New Industry Recognized Apprenticeship Regulations fall short of standards to which we hold Registered Apprenticeship, but could still be valuable workforce programs

On March 10^th, the U.S. Department of Labor (DOL) released final regulations on the roles and responsibilities of newly created Standards Recognition Entities (SREs) as an effort to implement a new Industry Recognized Apprenticeship system. Under the rule, SREs are nongovernmental entities who will have oversight role for ensuring Industry Recognized Apprenticeship Programs (IRAPs) meet quality standards defined within the regulatory language. SREs will stand in a role similar to that DOL and State Apprenticeship Agencies (SAAs) play in the registered system, and IRAPs are intended to operate parallel to registered apprenticeships – sharing the goal of helping workers access industry-recognized credentials while learning on the job and meeting industry demand for skills, but removing DOL from the role of validating individual program components and practices.

The regulations define IRAPs as “high-quality apprenticeship programs, wherein an individual obtains workplace-relevant knowledge and progressively advancing skills, that include a paid-work component and an educational or instructional component and that result in an industry-recognized credential” and additional analysis, below, details the rule’s distinctions between IRAPs and registered programs.

When evaluated as on-the-job learning programs, IRAPs stand to offer opportunity to workers to access industry driven credentials while earning a wage and to support business engagement for training workers. When evaluated next to the standards to which DOL holds registered programs, however, IRAPs are provided significant flexibility in program structure, wage progression, oversight and interaction with the public workforce system that seem counterproductive to protecting workers or meeting industry demand.

What is in the final rule

The final rule includes regulations on the process for becoming an SRE, the oversight and support role of SREs to the programs they recognize, required structure of IRAPs and incorporates several recommendations made by National Skills Coalition and our national partners. It also, however, fails to require several hallmarks of the registered program – including wage increases commensurate with skills gains, alignment with other state oversight of nondegree credentials, and robust equal employment opportunity provisions.

Registered apprenticeship – and now the newly created Industry Recognized Apprenticeship Programs – are governed by the National Apprenticeship Act (NAA), a six-paragraph piece of legislation that has been subject to only minimal Congressional updates over the past eighty years. Instead of through Congressional reauthorization, much of the policy and practice of apprenticeship in the U.S. is regulated through agency rulemaking.

The final rule updates those regulations, splitting them into subpart A (substantively the same as current regulations covering registered apprenticeship programs) and subpart B (creating and governing Standards Recognition Entities who will have oversight of Industry Recognized Apprenticeship Programs).

In creating SREs, the Department’s stated goal was to provide “additional flexibility necessary to scale the apprenticeship model into new industries and to address the diverse workforce needs of different industries and occupations.” This goal serves as the foundation of key differences between IRAPs and registered programs, including an exclusion in the final rule prohibiting SREs from recognizing IRAPs in the construction industry.

This carve out was absent in the draft regulations released last year, and the subject of a massive campaign by the building trades unions in responding to those draft regulations. According to proponents of the construction industry exclusion, and the Department in their justification of excluding construction in the final IRAP rule, the fact that the majority of U.S. apprenticeships are in the construction industry is evidence the model is effective for the industry and that expanding IRAPs to construction is not necessary to meet the goal of expanding apprenticeships in the U.S.

The regulations included a severability clause, allowing the remainder of the final rule to be implemented even if the exclusion of the construction industry is subject to legal action that would delay it being implemented.

Establishing Standards Recognition Entities (SRE)

The regulations detail who is eligible to become an SRE, including business associations, local agencies, educational institutions, community-based organizations, unions, labor management partnerships or a consortium of those entities. To qualify, entities must show expertise in an industry necessary to evaluate training, structure and curricula of programs and capacity to assess program quality, defined as ensuring programs meet the definition of industry recognized programs offered below. SREs would be recognized for five years.

This section of the final regs contains few significant changes from the proposed rule, but the department adds additional language around removing conflicts of interest between SREs and the IRAPs they recognize and a new requirement that SREs ensure IRAPs maintain an apprenticeship agreement with each apprentice in its program.

Between the release of the final rule and its implementation on May 11^th, DOL anticipates conducting technical assistance with entities who are interested in applying to be an SRE to prepare them to apply for recognition.

SRE oversight of IRAPs

SREs are tasked with ensuring IRAPs under their recognition train apprentices for jobs that require specialized knowledge, language that is similar to, but not quite as restrictive as the language governing registered programs. SREs must also ensure programs have a written apprenticeship plan, that apprentices receive credit for prior knowledge, if relevant, and lead to industry-recognized credentials. SREs also must ensure programs provide workers safe work environments, access to mentoring, adherence to EEO laws.

Integration of NSC comments into the final rule

The final regulations offer several updates to a draft version of the rule released last summer, including accepting and acknowledging many of the comments NSC submitted both individually and with a group of other national organizations. These updates include:

• Improved transparency of the credentials apprentices will earn in programs and the process for earning them. The final rule requires IRAPs to have training plans and apprenticeship agreements with each participant. This responds to NSC’s recommendations that programs need to offer transparency to workers and businesses on industry credentials workers will earn and how they will do so. This transparency is critical to workers being informed about the impact of their programs and to ensuring programs meet industry demand. This transparency is a step towards ensuring businesses utilizing IRAPs have clarity and understanding about the programs run for and by them and will level the playing field for competitors in a local area. Transparency is also critical for workers’ ability to align their own career and education goals within opportunities of training programs.
• Improved reporting and performance measures for programs, including the requirement that SREs both report on attainment of industry-recognized credentials and apprentices’ average earnings and make this information publicly available. This change responds to NSC comments urging DOL to publicly share a list of all SREs and to include the information on program employment outcomes at 2^nd and 4^th quarter after program completion, attainment of industry-recognized credentials, and post-program wages. This publicly available information helps map credential attainment and measure outcomes of IRAPs comparatively to how we measure other workforce programs. NSC urged the department to disaggregate the data collected on each of these measures, but the narrative and regulations do not address this comment. At the same time, the final rule does not establish a system for reporting and publicizing this data. NSC encourages DOL to release guidance on how SREs will be required to make this data regularly and publicly available to businesses and workers.

Even with these changes, however, when compared to the quality standards and processes required of registered apprenticeship programs, the final rule creates seemingly unnecessary distinctions between the two types of apprenticeship. Some of these challenges include:

• IRAPs are not required to provide workers with guaranteed wage increases commensurate with skills gains, a hallmark of the registered apprenticeship system and a key retention tool for businesses running programs. NSC submitted comments that urged DOL to update the definition of IRAPs to include clearly defined wage structures with increase commensurate with skills gains or credential attainment. NSC urges DOL to issue guidance and provide SREs with technical assistance on best practices for providing apprentices with wage increases commensurate with skills gains or credential attainment, including the business justification for doing so.
• The final rules do not adequately map out the role of states in administering workforce programs within their borders. Unlike most other training or education programming – like that run with federal WIOA, Higher Education Act or Career and Technical Education funding – the final rule does not include a required role for the state in oversight or approval of programs. Several of NSC’s state agency partners highlighted a concern that without an explicit role for the state, programs stood to be disjointed from each other and disconnected from the larger state plan and priorities for addressing worker and business skill needs. NSC urges the department to issue guidance, prior to the implementation of the final rules, that provide state agencies, including but not limited to State Apprenticeship Agencies, with information on how to best support high quality programs in their state.
• The regulations would not apply the Equal Employment Opportunity (EEO) protections applied to registered programs to IRAPs. The rule also does not require SREs to disaggregate data on participation and completion rates to evaluate how well programs serve women, people of color and people with disabilities, along with other workers underrepresented in apprenticeship programs. The final rule, like the draft rule, seems to conflate state and federal EEO laws with the standard of outreach and retention efforts required of registered apprenticeship programs. Under the regulations governing registered programs, those with more than 5 apprentices are required to do analysis of workers available in their local area and evaluate the demographic composition of their program against available workers. Programs that are not representative of their local area are then tasked with targeted outreach and retention efforts to expand the pool of workers who have access to – and success in – registered programs. These outreach and retention efforts are separate from EEO laws that govern harassment on the job, and are intended – in addition to protecting the welfare of apprentices – to ensure businesses have access to the broadest pipeline of potential workers. Given the overwhelming mismatch between skills workers can access and those businesses need, it seems inefficient and contrary to supporting business expansion of apprenticeship to not require those running IRAPs to adhere to these established best practices. The regulations governing EEO in registered programs were last updated in 2015 and are still being fully implemented. NSC strongly encourages DOL to issue guidance connecting SREs to those processes as applied to registered programs.

Congressional Context for the Final Rule

This final rule comes in the context of increasingly partisan conversations about how to modernize apprenticeship in the U.S., based on bipartisan support for the strategy but differing plans for how to expand it. Democrats on the Hill are, largely, defenders of the registered process – and associated modernization that system would require to address workforce needs in the 21^st century – while Republicans have increasingly dedicated attention to the capacity of this new IRAP model to scale apprenticeship. At the same time, there are several bipartisan efforts among members of Congress to expand both registered apprenticeship and work-based learning programs and Congress has increased appropriations over the past 5 years to support registered apprenticeship.

While the issue is not completely polarized, these final regulations and any appropriations to support their implementation is likely a nonstarter with Congressional Democrats. House Education and Labor Subcommittee on Workforce and Higher Education Chair, Susan Davis (D-CA), released a discussion draft of a bill to expand registered apprenticeship earlier in March, the product of bipartisan negotiations. Republicans have since stepped away from negotiations on the bill, however, in part because it did not include provisions on Industry Recognized Apprenticeship Programs. Without bipartisan agreement in the House, the bill is unlikely to see progress in the Senate both because of similar resistance from Republicans to excluding IRAPs and because the HELP Committee has made Higher Education Act (HEA) reauthorization a priority. With an already shortened Congressional calendar in an election year and HELP Committee Chairman Alexander (R-TN) poised to retire at the end of 2020, the committee’s bandwidth will likely focus first on HEA, leaving insufficient time to negotiate a bipartisan apprenticeship expansion.