Senate introduces OJT Act of 2010.
Senators Shaheen, Cochran Introduce On-the-Job Training Act of 2010
On June 7, Sen. Jeanne Shaheen (D-NH) and Sen. Thad Cochran (R-MS) introduced the On-the-Job Training Act of 2010 (S 3459), which would allow the Department of Labor (DOL) to award competitive grants to local workforce investment boards to support the expansion of on-the-job training (OJT) activities with area businesses.
OJT is a proven “earn-and-learn” strategy that can help address the skill demands of both workers and businesses. Employers participating in OJT contract with local boards to hire and train workers for a specified period of time, and in exchange may receive a subsidy to cover a portion of the employee’s wages. Employers are able minimize the upfront costs of training and supervision for new employees and ensure that training is aligned with the actual skill requirements of the job, while employees benefit from earning a paycheck while acquiring the skills to perform effectively on the job and advance their careers beyond the lifespan of the OJT program.
DOL data indicates that OJT can have a lasting impact for participants: in Program Year 2008, 80 percent of individuals participating in Workforce Investment Act (WIA)-funded OJT programs were still on the job nine months after exiting the program. And, there is evidence that expanding OJT programs could have a positive impact on job creation, as a recent survey conducted by the Pennsylvania Department of Labor & Industry found that nearly 80 percent of employers would be more inclined to hire new workers if they had access to a well-designed OJT program.
In addition to funding grants for local boards, the bill would provide resources to states and localities to engage in employer outreach and program development, and would authorize local boards to offer increased reimbursement rates for businesses that hire individuals with barriers to employment, or for small- or medium-sized firms.
National Skill Coalition released an Issue Brief in January providing detailed analysis of OJT activities under WIA, and urging Congress to consider expanding OJT as part of any federal job creation legislation.
