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White House to Launch Industry Apprenticeship Rule Next Week (1)

March 6, 2020, 2:56 PMUpdated: March 6, 2020, 4:10 PM

The White House is ready to roll out a final rule designed to expand apprenticeship programs by giving industry more oversight of the job-training process, a pivotal element of the Trump administration’s effort to bolster workers’ skills in high-growth sectors.

The Labor Department’s final rule to establish Industry-Recognized Apprenticeship Programs will be unveiled March 10 during an event in Ohio featuring President Donald Trump’s daughter and senior adviser Ivanka Trump, sources briefed on the tentative plans told Bloomberg Law. Businesses and industry groups will be able to effectively self-certify that apprenticeships offered under the IRAP model meet the requirements for federal assistance once the regulation goes into effect, according to an advanced copy of the final rule.

“The Department does not comment on active rulemaking,” a DOL spokeswoman told Bloomberg Law.

The regulation seeks to expand the Labor Department’s earn-as-you-learn job-training model by shifting oversight and credentialing authority to industry groups under the IRAP system. Employers in booming sectors like health care, advanced manufacturing, and information technology will be given more control over identifying the skills and standards that best serve their industries.

The IRAP system will supplement the department’s registered apprenticeship programs, which have been in place since the New Deal era. Democratic lawmakers and other workforce development advocates argue the new model will undermine the registered system by authorizing less rigorous, untested training that lacks the proper wage and safety standards for workers.

The final rule sets up a process for third-party groups, such as trade associations, to become “standards recognition entities,” which will have authority to certify that apprenticeship programs meet certain requirements.

Congress has yet to provide funding specifically for the new system, but the Labor Department has said it plans to draw on immigration visa fees and other sources to support IRAPs.

The regulation, which has been slowed by personnel changes and spending questions, implements a 2017 executive order from President Donald Trump. It is slated to take effect 30 days after being published in the Federal Register, which would be mid-April if it is released next week as planned.

The DOL under new Labor Secretary Eugene Scalia is using the regulation to address concerns from businesses that they lack skilled job applicants and that the existing government-run apprenticeship system’s bureaucratic red tape prevents many employers from participating.

Construction Left Out

The regulation excludes the construction industry from participating in IRAPs, a provision that was previously the subject of Trump administration infighting. Builders will instead be able to continue offering registered apprenticeships through decades-old training programs co-run with trade unions.

The department signaled it expects that move to be challenged in court, possibly by construction industry groups that have been pushing to get the industry involved in IRAPs. The new rule includes a severability clause, stating that the rest of the regulation will remain in effect if one portion is invalidated by court ruling. That would allow the construction industry to bring a legal challenge that asks a judge to lift the exemption without stopping IRAPs altogether.

Building trades unions, which have been more supportive of the president than the more liberal wing of organized labor, mounted a vocal campaign last year to warn their blue-collar members that the administration could let builders participate in the IRAP model. They argued that giving builders entrée to IRAPs would weaken organized labor’s talent pipeline under the registered apprenticeship process.

The department made a number of updates to a proposed version of the rule, responding to certain concerns aired when the regulation was initially unveiled last year.

New provisions that weren’t in the initial proposal include disallowing groups from becoming a standards recognition entity if they’ve been suspended or debarred from conducting business with the government. The final rule also requires standards recognition entities to conduct periodic compliance reviews of IRAPs, a move meant to strengthen oversight.

The rule does not address how the programs will be funded, stating that the regulation itself isn’t “the appropriate vehicle for such discussion.” However, funding uncertainties have clouded the initiative for several years.

The DOL recently announced $100 million in grants to support expansion of apprenticeship programs, including IRAPs, but Congress has yet to appropriate a single dollar to Trump’s project.

Funding problems extend further. House Democrats and the DOL’s internal watchdog are investigating whether the agency violated federal appropriations law by steering funds Congress authorized for registered apprenticeships to contractors who did work to advance the IRAP model. The department acknowledged it misspent $1.1 million, but says it corrected the problem. Some Democratic critics on Capitol Hill believe the DOL underestimated the amount of funds that were misspent.

(Updated to include information about when the rule will take effect.)

To contact the reporter on this story: Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editors responsible for this story: Chris Opfer at copfer@bloomberglaw.com; John Lauinger at jlauinger@bloomberglaw.com