DOL releases guidance on OJT NEG grants.

The Department of Labor (DOL) has released guidance for states receiving Recovery Act-funded On-the-Job Training (OJT) National Emergency Grants (NEGs) to assist grantees in the development of state implementation plans. The agency announced the grant recipients on June 25, awarding $75 million to 41 states, three Native American tribes, and the District of Columbia to support the development of OJT contracts with private and non-profit employers who agree to hire and train dislocated workers in exchange for partial reimbursement of their training costs. State implementation plans are due to the agency by August 31.

The Training and Employment Guidance Letter (TEGL):

• Emphasizes the importance of carefully identifying employers where OJT opportunities can be most effective, including opportunities that are likely to lead to participants being permanently hired following the training period, and that lead to industry recognized credentials where appropriate.
• Sets out special guidelines for employer reimbursement rates, including a sliding scale that allows grantees to reimburse small employers (up to 50 employees) at 90 percent of the participant’s wage rate, and reimburse mid-sized employers (51-250 employees) at 75 percent of the participant’s wages. The guidance also establishes a “wage cap” that limits allowable reimbursements for jobs that pay more than the state average hourly wage, and limits the duration of OJT contracts under the grants to six months.
• Stresses the agency’s expectation that the implementation plans define the roles of key partners, including businesses, organized labor, government agencies, and community-based organizations (CBOs). The guidance particularly stresses the advantages of partnering with CBOs to draw upon their expertise in recruitment, transition, and wrap-around services, and notes that CBOs can serve as effective intermediaries with local employers or serve as employers themselves.  

National Skills Coalition published an issue brief earlier this year describing how OJT could support the nation’s economic recovery efforts, and worked with Senators Jeanne Shaheen (D-NH) and Thad Cochran (R-MS) to develop the On-the-Job Training Act of 2010 (S 3459), which would create designated Workforce Investment Act (WIA) funding for competitive grants to local Workforce Investment Boards (WIBs) to support the expansion of OJT activities.  We look forward to working with DOL and Congress to ensure the successful implementation of the recent NEGs, and to expand support for OJT activities at the state and local level.