29 U.S.C. § 3174 — Use of funds for employment and training activities

(a) Statewide employment and training activities

(1) In general. Funds a Governor reserves under section 3173(a)(2) must be used for the statewide rapid-response activities in paragraph (2)(A). Funds reserved under sections 3163(a) and 3173(a)(1) must be used for the statewide employment and training activities in paragraph (2)(B), and may also be used for the activities in paragraph (3), whether the funds were allotted under section 3162(b)(1) or under paragraph (1) or (2) of section 3172(b).

(2) Required statewide activities.

(A) Statewide rapid response. (i) A State must use the Governor’s section 3173(a)(2) funds for statewide rapid-response activities. These must include: (I) rapid-response activities carried out in local areas by the State or a State-designated entity working with the local boards and chief elected officials; and (II) extra help for local areas experiencing disasters, mass layoffs, plant closings, or other events that substantially increase unemployment, carried out by the State in those areas with the local boards and chief elected officials. (ii) Funds reserved under section 3173(a)(2), and funds reserved under former section 2863(a)(2) as it existed the day before July 22, 2014, that remain unobligated after the first program year for which they were allotted may also be used by the Governor for statewide activities authorized under subparagraph (B) or paragraph (3)(A).

(B) Statewide employment and training activities. Funds reserved under sections 3163(a)(1) and 3173(a)(1) and not used under paragraph (1)(A) must be used for statewide employment and training activities. This includes: (i) helping State entities and agencies, local areas, and one-stop partners carry out the State plan, including coordinating and aligning required data systems; helping local areas carry out regional planning and service delivery required by section 3121(c); helping local areas develop, bring together, and implement industry or sector partnerships; and helping local areas, one-stop operators, one-stop partners, and eligible providers, including by developing and training staff, developing exemplary programs, creating opportunities for people with employment barriers to enter in-demand and nontraditional sectors or occupations, and giving technical help to local areas that fail local performance-accountability measures under section 3141(c); (ii) helping local areas as described in section 3121(b)(7); (iii) operating a fiscal and management accountability information system under section 3141(i); (iv) monitoring and overseeing activities under this subpart and subpart 2; (v) distributing: (I) the State list of eligible training-service providers, including nontraditional-training providers and eligible apprenticeship providers described in section 3152(a)(2)(B); (II) information identifying providers of on-the-job, customized, incumbent-worker, internship, paid or unpaid work-experience, or transitional-job training; (III) information about effective outreach to, partnerships with, and services for businesses; (IV) information about effective services for workers and job seekers; (V) program performance and attendance-cost information, including tuition and fees, as described in section 3152(d) and (h); and (VI) when applicable, information about physical and program accessibility for people with disabilities under section 3248 and the Americans with Disabilities Act of 1990; and (vi) evaluating activities authorized under this subpart and subpart 2 under section 3141(e), coordinated with the Secretary’s evaluations under section 3224(a).

(3) Additional statewide activities.

(A) Funds reserved under sections 3163(a)(1) and 3173(a)(1) and not used under paragraph (1)(A) or (2)(B) may be used for additional statewide activities. They may include: (i) innovative programs and strategies for all State employers, including small employers, such as incumbent-worker and customized training, sector and industry-cluster strategies, industry or sector partnerships, career pathways, microenterprise and entrepreneurship training and support, business intermediaries, layoff-aversion strategies, stronger links between the State one-stop system and employers, and other services that engage employers and make workforce development more responsive to State and local businesses, consistent with this subchapter; (ii) strategies to serve people with employment barriers and coordinate one-stop partners; (iii) creating or identifying education and training that uses current labor-market analysis; measures and gives credit for prior knowledge, skills, competencies, and experience through direct and prior-learning assessment; tests those skills and competencies for adaptability; makes credits portable and stackable for more skilled work; and speeds course or credential completion; (iv) programs increasing training and placement in nontraditional jobs; (v) remote access to one-stop services, including subsection (c)(3) training, through technology; (vi) subsection (c)(2) career services in State one-stop systems; (vii) coordination with the child-welfare system to serve children and youth eligible under section 477 of the Social Security Act; (viii) activities to improve coordination with economic development and with: (I) child-support services and assistance provided under part D of title IV of the Social Security Act; (II) Department of Agriculture cooperative-extension programs; (III) local disability programs, including State programs concerning intellectual and developmental disabilities, Statewide Independent Living Councils, programs funded under part B of chapter 1 of title VII of the Rehabilitation Act, and independent-living centers as defined in section 702 of that Act; (IV) adult education and literacy, including public-library activities; (V) corrections activities helping former offenders reenter the workforce; and (VI) financial-literacy activities, including those in section 3164(b)(2)(D). These activities may also develop and distribute workforce and labor-market information; (ix) research and demonstrations about adult and dislocated workers’ employment and education needs; (x) promising services for workers and businesses, including support for education, training, skill upgrading, and statewide networking so employees can become workplace-learning advisers and remain proficient; (xi) incentive grants to local areas based on local performance-accountability measures under section 3141(c); (xii) adopting, calculating, or commissioning approval of a State economic-self-sufficiency standard stating families’ income needs by family size, number and ages of children, and substate geography; (xiii) common intake procedures and related registration processes, materials, or software; and (xiv) technical help for local areas using pay-for-performance contracts, including help with data collection, data-entry requirements, performance levels, and evaluations.

(B) Administrative limit. (i) For each fiscal year, no more than 5 percent of the amount allotted under section 3162(b)(1), no more than 5 percent of the amount allotted under section 3172(b)(1), and no more than 5 percent of the amount allotted under section 3172(b)(2) may be used by the State to administer statewide youth workforce activities under section 3164 and statewide employment and training activities under this section. (ii) Those administrative funds may pay administrative costs of any of those statewide youth or employment and training activities, regardless of which listed allotment supplied the funds.

(b) Local employment and training activities. Funds allocated to a local area for adults under section 3173(b)(2)(A) or (3), as appropriate, and funds allocated for dislocated workers under section 3173(b)(2)(B), must be used for the subsection (c) activities for adults or dislocated workers, respectively. They may also be used for the subsection (d) activities for those groups, respectively.

(c) Required local activities

(1) In general. (A) Allocated funds must be used to: (i) establish the one-stop delivery system described in section 3151(e); (ii) provide paragraph (2) career services to adults and dislocated workers through that system; (iii) provide paragraph (3) training services; (iv) build relationships and networks with large and small employers and their intermediaries; and (v) develop, convene, or implement industry or sector partnerships. (B) Consistent with section 3151(h) and (i), a portion of funds made available under Federal laws authorizing the programs in section 3151(b)(1)(B), including the Wagner-Peyser Act, must be used for clauses (i) and (ii) of subparagraph (A), to the extent consistent with the applicable Federal law.

(2) Career services. (A) Services. Paragraph (1) funds must provide career services through the one-stop system to adults and dislocated workers. At minimum, these include: (i) deciding whether people qualify for assistance under this part; (ii) outreach, intake (which may include worker profiling), and orientation to available one-stop information and services; (iii) initial testing of skill levels, including literacy, numeracy, and English proficiency, and of aptitudes, abilities including skill gaps, and support-service needs; (iv) labor-exchange services, including (I) job-search and placement help and, when appropriate, career counseling, with information about in-demand sectors and occupations and nontraditional jobs, and (II) suitable recruitment and other business services for local employers, including small employers, which may include referrals to specialized business services not usually offered by the one-stop system; (v) referrals to and coordination with other programs and services, including one-stop programs and, when appropriate, other workforce programs; (vi) accurate workforce and labor-market statistics for local, regional, and national labor markets, including job vacancies, skills needed for those jobs, and local in-demand occupations’ earnings, skill requirements, and advancement opportunities; (vii) performance and program-cost information about eligible training providers under section 3152, youth-workforce providers under section 3153, adult-education providers, postsecondary career and technical education providers, out-of-school-youth career and technical education providers under the Carl D. Perkins Career and Technical Education Act of 2006, and vocational-rehabilitation providers under title I of the Rehabilitation Act; (viii) usable and understandable information about the local area’s performance under section 3141(c) and any additional one-stop performance information; (ix) usable and understandable information about available support services and assistance, including child care, child support, medical or child-health assistance under titles XIX and XXI of the Social Security Act, Supplemental Nutrition Assistance Program benefits, earned-income-tax-credit help, State temporary assistance for needy families, and other support services and transportation funded under this part, plus referrals to those services; (x) information and help with unemployment-compensation claims; (xi) help establishing eligibility for financial aid for training or education not funded under this Act; (xii) when appropriate to obtain or keep employment: (I) detailed and specialized skill and service-needs assessments, including diagnostic tests and other tools and in-depth interviews and evaluations to identify barriers and employment goals; (II) an individual employment plan stating goals, achievement objectives, and the services needed to reach them, including eligible training providers and career pathways; (III) group counseling; (IV) individual counseling; (V) career planning; (VI) short-term pre-vocational help in learning, communication, interviewing, punctuality, personal maintenance, and professional conduct for unsubsidized work or training; (VII) career-linked internships and work experiences; (VIII) workforce-preparation activities; (IX) financial-literacy services such as section 3164(b)(2)(D) activities; (X) out-of-area job-search and relocation help; and (XI) English-language acquisition and integrated education and training; and (xiii) follow-up services, including workplace counseling, for people placed in unsubsidized employment through this part, for at least 12 months after the first day of employment, as appropriate. (B) A one-stop operator or partner need not conduct a new interview, evaluation, or assessment under subparagraph (A)(xii) if it decides a recent one from another education or training program is appropriate. (C) These career services must be delivered either (i) directly by one-stop operators identified under section 3151(d), or (ii) through local-board-approved contracts with public, private for-profit, or private nonprofit providers.

(3) Training services. (A) Eligibility. (i) Except as provided in clause (ii), the listed local funds must provide training to adults and dislocated workers who, after interview, evaluation or assessment, and career planning, are found by a one-stop operator or partner to: (aa) be unlikely or unable to obtain or keep employment leading to economic self-sufficiency or wages comparable to or higher than wages from previous employment through the paragraph (2)(A)(xii) career services; (bb) need training for employment leading to economic self-sufficiency or wages comparable to or higher than wages from previous employment; and (cc) have the skills and qualifications to complete the chosen training. They must also: (II) choose training directly linked to jobs in the local area, planning region, or another area where they are willing to commute or relocate; (III) meet subparagraph (B); and (IV) qualify under the priority system in subparagraph (E). (ii) A new interview, evaluation, or assessment is unnecessary if a recent one from another education or training program is appropriate. (iii) Nothing here requires career services before training services.

(B) Qualification. (i) Except as provided in clause (ii), training is limited to people who cannot obtain other grant help, including Federal Pell Grants, or who need help beyond that other grant assistance. (ii) Training may be provided while a Pell Grant application is pending. If the person later receives a Pell Grant, the local area must be reimbursed appropriately from that grant. (iii) In deciding whether extra help is needed, the one-stop operator or partner may consider the full training cost, including dependent care, transportation, and other proper costs.

(C) Provider qualification. Training must be provided through providers identified under section 3152.

(D) Training may include: (i) occupational-skills training, including nontraditional employment; (ii) on-the-job training; (iii) incumbent-worker training under subsection (d)(4); (iv) workplace training combined with related instruction, including cooperative education; (v) private-sector training; (vi) skill upgrading and retraining; (vii) entrepreneurship training; (viii) transitional jobs under subsection (d)(5); (ix) job-readiness training combined with any service in clauses (i)–(viii); (x) adult education and literacy, including English-language acquisition and integrated education and training, provided with services in clauses (i)–(vii); and (xi) customized training with a commitment by an employer or group of employers to hire the person after successful completion.

(E) Priority. For adult funds, priority for paragraph (2)(A)(xii) career services and training must go to public-assistance recipients, other low-income people, and people deficient in basic skills. The local board and Governor must direct one-stop operators about these priority decisions.

(F) Consumer choice. (i) Training must maximize the customer’s choice of provider. (ii) Each local board, through one-stop centers, must provide the section 3152(d) list of eligible providers and accompanying information. (iii) An eligible person seeking training may consult a career planner, choose a provider from that list, and, when practicable, be referred to that provider and paid through an individual training account. (iv) A local board may coordinate an individual training account with Federal, State, local, or private job-training funds. (v) Consistent with clause (i), priority consideration goes to programs leading to recognized postsecondary credentials aligned with local in-demand sectors or occupations.

(G) Individual training accounts. (i) Except under clause (ii), training must use individual training accounts and be provided through the one-stop system. (ii) A service contract may be used instead if: (I) subparagraph (F) is met; (II) the service is on-the-job, customized, incumbent-worker, or transitional training; (III) the local board finds too few eligible providers, such as in a rural area, to make individual accounts work; (IV) it finds an effective community-based or other private organization program serving people with employment barriers; (V) it finds a contract with a higher-education institution or other eligible provider is most appropriate to train multiple people in in-demand sectors or occupations and does not limit customer choice; or (VI) it is a pay-for-performance contract. (iii) Training must directly connect to an in-demand sector or occupation in the local area, planning region, or another area where the recipient is willing to relocate. A local board may approve training for an occupation in a local economic sector with high potential for continuing demand or growth. (iv) Individual accounts and contracts may be used together, including arrangements letting account recipients receive contracted services.

(H) On-the-job-training reimbursement. (i) For on-the-job training, the Governor or local board may raise the reimbursement under section 3102(44) to up to 75 percent of the participant’s wage. The Governor must approve an increase for a State-funded program, or the local board must approve it for a locally funded program, in each case considering clause (ii). (ii) The decision must consider participant characteristics, employer size, the quality of employer training and advancement opportunities, and other appropriate factors. Those may include the number of participating employees, their current and expected wages and benefits, and how the training relates to a participant’s competitiveness.

(d) Permissible local activities

(1) In general. (A) The listed adult and dislocated-worker funds may be used through the one-stop system, and with local-board collaboration for clauses (vii) and (ix), for: (i) customized screening and referral of qualified training participants to employers; (ii) customized employment services for employers, employer associations, or similar organizations on a fee-for-service basis; (iii) pay-for-performance training contracts, using no more than 10 percent of the local area’s funds under section 3173(b)(2) or (3); (iv) customer support helping people with employment barriers, including disabilities, and veterans navigate multiple services; (v) technical help for operators, partners, and eligible providers about serving people with disabilities, including staff development and training, outreach, intake, assessments, service delivery, coordination, and performance measures; (vi) employment and training coordinated with State and local child-support enforcement, child-support services and assistance, Department of Agriculture cooperative extension, and technology-enabled remote access to one-stop services; (vii) activities to coordinate workforce and local economic-development work and promote entrepreneurship and microenterprise; improve links between the local workforce system and employers, including small employers; and strengthen links with unemployment-insurance programs; (viii) training for displaced homemakers and people training for nontraditional occupations, with local programs; (ix) business services and strategies meeting area employers’ workforce needs, as decided by the local board and consistent with the local plan. These may be provided through business intermediaries, for a fee, or by leveraging economic-development, philanthropic, and other public or private resources as the board decides. They may include: (aa) industry-sector strategies involving industry partnerships, regional skills alliances, industry skill panels, or sectoral skills partnerships; (bb) innovative employer services such as career pathways, skill upgrading, skill standards and certification for recognized credentials or employer use, and apprenticeships; (cc) help employers manage workforce reductions, coordinated with rapid response and layoff-aversion strategies, including early identification of at-risk firms, feasibility studies, and services addressing risk factors; and (dd) marketing these business services to suitable area employers, including small and midsize employers; (x) adjusting State economic-self-sufficiency standards for local conditions, or adopting, calculating, or commissioning local standards based on family size, children’s number and ages, and substate geography; (xi) better coordination with local disability programs, including State intellectual- and developmental-disability agencies, Statewide Independent Living Councils, Rehabilitation Act programs, and independent-living centers; and (xii) promising worker and business services, including education, training, skill upgrading, and networking for employees to become workplace-learning advisers and remain proficient. (B) Work support for low-wage workers. (i) The funds may provide work-support activities through the one-stop system to help low-wage workers keep and improve employment. One-stop partners must coordinate their appropriate programs and resources with these activities and resources. (ii) These activities may offer the section’s activities in ways that make participation easier, including during unusual hours and with on-site child care.

(2) Supportive services. The listed funds may provide supportive services to adults and dislocated workers who (A) participate in programs with activities authorized by subsection (c)(2) or (3), and (B) cannot obtain those services through other programs that provide them.

(3) Needs-related payments. (A) The funds may provide needs-related payments to unemployed adults and dislocated workers who do not qualify, or no longer qualify, for unemployment compensation, so they can participate in subsection (c)(3) training. (B) A dislocated worker who no longer qualifies for unemployment compensation is eligible only if enrolled in training by the end of the 13th week after the most recent qualifying layoff, or, if later, by the end of the eighth week after being told that a short-term layoff will last more than six months. (C) A dislocated worker’s payment may not exceed the greater of the applicable unemployment compensation level or, if the worker did not qualify for unemployment compensation, the poverty-line amount for the same period, adjusted for changes in total family income.

(4) Incumbent-worker training. (A)(i) A local board may reserve and use no more than 20 percent of its section 3173(b) allocation to pay the Federal share of incumbent-worker training costs under this paragraph. (ii) To decide whether an employer qualifies, the board must consider participant characteristics, how training affects participant and employer competitiveness, and other appropriate factors, which may include the number of trainees, their current and expected wages and benefits, and the employer’s other training and advancement opportunities. (iii) The Governor or State board may recommend training with statewide impact. (B) The local board must run the program with the employers or employer groups, which may partner with other entities to deliver training, to help workers gain skills to keep jobs or prevent layoffs. (C) Participating employers must pay the non-Federal share. (D)(i) Subject to clause (ii), the board sets that share, considering the number of trainees, current and expected wages and benefits, the training’s relationship to employer and worker competitiveness, and available employer training and advancement opportunities. (ii) The share may not be less than 10 percent for an employer with 50 or fewer employees, 25 percent for an employer with more than 50 but no more than 100 employees, or 50 percent for an employer with more than 100 employees. (iii) The employer’s share may include wages paid while a worker attends training. It may be paid in cash or fairly valued in kind.

(5) Transitional jobs. A local board may use no more than 10 percent of its section 3173(b) allocation for subsection (c)(3) transitional jobs that: (A) are time-limited, subsidized work experiences in the public, private, or nonprofit sector for people with employment barriers who are chronically unemployed or have an inconsistent work history; (B) combine work with comprehensive employment and support services; and (C) help those people establish a work history, show workplace success, and develop skills leading to entry into and retention in unsubsidized employment).