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Department of Labor proposes major expansion of apprenticeships

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The U.S. Department of Labor's (DOL's) newly proposed apprenticeship programs would be available to certified industry groups, schools, nonprofits and unions and would be largely free from regulatory oversight.

The DOL recently released the long-anticipated Notice of Proposed Rulemaking establishing certification requirements for a Trump administration priority: industry-recognized apprenticeship programs.

The expansion of employer-led apprenticeships does not change any requirements of the current DOL-regulated apprenticeship programs, which would exist alongside the industry-crafted channel.

The release of the proposed rule comes two years after President Donald Trump signed an executive order in June 2017 instructing the DOL to create guidelines for industry-recognized apprenticeships.

Participation in the DOL's registered apprenticeship programs has grown significantly in recent years but still involves only a tiny fraction of the workforce. One reason for the lack of involvement is the frustration some employers report with the DOL's registration process.

"The current registered apprenticeship model has a perception within industry of being complicated and heavily burdensome with paperwork and reporting," said Glenn Johnson, workforce development leader with BASF Corporation in Houston.

Montez King, the executive director of the National Institute for Metalworking Skills, based in Fairfax, Va., said that the current system lacks flexibility.

Under the new proposal, several entities could be certified to set standards for training, structure and curricula for apprenticeships in relevant industries. Those entities include trade, industry, and employer groups or associations; education institutions; state and local government agencies; nonprofit organizations; unions; or any consortium of these. They could approve or reject employers seeking to host new apprenticeship programs.

"The DOL would certify [the administering organizations] to ensure that they meet all legal requirements and have the capacity to monitor [the apprenticeships] to ensure that they meet certain criteria," said Michael Lotito, an attorney in law firm Littler's San Francisco office and co-chair of the firm's Workplace Policy Institute. "DOL's criteria for high-quality [apprenticeships] include paid work, work-based learning, mentorship, education and instruction, industry-recognized credentials, and safety, supervision and EEO requirements."

To guard against conflicts of interest, the DOL outlined that employers could not be certified on their own and that certified entities could not recognize their own apprenticeship programs.

But there are still many questions about how these intended protections and other aspects of the programs will be run, experts said.

"The proposal shows that the DOL intends to remove itself from regulatory oversight and transfer that responsibility to the accredited entities, but there is still a lot of confusion around what the role of the accredited entities would be and what level of oversight they are required to provide," explained Katie Spiker, director of government relations at the National Skills Coalition, a Washington, D.C.-based public-policy research and advocacy group.

Spiker said employers, education providers and workforce stakeholders need more clarity about how the proposal will be carried out and how to best implement industry-recognized apprenticeships. She said they also need to understand how the new system's benefits are preferable to other work-based learning programs.

"The idea of supporting employers' ability to run and scale work-based learning opportunities and for more workers to be able to access those opportunities is great," she said. "But I have a problem with the idea that industry-recognized apprenticeships are the only solution for all workforce challenges, to the detriment of investing in other workforce education programs. There is a spectrum of workforce programs in the United States that can help bring people into good jobs."

Carolyn Lee, executive director of The Manufacturing Institute, the research arm of the National Association of Manufacturers, said that job openings in manufacturing have risen to an all-time high, and manufacturers will struggle to fill millions of jobs over the next decade unless steps are taken to prepare the workforce. "We welcome this step by the Department of Labor to help modernize and expand apprenticeship programs, which are so critical to bridging the skills gap and connecting more people to rewarding careers in manufacturing," she said.

[Visit SHRM's resource page on workforce readiness.]

Construction Excluded

Lotito explained that under the proposed rule, the DOL would limit its initial approval of industry-recognized apprenticeships to industries currently lacking robust programs, such as advanced manufacturing, health care and information technology.

The DOL announced, in tandem with the proposed rule, grants worth more than $180 million to 23 schools partnering with companies that provide a funding match in those sectors. The DOL is also soliciting applications for an additional $100 million in grant funding for apprenticeship programs to close skills gaps in a wider pool of industries.

Construction programs, which account for more than 50 percent of registered apprenticeships, would initially be left out of the new apprenticeship channel. That decision pleased the building trades unions—which say that registered apprenticeships work best for workers—but disappointed employers.

"At a time when the vast majority of construction firms report having a hard time finding qualified workers to hire, it is deeply troubling that the Trump administration has opted to not include the [construction] sector in its new apprenticeship proposal," said Stephen E. Sandherr, CEO of the Associated General Contractors of America. "The fact is that it remains too difficult for many firms and their partners to establish apprenticeship programs for construction workers."

Sandherr added that barriers for apprenticeship programs for construction workers include the excessive costs incurred during a "rigid and inflexible registration process."

Concerns Still Abound

The industry-recognized apprenticeships approach has drawn criticism from congressional Democrats, labor unions and worker advocates who feel that the lack of government oversight could put workers at risk. "It's a giveaway to private corporations and for-profit colleges without any guarantee that apprentices are getting quality training opportunities, are being paid fairly for the work they do, or are working in safe conditions," said Sen. Patty Murray, D-Wash., ranking member of the Senate's education and labor committee.

Mary Alice McCarthy, director of the Center on Education and Skills at New America, a Washington, D.C.-based public-policy think tank, gives the Trump administration credit for the effort to make apprenticeships available to new populations and industries and better connect work-based learning to higher education. But she is not entirely assured by the new industry-sanctioned model.

On one hand, McCarthy said, she was glad to see that the new apprenticeship programs would not automatically be entitled to the same types of federal benefits and funding as the more-regulated registered apprenticeship system, and that the DOL introduced some quality-control measures for the programs, including a complaint process for apprentices.

But like Spiker, she believes there should be more clarity about conflicts of interest and the responsibilities of the certified bodies regarding data collection and equal employment opportunity compliance.

"What authority do the [certified entities] have to enforce compliance or collect data?" she asked. "What incentive will they have to do this? The proposal is an attempt to create a more self-regulated system, which we know from the higher-ed space doesn't work very well."

Under the DOL's current system, sponsors of apprenticeship programs register with a state or federal agency that determines if their programs meet regulatory requirements regarding program length, curricula, and apprentices' wages and working conditions. But accreditation under the new proposal is not as well-defined.

"The proposed quality-assurance process risks opening the door to low-quality programs and introducing considerable risk to apprentices and their employers," McCarthy said.

She also anticipates problems with the DOL's intention to recognize more than 200 accredited bodies. "That could be chaotic and hard to manage. It creates an arm's-length relationship between the quality-assurance process and the government; enables the rise of multiple accreditors with overlapping jurisdictions, duplication of programs and competing standards; and provides no clear mechanism for holding accreditors or programs accountable for poor outcomes."

Another potential sore spot for employers could be the new fees charged to host apprenticeship programs. The DOL said it anticipates that accredited entities may charge application and annual fees to employers hosting programs, although fees are neither required nor prohibited under the proposed rule.

This article provided by the Society for Human Resource Management (SHRM).

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