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Proposed Rule2022-19002

Workforce Innovation and Opportunity Act Effectiveness in Serving Employers Performance Indicator

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Published

September 14, 2022

Issuing agencies

Labor DepartmentEmployment and Training AdministrationEducation Department

Abstract

The Workforce Innovation and Opportunity Act (WIOA) establishes six primary indicators of performance. Currently, the regulations contain definitions for five of the six performance indicators. However, in the final rule implementing WIOA, the U.S. Departments of Labor and Education (the Departments) indicated that they would initially implement the sixth indicator of performance-- effectiveness in serving employers--in the form of a pilot program to test the feasibility and rigor of the three proposed approaches. With the pilot completed, the Departments are engaging in this rulemaking that proposes to define in a standardized way the performance indicator for effectiveness in serving employers for the regulations implementing the jointly administered requirements governing WIOA's six core programs.

Full Text

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<title>Federal Register, Volume 87 Issue 177 (Wednesday, September 14, 2022)</title>
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[Federal Register Volume 87, Number 177 (Wednesday, September 14, 2022)]
[Proposed Rules]
[Pages 56318-56340]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-19002]

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DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Part 677

[Docket No. ETA-2022-0006]
RIN 1205-AC01

DEPARTMENT OF EDUCATION

34 CFR Parts 361 and 463

RIN 1830-AA32

Workforce Innovation and Opportunity Act Effectiveness in Serving
Employers Performance Indicator

AGENCY: Office of Career, Technical, and Adult Education (OCTAE),
Rehabilitation Services Administration (RSA), Education; Employment and
Training Administration (ETA), Labor.

ACTION: Joint proposed rule.

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SUMMARY: The Workforce Innovation and Opportunity Act (WIOA)
establishes six primary indicators of performance. Currently, the
regulations contain definitions for five of the six performance
indicators. However, in the final rule implementing WIOA, the U.S.
Departments of Labor and Education (the Departments) indicated that
they

[[Page 56319]]

would initially implement the sixth indicator of performance--
effectiveness in serving employers--in the form of a pilot program to
test the feasibility and rigor of the three proposed approaches. With
the pilot completed, the Departments are engaging in this rulemaking
that proposes to define in a standardized way the performance indicator
for effectiveness in serving employers for the regulations implementing
the jointly administered requirements governing WIOA's six core
programs.

DATES: Interested persons are invited to submit written comments on the
proposed rule on or before November 14, 2022.

ADDRESSES: You may submit comments, identified by Docket No. ETA-2022-
0006 and Regulatory Identification Number (RIN) 1205-AC01, through the
Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Search for the
above-referenced RIN, open the proposed rule, and follow the on-screen
instructions for submitting comments.
Instructions: All submissions received must include the agency name
and docket number for this rulemaking or ``RIN 1205-AC01.'' Because of
the narrow scope of this proposed regulation, the Departments encourage
commenters to submit, and the Departments will consider, comments
regarding the definition of the effectiveness in serving employers
performance indicator and the indicator's use in determining if
sanctions are necessary for failure to achieve adjusted levels of
performance as set forth herein. The proposed amendments are limited to
the sections of the regulations detailed in this rulemaking.
Please be advised that the Departments will post all comments
received that relate to this notice of proposed rulemaking (NPRM)
without changes to <a href="https://www.regulations.gov">https://www.regulations.gov</a>, including any personal
information provided. The <a href="https://www.regulations.gov">https://www.regulations.gov</a> website is the
Federal eRulemaking Portal and all comments posted there are available
and accessible to the public. Therefore, the Departments recommend that
commenters remove personal information (either about themselves or
others), such as Social Security numbers, personal addresses, telephone
numbers, and email addresses included in their comments, as such
information may become easily available to the public via the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website. The responsibility to safeguard personal
information remains with the commenter.
Docket: For access to the docket to read background documents or
comments received, go to <a href="https://www.regulations.gov">https://www.regulations.gov</a> (search using RIN
1205-AC01 or Docket No. ETA-2022-0006).
Comments under the Paperwork Reduction Act of 1995 (PRA): In
addition to filing comments on any aspect of this proposed rule with
the Departments, interested parties may submit comments that concern
the information collection (IC) aspects of this NPRM to the Office of
Information and Regulatory Affairs (OIRA) at <a href="https://www.reginfo.gov/public/do/PRAMain">https://www.reginfo.gov/public/do/PRAMain</a>. Find the relevant information collection by
selecting ``Currently under Review--Open for Public Comments'' or by
using the search function.

FOR FURTHER INFORMATION CONTACT:
U.S. Department of Labor: Heidi Casta, Acting Administrator, Office
of Policy Development and Research, U.S. Department of Labor,
Employment and Training Administration, 200 Constitution Avenue NW,
Room N-5641, Washington, DC 20210, Telephone: (202) 693-3700 (voice)
(this is not a toll-free number), 1-877-872-5627, or 1-800-326-2577
(telecommunications device for the deaf).
U.S. Department of Education: Braden Goetz, Director of Policy,
Planning and Research, U.S. Department of Education, OCTAE, 400
Maryland Avenue SW, PCP, Washington, DC 20202-7240, Telephone: (202)
245-7405; or Jessica Hawes, WIOA Team Coordinator, Office of Special
Education and Rehabilitative Services, U.S. Department of Education,
RSA, 400 Maryland Avenue SW, PCP, Washington, DC 20202-2800, Telephone:
(202) 245-8232.

SUPPLEMENTARY INFORMATION:

Preamble Table of Contents

I. Rulemaking Authority and Background
II. Effectiveness in Serving Employers Performance Indicator for
Workforce Innovation and Opportunity Act Core Programs
A. Pilot Programs for Workforce Innovation and Opportunity Act
Core Programs
B. Proposed Changes to Sec. 677.155
C. Adjusted Levels of Performance for Workforce Innovation and
Opportunity Act Core Programs--Proposed Changes to Sec. 677.190
III. Regulatory Analysis and Review
A. Executive Orders 12866 (Regulatory Planning and Review) and
13563 (Improving Regulation and Regulatory Review)
B. Regulatory Flexibility Act, Small Business Regulatory
Enforcement Fairness Act, and Executive Order 13272 (Proper
Consideration of Small Entities in Agency Rulemaking)
C. Paperwork Reduction Act of 1995
D. Executive Order 13132 (Federalism)
E. Unfunded Mandates Reform Act of 1995
F. Executive Order 13175 (Indian Tribal Governments)

Acronyms and Abbreviations

AEFLA Adult Education and Family Literacy Act
BLS Bureau of Labor Statistics
CFR Code of Federal Regulations
Departments U.S. Departments of Labor and Education
DOL U.S. Department of Labor
E.O. Executive Order
ES Employment Service
ETA Employment and Training Administration
FR Federal Register
ICR Information Collection Request
INA Indian and Native American
NAICS North American Industry Classification System
NPRM or proposed rule Notice of proposed rulemaking
OCTAE Office of Career, Technical, and Adult Education
OIRA Office of Information and Regulatory Affairs
OMB Office of Management and Budget
PIRL Participant Individual Record Layout
PRA Paperwork Reduction Act of 1995
Pub. L. Public Law
PY Program Year
QCEW Quarterly Census of Employment and Wages
RFA Regulatory Flexibility Act
RIA Regulatory impact analysis
RIN Regulation Identifier Number
RSA Rehabilitation Services Administration
SBA U.S. Small Business Administration
Stat. United States Statutes at Large
TAC Technical Assistance Circular
TEGL Training and Employment Guidance Letter
UMRA Unfunded Mandates Reform Act
U.S.C. United States Code
VR Vocational Rehabilitation
WDB Workforce Development Board
WIOA Workforce Innovation and Opportunity Act

I. Rulemaking Authority and Background

President Barack Obama signed WIOA into law on July 22, 2014. WIOA,
the first legislative reform of the public workforce system in more
than 15 years, superseded titles I and II of the Workforce Investment
Act of 1998 and amended the Wagner-Peyser Act and the Rehabilitation
Act of 1973 (Rehabilitation Act). WIOA reaffirmed the role of the
customer-focused one-stop delivery system, a cornerstone of the public
workforce system, and enhanced and increased coordination among several
key employment, education, and training programs. In WIOA, Congress
directed the Departments to issue regulations implementing statutory
requirements to

[[Page 56320]]

ensure that the public workforce system operates as a comprehensive,
integrated, and streamlined system to provide pathways to prosperity
and continuously improve the quality and performance of its services to
job seekers and to employers.
WIOA sec. 116 establishes the performance indicators and
performance reporting requirements to assess the effectiveness of the
WIOA six core programs (sec. 116(b)(3)(A)(ii)) in serving WIOA
customers (i.e., participants, other job seekers, and employers).\1\
The core programs are the adult, dislocated worker, and youth programs
under title I of WIOA; the Adult Education and Family Literacy Act
(AEFLA) program under title II; the Employment Service (ES) program
authorized under the Wagner-Peyser Act as amended by WIOA title III;
and the Vocational Rehabilitation (VR) program authorized under title I
of the Rehabilitation Act as amended by WIOA title IV.
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\1\ Section 116(b)(2)(A) of WIOA states the primary indicators
of performance: (1) the percentage of participants who are employed
during the second and (2) fourth quarters after exit from the
program, (3) the median earnings of participants who are employed
during the second quarter after exit, (4) the percentage of
participants who obtain a recognized postsecondary credential during
the program or within 1 year of exit, (5) the percentage of
participants who achieve measurable skill gains during a program
year, and (6) ``indicators of effectiveness in serving employers.''
This last indicator is the subject of this NPRM. Definitions of the
others were included in the WIOA regulations promulgated in August
2016 (81 FR 55791; see 20 CFR 677.155, 34 CFR 361.155, 34 CFR
463.155).
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In the 2016 Joint WIOA Final Rule,\2\ the Departments initiated a
phased approach to defining the effectiveness in serving employers
performance indicator, which included a pilot study to explore
different possible definitions of this performance measure. This
proposed rulemaking is necessary to complete implementation of the
performance accountability requirements as discussed in the Joint WIOA
Final Rule and required by statute.
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\2\ Workforce Innovation and Opportunity Act; Joint Rule for
Unified and Combined State Plans, Performance Accountability, and
the One-Stop System Joint Provisions; Final Rule, 81 FR 55792 (Aug.
19, 2016) (hereinafter ``Joint WIOA Final Rule'').
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Currently, 20 CFR 677.155(a)(1)(vi) and 34 CFR 361.155(a)(1)(vi)
and 463.155(a)(1)(vi) implement the effectiveness in serving employers
performance indicator as described in sec. 116(b)(2)(A)(i)(VI) of WIOA,
subject to sec. 116(b)(2)(A)(iv), which requires the Secretaries of
Labor and Education to jointly develop and establish the performance
indicator, after consultation with representatives of State and local
governments, business and industry, and other interested parties.
In developing the Joint WIOA Final Rule, the Departments consulted
with stakeholders and considered public comments through the Joint WIOA
NPRM \3\ and the WIOA Joint Performance Information Collection Request
(ICR) (Office of Management and Budget (OMB) Control Number 1205-0526)
on three proposed approaches to defining the performance indicator. In
the Joint WIOA Final Rule, the Departments acknowledged the
dissatisfaction expressed by commenters with using any Joint WIOA NPRM
proposed approaches as a sole indicator of successful service to
employers and agreed with comments discussing the utility of piloting
multiple alternative measures to ensure that States are required to
report on employer satisfaction in the most effective manner. As such,
the Departments stated they would work to implement a pilot program,
the details of which would be further delineated in joint Departmental
guidance (81 FR at 55846).
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\3\ Workforce Innovation and Opportunity Act; Joint Rule for
Unified and Combined State Plans, Performance Accountability, and
the One-Stop System Joint Provisions; Notice of Proposed Rulemaking,
80 FR 20689 (Apr. 15, 2015) (hereinafter ``Joint WIOA NPRM'').
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After considering all input, the Departments implemented a pilot to
test the rigor and feasibility of the proposed approaches to inform the
development of a standard definition of the effectiveness in serving
employers performance indicator. The pilot tested all three approaches
described by the Departments in the Joint WIOA NPRM and Final Rule,
with the intent of assessing each approach for its efficacy in
measuring effectiveness in serving employers. The Departments included
these approaches in the WIOA Joint Performance ICR and required each
State to report on any two of the three approaches set out in the Joint
WIOA Final Rule, as well as any additional measure a State established
related to services to employers.\4\ This approach provided States with
flexibility in selecting the approaches to the effectiveness in serving
employers performance indicator that best suited their needs, while
providing the Departments the opportunity to evaluate States'
experiences in using these measures from Program Year (PY) 2016 through
PY 2020. This approach also allowed the Departments to obtain employer
feedback regarding the extent to which these different approaches
indicate effectiveness in serving employers. On behalf of the
Departments, DOL commissioned an examination of State experiences with
the various approaches through a third-party contractor and the
Departments used the results of that study to help inform the
Departments' analysis of which definition of the effectiveness in
serving employers performance indicator to implement.
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\4\ Governors had the option to establish and report on a third
State-specific approach for measuring effectiveness in serving
employers, in addition to two of the three Departmental pilot
approaches selected by the State.
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II. Effectiveness in Serving Employers Performance Indicator for
Workforce Innovation and Opportunity Act Core Programs

Because of the narrow scope of this proposed regulation, the
Departments encourage commenters to submit, and the Departments will
consider, comments regarding the definition of the effectiveness in
serving employers performance indicator and the indicator's use in
determining if sanctions are necessary for failure to achieve adjusted
levels of performance as set forth herein. The proposed amendments are
limited to the sections of the regulations detailed in this rulemaking.
Comments on other provisions and aspects of the WIOA regulations,
whether promulgated jointly by the Departments or independently by each
agency, will be considered outside the scope of this rulemaking and
will not be considered by the Departments.
In the discussion of the proposed regulatory text changes below,
the heading references the DOL CFR part and section number. However,
the U.S. Department of Education has identical provisions at 34 CFR
part 361, subpart E (under its State VR program regulations) and at 34
CFR part 463, subpart I (under its AEFLA regulations). For purposes of
brevity, the discussion of proposed regulatory text changes below
appears only once--in conjunction with the DOL section number--and
constitutes the Departments' collective explanation of the change.
These changes to the joint performance regulations will appear in each
of the CFR parts identified in this paragraph when the regulations are
finalized and published in the CFR. In this preamble, the Departments
describe only the proposed substantive changes. However, for
transparency, the Departments note we propose only one purely technical
edit to the regulatory text, specifically the replacement of a
semicolon with a period at the end of

[[Page 56321]]

Sec. 166.190(c)(3) for grammatical correctness and consistency.

A. Pilot Programs for Workforce Innovation and Opportunity Act Core
Programs

The Departments reviewed annual report data \5\ for PY 2017 through
PY 2020 \6\ for each of the three approaches for measuring
effectiveness in serving employers with a focus on minimizing employer
burden and using information that would provide an accurate picture of
how well the public workforce system serves employers. Specifically,
States, under guidance from the Departments (hereinafter ``joint
guidance''), piloted the following definitions for the effectiveness in
serving employers performance indicator: \7\
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\5\ The indicator is reported on an annual basis; therefore, the
reporting period is the program year from July 1 through June 30.
\6\ ETA, ``Workforce Performance Results,'' <a href="https://www.dol.gov/agencies/eta/performance/results">https://www.dol.gov/agencies/eta/performance/results</a> (last visited Oct. 23, 2021); ETA,
``PY 2020 WIOA National Performance Summary,'' Feb. 28, 2022,
<a href="https://www.dol.gov/sites/dolgov/files/ETA/Performance/pdfs/PY%202020%20WIOA%20National%20Performance%20Summary.pdf">https://www.dol.gov/sites/dolgov/files/ETA/Performance/pdfs/PY%202020%20WIOA%20National%20Performance%20Summary.pdf</a> (last
visited Feb. 28, 2022).
\7\ The Departments issued joint guidance on December 19, 2016,
``Performance Accountability Guidance for Workforce Innovation and
Opportunity Act (WIOA) Title I, Title II, Title III, and Title IV
Core Programs'' (Training and Employment Guidance Letter [TEGL] No.
10-16, OCTAE Program Memorandum 17-2, and RSA Technical Assistance
Circular [TAC] 17-01), that described the pilot indicators for
effectiveness in serving employers. The Departments updated this
joint guidance in August 2017, with the issuance of a change to the
guidance and required States to submit the first report of annual
results using data collected during PY 2017 (July 1, 2017-June 30,
2018), meaning that States did not report any data for the pilot
study for purposes of PY 2016. However, due to the lag in Quarterly
Census of Employment and Wages data availability for the Retention
with the Same Employer and Repeat Business Customers approaches, the
initial results for the effectiveness in serving employers
performance indicator pilot were not available for reporting in the
WIOA annual report due October 16, 2017. As a result, States
reported their initial data in PY 2017. ETA, TEGL No. 10-16, Change
1, ``Performance Accountability Guidance for Workforce Innovation
and Opportunity Act (WIOA) Title I, Title II, Title III, and Title
IV Core Programs,'' Aug. 23, 2017, page 26, <a href="https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=3255">https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=3255</a>; U.S. Department of Education,
OCTAE Program Memorandum 17-2, ``Performance Accountability Guidance
for Workforce Innovation and Opportunity Act (WIOA) Title I, Title
II, Title III, and Title IV Core Programs,'' Aug. 23, 2017, page 23,
<a href="https://www2.ed.gov/about/offices/list/ovae/pi/AdultEd/octae-program-memo-17-2.pdf">https://www2.ed.gov/about/offices/list/ovae/pi/AdultEd/octae-program-memo-17-2.pdf</a>; U.S. Department of Education, RSA-TAC-17-01,
``Performance Accountability Guidance for Workforce Innovation and
Opportunity Act (WIOA) Title I, Title II, Title III, and Title IV
Core Programs,'' Aug. 17, 2017, page 23, <a href="https://rsa.ed.gov/sites/default/files/subregulatory/tac-17-01.pdf">https://rsa.ed.gov/sites/default/files/subregulatory/tac-17-01.pdf</a>.
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<bullet> Retention with the Same Employer: Percentage of
participants with wage records who exit from WIOA core programs and
were employed by the same employer in the second and fourth quarters
after exit.
<bullet> Repeat Business Customer: Percentage of employers who have
used WIOA core program services more than once during the last three
reporting periods.
<bullet> Employer Penetration: Percentage of employers using WIOA
core program services out of all employers in the State.
During the pilot, the Departments determined that the effectiveness
in serving employers performance indicator should be a shared outcome
across all six core programs within each State (i.e., meaning that one
program would report on behalf of all six core programs in the State),
rather than reported separately by each of the six core programs. In
the joint guidance for the pilot, the Departments recommended that
States centralize the coordination of data collection and reporting
into a single agency and select one core program to report the data
statewide, representing all six core programs, on an annual basis.\8\
This recommendation promoted coordination at the State level and
encouraged a holistic approach to serving employers.
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\8\ ETA, TEGL No. 10-16, Change 1, page 26; U.S. Department of
Education, OCTAE Program Memorandum 17-2, page 23; U.S. Department
of Education, RSA-TAC-17-01, page 23.
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The pilot began during PY 2016 and continued through PY 2021. For
PY 2020--the most recent data available--the piloted approaches for the
effectiveness in serving employers performance indicator provided the
following performance results: \9\
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\9\ The most current public workforce system performance
accountability data can be found on ETA's website. ETA, ``Workforce
Performance Results,'' <a href="https://www.dol.gov/agencies/eta/performance/results">https://www.dol.gov/agencies/eta/performance/results</a> (last visited Feb. 28, 2022). See ETA, ``PY 2020 WIOA
National Performance Summary,'' Feb. 28, 2022, page 9, <a href="https://www.dol.gov/sites/dolgov/files/ETA/Performance/pdfs/PY%202020%20WIOA%20National%20Performance%20Summary.pdf">https://www.dol.gov/sites/dolgov/files/ETA/Performance/pdfs/PY%202020%20WIOA%20National%20Performance%20Summary.pdf</a>.
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<bullet> Retention with the Same Employer PY 2020 Rate: 54 percent
(36 States reported effectiveness in serving employers performance
using this definition);
<bullet> Repeat Business Customer PY 2020 Rate: 35 percent (47
States reported using this definition); and
<bullet> Employer Penetration PY 2020 Rate: 8 percent (44 States
reported using this definition).
Exhibit 1 summarizes this information and provides further detail
about the calculation methodology used to determine the outcome rate
for the three approaches.

Exhibit 1--Pilot Definition Outcomes for Program Year 2020
----------------------------------------------------------------------------------------------------------------
Number of
Performance states
Pilot definition outcome Pilot definition calculation reporting
national rate methodology * outcomes for
(%) definition
----------------------------------------------------------------------------------------------------------------
Retention with the Same Employer........... 54 The number of participants with 36
wage records who exit during the
reporting period and were employed
by the same employer during the
second quarter after exit and the
fourth quarter after exit DIVIDED
by the number of participants with
wage records who exit and were
employed during the second quarter
after exit.
Repeat Business Customer................... 35 The total number of establishments, 47
as defined by Bureau of Labor
Statistics (BLS) Quarterly Census
of Employment and Wages (QCEW)
program, served during the current
reporting period (i.e., one
program year) and that during the
prior three reporting periods have
used core program services more
than once DIVIDED by the number of
establishments, as defined by BLS
QCEW, served during the current
reporting period.

[[Page 56322]]

Employer Penetration Rate.................. 8 The total number of establishments, 44
as defined by the BLS QCEW
program, that received a service
or, if it is an ongoing activity,
are continuing to receive a
service or other assistance during
the reporting period DIVIDED by
the total number of
establishments, as defined by BLS
QCEW. This measure is a unique
count of employers using WIOA core
programs. If an establishment
receives, or continues to receive,
more than one service during the
reporting period (i.e., during the
program year), that establishment
should be counted only once in
this calculation.
----------------------------------------------------------------------------------------------------------------
* As described in the joint guidance issued by the Departments.

Throughout the pilot period, only one State reported on a State-
specific approach to the effectiveness in serving employers performance
indicator.\10\ However, this State-specific approach may not be
replicable across other States and does not reflect the effectiveness
of serving employers across all six core programs because the State
only applied it to the title III Wagner-Peyser Act ES program.\11\
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\10\ See Shayne Spaulding, Burt Barnow, Amanda Briggs, John
Trutko, Alex Trutko, and Ian Hecker, ``Measuring the Effectiveness
of Services to Employers: Options for Performance Measures under the
Workforce Innovation and Opportunity Act,'' Jan. 2021, Chapter 5
(Alternative Measures and Data Sources), <a href="https://wdr.doleta.gov/research/FullText_Documents/ETAOP2021-17%20Measures%20of%20Effectiveness%20in%20Serving%20Employers_Final%20Report.pdf">https://wdr.doleta.gov/research/FullText_Documents/ETAOP2021-17%20Measures%20of%20Effectiveness%20in%20Serving%20Employers_Final%20Report.pdf</a>.
\11\ One State reported a State-specific approach to measuring
effectiveness in serving employers, which the State called ``Active
Job Orders with Referrals.'' This measure is explained in the
State's PY 2019 WIOA Annual Statewide Performance Report Narrative,
which can be accessed at <a href="https://www.dol.gov/sites/dolgov/files/eta/performance/pdfs/PY2019/PA_PY19%20WIOA%20Annual%20Report%20Narrative.pdf">https://www.dol.gov/sites/dolgov/files/eta/performance/pdfs/PY2019/PA_PY19%20WIOA%20Annual%20Report%20Narrative.pdf</a> (last visited Jan.
27, 2022).
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The Departments assessed the pilot through a Department of Labor
contract that resulted in a final report titled Measuring the
Effectiveness of Services to Employers: Options for Performance
Measures under the Workforce Innovation and Opportunity Act.\12\
Specifically, the study assessed each approach to defining the
effectiveness in serving employers performance indicator for validity,
reliability, practicality, and unintended consequences.\13\ Though the
study did not definitively recommend one approach, in assessing the
study's findings for each of the three approaches of the effectiveness
in serving employers performance indicator, the Departments concluded
that the Retention with the Same Employer approach placed the least
amount of burden on States to implement, while also providing a valid
and reliable approach to measuring the indicator.
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\12\ S. Spaulding, et al., ``Measuring the Effectiveness of
Services to Employers: Options for Performance Measures under the
Workforce Innovation and Opportunity Act,'' Jan. 2021, <a href="https://wdr.doleta.gov/research/FullText_Documents/ETAOP2021-17%20Measures%20of%20Effectiveness%20in%20Serving%20Employers_Final%20Report.pdf">https://wdr.doleta.gov/research/FullText_Documents/ETAOP2021-17%20Measures%20of%20Effectiveness%20in%20Serving%20Employers_Final%20Report.pdf</a>.
\13\ See id. at 3-6 (stating that validity ``is used to assess
whether you are measuring what you intend to measure''; that
reliability ``refers to the ability to maintain consistency in data
collection over time and across organizations collecting the data'';
that practicality means that the measure ``must be relatively
uncomplicated and simple to administer to avoid threats to
reliability and validity'' and ``must be practical to use in
administrating programs''; and that unintended consequences are
``negative consequences or behaviors that result, like the
displacement of goals or conflict with other goals'').
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The study authors identified strengths for the Repeat Business
Customer approach, including that it serves as a proxy for employer
satisfaction. The study authors identified weaknesses in the Repeat
Business Customer approach, including that it: (1) may provide a
disincentive to reach out to new employers; (2) is subject to variation
in industry and sector economic conditions; and (3) may require a
statistical adjustment model to mitigate the weaknesses and improve
implementation and interpretation.\14\ The study authors identified
strengths for the Employer Penetration approach, including that the
dataset used for this measure is comprehensive, covering more than 95
percent of U.S. jobs. The study authors also identified weaknesses in
the Employer Penetration approach, including: (1) emphasis on quantity
rather than quality or intensity of the employer service provided; (2)
reliability issues associated with data entry and the process to count
unique establishments; (3) measurement of program output rather than
outcome; (4) potential for creation of perverse incentives to
prioritize program breadth rather than depth in service and delivery;
and (5) lack of sensitivity to industry sectors targeted by State and
local workforce agencies.\15\ The Departments considered the study's
findings and concurred with its conclusions on the Repeat Business
Customer approach and Employer Penetration approach. As noted above,
the study did not identify any significantly advantageous alternatives
to defining the effectiveness in serving employers performance
indicator outside of the three proposals (Executive Summary, pp. xx-
xxi). Nevertheless, the Departments identified the following advantages
regarding the Retention with the Same Employer definition of the
effectiveness in serving employers performance indicator:
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\14\ S. Spaulding, et al., ``Measuring the Effectiveness of
Services to Employers: Options for Performance Measures under the
Workforce Innovation and Opportunity Act,'' Jan. 2021, page 67,
<a href="https://wdr.doleta.gov/research/FullText_Documents/ETAOP2021-17%20Measures%20of%20Effectiveness%20in%20Serving%20Employers_Final%20Report.pdf">https://wdr.doleta.gov/research/FullText_Documents/ETAOP2021-17%20Measures%20of%20Effectiveness%20in%20Serving%20Employers_Final%20Report.pdf</a>.
\15\ S. Spaulding, et al., ``Measuring the Effectiveness of
Services to Employers: Options for Performance Measures under the
Workforce Innovation and Opportunity Act,'' Jan. 2021, page 68,
<a href="https://wdr.doleta.gov/research/FullText_Documents/ETAOP2021-17%20Measures%20of%20Effectiveness%20in%20Serving%20Employers_Final%20Report.pdf">https://wdr.doleta.gov/research/FullText_Documents/ETAOP2021-17%20Measures%20of%20Effectiveness%20in%20Serving%20Employers_Final%20Report.pdf</a>.
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<bullet> Demonstration of Effectiveness: Retention with the Same
Employer demonstrates a continued relationship between the employer and
participants who have exited WIOA programs. While many circumstances
affect an employer's retention of employees, an indication that an
employee maintains employment with the same employer in both the second
and fourth quarters after exiting from a WIOA program demonstrates a
level of success for

[[Page 56323]]

WIOA customers (i.e., successfully preparing participants to fill jobs
that meet employers' needs). Retention of an employee reduces the costs
to the employer associated with employee turnover and retraining. The
other two approaches are based only on employer data and fail to
capture any level of job match effectiveness.
<bullet> Stable Collection Mechanism: Retention with the Same
Employer uses data already collected in the WIOA Joint Performance ICR
(OMB Control Number 1205-0526). While not all States selected this
approach in the pilot, all States collect this information under the
existing WIOA Joint Performance ICR. In contrast, the Participant
Individual Record Layout (PIRL) in the WIOA Joint Performance ICR does
not currently collect data elements used for the Repeat Business
Customer and Employer Penetration approaches to the performance
indicator.
<bullet> Alignment with Employment Performance Indicators:
Retention with the Same Employer aligns with the performance indicators
for employment in the second and fourth quarters after exit, which are
existing performance indicators that all WIOA core programs already
report.
The Departments acknowledge that the limitations for Retention with
the Same Employer could include the unintended consequence that this
approach may be at odds with an employee seeking a higher paying job or
employment benefits, and the possibility that the performance outcome
for this indicator might not be the result of an employer receiving a
service from the workforce development system. The Departments seek
public comment on additional ways to mitigate potential unintended
consequences and downsides. However, notwithstanding these
considerations, the Departments have determined that the strengths of
this approach outweigh its limitations, as well as the disadvantages of
the other two approaches discussed above. Prioritizing these advantages
(i.e., stable data collection mechanism, alignment with other
employment performance indicators, and demonstrating maintained
relationships between employers and employees), the Departments have
determined Retention with the Same Employer is the preferred approach
of measuring effectiveness in serving employers. Performance on this
indicator, like the other performance indicators, would be affected by
fluctuating economic conditions. The Departments will use the
statistical adjustment model, as WIOA requires, to assess performance
affected by fluctuating economic conditions and participant
characteristics.
Of the three piloted approaches, Retention with the Same Employer
is the least burdensome for both States and employers, as noted in the
Joint WIOA Final Rule regulatory impact analysis (RIA) (81 FR at
55968). Retention with the Same Employer uses wage records to calculate
the measure. Wage records are the least burdensome records to use
because States already have these records for other WIOA-required
reporting, and they are the most standardized and statistically valid
records available. Because the records are the most standardized
records available, States would be able to coordinate data aggregation
for the six core programs more easily for Retention with the Same
Employer than they would for either Repeat Business Customer or
Employer Penetration.
While not all States selected the Retention with the Same Employer
indicator for the pilot, all States have the mechanism to collect this
information. Data for the Repeat Business Customer and Employer
Penetration Rate are collected and reported outside of the PIRL and
present obstacles for core programs in terms of data aggregation. As
noted above, the Retention with the Same Employer indicator is based on
wage records and is the only indicator of these three that collects
data through the OMB-approved ICR. As such, the data source for the
Retention with the Same Employer indicator is stable and is available
to all programs in all States. With respect to the Repeat Business
Customer and Employer Penetration indicators, States had to develop
data sources on an ad hoc basis; therefore, the data sources vary from
State to State using either of these other two indicators, making
comparisons less reliable for performance accountability purposes.
Because effectiveness in serving employers is a statewide indicator in
which one core program would report data on behalf of all six core
programs in the State, the Departments are giving heavy consideration
to the benefits of the data used to calculate this measure described
above.
In addition, the Departments note that Retention with the Same
Employer has the benefit of aligning with two of the three employment-
related performance indicators, specifically the employment in the 2nd
and 4th quarter after exit indicators that measure the employment
outcomes of program participants. As such, it promotes the statutory
purpose of WIOA, particularly that set forth in WIOA sec. 2(3): ``To
improve the quality and labor market relevance of workforce investment,
education, and economic development efforts . . . to provide America's
employers with the skilled workers the employers need to succeed in a
global economy.'' Using Retention with the Same Employer would measure
two levels of program effort--from the standpoint of the employer in
retaining an employee on a long-term basis and from the standpoint of a
State's efforts to help a participant obtain and maintain stable
employment.
After careful consideration of the information gained from the
States' reports on using the three piloted approaches and the pilot
study's findings, including the strengths and weaknesses described
above, the Departments are proposing to define the effectiveness in
serving employers performance indicator as Retention with the Same
Employer on a statewide level, as tested in the pilot. To encourage
programs to work together to serve employers using well-rounded
approaches, the Departments have determined this indicator would be
measured as a shared outcome across all core programs within each
State, rather than measured as an individual performance indicator
separately for each of the core programs. As such, the data would be
reported by one core program on behalf of all six core programs in the
State. This means that the indicator would include participant data
from all six core programs in the State to generate one overall State
indicator score. As such, this score assesses the State's workforce
development system as a whole in terms of its effectiveness in serving
employers. Finally, measuring a statewide effectiveness in serving
employers performance indicator at the individual program level would
be contrary to WIOA's efforts to streamline reporting across the core
programs, and this approach reduces the burden of collecting and
reporting data for effectiveness in serving employers on these
grantees.
This determination requires that changes be made to 20 CFR
677.155(a)(1)(vi) and (c)(6), 34 CFR 361.155(a)(1)(vi) and (c)(6), and
34 CFR 463.155(a)(1)(vi) and (c)(6). These proposed changes are
discussed in section II.B of this NPRM.
Section 116(b)(2)(A)(i)(VI) of WIOA applies the same effectiveness
in serving employers performance indicator to four non-core programs
DOL administers under WIOA title I.\16\ For consistency

[[Page 56324]]

and alignment across WIOA programs, in addition to all the reasons
discussed above, DOL proposes to incorporate this same definition for
the effectiveness in serving employers performance indicator into
regulations in a related rulemaking, DOL-Only Performance
Accountability NPRM (RIN 1205-AC08), published concurrently with this
NPRM elsewhere in the Federal Register.
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\16\ WIOA secs. 159(c), 166(h), 167(c)(3), and 171(f) direct the
Secretary of Labor to establish levels of performance for the
relevant primary indicators of performance in WIOA sec. 116(b)(2)(A)
for the Job Corps program, Indian and Native American programs, the
National Farmworker Jobs Program, and the YouthBuild program,
respectively.
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B. Proposed Changes to Sec. 677.155

Section 677.155 What are the primary indicators of performance under
the Workforce Innovation and Opportunity Act?
Section 677.155 sets forth the primary indicators that the
Departments use to evaluate the performance of WIOA's six core
programs, as required by WIOA sec. 116(b)(2)(A)(i). These primary
performance indicators apply to the adult, dislocated worker, and youth
programs, the AEFLA program, the Wagner-Peyser Act ES program, and the
VR program. These primary performance indicators create a common
language shared across the programs' performance measures, support
system alignment, enhance programmatic decision-making, and help
participants make informed decisions related to training. Paragraphs
677.155(a)(1)(vi) and (c)(6) implement the sixth statutory performance
indicator as described in sec. 116(b)(2)(A)(i)(VI) of WIOA, subject to
sec. 116(b)(2)(A)(iv), which requires the Departments to develop the
indicator after consultation with the stakeholders listed at sec.
116(b)(4)(B) and discussed above. This performance indicator measures
program effectiveness in serving employers.
For the reasons discussed above, the Departments propose to revise
Sec. 677.155(a)(1)(vi) to establish Retention with the Same Employer
as the standard definition for measuring effectiveness in serving
employers, the sixth performance indicator for all WIOA core programs.
The proposed regulation removes the title effectiveness in serving
employers \17\ and defines Retention with the Same Employer as the
percentage of participants with wage records who exited the program and
were employed by the same employer in the second and fourth quarters
after exiting the program. The proposed definition also clarifies that,
for the six WIOA core programs, the indicator is a statewide indicator
that is reported by one core program on behalf of all six core programs
in the State. Finally, the proposed definition references guidance to
signal to States that the Departments will provide additional details
and explanations for reporting on the effectiveness in serving
employers performance indicator in joint guidance. This reference to
guidance is consistent with other sections of the Departments' Joint
WIOA Performance Accountability regulations.
---------------------------------------------------------------------------

\17\ The regulations for definitions for the other WIOA
performance indicators do not include the names of the indicators;
they simply provide the definitions of the indicators. For
consistency with the regulations for the other indicators, proposed
Sec. 677.155(a)(1)(vi) removes the name of the effectiveness in
serving employer indicator and adds the definition.
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The Departments also propose to make corresponding changes to Sec.
677.155(c)(6) to define effectiveness in serving employers as Retention
with the Same Employer for the WIOA title I youth program.

C. Adjusted Levels of Performance for Workforce Innovation and
Opportunity Act Core Programs--Proposed Changes to Sec. 677.190

Sec. 677.190 When are sanctions applied for failure to achieve
adjusted levels of performance?
Currently, 20 CFR 677.190 details the circumstances under which
sanctions are applied when WIOA core programs fail to achieve adjusted
levels of performance. Paragraph (c) sets forth criteria the
Departments use to determine which States have met adjusted levels of
performance: (1) the overall State program score (Sec. 677.190(c)(1));
(2) the overall State indicator score (Sec. 677.190(c)(3)); and (3)
the individual indicator score (Sec. 677.190(c)(5)).
The Departments propose revising Sec. 677.190 to include the
effectiveness in serving employers performance indicator in the
criteria for determining if a State has failed to meet adjusted levels
of performance as part of the overall State indicator score. The
proposed revision would establish conforming language regarding the
assessment of effectiveness in serving employers as a statewide
performance indicator, as expressed in the Joint WIOA Final Rule, and
the definition for effectiveness in serving employers proposed in Sec.
677.155(a)(vi) and (c)(6).
As clarified and detailed in the Joint WIOA Final Rule preamble (81
FR at 55847) and joint guidance, the Departments conclude that the
collaborative nature of the indicator supports implementing the
effectiveness in serving employers performance indicator as a shared
measure across all core programs. WIOA sec. 116(b)(2)(A)(i)(VI)
requires assessing effectiveness in serving employers. Unlike the
statutory provisions describing the other primary indicators of
performance in sec. 116(b)(2)(A)(i), the statute does not describe
effectiveness in serving employers as based on individual participants'
outcomes. Based on this distinction, the Departments are proposing to
assess this indicator as a shared indicator across all core programs.
The Departments intend to encourage cross-program collaboration,
coordination, and a holistic approach to serving employers. To further
this collaborative approach, the Departments are requiring that this
performance indicator be reported by one core program on behalf of all
six core programs within each State.
As proposed, States would continue using the approach recommended
in the joint guidance and discussed above, in which one core program
reports the data statewide, on behalf of and representing all six core
programs, on an annual basis.
The proposed regulatory text for Sec. 677.190 clarifies that
effectiveness in serving employers is to be assessed as an overall
State indicator score and is excluded from the overall State program
score and the individual indicator score. Effectiveness in serving
employers is a statewide indicator shared across all core programs and
is assessed only as an overall State indicator score, and, therefore,
it cannot be attributed to any one program by itself (consequently, one
program is reporting on behalf of all six core programs in the State).
This is consistent with the holistic nature of the indicator.
Furthermore, establishing the effectiveness in serving employers
performance assessment as just one statewide indicator ensures that the
effectiveness in serving employers indicator does not have the
potential to be an outsized influence on the determination of a State's
performance success or failure, which could lead to the possible
application of sanctions. Because the indicator is a shared score,
there is only one score generated for this indicator. Therefore, if the
effectiveness in serving employers indicator were assessed as part of
each of the six overall State program scores, this same score would
repeat for each program in assessing the overall State program score,
despite not being attributable to each program as noted above, thereby
giving the indicator the potential to be an outsized influence in
assessing State performance.
To reflect the effectiveness in serving employers performance
indicator's status as a shared statewide indicator as

[[Page 56325]]

proposed in Sec. 677.155(a)(vi) and (c)(6), the Departments propose to
add language to Sec. 677.190(c)(3)(ii) stating that the overall State
indicator score for effectiveness in serving employers equals the
statewide percentage achieved of the statewide adjusted level of
performance. Although the Departments propose a definition for the
effectiveness in serving employers performance indicator, consistent
with how the Departments have implemented the provisions for the other
five performance indicators, the indicator would not be included in
sanctions determinations until the Departments collect a minimum of 2
years of performance data, develop a statistical adjustment model that
yields reliable estimates for the indicator, and negotiate performance
levels for the indicator. As explained in the Departments' jointly
issued guidance on February 6, 2020, the Departments will continue to
review how the negotiations process applies to the effectiveness in
serving employers indicator until at least 2 years of sufficient
baseline data are collected and then will provide additional guidance
regarding the process for negotiating this joint indicator.\18\ The
Departments propose changing Sec. 677.190(c)(1) to exclude the
effectiveness in serving employers performance indicator from the
calculation of an overall State program score, which compares a
program's results regarding the other primary indicators of performance
with the adjusted levels of performance for that program. As explained
above, the statewide and collaborative nature of the indicator cannot
be attributed to any one program by itself because it measures the
effectiveness of serving employers by the State's workforce development
system as a whole.
---------------------------------------------------------------------------

\18\ The Departments issued guidance on February 6, 2020, to
delineate the process for negotiating levels of performance and the
application of sanctions for the States outlined in sec. 116 of WIOA
and its implementing joint regulations. ETA, TEGL No. 11-19,
``Negotiations and Sanctions Guidance for the Workforce Innovation
and Opportunity Act (WIOA) Core Programs,'' Feb. 6, 2020, <a href="https://wdr.doleta.gov/directives/corr_doc.cfm?docn=3430">https://wdr.doleta.gov/directives/corr_doc.cfm?docn=3430</a>; U.S. Department of
Education, OCTAE Program Memorandum 20-2, ``Negotiations and
Sanctions Guidance for the Workforce Innovation and Opportunity Act
(WIOA) Core Programs,'' Feb. 6, 2020, <a href="https://www2.ed.gov/about/offices/list/ovae/pi/AdultEd/octae-program-memo-20-2.pdf">https://www2.ed.gov/about/offices/list/ovae/pi/AdultEd/octae-program-memo-20-2.pdf</a>; U.S.
Department of Education, RSA-TAC-20-02, ``Negotiations and Sanctions
Guidance for the Workforce Innovation and Opportunity Act (WIOA)
Core Programs,'' Feb. 6, 2020, <a href="https://www2.ed.gov/policy/speced/guid/rsa/subregulatory/tac-20-02.pdf">https://www2.ed.gov/policy/speced/guid/rsa/subregulatory/tac-20-02.pdf</a>.
---------------------------------------------------------------------------

The Departments propose to add two paragraphs to Sec.
677.190(c)(3) to ensure the effectiveness in serving employers
performance indicator's sole use as a shared statewide indicator. The
first proposed paragraph, Sec. 677.190(c)(3)(i), begins with language
currently found in Sec. 677.190(c)(3), which specifies that the
overall State indicator score is the average of the percentages
achieved of the adjusted levels of performance by all the core programs
on the performance indicator. The Departments propose to exclude the
effectiveness in serving employers performance indicator from this
calculation.
The second proposed paragraph, Sec. 677.190(c)(3)(ii), ensures the
statewide nature of the effectiveness in serving employers performance
indicator shared across all core programs and that it would be assessed
only as an overall State indicator score. Proposed Sec.
677.190(c)(3)(ii) would adopt in regulations the recommendation in the
joint guidance--that one core program report performance data for the
effectiveness in serving employers performance indicator on behalf of
all six core programs. In addition, proposed Sec. 677.190(c)(3)(ii)
specifies that the overall State indicator score for effectiveness in
serving employers is calculated as the statewide percentage achieved of
the statewide adjusted level of performance. Finally, proposed Sec.
677.190(c)(3)(ii) also references guidance to signal to States that the
Departments will provide additional details and explanations for
reporting on the effectiveness in serving employers performance
indicator in joint guidance. This reference to guidance is consistent
with other sections of the Departments' Joint WIOA Performance
Accountability regulations.
Therefore, all core programs would collect the necessary
information for this indicator and submit the information to one core
program. That core program would report the performance data to the
relevant Federal agency. This approach is consistent with current
practice under the joint guidance, whereby the State selects the core
program to receive the information and then report to the relevant
Federal agency. This reporting requirement differentiates this
indicator from the other five primary indicators of performance. The
performance outcomes for the other five primary indicators of
performance are reported by each core program to its respective Federal
agency.
For the other five primary indicators of performance, the overall
State indicator score is based on averages divided by the adjusted
level of performance, whereas for the effectiveness in serving
employers performance indicator, the overall State indicator score is
based on actual results divided by the adjusted level of performance.
Because effectiveness in serving employers is a statewide indicator,
there are no individual indicator scores to average for each core
program.
The Departments propose to revise paragraph (c)(5) to specify that
the Departments will not include the effectiveness in serving employers
performance indicator when calculating individual indicator scores.

III. Regulatory Analysis and Review

A. Executive Orders 12866 (Regulatory Planning and Review) and 13563
(Improving Regulation and Regulatory Review)

Under Executive Order (E.O.) 12866, OIRA determines whether a
regulatory action is significant and, therefore, subject to the
requirements of the E.O. and review by OMB. See 58 FR 51735 (Oct. 4,
1993). Section 3(f) of E.O. 12866 defines a ``significant regulatory
action'' as an action that is likely to result in a rule that (1) has
an annual effect on the economy of $100 million or more, or adversely
affects in a material way a sector of the economy, productivity,
competition, jobs, the environment, public health or safety, or State,
local, or Tribal governments or communities (also referred to as
economically significant); (2) creates serious inconsistency or
otherwise interferes with an action taken or planned by another agency;
(3) materially alters the budgetary impacts of entitlement grants, user
fees, or loan programs, or the rights and obligations of recipients
thereof; or (4) raises novel legal or policy issues arising out of
legal mandates, the President's priorities, or the principles set forth
in the E.O. Id. This proposed rule is a significant regulatory action,
although not an economically significant regulatory action under sec.
3(f) of E.O. 12866. Accordingly, OMB reviewed this proposed rule.
E.O. 13563 directs agencies to propose or adopt a regulation only
upon a reasoned determination that its benefits justify its costs; the
regulation is tailored to impose the least burden on society,
consistent with achieving the regulatory objectives; and, in choosing
among alternative regulatory approaches, the agency has selected those
approaches that maximize net benefits. E.O. 13563 recognizes that some
benefits are difficult to quantify and provides that, where appropriate
and permitted by law, agencies may consider and discuss qualitatively
values that are difficult or impossible to quantify, including equity,
human dignity, fairness, and distributive impacts.

[[Page 56326]]

1. Outline of the Analysis
Section III.A.2 provides a summary of the results of the RIA.
Section III.A.3 describes the need for the proposed rule, and section
III.A.4 describes the process used to estimate the costs and cost
savings of the proposed rule and the general inputs used, such as wages
and number of affected entities. Section III.A.5 explains how the
provisions of the proposed rule would result in quantifiable costs and
cost savings and presents the calculations the Departments used to
estimate them. In addition, section III.A.5 describes the qualitative
benefits of the proposed rule. Section III.A.6 summarizes the estimated
first-year and 10-year total and annualized costs, cost savings, net
costs, and transfer payments of the proposed rule. Finally, section
III.A.7 describes the regulatory alternatives considered when
developing the proposed rule.
2. Analysis Summary
The Departments estimate that the proposed rule would result in
costs and cost savings. As shown in Exhibit 2, the proposed rule is
expected to have an annualized quantifiable cost of $44,573 and a total
10-year quantifiable cost of $313,071 at a discount rate of 7
percent.\19\ The proposed rule is estimated to have annualized
quantifiable cost savings of $1.96 million and total 10-year
quantifiable cost savings of $14.28 million at a discount rate of 7
percent.\20\ The Departments estimate that the proposed rule would
result in an annualized net quantifiable cost savings of $1.99 million
and a total 10-year net cost of $13.96 million, both at a discount rate
of 7 percent and expressed in 2020 dollars.\21\
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\19\ The proposed rule would have an annualized cost of $37,360
and a total 10-year cost of $318,690 at a discount rate of 3 percent
in 2020 dollars.
\20\ The proposed rule would have an annualized cost savings of
$1.88 million and a total 10-year cost savings of $16.02 million at
a discount rate of 3 percent in 2020 dollars.
\21\ The proposed rule would have an annualized net cost savings
of $1.84 million and a total 10-year cost of $15.70 million at a
discount rate of 3 percent in 2020 dollars.

Exhibit 2--Estimated Monetized Costs, Cost Savings, and Net Cost Savings of the Proposed Rule
[2020 $millions]
----------------------------------------------------------------------------------------------------------------
Net cost
Costs Cost savings savings
----------------------------------------------------------------------------------------------------------------
Undiscounted 10-Year Total...................................... $0.35 $19.00 $18.64
10-Year Total with a Discount Rate of 3%........................ 0.33 16.69 16.36
10-Year Total with a Discount Rate of 7%........................ 0.31 14.28 13.96
10-Year Average................................................. 0.04 1.90 1.86
Annualized at a Discount Rate of 3%............................. 0.04 1.96 1.92
Annualized at a Discount Rate of 7%............................. 0.04 2.03 1.99
----------------------------------------------------------------------------------------------------------------

The cost of the proposed rule is associated with rule
familiarization and the requirement to calculate and report Retention
with the Same Employer for the effectiveness in serving employers
performance indicator for 57 States and 78 VR agencies.\22\ No longer
requiring States to collect, calculate, and report for two alternative
definitions of the effectiveness in serving employers performance
indicator and instead requiring States to calculate and report only the
Retention with the Same Employer definition of the indicator would
contribute to the cost savings of the proposed rule. See the costs and
cost savings subsections of section III.A.5 (Subject-by-Subject
Analysis) below for a detailed explanation.
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\22\ Consistent with sec. 3(56) of WIOA and 20 CFR 677.150(d),
the use of the term ``States'' in this RIA refers to the 50 States;
the District of Columbia; the U.S. territories of American Samoa,
Guam, the Commonwealth of the Northern Mariana Islands, the
Commonwealth of Puerto Rico, and the Virgin Islands; and the
Republic of Palau, a country in free association with the United
States.
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The Departments cannot quantify the benefits of the proposed rule;
therefore, section III.A.5 (Subject-by-Subject Analysis) describes the
benefits qualitatively.
3. Need for Regulation
In the Joint WIOA Final Rule, the Departments described a phased
approach, which included a pilot study, to defining in regulation the
sixth statutory performance indicator--effectiveness in serving
employers--required by WIOA. This proposed rulemaking is necessary to
complete implementation of the performance accountability requirements
as discussed in the Joint WIOA Final Rule and required by statute.
Specifically, States, under the Departments' joint guidance, piloted
the following definitions for the effectiveness in serving employers
performance indicator:
<bullet> Retention with the Same Employer: Percentage of
participants with wage records who exit from WIOA core programs and
were employed by the same employer in the second and fourth quarters
after exit.
<bullet> Repeat Business Customer: Percentage of employers who have
used WIOA core program services more than once during the last three
reporting periods.
<bullet> Employer Penetration: Percentage of employers using WIOA
core program services out of all employers in the State.
The Departments propose establishing Retention with the Same
Employer as the standard definition of the effectiveness in serving
employers performance indicator to complete implementation of the WIOA
performance accountability requirements to assess the effectiveness of
States and local areas in achieving positive outcomes.
4. Analysis Considerations
a. WIOA Core Programs
The Departments estimated the costs and cost savings of the
proposed rule relative to the existing baseline (i.e., the current
practices for complying with the joint WIOA performance accountability
regulations and the Departments' joint guidance). WIOA sec. 116
establishes the requirement for performance indicators and performance
reporting requirements to assess the effectiveness of the WIOA core
programs enumerated in sec. 116(b)(3)(A)(ii) in serving employers. The
core programs include adult, dislocated worker, and youth programs
under title I of WIOA; the AEFLA programs under title II; the ES
services program authorized under the Wagner-Peyser Act as amended by
WIOA title III; and the VR program authorized under title I of the
Rehabilitation Act as amended by WIOA title IV. The analysis refers to
the title I and title III programs jointly as the DOL programs.

[[Page 56327]]

The baseline consists of the combination of piloted approaches for
effectiveness in serving employers that States collected in 2020 and
would be expected to continue to report in the absence of this proposed
rule. The baseline uses DOL historical data on the number of States
that report each combination of the three piloted approaches for the
effectiveness in serving employers performance indicator. Exhibit 3
displays DOL data from 2017 through 2020 on the existing effectiveness
in serving employers approach combinations. The Departments used the
most recent year of State data reported for PY 2020 to define the
existing baseline of States reporting combinations of approaches to the
effectiveness in serving employers performance indicator.

Exhibit 3--State Reporting Combinations of Effectiveness in Serving Employers Definitions \a\
----------------------------------------------------------------------------------------------------------------
Retention
Retention with the same Repeat All three
with the same employer + business effectiveness
employer + repeat customer + in serving
employer business employer employers
penetration customer penetration approaches
----------------------------------------------------------------------------------------------------------------
2017............................................ 12 5 17 10
2018............................................ 10 10 17 15
2019............................................ 9 11 18 14
2020 \b\........................................ 9 12 20 15
----------------------------------------------------------------------------------------------------------------
\a\ DOL collects data on 52 of 57 States.
\b\ For PY 2020, DOL received data from 56 of 57 States. DOL assumes the remaining State reports the least
costly combination of pilot approaches (Retention with the Same Employer + Employer Penetration).

In accordance with the RIA guidance articulated in OMB's Circular
A-4 and consistent with the Departments' practices in previous
rulemakings, this RIA focuses on the likely consequences of the
proposed rule (i.e., costs and cost savings that accrue to entities
affected). The analysis covers 10 years (from 2022 through 2031) to
ensure it captures major costs and cost savings that accrue over time.
The Departments express all quantifiable impacts in 2020 dollars and
use discount rates of 3 and 7 percent, pursuant to Circular A-4.
Exhibit 4 presents the number of entities that are expected to be
affected by the proposed rule. The Departments provide these estimates
and use them throughout this analysis to estimate the costs and cost
savings of the proposed rule.
---------------------------------------------------------------------------

\23\ Local AEFLA providers include local education agencies;
community-based organizations; faith-based organizations; libraries;
community, junior, and technical colleges; 4-year colleges and
universities; correctional institutions; and other agencies and
institutions.

Exhibit 4--WIOA Core Programs--Number of Affected Entities by Type
------------------------------------------------------------------------
Entity type Number
------------------------------------------------------------------------
DOL Programs:
States.............................................. 57
Local Workforce Development Boards (WDBs)........... 580
AEFLA Program:
States.............................................. 57
Local AEFLA providers \23\.......................... 1,719
RSA Program:
VR agencies......................................... 78
------------------------------------------------------------------------

b. Compensation Rates
In section III.A.5 (Subject-by-Subject Analysis), the Departments
present the costs, including labor, associated with the implementation
of the provisions of the proposed rule. Exhibits 5a through 5c present
the hourly compensation rates for the occupational categories expected
to experience a change in level of effort (workload) due to the
proposed rule. We used the Bureau of Labor Statistics' mean hourly wage
rate for State and local employees.<SUP>24 25</SUP> We also used the
wage rate from the Office of Personnel Management's Salary Table for
the 2021 General Schedule for Federal employees in the management
analyst occupation (Grade 14, Step 5).\26\ To reflect total
compensation, wage rates include nonwage factors, such as overhead and
fringe benefits (e.g., health and retirement benefits). For all labor
groups (i.e., local, State, and Federal Government), we used an
overhead rate of 17 percent.\27\ For the State and local sectors, we
used a fringe benefits rate of 62 percent, which represents the ratio
of average total compensation to average wages for State and local
government workers in March 2021.\28\ For the Federal Government, we
used a fringe benefits rate of 63 percent.\29\ We then multiplied the
sum of the loaded wage factor and overhead rate by the corresponding
occupational category wage rate to calculate an hourly compensation
rate.\30\
---------------------------------------------------------------------------

\24\ BLS, ``May 2020 National Industry-Specific Occupational
Employment and Wage Estimates: NAICS 999200-State Government,
excluding schools and hospitals (OEWS Designation),'' <a href="https://www.bls.gov/oes/current/naics4_999200.htm">https://www.bls.gov/oes/current/naics4_999200.htm</a> (last updated Mar. 31,
2021).
\25\ BLS, ``May 2020 National Industry-Specific Occupational
Employment and Wage Estimates: NAICS 999300--Local Government,
excluding schools and hospitals (OEWS Designation),'' <a href="https://www.bls.gov/oes/current/naics4_999300.htm">https://www.bls.gov/oes/current/naics4_999300.htm</a> (last updated Mar. 31,
2021).
\26\ Office of Personnel Management, ``Salary Table 2021,''
<a href="https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2021/GS_h.pdf">https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2021/GS_h.pdf</a> (last visited Oct. 21, 2021).
\27\ Cody Rice, U.S. Environmental Protection Agency, ``Wage
Rates for Economic Analyses of the Toxics Release Inventory
Program,'' June 10, 2002, <a href="https://www.regulations.gov/document?D=EPA-HQ-OPPT-2014-0650-0005">https://www.regulations.gov/document?D=EPA-HQ-OPPT-2014-0650-0005</a>.
\28\ BLS, ``Employer Costs for Employee Compensation--March
2021,'' Sept. 16, 2021, <a href="https://www.bls.gov/news.release/pdf/ecec.pdf">https://www.bls.gov/news.release/pdf/ecec.pdf</a>. Calculated using Table 1. Employer Costs for Employee
Compensation by ownership.
\29\ Department of Labor, ``Workforce Innovation and Opportunity
Act (WIOA) Common Performance Reporting'' OMB Control No. 1205-0526,
<a href="https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202012-1205-003">https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202012-1205-003</a>
(last visited Oct. 21, 2021).
\30\ The hourly compensation rates presented in Exhibit 5a,
Exhibit 5b, and Exhibit 5c are rounded. Calculations used throughout
the RIA use the unrounded value. Therefore, numbers may not sum due
to rounding for the convenience of the reader.

[[Page 56328]]

Exhibit 5a--Compensation Rates for Local Employees
[2020 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hourly
Position Grade level Base hourly Loaded wage factor Overhead costs compensation
wage rate rate
........... (a) (b) (c) d = a + b + c
--------------------------------------------------------------------------------------------------------------------------------------------------------
Management Analyst.......................................... N/A $41.23 $25.43 ($41.23 x 0.62) $7.01 ($41.23 x $73.67
0.17)
Database Administrator...................................... N/A $26.14 $16.12 ($26.14 x 0.62) $4.44 ($26.14 x $46.71
0.17)
--------------------------------------------------------------------------------------------------------------------------------------------------------

Exhibit 5b--Compensation Rates for State Employees
[2020 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hourly
Position Grade level Base hourly Loaded wage factor Overhead costs compensation
wage rate rate
........... (a) (b) (c) d = a + b + c
--------------------------------------------------------------------------------------------------------------------------------------------------------
Management Analyst.......................................... N/A $33.41 $20.61 ($33.41 x 0.62) $5.68 ($33.41 x $59.70
0.17)
Staff Trainer............................................... N/A $37.23 $22.97 ($37.23 x 0.62) $6.33 ($37.23 x $66.53
0.17)
Rehabilitation Counselor.................................... N/A $26.83 $16.55 ($26.83 x 0.62) $4.56 ($26.83 x $47.94
0.17)
--------------------------------------------------------------------------------------------------------------------------------------------------------

Exhibit 5c--Compensation Rates for Federal Employees
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hourly
Position Grade level Base hourly Loaded wage factor Overhead costs compensation
wage rate rate
........... (a) (b) (c) d = a + b + c
--------------------------------------------------------------------------------------------------------------------------------------------------------
Management Analyst.......................................... GS-14, Step $51.00 $32.13 ($51.00 x 0.63) $8.67 ($51.00 x $91.80
5 0.17)
--------------------------------------------------------------------------------------------------------------------------------------------------------

5. Subject-by-Subject Analysis
The Departments' analysis below covers the estimated costs and cost
savings of the proposed rule.
c. Costs
The following sections describe the costs of the proposed rule.\31\
---------------------------------------------------------------------------

\31\ Numbers may not sum due to rounding for the convenience of
the reader.
---------------------------------------------------------------------------

(1) WIOA Core Programs Rule Familiarization
If the proposed rule is finalized, State- and local-level DOL
programs, State- and local-level AEFLA programs, and State VR agencies
would need to familiarize themselves with the new regulations.
Consequently, this would impose a one-time cost in the first year.
To estimate the first-year cost of rule familiarization at the
State level, the Departments multiplied the estimated number of
management analysts (one) by the time required to read and review the
rule (1 hour), and by the applicable hourly compensation rate ($59.70/
hour). We multiplied this result by the sum of the number of States
(57) for the DOL programs, the number of States (57) for the AEFLA
programs, and the number of VR agencies (78). This calculation yields
$11,462 in one-time labor costs, which is equal to an average annual
cost of $1,146 over the 10-year analysis period.
At the local level for the DOL programs, the Departments multiplied
the estimated number of management analysts (one) by the time required
to read and review the rule (1 hour), by the applicable hourly
compensation rate ($73.67/hour), and by the number of local boards
(580). This calculation yields $42,730 in one-time labor costs, which
is equal to an average annual cost of $4,273 over the 10-year analysis
period.\32\
---------------------------------------------------------------------------

\32\ Numbers may not sum due to rounding for the convenience of
the reader.
---------------------------------------------------------------------------

At the local level for the AEFLA programs, the Departments
multiplied the estimated number of management analysts (one) by the
time required to read and review the rule (1 hour), by the applicable
hourly compensation rate ($73.67/hour), and by the number of local
AEFLA providers (1,719). This calculation yields $126,643 in one-time
labor costs, which is equal to an average annual cost of $12,664 over
the 10-year analysis period.
The sum of these costs yields a total one-time labor cost of
$180,835 for State- and local-level DOL programs, State- and local-
level AEFLA programs, and State VR agencies to read and review the new
rule. Over the 10-year period of analysis, these estimated one-time
costs result in an average annual cost of $18,084 undiscounted, or
$21,199 and $25,747 at discount rates of 3 and 7 percent, respectively.
(2) Calculating and Reporting Retention With the Same Employer
WIOA sec. 116(b)(2)(A)(i)(VI) provides that the sixth primary
indicator of performance will be an indicator that measures program
effectiveness in serving employers, which WIOA sec. 116(b)(2)(A)(iv)
directs the Departments to establish. Currently, under the Departments'
joint guidance, States must report at least two of the following three
approaches to measuring effectiveness in serving employers: Retention
with the Same Employer, Employer Penetration, and Repeat Business
Customer. If the proposed rule is finalized, all States would be
required to adopt the same approach to measure effectiveness in serving
employers: Retention with the Same Employer. Twenty States do not
currently report the Retention with the Same Employer approach to the
effectiveness in serving employers

[[Page 56329]]

performance indicator.\33\ These 20 States would have new costs
associated with setting up procedures to calculate and report Retention
with the Same Employer and annual costs associated with continuing to
calculate and report Retention with the Same Employer. To estimate the
cost of establishing Retention with the Same Employer as the
effectiveness in serving employers performance indicator, the
Departments followed the assumptions used to estimate the pilot cost of
the Retention with the Same Employer approach to effectiveness in
serving employers in the 2016 Joint WIOA Final Rule. However, we
updated those assumptions for this analysis by removing the cost of
collecting data (4 hours) because all States are already collecting the
required data in the baseline. We then increased the number of hours we
assume State-level DOL programs require for one-time costs of
programming (from 4 to 6 hours) based on the Departments' experience
with initial costs for programming following the Joint WIOA Final Rule.
The assumptions and costs are summarized as follows:
---------------------------------------------------------------------------

\33\ Thirty-four States report Retention with the Same Employer
according to DOL data. DOL collects data on 52 of 57 States defined
in this analysis. DOL assumes the remaining 5 States report the
cheapest combination of pilot approaches (Retention with the Same
Employer + Employer Penetration), resulting in the RIA assuming 39
States report Retention with the Same Employer.
---------------------------------------------------------------------------

At the Federal level for the DOL core programs, the Departments
estimate the one-time labor cost associated with calculating and
reporting Retention with the Same Employer by multiplying the estimated
number of GS-14, Step 5 management analysts (one) by the time required
for technical assistance development (8 hours) and by the hourly
compensation rate ($91.80/hour). This calculation results in a one-time
labor cost of $734.
The Departments estimated DOL's annual labor costs for calculating
and reporting Retention with the Same Employer by multiplying the
estimated number of GS-14, Step 5 management analysts (one) by the time
required for technical assistance delivery (4 hours) and by the hourly
compensation rate ($91.80/hour). This calculation would result in an
annual labor cost of $367.
At the State level for the DOL core programs, the Departments
estimated the one-time labor cost associated with calculating and
reporting Retention with the Same Employer by multiplying the estimated
number of management analysts (one) by the time required for
programming (6 hours) and by the hourly compensation rate ($59.70/
hour). We multiplied the labor cost ($358) by the number of States (57)
to estimate this one-time cost at $20,417.
The Departments estimated the State-level DOL core programs' annual
labor cost associated with calculating and reporting Retention with the
Same Employer by multiplying the estimated number of management
analysts (one) by the time required for Federal reporting (4 hours) and
by the hourly compensation rate ($59.70/hour). We multiplied the labor
cost ($239) by the number of States (57) to estimate this annual cost
at $13,611.
At the Federal level for the AEFLA program, the Departments
estimated the one-time labor cost associated with calculating and
reporting Retention with the Same Employer by multiplying the estimated
number of GS-14, Step 5 management analysts (one) by the time required
for technical assistance development (8 hours) and by the hourly
compensation rate ($91.80/hour). This calculation would result in a
one-time labor cost of $734.
The Departments estimated AEFLA's annual labor cost for calculating
and reporting Retention with the Same Employer at the Federal level by
multiplying the estimated number of GS-14, Step 5 management analysts
(one) by the time required for technical assistance delivery (4 hours)
and by the hourly compensation rate ($91.80/hour). This calculation
would result in an annual labor cost of $367.
At the State level for the AEFLA program, the Departments estimated
the one-time labor cost associated with calculating and reporting
Retention with the Same Employer by multiplying the estimated number of
management analysts (one) by the time required for programming and data
collection (6 hours) and by the hourly compensation rate ($59.70). We
multiplied the labor cost ($358) by the number of States (57) to
estimate this one-time cost at $20,417.\34\
---------------------------------------------------------------------------

\34\ Numbers may not sum due to rounding for the convenience of
the reader.
---------------------------------------------------------------------------

The Departments estimated the State-level AEFLA program's annual
labor cost associated with calculating and reporting Retention with the
Same Employer by multiplying the estimated number of management
analysts (one) by the time required for Federal reporting (4 hours) and
by the hourly compensation rate ($59.70/hour). We multiplied the labor
cost ($239) by the number of States (57) to estimate this annual cost
at $13,611.
At the Federal level for the VR program, the Departments estimated
the one-time labor cost associated with calculating and reporting
Retention with the Same Employer by multiplying the estimated number of
GS-14, Step 5 management analysts (one) by the time required for
technical assistance development (8 hours) and by the hourly
compensation rate ($91.80/hour). This calculation would result in a
one-time labor cost of $734.
The Departments estimated the annual labor costs associated with
calculating and reporting Retention with the Same Employer at the
Federal level for the VR program by multiplying the estimated number of
GS-14, Step 5 management analysts (one) by the time required for
technical assistance delivery (4 hours) and by the hourly compensation
rate ($91.80/hour). This calculation would result in an annual labor
cost of $367.
At the State level for the VR program, the Departments estimated
the one-time labor cost associated with calculating and reporting
Retention with the Same Employer by multiplying the estimated number of
management analysts (one) by the time required for programming (6
hours) and by the hourly compensation rate ($59.70/hour). We multiplied
the labor cost ($358) by the number of VR agencies (78) to estimate
this one-time cost at $27,939.
The Departments estimated the State-level VR program's annual labor
cost associated with calculating and reporting Retention with the Same
Employer by multiplying the estimated number of management analysts
(one) by the time required for Federal reporting (4 hours) and by the
hourly compensation rate ($59.70/hour). We multiplied the labor cost
($239) by the number of VR agencies (78) to estimate this annual cost
of $18,626.
The sum of these one-time costs of the retention measure yields
$70,977 for individuals from the Federal- and State-level DOL core
programs, AEFLA program, and VR program. In addition, the sum of the
annual costs associated with calculating and reporting Retention with
the Same Employer for these entities yields $46,951 per year. Exhibits
6a and 6b summarize the above calculations.

[[Page 56330]]

Exhibit 6a--Retention With the Same Employer, Initial Cost
----------------------------------------------------------------------------------------------------------------
Management Number of
Agency analyst hours management Loaded wage Population \2\ Total \3\
\1\ analysts rate
----------------------------------------------------------------------------------------------------------------
Federal-level DOL............... 8 1 $91.80 NA $734
State-level DOL................. 6 1 59.70 57 20,417
Federal-level AEFLA............. 8 1 91.80 NA 734
State-level AEFLA............... 6 1 59.70 57 20,417
Federal-level RSA............... 8 1 91.80 NA 734
State-level RSA................. 6 1 59.70 78 27,939
-------------------------------------------------------------------------------
Total Initial Cost.......... .............. .............. .............. .............. 70,977
----------------------------------------------------------------------------------------------------------------
\1\ Management analysts on the Federal level are GS-14, Step 5.
\2\ Population figures represent States (57) and VR agencies (78).
\3\ Numbers may not sum due to rounding for the convenience of the reader.

Exhibit 6b--Retention With the Same Employer, Annual Cost
----------------------------------------------------------------------------------------------------------------
Management Number of
Agency analyst hours management Loaded wage Population \2\ Total \3\
\1\ analysts rate
----------------------------------------------------------------------------------------------------------------
Federal-level DOL............... 4 1 $91.80 NA $367
State-level DOL................. 4 1 59.70 57 13,611
Federal-level AEFLA............. 4 1 91.80 NA 367
State-level AEFLA............... 4 1 59.70 57 13,611
Federal-level RSA............... 4 1 91.80 NA 367
State-level RSA................. 4 1 59.70 78 18,626
-------------------------------------------------------------------------------
Total Annual Cost........... .............. .............. .............. .............. 46,951
----------------------------------------------------------------------------------------------------------------
\1\ Management analysts on the Federal level are GS-14, Step 5.
\2\ Population figures represent States (57) and VR agencies (78).
\3\ Numbers may not sum due to rounding for the convenience of the reader.

The costs in Exhibits 6a and 6b represent the costs for all 57
States to report the Retention with the Same Employer approach to the
effectiveness in serving employers performance indicator. Currently, 37
States already report Retention with the Same Employer. The remaining
20 States would face costs with having to start reporting Retention
with the Same Employer. We therefore multiply the total one-time costs
($70,977) and annual costs ($46,951) by the 35.1 percent of States not
currently reporting the retention measure (20 out of 57) yielding
$24,904 in one-time costs and an additional $16,474 in annual costs to
increase the number of States reporting the retention measure from 37
to all 57.
The estimated total cost from requiring all States to report
Retention with the Same Employer over the 10-year period is $173,169
undiscounted, or $153,172 and $132,235 at discount rates of 3 and 7
percent, respectively, with an annualized cost over the 10-year period
of $17,956 and $18,827 at discount rates of 3 and 7 percent,
respectively.
d. Cost Savings
The following sections describe the cost savings of the proposed
rule.
(1) Summary of Approach
The pilot program announced in the 2016 Joint WIOA Final Rule
required States to report two of the three approaches for measuring
effectiveness in serving employers. Under this proposed rule States
would no longer face costs associated with collecting the information
required to calculate the Employer Penetration or Repeat Business
Customer approaches to the effectiveness in serving employers
performance indicator. To estimate the cost savings, we first update
the costs associated with collecting each of these pilot approaches
following the assumptions used to estimate the cost of the Retention
with the Same Employer pilot approach in the 2016 Joint WIOA Final
Rule. We then estimate the cost savings under the proposed rule
associated with the proportion of States that would no longer report
the various combinations of the pilot approaches that States report in
the baseline.
Currently, 9 States report Retention with the Same Employer and
Employer Penetration, 12 States report Retention with the Same Employer
and Repeat Business Customer, 20 States report Employer Penetration and
Repeat Business Customer, and 15 States report all 3 approaches to
defining the effectiveness in serving employers performance indicator.
To estimate cost savings, we first estimate the annual cost of all 57
States collecting data for, calculating, and reporting the percentage
of employers using services out of all employers in the State (Employer
Penetration) and the percentage of repeat employers using services
within the previous 3 years (Repeat Business Customer). We then
multiply the annual cost by the percentage of States currently using
the pilot approach to estimate the cost savings. Below, we present the
updated costs associated with all 57 States reporting each pilot
approach, and then present the cost savings associated with the
proportion of States no longer reporting them.
(2) Employer Penetration: Percentage of Employers Using Services Out of
All Employers in the State
Under the pilot program, States must use two of three specified
approaches to measure effectiveness in serving employers. The proposed
rule would only require States to collect data for, calculate, and
report the first approach (Retention with the Same Employer). This
section calculates the cost for all 57 States to collect data,
calculate, and report Employer Penetration and then uses these costs to
estimate cost savings

[[Page 56331]]

for the proportion of States that would no longer report Employer
Penetration under the proposed rule.
At the Federal level for the DOL core programs, the Departments
estimated the annual labor cost associated with Employer Penetration by
multiplying the estimated number of GS-14, Step 5 management analysts
(one) by the time required for technical assistance delivery (4 hours)
and by the hourly compensation rate ($91.80/hour). This calculation
would result in an annual labor cost of $367.
At the State level for the DOL core programs, the Departments
estimated Employer Penetration's annual labor cost by multiplying the
estimated number of management analysts (one) by the sum of time
required for data collection (4 hours), providing training and
technical assistance to Local WDBs (3 hours), and Federal reporting (4
hours) and by the hourly compensation rate ($59.70/hour). We multiplied
the labor cost ($657) by the number of States (57) to estimate this
annual cost at $37,431.
For local-level DOL core programs, the Departments estimated the
annual labor cost for Employer Penetration by multiplying the estimated
number of management analysts (one) by the time required for data
collection (4 hours) and by the hourly compensation rate ($73.67/hour).
We multiplied the labor cost ($295) by the number of Local WDBs (580)
to estimate this annual cost at $170,920.
At the Federal level for the AEFLA program, the Departments
estimated the annual labor cost associated with Employer Penetration by
multiplying the estimated number of GS-14, Step 5 management analysts
(one) by the time required for technical assistance delivery (4 hours)
and by the hourly compensation rate ($91.80/hour). This calculation
would result in an annual labor cost of $367.
At the State level for the AEFLA program, the Departments estimated
Employer Penetration's annual labor cost by multiplying the estimated
number of management analysts (one) by the sum of time required for
data collection (4 hours), providing training and technical assistance
to local AEFLA providers (3 hours), and Federal reporting (4 hours) and
by the hourly compensation rate ($59.70/hour). We multiplied the labor
cost ($657) by the number of States (57) to estimate this annual cost
at $37,431.
For the local-level AEFLA program, the Departments estimated the
annual labor cost for Employer Penetration by multiplying the estimated
number of management analysts (one) by the time required for data
collection (4 hours) and by the hourly compensation rate ($73.67/hour).
We multiplied the labor cost ($295) by the number of local AEFLA
providers (1,719) to estimate this annual cost at $506,572.\35\
---------------------------------------------------------------------------

\35\ Numbers may not sum due to rounding for the convenience of
the reader.
---------------------------------------------------------------------------

At the Federal level for the VR program, the Departments estimated
the annual labor cost associated with Employer Penetration by
multiplying the estimated number of GS-14, Step 5 management analysts
(one) by the time required for technical assistance delivery (4 hours)
and by the hourly compensation rate ($91.80/hour). This calculation
would result in an annual labor cost of $367.
At the State level for the VR program, the Departments estimated
Employer Penetration's annual labor cost by multiplying the estimated
number of management analysts (one) by the time required for Federal
reporting (4 hours) and by the hourly compensation rate ($59.70/hour).
In addition, we added the estimated number of rehabilitation counselors
(62 assistants) by the time required for data collection (1 hour each)
and by the hourly compensation rate ($47.94/hour). We summed the labor
cost for both categories and multiplied it ($3,211) by the number of VR
agencies (78) to estimate this annual cost at $250,472.
Summing these annual costs for all 57 States to calculate and
report Employer Penetration yields $1,003,929 per year for the Federal-
, State-, and local-level DOL core programs and AEFLA programs and the
State-level VR programs. The Departments used the updated costs in
Exhibit 7 to estimate the cost savings for States that would no longer
report this pilot approach.

Exhibit 7--Employer Penetration, Annual
--------------------------------------------------------------------------------------------------------------------------------------------------------
Loaded wage
Agency Labor category \1\ Hours Workers rate Population \2\ Total \3\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Federal-level DOL......................... Management Analyst.......... 4 1 $91.80 NA $367
State-level DOL........................... Management Analyst.......... 11 1 59.70 57 37,431
Local-Level DOL........................... Management Analyst.......... 4 1 73.67 580 170,920
Federal-level AEFLA....................... Management Analyst.......... 4 1 91.80 NA 367
State-level AEFLA......................... Management Analyst.......... 11 1 59.70 57 37,431
Local-Level AEFLA......................... Management Analyst.......... 4 1 73.67 1,719 506,572
Federal-level RSA......................... Management Analyst.......... 4 1 91.80 NA 367
State-level RSA........................... Management Analyst.......... 4 1 59.70 78 18,626
State-level RSA........................... Rehab Counselor............. 1 62 47.94 78 231,846
-------------------------------------------------------------------------------
Annual Total.......................... ............................ .............. .............. .............. .............. 1,003,929
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Management analysts on the Federal level are GS-14, Step 5.
\2\ Population figures represent States (57), VR agencies (78), and AEFLA providers (1,719).
\3\ Numbers may not sum due to rounding for the convenience of the reader.

(3) Repeat Business Customer: Percentage of Repeat Employers Using
Services Within the Previous 3 Years
This section calculates the cost for all 57 States to collect data,
calculate, and report the Repeat Business Customer approach to the
effectiveness in serving employers performance indicator. The
Departments use these costs to estimate cost savings for the proportion
of States that would no longer report this pilot approach under the
proposed rule.
At the Federal level for the DOL core programs, the Departments
estimated the annual labor cost associated with Repeat Business
Customer by multiplying the estimated number of GS-14, Step 5
management analysts (one) by the time required for technical assistance
delivery (4 hours) and by the hourly compensation rate ($91.80/hour).

[[Page 56332]]

This calculation would result in an annual labor cost of $367.
At the State level for the DOL core programs, the Departments
estimated Repeat Business Customer's annual labor cost by multiplying
the estimated number of management analysts (one) by the sum of time
required for data collection (4 hours), providing training and
technical assistance to Local WDBs (3 hours), and Federal reporting (4
hours) and by the hourly compensation rate ($59.70/hour). We multiplied
the labor cost ($657) by the number of States (57) to estimate this
annual cost at $37,431.
For the local-level DOL core programs, the Departments estimated
the annual labor cost for Repeat Business Customer by multiplying the
estimated number of management analysts (one) by the time required for
data collection (6 hours) and by the hourly compensation rate ($73.67/
hour). We multiplied the labor cost ($442) by the number of Local WDBs
(580) to estimate this annual cost at $256,380.
At the Federal level for the AEFLA program, the Departments
estimated the annual labor cost associated with Repeat Business
Customer by multiplying the estimated number of GS-14, Step 5
management analysts (one) by the time required for technical assistance
delivery (4 hours) and by the hourly compensation rate ($91.80/hour).
This calculation would result in an annual labor cost of $367.
At the State level for the DOL core programs, the Departments
estimated Repeat Business Customer's annual labor cost by multiplying
the estimated number of management analysts (one) by the sum of time
required for data collection (4 hours), providing training and
technical assistance to local AEFLA providers (3 hours), and Federal
reporting (4 hours) and by the hourly compensation rate ($59.70/hour).
We multiplied the labor cost ($657) by the number of States (57) to
estimate this annual cost at $37,431.
For the local-level AEFLA program, the Departments estimated the
annual labor cost for Repeat Business Customer by multiplying the
estimated number of management analysts (one) by the time required for
data collection (6 hours) and by the hourly compensation rate ($73.67/
hour). We multiplied the labor cost ($442) by the number of local AEFLA
providers (1,719) to estimate this annual cost at $759,859.
At the Federal level for the VR program, the Departments estimated
the annual labor cost associated with Repeat Business Customer by
multiplying the estimated number of GS-14, Step 5 management analysts
(one) by the time required for technical assistance delivery (4 hours)
and by the hourly compensation rate ($91.80/hour). This calculation
would result in an annual labor cost of $367.
At the State level for the VR program, the Departments estimated
Repeat Business Customer's annual labor cost by multiplying the
estimated number of management analysts (one) by the time required for
Federal reporting (4 hours) and by the hourly compensation rate
($59.70/hour). In addition, we added the estimated number of
rehabilitation counselors (62 counselors) by the time required for data
collection (1 hour each) and by the hourly compensation rate ($47.94/
hour). We summed the labor cost for both categories ($3,211) and
multiplied it by the number of VR agencies (78) to estimate this annual
cost of $250,472.
Summing these annual costs for all States to calculate and report
Repeat Business Customer yields $1,342,676 per year for the Federal-,
State-, and local-level DOL core programs and AEFLA programs and the
State-level VR programs. The Departments used the updated costs in
Exhibit 8 to estimate the cost savings for States to no longer report
this pilot approach.

Exhibit 8--Repeat Business Customer, Annual
--------------------------------------------------------------------------------------------------------------------------------------------------------
Loaded wage
Agency Labor category \1\ Hours Workers rate Population \2\ Total \3\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Federal-level DOL......................... Management Analyst.......... 4 1 $91.80 NA $367
State-level DOL........................... Management Analyst.......... 11 1 59.70 57 37,431
Local-level DOL........................... Management Analyst.......... 6 1 73.67 580 256,380
Federal-level AEFLA....................... Management Analyst.......... 4 1 91.80 NA 367
State-level AEFLA......................... Management Analyst.......... 11 1 59.70 57 37,431
Local-level AEFLA......................... Management Analyst.......... 6 1 73.67 1,719 759,859
Federal-level RSA......................... Management Analyst.......... 4 1 91.80 NA 367
State-level RSA........................... Management Analyst.......... 4 1 59.70 78 18,626
State-level RSA........................... Rehab Counselor............. 1 62 47.94 78 231,846
-------------------------------------------------------------------------------
Annual Total.......................... ............................ .............. .............. .............. .............. 1,342,676
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Management analysts on the Federal level are GS-14, Step 5.
\2\ Population figures represent States (57), VR agencies (78), and AEFLA providers (1,719).
\3\ Numbers may not sum due to rounding for the convenience of the reader.

(4) Summary of Cost Savings
Under the proposed rule, the 14 States that currently report only
the Retention with the Same Employer and Employer Penetration pilot
approaches would have cost savings from no longer having to collect
data for, calculate, and report Employer Penetration. Multiplying the
annual cost for all 57 States to collect data for, calculate, and
report Employer Penetration ($1,003,929) by the 17.5 percent of States
reporting these two pilot approaches only (10 out of 57) yields annual
cost savings of $176,128.
The 12 States currently reporting only the Retention with the Same
Employer and Repeat Business Customer pilot approaches would have cost
savings from no longer collecting data for, calculating, and reporting
Repeat Business Customer. Multiplying the annual cost for all 57 States
to collect data for, calculate, and report Repeat Business Customer
($1,342,676) by the 21.1 percent of States reporting these two pilot
approaches only (12 out of 57) yields annual cost savings of $282,669.
The 20 States currently reporting only Employer Penetration and
Repeat Business Customer and the 15 States currently reporting all
three pilot approaches to the effectiveness in serving employers
performance indicator would have cost savings from no longer collecting
data for, calculating, and reporting both Employer Penetration and
Repeat Business Customer. Multiplying the sum of annual costs for all
57 States to collect data for, calculate, and report both Employer
Penetration and Repeat

[[Page 56333]]

Business Customer ($2,346,605) by the 35.1 percent of States reporting
Employer Penetration and Repeat Business Customer only and by the 26.3
percent of States reporting all three approaches yields annual cost
savings of $823,370 and $617,528, respectively.
Summing these annual cost savings yields total annual cost savings
for all 57 States of $1,899,694 from the proposed rule. The Departments
estimate total cost savings over the 10-year period at $18,996,941
undiscounted, or $16,690,919 and $14,276,642 at discount rates of 3 and
7 percent, respectively. At discount rates of 3 and 7 percent, the 10-
year period results in annualized cost savings of $1,956,685 and
$2,032,673, respectively.
e. Qualitative Benefits Discussion
(1) General Benefits of Measuring Effectiveness in Serving Employers
The Departments cannot quantify the proposed rule's benefits
associated with improving the WIOA core programs' effectiveness in
serving employers. Measuring effectiveness in serving employers allows
DOL, AEFLA, and RSA programs to set goals, monitor, and learn how to
serve employers more effectively.\36\ Reporting a measure of
effectiveness in serving employers also helps Federal, State, and local
policymakers evaluate program performance and inform future policy
changes to better meet program goals, particularly providing employers
with skilled workers and other services.
---------------------------------------------------------------------------

\36\ S. Spaulding, et al., ``Measuring the Effectiveness of
Services to Employers: Options for Performance Measures under the
Workforce Innovation and Opportunity Act,'' Jan. 2021, <a href="https://wdr.doleta.gov/research/FullText_Documents/ETAOP2021-17%20Measures%20of%20Effectiveness%20in%20Serving%20Employers_Final%20Report.pdf">https://wdr.doleta.gov/research/FullText_Documents/ETAOP2021-17%20Measures%20of%20Effectiveness%20in%20Serving%20Employers_Final%20Report.pdf</a>.
---------------------------------------------------------------------------

The Departments cannot quantify these estimated benefits because we
do not have quantitative data on how the effectiveness in serving
employers performance measure has influenced program implementation and
how much it would influence future policies.
(2) Specific Benefits of Reporting Retention With the Same Employer
Requiring all States to calculate and report Retention with the
Same Employer as the effectiveness in serving employers performance
indicator would make it easier to compare WIOA core programs'
effectiveness in serving employers performance across States and ensure
all States have an indicator of job turnover and match quality between
workers exiting WIOA core programs and employers. Retention with the
Same Employer demonstrates a continued relationship between the
employer and participants who have exited WIOA core programs. While
many circumstances can have an impact on an employer's retention of
employees, an indication that an employee is still working for the same
employer in both the second and fourth quarters after exiting from a
WIOA program demonstrates a level of success for both parties, as
retention of an employee reduces the costs to the employer associated
with employee turnover and retraining. Thus, reporting Retention with
the Same Employer can help inform design and implementation of program
services to reduce job turnover and improve employer-employee match
quality. Improved matching and reduced turnover allow employees and
employers to operate closer to their productive potential and can make
it more worthwhile for employers to invest in training their employees
and for employees to invest in learning employer-specific skills.
6. Summary of the Analysis
Exhibit 9 summarizes the estimated total costs and cost savings of
the proposed rule over the 10-year analysis period. Discontinuing
reporting of Employer Penetration and Repeat Business Customer has the
largest effect as a cost savings. The Departments estimate the total
net cost savings of the proposed rule at $13,963,572 at a discount rate
of 7 percent.

Exhibit 9--Estimated 10-Year Monetized Costs and Cost Savings of the Proposed Rule by Provision
[2020 $millions]
----------------------------------------------------------------------------------------------------------------
Total net cost
Provision Cost Cost savings savings
----------------------------------------------------------------------------------------------------------------
Rule Familiarization............................................ $0.13 .............. ..............
Reporting Retention with the Same Employer...................... 0.17 .............. ..............
No Longer Reporting Other Measures.............................. .............. $19.00 ..............
Undiscounted.................................................... 0.35 19.00 $18.64
With a Discount Rate of 3%...................................... 0.33 16.69 16.36
With a Discount Rate of 7%...................................... 0.31 14.28 13.96
----------------------------------------------------------------------------------------------------------------

The Departments estimate the annualized costs of the proposed rule
at $44,574 and the annualized cost savings at $2,032,673, at a discount
rate of 7 percent. The Departments estimate the proposed rule would
result in an annualized net quantifiable cost savings of $1,988,098 and
a total 10-year net cost savings of $13,963,572, both at a discount
rate of 7 percent and expressed in 2020 dollars. Exhibit 10 summarizes
the estimated total costs and cost savings of the proposed rule over
the 10-year analysis period.

Exhibit 10--Estimated Monetized Costs, Cost Savings, and Net Cost Savings of the Proposed Rule
[2020 $]
----------------------------------------------------------------------------------------------------------------
Costs Costs savings Net cost savings
----------------------------------------------------------------------------------------------------------------
2022................................................... $205,740 $1,899,694 $1,693,955
2023................................................... 16,474 1,899,694 1,883,220
2024................................................... 16,474 1,899,694 1,883,220
2025................................................... 16,474 1,899,694 1,883,220
2026................................................... 16,474 1,899,694 1,883,220
2027................................................... 16,474 1,899,694 1,883,220
2028................................................... 16,474 1,899,694 1,883,220

[[Page 56334]]

2029................................................... 16,474 1,899,694 1,883,220
2030................................................... 16,474 1,899,694 1,883,220
2031................................................... 16,474 1,899,694 1,883,220
Undiscounted 10-Year Total............................. 354,005 18,996,941 18,642,936
10-Year Total with a Discount Rate of 3%............... 334,007 16,690,919 16,356,912
10-Year Total with a Discount Rate of 7%............... 313,071 14,276,642 13,963,572
10-Year Average........................................ 35,400 1,899,694 1,864,294
Annualized with a Discount Rate of 3%.................. 39,156 1,956,685 1,917,529
Annualized with a Discount Rate of 7%.................. 44,574 2,032,673 1,988,098
----------------------------------------------------------------------------------------------------------------

7. Regulatory Alternatives
The Departments considered two alternatives to the proposed
definition of the effectiveness in serving employers performance
indicator. First, the Departments considered requiring use of the
Employer Penetration pilot approach, which reports the percentage of
employers using services out of all employers in the State. This
approach would have required counts of services provided to employers,
requiring States and local areas to report unique counts of individual
employers receiving services through WIOA's programs. Employer
Penetration would require a more data-intensive analysis than the
proposed approach of Retention with the Same Employer. Employer
Penetration would have the benefit of capturing the extent to which
employers within a State are engaged with WIOA-funded services and
would provide State programs an incentive to work with additional
employers. As discussed earlier in Section II.A (Pilot Programs for
Workforce Innovation and Opportunity Act Core Programs), on behalf of
the Departments, DOL commissioned an examination of State experiences
with the various approaches through a third-party contractor, which
found weaknesses in this pilot approach, including (1) an emphasis on
quantity rather than quality or intensity of the employer service
provided; (2) reliability issues associated with data entry and the
process to count unique establishments; (3) measurement of program
output rather than outcome; (4) potential for creation of perverse
incentives to prioritize program breadth rather than depth in service
and delivery; and (5) a lack of sensitivity to industry sectors
targeted by State and local workforce agencies.\37\ The Departments
estimated the costs and cost savings of this alternative using the same
method as the proposed approach. That is, the Departments used the
estimated cost of collecting data, calculating, and reporting Employer
Penetration, and then estimated the cost for the proportion of States
that would need to start using this approach to reporting effectiveness
in serving employers (12 States). Exhibit 11 summarizes these
calculations below.
---------------------------------------------------------------------------

\37\ S. Spaulding, et al., ``Measuring the Effectiveness of
Services to Employers: Options for Performance Measures under the
Workforce Innovation and Opportunity Act,'' Jan. 2021, page 68,
<a href="https://wdr.doleta.gov/research/FullText_Documents/ETAOP2021-17%20Measures%20of%20Effectiveness%20in%20Serving%20Employers_Final%20Report.pdf">https://wdr.doleta.gov/research/FullText_Documents/ETAOP2021-17%20Measures%20of%20Effectiveness%20in%20Serving%20Employers_Final%20Report.pdf</a>.

Exhibit 11--Summary of Regulatory Alternative 1 Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Adjusted cost Adjusted cost
estimates: estimates:
Number of Updated 2016 cost Updated 2016 cost updated cost updated cost
Non-reported measure States estimates: initial estimates: annual estimates x (# estimates x (#
cost cost States / 57), States / 57),
initial cost annual cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Employer Penetration......................................... 12 $258,208 $1,003,929 $54,360 $211,354
--------------------------------------------------------------------------------------------------------------------------------------------------------

Costs include calculating and reporting Employer Penetration and
rule familiarization for WIOA core programs. The Departments estimate
the total cost of the first alternative over the 10-year period at $2.1
million undiscounted, or $1.9 million and $1.6 million at discount
rates of 3 and 7 percent, respectively, and an annualized cost of the
10-year period at $220,489 and $229,543 with discount rates of 3 and 7
percent, respectively.
To calculate cost savings the Departments used the estimated cost
of collecting data for, calculating, and reporting the two other
effectiveness in serving employers approaches (Retention with the Same
Employer and Repeat Business Customer), and then estimated the cost
savings for the proportion of States that would transition from their
existing reporting combination of two or three effectiveness in serving
employers approaches to the single Employer Penetration approach to the
performance indicator. Exhibit 12 summarizes these calculations below.

[[Page 56335]]

Exhibit 12--Summary of Regulatory Alternative 1 Cost Savings
----------------------------------------------------------------------------------------------------------------
Adjusted cost
savings
estimates:
Number of Updated 2016 cost updated cost
Reported measures States estimates: annual estimates x (#
cost savings States / 57):
annual cost
savings
----------------------------------------------------------------------------------------------------------------
Employer Penetration + Retention with the Same Employer... 10 $46,951 $8,237
Employer Penetration + Repeat Business Customer........... 20 1,342,676 471,114
Retention with the Same Employer + Repeat Business 12 1,389,626 292,553
Customer (No Employer Penetration).......................
All Three................................................. 15 1,389,626 365,691
----------------------------------------------------------------------------------------------------------------

The Departments estimated the total cost savings associated with
the first alternative over the 10-year period at $11.4 million
undiscounted, or $10.0 million and $8.5 million at discount rates of 3
and 7 percent, respectively, with an annualized cost savings associated
with the first alternative over the 10-year period at $1,171,723 and
$1,217,227 with discount rates of 3 and 7 percent, respectively.
We estimate the first regulatory alternative to result in total net
cost savings over the 10-year period of $9.2 million undiscounted, or
$8.1 million and $6.9 million at discount rates of 3 and 7 percent,
respectively, with an annualized net cost savings of the 10-year period
at $951,233 and $987,684 with discount rates of 3 and 7 percent,
respectively.
The Departments considered a second regulatory alternative that
would require the use of the Repeat Business Customer approach to the
effectiveness in serving employers performance indicator, which reports
the percentage of employers receiving services in a year who also
received services within the previous 3 years. This approach to the
effectiveness in serving employers measure requires counts of services
provided to employers through WIOA's programs. Repeat Business Customer
requires a more data-intensive analysis than the proposed approach of
Retention with the Same Employer. Repeat Business Customer captures the
extent to which employers within a State can find workers and the
employer's level of satisfaction with the public workforce system
services. The Departments, in an Urban Institute study, found
weaknesses in this pilot approach including that it (1) may provide a
disincentive to reach out to new employers; (2) is subject to variation
in industry and sector economic conditions; and (3) may require a
statistical adjustment model to mitigate the weaknesses and improve
implementation and interpretation.\38\ The Departments estimated the
costs and cost savings of this alternative using the same method as the
proposed approach. That is, the Departments used the estimated cost of
collecting data, calculating, and reporting Repeat Business Customer,
and then estimated the cost for the proportion of States that would
need to start using this approach to reporting effectiveness in serving
employers (10 States). Exhibit 13 summarizes these calculations below.
---------------------------------------------------------------------------

\38\ S. Spaulding, et al., ``Measuring the Effectiveness of
Services to Employers: Options for Performance Measures under the
Workforce Innovation and Opportunity Act,'' Jan. 2021, page 67,
<a href="https://wdr.doleta.gov/research/FullText_Documents/ETAOP2021-17%20Measures%20of%20Effectiveness%20in%20Serving%20Employers_Final%20Report.pdf">https://wdr.doleta.gov/research/FullText_Documents/ETAOP2021-17%20Measures%20of%20Effectiveness%20in%20Serving%20Employers_Final%20Report.pdf</a>.

Exhibit 13--Summary of Regulatory Alternative 2 Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Adjusted cost Adjusted cost
estimates: estimates:
Number of Updated 2016 Updated 2016 cost updated cost updated cost
Non-reported measure States cost estimates: estimates: annual estimates x (# estimates x (#
initial cost cost States / 57), States / 57),
initial cost annual cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Repeat Business Customer........................................ 10 $254,805 $1,342,676 $44,703 $235,557
--------------------------------------------------------------------------------------------------------------------------------------------------------

Costs include the cost of calculating and reporting Repeat Business
Customer and the cost of rule familiarization for WIOA core programs.
The Departments estimated the total cost of the second alternative over
the 10-year period at $2.3 million undiscounted, or $2.1 million and
$1.8 million at discount rates of 3 and 7 percent, respectively, with
an annualized cost of the 10-year period at $241,449 and $250,620 with
discount rates of 3 and 7 percent, respectively.
To calculate cost savings, the Departments used the estimated cost
of collecting data for, calculating, and reporting the two other
effectiveness in serving employers approaches (Retention with the Same
Employer and Employer Penetration), and then estimated the cost savings
for the proportion of States that would transition from their existing
reporting combination of two or three effectiveness in serving
employers approaches to the single Repeat Business Customer approach to
the performance indicator. Exhibit 14 summarizes these calculations
below.

[[Page 56336]]

Exhibit 14--Summary of Regulatory Alternative 2 Cost Savings
----------------------------------------------------------------------------------------------------------------
Adjusted cost
savings
Updated 2016 estimates:
Number of cost updated cost
Reported measures States estimates: estimates x (#
annual cost States / 57):
savings annual cost
savings
----------------------------------------------------------------------------------------------------------------
Repeat Business Customer + Retention with the Same Employer..... 12 $46,951 $9,884
Repeat Business Customer + Employer Penetration................. 20 1,003,929 352,256
Employer Penetration + Retention with the Same Employer (No 10 1,050,880 184,365
Repeat Business Customer)......................................
All Three....................................................... 15 1,050,880 276,547
----------------------------------------------------------------------------------------------------------------

The Departments estimated total cost savings associated with the
second alternative over the 10-year period is $8.2 million
undiscounted, or $7.2 million and $6.2 million at discount rates of 3
and 7 percent, respectively with an annualized cost associated with the
second alternative over the 10-year period is $847,744 and $880,666
with discount rates of 3 and 7 percent, respectively.
The Departments estimate the second regulatory alternative to
result in total net cost savings over the 10-year period of $5.9
million undiscounted, or $5.2 million and $4.4 million at discount
rates of 3 and 7 percent, respectively, with an annualized net cost
savings of the 10-year period at $606,295 and $630,046 with discount
rates of 3 and 7 percent, respectively.
Exhibit 15 summarizes the estimated net cost savings associated
with the three considered approaches to the effectiveness in serving
employers performance indicator (i.e., the three piloted approaches).
The Departments prefer the proposed approach of requiring the use of
Retention with the Same Employer because it has data more readily
available, and, therefore, is less burdensome. The Retention with the
Same Employer approach better aligns with workforce system goals of
supporting employer-employee job match quality and reducing turnover
without the weaknesses associated with the other two approaches to
defining the effectiveness in serving employers performance indicator.

Exhibit 15--Estimated Monetized Costs of the Proposed Rule and Regulatory Alternatives
[2020 $Millions]
----------------------------------------------------------------------------------------------------------------
Regulatory Regulatory
Proposed rule alternative 1 alternative 2
----------------------------------------------------------------------------------------------------------------
Total 10-Year Net Cost Savings.................................. $18.6 $9.2 $5.9
Total with 3% Discount.......................................... 16.4 8.1 5.2
Total with 7% Discount.......................................... 14.0 6.9 4.4
Annualized with 3% Discount..................................... 1.86 0.92 0.59
Annualized with 7% Discount..................................... 1.92 0.95 0.61
----------------------------------------------------------------------------------------------------------------

B. Regulatory Flexibility Act, Small Business Regulatory Enforcement
Fairness Act, and Executive Order 13272 (Proper Consideration of Small
Entities in Agency Rulemaking)

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601 et seq.,
as amended by the Small Business Regulatory Enforcement Fairness Act of
1996, Public Law 104-121 (Mar. 29, 1996), requires Federal agencies
engaged in rulemaking to consider the impact of their proposals on
small entities, consider alternatives to minimize that impact, and
solicit public comment on their analyses. The RFA requires the
assessment of the impact of a regulation on a wide range of small
entities, including small businesses, not-for-profit organizations, and
small governmental jurisdictions. Agencies must perform a review to
determine whether a proposed or final rule would have a significant
economic impact on a substantial number of small entities. 5 U.S.C. 603
and 604. The RFA permits an agency, in lieu of preparing such an
analysis, to certify that the rulemaking is not expected to have a
significant economic impact on a substantial number of small entities.
5 U.S.C. 605.
The Departments determined that the proposed rule would not have a
significant economic impact on a substantial number of small entities
because any impacted small entities are already receiving financial
assistance under the WIOA program and likely would continue to do so.
The Departments have certified this to the Chief Counsel for Advocacy,
Small Business Administration, pursuant to the RFA. 5 U.S.C. 605.
Affected Small Entities
The WIOA title I adult, dislocated worker, and youth program
grantees, the WIOA title II State-level AEFLA grantees, WIOA title III
Wagner-Peyser ES grantees, and VR program grantees (under the
Rehabilitation Act as amended by WIOA title IV), are State government
agencies and, therefore, are not considered small entities. However,
the proposed rule could have a minimal impact on a variety of AEFLA
local providers, some of which are small entities by U.S. Small
Business Administration (SBA) size standards: \39\ (1) local
educational agencies (NAICS 611710; $21 million); (2) community-based
organizations (NAICS 813410; $8.5 million); (3) faith-based
organizations (NAICS 813110; $11.5 million); (4) libraries (NAICS
519120; $18.5 million); (5) community, junior (NAICS 611210; $28.5
million), and technical colleges (NAICS 611519; $18.5 million); (6) 4-
year colleges and universities (NAICS 611310; $30.5

[[Page 56337]]

million); (7) correctional institutions (NAICS 922410; NA \40\); (8)
other institutions, such as medical and special institutions not
designed for justice-involved individuals (NAICS 623210; $16.5
million); and (9) other public or private non-profit agencies or
institutions (NAICS 813319; $16 million).
---------------------------------------------------------------------------

\39\ SBA, ``Table of size standards,'' Effective May 2, 2022,
<a href="https://www.sba.gov/document/support-table-size-standards">https://www.sba.gov/document/support-table-size-standards</a> (last
visited June 15, 2022). Dollar values provided in parentheses are
the SBA average annual receipts small entity threshold (2017$) for
the relevant North American Industry Classification System (NAICS)
code.
\40\ There is no SBA size standard for this NAICS code.
---------------------------------------------------------------------------

Impact on Small Entities
As proposed in this NPRM, the definition of the effectiveness in
serving employers performance indicator would have a minimal impact on
AEFLA local providers. Each local AEFLA provider is expected to incur a
$73.67 cost to review the rule. The $73.67 cost to review the rule is a
de minimis burden on the entities incurring the cost, including the
smallest entities subject to the rule. For example, the average
community-based organization (NAICS 813410--civic and social
organizations)--the business type with the smallest average revenue at
$702,445--would spend much less than 1 percent of their annual revenue
on this cost. Among libraries (NAICS 519120) with fewer than 5
employees (the subset of the above listed entity types with the least
average revenue, by size in employees, at $110,980), this cost is 0.066
percent of the average entity's annual revenue.
Local AEFLA providers are not estimated to incur any new costs to
report Retention with the Same Employer and may incur cost savings if
they currently report Employer Penetration or Repeat Business
Customers. Local AEFLA providers that currently report Employer
Penetration would incur cost savings of $295 and local AEFLA providers
that currently report Repeat Business Customers would incur cost
savings of $442. Federal transfer payments to States would fully
finance the minor WIOA program cost burdens on grantees that would
result from finalizing the proposed rule. Therefore, the Department
hereby certifies that the proposed rule would not have a significant
economic impact on a substantial number of small entities.

C. Paperwork Reduction Act of 1995

The purposes of the PRA, 44 U.S.C. 3501 et seq., include minimizing
the paperwork burden on affected entities. The PRA requires certain
actions before an agency can adopt or revise a collection of
information, including publishing for public comment a summary of the
collection of information and a brief description of the need for and
proposed use of the information.
As part of their continuing efforts to reduce paperwork and
respondent burden, the Departments conduct a preclearance consultation
program to provide the general public and Federal agencies with an
opportunity to comment on proposed and continuing collections of
information in accordance with the PRA. See 44 U.S.C. 3506(c)(2)(A).
This activity helps to ensure that (1) the public understands the
Departments' collection instructions; (2) respondents can provide the
requested data in the desired format; (3) reporting burden (time and
financial resources) is minimized; (4) collection instruments are
clearly understood; and (5) the Departments can properly assess the
impact of collection requirements on respondents. Furthermore, the PRA
requires all Federal agencies to analyze proposed regulations for
potential time burdens on the regulated community created by provisions
in the proposed regulations that require any party to obtain, maintain,
retain, report, or disclose information. The information collection
requirements also must be submitted to OMB for approval.
A Federal agency may not conduct or sponsor a collection of
information unless it is approved by OMB under the PRA and displays a
currently valid OMB control number. The public also is not required to
respond to a collection of information unless it displays a currently
valid OMB control number. In addition, notwithstanding any other
provisions of law, no person will be subject to penalty for failing to
comply with a collection of information if the collection of
information does not display a currently valid OMB control number. See
44 U.S.C. 3512.
The proposed rule would revise ETA 9169, WIOA Statewide and Local
Performance Report Template approved under OMB Control Number 1205-
0526. The revision would require ``Retention with the Same Employer''
as the only definition of the effectiveness in serving employers
performance indicator in the WIOA Common Performance Reporting ICR by
an entity that reports to the Departments on behalf of the State. Data
elements for the collection and calculation for the two other piloted
definitions of the effectiveness in serving employers performance
indicator--Repeat Business Customer and Employer Penetration--would be
removed from the ICR, along with the corresponding breakouts of the
employer services that comprise them. No other changes are proposed for
this ICR. In accordance with the PRA, the Departments have submitted
the associated ICR to OMB in concert with the publishing of this
proposed rule. This provides the public the opportunity to submit
comments on the ICR, either directly to the Departments or to OMB. The
Departments will only consider comments within the scope of this ICR.
The 60-day period for the public to submit comments begins with the
submission of the ICR to OMB. Comments regarding this ICR may be
submitted electronically through <a href="https://www.regulations.gov">https://www.regulations.gov</a> and/or to
OIRA at <a href="https://www.reginfo.gov/public/do/PRAMain">https://www.reginfo.gov/public/do/PRAMain</a>. See the ADDRESSES
section of this proposed rule for more information about submitting
comments.
Agency: DOL-ETA.
Title of Collection: Workforce Innovation and Opportunity Act
(WIOA) Common Performance Reporting.
Type of Review: Revision of an approved ICR.
OMB Control Number: 1205-0526.
Description: The proposed rule would require Retention with the
Same Employer as the only definition of the effectiveness in serving
employers performance indicator in ETA 9169, WIOA Statewide and Local
Performance Report Template by an entity that reports to the
Departments on behalf of the State. Data elements for the collection
and calculation for the two other piloted definitions of the
effectiveness in serving employers performance indicator--Repeat
Business Customer and Employer Penetration--would be removed from the
ICR, along with the corresponding breakouts of the employer services
that comprise them. This package is unchanged except to remove the data
elements discussed above. No other changes are proposed for this ICR.
Affected Public: State Governments.
Obligation to Respond: Required to Obtain or Retain Benefits.
Frequency: Annually.
Estimated Total Annual Respondents: 19,114,129.
Estimated Total Annual Responses: 38,216,054.
Estimated Total Annual Burden Hours: 9,863,057.
Estimated Total Annual Other Burden Costs: $34,594,532.
Authority for the Information Collection: 20 CFR 677.155(a)(1)(vi),
and 34 CFR 361.155(a)(1)(vi) and 463.155(a)(1)(vi).

D. Executive Order 13132 (Federalism)

E.O. 13132 aims to guarantee the division of governmental

[[Page 56338]]

responsibilities between the National Government and the States and to
further the policies of the Unfunded Mandates Reform Act of 1995
(UMRA). Accordingly, E.O. 13132 requires executive departments and
agencies to ensure that the principles of federalism guide them in the
formulation and implementation of policies. Further, agencies must
adhere to constitutional principles, examine the constitutional and
statutory authority supporting a regulation that would limit the
policymaking discretion of the States, and assess the need for such a
regulation. To the extent practicable, agencies must consult State and
local officials before implementing any such regulation.
E.O. 13132 further provides that agencies must implement a
regulation that limits the policymaking discretion of the States only
where there is constitutional and statutory authority for the
regulation, and it addresses a problem of national significance. For a
regulation administered by the States, the National Government must
grant the States the maximum administrative discretion possible to
avoid intrusive Federal oversight of State administration, and agencies
must adhere to special requirements for a regulation that pre-empts
State law. E.O. 13132 also sets forth the procedures agencies must
follow for certain regulations with federalism implications, such as
preparation of a summary impact statement.
Accordingly, the Departments reviewed this WIOA-required NPRM for
federalism implications and have concluded that none exist in this
rulemaking. This joint NPRM does not contain any substantial direct
effects on States, on the relationships between the States, or on the
distribution of power and responsibilities among the various levels of
government as described by E.O. 13132. Therefore, the Departments
concluded that this NPRM does not have a sufficient federalism
implication to warrant the preparation of a summary impact statement.

E. Unfunded Mandates Reform Act of 1995

UMRA directs agencies to assess the effects of Federal regulatory
actions on State, local, and Tribal governments, and the private
sector. A Federal mandate is any provision in a regulation that imposes
an enforceable duty upon State, local, or Tribal governments, or
imposes a duty upon the private sector.
Following the consideration of the above factors, the Departments
concluded this joint NPRM contains no unfunded Federal mandates, as
defined in 2 U.S.C. 658(6) to include either a ``Federal
intergovernmental mandate'' or a ``Federal private sector mandate.''
Reporting Retention with the Same Employer as the effectiveness in
serving employers performance indicator as proposed does not place any
additional burdens on State, local, and Tribal governments because the
WIOA core programs already collect and report the necessary
information. Furthermore, Federal program funding triggers the
reporting requirement; therefore, the Departments provide funding for
any associated reporting mandate. Private training entities participate
as a provider under a WIOA core program on a purely voluntary basis,
and voluntarily assume the information collection.

F. Executive Order 13175 (Indian Tribal Governments)

The Departments reviewed this proposed rule under the terms of E.O.
13175 and DOL's Tribal Consultation Policy and have determined that it
would have Tribal implications, because the proposed regulations would
have substantial direct effects on: one or more Indian Tribes; the
relationship between the Federal government and Indian Tribes; or the
distribution of power and responsibilities between the Federal
government and Indian Tribes. Therefore, DOL has prepared a Tribal
summary impact statement. Because the Tribal implications of this
proposed rule relate only to DOL Indian and Native American (INA)
program grantees, DOL has printed the requisite Tribal summary impact
statement in the DOL-specific effectiveness in serving employers NPRM
published elsewhere in this issue of the Federal Register, which
proposes related changes for effectiveness in serving employers to
DOL's INA program regulations.

List of Subjects

20 CFR Part 677

Employment, Grant programs--labor.

34 CFR Part 361

Administrative practice and procedure, Grant programs--education,
Grant programs--social programs, Reporting and recordkeeping
requirements, Vocational rehabilitation.

34 CFR Part 463

Adult education, Grant programs--education.

For the reasons discussed in the preamble, the Employment and
Training Administration proposes to amend 20 CFR part 677 as follows:

PART 677--PERFORMANCE ACCOUNTABILITY UNDER TITLE I OF THE WORKFORCE
INNOVATION AND OPPORTUNITY ACT

0
1. The authority citation for part 677 continues to read as follows:

Authority: Secs. 116, 189, and 503 of Pub. L. 113-128, 128 Stat.
1425 (Jul. 22, 2014).

Subpart A--State Indicators of Performance for Core Programs

0
2. Amend Sec. 677.155 by revising paragraphs (a)(1)(vi) and (c)(6) to
read as follows:

Sec. 677.155 What are the primary indicators of performance under the
Workforce Innovation and Opportunity Act?

(a) * * *
(1) * * *
(vi) The percentage of participants with wage records in the second
quarter after exit who were employed by the same employer in the second
and fourth quarters after exit. For the six core programs, this
indicator is a statewide indicator reported by one core program on
behalf of all six core programs in the State, as described in guidance.
* * * * *
(c) * * *
(6) The percentage of participants with wage records in the second
quarter after exit who were employed by the same employer in the second
and fourth quarters after exit. For the six core programs, this
indicator is a statewide indicator reported by one core program on
behalf of all six core programs in the State, as described in guidance.

Subpart B--Sanctions for State Performance and the Provision of
Technical Assistance

0
3. Amend Sec. 677.190 by revising paragraph (c) to read as follows:

Sec. 677.190 When are sanctions applied for failure to achieve
adjusted levels of performance?

[[Page 56339]]

employers indicator described in Sec. 677.155(a)(1)(vi), by a core
program will constitute the overall State program score.
(2) However, until all indicators for the core program have at
least 2 years of complete data, the overall State program score will be
based on a comparison of the actual results achieved to the adjusted
level of performance for each of the primary indicators that have at
least 2 years of complete data for that program.
(3) The overall State indicator score, which is expressed as the
percent achieved, compares the actual results achieved on a primary
indicator of performance by all core programs in a State to the
adjusted levels of performance for that primary indicator.
(i) The average of the percentages achieved of the adjusted level
of performance by all of the core programs on that indicator will
constitute the overall State indicator score, except for the
effectiveness in serving employers indicator described in Sec.
677.155(a)(1)(vi).
(ii) The overall State indicator score for effectiveness in serving
employers, as reported by one core program on behalf of all six core
programs in the State, as described in guidance, is a statewide
indicator that reflects the performance for all core programs. It is
calculated as the statewide percentage achieved of the statewide
adjusted level of performance.
(4) However, until all indicators for the State have at least 2
years of complete data, the overall State indicator score will be based
on a comparison of the actual results achieved to the adjusted level of
performance for each of the primary indicators that have at least 2
years of complete data in a State.
(5) The individual indicator score, which is expressed as the
percent achieved, compares the actual results achieved by each core
program on each of the individual primary indicators to the adjusted
levels of performance for each of the program's primary indicators of
performance, except for the effectiveness in serving employers
indicator described in Sec. 677.155(a)(1)(vi).
* * * * *
For the reasons stated in the preamble, the Department of Education
proposes to amend 34 CFR parts 361 and 463 as follows:

PART 361--STATE VOCATIONAL REHABILITATION SERVICES PROGRAM

Subpart E--Performance Accountability Under Title I of the
Workforce Innovation and Opportunity Act

0
4. The authority citation for part 361, subpart E continues to read as
follows:

Authority: Secs. 116, 189, and 503 of Pub. L. 113-128, 128 Stat.
1425 (Jul. 22, 2014).

0
5. Amend Sec. 361.155 by revising paragraphs (a)(1)(vi) and (c)(6) to
read as follows:

Sec. 361.155 What are the primary indicators of performance under the
Workforce Innovation and Opportunity Act?

Sec. 361.190 When are sanctions applied for failure to achieve
adjusted levels of performance?

* * * * *
(c) Whether a State has failed to meet adjusted levels of
performance will be determined using the following criteria:
(1) The overall State program score, which is expressed as the
percent achieved, compares the actual results achieved by a core
program on the primary indicators of performance, except for the
effectiveness in serving employers indicator described in Sec.
361.155(a)(1)(vi), to the adjusted levels of performance for that core
program. The average of the percentages achieved of the adjusted level
of performance for each of the primary indicators, except for the
effectiveness in serving employers indicator described in Sec.
361.155(a)(1)(vi), by a core program will constitute the overall State
program score.
(2) However, until all indicators for the core program have at
least 2 years of complete data, the overall State program score will be
based on a comparison of the actual results achieved to the adjusted
level of performance for each of the primary indicators that have at
least 2 years of complete data for that program.
(3) The overall State indicator score, which is expressed as the
percent achieved, compares the actual results achieved on a primary
indicator of performance by all core programs in a State to the
adjusted levels of performance for that primary indicator.
(i) The average of the percentages achieved of the adjusted level
of performance by all of the core programs on that indicator will
constitute the overall State indicator score, except for the
effectiveness in serving employers indicator described in Sec.
361.155(a)(1)(vi).
(ii) The overall State indicator score for effectiveness in serving
employers, as reported by one core program on behalf of all six core
programs in the State, as described in guidance, is a statewide
indicator that reflects the performance for all core programs. It is
calculated as the statewide percentage achieved of the statewide
adjusted level of performance.
(4) However, until all indicators for the State have at least 2
years of complete data, the overall State indicator score will be based
on a comparison of the actual results achieved to the adjusted level of
performance for each of the primary indicators that have at least 2
years of complete data in a State.
(5) The individual indicator score, which is expressed as the
percent achieved, compares the actual results achieved by each core
program on each of the individual primary indicators to the adjusted
levels of performance for each of the program's primary indicators of
performance, except for the effectiveness in serving employers
indicator described in Sec. 361.155(a)(1)(vi).
* * * * *

PART 463--ADULT EDUCATION AND FAMILY LITERACY ACT

Subpart I--Performance Accountability Under Title I of the
Workforce Innovation and Opportunity Act

0
7. The authority citation for part 463, subpart I continues to read as
follows:

Authority: Secs. 116, 189, and 503 of Pub. L. 113-128, 128 Stat.
1425 (Jul. 22, 2014).

[[Page 56340]]

0
8. Amend Sec. 463.155 by revising paragraphs (a)(1)(vi) and (c)(6) to
read as follows:

Sec. 463.155 What are the primary indicators of performance under the
Workforce Innovation and Opportunity Act?

Sec. 463.190 When are sanctions applied for failure to achieve
adjusted levels of performance?

* * * * *
(c) Whether a State has failed to meet adjusted levels of
performance will be determined using the following criteria:
(1) The overall State program score, which is expressed as the
percent achieved, compares the actual results achieved by a core
program on the primary indicators of performance, except for the
effectiveness in serving employers indicator described in Sec.
463.155(a)(1)(vi), to the adjusted levels of performance for that core
program. The average of the percentages achieved of the adjusted level
of performance for each of the primary indicators, except for the
effectiveness in serving employers indicator described in Sec.
463.155(a)(1)(vi), by a core program will constitute the overall State
program score.
(2) However, until all indicators for the core program have at
least 2 years of complete data, the overall State program score will be
based on a comparison of the actual results achieved to the adjusted
level of performance for each of the primary indicators that have at
least 2 years of complete data for that program.
(3) The overall State indicator score, which is expressed as the
percent achieved, compares the actual results achieved on a primary
indicator of performance by all core programs in a State to the
adjusted levels of performance for that primary indicator.
(i) The average of the percentages achieved of the adjusted level
of performance by all of the core programs on that indicator will
constitute the overall State indicator score, except for the
effectiveness in serving employers indicator described in Sec.
463.155(a)(1)(vi).
(ii) The overall State indicator score for effectiveness in serving
employers, as reported by one core program on behalf of all six core
programs in the State, as described in guidance, is a statewide
indicator that reflects the performance for all core programs. It is
calculated as the statewide percentage achieved of the statewide
adjusted level of performance.
(4) However, until all indicators for the State have at least 2
years of complete data, the overall State indicator score will be based
on a comparison of the actual results achieved to the adjusted level of
performance for each of the primary indicators that have at least 2
years of complete data in a State.
(5) The individual indicator score, which is expressed as the
percent achieved, compares the actual results achieved by each core
program on each of the individual primary indicators to the adjusted
levels of performance for each of the program's primary indicators of
performance, except for the effectiveness in serving employers
indicator described in Sec. 463.155(a)(1)(vi).
* * * * *

Martin J. Walsh,
Secretary of Labor.
Miguel A. Cardona,
Secretary of Education.
[FR Doc. 2022-19002 Filed 9-13-22; 8:45 am]
BILLING CODE 4000-01-P 4510-FN-P

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