-
Peyser Act, its implementing regulations, and 2 CFR parts 200 and 2900.
Some commenters stated that private entities would provide inferior
service because they are motivated by profit, rather than service. A
commenter cited instances of communications challenges with
participants served by some contractors in non-DOL administered
programs. Some stated that, for example, as a result of profit or
outcome incentives, ``privatization efforts,'' as described by the
commenter, could result in ``contractors'' referring only the most
employable workers to employers, which could lead to poorer employment
outcomes for individuals with the highest barriers to employment. One
commenter added that the proposed rule would have a disproportionate,
adverse impact on Black and Hispanic workers. Another commenter stated
that publicly administered public services reduce inequality.
The Department appreciates the concerns of commenters and agrees
that the quality of services is important. This rule does not privatize
Wagner-Peyser Act services, but rather it provides flexibility to
States to offer Wagner-Peyser Act services using the best staffing
approach available to them to provide these services. States, working
with local workforce development boards as appropriate, must ensure
that proper policies and processes are in place to deter inadequate
communication and services and that the workforce system continues to
provide effective and meaningful services to all participants.
Regarding the commenter's concern about private entities being
motivated by profit and thus not willing to provide services to those
individuals with barriers to employment, the Department notes that
there is flexibility in how States can structure their agreements with
their service providers. Included is the ability to align the goals of
the agreement with the goals of the Wagner-Peyser Act, including
serving UI claimants, dislocated workers, MSFWs, and other individuals
with barriers to employment.
The Department disagrees that staffing flexibility would result in
adverse impact on Black and Hispanic workers. Staffing flexibility may
allow local organizations, closer to the communities in which job
seekers live, to deliver culturally competent services to a local
community instead of workers managed by a central State office. Rather
than negatively affecting services to these communities, this final
rule will permit States to provide more tailored staffing models to
address the needs of these unique communities, as needed.
The Department notes that States, as Wagner-Peyser Act grantees,
are required to oversee all operations of the Wagner-Peyser Act,
whether or not they ultimately decide to exercise this final rule's
staffing flexibility. This includes ensuring that the State is meeting
the universal access requirements of the Wagner-Peyser Act in 20 CFR
652.207, which ensures services are available to all workers and not
just the most employable ones. The Department also notes that the non-
discrimination requirements of WIOA sec. 188 apply to the services
provided under the Wagner-Peyser Act regardless of the staffing model a
State may choose to implement.
[[Page 596]]
Consistent with 20 CFR 683.400, the Department will continue to conduct
monitoring to ensure States and their subrecipients are complying with
all of the requirements of the Wagner-Peyser Act, its implementing
regulations, and 2 CFR parts 200 and 2900.
A commenter stated that public employment offices belong in the
public sphere because they provide employment services without fees and
on an impartial basis, and that the proposal threatens the unbiased
nature of ES referrals and remove public employees from the actual
offices (especially given that UI employees often work off-site in call
centers). The commenter expressed concern that if a ``contractor'' were
providing ES activities, the contractor would charge a fee and may
jeopardize unbiased referrals.
This final rule gives States flexibility to staff ES programs in a
manner they believe is best tailored to meet the unique needs of the
workers who will use the services. The Department does not share the
commenter's concerns. The Wagner-Peyser Act program is a universal
access program requiring that labor exchange services be available to
all employers and job seekers, per 20 CFR 652.207. Such fees would not
be permissible and a service provider could not charge a fee for
offering ES activities. Additionally, 20 CFR 678.440(b) prohibits
charging a fee to employers for career services, specifically labor
exchange activities and labor market information, which are the primary
services under the Wagner-Peyser Act.
The Department notes that it has been permissible for non-merit
staff to carry out similar functions, such as reviewing compliance with
State work search requirements, for example, as part of the REA program
for many years. The Department recognizes the importance of the
connection between the UI and Wagner-Peyser Act programs, and considers
the flexibility this regulation provides to States as an opportunity
for States to test and improve strategies for serving unemployed
individuals.
Some commenters opposed the staffing flexibility in the proposed
rule because they stated that ``privatization,'' as termed by the
commenter, is inefficient, citing Supplemental Nutrition Assistance
Program (SNAP) efforts in Texas and Indiana. One commenter likewise
opposed the staffing flexibility in the proposed rule, arguing that
``privatization'' of services within Temporary Assistance for Needy
Families (TANF) in Wisconsin resulted in poorer services for the
public, with ``contractors'' retaining a substantial amount of their
budget rather than using it to provide services. While the Department
appreciates commenters' concerns over potential inefficiencies that
could arise if States adopt the additional flexibility in this final
rule, the Department notes that SNAP and TANF are different programs
with different statutory and regulatory requirements. States
considering using this final rule's staffing flexibility are encouraged
to consider the range of experiences other programs have had, including
those noted in relevant research, or to conduct their own evaluations
or pilot projects. States can also use lessons learned from other
efforts as they decide whether to use the staffing flexibility in this
final rule.
Regardless of how States choose to provide ES activities, they are
still Wagner-Peyser Act grantees, so they must oversee all operations
of the Wagner-Peyser Act activities and are still subject to 20 CFR
part 683, subpart D--Oversight and Resolution of Findings. Consistent
with 20 CFR 683.400, the Department will continue to conduct monitoring
to ensure States are complying with all of the requirements of the
Wagner-Peyser Act, its implementing regulations, and 2 CFR parts 200
and 2900. The Department will hold States responsible for violations of
the ES implementing regulations, the statute, and the Uniform Guidance.
Some commenters were concerned that allowing the flexibility in
staffing provided under this final rule, which they characterized as
privatization, would result in overall cost increases, as UI programs
require merit-staffing and often rely on ES staff in performing their
functions. A commenter likewise stated that providing services through
the use of what they termed private contracts would harm Trade
Adjustment Assistance (TAA) and veterans' programs that currently
require merit-staffing and benefit from being able to draw on ES
resources. Some commenters also stated that merit-staffing allows for
the efficient management and protection of a claimant's UI information,
benefit delivery, and job search. Some commenters stated that changing
ES staff would change the ``public face'' of UI programs, undermining
public trust in the organization. The Department has determined States
are in the best position to determine what funding and staffing
structure is the most efficient and effective for their programs, as
States are most familiar with their own particular needs. The
Department encourages States to consider costs when determining whether
they will use the staffing flexibility provided in this final rule.
The Department notes that this final rule does not change the
merit-staffing requirement in the UI program. Additionally, nothing in
this final rule changes UI requirements related to a claimant's UI
information, benefit delivery, and job search. States wishing to use
this final rule's flexibility for the provision of ES activities will
need to consider how to ensure the State remains in compliance with all
UI requirements.
The Department appreciates the considerations that States need to
take into account, such as the effects on partner programs, when
deciding whether to use this final rule's staffing flexibility. States,
as Wagner-Peyser Act grantees, are still required to oversee all
operations of the Wagner-Peyser Act whether or not they ultimately
decide to use this final rule's staffing flexibility.
One commenter stated that ``privatization introduces new data
security issues'' because of the differing security standards at
private companies, the risk that such companies may attempt to monetize
confidential information, and the possibility of disgruntled
``contractors'' misusing confidential information. Another commenter
provided an example of a disgruntled contractor misusing confidential
information. Similarly, a different commenter agreed that the proposal
could reduce information security.
The Department appreciates the considerations, such as data
security, that States need to take into account when deciding whether
to take advantage of this final rule's staffing flexibility. States are
required to comply with all applicable data confidentiality
restrictions, such as those found at 20 CFR 683.220 and 2 CFR
200.303(e). 20 CFR 683.220(a) requires States to have an internal
control structure and written policies that provide safeguards to
protect personally identifiable information. In considering whether to
use a service provider to deliver ES activities, States must consider
any implications using a service provider will have on these policies.
Likewise, 2 CFR 200.303(e) requires States to take reasonable measures
to safeguard protected personally identifiable information and States
must consider how a service provider will comply with this requirement
when determining if it would be appropriate to take advantage of this
final rule's staffing flexibility for providing ES activities. As
appropriate, the Department will continue to provide guidance of the
specific requirements
[[Page 597]]
grantees must follow pertaining to the acquisition, handling, and
transmission of personally identifiable information.
One commenter opposed the staffing flexibility in the proposed rule
because, the commenter stated, agreements for ``bureaucratic
functions'' require such long terms that they lose the competitiveness
necessary to drive down costs. The Department appreciates the
considerations that States need to take into account when deciding
whether to exercise staffing flexibility under the Wagner-Peyser Act,
including the structure of the agreement, duration, costs, and
services. The Department does not agree with the commenter that there
will be no cost savings associated with staffing flexibility for
providing ES activities. As explained in the economic analysis
accompanying the NPRM and this final rule, the Department has concluded
that there will be cost savings. Moreover, the Department considers
States to be in the best position to determine the appropriateness of
adopting the staffing flexibility for ES activities and whether the
flexibility will drive down costs.
One commenter opposed the flexibility in the proposed rule because
the commenter stated that the NPRM failed to explain how
``contractors'' could fulfill the essential functions of the Wagner-
Peyser Act's accountability, fiscal control, and operational
responsibilities. The Department appreciates the considerations that
States need to take into account when deciding whether to take
advantage of the staffing flexibility under the Wagner-Peyser Act the
Department is providing. The Department did not include in the NPRM nor
in this final rule prescriptive requirements regarding how a service
provider could fulfill these requirements. States are in the best
position to determine whether a service provider could meet these
obligations, and this rule is intended to encourage innovative and
flexible approaches to service delivery, customized to the unique
populations each State serves and each State knows best. Overly
specific requirements on State-level service providers would disserve
those important policy goals. The Department notes, however, that even
if a State chooses to use a service provider to deliver these services,
States, as the Wagner-Peyser Act grantees, are required to provide all
of the services under the Wagner-Peyser Act consistent with the
accountability, fiscal control, and operational responsibilities
dictated by the Act, its implementing regulations, including 20 CFR
683.200, and the Uniform Guidance. A State using a service provider to
deliver ES activities will have to ensure as part of its obligations
that these requirements are being met.
One commenter stated that WIOA title I programs should not be used
to judge the efficacy of what the commenter termed ``privatization'' of
Wagner-Peyser Act services, as the ES serves more customers and at a
lower cost per customer. This rule does not privatize Wagner-Peyser Act
services, but rather it provides flexibility to States to offer Wagner-
Peyser Act services using the best staffing approach available to them
to provide these services. The Department acknowledges that the ES has
a lower ``cost per participant'' than the WIOA title I programs;
however, the programs deliver a different set of services. Further, the
Department does not consider cost per participant to be the only
relevant factor in determining program efficacy. An important factor
the Department considered and discussed in the NPRM is the performance
indicators for the Wagner-Peyser Act as required under WIOA sec. 116.
As part of its justification for proposing staffing flexibility, the
Department noted that when isolating similar services provided by the
Wagner-Peyser Act and the WIOA Adult and Dislocated Worker programs,
the outcomes on those performance indicators were comparable. Cost per
participant is one of the factors a State may use when determining
whether it is efficacious to use different staffing models for Wagner-
Peyser Act services, but, for reasons stated in the NPRM, the
Department reiterates that the comparison to the WIOA title I Adult and
Dislocated Worker programs is appropriate.
The Department received several comments recommending the
Department consider the average cost per participant data of the
Wagner-Peyser Act services compared to the WIOA Dislocated Worker
program as part of its economic analysis.
The Department recognizes the value of average cost per participant
data and anticipates that States will consider this information when
determining the most cost-effective approach to delivering ES
activities. In the economic analysis, the Department did not compare
the average cost per participant receiving Wagner-Peyser Act services
to the average cost per participant receiving WIOA Dislocated Worker
services due to the differences between the two programs. As part of
its justification for merit-staffing flexibility, the Department noted
that when isolating similar services provided by the Wagner-Peyser Act
and the WIOA Adult and Dislocated Worker programs, the outcomes were
similar. However, the cost of the totality of services available in the
Dislocated Worker program cannot be usefully compared to the cost of
the totality of services available through the Wagner-Peyser Act. The
Dislocated Worker program provides more comprehensive services, such as
individualized career services and training services, which cost more
individually than Wagner-Peyser Act-funded services cost collectively.
Therefore, the Department does not include these Dislocated Worker
program services in its economic analysis of the rule.
Another commenter stated that, because the allotments to States
under the Wagner-Peyser Act are often less than their WIOA title I
allotments and the outcomes are similar, if cost savings are the goal,
the Department should require that WIOA title I services be provided by
merit staff. The Department declines this suggestion because it is
outside the scope of this rulemaking. This rulemaking is focused
specifically on Wagner-Peyser Act services, not WIOA title I services.
Further, as explained in the NPRM, cost savings are not the only goal
under this rulemaking. The Department laid out several other goals in
providing staffing flexibility, including aligning the provision of
Wagner-Peyser Act services and activities with WIOA's service delivery
model so the programs work better together and allowing maximum
flexibility to States to encourage innovative and creative approaches
to deliver employment services with limited resources.
The Department notes that as part of the explanation for staffing
flexibility in the NPRM, the Department explained that when isolating
similar services provided by the Wagner-Peyser Act and the WIOA Adult
and Dislocated Worker programs, the outcomes on the primary indicators
of performance were comparable. However, it is not appropriate to
compare the cost of the totality of services provided in the title I
programs with the cost of the services available through the Wagner-
Peyser Act, in part because the WIOA title I Adult and Dislocated
Worker programs provides more comprehensive services, such as
individualized career services, as well as training services.
Therefore, contrary to what the commenter suggested, this was not part
of the justification for staffing flexibility in the ES program.
One commenter opposed the proposed staffing flexibility because
they stated that ``privatization,'' as termed by the commenter, would
reduce accountability and transparency. This rule does not privatize
Wagner-Peyser
[[Page 598]]
Act services, but rather it provides flexibility to States to offer
Wagner-Peyser Act services using the best staffing approach available
to them to provide these services. The Department does not agree that
staffing flexibility necessarily would reduce accountability or
transparency. For example, a State may find it easier to hold an
individual service provider accountable for performance than a State
agency. Additionally, States can design agreements with service
providers to require accountability and information reporting resulting
in increased accountability and transparency. The Department notes that
States, as Wagner-Peyser Act grantees, are still required to oversee
all operations of the Wagner-Peyser Act whether or not they ultimately
decide to use the staffing flexibility provided by this final rule.
States will be responsible for holding their service providers
accountable for the delivery of services under the Wagner-Peyser Act
consistent with their responsibilities found in 20 CFR part 683,
subparts B (Administrative Rules, Costs, and Limitations) and D
(Oversight and Resolution of Findings). Further, consistent with 20 CFR
683.400, the Department will continue to conduct monitoring to ensure
States are complying with all of the requirements of the Wagner-Peyser
Act, its implementing regulations, and 2 CFR parts 200 and 2900.
One commenter opposed the staffing flexibility proposed in the
rule, stating that State employees are more efficient than their
private counterparts and mentioning greater accountability of the
former and costlier overhead for the latter. Other commenters opposed
the staffing flexibility proposed in the rule because they stated that
any possible cost-savings would be outweighed by the costs of contract
training and oversight. The Department appreciates the considerations
that States need to take into account when deciding whether to use the
staffing flexibility under the Wagner-Peyser Act. The Department
recognizes that there may be administrative costs associated with
obtaining a service provider to deliver ES activities. However, the
Department has determined there could be a reduction in costs due to
the diminished need for management and oversight of State employees.
States should consider any additional costs that may result from
obtaining a service provider, as well as cost savings, when determining
the appropriate staffing model for their State. Regardless of how
States staff the ES program, the Wagner-Peyser Act requires grantee
States to oversee all operations of the Wagner-Peyser Act.
One commenter opposed the proposed rule because, in the commenter's
view, it would increase the risk of conflicts of interest and
violations of lobbying and ethical rules. Conversely, another commenter
stated that the proposed rule could reduce conflicts of interest by
separating the service provision functions from the oversight functions
at the State level. This rule does not privatize Wagner-Peyser Act
services, but rather it provides flexibility to States to offer Wagner-
Peyser Act services using the best staffing approach available to them
to provide these services. The Department appreciates the
considerations that States need to take into account when deciding
whether to use the staffing flexibility this final rule provides for
delivering services under the Wagner-Peyser Act. The Department does
not agree that staffing flexibility necessarily increases the risk of
conflicts of interest and violations of lobbying and ethical rules as
States will still be bound to follow the same requirements they
currently follow. For example, 20 CFR 683.200(e) imposes restrictions
on lobbying using Wagner-Peyser Act funds and paragraph (c)(5) of this
section requires disclosures of conflict of interest. The Uniform
Guidance, which States are required to follow, also imposes
restrictions on using Wagner-Peyser Act funds for lobbying. See 2 CFR
200.450.
The Department notes that States, as Wagner-Peyser Act grantees,
are still required to oversee all operations of the Wagner-Peyser Act
whether they ultimately decide to use a service provider to staff these
services or not. Further, consistent with 20 CFR 683.400, the
Department will continue to conduct monitoring to ensure States are
complying with all of the requirements of the Wagner-Peyser Act, its
implementing regulations, and 2 CFR parts 200 and 2900.
Some commenters stated that non-merit-staffing would result in
political, corrupt, and/or nepotistic employment decisions. The
Department appreciates the commenters' concerns regarding corruption
and/or nepotistic employment decisions, and it works to ensure such
acts do not take place in DOL-funded grant programs, regardless of the
staffing model in place. The Department appreciates the considerations
that States need to take into account when deciding whether to exercise
staffing flexibility under the Wagner-Peyser Act and how they structure
their agreements and conduct oversight to prevent corruption or
nepotism. The Department expects States--both those that continue to
use merit staff and those that do not--to have policies and internal
controls in place that prevent corruption or nepotism. Further,
consistent with 20 CFR 683.400, the Department will continue to conduct
monitoring to ensure States are complying with all of the requirements
of the Wagner-Peyser Act, its implementing regulations, and 2 CFR parts
200 and 2900. As explained above, the Department anticipates that
conflict-of-interest disclosure requirements will help guard against
the kind of corruption and nepotism the commenter mentioned.
One commenter opposed the staffing flexibility proposed in the
rule, stating that public employees tend to be more knowledgeable and
have more experience than ``contractor'' who lack expertise and have
additional costs associated with bidding on contracts. Likewise, other
commenters stated that allowing the proposed staffing flexibility could
dismantle current infrastructure and relationships between State merit
staff currently carrying out the Wagner-Peyser Act and other service
providers, other agencies, and employers. One commenter stated that the
diminished competency of the ES would undermine the public's trust in
the program.
Commenters argued that contracting or privatizing (as they termed
it) the ES would be inefficient because it would cause turnover and
loss of institutional knowledge. Commenters mentioned specific areas of
expertise that require substantial time and dedication to master, such
as the TAA program and the State-specific case-management system.
Another commenter added that, as a result of ``contractor'' turnover,
service procedure can change, confusing job seekers. This rule does not
privatize Wagner-Peyser Act services, but rather it provides
flexibility to States to offer Wagner-Peyser Act services using the
best staffing approach available to them to provide these services. The
Department appreciates the considerations that States need to take into
account when deciding whether to exercise the staffing flexibility
under the Wagner-Peyser Act. States should consider any impacts to
service quality, impacts on partner programs, and staffing turnover
that may result from their decision, as well as consider establishing
policies and oversight functions that ensure service quality and
partner program relationships regardless of the staffing model chosen.
States, as Wagner-Peyser Act grantees, are still required to oversee
all
[[Page 599]]
operations of the Wagner-Peyser Act, regardless of the staffing model
chosen.
Other commenters expressed concern about how the proposal could
affect MSFWs and outreach services specifically. One commenter
recommended that the Department consider National Farmworker Jobs
Program (NFJP) grantees as partners for MSFW outreach. One commenter
stated that changes in outreach staffing requirements would disrupt
beneficial relationships and lead to a reduction in reporting on
employment law violations. The commenter further stated that the
proposal could harm MSFWs by diminishing the status and
responsibilities of the Monitor Advocate System, sending a message that
MSFW rights are not a priority. Finally, some commenters stated that
providing ES to MSFWs is a very complicated task, and is becoming more
so. The commenters described increasingly complicated job postings,
requirements of matching such postings against Wagner-Peyser Act and H-
2A criteria, and migrant housing regulations. The commenters stated
that the proposal would reduce the experience of ES staff and thus
their ability to perform their duties. The Department acknowledges that
there may be distinct effects of staffing flexibility on the Monitor
Advocate System. In response to the recommendation that the Department
consider NFJP grantees as partners for MSFW outreach, the Department
notes the requirement at Sec. 653.108(k) for the State Monitor
Advocate (SMA) to establish an ongoing liaison with NFJP grantees, in
addition to the requirement at Sec. 653.108(l) to establish a
Memorandum of Understanding (MOU) with NFJP grantees. The staffing
flexibility does not change these requirements and States still must
establish this relationship.
Additionally, the NFJP grantees are a required partner of the one-
stop delivery system, which requires States to provide access to those
services at one-stop centers in the local areas where the NFJP program
is carried out. The Department encourages State Workforce Agencies
(SWAs) to coordinate outreach with NFJP grantees, but notes that
outreach to NFJP grantees alone is not a substitute for the SWAs'
required outreach obligations pursuant to 20 CFR 653.107. However,
under this final rule, States can consider the outreach staffing option
that works best for them, which may include having NFJP grantees be
subrecipients of the Wagner-Peyser Act funds and provide ES activities,
including outreach activities.
In response to the commenter who maintained that staffing
flexibility could lead to disruptions in beneficial relationships and a
decrease in reporting employment-related law violations, the Department
notes that it is the choice of the State whether to use the staffing
flexibility. This rule does not privatize Wagner-Peyser Act services,
but rather it provides flexibility to States to offer Wagner-Peyser Act
services using the best staffing approach available to them to provide
these services. If the State chooses to adopt staffing flexibility, the
State, as the Wagner-Peyser Act grantee, is still required to oversee
all operations of the Wagner-Peyser Act activities, including oversight
to avoid any disruptions in service. In regards to a potential decrease
in reporting violations, regardless of the staffing method used, the
new staff must be trained pursuant to 20 CFR 653.107(b)(7), which
includes training on protections afforded to MSFWs, and training on
sexual harassment and human trafficking awareness. These trainings are
intended to help outreach workers identify when such issues may be
occurring in the fields and how to document and refer the cases to the
appropriate enforcement agencies.
Lastly, SWAs must continue to comply with 20 CFR 653.107(b)(6),
which requires outreach workers to be alert to observe the working and
living conditions of MSFWs and, upon observation or upon receipt of
information regarding a suspected violation of Federal or State
employment-related law, to document and refer information to the ES
Office Manager for processing. If an outreach worker observes or
receives information about apparent violations, the outreach worker
must document and refer the information to the appropriate ES Office
Manager. These requirements remain in effect and nothing in this final
rule changes these State obligations.
In response to the statement that the rulemaking could harm MSFWs
by diminishing the status and responsibilities of the Monitor Advocate
System, sending a message that MSFW rights are not a priority, the
Department makes clear in this preamble that the Monitor Advocate
System continues to be a priority for the Department to ensure
farmworkers receive equal access to resources and protections.
Similarly, across all titles, WIOA focuses on serving individuals with
barriers to employment, which includes eligible MSFWs as defined in
WIOA sec. 167(i)(1) through (3). Staffing flexibility is an option
afforded to States; however, States will continue to be required to
carry out the duties set forth in the ES regulations and to provide
services to farmworkers on a basis that is qualitatively equivalent and
quantitatively proportionate to the services provided to non-MSFWs. As
part of the Monitor Advocate System, the States will continue to
provide an SMA to ensure MSFWs are being provided the full range of
employment and training services through the one-stop delivery system,
as well as outreach staff to provide information to MSFWs on this
system.
In response to the concerns that staffing flexibility would reduce
the experience of ES staff and thus their ability to perform their
duties, the Department reiterates that States may choose to maintain
merit staff, and notes that turnover can and has occurred among merit
staff. All staff, regardless of whether they are State employees or
employees of a service provider, must be trained to carry out the
duties set forth in the ES regulations. The Department further affirms
its commitment for the National Monitor Advocate (NMA) and Regional
Monitor Advocates (RMAs) to continue to provide technical assistance to
ensure services are offered to MSFWs on an equitable basis.
III. Section-by-Section Discussion of Public Comments and Final
Regulations
The discussion below responds to section-specific comments, as well
as details any changes made in response to those comments. If the
Department did not receive comments regarding a particular section,
that section is not discussed below, and the final rule adopts that
section as proposed. 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. Part 651--General Provisions Governing the Wagner-Peyser Act
Employment Service
Sec. 651.10 Definitions of Terms Used in This Part and Parts 652, 653,
654, and 658 of This Chapter
Section 651.10 establishes terms and definitions used throughout
the Wagner-Peyser Act regulations. The Department received several
comments regarding the changes to terms and definitions proposed in the
NPRM, which are responded to below. If no commenter addressed a
specific term, that term is not addressed below and has been published
in the regulatory text as proposed in the NPRM.
[[Page 600]]
Employment Service (ES) Office
Noting that WIOA envisions an integrated workforce development
system that provides streamlined service delivery of the WIOA core
programs, including ES activities, one commenter questioned the
necessity of defining an ES office separately from a one-stop center.
The commenter suggested that the Department instead use the term ``one-
stop center'' in the regulations. While it is true that WIOA envisions
an integrated workforce development system, including the ES as a core
program, the Department is not removing the definition of ``Employment
Service (ES) office,'' because the Wagner-Peyser Act, WIOA, and their
implementing regulations use the term. Therefore, a definition of the
term is helpful to clarify States' obligations in administering these
programs. For example, sec. 121(e)(3) of WIOA provides that ``the
employment service offices in each State shall be colocated with one-
stop centers.'' The Department uses and defines the term ``Employment
Service (ES) office'' to make clear what is required to be colocated--
any site where Wagner-Peyser Act ES activities are provided. This helps
ensure that States provide and align ES activities with WIOA services
as part of the workforce development system.
Employment Service (ES) Office Manager
One commenter noted the term ``Employment Service (ES) Office
Manager'' may not be necessary if the Department removes the term ``ES
office,'' as ES activities are provided in a one-stop center. The
commenter suggested using the term ``One-Stop Center Manager.'' As
explained above, the Department will retain the definition of
``Employment Service (ES) office,'' because the term is used in WIOA
and the Wagner-Peyser Act, and it helps clarify States'
responsibilities in providing ES activities. Likewise, the Department
is retaining the definition of ``Employment Service (ES) Office
Manager,'' because this term is used in the Wagner-Peyser Act and
WIOA's implementing regulations to describe the individual in the ES
office who carries out key responsibilities in providing services to
job seekers and employers. Therefore, this is a necessary term to
include in the regulation for the effective management and oversight of
local ES staff.
Employment Service (ES) Staff
The Department will remove the term ``contractors'' from the
definition of ES staff in finalizing the rule. As explained above,
States using a service provider to deliver ES activities will be making
a subaward to a subrecipient under the Uniform Guidance. See 2 CFR
200.92, 200.93, and 200.330. While the State may call its agreement
with its service provider/subrecipient a contract, the service provider
does not meet the definition of a contractor under the Uniform
Guidance. See 2 CFR 200.23 and 200.330. Therefore, to avoid confusion,
the Department is removing the term ``contractors'' from the definition
of ES staff.
One commenter requested the Department modify its definition of
``Wagner-Peyser Act Employment Service staff (ES staff)'' to remove the
term ``Wagner-Peyser Act'' so the definition is alphabetically in the
definitions and for consistency with its use in the regulation. The
commenter noted the definition does not appear to need the lead-in
``Wagner-Peyser Act,'' as the other definitions that contain
``Employment Service'' do not include similar language. The commenter
also noted that removing ``Wagner-Peyser Act'' would make all
``Employment Service'' definitions alphabetical for ease of
identification. The Department agrees with the commenter and has
changed the definition of ``Wagner-Peyser Act Employment Service staff
(ES staff)'' to ``Employment Service (ES) staff.'' The Department
agrees that using the term ES staff is clearer and more user-friendly.
One commenter requested the Department define the term ``staff of a
subrecipient'' in the Department's proposed definition for ``Wagner-
Peyser Act Employment Service (ES) staff'' in this regulation, because
it is unclear how this category is applicable to State employees or
subrecipients. The Department clarifies that the term ``subrecipient''
in the definition of ES staff has the meaning given to that term in the
Uniform Guidance at 2 CFR 200.93. As explained above, because States
using a service provider to deliver ES activities will be making a
subaward, the individuals providing these services will be the staff of
a subrecipient. Therefore, the Department has chosen to leave this term
in the definition of the term ES staff. However, because the term is
defined in the Uniform Guidance, the Department has decided it is not
necessary to define it here in 20 CFR 651.10.
Field Checks
One State agency questioned if the intent of the revised definition
of ``field checks'' was to not allow SWA personnel to conduct field
checks, as the added reference to ``through its ES offices'' appeared
to limit the field checks function to only local staff and, as added,
Federal staff. The Department clarifies that it is not the intent of
the Department to exclude SWA officials (individuals employed by the
SWA or any of its subdivisions) from conducting field checks. The
Department intends for all ES Staff, including the SMA and other SWA
officials, to conduct field checks. The Department is removing the
language providing that field checks be conducted through ES offices to
make this clarification. The final regulatory text is, ``Field checks
means random, unannounced appearances by ES staff and/or Federal staff
at agricultural worksites to which ES placements have been made through
the intrastate or interstate clearance system to ensure that conditions
are as stated on the job order and that the employer is not violating
an employment-related law.''
Respondent
One commenter requested the Department define the term ``service
provider'' as it is used in the Department's proposed definition of
``respondent'' in this regulation. The Department does not consider a
definition for the term ``service provider'' to be necessary. In the
context of this regulation, the service provider is the entity or
entities that deliver services under the Wagner-Peyser Act. The
Department clarifies that it is adding this term to the definition of
``respondent'' to ensure that all individuals or entities providing
services are held accountable.
B. Part 652--Establishment and Functioning of State Employment Service
Part 652 discusses State agency roles and responsibilities; rules
governing ES offices; the relationship between the ES and the one-stop
delivery system; required and allowable Wagner-Peyser Act services;
universal service access requirements; provision of services and work-
test requirements for UI claimants; and State planning. The changes in
this section increase the flexibility available to States in providing
Wagner-Peyser Act-funded services and activities by allowing them to
use alternative staffing models.
Sec. 652.215 Can Wagner-Peyser Act-funded activities be provided
through a variety of staffing models?
Section 652.215 governs how States may staff the provision of
Wagner-Peyser Act-funded services. The Department received comments
regarding the flexibility provided in the
[[Page 601]]
regulation and has responded to them below. The Department is
publishing Sec. 652.215 as proposed.
Several commenters opposed the rule because they did not agree that
removing the requirement that States provide Wagner-Peyser Act-funded
activities with staff other than merit-staffing rule was a legally
permissible policy. The commenters explained that, although the
Department stated in the WIA and WIOA rulemakings that the imposition
of the merit-staffing requirement was a policy choice and
interpretation of the Wagner-Peyser Act, nothing in either of these
rulemakings indicated (explicitly or implicitly) that the policy was
not legally required by the statute or that the Department was free to
choose a different interpretation of the Act. Section 3(a) of the
Wagner-Peyser Act requires the Secretary to develop and prescribe
``minimum standards of efficiency.'' As explained in the WIA and WIOA
rulemakings, and acknowledged by commenters, the Department interprets
this provision to give the Department the discretion to impose a merit-
staffing requirement.
In the 1998 case Michigan v. Herman, the U.S. District Court for
the Western District of Michigan found that the Wagner-Peyser Act
``does not explicitly require merit-staffing'' and determined that the
language of sec. 3(a) of the Act is ``broad enough to permit the
[Secretary] to require merit-staffing.'' 81 F. Supp. 2d 840, 847-48
(W.D. Mich. 1998). However, the court noted that ``there is ample basis
for a conflicting interpretation of the Wagner-Peyser Act's
requirements,'' suggesting that the Department has latitude to
interpret sec. 3(a) to permit the flexibility afforded in this
regulation. If the court believed that sec. 3(a) was limited to the
Department's previous interpretation--that it required the use of merit
staff--it would have explicitly so stated.
In the WIA Interim final rule preamble, the Department stated that
the ``regulations reflect[ed] the Department's interpretation of the
Wagner-Peyser Act, affirmed in [Michigan v. Herman], to require that
job finding, placement and reemployment services funded under the Act .
. . be delivered by public merit-staff employees.'' 64 FR 18662, 18691
(Apr. 15, 1999). The Department described its interpretation as that
affirmed in Michigan v. Herman, which held that the Department could
require merit-staffing, but not that it must. And the opinion in that
case describes the Department's own interpretation of the statute as
one giving ``discretion to the Secretary'' to require merit-staffing.
Herman, 81 F. Supp. 2d at 846. The Department's statement in the WIA
preamble, therefore, should not be construed as denying the Department
discretion over the merit-staffing question.
In the WIA final rule, the Department did not address whether the
Wagner-Peyser Act obligated the Department to impose a merit-staffing
requirement for Wagner-Peyser Act-funded services. 65 FR 49294, 49385
(Aug. 11, 2000). Instead, the Department simply noted that the final
WIA regulation imposed a merit-staffing requirement reflecting the
Department's authority under the Wagner-Peyser Act, as affirmed in
Michigan v. Herman, to require Wagner-Peyser Act-funded services be
provided by merit staff. Thus, in the WIA final rule, the Department
did not opine on whether sec. 3(a) mandated the imposition of a merit-
staffing requirement for Wagner-Peyser Act-funded services.\6\
---------------------------------------------------------------------------
\6\ Here, the Department's interpretation of the Wagner-Peyser
Act should be distinguished from its description of its own
regulations. The Department described its regulations as ``mak[ing]
clear that Wagner-Peyser Act services must be delivered by merit-
staff employees of a State agency.'' 65 FR 49385. But that is
different from stating that the Act itself requires merit-staffing.
---------------------------------------------------------------------------
Finally, in the WIOA NPRM, the Department explained that the
Department has maintained the policy of requiring merit-staffing since
the earliest years of the ES and that Michigan v. Herman upheld this
policy. 80 FR 20805 (April 16, 2015). The Department explained that it
would continue this policy from WIA to WIOA. Id. Notably, the WIOA NPRM
did not suggest that there was a statutory requirement in the Wagner-
Peyser Act for merit staff. Id. The language in the WIA and WIOA
rulemakings demonstrates that since the decision in the Michigan v.
Herman case, the Department has not read the Wagner-Peyser Act to
include a statutory requirement that Wagner-Peyser Act services be
delivered by State merit staff. Instead, as the Department explained in
the NPRM for this final rule, the Department has previously read this
provision to give it the discretion to impose a merit-staffing
requirement.
The commenters indicated that they thought the Department had an
obligation in prior rulemakings to state that the policy was not
legally required in order to make the change in this final rule. The
Department disagrees. Throughout this rule's NPRM and final rule
preambles, the Department has amply explained its legal authority and
its policy bases for providing new staffing flexibility under the
Wagner-Peyser Act. That is sufficient. The Department does not agree
with commenters that there is an additional requirement to notify the
public in prior rulemakings (or in other ways) that it is within the
Department's discretion to revise, through notice-and-comment
rulemaking, its interpretation of the Wagner-Peyser Act.
A number of commenters opposed the flexibility in the proposed rule
that would allow States to provide Wagner-Peyser Act-funded services
with staff other than State merit staff explaining that the proposal
would remove a long-standing and legally required merit-staffing
requirement. The Department acknowledges that it has had a long-
standing policy of requiring States to deliver Wagner-Peyser Act labor
exchange services with State merit staff. However, as explained above,
the Wagner-Peyser Act does not contain a statutory requirement to
impose a merit-staffing requirement on States. Instead, the
Department's imposition of a requirement that ES activities be provided
by State merit staff was the Department's policy decision, and one that
is permissible under the Act.
It is within agencies' authority to change long-standing policies,
such as the merit-staffing requirement. In making the change, agencies
are required to ``display awareness'' that they are changing their
position and show that there are good reasons for the new policy.
Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117, 2125-26 (2016). The
Department's proposal did so. In the NPRM, the Department acknowledged
the policy change and explained the reasons for the change: (1) Allows
States to align the provision of ES activities with WIOA's service-
delivery model so the programs work better together; (2) allows States
to develop innovative and creative approaches to delivering ES
activities with limited resources; and (3) frees resources to assist
job creators and workers more effectively. In the NPRM, the Department
also explained that it has found that services similar to those
provided through the ES program can be delivered effectively through
systems without the specific Federal regulatory requirements regarding
State merit-staffing.
Several commenters stated that the Department's analysis had not
justified a reversal of the Department's long-standing position that
the Wagner-Peyser Act legally requires the delivery of ES activities
through merit staff. The policy reasons for the Department's decision
to allow States flexibility in staffing ES programs are discussed at
length throughout the NPRM's preamble
[[Page 602]]
and include the benefits of granting States flexibility to fit the
unique needs of their particular workers, employers, and ES programs;
freeing up resources to better serve job creators and job seekers;
better integrating the ES program with services under WIOA; and the
successful functioning of flexible staffing arrangements in the
provision of other, comparable services. Notably, the regulatory
changes that this final rule adopts do not require the States to change
their staffing mandates for ES programs. Rather, States will be free to
choose the staffing model that best fits their needs.
Another commenter stated that the Department was not legally
justified in making the changes proposed in the NPRM. The Department
disagrees. First, in the NPRM, the Department explained that the
Wagner-Peyser Act does not dictate particular staffing models. 84 FR
29433, 29436 (June 24, 2019). Instead, sec. 3(a) of the Wagner-Peyser
Act requires the Department to develop and prescribe ``minimum
standards of efficiency'' in the provision of ES programs. The
Department noted that the broad scope of sec. 3(a) has been recognized
in court, and it explained that in Michigan v. Herman, the court
recognized that, while this provision is broad enough to permit the
Department to impose a merit-staffing requirement, there was more than
enough basis for a conflicting interpretation of the Wagner-Peyser Act.
Id.
Second, the Department explained in the NPRM preamble that, while
it may have previously cited sec. 5(b) as support for imposing
mandatory merit-staffing, that section ``does not require the
imposition of such a requirement.'' Id. Instead, the NPRM explained
that this provision merely conditions States' Wagner-Peyser Act funds
on merit-staffing in the administration of UI programs. Id.
Third, the Department also explained its interpretation of the
Wagner-Peyser Act in the WIA and WIOA rulemakings, stating that while
the Department continued to require State merit-staffing in these
rulemakings, this was maintained as a policy choice. Id.
A number of commenters opposed the proposed rule, because they
stated it is contrary to how Congress interprets the Wagner-Peyser Act.
Some commenters stated that over the years, Congress has taken several
actions to require merit-staffing in the ES system or that reaffirmed
the Wagner-Peyser Act's statutory requirement to have merit-staffing.
Commenters gave several examples of these actions: (1) The
Intergovernmental Personnel Act of 1970 (IPA) named the Wagner-Peyser
Act as one of the two acts administered by the Department that
transferred merit authority to the Civil Service Commission (now the
Office of Personnel Management); (2) the regulations implementing the
IPA demonstrated there is a statutory requirement to have merit-
staffing in Wagner-Peyser Act-funded programs; (3) in 2006, when the
Department attempted to change its legal interpretation of the Act,
Congress blocked the proposal through a provision in the appropriation;
and did so for several years afterwards until the proposed rule was
withdrawn; and (4) the Department issuing Training and Employment
Guidance Letter (TEGL) No. 11-12, Using Funds Authorized Under Section
7(a) of the Wagner-Peyser Act of 1933 for Intensive Services as Defined
by the Workforce Investment Act (Jan. 3, 2013). The Department does not
agree that the IPA and its implementing regulations prevent the
Department from allowing added staffing flexibility under the Wagner-
Peyser Act. Section 208 of the IPA transferred the authority of the
Department and other agencies to prescribe standards for a merit system
of personnel administration in various Federal grant-in-aid programs.
42 U.S.C. 4728. In particular, the IPA transferred the Department's
duties under the Wagner-Peyser Act and sec. 303(a)(1) of the Social
Security Act (SSA), to the extent that the functions, powers, and
duties under these laws relate to the prescription of personnel
standards on a merit basis. 42 U.S.C. 4728(a) and (a)(2). The OPM
regulations implementing the IPA provide a list of programs with a
statutory or regulatory requirement for merit staff. The ``Employment
Security (Unemployment Insurance and Employment Services)'' program,
which cites as authority the SSA and the Wagner-Peyser Act, is listed
as having a ``statutory requirement'' for merit staff. 5 CFR part 900,
subpart F, Appendix A.
However, there is no indication that Congress, in including the
Wagner-Peyser Act in sec. 208 of the IPA, intended to affirm a merit-
staffing requirement not found in the Act itself, or to impliedly amend
the Act to include one, rather than simply reflecting existing merit
system functions being carried out by the Department at that time. The
Department notes that the question of Congress's intent in enacting the
IPA was considered by the court in Michigan v. Herman. After reviewing
the text and legislative history of the Wagner-Peyser Act and the IPA,
among other arguments, the court concluded that the Wagner-Peyser Act
``does not explicitly require merit-staffing'' and that ``Congress has
never clearly ratified or rejected the Department's inclusion of a
merit-staffing requirement.'' Michigan v. Herman, 81 F. Supp. 2d at
847-48.
Similarly, there is no indication that OPM's regulations at 5 CFR
part 900 are intended to be authoritative or interpretive of other
statutes, rather than merely descriptive. The predecessor to the
current part 900 regulations was issued jointly in 1963 by the
Department of Health, Education and Welfare, the Department of Labor,
and the Department of Defense, prior to the passage of the IPA and its
resulting transfer of functions. It was codified at 45 CFR part 70. In
prescribing merit standards under the Wagner-Peyser Act at that time,
the regulations at part 70 cited as authority a provision in the
Department's yearly congressional appropriation requiring merit-
staffing (former 29 U.S.C. 49n). This provision was not repeated in the
Department of Labor Appropriations Act, 1965 (Pub. L. 88-605, 78 Stat.
959, 960 (1964)), or in any such act thereafter. Thus, the current OPM
regulations, as they relate to the Wagner-Peyser Act, originated not
only from a former departmental interpretation of the Wagner-Peyser
Act, but also in a long-expired appropriations rider. Notwithstanding
DOL's imposition of a merit-staffing requirement at the time of the
IPA's enactment, there was no longer any corresponding statutory
requirement in the Wagner-Peyser Act.
Further, while Appendix A in the current part 900 lists the ES as
having a ``statutory requirement'' for merit-staffing, the accompanying
citation is to sec. 5(b) of the Wagner-Peyser Act, 29 U.S.C. 49d(b).
Section 5(b) does not impose any such requirement, but merely requires
the Secretary to certify that States are complying with sec. 303 of the
SSA (requiring, among other things, use of merit staff by States in
administering their UI programs) and that States are coordinating ES
activities with the provision of UI claimant services. The provisions
administered by OPM constitute a transfer of functions and apply only
to the extent the Department imposes an underlying merit-staffing
requirement, which, as discussed above, the Wagner-Peyser Act does not
impose. Indeed, OPM has previously revised Appendix A to reflect
programmatic changes of the type effected by this final rule. Neither
the IPA nor the OPM regulations contain an independent legal
requirement for merit-staffing in the ES.
The Department does not agree that the language in the Revised
Continuing
[[Page 603]]
Appropriations Resolution, 2007 (Pub. L. 110-5) (Feb. 15, 2007)--the
2006 appropriation commenters referred to--demonstrated that Congress
was reaffirming a merit-staffing statutory requirement for the ES. In
2007, the appropriation for fiscal year 2007 provided that none of the
funds made available were to be used to finalize or implement any
proposed regulation under WIA, the Wagner-Peyser Act, or the Trade
Adjustment Assistance Reform Act of 2002 (TAARA) until legislation
reauthorizing WIA and TAARA was enacted. Nothing in this language
indicates that Congress thought the Department did not have the legal
authority to give States the flexibility to provide Wagner-Peyser Act-
funded services with non-merit staff. Instead, the Department views
this appropriation language as Congress's disapproval of the
Department's policy choice, rather than a definitive statement on the
Department's legal authority.
As explained above, the Wagner-Peyser Act does not contain a
statutory requirement that State merit staff perform ES activities. The
Department now interprets the Wagner-Peyser Act to give States the
flexibility to determine whether providing Wagner-Peyser Act-funded
services through merit staff is the best way to deliver these services
for their State. States are free to continue to have merit staff
provide these services or to adopt other staffing models that may work
better for their State.
Several commenters opposed the proposed rule, because, they stated,
merit-staffing is a statutory requirement and the Department does not
have discretion to rescind this statutory requirement. These commenters
pointed to TEGL No. 11-12 as affirming that the merit-staffing
requirement is statutorily mandated in the Wagner-Peyser Act or for the
proposition that the Department does not have the authority or
discretion to rescind the statutory requirement that Wagner-Peyser Act-
funded activities be provided by merit-staffed employees.
The Department agrees that Federal agencies do not have the
discretion to rescind statutory requirements. However, as explained in
response to other commenters, it is the Department's position that the
Wagner-Peyser Act does not contain a statutory requirement for State
merit staff to provide ES activities. Because the Department only
interprets the Wagner-Peyser Act to permit the Department to impose
such a requirement, it is within the Department's discretion to provide
States the flexibility to deliver these services through merit staff or
otherwise.
Additionally, the Department notes TEGLs are guidance documents
issued by ETA. They are interpretations of the statutes the Department
administers and the regulations the Department promulgates to implement
these statutes. TEGL No. 11-12, released in 2013, states that the
guidance did not change the requirement that State merit staff
employees deliver Wagner-Peyser Act labor exchange services, and it
addresses the use of Wagner-Peyser Act funds to provide intensive
services under WIA. The TEGL simply reminds States that nothing in the
guidance changes the regulatory requirement in the WIA regulations that
States provide Wagner-Peyser Act-funded services with merit staff. The
TEGL does not, as commenters suggested, state that there is a statutory
requirement to provide Wagner-Peyser Act-funded services with merit
staff. Nor does it address the Department's authority or discretion to
rescind a statutory requirement.
Several commenters opposed the rule because they stated the history
and origins of the Wagner-Peyser Act and the inherently governmental
nature of the Wagner-Peyser Act functions show Congress's intention to
require merit-staffing as a foundation of the ES system. Relatedly, a
number of commenters opposed the rule because of the integration
between the UI work test and the ES staff. These commenters explained
that ES staff perform the UI work test as provided under sec.
7(a)(3)(F) of the Wagner-Peyser Act to ensure that claimants are able
to work, available for work, and actively seeking work. The commenters
stated these are federally required conditions of State UI eligibility
and, in this relationship, the ES staff function as gatekeepers, making
the role of the ES staff inherently governmental. Because these
commenters viewed this activity as inherently governmental, they stated
these activities can only be handled by State merit staff. Similarly,
some commenters stated that the UI work test duties are inherently
governmental in nature, so they cannot be privatized. Other commenters
stated that because the ES administers the work test to determine if
individuals are able and available to work and actively seeking
employment, the ES worker is in the position of determining eligibility
for UI. The commenters stated that eligibility determination is a
government function properly carried out by merit-based staff.
The Department appreciates the history and development of the
Federal ES beginning in the early twentieth century. Following years of
a two-tiered, underfunded, and largely ineffective network of
employment offices, the Wagner-Peyser Act was passed in 1933 in order
to promote greater cooperation and coordination between the Federal and
State programs, to avoid active competition between the two, and to
ameliorate wastefulness in the system. See S. Rep. No. 73-63, at 3-4
(1933). This final rule is in keeping with the spirit of Federal-State
cooperation that undergirds the Wagner-Peyser Act, by allowing States
the choice to staff their ES program activities and services as they
deem most effective.
To the extent that the system of State-run employment offices was
created in order to put a stop to the abuses of private employment
agencies,\7\ the Department notes that this final rule in no way marks
a return to a private system of employment firms. All ES activities and
services nationwide will continue to be provided through the public ES.
Nor will the States be subject to any risk of patronage that may have
been a concern in the early years of the program, prior to the
development of many of the legal safeguards that are currently in
place. States that opt to use alternative staffing methods will
continue to be accountable, subject to all of the obligations found in
the ES regulations regarding effective service delivery, including
oversight and monitoring, as well as all other applicable laws, in
administering the program.
---------------------------------------------------------------------------
\7\ This history is detailed in Henry P. Guzda, ``The U.S.
Employment Service at 50: it too had to wait its turn,'' Monthly
Labor Review, 12-19 (June 1983).
---------------------------------------------------------------------------
The Department does not agree with commenters that the functions of
the Wagner-Peyser Act are inherently governmental. The Office of
Management and Budget (OMB) has defined inherently governmental
functions as those functions ``so intimately related to the public
interest as to mandate performance only by Federal employees.'' OMB,
Performance of Commercial Activities, Circular No. A-76 (August 4, 1983
(Revised 1999)). Inherently governmental functions, according to this
guidance, normally fall into two categories: (1) Acts of governance;
and (2) monetary transactions and entitlements. Acts of governance are
the discretionary exercise of government authority, such as criminal
investigations, prosecutions, and other judicial functions. Monetary
transactions and entitlements include functions such as tax collection
and revenue disbursements.
Section 7 enumerates the services the ES provides. These services
include, among others, job search and placement
[[Page 604]]
activities for job seekers, appropriate recruitment services for
employers, and developing linkages between services under the Wagner-
Peyser Act and other Federal or State legislation. None of these
activities are inherently governmental because they do not involve
governance or monetary transactions and entitlements. Indeed, one of
private firms' core functions is finding the employees they need, and
there are innumerable private firms offering job-search and job-
placement services. In addition, many of these services, such as the
job search and placement activities, are similar to the services WIOA
provides. That WIOA does not have a merit-staffing requirement supports
the Department's position that these activities are not inherently
governmental.
The Department acknowledges that there are important linkages
between the ES program and the UI program. Section 7(a)(3)(F) of the
Wagner-Peyser Act requires ES staff to conduct the work test for the UI
program, including making eligibility assessments. In the UI program
context, the Department has previously explained that States may not
use a service provider for inherently governmental functions and that
these functions must be performed by State merit staff. See
Unemployment Insurance Program Letter (UIPL) No. 12-01, Outsourcing of
Unemployment Compensation Administrative Functions, Dec. 12, 2000. In
this UIPL, the Department listed a number of UI functions that are
considered inherently governmental and thus must be performed by State
merit staff. One such function is determining whether to pay (or not
pay) UI benefits.
20 CFR 652.209(b)(2) requires the ES to administer the work test
and conduct eligibility assessments for UI claimants. The UI work test
includes activities designed to ensure that an individual whom a State
determines to be eligible for UI benefits is able to work, available
for work, and actively seeking work in accordance with the State's UI
law. In providing these services, it is possible ES staff may detect
eligibility issues for UI claimants. However, the Wagner-Peyser Act
implementing regulations and guidance make clear that only UI merit
staff members may adjudicate UI eligibility issues. Therefore, 20 CFR
652.210(b)(3) requires ES staff to provide UI program staff with
information about a UI claimant's ability or availability for work or
the suitability of work offered to UI claimants. This ensures that UI
merit staff have the information they need to adjudicate any
eligibility issues detected during the work test or eligibility
assessment.
UIPL No. 14-18, Unemployment Insurance and the Workforce Innovation
and Opportunity Act (Aug. 20, 2018), further explains how ES staff meet
the requirements to provide these services to UI claimants and offer
information about any eligibility issues the ES detects while providing
these services. Specifically, the UIPL explains how States ensure that
the necessary information about a UI claimant's ability, availability,
or the suitability of work offered is referred to the State's UI staff.
First, States are required to have in place an ``effective feedback
loop'' to inform UI staff whether the claimant reported as directed and
participated in the appropriate eligibility assessment and/or services.
Second, States must ensure ES staff are trained to conduct a thorough
eligibility assessment to identify potential eligibility issues for
referral to UI staff. Third, States must ensure that ES staff are
trained to properly document information for use by UI staff in
adjudicating any eligibility issues. Finally, this feedback loop must
be in place and clearly documented. Id. at 10.
The work test and eligibility assessments themselves do not involve
making a determination on whether to pay (or not pay) unemployment
compensation; instead, the individuals conducting the test and
assessment gather information and then share that information through
the above-mentioned feedback loop with the UI program staff who make
the determination about an individual's eligibility or continuing
eligibility for unemployment compensation. Id. The Department requires
a clearly documented feedback loop that advises UI staff whether the
individual reported as directed and participated in the eligibility
assessment and/or services. Id. Sending this information to UI staff
ensures that only UI merit staff members are adjudicating UI
eligibility issues, consistent with the requirement in sec. 303(a)(1)
of the SSA that the UI program maintains personnel standards on a merit
basis.
One commenter opposed the proposed rule because, the commenter
stated, that Congress envisioned at the Wagner-Peyser Act's inception,
and affirmed over the years, a professional cadre of State government
ES employees selected by merit to avoid favoritism or partisanship in
the delivery of services. As discussed above, the Wagner-Peyser Act
does not reflect any express intent to require merit-staffing in the
ES. Congress could have chosen to insert such a requirement in the
Wagner-Peyser Act at the time of its passage, or at any time
thereafter, as it did in other legislation--for example, sec. 303(a)(1)
of the SSA. Further, while a merit-staffing requirement has been
included in a number of previous departmental appropriations acts,
Congress specifically chose not to make this a permanent feature of the
Wagner-Peyser Act. Instead, since its passage in 1933, the Wagner-
Peyser Act has explicitly given the Secretary discretion under sec.
3(a) to develop and prescribe ``minimum standards of efficiency'' in
the administration of the ES program. This discretion was affirmed in
Michigan v. Herman, where the court found no conclusive evidence that
Congress had intended to impose a merit-staffing requirement, or had
affirmed or rejected such a requirement in the ensuing decades.
Several commenters opposed the proposed rule because they viewed it
as inconsistent with the reasons Congress initially created the ES.
They contended that before Congress passed the Wagner-Peyser Act, there
was corruption, political patronage, and inequities in private
employment offices nationwide and that in passing the Act, Congress
envisioned a State merit system to prevent favoritism and promote
equality in the delivery of services. This final rule is consistent
with the purposes of the Wagner-Peyser Act, which was passed primarily
to strengthen the overall structure, value, and effectiveness of the ES
system in the United States through innovation. The Department
recognizes the history of ES offices in the United States, and the
problems that first prompted States to create their own free, public
employment offices. This final rule does not detract from the public
nature of an ES system that offers universal access to job seekers, nor
does it vest in private entities the ultimate responsibility for
effective service delivery to the public. The myriad of obligations to
which the States are subject as conditions for receipt of funding under
the Wagner-Peyser Act, as well as obligations imposed by other
applicable laws, remain unchanged by this final rule.
One commenter viewed the history of the Wagner-Peyser Act and the
inherently governmental nature of its functions carried out by merit
staff as a foundation of the ES system and that Congress's actions to
protect merit-staffing in the ES since the law's New Deal-era passage
show Congressional intent for and support of merit-staffing for ES. The
Department agrees that the staff who provide Wagner-Peyser Act-funded
services are key to the success of the program and job seekers and
employers' use of the ES. However, the Department views the foundation
of the
[[Page 605]]
ES to be the services provided to job seekers and employers. Each State
has unique needs from the ES and a one-size-fits-all staffing model may
not be able to take these needs into account. Therefore, the Department
has determined it would be most appropriate to give States the
flexibility to determine which staffing model provides the most
effective services to their customers.
The Department acknowledges that Congress has taken actions related
to merit-staffing of Wagner-Peyser Act-funded services. However, as
explained above, while the imposition of a merit-staffing requirement
is a permissible interpretation of sec. 3(a) of the Wagner-Peyser Act,
it is not required by the Act.
Likewise, several commenters opposed the flexibility in the
proposed rule to provide Wagner-Peyser Act-funded services with staff
other than merit staff, because they believed Congress would not
approve of the flexibility. Specifically, the commenters explained that
Congress's actions since the bill's passage show the original intent of
the authors of the Wagner-Peyser Act and Congress's intent to require
merit-staffing in the ES. Similarly, some commenters opposed the
proposed rule because, they stated, there was a pattern of
Congressional action to prevent the ``privatization'' (as they termed
it) of ES activities, revealing that Congress has a critical role in
supporting and maintaining the ES merit-staffing requirement. This rule
does not privatize Wagner-Peyser Act services, but rather it provides
flexibility to States to offer Wagner-Peyser Act services using the
best staffing approach available to them to provide these services. The
Department acknowledges that Congress has taken actions since the
enactment of the Wagner-Peyser Act that maintained the Department's
regulatory requirement that States provide ES activities with State
merit staff. For the reasons discussed above, there is no current
statutory merit staff requirement in the Wagner-Peyser Act. Since the
enactment of the Wagner-Peyser Act in 1933, a number of years have
passed during which Congress could have either amended the Wagner-
Peyser Act to make it a statutory requirement that States provide
Wagner-Peyser Act-funded services with merit staff or continued to
require use of merit staff in the ES system via appropriations rider,
as was done for a number of years. But Congress has not done so.
Most notably, on May 15, 1998, in Michigan v. Herman the court held
that there was no explicit statutory mandate in the Wagner-Peyser Act
to require States to deliver Wagner-Peyser Act-funded services with
State merit staff. 81 F. Supp. 2d at 847. On August 7, 1998, a little
over two months later, Congress enacted WIA, which included a number of
amendments to the Wagner-Peyser Act. Thus, as of May 15, 1998, Congress
was aware that a court had concluded there was no explicit merit-
staffing requirement in the Wagner-Peyser Act. Had Congress wanted to
make it a statutory requirement, Congress could have used the 1998
amendments to include one. However, Congress did not include such a
requirement in these 1998 amendments. Similarly, in 2014, Congress
again re-authorized the workforce development system and amended the
Wagner-Peyser Act. Like the 1998 amendments, these amendments also did
not include a statutory requirement to provide ES activities with State
merit staff.
Commenters also stated that later congressional actions can
demonstrate the original intent of the authors of the Wagner-Peyser
Act. The Wagner-Peyser Act was enacted in 1933. It is questionable
whether congressional actions taken later, sometimes decades later,
should have much relevance to the intent of the Act's authors.
Regardless, the key language of the Act itself, which Congress has not
amended, shows no congressional intent to impose a permanent merit-
staffing requirement.\8\
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\8\ The original Wagner-Peyser Act employed this language: ``The
bureau shall also assist in coordinating the public employment
offices throughout the country and in increasing their usefulness by
developing and prescribing minimum standards of efficiency . . . .''
Public Law 73-30 Sec. 3(a), 48 Stat. 113, 114 (1933). The Act, as
amended, uses the same ``minimum standards of efficiency'' language:
``The Secretary shall assist in coordinating the State public
employment service offices throughout the country and in increasing
their usefulness by developing and prescribing minimum standards of
efficiency . . . .'' 29 U.S.C. 49b(a) (2018).
---------------------------------------------------------------------------
Several commenters opposed the proposed rule because they believe
the ES system only qualifies as a ``public employment office'' if the
employees are State merit-staffed employees. The commenters noted that
sec. 1 of the Wagner-Peyser Act requires the establishment of a
``national system of public employment service offices,'' and the
commenters contended that a principal component of such a system are
``employees of State government [who are] hired and promoted on the
basis of merit under a civil service system.'' They believe this is
what makes the offices ``public.'' Without merit-staffed State
government employees, the commenters asserted, the public nature of the
ES is given to private control and is no longer a ``public employment
office.'' These commenters interpreted the term ``public'' in the
phrase ``public employment office'' in sec. 1 of the Wagner-Peyser Act
to refer to the employment relationship between the individuals
providing Wagner-Peyser Act-funded services and the State. However,
nothing in the Wagner-Peyser Act indicates this was the intent of
Congress in establishing the ES. As explained above, the history of the
Wagner-Peyser Act's passage indicates Congress established the ES to
promote greater cooperation and coordination between the Federal and
State programs, to avoid active competition between the two, and to
ameliorate wastefulness in the system. See S. Rep. No. 73-63, at 3-4
(1933). To the extent that the ES was created to end the abuses of
private employment agencies,\9\ the Department notes that this final
rule in no way marks a return to a private system of employment firms.
All ES activities and services nationwide will continue to be provided
through State-administered offices, with services universally available
and financed with public funding via a grant from the Department, which
will continue to oversee that States meet their obligations under the
Wagner-Peyser Act. Accordingly, contrary to the commenter's assertion,
the Department will continue to administer a national system of public
employment service offices under this final rule.
---------------------------------------------------------------------------
\9\ This history is detailed in Henry P. Guzda, ``The U.S.
Employment Service at 50: it too had to wait its turn,'' Monthly
Labor Review, 12-19 (June 1983).
---------------------------------------------------------------------------
The Department notes that sec. 2(6) of the Wagner-Peyser Act
provides that the term ``employment service office'' means a local
office of a State agency. The Department interprets this to mean that
an ES office is any local office where the State agency provides ES
activities (be it through State employees or a service provider). This
is consistent with the definition the Department proposed for ``ES
office'' in the NPRM and finalized in this rule.
Several commenters opposed the flexibility provided in the proposed
rule because they stated it contradicts the Department's long-standing
position. They contended that it has been a long-standing position of
the Department, as the Department argued in Michigan v. Herman, that
the Wagner-Peyser Act requires merit-based staffing. Commenters
explained that in the Michigan v. Herman case, the Department argued
that Congress intended merit-staffing to be a key component of a public
ES at the outset
[[Page 606]]
and described how Congress has reaffirmed this principle over time. The
Department acknowledges that it has required States to provide labor
exchange services with State merit staff. However, as explained
elsewhere in this final rule, the Department is now changing its policy
and is giving the States the flexibility to determine what staffing
model works best for their State's needs. In Michigan v. Herman, the
Department contended that its construction of the Wagner-Peyser Act to
require merit staffing was supported by the language of the statute and
was consistent with Congressional intent. However, the court ruled that
it ``cannot state, as a matter of law, which of the various
interpretations presented more accurately reflects Congressional
intent'' and concluded that sec. 3(a) was broad enough to permit the
Department to require merit-staffing. Michigan v. Herman, 81 F. Supp.
2d at 847-48. Implicit in the court's decision is that it would also be
a permissible read of this provision to not require merit-staffing.
Now, consistent with the decision in Michigan v. Herman, the Department
is exercising its discretion to interpret sec. 3(a) of the Wagner-
Peyser Act and will no longer require States to use State merit staff
to deliver labor exchange services. As explained above, the Department
notes that it is permissible for Federal agencies to change their
interpretations as long as they provide a reasoned explanation for the
change. Encino Motorcars, LLC, 136 S. Ct. at 2125. This includes
``display[ing] awareness'' that the agency is changing its position and
showing that there are good reasons for the change. Id. at 2126. As
required, in the NPRM for this rule, the Department acknowledged that
its proposal was a departure from the requirement to use merit staff
and provided four reasons for this change. See 84 FR 29433, 29434 (June
24, 2019). No commenters expressed that the prior rule engendered
substantial reliance interests, and even if they had, as noted, the
Department has provided a substantial justification for this
change.\10\
---------------------------------------------------------------------------
\10\ The Department also notes that the flexibilities permitted
by this rule are purely optional, and the Department's monitoring
and requirements of States' service delivery remain in place.
---------------------------------------------------------------------------
One commenter asked if private entities receiving Wagner-Peyser Act
funds would be required to comply with State and Federal freedom of
information act rules and regulations. The Freedom of Information Act
(FOIA) establishes a statutory scheme for members of the public to use
in making requests for Federal agency records. Only agencies within the
Executive Branch of the Federal government, independent regulatory
agencies, Amtrak, and some components within the Executive Office of
the President, are subject to the FOIA. See 5 U.S.C. 551(1) and
552(f)(1) and 49 U.S.C. 24301(e). Therefore, if a private entity
receives Wagner-Peyser Act funds from a State that entity is not
subject to the FOIA or its implementing regulations.
However, the Department notes that each State has its own open
record law. The Department is not the appropriate entity to interpret
the application of a State's laws. Entities receiving Wagner-Peyser Act
funds from a State must conduct their own analysis to determine the
applicability of a State's freedom of information laws and regulations.
One commenter opposed the proposed rule, arguing in part that it
could lead to politicization, which the commenter stated is currently
prohibited, because most State employees are covered by the Hatch Act.
The Hatch Act of 1939 (Pub. L. 76-252) restricts the political activity
of individuals principally employed by State, District of Columbia, or
local executive agencies and who work in connection with programs
financed in part by Federal loans or grants. The Department
acknowledges that some individuals providing ES activities may no
longer be covered by the Hatch Act, as they may no longer be
principally employed by a State, the District of Columbia, or a local
executive agency. However, the ES is a universal access program that
requires that labor exchange services be available to all employers and
job seekers. See 20 CFR 652.207. States, regardless of who is providing
the services, must ensure that this requirement is met. If a State
decides to use the staffing flexibility in this final rule to provide
these services, the State's monitoring will include ensuring the
universal access requirement is met. In turn, the Department's
monitoring of the State will also focus on this requirement.
One commenter opposed the proposed rule because the commenter
stated that recognizing the inherently governmental functions of the
ES, Congress has acted many times in the 85-year history of the Wagner-
Peyser Act to require merit-staffing in the ES and has recognized that
any changes require congressional action. The Department does not agree
that changes in the merit-staffing requirement can only be made through
congressional action. As explained above, the Wagner-Peyser Act permits
the Department to require States to deliver Wagner-Peyser Act-funded
services with State merit staff, but it does not impose a statutory
requirement that such services be merit-staffed. Because the merit-
staffing requirement is not mandated by statute, as noted above, it is
within the Department's authority to provide States with this
flexibility.
One commenter opposed the proposed rule because of the potential
impact on the Reemployment Services and Eligibility Assessment (RESEA)
program. The commenter explained that ``[p]rivatizing the public
Employment Service'' could jeopardize the effectiveness of RESEA. The
commenter noted that many States have launched RESEA models that rely
on ES staff being cross-trained in UI to a level that they can deliver
legally accurate guidance on the State's UI law and qualifying
requirements. The commenter expressed concerns that allowing what they
described as the privatization of services under RESEA grants would
amount to privatizing key components of the UI program, a result that
Congress did not intend when it expanded RESEA last year, and that is
not permissible under current law. This rule does not privatize Wagner-
Peyser Act services, but rather it provides flexibility to States to
offer Wagner-Peyser Act services using the best staffing approach
available to them to provide these services. The Department does not
agree that the proposed flexibility given to States would negatively
impact the RESEA program. The RESEA program assesses the continued
eligibility and reemployment needs of UI claimants for the program's
targeted populations. As the Department explained in its guidance on
RESEA, UI staff, Wagner-Peyser Act-funded State ES staff, WIOA staff,
or other AJC staff may deliver these services. See UIPL 07-19, Fiscal
Year (FY) 2019 Funding Allotments and Operating Guidance for
Unemployment Insurance (UI) Reemployment Services and Eligibility
Assessment (RESEA) Grants (Jan. 11, 2019). Therefore, the Department
currently permits non-merit staff to carry out RESEA, as many WIOA
staff are not merit staff. Additionally, the Department has provided
guidance to States on handling eligibility issues that are detected in
the course of providing RESEA services. Similar to how the ES program
administers the work test, States are required to have feedback loops
from the AJC to the UI system on whether claimants reported as directed
and participated in the minimum activities outlined in their
reemployment plans. This ensures that any eligibility issues are
referred to the UI agency and that eligibility issues are
[[Page 607]]
adjudicated by State merit staff, consistent with the requirement in
sec. 303(a)(1) of the SSA.
The Department supports efforts that States have already made in
launching RESEA programs and encourages States to continue to create
the RESEA program that best fits each State's needs. The Department
notes that this final rule does not require States to use non-merit
staff to deliver their ES activities; instead, it gives the States the
discretion to choose the staffing model that best meets each State's
needs.
A commenter cited the Federal law that created the cabinet-level
U.S. Department of Labor in 1913, which states that the Department's
purpose is to foster, promote, and develop the welfare of working
people in order to improve their working conditions and enhance
opportunities for profitable employment. The commenter stated that the
proposed regulations are in step with the trend to reduce civil service
protections, and they are out of step with the Department's purpose.
This final rule is consistent with the Department's purposes, one of
which, as the commenter noted, is to enhance opportunities for
profitable employment. States are in the best position to decide what
is the most effective, efficient, and cost-effective way to provide
services under the Wagner-Peyser Act; this final rule recognizes this
and gives States the flexibility to determine what staffing model best
suits the States' needs without sacrificing the quality of Wagner-
Peyser Act services. Additionally, this flexibility may allow States to
align the provision of Wagner-Peyser Act services with WIOA service
delivery models so the programs work better together. Consistent with
the Department's purpose, this will enhance opportunities for
profitable employment.
One commenter suggested that adoption of the additional flexibility
in the proposed rule would undermine current or existing efforts to
align and integrate services provided to job seekers and employers. The
commenter noted existing efforts made in the operation of the Wagner-
Peyser Act since the enactment of WIOA; these efforts include the
alignment of service delivery with WIOA, including cross-training of
workforce programs, electronic systems, and a customer centered
approach to service delivery. According to the commenter, States'
efforts have resulted in more efficient offices and a more holistic
approach to service delivery for customers. The Department commends the
commenter's efforts to align and integrate services provided to job
seekers and employers. The Department notes that this final rule does
not impose any requirements on States to change their service delivery
models and States may continue to use State merit staff to deliver
Wagner-Peyser Act-funded labor exchange services if the State prefers
this model. This final rule provides flexibility to States to consider
and choose alternative staffing models if they determine it to be a
more effective approach to serving the job seekers and job creators
they serve.
One commenter noted that contracted services under WIOA have
resulted in a high turnover rate for staff and expressed concern that
this turnover may happen in the Wagner-Peyser Act-funded labor exchange
services if the merit-staffing requirement were removed. The commenter
expressed concern that ``clients would suffer while contractors get `up
to speed,' '' and that the networks developed over time cannot be
replicated by a new service provider. The commenter also suggested that
if the flexibility provided by this final rule were adopted, staffing
retention would decrease and for-profit companies may generate ``false
numbers.''
Another commenter noted that contracting services may result in
fewer services for individuals with barriers to employment and
individuals who may require more services in order to obtain
employment, because the ``contractors'' may perceive these individuals
to be more costly to assist. The commenter appeared to suggest that
service providers would be concerned more about profit than ensuring
individuals receive individually appropriate services. Additionally,
some commenters noted concerns about services to rural communities, if
services are contracted out, because providing services in these
communities may not be as profitable in a contract-for-service system.
Other commenters expressed concerns about additional costs associated
with contracting services provided under the Wagner-Peyser Act, which,
according to the commenters, may result in reduced services to
customers.
A few commenters also noted their concerns that a service provider
may have incentives inconsistent with the Wagner-Peyser Act goal of
providing universal access to all job seekers. One stated that if a
contracted firm is given a flat fee, there may be an incentive to
``dump clients.'' Multiple commenters also stated another potential
risk associated with contracted services is if a success-related
incentive is provided, service providers may screen for the cases most
likely to succeed regardless of intervention and have ``little
incentive to consider whether they are referring candidates of diverse
nationalities and races or simply referring the most employable
workers.'' One commenter stated there is a ``potentially damaging
incentive'' when it comes to job placement. The commenter stated that
``contractors'' may be able to use the Worker Profiling and
Reemployment Services system to identify those most likely to obtain
employment and serve only those easier to serve individuals.
The Department appreciates the considerations that States will need
to take into account when deciding whether to use the staffing
flexibility provided in this final rule, including how services and
process changes are staffed and integrated at the local level. States,
as Wagner-Peyser Act grantees, are required to oversee all operations
of the Wagner-Peyser Act activities, regardless of how they choose to
use this final rule's additional staffing flexibility. States are
responsible for the operations and performance of the State's Wagner-
Peyser Act ES program, including the quality provision of services to
employers and job seekers. These responsibilities continue to include
the requirement at 20 CFR 652.207 to provide universal access to
Wagner-Peyser Act services for all employers and job seekers to receive
labor exchange services, not just those easiest to serve.
The Department considers States to be in the best position to
decide what is the most productive, efficient, and cost-effective way
to provide services under the Wagner-Peyser Act. This regulation does
not require States to change their staffing structure for providing
services under the Wagner-Peyser Act, but it provides them flexibility
in how they staff the delivery of these services. As stated above,
States are ultimately responsible for the operations and performance of
the State's Wagner-Peyser Act program. The Department encourages States
to ensure the incentives of any agreements with service providers align
with the goals and requirements of the Wagner-Peyser Act.
One commenter was supportive of the proposed rule, but requested
guidance related to the operations of the Wagner-Peyser Act, including
on the services provided, colocation, referrals, farmworker services,
and services to veterans. The Department recognizes there may be need
for additional guidance on implementing staffing flexibility once this
rule is finalized. The Department will continue to
[[Page 608]]
provide guidance to States and the workforce system as needed through
webinars, WorkforceGPS, TEGLs, and other means to ensure effective
operations of Wagner-Peyser Act activities. Currently, the Department
has provided guidance on the provision of career services by ES staff
in TEGL No. 19-16, guidance on veterans' priority of service including
in the ES in TEGL No. 10-09, and guidance on the reporting of services
to farmworkers by the ES in TEGL No. 14-18.
One commenter asked how one-stop infrastructure costs and other
shared one-stop operational costs will be handled if a State contracts
for the delivery of its labor exchange Wagner-Peyser Act-funded
services. Another commenter requested that local workforce development
boards be consulted when services provided under the Wagner-Peyser Act
are contracted out, in order to ensure one-stop financial commitments
continue to be addressed. The Department recognizes the importance of
addressing one-stop infrastructure costs and other shared operational
costs for ES programs and notes that this final rule does not make any
changes to obligations of WIOA required one-stop partners on
infrastructure costs. The Department has provided guidance and
technical assistance on the sharing and allocation of infrastructure
costs among one-stop partners. All one-stop partners, including State
ES programs, are still required to contribute to the infrastructure
costs of AJCs. If a State's adjustments in ES staffing impact the cost
allocation methods in the MOU, than the parties must modify the MOU as
appropriate, consistent with 20 CFR part 678, subpart C. For more
information and guidance on one-stop operations and infrastructure
funding of the one-stop delivery system, see TEGL No. 16-16, One-Stop
Operations Guidance for the American Job Center Network (Jan. 18,
2017), and TEGL No. 17-16 Infrastructure Funding of the One-Stop
Delivery System (Jan. 18, 2017). The Department will continue to
provide guidance and technical assistance as needed.
One commenter recommended that the Department require States to
accept comments and consult with local workforce development boards and
local elected officials if services provided under the Wagner-Peyser
Act will be contracted to an entity other than a local workforce
development board. The Department acknowledges that some States will
want to consult with local workforce development boards and local
elected officials, who have gained experience over the years with
alternative staffing methods for the provision of WIOA services, as
they determine the most appropriate staffing model for their State.
However, the Department has chosen not to require States to accept
comments or consult with local workforce development boards or local
elected officials if the State implements staffing flexibility under
this final rule. The flexibility in the final rule is based on the
State's responsibility to oversee operations of ES activities including
delivering effective services, and the State is in the best position to
determine whether and how to consult with local workforce development
boards.
One commenter stated that onsite monitoring of Federal programs has
been reduced, and that the changes to the merit-staffing requirement
may result in less oversight of the Wagner-Peyser Act regulations. The
commenter noted that less monitoring may lead to less ``fidelity to
impartiality and fairness in the staffing of ES activities under the
administrative flexibility.'' Based on this, the commenter recommended
that merit-staffing of Wagner-Peyser Act-funded staff be maintained to
ensure the fair and equitable delivery of ES activities to job seekers,
UI claimants, MSFWs, and employers. The commenter suggested that, if
the proposed flexibility is approved, the Department should add
additional regulatory language to require onsite annual Federal reviews
of State adherence to unbiased and impartial delivery of employment
services, and prohibition of patronage in the selection and promotion
of AJC ES and UI staff members.
As explained above, States, as Wagner-Peyser Act grantees, are
required to oversee all Wagner-Peyser Act operations, whether or not
they decide to use alternate staffing methods, and are ultimately
responsible for the operations and performance of the State's Wagner-
Peyser Act program. These responsibilities continue to include the
requirement at 20 CFR 652.207 to provide universal access to Wagner-
Peyser Act services, and the Department expects States to ensure that
services are delivered fairly and impartially.
The commenter suggested including regulatory language requiring the
Department to conduct onsite annual reviews of States. The Department
has not included this as a requirement in the regulation, because,
consistent with 20 CFR 683.400, the Department already conducts
monitoring at the State and local levels, including onsite monitoring,
on a regular schedule. Additionally, States are required to conduct
regular onsite monitoring of its Wagner-Peyser Act program, consistent
with 20 CFR 683.410. As the Department's grantees, States must continue
to oversee, provide guidance, and ensure compliance of its Wagner-
Peyser Act operations and service delivery, regardless of whether they
ultimately decide to take advantage of staffing flexibility or not.
Unemployment Insurance and the Wagner-Peyser Act
The Department notes that this regulation does not change the
requirement in sec. 303(a)(1) of the SSA that UI services be provided
by merit staff.
Several commenters opposed the proposed rule because they stated
that title III of the SSA authorized the payment of Federal
Unemployment Tax Act funds to administer UI benefits through public
employment offices. They asserted that the integration of the financing
and administration of UI and the public employment offices led to
housing these two offices within the same State agency, thus, extending
the merit-staffing requirements to the ES. The Department does not
agree that the financing structure of the UI and ES programs extends
the UI merit-staffing requirement to the ES. Section 901(a) of the SSA
establishes an employment security administration account (ESA) and
sec. 901(c)(1)(A) authorizes use of the funds in this account for
certain enumerated purposes, including assisting the States in the
administration of their UI laws and the establishment and maintenance
of systems of public employment offices in accordance with the Wagner-
Peyser Act. Although the financing for the ES and the State's UI
program come from the same source, the ESA, the administration
requirements of the two programs are not the same. Specifically, sec.
901(c)(1)(A)(ii) of the SSA provides for the establishment of public
employment offices in accordance with the Wagner-Peyser Act's
requirements. The Department interprets this to mean that the ESA funds
used for the administration of the Wagner-Peyser Act are subject to the
requirements of the Act. As explained above, the Department does not
interpret the Wagner-Peyser Act to contain a statutory merit-staffing
requirement. Therefore, the Department does not agree with commenters
that the financing structure of the ES and UI program extends the
merit-staffing requirement of sec. 303(a)(1) of the SSA for the UI
program to the ES program.
The Department acknowledges that in many States, the State agency
administering the UI program is the
[[Page 609]]
same agency administering the ES program. The Department supports the
close alignment of the ES and UI program, because the ES program plays
a key role in UI, helping connect job seekers with employers so as to
return UI recipients to work as soon as possible. The ES, however, does
not administer the UI program. While it is reasonable for States to
locate these functions within the same State agency, there is no
requirement to do so. This final rule does not prohibit States from
extending merit-staffing to the delivery of ES labor exchange services.
One commenter noted that this proposed rulemaking would create a
staffing disconnect between the Wagner-Peyser Act and UI programs, and
not having these activities performed by State merit-staff employees
would complicate the administration of UI benefit eligibility. Another
commenter stressed the importance of keeping the connection between UI
benefits and the labor exchange system funded by the Wagner-Peyser Act.
The Department does not agree that the final rule will hamper the
coordination of employment services and UI claimant services.
Consistent with 20 CFR 652.209, States must provide reemployment
services to UI claimants for whom such services are required as a
condition for receipt of UI benefits. Even if States choose to use a
service provider for the provision of Wagner-Peyser Act-funded
services, States are still responsible for fulfilling the requirements
of 20 CFR 652.209. The Department considers States to be in the best
position to develop business processes designed to ensure coordination
between UI and the Wagner-Peyser Act in serving unemployed job seekers.
The Department monitors States to ensure they are fulfilling these
statutory and regulatory requirements.
Multiple commenters stated they opposed the flexibility provided in
the rule because past reemployment initiatives have relied on the UI
programs' ability to use ES staff, which would not be possible if ES
programs were not merit-staffed. The Department recognizes that States
may find value in having ES staff cross-trained and able to carry out
UI functions, particularly in an economic downturn when UI workload can
spike quickly. This rule does not prevent States from continuing this
practice as long as any staff with responsibility for determining UI
benefit eligibility are merit-staffed.
Some commenters noted a concern regarding the accuracy in the
administration of employment systems by non-State-merit staff under the
proposed regulation and that it may complicate efforts to reduce the
error rate in the administration of UI benefits. The Department
appreciates the considerations that States need to take into account
when deciding whether to use the staffing flexibility this final rule
provides, including ensuring using accurate information to administer
UI programs. States are in the best position to ensure staffing and
procedures are in place to support the accurate administration of UI
benefits, including ensuring that staff carrying out the UI work test
under the Wagner-Peyser Act are properly trained. Regardless of whether
or not a State takes advantage of the flexibility this final rule
provides, the Department will still require States to properly and
efficiently administer the UI program so as to ensure accuracy of
benefit payments, including reporting on the accuracy of their payments
through the Benefit Accuracy Measurement (BAM) under 20 CFR part 602
and ensuring that all eligibility determinations meet the payment
timeliness requirements at 20 CFR part 640.
Additionally, States, as the Wagner-Peyser Act grantees, are
required to oversee all operations of the Wagner-Peyser Act activities,
whether they ultimately decide to use staffing flexibility to provide
these services or not. Consistent with 20 CFR 683.400, the Department
will continue to conduct monitoring at the State and local levels.
A few commenters noted concerns regarding impartiality of the staff
providing the services under the Wagner-Peyser Act. They expressed
concern that non-merit staff would jeopardize its future as an
impartial program connecting job seekers to UI benefits and job
referrals. The Department appreciates the considerations that States
will need to take into account when deciding whether to use staffing
flexibility under this final rule, including how the program will
maintain its impartiality in connecting job seekers to UI benefits and
job referrals. ES staff have specific obligations in serving UI
claimants and in carrying out services to job seekers, which include:
Coordination and provision of labor exchange service; targeting UI
claimants for job search assistance and referrals to employment;
administering State UI work test requirements; and providing meaningful
assistance to individuals seeking assistance in filing a UI claim.
States, as the Wagner-Peyser Act grantees, are required to oversee all
operations of the Wagner-Peyser Act activities, whether or not they
ultimately decide to use the staffing flexibility provided by this
final rule, because States are still subject to 20 CFR part 683,
subpart D--Oversight and Resolution of Findings.
One commenter noted that there may be challenges stemming from data
privacy requirements in having contracted staff providing ES
activities, as they related to UI and TAA administration. They noted
that constraints associated with confidentiality of UI and TAA data
remain intact. The commenter stated that in this new proposed system,
which purportedly streamlines the provision of employment services to
individuals, additional layers (obtaining written informed consent,
monitoring ``contractors'' to ensure compliance with the Wagner-Peyser
Act requirements) would have to be added. The Department appreciates
the considerations that States will need to take into account when
deciding whether to use staffing flexibility, including the
confidentiality concerns associated with confidential UI and TAA data.
States, as the Wagner-Peyser Act grantees, are required to oversee all
operations of the Wagner-Peyser Act activities, whether they ultimately
decide to take advantage of the staffing flexibility provided by this
final rule for these services or not. The Department has issued
guidance to support States in their efforts to integrate UI and WIOA
programs, including the ES program in UIPL No. 14-18, Unemployment
Insurance and the Workforce Innovation and Opportunity Act. This
guidance includes information related to UI confidentiality
requirements found in 20 CFR part 603 and the interaction between those
requirements and the operation of WIOA programs, including the ES
program, and the Department encourages States to review this guidance.
In addition, WIOA partner programs have experience integrating services
within an AJC while maintaining the confidentiality of individual
participants' data; therefore, States adopting this final rule's
flexibility should be able to ensure privacy requirements are
maintained.
Some commenters noted concerns regarding the administration of
State UI programs, including a concern that the work-test function of
UI eligibility being performed by non-State-merit staff under the
proposed regulation would result in inaccuracies or process delays of
UI benefits. One commenter mentioned concerns about the services
provided to unemployed job seekers, including the long-term unemployed,
since they are the most vulnerable job seekers. The commenter was
concerned about the impact of non-merit staff being involved in the
provision and
[[Page 610]]
reporting of services, because negative results have serious economic
impact on the individual due to it causing a delay or denial of their
UI benefits. The commenter noted it is important that the individuals
reporting these results be held accountable for the accuracy of their
reports and stated that merit-based employees best exemplify this level
of accountability.
One commenter asked what safeguards would be implemented to ensure
that the work readiness test performed by ES staff for UI purposes
would not be compromised and will continue to be administered fairly
and equitably. The Department recognizes the importance of the
connection between the UI and Wagner-Peyser Act programs, and considers
the flexibility this regulation provides to States as an opportunity
for States to test and improve strategies for serving unemployed
individuals. To assist with this, the Department continues to place an
emphasis on planning across the Wagner-Peyser Act and UI programs,
through the required WIOA State Plan process. As part of that process,
States are required to address strategies developed to support training
and awareness across core programs and the UI program, including on the
identification of UI eligibility issues and referrals to UI staff for
adjudication. Additionally, as part of this process the States are
required to describe strategies for providing reemployment assistance
to UI claimants and other unemployed individuals. These requirements
can be found at OMB Control Number 1205-0522, Required Elements for
Submission of the Unified or Combined State Plan and Plan Modifications
under the Workforce Innovation and Opportunity Act.
Regarding the commenter's concerns about UI benefit delays or
inaccuracies and what ``safeguards'' would be implemented to ensure
that the work readiness test performed by ES staff for UI purposes is
not compromised, the Department notes that it has been permissible for
non-State merit staff to carry out similar functions, for example,
reviewing compliance with State work search requirements, as part of
the RESEA program and its predecessor, the REA program, for many years.
The service delivery staff must be trained to identify any potential UI
eligibility issues that come to their attention, or that are identified
when staff are providing such services, and refer any such issues to UI
merit staff to adjudicate, as appropriate, potential UI eligibility
issues. Additional guidance can be found in UIPL No. 12-01, Outsourcing
of Unemployment Compensation Administrative Functions, UIPL No. 12-01,
Change 1, Outsourcing of Unemployment Compensation Administrative
Functions-Claims Taking, and UIPL No. 14-18, Unemployment Insurance and
the Workforce Innovation and Opportunity Act.
Additionally, regardless of whether or not a State takes advantage
of the flexibility this final rule provides, the Department will still
require States to properly and efficiently administer the UI program so
as to ensure accuracy of benefit payments, including reporting on the
accuracy of their payments through the BAM under 20 CFR part 602 and
ensuring that all eligibility determinations meet the payment
timeliness requirements at 20 CFR part 640.
Sec. 652.216 May the one-stop operator provide guidance to Employment
Service staff in accordance with the Wagner-Peyser Act?
Section 652.216 governs how one-stop operators provide guidance to
ES staff. The Department received comments on this section and responds
to them below. The Department is finalizing this section as proposed.
One commenter requested the Department include a requirement in the
regulation that States that continue to use State merit-staffing models
must follow all applicable State personnel laws and regulations,
because the commenter was concerned that not including this would
potentially allow non-State entities to determine personnel actions
that are solely the responsibility of the SWA. The Department
recognizes that some States will continue to use State merit-staffing
models. However, the Department declines to include language in the
regulation instructing States to follow applicable State personnel laws
and regulations because it is unnecessary; States are already bound to
follow their applicable State personnel laws and regulations. The
Department notes that States that choose to continue providing ES
activities with State merit staff may consider developing policies or
including terms in the local MOU to clearly delineate what
responsibilities the one-stop operator may have or not have within the
State's personnel system.
C. Part 653--Services of the Wagner-Peyser Act Employment Service
System
Part 653 sets forth the principal regulations of the Wagner-Peyser
Act ES concerning the provision of services for MSFWs consistent with
the requirement that all services of the workforce development system
be available to all job seekers in an equitable fashion. This includes
ensuring MSFWs have access to these services in a way that meets their
unique needs. MSFWs must receive services on a basis that is
qualitatively equivalent and quantitatively proportionate to services
provided to non-MSFWs.
In part 653, the Department changed the language throughout to
reflect States' new flexibility in staffing. In addition to what was
proposed in the NRPM and in response to commenters' concerns, the
Department made three additional notable changes in part 653: (1)
Strengthening the recruitment criteria for outreach staff and ES staff
at significant MSFW one-stop centers by requiring that SWAs seek such
staff who speak the language of a significant portion of the MSFW
population in the State; (2) strengthening the outreach staff
identification card requirement by ensuring the SWAs provide outreach
staff members with an identification card or other materials
identifying them as representatives of the State; and (3) clarifying
that the SMA may recommend the onsite review be delegated only to a SWA
official.
Sec. 653.107 Outreach and Agricultural Outreach Plan
20 CFR 653.107 governs the outreach requirements States must carry
out to ensure services are provided to MSFWs on a qualitatively
equivalent and quantitatively proportionate basis as services provided
to others in the ES program. The Department is finalizing the changes
proposed in 20 CFR 653.107 except for the changes described below.
First, the final rule adds a new paragraph to 20 CFR 653.107(a) on
SWA responsibilities. Newly added 20 CFR 653.107(a)(6) makes clear that
it is the State's obligation to ensure outreach staff receive an
identification card or other materials identifying them as
representatives of the State. The existing regulation contains a long-
standing requirement at Sec. 653.107(b)(10) for outreach staff to be
provided with, and carry and display, upon request, identification
cards or other material identifying them as employees of the SWA.
However, there was no corresponding requirement to issue the badge or
other materials in paragraph (a) of 20 CFR 653.107 that outlines the
SWA's responsibilities. Therefore, while it was always the State's
responsibility to provide a badge or these other materials, the
Department is adding this paragraph to Sec. 653.107(a) for clarity.
The new paragraph will read, ``SWAs must ensure each outreach staff
member is provided with an identification card
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or other materials identifying them as representatives of the State.''
States can meet this requirement in a variety of ways. For example, the
SWA could issue a template for service providers to use in creating the
badge or identification materials. Alternatively, the State could issue
identification cards to all outreach staff, including any who are
employees of service providers. States may also use any other method
that ensures outreach staff have a card or other materials identifying
them as representatives of the State. The Department is making this
clarifying change to ensure that, if a State chooses to use merit staff
flexibility, this responsibility of the State is clear and all outreach
staff will continue to have the same level of authority and access when
conducting outreach to MSFWs.
Second, and relatedly, the Department is amending paragraph (b)(10)
of Sec. 653.107 to state that outreach staff must be provided with,
carry, and display, upon request, identification cards or other
material identifying them as representatives of the State. This change
clarifies that the outreach staff are representatives of the State.
This addition is intended to help outreach staff retain access to and
trust with agricultural employers. It gives all outreach staff, whether
they are a State employee or the employee of a service provider, an
official identification to assuage concerns from agricultural employers
who may be cautious about letting unknown representatives on their
property. It will also demonstrate to MSFW customers that the outreach
staff member is an official representative of the State who can be
trusted to provide services and receive complaints.
Finally, in response to concerns that outreach staff of a service
provider would not have the experience and characteristics necessary to
serve MSFWs, the Department is strengthening the criteria that SWAs
must use to seek qualified outreach staff. The current regulations
require SWAs to seek outreach staff who: (1) Are from MSFW backgrounds;
(2) speak a language common among MSFWs in the State; or (3) are
racially or ethnically representative of the MSFWs in the service area.
See 20 CFR 653.107(a)(3)(i) through (iii).
The NPRM proposed to require SWAs to ensure that outreach staff
candidates were sought using the same criteria used for SMAs. Those
criteria are located in Sec. 653.108(b)(1) through (3) and are as
follows: (1) Who are from MSFW backgrounds; or (2) who speak Spanish or
other languages of a significant proportion of the State MSFW
population; or (3) who have substantial work experience in farmworker
activities.
While the Department proposed to align the hiring criteria with
that of the SMA in the NPRM, in response to commenters' concerns about
effective services for MSFWs, the Department has determined it could
better strengthen the recruitment criteria for language requirements at
Sec. 653.107(a)(3) to mandate that SWAs must seek qualified candidates
who speak the language of a significant proportion of the State MSFW
population, and who are either from MSFW backgrounds or have
substantial work experience in farmworker activities.
This change will help ensure outreach staff speak the language
spoken by a significant proportion of the State MSFW population, and
that the outreach staff sought will be from an MSFW background or have
work experience in farmworker activities. The Department interprets the
requirement that the outreach staff sought be from an MSFW background
to mean that they or a family member have worked in farmwork as defined
at 20 CFR 651.10. The Department interprets the requirement that the
outreach staff sought have work experience in farmworker activities to
mean that they have worked with farmworkers, either as a service
provider or through other means. These changes will enable new outreach
staff to connect confidently with MSFWs.
The final rule maintains the same recruitment requirements for the
SMA position, a position that has a wide range of responsibilities, as
those in the existing regulation. However, for positions that require
daily direct interaction with farmworkers, the Department has
considered the concerns of commenters and strengthened the recruitment
requirements to include language, paired with either farmworker
background or experience, instead of just one of these three
qualifications. The Department further strongly encourages States to
recruit SMAs who speak the language of a significant proportion of
MSFWs in their State.
Many commenters expressed concerns about the effects that changes
in the staffing requirements for outreach workers would have on MSFWs.
Commenters stated that outreach staff play an important role in
assisting farmworkers to access ES activities and that for many MSFWs,
outreach staff are their principal source of contact with the ES
system. Commenters who opposed changes in the staffing requirements
cited many reasons for their opposition. Commenters stated the changes
would erode the Judge Richey Court Order in NAACP, Western Region v.
Brennan, No. 2010-72, 1974 WL 229 (D.D.C. Aug. 13, 1974), by allowing
SWAs to use less experienced individuals with little or no knowledge of
the MSFW population to conduct MSFW outreach and perform required
monitoring activities.
The Department has concluded that the Judge Richey Court Order is
no longer in effect. Regardless, the Department is still committed to
ensuring that MSFWs have equal access to the ES program and therefore
has decided to retain the key requirements of the Judge Richey Court
Order to ensure that MSFWs receive ES services on a qualitatively
equivalent and quantitatively proportionate basis. The Department has
concluded the changes in this final rule will not undermine this
commitment.
The Department will continue to hold SWAs accountable to ensure
MSFWs are offered the full range of employment and training services on
a basis that is qualitatively equivalent and quantitatively
proportionate to the same services offered to non-MSFWs. Moreover, SWAs
must continue to seek qualified outreach staff who have the
characteristics identified at 20 CFR 653.107(a)(3). Lastly, if a State
chooses to change its staffing arrangements, the State must ensure that
new staff are trained and familiarized with the position and the
corresponding duties. The SWA must continue to comply with 20 CFR
653.107(b), including the training of outreach staff as required at 20
CFR 653.107(b)(7). This will help equip new staff with the knowledge
necessary to provide quality services to MSFWs and meet MSFWs'
employment needs.
Commenters stated that ``outside contractors'' will lack the
established relationships with employers, MSFW service agents,
community ties, and extensive knowledge of the local labor market that
longtime outreach staff have developed over the years. Commenters also
asserted that the proposal will disrupt well-established and productive
relationships. The Department acknowledges that States may want to
consider the potential impact on established relationships that
staffing flexibility may have as they are deciding if using staffing
flexibility is the right approach for their State. The Department notes
that States may choose to retain existing staff as nothing in the
regulation requires States to change their current staffing for these
services. As previously stated, if a State chooses to change its
staffing arrangements the State must ensure that
[[Page 612]]
new staff are trained and familiarized with the position and the
corresponding duties. The SWA must continue to comply with 20 CFR
653.107(b), including the training of outreach staff as required at 20
CFR 653.107(b)(7).
Commenters stated that contracted outreach staff will not
understand the unique needs of MSFWs. The Department does not agree
with these commenters. The Department anticipates that outreach staff
will be familiar with the unique needs of MSFWs because States must
seek to hire outreach staff that meet the characteristics identified at
20 CFR 653.107(a), which include individuals who are from MSFW
backgrounds or have significant experience in farmworker activities.
Commenters stated there will be a reduction in reports of apparent
violations of employment-related laws. Commenters stated the new hires
will lack the current outreach staff familiarity with relevant
employment-related laws, built up through numerous training sessions
and years of monitoring employer compliance. One commenter stated that,
when abusive labor practices occur, farmworkers often first seek out
the outreach staff to report an issue and ask for assistance. The
contact outreach staff have with MSFWs becomes only more important as
the number of available agricultural job opportunities through the ES
system grows, and the potential for labor abuses increases.
The Department does not anticipate that there would be a reduction
in reports of apparent violations of employment-related laws if States
take advantage of the staffing flexibility provided in this final rule.
The Department notes 20 CFR 653.107(b)(7) does not change with this
final rule. This section states, in part, that outreach staff must be
trained in the benefits and protections afforded MSFWs by the ES, as
well as the procedure for informal resolution of complaints. The
regulatory text further clarifies that trainings are intended to help
outreach staff identify when such issues may be occurring in the fields
and how to document and refer the cases to the appropriate enforcement
agencies.
Moreover, 20 CFR 653.107(b)(6) requires that outreach staff be
alert to observe the working and living conditions of MSFWs and, upon
observation or upon receipt of information regarding a suspected
violation of Federal or State employment-related law, document and
refer information to the ES Office Manager for processing.
Additionally, if an outreach staff member observes or receives
information about apparent violations (as described in Sec. 658.419 of
this chapter), the outreach staff member must document and refer the
information to the appropriate ES Office Manager. Therefore, States are
required to ensure that outreach staff, even if they are not State
merit staff, are trained to identify and report potential violations of
the ES regulations and employment-related laws.
One commenter noted that contracted outreach staff may not be fully
committed to the work, stating that public sector employees are more
motivated by responsibility, growth, and feedback, and less motivated
by financial rewards or earning a good salary. Another commenter
asserted that the staffing flexibility will result in a deterioration
of services to MSFWs. The commenter stated that, when outside entities
operate one-stop centers, they only occasionally retain the former
State employees who had previously held the jobs. According to this
commenter, much of the turnover is due to for-profit businesses that
reduce compensation and benefits to employees to cut operating costs.
The commenter stated that this results in worse service and that
similar results are likely if the outreach staff positions are
contracted out.
Some commenters expressed support for the staffing flexibility for
outreach staff. One commenter stated that the proposed rulemaking would
give States flexibility to staff employment and farmworker outreach
services in the most effective and efficient way, using a combination
of State employees, local government employees, contracted services,
and other staffing models, which could make more resources available to
help employers find employees and help job seekers find work. Another
commenter stated the resources allocated to worker outreach for the
extension of services, while they are important and may impact a
potential employee's ability to work, should be considered secondary to
the effort devoted to securing gainful employment for unemployed/
underemployed workers.
The Department appreciates the considerations States must take into
account when considering if exercising the staffing flexibility
provided in this final rule is best for their State. However, the
Department notes that, regardless of who is providing the services, the
State, as the Wagner-Peyser Act grantee, is responsible for ensuring
the services provided to MSFWs meet the requirements of these
regulations. The Department continues to require State Administrators
to ensure their SWAs monitor their own compliance with ES regulations
in serving MSFWs on an ongoing basis and notes that the State
Administrator has overall responsibility for SWA self-monitoring, as
required by Sec. 653.108(a). Regardless of how a State chooses to
staff positions, it will be held accountable for delivering services in
accordance with the ES regulations. Moreover, the Department at the
national and regional levels will continue to monitor and assess SWA
performance and compliance with ES regulations. See 20 CFR 658.602(j)
and 658.603(a).
Sec. 653.108 State Workforce Agency and State Monitor Advocate
Responsibilities
20 CFR 653.108 governs the obligations of the SWA and the SMA in
providing ES activities to MSFWs. The Department is finalizing this
section as proposed, except for the changes noted herein.
The Department is making one change to the criteria at Sec.
653.108(b)(2), which currently provides that, among qualified
candidates, SWAs must seek persons who speak Spanish or other languages
of a significant proportion of the State MSFW population, by removing
the reference to Spanish. As finalized, the rule reads, in part,
``[w]ho speak the language of a significant proportion of the State
MSFW population.'' The Department is removing the reference to speaking
Spanish, because some MSFWs do not speak Spanish and the Department
wants to ensure recruitment for these positions focuses on seeking to
hire individuals who can speak the language common to MSFWs in the
State to facilitate communication and the provision of services.
Several commenters expressed general opposition to the proposed
changes at 20 CFR 653.108. Other commenters expressed general support
for the changes at Sec. 653.108. One commenter agreed that it would be
more appropriate for the SMA to be a State employee and that flexible
staffing models would allow for more responsive staffing determinations
and ultimately ensure that MSFWs receive ES activities that are
qualitatively equivalent and quantitatively proportionate to the
services provided to other job seekers. Other commenters supported the
change noting their support for general staffing flexibility.
The Department notes that the proposed changes mean that States
have the flexibility to staff the provision of Wagner-Peyser Act-funded
services in the most effective and efficient way. Therefore, the SMA's
compensation may or may not change, depending on the decision of the
State. The
[[Page 613]]
Department does not intend for the role of the SMA to be reduced in any
way, or change beyond the staffing flexibility, given that the SMA must
remain a SWA official with extensive responsibilities, identified at 20
CFR 653.108.
One commenter opposed the proposed rule because, the commenter
stated, the Department's proposed changes for the SMA would reduce the
SMA's prestige, influence, and likely the compensation of the SMA. The
commenter stated that the Department had not provided sufficient
justification for these changes. The final rule provides States with
additional flexibility in the delivery of ES activities. States will be
free to choose the staffing model that best fits their needs. The final
rule allows the States to create a staffing model that works best for
their unique circumstances, taking into consideration all relevant
factors for effective implementation of ES programs, including the
prestige, influence, and compensation of the SMA. The Department notes
that this regulatory change, by itself, will do nothing to reduce the
SMA's prestige, influence, or compensation, as States will not be
obligated to make any changes to staffing requirements for ES programs.
The Department further notes that the preamble to the NPRM provided
substantial justification for the changes to this section.
Regarding 20 CFR 653.108(b), one commenter expressed opposition to
the proposed elimination of the requirement that the SMA be State merit
staff. This commenter stated that a State merit employee is required to
ensure direct employment services are provided to migrant workers and
employers that are qualitatively equivalent and quantitatively
proportionate to the services provided to other job seekers. The
Department notes that the State agency has the flexibility to choose to
maintain the SMA as merit staff, if it so desires. Moreover, SWAs must
continue to ensure the services provided to MSFWs are qualitatively
equivalent and quantitatively proportionate to the services provided to
non-MSFWs. The Department notes it will continue to monitor SWA
compliance with the ES regulations.
Regarding 20 CFR 653.108(c), where the Department proposed to
remove the requirement that the SMA must have status and compensation
as approved by the civil service classification system and be
comparable to other State positions assigned similar levels of tasks,
complexity, and responsibility, some commenters pointed to the
settlement arising from the court order in NAACP, W. Region. Commenters
stated that the consent decree in that case took care to ensure that
SMAs were afforded unfettered access to State ES officials on matters
impacting services to the MSFW population. Commenters further stated
that the consent decree gave the SMA position the same degree of
influence within the State agency as other senior policy positions with
similar levels of tasks, complexity, and responsibility, which has been
in regulations since 1980.
Commenters stated that the Department did not provide an
explanation for proposing to remove the requirement and that the role
of the SMA has not diminished in importance. Commenters further stated
that the role of the SMA to ensure that the SWAs comply with their
obligations is even more essential today than in 1980, due to the
increase in H-2A workers in the country, the need to ensure that wages
and working conditions offered to H-2A workers are at least equal to
those prevailing in the area of employment, and that the housing
offered meets Federal regulations. Lastly, they asserted that close
monitoring is also required of U.S. workers referred to jobs with H-2A
employers, because U.S. workers often suffer discriminatory treatment
in favor of the guestworkers. In contrast, some commenters stated that
they supported the proposed changes to the status of the SMA, because
they support flexible staffing for activities conducted under the
Monitor Advocate System.
As the Department explained in the NPRM, this change is intended to
give States the flexibility to determine what is appropriate for the
SMA position and is consistent with other changes proposed in the NPRM.
For the SMA position in particular, which the Department deemed
appropriate to maintain as a SWA official, the Department notes that
States have the discretion to determine their employee's status and
compensation. There is nothing in the final rule that requires States
to change the status, compensation, or the influences of the SMA.
The Department also notes it is not suggesting that the role of the
SMA has diminished in importance. Rather, States determine how to
compensate SMAs appropriately. The SMA will continue to have the same
responsibilities under these regulations, even if a State chooses to
remove the SMA from its merit system, and the Department anticipates
States will compensate the SMA accordingly.
In response to commenters who asserted that close monitoring is
required to ensure U.S. workers who are referred to jobs with H-2A
employers are not subject to discriminatory practices, the Department
agrees and notes that the SMA position continues to include monitoring
as a key component of the position. Moreover, SWAs must continue to
ensure the services provided to MSFWs are qualitatively equivalent and
quantitatively proportionate to the services provided to non-MSFWs. The
Department notes it will continue to monitor SWA compliance with the ES
regulations.
Likewise, the Department acknowledges that the SMA has an important
role in ensuring States and employers are complying with the
requirements of the H-2A program. The SMA will continue to have the
same responsibilities as the SMA had prior to this final rule. For
example, the SMA will continue to be responsible for talking to workers
in the field, which includes H-2A workers and U.S. workers. This
ensures that the SMA will be detecting and taking action when wage and
housing compliance issues emerge. Therefore, the Department does not
anticipate that there will be a negative impact on States' and
employers' compliance with the H-2A program requirements. The
Department notes that States are still required to conduct field checks
on all clearance job orders, including those job orders attached to H-
2A applications, pursuant to 20 CFR 653.503.
One commenter noted that the SMA is still required to be a State
employee, but that the requirement to have ``status and compensation as
approved by the civil service classification system and be comparable
to other State positions assigned similar levels of tasks, complexity,
and responsibility'' was removed. The commenter explained that
individuals employed in the commenter's SWA are covered by all
applicable State personnel laws and regulations. Meaning, if the SMA is
a State employee, by default the SMA is a State merit-staffed
individual. The commenter opposed the removal of this provision and
recommended it be retained, noting that the Department does not have
the authority to allow States to arbitrarily determine status and
compensation outside of the civil service classification system.
The Department understands the commenter's concern and clarifies
that the Department is not requiring States to change how they
structure their pay scales or systems. The regulation only gives States
the flexibility to create the staffing arrangement that best suits each
State's needs. States are free to structure the status and compensation
for the
[[Page 614]]
SMA position consistent with their own States' laws, regulations, and
policies, as long as the SMA remains a State employee. Therefore, if
keeping the SMA as a State employee means that the SMA will be in the
State's civil service system, the State is free to do so. The
Department has concluded no change is needed to the text of the
regulation in response to this comment.
One commenter questioned whether the last sentence in 20 CFR
653.108(d)--which as proposed stated that any State that proposes less
than full-time dedication must demonstrate to its Regional
Administrator (RA) that the SMA function can be effectively performed
with part-time ES staffing--should include ``ES.'' The commenter stated
the reference to ``ES'' does not appear necessary, as this sentence is
speaking specifically to the SMA function, which is a SWA official and
not ES staff. The commenter recommended the sentence revert to the
original text that does not include the ``ES'' reference. The
Department appreciates the commenter raising this incongruence and
agrees the addition of ``ES'' is not appropriate given that the
requirement is referring to the SMA. Therefore, it is not correct to
use the term ``ES staffing'' here. The final rule removes ``ES'' from
this provision.
One commenter stated that the Department proposed to remove the 20
CFR 653.108(g)(1) requirement that SMAs ``without delay, must advise
the SWA and local offices of problems, deficiencies, or improper
practices in the delivery of services and protections'' to MSFWs. The
commenter stated that this provision was part of the original
regulations issued in 1980 to resolve the NAACP, W. Region litigation
and that those regulations were intended to allow the SWAs and local
offices to quickly correct deficiencies. The commenter stated that the
Department did not indicate that this section has proven overly
burdensome or ineffective, and it offers no reason for removing it. The
commenter stated that the deletion is arbitrary and capricious and
recommends that the language be retained as a tool to assist in
effective agency self-monitoring.
The Department did not propose to remove the requirement at 20 CFR
653.108(g)(1), which requires the SMA to advise the SWA and local
offices of problems, deficiencies, or improper practices in the
delivery of services and protections afforded by regulations and
permits the SMA to request a corrective action plan to address these
deficiencies. This provision also requires the SMA to advise the SWA on
means to improve the delivery of services. In the NPRM, the Department
addressed its proposed changes to paragraph (g)(1), and did not propose
to change the aforementioned text. Therefore, the Department clarifies
that the final regulatory text retains the second and third sentences
of paragraph (g)(1) as is and, as proposed in the NPRM, revises the
first sentence to read: ``Conduct an ongoing review of the delivery of
services and protections afforded by the ES regulations to MSFWs by the
SWA and ES offices (including efforts to provide ES staff in accordance
with Sec. 653.111, and the appropriateness of informal complaint and
apparent violation resolutions as documented in the complaint logs).''
One commenter noted that the Department proposed 20 CFR
653.108(g)(3) to ensure all significant MSFW one-stop centers not
reviewed onsite by Federal staff are reviewed at least once per year by
ES staff. The commenter noted that, instead of changing the former
reference from ``State staff'' to ``ES staff,'' it should be changed
from ``State staff'' to ``SWA officials.'' Otherwise, this function is
given to the local level and bypasses State-level oversight. The
Department agrees with the commenter that it would be more appropriate
for a State employee to carry out the kind of monitoring envisioned
here. The responsibilities laid out in paragraph (g) of 20 CFR 653.108
are the responsibilities of the SMA, and thus, a State employee (SWA
official) should do this monitoring. Therefore, the Department will
finalize 20 CFR 653.108(g)(3) to provide that all significant MSFW one-
stop centers not reviewed onsite by Federal staff are reviewed at least
once per year ``by a SWA official.''
Also in 20 CFR 653.108(g), the Department is making two additional
changes to clarify the roles in onsite reviews. The first change is to
20 CFR 653.108(g)(2)(v). The proposed language for Sec.
653.108(g)(2)(v) stated that the corrective action plan must be
approved or revised by appropriate superior officials and the SMA.
However, the NPRM's preamble for this provision explained that the
Department was proposing to replace ``superior officials'' with ``SWA
officials'' to make it clear that a State employee must approve the
corrective action plan. See 84 FR 29433, 29441 (June 24, 2019). The
proposed regulatory language for this provision in the NPRM
inadvertently did not include this revision. The final rule's
regulatory text adopts the text as described in the NPRM preamble. It
states, ``The plan must be approved or revised by SWA officials and the
SMA.''
The second change is to 20 CFR 653.108(g)(2)(vii). The Department
proposed to revise this provision to state that the SMA may recommend
the onsite review ``be delegated to an ES staff person.'' As proposed,
this would permit the staff of a service provider to carry out these
onsite reviews, permitting the service provider to monitor itself. The
Department intends for the State to carry out monitoring of the local
one-stop centers, as the State is the entity ultimately responsible for
ensuring its compliance with the requirements for providing services to
MSFWs. Therefore, to ensure the State is providing these services as
required, the Department will require a State official to conduct these
reviews. The Department is finalizing this rule with a minor change to
the proposed rule text to provide that the SMA may delegate the onsite
review to a SWA official (not ES staff) to clarify that the SMA may
only delegate the responsibility for onsite reviews to a State
employee. The final rule provides that the SMA may recommend that the
review described in paragraph (g)(2) of this section be delegated to a
SWA official. The Department notes that the current version of the
regulatory text allows for this delegation to a responsible,
professional member of the administrative staff of the SWA. As
explained above, the rule as finalized will change this language to
permit the delegation to a SWA official. The Department anticipates
that the SMA would choose to delegate these reviews to a SWA official
that is responsible and professional.
One commenter stated that at 20 CFR 653.108(o), the proposed rule
referenced ``significant MSFW ES offices,'' where other sections of the
regulations refer to ``significant MSFW one-stop centers.'' For
consistency, the commenter suggested using ``significant MSFW one-stop
centers.'' The Department agrees with the commenter that ``significant
MSFW ES offices'' should be written ``significant MSFW one-stop
centers,'' particularly because ``significant MSFW one-stop centers''
is a defined term in the ES regulations at 20 CFR 651.10.
Sec. 653.111 State Workforce Agency Staffing Requirements
20 CFR 653.111 governs the requirements for SWA staffing. The
Department is finalizing this section as proposed, except for the
changes described below.
The Department stated in the NPRM that it had ``serious concerns
about the constitutionality of the additional, race-based and
ethnicity-based hiring criteria in the current regulation.'' 84 FR at
[[Page 615]]
29441. The NPRM noted that the regulations were adopted in response to
a 1974 court order--now 45 years ago--and that more recent Supreme
Court precedent had emphasized that a racial-classification scheme
cannot last ``longer than the discriminatory effects it is designed to
eliminate,'' Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 227
(1995), and that a university, by comparison, cannot impose ``a fixed
quota'' or ``some specified percentage'' of a racial or ethnic group.
Fisher v. Texas, 136 S. Ct. 2198, 2208 (2016). The Department's legal
concerns remain, especially when commenters did not present evidence of
systemic discrimination in the ES program today.
The NPRM also stated that the Department believed it could meet the
needs of MSFWs without resorting to race-based or ethnicity-based
criteria, and instead use the criteria employed for selecting State
Monitor Advocates. The Department believes the criteria it establishes
in this final rule for staffing significant MSFW ES offices, in
addition to all the other safeguards and requirements in the MSFW
program, will ensure that MSFWs are appropriately served.
One commenter opposed the Department's proposal to remove
requirements from 653.111 that obligate States to engage in affirmative
action hiring practices. The commenter stated that simply citing U.S.
Supreme Court decisions that have limited the use of race-based
affirmative action programs is not a legally sufficient basis to remove
the affirmative action requirements. Specifically, the commenter stated
that the Department had not offered evidence that the discrimination
the affirmative action provisions were intended to rectify was
remedied. The commenter stated they opposed the elimination of these
provisions, because there continues to be systemic racism in the United
States as evidenced by a wage and wealth gap between white and African
American workers. The Department has the authority to remove the
affirmative action race-based hiring criteria and believes it is
required to remove or revise these criteria as presently constituted to
comply with current law. The federal government may impose race-based
classifications only if the requirement meets the strict scrutiny
standard. See Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 227
(1995). In order to meet strict scrutiny, the federal agency must
demonstrate that the racial classification serves a compelling
governmental interest and is narrowly tailored to further that
interest. For the reasons provided in the NPRM and discussed here, the
Department has serious constitutional concerns about the regulations as
they have been written, and has additionally determined as a policy
matter that it can meet farmworkers' needs without resorting to race-
based hiring criteria. Other criteria can be just as probative, or
perhaps even more so, of candidates' ability to serve MSFWs.
The ES regulations have a number of provisions intended to ensure
that MSFWs' needs are met. For example, as explained above, the
Department is finalizing 20 CFR 653.111 with slight changes for the
recruitment criteria for outreach staff and ES staff in significant
MSFW offices. The Department will require that States ensure the
recruitment of ES staff who speak a language that a significant
proportion of the State's MSFW population speak and who are from MSFW
backgrounds or who have substantial work experience in farmworker
activities. Bringing prominence to the requirement that States ensure
that outreach workers and ES staff speak a language that a significant
proportion of MSFWs speak will help ensure that the ES Staff directly
engaging with MSFWs are best able to meet MSFWs' needs.
One commenter opposed the removal of the affirmative action hiring
requirements because, the commenter stated, the proposed changes to the
affirmative action hiring requirements would mean that ES staff people
would no longer be subject to key, longstanding protections against
racial discrimination. The Department disagrees that ES staff will no
longer be subject to longstanding protections from racial
discrimination. ES staff are subject to all anti-discrimination
provisions applicable to the ES program. This includes the
nondiscrimination and equal opportunity provisions of WIOA sec. 188 and
its implementing regulations at 29 CFR part 38, which prohibit
employment discrimination in the administration of or in connection
with the Wagner-Peyser Act program based on race, color, religion, sex,
national origin, age, disability, or political affiliation or belief.
See, e.g., 29 CFR 38.18. Additionally, under Sec. 653.111(c), which is
being finalized as proposed, SWAs remain subject to all applicable
Federal laws prohibiting discrimination and protecting equal employment
opportunity.
One commenter opposed the changes to the affirmative action hiring
requirements because, the commenter stated, discrimination against
MSFWs in the ES still exists. Specifically, the commenter explained
that the affirmative action hiring goals are the result of a 1974 court
order, and that while subsequent Supreme Court decisions have limited
the use of certain types of race-based affirmative action programs, the
Department had acknowledged that such targets still may be used until
the discriminatory effects of past discrimination are eliminated.
According to the commenter, for ES activities provided to MSFWs,
lingering discriminatory practices warrant retention of the affirmative
action plans. Although a number of commenters opposed the removal of
the affirmative action provisions, neither this commenter nor any other
commenters offered any evidence that lingering discriminatory practices
against MSFWs still exist in the ES program. As explained above, the
Department has concluded that it can effectively meet the needs of
MSFWs without using hiring criteria that favor or disfavor applicants
based on their race. Moreover, the nondiscrimination and equal
opportunity provisions of WIOA sec. 188 and its implementing
regulations prohibit discrimination in the Wagner-Peyser Act program
based on race, color, religion, sex, national origin, age, disability,
or political affiliation or belief, or, for beneficiaries, applicants,
and participants only, on the basis of citizenship status or
participation. See, e.g., 29 CFR 38.5 and 38.18. Further, as noted
above, SWAs remain subject to all applicable Federal laws prohibiting
discrimination and protecting equal employment opportunity under 20 CFR
653.111(c), which is being finalized as proposed. States should
continue to hire the individuals they determine will help best meet
MSFWs' needs and will effectively carry out the requirements of the
final rule.
One commenter opposed the Department's proposal to remove the
affirmative action hiring requirements because, the commenter asserted,
the Department did not suggest or offer any evidence that the
inequities in service delivery highlighted in the NAACP, W. Region
litigation were eradicated. The commenter stated that the ES is little
more diverse than it was in 1980, and given that there are now a large
number of indigenous workers from Mexico and Central America, as well
as Afro-Caribbean immigrants, there is no basis for removing the
affirmative action references in the regulations. Regardless, current
law does not permit the Department to maintain 20 CFR 653.111's
affirmative action race-based hiring requirement as presently written.
The Federal government may impose race-based classifications only if
they
[[Page 616]]
meet the strict scrutiny standard. Adarand, 515 U.S. at 227. As
explained in the NPRM, the Department believes the current scheme is
not narrowly tailored, and it has determined as a policy matter that it
can meet farmworkers' needs without resorting to race-based hiring
criteria.
The Department agrees with the commenter that special provision
must be made to provide effective services to MSFWs. In order to ensure
that the ES staff who are working with MSFWs are able to provide the
best services possible and most effectively engage with MSFWs, the
Department is slightly modifying the recruitment criteria for ES staff
at significant MSFW one-stop centers at 20 CFR 653.111 and outreach
staff at 20 CFR 653.107. For the reasons explained in the preamble
discussion of 20 CFR 653.107 and 653.108 in this final rule, in
recruiting for these positions, States will be required to ensure that
individuals are sought who speak a language spoken by a significant
proportion of the State's MSFW population and who are from MSFW
backgrounds or who have substantial work experience in farmworker
activities. Increasing the recruitment focus on language ability will
help ensure that MSFWs are best able to engage with the ES program.
One commenter opposed the removal of the affirmative action
staffing requirements because it would, the commenter stated, reduce
diversity at the SWA and adversely affect MSFWs. The commenter noted
that eliminating the affirmative action hiring practices within the SWA
will inevitably decrease the diversity of the SWA's workforce--and that
when there is a diminished presence of minority public servants in
SWAs, MSFWs inevitably suffer, because the potential for bringing
together and building connections is most successful when individuals
are able to connect at a very basic human level. Those connections are
more likely to occur, the commenter stated, when the persons providing
services are of similar ethnic, racial, linguistic, and historical
backgrounds as the individuals being served. Similarly, another
commenter stated that eliminating affirmative action hiring goals is
misguided, because MSFWs have particular needs, beyond linguistic
needs. The commenter explained that actively hiring outreach staff from
farmworker communities, which are disproportionately communities of
color, is one of the few ways to guarantee that outreach staff have the
cultural competency, sensitivity, and humility necessary to assist
MSFWS with meeting their employment needs. The Department appreciates
the commenters' concerns about providing effective services to MSFWs
and notes that States should continue to hire the individuals they
determine will help best meet MSFWs' needs within the requirements of
the final rule, including those that come from farmworker backgrounds.
Additionally, to ensure that MSFWs still have access to effective
ES activities, the Department still requires that States ensure that
recruitment for these positions be for individuals who are from MSFW
backgrounds or who have substantial work experience in farmworker
activities. Individuals with these characteristics are familiar with
the array of issues MSFWs experience in their employment and have the
cultural competency and sensitivity necessary to meet MSFWs' employment
needs.
One commenter stated it opposed the elimination of affirmative
action provisions for any aspect of the workforce, citing evidence of
systemic racism that persists in the United States. It also asserted
that eliminating affirmative action hiring practices within SWAs will
decrease the diversity of its workforce. It stated that there are
studies of States that have eliminated affirmative action over the past
several years, which show that minorities working in State and local
government decreased when affirmative action was dismantled. One
commenter stated that, when there is a diminished presence of minority
public servants in SWAs, MSFWs suffer. This commenter went on to say
that building connections between job seekers and employers ``are more
likely to occur when the persons providing services are of similar
ethnic, racial, linguistic, and historical backgrounds as the
individuals being served.''
Commenters asserted that eliminating the presence of individuals at
SWAs of similar backgrounds will make it more difficult for farmworkers
to benefit from the services provided by these SWAs. They referenced
the particular needs of MSFWs, which go beyond linguistic needs, and
may include, as one commenter noted, cultural isolation. One commenter
stated that language skills, cultural awareness, and sensitivity should
be top priorities for any staff working with MSFWs. Another commenter
stated that actively hiring outreach staff that come from farmworker
communities, which are disproportionately communities of color, is
particularly needed and can guarantee that outreach staff have the
cultural competency to assist farmworkers with their employment needs,
and to serve both MSFWs and H-2A workers.
As stated in the NPRM, the Department is fully committed to serving
all MSFWs, and to requiring that States provide useful help to MSFWs
from staff who can speak their languages and understand their work
environments. As described in the NPRM and above, affirmative action
requirements that mandate States to hire people of certain races or
ethnicities are unconstitutional. The Department continues to harbor
serious concerns about the constitutionality of the hiring scheme that
has been in place. And the Department has decided as a policy matter
that it can meet the needs of MSFWs without using race-based and
ethnicity-based hiring criteria. Instead, the Department is mandating
recruitment of ES staff with the skills and background necessary to
provide quality services to farmworkers, specifically language skills
paired with farmworker background or experience. Accordingly, the
Department is maintaining in the final rule an emphasis on hiring ES
staff who speak languages spoken by MSFWs and who have an MSFW
background or experience. Additionally, the Department will continue to
monitor SWA's compliance with the ES regulations, which includes
ensuring MSFWs have access to employment and training services in a way
that meets their unique needs, and it will take appropriate action if
it determines that the SWA is not meeting its obligations under these
regulations.
At 20 CFR 653.111(a), the NPRM proposed that the SWA must implement
and maintain a program for staffing significant MSFW one-stop centers
by providing ES staff in a manner facilitating the delivery of
employment services tailored to the special needs of MSFWs, including
by seeking ES staff that meet the criteria in Sec. 653.108(b)(1)
through (3). Those criteria are as follows: (1) Who are from MSFW
backgrounds; or (2) who speak Spanish or other languages of a
significant proportion of the State MSFW population; or (3) who have
substantial work experience in farmworker activities.
In response to commenters' concerns about providing effective
services to MSFWs, the Department is strengthening recruitment criteria
for ES staff in significant MSFW one-stop centers. The Department is
aligning the recruitment criteria with those used for outreach staff at
Sec. 653.107(a)(3)(i) and (ii), which requires SWAs to seek persons
who speak the language of a significant proportion of the State
[[Page 617]]
MSFW population; and (1) who are from MSFW backgrounds; or (2) who have
substantial work experience in farmworker activities. Therefore, as
finalized, Sec. 653.111(a) provides, ``The SWA must implement and
maintain a program for staffing significant MSFW one-stop centers by
providing ES staff in a manner facilitating the delivery of employment
services tailored to the special needs of MSFWs, including by seeking
ES staff that meet the criteria in Sec. 653.107(a)(3).''
This change will ensure that recruitment for ES staff in
significant MSFW one-stop centers and outreach staff will seek
individuals that speak the language spoken by a significant proportion
of the State MSFW population, and who are from an MSFW background--
meaning that they or a family member have worked in farmwork as defined
at 20 CFR 651.10--or have work experience in farmworker activities--
meaning that they have worked with farmworkers, either as a service
provider or through other means. These changes will enable ES staff at
significant MSFW one-stop centers to better connect with and provide
services to MSFWs. The Department notes that it removed the requirement
for SWAs to seek persons who speak Spanish from the recruitment
criteria for SMAs, staff at significant MSFW one-stop centers, and
outreach staff, because some MSFWs do not speak Spanish. The Department
wants to ensure recruitment for these positions focuses on seeking to
hire individuals who can speak the language common to MSFWs in the
State to facilitate communication and the provision of services.
Additionally, the criteria to seek persons who speak the language of a
significant proportion of the State MSFW population achieves the goal
of ensuring that staff speak a language common to MSFWs in the State,
which may be Spanish or another language.
One commenter asserted that ``privatizing these functions'' would
likely result in MSFWs receiving inferior services. The Department
notes that SWAs will continue to be held accountable to the same
standards, regardless of how the SWAs choose to staff the provision of
services. Moreover, SWAs must continue to ensure the services provided
to MSFWs are qualitatively equivalent and quantitatively proportionate
to the services provided to non-MSFWs. The Department will continue to
monitor SWA compliance with the ES regulations.
One commenter stated that MSFW staff are well-trained to ensure
that workers are treated appropriately and that housing meets basic
standards. The commenter also stated that non-governmental staff will
likely lack the necessary authority to enforce the kinds of legal
protections that these longstanding regulations were designed to
ensure. The Department responds that, under Federal regulations, ES
staff are not authorized to enforce legal protections. Rather, outreach
staff must be trained to identify potential violations of the ES
regulations or employment-related laws. It is then incumbent upon them
to refer the potential violations to ES Office Managers or the
Complaint System Representatives to attempt to resolve the issue
informally. In some cases, violations may need to be logged and
immediately referred to the appropriate enforcement agency.
D. Part 658--Administrative Provisions Governing the Wagner-Peyser Act
Employment Service
Part 658 sets forth systems and procedures for complaints,
monitoring for compliance assessment, enforcement, and sanctions for
violations of the ES regulations and employment-related laws, including
discontinuation of services to employers and decertification of SWAs.
In part 658, the Department, among other changes, is finalizing the
following proposed changes: (1) The State Administrator has overall
responsibility for the Employment Service and Employment-Related Law
Complaint System (Complaint System), which includes informal resolution
of complaints; (2) a SWA official (as defined at Sec. 651.10) must
make determinations regarding initiation of the discontinuation of
services to an employer; and (3) the RMA does not have to be a full-
time position.
Sec. 658.501 Basis for Discontinuation of Services
Section 658.501 governs when States may or must discontinue
providing services to employers. One State agency asked whether the
intent of the change at 20 CFR 658.501(b) from ``The SWA may'' to ``SWA
officials may'' is only to give the authority of discontinuing services
to the SWA and not local ES offices. The Department clarifies that the
intent of the change is to permit only SWA officials to discontinue
services and it is finalizing this section as proposed.
Sec. 658.601 State Workforce Agency Responsibility
Section 658.601 governs the States' establishment and maintenance
of a self-appraisal system. The Department is finalizing this provision
with the change described below.
One commenter stated that the proposed change at 20 CFR 658.601 is
incorrect. The commenter asserted that the required self-appraisal
system was not reported as part of the 9002A. The commenter clarified
that it has been replaced under WIOA as a narrative with aggregate
State customized data in the annual narrative. The Department clarifies
that Sec. 658.601(a)(1)(ii) instructs SWAs to use a particular ETA
report to compare planned numerical performance goals to actual
accomplishments. Because the 9002A report is obsolete, the Department
updated the language to reflect the new report that States are required
to use, the WIOA Common Performance Reporting System, ETA Form 9172
(Participant Individual Record Layout).
Sec. 658.603 Employment and Training Administration Regional Office
Responsibility
Section 658.603 governs ETA responsibilities in overseeing the
States' provision of ES activities to MSFWs. The Department received
comments on this section and is responding to them below. The
Department is finalizing this section as proposed.
Several commenters opposed the proposed changes to Sec. 658.603
and raised three main issues in their comments: (1) The Department did
not offer an explanation for the changes; (2) the changes will erode
the effectiveness of the RMA in protecting MSFWs; and (3) contracting
ES staff will create the need for States and RMAs to enhance the
monitoring of SWAs, because outsourced staff may have little or no
experience serving farmworkers and complying with the exacting dictates
of the regulations and those governing the H-2A program.
In the NPRM, the Department explained that it was proposing to
remove the requirement that the RMA be full-time, because different
States have different MSFW needs, and the Department has determined it
is most appropriate for the ETA RA to determine whether those needs
merit a full-time employee dedicated to serving one population. This
gives the RA greater flexibility in how they staff their offices based
on the needs of their region.
The Department does not predict there will be an erosion in the
effectiveness of the RMA in protecting farmworkers. First, the RMA must
continue to carry out all of the RMA duties set forth at 20 CFR
658.603(f). Second, the RA continues to have the
[[Page 618]]
responsibility to regularly review and assess SWA performance and
compliance with ES regulations pursuant to 20 CFR 658.603(a).\11\
Through these reviews and assessments, the Department will work to
guarantee that the Monitor Advocate System ensures services to
farmworkers are provided on a qualitatively equivalent and
quantitatively proportionate basis to the services provided to non-
MSFWs, regardless of the staffing model the State selects. This will
ensure that the RMA's effectiveness in protecting MSFWs is not eroded.
---------------------------------------------------------------------------
\11\ 20 CFR 658.603(a) states that the RA is responsible for
regularly reviewing and assessing SWA performance and ensuring their
compliance with ES regulations.
---------------------------------------------------------------------------
The Department reaffirms that the responsibilities of the State to
comply with the ES regulations do not change with this final rule.
Pursuant to 20 CFR 658.601(a) each SWA must establish and maintain a
self-appraisal system for ES operations to determine success in
reaching goals and to correct deficiencies in performance. Whether the
State continues to hire merit staff in its local offices or uses a
services provider, the State Administrators must ensure their SWA
monitors their own compliance with ES regulations in serving MSFWs on
an ongoing basis.\12\ Additionally the SMAs must conduct an ongoing
review of the delivery of services and protections afforded by the ES
regulations to MSFWs by the SWA and ES offices.\13\ This includes
ensuring MSFWs have access to ES activities in a way that meets their
unique needs. MSFWs must receive services on a basis that is
qualitatively equivalent and quantitatively proportionate to services
provided to non-MSFWs; nothing in this final rule changes that
requirement. The Department notes it has extensive experience
overseeing programs with different staffing models and that the SMAs,
RMAs, and NMA will continue to monitor to ensure the State is providing
equitable services to MSFWs, regardless of the staffing structure the
SWA chooses. The Department will provide monitoring guidance for States
that choose to outsource the provision of employment services.
---------------------------------------------------------------------------
\12\ 20 CFR 653.108(a).
\13\ 20 CFR 653.108(g)(1).
---------------------------------------------------------------------------
Removing Full-Time Staffing Requirement
Commenters opposed the Department's proposal to remove the full-
time staffing requirement for the RMA position at 20 CFR 658.603(f),
because commenters stated the RMA position was expressly deemed to be
full-time, with a wide range of specified duties. According to one
commenter, the Department does not suggest that the challenges faced by
the ES have so lessened since 1980 that RMA support is only needed on a
part-time basis. The Department appreciates the commenter's historical
context. However, the Department clarifies that it is not suggesting
the RMA is only needed on a part-time basis; rather, it is at the
discretion of RAs to determine how best to staff the responsibilities
of their region. In the NPRM, the Department explained it was removing
the requirement that the RMA position be a full-time position,
recognizing different States' MSFW populations in the relevant labor
markets. The Department recognizes that not all States have the same
number of significant MSFW one-stop centers and that not all DOL
regions have the same number of significant MSFW States, significant
MSFW one-stop centers, or regional staff. Therefore, the Department is
giving RAs the flexibility to analyze the MSFW needs in the relevant
labor market and the available staffing to determine if a full time RMA
is needed. Allowing local management to determine whether RMAs can
perform their duties part-time enhances the effectiveness and cost-
efficiency of ES programs. Of course, RMAs may remain full-time if the
demands of their region necessitate a full-time position. Furthermore,
the Department does not suggest that the challenges faced by the ES
have lessened since 1980. Rather, the Department notes, as it explained
in the NPRM preamble, that different States have different MSFW
populations in the relevant labor market. The Department reiterates,
however, that regardless of the time spent by the RMA, whether full-
time or part-time, the activities and requirements of the RMA remain.
Revising Onsite Review Requirements
A couple of commenters stated that removing the mandate for the RMA
to visit each State in its region at least once per year will hinder
the RMA's ability to monitor the region. One commenter stated that the
Department's reasoning that it is ``very challenging'' for RMAs to make
harvest time visits to the States in their region is insufficient and
that the challenge could only be exacerbated by a shift to part-time
staffing. The commenter stated the Department offered no reason for
relieving the RMA of the obligation for harvest time trips and
attendance at MSFW-related meetings. Furthermore, the commenter stated,
given the rapidly changing landscape of agricultural ES activities in
every region in the wake of rapidly increasing numbers of H-2A
applications and the accompanying challenges for the SWAs, there is no
justifiable basis for diminishing regional oversight activities.
The Department understands the RMA's importance in monitoring the
States for compliance with the MSFW regulations. The Department notes
that even though RMAs are no longer required to visit each State once a
year, the RMAs will continue to monitor all States in their region
pursuant to 20 CFR 658.603(f)(1) and (2) and that nothing would prevent
the RMA from visiting a State once a year (or more often) if necessary.
These provisions require RMAs to review the effective functioning of
the SMAs in their regions and review the performance of SWAs in
providing the full range of employment services to MSFWs. As explained
in the preamble to the NPRM, the Department is eliminating this
requirement, because it may not be necessary for the RMA to travel to a
State once a year where there is not a significant MSFW population or
where the NMA has already traveled. The Department also noted in the
NPRM preamble that travel to each State once a year is challenging with
the limited funding available to the Department. In an effort to ensure
limited funding is used most efficiently, the Department determined
that RAs are in the best position to make travel decisions for their
staff depending on the needs of the Region. Moreover, if it is not a
significant MSFW State and the RMA has a good sense of what is
happening in the State, it may not be necessary to travel there.
One commenter opposed the proposed change to remove the requirement
that RMAs make harvest time visits to the States, because the commenter
stated that the Department's explanation that it was very challenging
to make these trips was not sufficient. The commenter explained that
given the rapidly changing landscape of agricultural ES activities in
each region and the increasing numbers of H-2A applications and
accompanying challenges for SWAs, there is no justifiable basis for
diminishing regional oversight activities.
The Department is finalizing this change because, if an RMA
conducted an on-site review in a particular State it may not be
necessary to return to that same State to conduct a harvest time visit.
If there is not a significant MSFW population in that particular State
or if the NMA already visited the State that year, such a visit may not
be necessary. However, the Department notes the importance of these
visits and that, if warranted, the goals of these could be
[[Page 619]]
accomplished by using technology such as videoconferencing or
teleconferences.
IV. Rulemaking Analyses and Notices
A. Executive Orders 12866 (Regulatory Planning and Review) and 13563
(Improving Regulation and Regulatory Review)
Under E.O. 12866, the 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.
58 FR 51735. 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
inconsistencies 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. OMB has determined that while this
final rule is not an economically significant regulatory action under
sec. 3(f) of E.O. 12866, it raises novel legal or policy issues and is
therefore otherwise significant. Accordingly, OMB has reviewed this
final rule.
E.O. 13563 directs agencies to propose or adopt a regulation only
upon a reasoned determination that its benefits justify its costs; it
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 not a `major rule', as defined by 5 U.S.C. 804(2).
Public Comments
Commenters asserted that the economic analysis in the proposed rule
left out any discussion of program effectiveness or accountability and
that a determination of whether to make the proposed changes should be
based on the cost-effectiveness of ES activities. One commenter stated
that the proposal would impose greater costs on employers through
Federal and State unemployment taxes. Commenters contended that the
2004 Jacobson study \14\ demonstrates that the benefits of using merit-
staffing outweigh its costs. Commenters also contended that a 2012
study of Nevada's REA program \15\ found that requiring merit-based
staff to conduct all program components improved outcomes. Some
commenters pointed to examples of efforts in the United States to
privatize (as the commenters termed it) the delivery of social service
programs that resulted in cost overruns and other problems. The
Department recognizes these studies and findings, but this final rule
does not privatize Wagner-Peyser Act services; rather, it provides
flexibility to States to offer Wagner-Peyser Act services using the
best staffing models available to them to provide these services, while
the Department maintains oversight and long-established criteria for
proper and efficient delivery of those services. States are encouraged
to consider cost-effectiveness when determining whether to use flexible
staffing models for the delivery of ES activities. States are also
encouraged to conduct evaluations of various service delivery models.
The Department anticipates that States will choose the service delivery
model that is the most cost effective in their State.
---------------------------------------------------------------------------
\14\ Louis Jacobson, Ian Petta, Amy Shimshak, and Regina Yudd,
``Evaluation of Labor Exchange Services in a One-Stop Delivery
System Environment,'' prepared by Westat for the U.S. Department of
Labor, Employment and Training Administration Occasional Paper 2004-
09 (Feb. 2004).
\15\ Marios Michaelides, Eileen Poe-Yamagata, Jacob Benus, and
Dharmendra Tirumalasetti, ``Impact of the Reemployment and
Eligibility Assessment (REA) Initiative in Nevada,'' prepared by
IMPAQ for the U.S. Department of Labor (Jan. 2012).
---------------------------------------------------------------------------
Some commenters stated that current ES programs are more cost-
efficient than flexibly staffed WIOA title I programs. The Department
anticipates that States will take cost information for their State into
consideration when determining the most cost-effective approach to
delivering ES activities. The Department did not compare the average
cost per participant receiving Wagner-Peyser Act services to the
average cost per participant receiving WIOA Dislocated Worker services
due to the differences between the two programs. When isolating similar
services provided by the Wagner-Peyser Act and the WIOA Adult and
Dislocated Worker programs, the outcomes were similar. However, the
cost of the totality of services available in the Dislocated Worker
program is not comparable to the cost of the services available through
the Wagner-Peyser Act because the Dislocated Worker program provides
more comprehensive services, such as individualized career services and
training services.
Some commenters stated that the economic analysis relied on too few
States. As explained in the proposed rule, to estimate the potential
wage savings to States, the Department surveyed a sample of States that
receive various levels of Wagner-Peyser Act funding. The Department
began by sorting the 54 jurisdictions by funding level (from high to
low), and then divided the list into three tiers. Next, the Department
selected States from each of the three tiers and sent questions to
those States regarding work hours and staff occupations. The Department
has determined the eight States that were selected are a representative
sample that allows for a robust analysis; therefore, the Department did
not survey additional States for the final rule.
Two commenters questioned why the proposed rule assumed that 50
percent of merit staff would be replaced with non-merit staff. The
Department provided the following explanation in the proposed rule:
``The three pilot States have an average of 52 percent non-State-merit
staff providing labor exchange services; therefore, the Department
assumes a 50 percent substitution rate in its wage savings
calculations.''
Some commenters stated that the economic analysis used inaccurately
high wages for public sector employees, and they stated that
Occupational Employment Statistics (OES) data should not be relied on
to compare the salaries of government and private sector workers.
However, the commenters did not provide any alternative sources for
wage data. The Department continues to believe that OES is the best
source available for wage data by occupation, industry, and State. No
data source is perfect, but OES data are the most robust and reliable
data for the Department's analysis.
One commenter pointed out that the analysis does not use the most
current and relevant information available from U.S. Bureau of Labor
Statistics (BLS). The Department used 2017 OES data,
[[Page 620]]
which were the most current data available when the analysis was
conducted. The Department has updated the data to 2018 for the analysis
in this final rule.
Commenters also stated that the analysis does not compare similar
workers in both sectors and that the occupational codes are not
representative of the actual work done by ES staff. The Department
compared the wage rates for three Standard Occupational Classification
(SOC) codes: (1) SOC 11-3011 Administrative Services Managers; (2) SOC
13-1141 Compensation, Benefits, and Job Analysis Specialists; and (3)
SOC 43-9061 Office Clerks, General. The Department has determined these
are the most applicable SOC codes because they represent three
occupational levels of ES staff: Managers or supervisors; project
managers or mid-level analysts; and administrative assistants or
customer service representatives. The Department maintained these three
occupations in the final rule because these three occupations most
closely reflect the job duties of ES staff members. Moreover,
commenters did not suggest specific alternatives.
Some commenters asserted that the Department unreasonably assumed
that administrative costs for contracting out services would be small.
Other commenters contended that the Department failed to sufficiently
account for the administrative costs of providing services through
contracts. Several commenters provided examples of costs that would be
incurred by States that choose to use contract-based staffing methods
for the delivery of ES activities, including expenses related to
developing requests for proposal, managing the bidding process,
reviewing proposals, drafting contracts, and monitoring contracts. The
Department recognizes that there would be costs associated with
obtaining a service provider to deliver ES activities. There would also
be a reduction in costs due to the diminished need for management and
oversight of State employees. The Department does not have a way to
reliably estimate the difference between the new administrative costs
and the administrative cost savings, but addressed commenters' concerns
to the extent possible by lowering the overhead rate for government
workers, as described below.
Some commenters questioned why the Department doubled the wage
rates to account for fringe benefits and overhead without elaboration.
To address comments about administrative and overhead costs, the
Department lowered the overhead rate for State government workers. In
the proposed rule, the Department doubled the base wage rate for
government workers and all sector workers to account for fringe
benefits and overhead costs. For government workers, doubling the base
wage rate reflected a fringe benefits rate of 60 percent \16\ and an
overhead rate of 40 percent.\17\ For all sector workers, doubling the
base wage rate reflected a fringe benefits rate of 44 percent \18\ and
an overhead rate of 56 percent.\19\ In the final rule, the Department
used updated ECEC data to calculate the fringe benefits rates and the
results were the same: 60 percent for the government sector \20\ and 44
percent for private sector workers.\21\ In response to public comments,
the Department reevaluated the most appropriate overhead rates to use
in the final rule. The Department decided to keep the 56 percent
overhead rate for new hires (represented by all sector workers) in
light of the costs related to awarding funds and monitoring
subrecipients, and to reduce the overhead rate for government workers
from 40 percent to 17 percent \22\ to reflect the lower marginal
increase in overhead costs for retaining incumbent workers than hiring
new workers.
---------------------------------------------------------------------------
\16\ BLS, Employer Costs for Employee Compensation, https://www.bls.gov/ncs/data.htm. For State and local government workers,
wages and salaries averaged $30.45 per hour worked in 2017, while
benefit costs averaged $18.12, which is a benefits rate of 60
percent.
\17\ U.S. Department of Health and Human Services, ``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 Employer Costs for Employee Compensation (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 60 percent benefits rate calculated from ECEC data,
resulting in an overhead rate of approximately 40 percent.
\18\ BLS, Employer Costs for Employee Compensation, https://www.bls.gov/ncs/data.htm. For private industry workers, wages and
salaries averaged $23.26 per hour worked in 2017, while benefit
costs averaged $10.16, which is a benefits rate of 44 percent.
\19\ U.S. Department of Health and Human Services, ``Guidelines
for Regulatory Impact Analysis'' (2016), https://aspe.hhs.gov/system/files/pdf/242926/HHS_RIAGuidance.pdf. To isolate the overhead
costs from HHS's 100 percent assumption, the Department subtracted
the 44 percent benefits rate calculated from ECEC data, resulting in
an overhead rate of approximately 56 percent.
\20\ BLS, Employer Costs for Employee Compensation, https://www.bls.gov/ncs/data.htm. For State and local government workers,
wages and salaries averaged $31.12 per hour worked in 2018, while
benefit costs averaged $18.69, which is a benefits rate of 60
percent.
\21\ BLS, Employer Costs for Employee Compensation, https://www.bls.gov/ncs/data.htm. For private industry workers, wages and
salaries averaged $23.86 per hour worked in 2018, while benefit
costs averaged $10.38, which is a benefits rate of 44 percent.
\22\ Cody Rice, U.S. Environmental Protection Agency, ``Wage
Rates for Economic Analyses of the Toxics Release Inventory
Program,'' June 10, 2002, https://www.regulations.gov/document?D=EPA-HQ-OPPT-2014-0650-0005.
---------------------------------------------------------------------------
Some commenters stated that the proposal would lead to increased
staff turnover. The Department acknowledges that, on average, employee
turnover is higher in the private sector than in the public sector.
According to data from the Job Openings and Labor Turnover Survey
(JOLTS) program, the separations rate for the private sector was 4.1
percent on average over the past year, while the separations rate for
State and local government was 1.6 percent,\23\ substantiating
commenters' statements insofar as they stand for the general
proposition that turnover is higher among private sector workers than
government workers. While private sector workers on average may have a
higher turnover rate than State employees on average, the Department is
unable to quantify the potential impact on ES activities particularly,
aside from reducing the overhead rate for State employees, as described
above. Importantly, the Department is not requiring delivery of ES
activities by private sector workers and anticipates that States will
take employee turnover into consideration when assessing the cost
effectiveness of various service delivery options.
---------------------------------------------------------------------------
\23\ BLS, JOLTS program, https://www.bls.gov/jlt.
``Separations'' includes quits, layoffs and discharges, and other
separations. Total separations is referred to as ``turnover.''
---------------------------------------------------------------------------
Several commenters stated that the Department is unsure of the
proposed rule's costs, and that this degree of uncertainty cautions
against implementing the proposal. Even though the Department has
determined that its cost estimates are based on the best available
data, the Department acknowledges that projections of future costs and
estimates based on surveys are subject to some degree of uncertainty.
As such, the Department discussed in detail the areas of uncertainty in
the analysis.
Wage Savings for States
As stated elsewhere in this preamble, the Department is exercising
its discretion under the Wagner-Peyser Act to give States more staffing
options for how they provide labor exchange services and carry out
certain other ES
[[Page 621]]
activities authorized by that Act. This flexibility will permit States
to continue using State merit-staffing models to perform these
functions, or to use other innovative models that best suit each
State's individual needs. All 50 States, plus the District of Columbia,
Puerto Rico, Guam, and the U.S. Virgin Islands, receive funding under
the Wagner-Peyser Act (54 jurisdictions total).
To estimate the wage savings to States, the Department surveyed a
sample of States that receive various levels of Wagner-Peyser Act
funding to obtain an approximation of staffing levels and patterns. In
Program Year (PY) 2019, 17 jurisdictions received annual Wagner-Peyser
Act funding between $12.4 and $77.5 million (labeled Tier 1 States in
this analysis), 17 jurisdictions received funding between $6.0 million
and $12.2 million (labeled Tier 2 States in this analysis), and 20
jurisdictions received funding of less than $6.0 million (labeled Tier
3 States in this analysis).\24\ Eight States were surveyed by the
Department and asked to provide the total number of Full-Time
Equivalent (FTE) hours worked by State merit staff dedicated to
delivering Wagner-Peyser Act-funded services, as well as the
occupational/position title for all employees included in the FTE
calculations.\25\ The results ranged from 561 FTEs in California, the
State that received the highest level of Wagner-Peyser Act funding in
PY 2019, to 19 FTEs in Delaware, the State that received the lowest
level of Wagner-Peyser Act funding in PY 2019.\26\ On average among the
States surveyed, 15 percent of staff funded under the Wagner-Peyser Act
are managers or supervisors, 19 percent provide project management or
mid-level analysis, and 66 percent provide administrative support and/
or customer service.\27\
---------------------------------------------------------------------------
\24\ State allotments are primarily based on a State's relative
share of the civilian labor force and relative share of total
unemployment.
\25\ The eight States surveyed were California, Delaware, Idaho,
Maryland, North Dakota, Ohio, Tennessee, and Utah. California, Ohio,
and Maryland are in Tier 1. Tennessee and Idaho are in Tier 2. Utah,
North Dakota, and Delaware are in Tier 3. In the proposed rule,
Tennessee was in Tier 1 and Maryland was in Tier 2 based on PY 2018
funding levels; in the final rule, Maryland is in Tier 1 and
Tennessee is in Tier 2 based on PY 2019 funding levels.
\26\ The U.S. Virgin Islands and Guam received lower levels of
Wagner-Peyser Act funding than Delaware. The PY 2019 allotments are
available at https://www.federalregister.gov/documents/2019/04/19/2019-07729/program-year-py-2019-workforce-innovation-and-opportunity-act-wioa-allotments-py-2019-wagner-peyser.
\27\ Three States (California, North Dakota, and Ohio) provided
a breakdown of FTEs by occupation. The Department calculated an
average distribution based on those three States, and then applied
the distribution to the other five States. Table X reflects the data
provided by California, North Dakota, and Ohio and the calculated
distributions for Maryland, Tennessee, Idaho, Utah, and Delaware.
---------------------------------------------------------------------------
To estimate the percent of current ES positions that States would
choose to re-staff under this final rule, the Department surveyed three
States that participate in a Wagner-Peyser Act pilot program and
already have non-State-merit staff providing labor exchange services:
Colorado, Massachusetts, and Michigan. These three States were asked
how many of their Wagner-Peyser Act-funded FTE hours are provided by
non-State-merit staff.\28\ The three pilot States have an average of 52
percent non-State-merit staff providing labor exchange services;
therefore, the Department assumes a 50 percent substitution rate in its
wage savings calculations. For example, the Department estimated that
California would employ 280.5 FTEs (= 561 FTEs x 50%) who are neither
merit-staffed nor State employees after the final rule takes effect,
while Delaware would employ 9.5 such FTEs (= 19 FTEs x 50%). The FTEs
are assumed to be distributed in accordance with the average staffing
patterns of the surveyed States: 15 percent are managers or
supervisors, 19 percent provide project management or mid-level
analysis, and 66 percent provide administrative support and/or customer
service.
---------------------------------------------------------------------------
\28\ SMAs will continue to be State staff, so they are not
included in the calculations of this final rule.
---------------------------------------------------------------------------
To calculate the potential savings, median wage rates for
government workers in each of the eight States were obtained from the
BLS OES program.\29\ The median wage rates for private sector workers
are not available by State and occupation; therefore, the Department
used the median wage rates for all sectors \30\ as a proxy because
private sector jobs constitute 85 percent of total employment.\31\ The
median wage rates were obtained for three SOC codes: (1) SOC 11-3011
Administrative Services Managers; (2) SOC 13-1141 Compensation,
Benefits, and Job Analysis Specialists; and (3) SOC 43-9061 Office
Clerks, General. To account for fringe benefits, the Department used a
60 percent benefits rate for the government sector \32\ and a 44
percent rate for private sector workers.\33\ To account for overhead
costs, the Department used a 17 percent overhead rate \34\ for the
government sector and a 56 percent overhead rate \35\ for new hires
(represented by all sector workers). In response to public comments,
the Department reduced the overhead rate for government workers from 40
percent to 17 percent in the final rule to reflect the lower marginal
increase in overhead costs for retaining incumbent workers than hiring
new workers.
---------------------------------------------------------------------------
\29\ BLS OES data for government workers by State (May 2018):
https://www.bls.gov/oes/special.requests/oes_research_2018_sec_99.xlsx. These data do not distinguish between
government staff employed under a merit system and staff who are
not, thus the Department could not accurately estimate of the impact
of transitioning to State employees not under a merit system.
\30\ BLS OES data for all sectors by State (May 2018): https://www.bls.gov/oes/special.requests/oesm18st.zip.
\31\ In May 2018, total employment was 144,733,270 (https://www.bls.gov/oes/current/oes_nat.htm), with 122,999,150 jobs (85%) in
the private sector (https://www.bls.gov/oes/current/000001.htm) and
21,734,120 jobs (15%) in the government sector (https://www.bls.gov/oes/current/999001.htm).
\32\ BLS, Employer Costs for Employee Compensation, https://www.bls.gov/ncs/data.htm. For State and local government workers,
wages and salaries averaged $31.12 per hour worked in 2018, while
benefit costs averaged $18.69, which is a benefits rate of 60
percent.
\33\ BLS, Employer Costs for Employee Compensation, https://www.bls.gov/ncs/data.htm. For private industry workers, wages and
salaries averaged $23.86 per hour worked in 2018, while benefit
costs averaged $10.38, which is a benefits rate of 44 percent.
\34\ Cody Rice, U.S. Environmental Protection Agency, ``Wage
Rates for Economic Analyses of the Toxics Release Inventory
Program,'' June 10, 2002, https://www.regulations.gov/document?D=EPA-HQ-OPPT-2014-0650-0005.
\35\ U.S. Department of Health and Human Services, ``Guidelines
for Regulatory Impact Analysis'' (2016), https://aspe.hhs.gov/system/files/pdf/242926/HHS_RIAGuidance.pdf. To isolate the overhead
costs from HHS's 100 percent assumption, the Department subtracted
the 44 percent benefits rate calculated from ECEC data, resulting in
an overhead rate of approximately 56 percent.
---------------------------------------------------------------------------
Then the difference between the fully loaded wage rates of
government workers and workers in all sectors was calculated. For
example, in Ohio, the median hourly wage rate for managers/supervisors
is $35.91 in the government sector and $40.84 in all sectors.
Accounting for fringe benefits and overhead costs, the fully loaded
median hourly rate is $63.56 in the government sector [= $35.91 +
($35.91 x 60%) + ($35.91 x 17%)] and $81.68 in all sectors [= $40.84 +
($40.84 x 44%) + ($40.84 x 56%)], a difference of $18.12 per hour.
Since the fully loaded wage rate is $18.12 per hour higher in all
sectors than in the government sector, Ohio would not realize a savings
at the manager/supervisor level under this final rule. Likewise, Ohio
would not realize a savings at the project management level because the
fully loaded wage rate is $6.89 per hour higher in all sectors than in
the government sector (= $49.31 for government workers--$56.20 for
workers in all sectors). However, Ohio would realize a $1.23 per hour
savings at the administrative support level (=
[[Page 622]]
$32.71 for government workers--$31.48 for workers in all sectors).
Multiplying this fully loaded wage rate difference by the estimated
number of FTEs in this occupation (34.0 FTEs) and by 2,080 hours (= 40
hours per week x 52 weeks per year) results in a potential savings for
Ohio of $86,986 per year at the administrative support level (= $1.23
per hour savings x 34.0 FTEs x 2,080 hours per year). The same process
was followed for the other seven States surveyed by the Department.
Next, the estimated wage savings for the States within each tier
were summed. The estimated savings for the Tier 1 States of California
($950,456), Ohio ($86,986), and Maryland ($0) equals $1,037,442. The
estimated savings for the Tier 2 States of Tennessee ($0) and Idaho
($9,058) equals $9,058. The estimated savings for the Tier 3 States of
Utah ($106,579), North Dakota ($0), and Delaware ($13,250) equals
$119,829.
The results for each tier were then multiplied by the appropriate
ratio to estimate the wage savings for the entire tier. There are 17
States in Tier 1, so the estimated savings for the Tier 1 States of
California, Ohio, and Maryland ($1,037,442) was multiplied by 17/3,
bringing the total estimated savings to $5,878,836 per year for Tier 1.
There are 17 States in Tier 2, so the estimated savings for the Tier 2
States of Tennessee and Idaho ($9,058) was multiplied by 17/2, bringing
the total estimated savings to $76,996 per year for Tier 2. There are
20 States in Tier 3, so the estimated savings for the Tier 3 States of
Utah, Nevada, and Delaware ($119,829) was multiplied by 20/3, bringing
the total estimated savings to $798,859 per year for Tier 3.
Finally, the estimated wage savings for each tier were added
together. Therefore, the total estimated savings of this final rule is
$6,754,691 per year (= $5,878,836 for Tier 1 States + $76,996 for Tier
2 States + $798,859 for Tier 3 States), as shown in Table X.\36\
---------------------------------------------------------------------------
\36\ This rule may have other effects, which are described
qualitatively here. The changes to Sec. 653.111, regarding the
staffing of significant MSFW one-stop centers, could affect States'
administrative costs. The changes would revise the staffing criteria
for these centers, eliminating some requirements and adding new
requirements. It is unknown whether this change will reduce or
increase costs, but the Department believes that the effect in
either case will be small.
---------------------------------------------------------------------------
For purposes of E.O.s 12866 and 13771, the base wage and fringe
benefit portions of these estimated savings are categorized as
transfers from employees to States.
Table X--Estimated Wage Savings per Year
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Cost savings =
Number of FTEs Median wage Loaded median Difference estimated FTE
Number of FTEs with 50% rate for wage rate for Median wage Loaded median between loaded x wage rate
SOC code (rounded) substitution government government rate for all wage rate for wage rates for difference x
rate sector sector sectors all sectors government and 2080 hours per
all sectors year
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CA:
11-3011..................................................... 117 58.5 $54.25 $96.02 $51.07 $102.14 $6.12 $0
13-1141..................................................... 74 37.0 34.45 60.98 34.20 68.40 7.42 0
43-9061..................................................... 370 185.0 20.58 36.43 16.98 33.96 -2.47 (950,456)
561 280.5 .............. .............. .............. .............. .............. ..............
OH:
11-3011..................................................... 8 4.0 35.91 63.56 40.84 81.68 18.12 0
13-1141..................................................... 7 3.5 27.86 49.31 28.10 56.20 6.89 0
43-9061..................................................... 68 34.0 18.48 32.71 15.74 31.48 -1.23 (86,986)
84 42.0 .............. .............. .............. .............. .............. ..............
MD:
11-3011..................................................... 12 6.0 45.04 79.2 52.08 104.16 24.44 0
13-1141..................................................... 16 8.0 29.42 52.07 34.45 68.90 16.83 0
43-9061..................................................... 53 26.5 17.24 30.51 15.67 31.34 0.83 0
81 40.5 .............. .............. .............. .............. .............. ..............
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated cost savings for CA, OH, and MD....................................................................... .............. .............. .............. .............. (1,037,442)
---------------------------------------------------------------
Estimated cost savings for 17 Tier 1 States..................................................................... .............. .............. .............. .............. (5,878,836)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
TN:
11-3011..................................................... 22 11.0 35.47 62.78 38.81 77.62 14.84 0
13-1141..................................................... 28 14.0 24.63 43.60 25.74 51.48 7.88 0
43-9061..................................................... 97 48.5 15.46 27.36 14.96 29.92 2.56 0
148 74.0 .............. .............. .............. .............. .............. ..............
ID:
11-3011..................................................... 10 5.0 29.72 52.60 33.87 67.74 15.14 0
13-1141..................................................... 13 6.5 28.11 49.75 24.54 49.08 -0.67 (9,058)
43-9061..................................................... 46 23.0 15.62 27.65 14.62 29.24 1.59 0
70 35.0 .............. .............. .............. .............. .............. ..............
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated cost savings for TN and ID............................................................................ .............. .............. .............. .............. (9,048)
---------------------------------------------------------------
Estimated cost savings for 17 Tier 2 States..................................................................... .............. .............. .............. .............. (76,996)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
UT:
11-3011..................................................... 11 5.5 32.60 57.70 36.44 72.88 15.18 0
13-1141..................................................... 14 7.0 30.42 53.84 23.26 46.52 -7.32 (106,579)
43-9061..................................................... 48 24.0 14.94 26.44 14.96 29.92 3.48 0
73 36.5 .............. .............. .............. .............. .............. ..............
ND:
11-3011..................................................... 6 3.0 35.43 62.71 37.75 75.50 12.79 0
13-1141..................................................... 15 7.5 30.42 53.84 27.10 54.20 0.36 0
43-9061..................................................... 21 10.5 18.76 33.21 18.09 36.18 2.97 0
41 20.5 .............. .............. .............. .............. .............. ..............
DE:
11-3011..................................................... 3 1.5 41.33 73.15 53.61 107.22 34.07 0
[[Page 623]]
13-1141..................................................... 4 2.0 26.95 47.70 31.81 63.62 15.92 0
43-9061..................................................... 13 6.5 16.43 29.08 14.05 28.10 -0.98 (13.250)
19 9.5 .............. .............. .............. .............. .............. ..............
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated cost savings for UT, ND, and DE....................................................................... .............. .............. .............. .............. (119,829)
---------------------------------------------------------------
Estimated cost savings for 20 Tier 3 States..................................................................... .............. .............. .............. .............. (798,859)
---------------------------------------------------------------
Total estimated cost savings................................................................................ .............. .............. .............. .............. (6,754,691)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Rule Familiarization Costs
Regulatory familiarization costs represent direct costs to States
associated with reviewing the new regulation. The Department calculated
this cost by multiplying the estimated time to review the rule by the
hourly compensation of a Human Resources Manager and by the number of
jurisdictions (including the District of Columbia, Puerto Rico, Guam,
and the U.S. Virgin Islands).
The Department estimates that rule familiarization will take on
average one hour by a State government Human Resources Manager who is
paid a median hourly wage of $48.66.\37\ The Department used a 60
percent benefits rate \38\ and a 17 percent overhead rate,\39\ so the
fully loaded hourly wage is $86.13 [= $48.66 + ($48.66 x 60%) + ($48.66
x 17%)]. Therefore, the one-time rule familiarization cost for all 54
jurisdictions (the 50 States, the District of Columbia, Puerto Rico,
Guam, and the U.S. Virgin Islands) is estimated to be $4,651 (= $86.13
x 1 hour x 54 jurisdictions).
---------------------------------------------------------------------------
\37\ BLS OES National Industry-Specific Occupational Employment
and Wage Estimates, Sector 99 (May 2018): https://www.bls.gov/oes/current/naics2_99.htm.
\38\ BLS, Employer Costs for Employee Compensation, https://www.bls.gov/ncs/data.htm. For State and local government workers,
wages and salaries averaged $31.12 per hour worked in 2018, while
benefit costs averaged $18.69, which is a benefits rate of 60
percent.
\39\ Cody Rice, U.S. Environmental Protection Agency, ``Wage
Rates for Economic Analyses of the Toxics Release Inventory
Program,'' June 10, 2002, https://www.regulations.gov/document?D=EPA-HQ-OPPT-2014-0650-0005.
---------------------------------------------------------------------------
Summary of Estimated Impacts and Discussion of Uncertainty
For all States, the expected first-year budget savings will be
approximately $6,750,040 (= $6,754,691 wage savings - $4,651 regulatory
familiarization costs).
This analysis assumes a 50 percent substitution rate, meaning that
States will choose to re-staff certain positions with personnel other
than State merit staff because these models may be more efficient and
less expensive. Wage savings will vary among States based on each
State's substitution rate. For some States, substitution at the
managerial level may be cheaper; for other States, cost savings may be
realized for administrative staff. Some States may find that private
sector wage rates, for example, are more expensive than State merit
staff wage rates and so choose to keep their current Wagner-Peyser Act
merit staff. Under this final rule, States are not required to re-staff
employment services and certain other activities under the Wagner-
Peyser Act; they are given the option to do so. The purpose of this
final rule is to grant States maximum flexibility in administering the
Wagner-Peyser Act ES program and thereby free up resources for more and
better service to employers and job seekers. Each State's wage savings
will depend on the choices it makes for staffing.\40\
---------------------------------------------------------------------------
\40\ This rule is expected to reduce deadweight loss (DWL). DWL
occurs when a market operates at less than optimal equilibrium
output, which happens any time the conditions for a perfectly
competitive market are not met. Causes of DWL include taxes,
subsidies, externalities, labor market interventions, price
ceilings, and price floors. This rule removes a wage premium. The
lower cost of labor may lead to an increase in the total number of
labor hours purchased on the market. DWL reduction is a function of
the difference between the compensation employers would be willing
to pay for the hours gained and the compensation employees would be
willing to accept for those hours. The size of the DWL reduction
will largely depend on the elasticities of labor demand and labor
supply.
---------------------------------------------------------------------------
Non-Quantifiable Benefits
In addition to cost savings, this final rule will likely provide
benefits to States and to society. The added staffing flexibility this
final rule gives to States will allow them to identify and achieve
administrative efficiencies. Given the estimated cost savings that will
result, States will be able to dedicate more resources under the
Wagner-Peyser Act to providing services to job seekers and employers.
These services, which help individuals find jobs and help employers
find workers, will provide economic benefits through greater
employment. These resources can also provide the States with added
capacity to deliver more career services, including individualized
career services, which studies have shown improve employment outcomes.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA), 5 U.S.C. Chapter 6, requires
the Department to evaluate the economic impact of this final rule on
small entities. The RFA defines small entities to include small
businesses, small organizations, including not-for-profit
organizations, and small governmental jurisdictions. The Department
must determine whether the final rule imposes a significant economic
impact on a substantial number of such small entities. The Department
concludes that this final rule does not directly regulate any small
entities, so any regulatory effect on small entities will be indirect.
Accordingly, the Department has determined this final rule will not
have a significant economic impact on a substantial number of small
entities within the meaning of the RFA.
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
[[Page 624]]
with an opportunity to comment on proposed and continuing collections
of information in accordance with the 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.
A Federal agency may not conduct or sponsor a collection of
information unless approved by OMB under the PRA and displays a
currently valid OMB control number. The public is also not required to
respond to a collection of information unless it displays a currently
valid OMB control number. In addition, notwithstanding any other
provisions of law, no person will be subject to penalty for failing to
comply with a collection of information if the collection of
information does not display a currently valid OMB control number (44
U.S.C. 3512).
In accordance with the PRA, the Department submitted two
information collection requests (ICRs) to OMB in concert with the
publishing of the NPRM. This provided the public the opportunity to
submit comments on the ICRs, either directly to the Department or to
OMB. The 60-day period for the public to submit comments began with the
submission of the ICRs to OMB. The Department did not receive comments
on either of the two ICRs. The Department notes that the changes in the
State Plan ICR are limited to the Wagner-Peyser Act program portion of
that ICR and are consistent with the narrow focus of the changes in
this final rule. The Department is clarifying that this joint State
Plan ICR as a whole was approved by OMB in September 2019 with an
expiration date of September 30, 2022. The other five (5) core programs
affected by this joint State Plan ICR will not be impacted by the
changes in this ICR package.
Therefore, the ICRs are being finalized consistent with this final
rule.
The information collections in this final rule are summarized as
follows.
Required Elements for Submission of the Unified or Combined State Plan
and Plan Modifications Under the Workforce Innovation and Opportunity
Act
Agency: DOL-ETA.
Title of Collection: Required Elements for Submission of the
Unified or Combined State Plan and Plan Modifications under the
Workforce Innovation and Opportunity Act.
Type of Review: Revision.
OMB Control Number: 1205-0522.
Description: Under the provisions of WIOA, the Governor of each
State or Territory must submit a Unified or Combined State Plan to the
U.S. Department of Labor--approved jointly with the U.S. Department of
Education--that fosters strategic alignment of the six core programs,
which include: The Adult, Dislocated Worker, Youth, Wagner-Peyser Act
ES, Adult Education and Family Literacy Act, and VR programs.
Affected Public: States, Local, and Tribal Governments.
Obligation to Respond: Required to Obtain or Retain Benefits.
Estimated Total Annual Respondents: 38.
Estimated Total Annual Responses: 38.
Estimated Total Annual Burden Hours: 8,136.
Estimated Total Annual Other Burden Costs: $0.
Regulations Sections: DOL programs--20 CFR 652.211, 653.107(d),
653.109(d), 676.105, 676.110, 676.115, 676.120, 676.135, 676.140,
676.145, 677.230, 678.310, 678.405, 678.750(a), 681.400(a),
681.410(b)(2), 682.100, 683.115. ED programs--34 CFR parts 361, 462,
and 463.
Migrant and Seasonal Farmworker Monitoring Report and Complaint/
Apparent Violation Form
This information collection is not new. The MSFW information
collected supports regulations that set forth requirements to ensure
such workers receive services that are qualitatively equivalent and
quantitatively proportionate to other workers. ETA is revising Form
ETA-5148 to conform to the changes in this final rule. In the proposed
rule, the Department listed Sec. Sec. 653.107(a)(3), 653.108(g)(1) and
(s)(11), and 653.111 as including proposed changes that affected the
information collection. Only the final rule's changes in Sec.
653.108(s)(2) affect the information collection. This update is
reflected below.
Unrelated to this rulemaking, this information collection is
currently being revised for other purposes. Those changes were the
subject of a separate Federal Register Notice published in a Federal
Register notice on March 7, 2019 (84 FR 8343). While this package is
unrelated, the Department is incorporating the modifications to the
burden estimate. Since the unrelated package contains the most current
calculations for estimating the burden, the Department is aligning the
calculations in this final rule to ensure future consistency.
Agency: DOL-ETA.
Title of Collection: Migrant and Seasonal Farmworker Monitoring
Report and Complaint/Apparent Violation Form.
Type of Review: Revision.
OMB Control Number: 1205-0039.
Description: This information collection package includes the ETA
Form 5148 (Services to Migrant and Seasonal Farmworkers Report) and the
ETA Form 8429 (Complaint/Apparent Violation Form). SWAs must submit
(pursuant to Sec. 653.109) ETA Form 5148 quarterly to report the level
of services provided to MSFWs through the one-stop centers and through
outreach staff to demonstrate the degree to which MSFWs are serviced
and to ensure that such services are provided on a basis that is
qualitatively equivalent and quantitatively proportionate to the
services provided to non-MSFWs. The Department requires SWAs to use ETA
Form 8429 when logging and referring complaints and/or apparent
violations pursuant to part 658, subpart E.
Affected Public: State and Local Governments; Individuals or
Households.
Obligation to Respond: Required to Obtain or Retain Benefits.
Estimated Total Annual Respondents: 51.
Estimated Total Annual Responses: 6,572.
Estimated Total Annual Burden Hours: 8,813.
Estimated Total Annual Other Burden Costs: $361,949.
Regulations Sections: Sec. 653.108(s)(2).
Interested parties may obtain a copy free of charge of one or more
of the 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)
E.O. 13132 requires Federal agencies to ensure that the principles
of Federalism animating our Constitution guide the executive
departments and agencies in the formulation and implementation of
policies and to further the policies of the Unfunded Mandates Reform
Act. Further, agencies must strictly adhere to constitutional
principles. Agencies must closely examine the constitutional and
statutory
[[Page 625]]
authority supporting any action that would limit the policy-making
discretion of the States and they must carefully assess the necessity
for any such action. To the extent practicable, State and local
officials must be consulted before any such action is implemented. The
Department has reviewed the final rule in light of these requirements
and has concluded that it is properly premised on the statutory
authority given to the Secretary to set standards of efficiency for
programs under the Wagner-Peyser Act, and it meets the requirements of
E.O. 13132 by enhancing, rather than limiting, States' discretion in
the administration of these programs.
Accordingly, the Department has reviewed this final rule and has
concluded that the rulemaking has no substantial direct effects on
States, or on the distribution of power and responsibilities among the
various levels of government as described by E.O. 13132. Therefore, the
Department has concluded that this final rule does not have a
sufficient Federalism implication to warrant consultation with State
and local officials or the preparation of a summary impact statement.
E. Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) requires each Federal agency to prepare a written statement
assessing the effects of any Federal mandate in a final agency rule
that may result in an expenditure of $100 million or more (adjusted
annually for inflation with the base year 1995) in any one year by
State, local, and tribal governments, in the aggregate, or by the
private sector. A Federal mandate is defined in 2 U.S.C. 658, in part,
as any provision in a regulation that imposes an enforceable duty upon
State, local, or tribal governments, or the private sector.
Following consideration of these factors, the Department has
concluded that the final rule contains no unfunded Federal mandates,
including either a ``Federal intergovernmental mandate'' or a ``Federal
private sector mandate.'' Rather, this final rule increases State
flexibility in staffing the Wagner-Peyser Act program.
F. Executive Order 13175 (Indian Tribal Governments)
The Department has reviewed the NPRM under the terms of E.O. 13175
and DOL's Tribal Consultation Policy, and have concluded that the
changes to regulatory text that are the focus of the final rule would
not have tribal implications, as these changes do not have substantial
direct effects on one or more Indian tribes, the relationship between
the Federal government and Indian tribes, nor the distribution of power
and responsibilities between the Federal government and Indian tribes.
Therefore, no consultations with tribal governments, officials, or
other tribal institutions were necessary.
List of Subjects
20 CFR Part 651
Employment, Grant programs--labor.
20 CFR Part 652
Employment, Grant programs--labor, Reporting and recordkeeping
requirements.
20 CFR Part 653
Agriculture, Employment, Equal employment opportunity, Grant
programs--labor, Migrant labor, Reporting and recordkeeping
requirements.
20 CFR Part 658
Administrative practice and procedure, Employment, Grant programs--
labor, Reporting and recordkeeping requirements.
Accordingly, the Employment and Training Administration amends 20
CFR chapter V, parts 651, 652, 653 and 658, as follows:
PART 651--GENERAL PROVISIONS GOVERNING THE WAGNER-PEYSER ACT
EMPLOYMENT SERVICE
0
1. The authority citation for part 651 continues to read as follows:
Authority: 29 U.S.C. 49a; 38 U.S.C. part III, 4101, 4211; Secs.
503, 3, 189, Pub. L. 113-128, 128 Stat. 1425 (July 22, 2014).
0
2. Amend Sec. 651.10 by:
0
a. Removing the definition of ``Affirmative action'';
0
b. Adding a definition for ``Complaint System Representative'';
0
c. Revising the definition of ``Employment Service (ES) office'';
0
d. Adding definitions in alphabetical order for ``Employment Service
(ES) Office Manager'' and ``Employment Service (ES) staff'';
0
e. Revising the definitions of ``Field checks'' and ``Field visits'';
0
f. Removing the definition of ``Local Office Manager'';
0
g. Revising the definition for ``Outreach contact'';
0
h. Adding a definition in alphabetical order for ``Outreach staff'';
0
i. Revising the definition of ``Respondent''; and
0
j. Adding in alphabetical order a definition for ``State Workforce
Agency (SWA) official''.
The additions and revisions read as follows:
Sec. 651.10 Definitions of terms used in this part and parts 652,
653, 654, and 658 of this chapter.
* * * * *
Complaint System Representative means the ES staff individual at
the local or State level who is responsible for handling complaints.
* * * * *
Employment Service (ES) office means a site that provides Wagner-
Peyser Act services as a one-stop partner program. A site must be
colocated in a one-stop center consistent with the requirements of
Sec. Sec. 678.305 through 678.315 of this chapter.
Employment Service (ES) Office Manager means the individual in
charge of all ES activities in a one-stop center.
* * * * *
Employment Service (ES) staff means individuals, including but not
limited to State employees and staff of a subrecipient, who are funded,
in whole or in part, by Wagner-Peyser Act funds to carry out activities
authorized under the Wagner-Peyser Act.
* * * * *
Field checks means random, unannounced appearances by ES staff and/
or Federal staff at agricultural worksites to which ES placements have
been made through the intrastate or interstate clearance system to
ensure that conditions are as stated on the job order and that the
employer is not violating an employment-related law.
Field visits means appearances by Monitor Advocates or outreach
staff to the working and living areas of migrant and seasonal
farmworkers (MSFWs), to discuss employment services and other
employment-related programs with MSFWs, crew leaders, and employers.
Monitor Advocates or outreach staff must keep records of each such
visit.
* * * * *
Outreach contact means each MSFW that receives the presentation of
information, offering of assistance, or follow-up activity from
outreach staff.
Outreach staff means ES staff with the responsibilities described
in Sec. 653.107(b) of this chapter.
* * * * *
Respondent means the individual or entity alleged to have committed
the violation described in the complaint, such as the employer, service
provider, or State agency (including a State agency official).
* * * * *
[[Page 626]]
State Workforce Agency (SWA) official means an individual employed
by the State Workforce Agency or any of its subdivisions.
* * * * *
PART 652--ESTABLISHMENT AND FUNCTIONING OF STATE EMPLOYMENT SERVICE
0
3. The authority citation for part 652 continues to read as follows:
Authority: 29 U.S.C. 491-2; Secs. 189 and 503, Public Law 113-
128, 128 Stat. 1425 (July 22, 2014).
0
4. Amend Sec. 652.204 by revising the first sentence to read as
follows:
Sec. 652.204 Must funds authorized under the Wagner-Peyser Act (the
Governor's Reserve) flow through the one-stop delivery system?
No, sec. 7(b) of the Wagner-Peyser Act provides that 10 percent of
the State's allotment under the Wagner-Peyser Act is reserved for use
by the Governor for performance incentives, supporting exemplary models
of service delivery, professional development and career advancement of
SWA officials as applicable, and services for groups with special
needs. * * *
0
5. Amend Sec. 652.207 by revising paragraph (b)(3) to read as follows:
Sec. 652.207 How does a State meet the requirement for universal
access to services provided under the Wagner-Peyser Act?
* * * * *
(b) * * *
(3) In each local area, in at least one comprehensive physical
center, ES staff must provide labor exchange services (including staff-
assisted labor exchange services) and career services as described in
Sec. 652.206; and
* * * * *
0
6. Amend Sec. 652.210 by revising paragraph (b) introductory text to
read as follows:
Sec. 652.210 What are the Wagner-Peyser Act's requirements for
administration of the work test, including eligibility assessments, as
appropriate, and assistance to unemployment insurance claimants?
* * * * *
(b) ES staff must assure that:
* * * * *
0
7. Revise Sec. 652.215 to read as follows:
Sec. 652.215 Can Wagner-Peyser Act-funded activities be provided
through a variety of staffing models?
Yes, Wagner-Peyser Act-funded activities can be provided through a
variety of staffing models. They are not required to be provided by
State merit-staff employees; however, States may still choose to do so.
0
8. Revise Sec. 652.216 to read as follows:
Sec. 652.216 May the one-stop operator provide guidance to Employment
Service staff in accordance with the Wagner-Peyser Act?
(a) Yes, the one-stop delivery system envisions a partnership in
which Wagner-Peyser Act labor exchange services are coordinated with
other activities provided by other partners in a one-stop setting. As
part of the local MOU described in Sec. 678.500 of this chapter, the
SWA, as a one-stop partner, may agree to have ES staff receive guidance
from the one-stop operator regarding the provision of labor exchange
services.
(b) The guidance given to ES staff must be consistent with the
provisions of the Wagner-Peyser Act, the local MOU, and applicable
collective bargaining agreements.
PART 653--SERVICES OF THE WAGNER-PEYSER ACT EMPLOYMENT SERVICE
SYSTEM
0
9. The authority citation for part 653 continues to read as follows:
Authority: Secs. 167, 189, 503, Public Law 113-128, 128 Stat.
1425 (July 22, 2014); 29 U.S.C. chapter 4B; 38 U.S.C. part III,
chapters 41 and 42.
0
10. Amend Sec. 653.102 by revising the third sentence to read as
follows:
Sec. 653.102 Job information.
* * * One-stop centers must provide adequate assistance to MSFWs to
access job order information easily and efficiently. * * *
0
11. Amend Sec. 653.103 by revising paragraphs (c) and (d) to read as
follows:
Sec. 653.103 Process for migrant and seasonal farmworkers to
participate in workforce development activities.
* * * * *
(c) One-stop centers must provide MSFWs a list of available career
and supportive services in their native language.
(d) One-stop centers must refer and/or register MSFWs for services,
as appropriate, if the MSFW is interested in obtaining such services.
0
12. Amend Sec. 653.107 by:
0
a. Revising paragraphs (a)(1), (a)(2) introductory text, and (a)(3) and
(4);
0
b. Adding paragraph (a)(6); and
0
c. Revising paragraphs (b) introductory text, (b)(2), (b)(4)(iv),
(b)(5) through (11), and (c).
The revisions and addition read as follows:
Sec. 653.107 Outreach and Agricultural Outreach Plan.
(a) * * *
(1) Each SWA must provide an adequate number of outreach staff to
conduct MSFW outreach in their service areas. SWA Administrators must
ensure State Monitor Advocates (SMAs) and outreach staff coordinate
their outreach efforts with WIOA title I sec. 167 grantees as well as
with public and private community service agencies and MSFW groups.
(2) As part of their outreach, SWAs must ensure outreach staff:
* * * * *
(3) For purposes of providing and assigning outreach staff to
conduct outreach duties, and to facilitate the delivery of employment
services tailored to the special needs of MSFWs, SWAs must seek
qualified candidates who speak the language of a significant proportion
of the State MSFW population; and
(i) Who are from MSFW backgrounds; or
(ii) Who have substantial work experience in farmworker activities.
(4) In the 20 States with the highest estimated year-round MSFW
activity, as identified in guidance issued by the Secretary, there must
be full-time, year-round outreach staff to conduct outreach duties. For
the remainder of the States, there must be year-round part-time
outreach staff, and during periods of the highest MSFW activity, there
must be full-time outreach staff. All outreach staff must be
multilingual, if warranted by the characteristics of the MSFW
population in the State, and must spend a majority of their time in the
field.
* * * * *
(6) SWAs must ensure each outreach staff member is provided with an
identification card or other materials identifying them as
representatives of the State.
(b) Outreach staff responsibilities. Outreach staff must locate and
contact MSFWs who are not being reached by the normal intake activities
conducted by the ES offices. Outreach staff responsibilities include:
* * * * *
(2) Outreach staff must not enter work areas to perform outreach
duties described in this section on an employer's property without
permission of the employer unless otherwise authorized to enter by law;
must not enter workers' living areas without the permission of the
workers; and must comply with appropriate State laws regarding access.
* * * * *
[[Page 627]]
(4) * * *
(iv) Referral of complaints to the ES office Complaint System
Representative or ES Office Manager;
* * * * *
(5) Outreach staff must make follow-up contacts as necessary and
appropriate to provide the assistance specified in paragraphs (b)(1)
through (4) of this section.
(6) Outreach staff must be alert to observe the working and living
conditions of MSFWs and, upon observation or upon receipt of
information regarding a suspected violation of Federal or State
employment-related law, document and refer information to the ES Office
Manager for processing in accordance with Sec. 658.411 of this
chapter. Additionally, if an outreach staff member observes or receives
information about apparent violations (as described in Sec. 658.419 of
this chapter), the outreach staff member must document and refer the
information to the appropriate ES Office Manager.
(7) Outreach staff must be trained in local office procedures and
in the services, benefits, and protections afforded MSFWs by the ES,
including training on protecting farmworkers against sexual harassment.
While sexual harassment is the primary requirement, training also may
include similar issues, such as sexual coercion, assault, and human
trafficking. Such trainings are intended to help outreach staff
identify when such issues may be occurring in the fields and how to
document and refer the cases to the appropriate enforcement agencies.
They also must be trained in the procedure for informal resolution of
complaints. The program for such training must be formulated by the
State Administrator, pursuant to uniform guidelines developed by ETA.
The SMA must be given an opportunity to review and comment on the
State's program.
(8) Outreach staff must maintain complete records of their contacts
with MSFWs and the services they perform. These records must include a
daily log, a copy of which must be sent monthly to the ES Office
Manager and maintained on file for at least 2 years. These records must
include the number of contacts, the names of contacts (if available),
and the services provided (e.g., whether a complaint was received and
if the complaint or apparent violation was resolved informally or
referred to the appropriate enforcement agency, and whether a request
for career services was received). Outreach staff also must maintain
records of each possible violation or complaint of which they have
knowledge, and their actions in ascertaining the facts and referring
the matters as provided herein. These records must include a
description of the circumstances and names of any employers who have
refused outreach staff access to MSFWs pursuant to paragraph (b)(2) of
this section.
(9) Outreach staff must not engage in political, unionization, or
anti-unionization activities during the performance of their duties.
(10) Outreach staff must be provided with, carry, and display, upon
request, identification cards or other material identifying them as
representatives of the State.
(11) Outreach staff in significant MSFW local offices must conduct
especially vigorous outreach in their service areas.
(c) ES office outreach responsibilities. Each ES Office Manager
must file with the SMA a monthly summary report of outreach efforts.
These reports must summarize information collected, pursuant to
paragraph (b)(8) of this section. The ES Office Manager and/or other
appropriate staff must assess the performance of outreach staff by
examining the overall quality and productivity of their work, including
the services provided and the methods and tools used to offer services.
Performance must not be judged solely by the number of contacts made by
the outreach staff. The monthly reports and daily outreach logs must be
made available to the SMA and Federal onsite review teams.
* * * * *
0
13. Amend Sec. 653.108 by revising:
0
a. Paragraphs (b) introductory text, (b)(2), (c), and (d);
0
b. The first sentence of paragraph (g)(1);
0
c. Paragraph (g)(2)(i)(D);
0
d. The second sentence of paragraph (g)(2)(v);
0
e. Paragraphs (g)(2)(vii) and (g)(3);
0
f. The first sentence of paragraph (i);
0
g. The first and second sentences of paragraph (o); and
0
h. Paragraphs (s)(2) and (3) and (9) and (11).
The revisions read as follows:
Sec. 653.108 State Workforce Agency and State Monitor Advocate
responsibilities.
* * * * *
(b) The State Administrator must appoint an SMA who must be a SWA
official. The State Administrator must inform farmworker organizations
and other organizations with expertise concerning MSFWs of the opening
and encourage them to refer qualified applicants to apply. Among
qualified candidates, the SWAs must seek persons:
* * * * *
(2) Who speak the language of a significant proportion of the State
MSFW population; or
* * * * *
(c) The SMA must have direct, personal access, when necessary, to
the State Administrator.
(d) The SMA must have ES staff necessary to fulfill effectively all
of the duties set forth in this subpart. The number of ES staff
positions must be determined by reference to the number of MSFWs in the
State, as measured at the time of the peak MSFW population, and the
need for monitoring activity in the State. The SMA must devote full
time to Monitor Advocate functions. Any State that proposes less than
full-time dedication must demonstrate to its Regional Administrator
that the SMA function can be effectively performed with part-time
staffing.
* * * * *
(g) * * *
(1) Conduct an ongoing review of the delivery of services and
protections afforded by the ES regulations to MSFWs by the SWA and ES
offices (including efforts to provide ES staff in accordance with Sec.
653.111, and the appropriateness of informal complaint and apparent
violation resolutions as documented in the complaint logs). * * *
(2) * * *
(i) * * *
(D) Complaint logs including logs documenting the informal
resolution of complaints and apparent violations; and
* * * * *
(v) * * * The plan must be approved or revised by SWA officials and
the SMA. * * *
* * * * *
(vii) The SMA may recommend that the review described in paragraph
(g)(2) of this section be delegated to a SWA official, if and when the
State Administrator finds such delegation necessary. In such event, the
SMA is responsible for and must approve the written report of the
review.
(3) Ensure all significant MSFW one-stop centers not reviewed
onsite by Federal staff are reviewed at least once per year by a SWA
official, and that, if necessary, those ES offices in which significant
problems are revealed by required reports, management information, the
Complaint System, or other means are reviewed as soon as possible.
* * * * *
(i) At the discretion of the State Administrator, the SMA may be
[[Page 628]]
assigned the responsibility as the Complaint System Representative. * *
*
* * * * *
(o) The SMA must ensure that outreach efforts in all significant
MSFW one-stop centers are reviewed at least yearly. This review will
include accompanying at least one outreach staff from each significant
MSFW one-stop center on field visits to MSFWs' working, living, and/or
gathering areas. * * *
* * * * *
(s) * * *
(2) An assurance that the SMA has direct, personal access, whenever
he/she finds it necessary, to the State Administrator.
(3) An assurance the SMA devotes all of his/her time to Monitor
Advocate functions. Or, if the SMA conducts his/her functions on a
part-time basis, an explanation of how the SMA functions are
effectively performed with part-time staffing.
* * * * *
(9) A summary of the training conducted for ES staff on techniques
for accurately reporting data.
* * * * *
(11) For significant MSFW ES offices, a summary of the State's
efforts to provide ES staff in accordance with Sec. 653.111.
0
14. Amend Sec. 653.109 by revising paragraph (c) to read as follows:
Sec. 653.109 Data collection and performance accountability measures.
* * * * *
(c) Provide necessary training to ES staff on techniques for
accurately reporting data.
* * * * *
0
15. Revise Sec. 653.111 to read as follows:
Sec. 653.111 State Workforce Agency staffing requirements.
(a) The SWA must implement and maintain a program for staffing
significant MSFW one-stop centers by providing ES staff in a manner
facilitating the delivery of employment services tailored to the
special needs of MSFWs, including by seeking ES staff that meet the
criteria in Sec. 653.107(a)(3).
(b) The SMA, Regional Monitor Advocate, or the National Monitor
Advocate, as part of his/her regular reviews of SWA compliance with
these regulations, must monitor the extent to which the SWA has
complied with its obligations under paragraph (a) of this section.
(c) SWAs remain subject to all applicable Federal laws prohibiting
discrimination and protecting equal employment opportunity.
0
16. Amend Sec. 653.501 by revising paragraphs (a) introductory text,
(c)(3)(vii), and (d)(6) and (9) to read as follows:
Sec. 653.501 Requirements for processing clearance orders.
(a) Assessment of need. No ES office or SWA official may place a
job order seeking workers to perform farmwork into intrastate or
interstate clearance unless:
* * * * *
(c) * * *
(3) * * *
(vii) Outreach staff must have reasonable access to the workers in
the conduct of outreach activities pursuant to Sec. 653.107.
(d) * * *
(6) ES staff must assist all farmworkers, upon request in their
native language, to understand the terms and conditions of employment
set forth in intrastate and interstate clearance orders and must
provide such workers with checklists in their native language showing
wage payment schedules, working conditions, and other material
specifications of the clearance order.
* * * * *
(9) If weather conditions, over-recruitment, or other conditions
have eliminated the scheduled job opportunities, the SWAs involved must
make every effort to place the workers in alternate job opportunities
as soon as possible, especially if the worker(s) is/are already en
route or at the job site. ES staff must keep records of actions under
this section.
* * * * *
0
17. Amend Sec. 653.502 by revising paragraph (e)(2) to read as
follows:
Sec. 653.502 Conditional access to the Agricultural Recruitment
System.
* * * * *
(e) * * *
(2) With the approval of an appropriate SWA official, remove the
employer's clearance orders from intrastate and interstate clearance;
and
* * * * *
0
18. Amend Sec. 653.503 by revising paragraphs (d) and (e) to read as
follows:
Sec. 653.503 Field checks.
* * * * *
(d) If the individual conducting the field check observes or
receives information, or otherwise has reason to believe that
conditions are not as stated in the clearance order or that an employer
is violating an employment-related law, the individual must document
the finding and attempt informal resolution where appropriate (for
example, informal resolution must not be attempted in certain cases,
such as E.O.-related issues and others identified by the Department
through guidance). If the matter has not been resolved within 5
business days, the SWA must initiate the Discontinuation of Services as
set forth at part 658, subpart F of this chapter and must refer
apparent violations of employment-related laws to appropriate
enforcement agencies in writing.
(e) SWA officials may enter into formal or informal arrangements
with appropriate State and Federal enforcement agencies where the
enforcement agency staff may conduct field checks instead of and on
behalf of the SWA. The agreement may include the sharing of information
and any actions taken regarding violations of the terms and conditions
of the employment as stated in the clearance order and any other
violations of employment-related laws. An enforcement agency field
check must satisfy the requirement for SWA field checks where all
aspects of wages, hours, and working and housing conditions have been
reviewed by the enforcement agency. The SWA must supplement enforcement
agency efforts with field checks focusing on areas not addressed by
enforcement agencies.
* * * * *
PART 658--ADMINISTRATIVE PROVISIONS GOVERNING THE WAGNER-PEYSER ACT
EMPLOYMENT SERVICE
0
19. The authority citation for part 658 continues to read as follows:
Authority: Secs. 189, 503, Pub. L. 113-128, 128 Stat. 1425
(July 22, 2014); 29 U.S.C. chapter 4B.
0
20. Amend Sec. 658.410 by revising paragraphs (b), (c) introductory
text, (c)(6), (f), (g), (h), (i), (k), and (m) to read as follows:
Sec. 658.410 Establishment of local and State complaint systems.
* * * * *
(b) The State Administrator must have overall responsibility for
the operation of the Complaint System; this includes responsibility for
the informal resolution of complaints. In the ES office, the ES Office
Manager is responsible for the operation of the Complaint System.
(c) SWAs must ensure centralized control procedures are established
for the processing of complaints. The ES Office Manager and the SWA
Administrator must ensure a central complaint log is maintained,
listing all
[[Page 629]]
complaints taken by the ES office or the SWA, and specifying for each
complaint:
* * * * *
(6) The action taken, and whether the complaint has been resolved,
including informally. The complaint log also must include action taken
on apparent violations.
* * * * *
(f) Complaints may be accepted in any one-stop center, or by a SWA,
or elsewhere by outreach staff.
(g) All complaints filed through the local ES office must be
handled by a trained Complaint System Representative.
(h) All complaints received by a SWA must be assigned to a trained
Complaint System Representative designated by the State Administrator,
provided that the Complaint System Representative designated to handle
MSFW complaints must be the State Monitor Advocate (SMA).
(i) State agencies must ensure any action taken by the Complaint
System Representative, including referral on a complaint from an MSFW,
is fully documented and contains all relevant information, including a
notation of the type of each complaint pursuant to Department guidance,
a copy of the original complaint form, a copy of any ES-related
reports, any relevant correspondence, a list of actions taken, a record
of pertinent telephone calls, and all correspondence relating thereto.
* * * * *
(k) The appropriate ES staff handling a complaint must offer to
assist the complainant through the provision of appropriate services.
* * * * *
(m) Follow-up on unresolved complaints. When an MSFW submits a
complaint, the SMA must follow-up monthly on the handling of the
complaint, and must inform the complainant of the status of the
complaint. No follow-up with the complainant is required for non-MSFW
complaints.
* * * * *
0
21. Amend Sec. 658.411 by:
0
a. Revising paragraph (a)(1);
0
b. Removing in paragraphs (a)(2)(iii), (a)(3) and (4), (b)(1)(ii)
introductory text, (b)(1)(ii)(B) through (D), (c)(1), (d)(2)(i) and
(ii), and (d)(3)(i) the words ``Complaint System representative''
wherever they appear and adding in their place ``Complaint System
Representative''; and
0
c. Revising paragraphs (d)(3)(ii), (d)(5)(ii), and (d)(5)(iii)(G).
The revisions read as follows:
Sec. 658.411 Action on complaints.
(a) * * *
(1) Whenever an individual indicates an interest in filing a
complaint under this subpart with an ES office, the SWA, or outreach
staff, the individual receiving the complaint must offer to explain the
operation of the Complaint System and must offer to take the complaint
in writing.
* * * * *
(d) * * *
(3) * * *
(ii) If resolution at the SWA level has not been accomplished
within 30 working days after the complaint was received by the SWA (or
after all necessary information has been submitted to the SWA pursuant
to paragraph (a)(4) of this section), whether the complaint was
received directly or from an ES office pursuant to paragraph (d)(2)(ii)
of this section, the SWA official must make a written determination
regarding the complaint and must send electronic copies to the
complainant and the respondent. The determination must follow the
procedures set forth in paragraph (d)(5) of this section.
* * * * *
(5) * * *
(ii) If SWA officials determine that the employer has not violated
the ES regulations, the SWA must offer to the complainant the
opportunity to request a hearing within 20 working days after the
certified date of receipt of the notification.
(iii) * * *
(G) With the consent of the SWA official and of the State hearing
official, the party who requested the hearing may withdraw the request
for the hearing in writing before the hearing.
* * * * *
0
22. Amend Sec. 658.419 by revising paragraph (a) to read as follows:
Sec. 658.419 Apparent violations.
(a) If a SWA, an ES office employee, or outreach staff observes,
has reason to believe, or is in receipt of information regarding a
suspected violation of employment-related laws or ES regulations by an
employer, except as provided at Sec. 653.503 of this chapter (field
checks) or Sec. 658.411 (complaints), the employee must document the
suspected violation and refer this information to the ES Office
Manager.
* * * * *
0
23. Amend Sec. 658.501 by revising paragraphs (a) introductory text,
(b), and (c) to read as follows:
Sec. 658.501 Basis for discontinuation of services.
(a) SWA officials must initiate procedures for discontinuation of
services to employers who:
* * * * *
(b) SWA officials may discontinue services immediately if, in the
judgment of the State Administrator, exhaustion of the administrative
procedures set forth in this subpart in paragraphs (a)(1) through (7)
of this section would cause substantial harm to a significant number of
workers. In such instances, procedures at Sec. Sec. 658.503 and
658.504 must be followed.
(c) If it comes to the attention of an ES office or a SWA that an
employer participating in the ES may not have complied with the terms
of its temporary labor certification, under, for example the H-2A and
H-2B visa programs, SWA officials must engage in the procedures for
discontinuation of services to employers pursuant to paragraphs (a)(1)
through (8) of this section and simultaneously notify the Chicago
National Processing Center (CNPC) of the alleged non-compliance for
investigation and consideration of ineligibility pursuant to Sec.
655.184 or Sec. 655.73 of this chapter respectively for subsequent
temporary labor certification.
0
24. Amend Sec. 658.601 by revising paragraphs (a)(1)(ii) and
(a)(2)(ii) to read as follows:
Sec. 658.601 State Workforce Agency responsibility.
(a) * * *
(1) * * *
(ii) To appraise numerical activities/indicators, actual results as
shown on the Department's ETA Form 9172, or any successor report
required by the Department must be compared to planned levels.
Differences between achievement and plan levels must be identified.
* * * * *
(2) * * *
(ii) To appraise these key numerical activities/indicators, actual
results as shown on ETA Form 9172, or any successor report required by
the Department must be compared to planned levels. Differences between
achievement and plan levels must be identified.
* * * * *
0
25. Amend Sec. 658.602 by revising paragraphs (l), (o)(1), and (s)(2)
to read as follows:
Sec. 658.602 Employment and Training Administration National Office
responsibility.
* * * * *
[[Page 630]]
(l) If the NMA finds the effectiveness of any RMA has been
substantially impeded by the Regional Administrator or other regional
office official, he/she must, if unable to resolve such problems
informally, report and recommend appropriate actions directly to the
OWI Administrator. If the NMA receives information that the
effectiveness of any SMA has been substantially impeded by the State
Administrator, a State or Federal ES official, or other ES staff, he/
she must, in the absence of a satisfactory informal resolution at the
regional level, report and recommend appropriate actions directly to
the OWI Administrator.
* * * * *
(o) * * *
(1) Meet with the SMA and other ES staff to discuss MSFW service
delivery; and
* * * * *
(s) * * *
(2) Provide technical assistance to ETA regional office and ES
staff for administering the Complaint System, and any other employment
services as appropriate.
* * * * *
0
26. Amend Sec. 658.603 by:
0
a. Revising the section heading and paragraphs (f) introductory text
and (h);
0
b. Republishing paragraph (n) introductory text; and
0
e. Revising paragraphs (n)(3), (o), (r) introductory text, (r)(1), and
(t).
The revisions read as follows:
Sec. 658.603 Employment and Training Administration regional office
responsibility.
* * * * *
(f) The Regional Administrator must appoint a RMA who must carry
out the duties set forth in this subpart. The RMA must:
* * * * *
(h) The Regional Administrator must ensure that staff necessary to
fulfill effectively all the regional office responsibilities set forth
in this section are assigned.
* * * * *
(n) The RMA must review the activities and performance of the SMAs
and the State monitoring system in the region, and must recommend any
appropriate changes in the operation of the system to the Regional
Administrator. The RMA's review must include a determination whether
the SMA:
* * * * *
(3) Is making recommendations that are being consistently ignored
by SWA officials. If the RMA believes that the effectiveness of any SMA
has been substantially impeded by the State Administrator, other State
agency officials, any Federal officials, or other ES staff, he/she must
report and recommend appropriate actions to the Regional Administrator.
Copies of the recommendations must be provided to the NMA
electronically or in hard copy.
* * * * *
(o)(1) The RMA must be informed of all proposed changes in policy
and practice within the ES, including ES regulations, which may affect
the delivery of services to MSFWs. He/she must advise the Regional
Administrator on all such proposed changes which, in his/her opinion,
may adversely affect MSFWs or which may substantially improve the
delivery of services to MSFWs.
(2) The RMA also may recommend changes in ES policy or regulations,
as well as changes in the funding of State Workforce Agencies and/or
adjustments of reallocation of the discretionary portions of funding
formulae as they pertain to MSFWs.
* * * * *
(r) As appropriate, each year during the peak harvest season, the
RMA must visit each State in the region not scheduled for an onsite
review during that fiscal year and must:
(1) Meet with the SMA and other ES staff to discuss MSFW service
delivery; and
* * * * *
(t) The RMA must attend MSFW-related public meeting(s) conducted in
the region, as appropriate. Following such meetings or hearings, the
RMA must take such steps or make such recommendations to the Regional
Administrator, as he/she deems necessary to remedy problem(s) or
condition(s) identified or described therein.
* * * * *
0
27. Amend Sec. 658.704 by republishing paragraph (a) introductory text
and revising paragraph (a)(4) to read as follows:
Sec. 658.704 Remedial actions.
(a) If a SWA fails to correct violations as determined pursuant to
Sec. 658.702, the Regional Administrator must apply one or more of the
following remedial actions to the SWA:
* * * * *
(4) Requirement of special training for ES staff;
* * * * *
John P. Pallasch,
Assistant Secretary for Employment and Training, Labor.
[FR Doc. 2019-27260 Filed 1-3-20; 8:45 am]
BILLING CODE 4510-FN-P
