Rule2022-20560
Apprenticeship Programs, Labor Standards for Registration
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 26, 2022
Effective
November 25, 2022
Issuing agencies
Labor Department
Abstract
The U.S. Department of Labor (DOL or the Department) is issuing this final rule to rescind its 2020 regulation that established a process under which the Department's Office of Apprenticeship (OA) Administrator (Administrator) was authorized to grant recognition to qualified third-party entities, known as Standards Recognition Entities (SREs), which in turn were authorized to evaluate and extend recognition to Industry-Recognized Apprenticeship Programs (IRAPs). This final rule also makes necessary conforming changes to the regulations governing the registration of apprenticeship programs by the Department.
Full Text
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<title>Federal Register, Volume 87 Issue 185 (Monday, September 26, 2022)</title>
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[Federal Register Volume 87, Number 185 (Monday, September 26, 2022)]
[Rules and Regulations]
[Pages 58269-58288]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-20560]
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DEPARTMENT OF LABOR
29 CFR Part 29
[Docket No. ETA-2021-0007]
RIN 1205-AC06
Apprenticeship Programs, Labor Standards for Registration
AGENCY: Employment and Training Administration, Labor.
ACTION: Final rule.
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SUMMARY: The U.S. Department of Labor (DOL or the Department) is
issuing this final rule to rescind its 2020 regulation that established
a process under which the Department's Office of Apprenticeship (OA)
Administrator (Administrator) was authorized to grant recognition to
qualified third-party entities, known as Standards Recognition Entities
(SREs), which in turn were authorized to evaluate and extend
recognition to Industry-Recognized Apprenticeship Programs (IRAPs).
This final rule also makes necessary conforming changes to the
regulations governing the registration of apprenticeship programs by
the Department.
DATES: This final rule is effective November 25, 2022.
FOR FURTHER INFORMATION CONTACT: John V. Ladd, Administrator, Office of
Apprenticeship, U.S. Department of Labor, 200 Constitution Avenue NW,
Room C-5311, Washington, DC 20210; telephone (202) 693-2796 (this is
not a toll-free number).
Individuals with hearing or speech impairments, please dial 7-1-1
to access telecommunications relay services.
SUPPLEMENTARY INFORMATION:
List of Abbreviations
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Abbreviation Definition
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AAI............................... American Apprenticeship Initiative.
Administrator..................... Administrator of the U.S. Department
of Labor's Office of
Apprenticeship.
BLS............................... U.S. Bureau of Labor and Statistics.
CFR............................... Code of Federal Regulations.
COVID-19.......................... Coronavirus Disease 2019.
DOL or the Department............. U.S. Department of Labor.
ECEC.............................. Employer Costs for Employee
Compensation.
EEO............................... equal employment opportunity.
E.O............................... Executive Order.
ERISA............................. Employee Retirement Income Security
Act of 1974.
ETA............................... Employment and Training
Administration.
FR................................ Federal Register.
FY................................ Fiscal Year.
GS................................ General Schedule.
HHS............................... U.S. Department of Health and Human
Services.
IC................................ information collection.
IRAP.............................. Industry-Recognized Apprenticeship
Program.
IT................................ information technology.
NAA............................... National Apprenticeship Act of 1937.
NPRM.............................. Notice of Proposed Rulemaking.
OA................................ Office of Apprenticeship.
OJL............................... on-the-job learning.
OMB............................... Office of Management and Budget.
RAP............................... Registered Apprenticeship program.
RAPIDS............................ Registered Apprenticeship Partners
Information Database System.
RI................................ Related instruction.
SAA............................... State Apprenticeship Agency.
Secretary......................... U.S. Secretary of Labor.
SOC............................... Standard Occupational
Classification.
SRE............................... Standards Recognition Entity.
Task Force........................ Task Force on Apprenticeship
Expansion.
UMRA.............................. Unfunded Mandates Reform Act of
1995.
U.S.C............................. U.S. Code.
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Preamble Table of Contents
I. Background
II. The Registered Apprenticeship System Is Highly Successful for
Industry
III. The Registered Apprenticeship System Is Highly Successful for
Workers
A. Registered Apprenticeships Uniformly Provide More Rigorous,
Higher Quality Training
B. Registered Apprenticeships Provide Better Safety and Welfare
Protections
IV. The IRAP System Is Redundant of the Registered Apprenticeship
System
V. The Effect of the Department's Rescission of the 2020 IRAP Final
Rule
VI. 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 of 1996, and Executive Order 13272 (Proper
Consideration of Small Entities in Agency Rulemaking)
C. Paperwork Reduction Act
D. Executive Order 13132: Federalism
E. Unfunded Mandates Reform Act of 1995
F. Executive Order 13175 (Indian Tribal Governments)
I. Background
The National Apprenticeship Act of 1937 (NAA), 29 U.S.C. 50,
authorizes the Secretary of Labor (Secretary) to: (1) formulate and
promote the use of labor standards necessary to safeguard the welfare
of apprentices and to encourage their inclusion in apprenticeship
contracts; (2) bring together employers and labor for the formulation
of programs of apprenticeship; and (3) cooperate with State agencies
engaged in the formulation and promotion of standards of
apprenticeship. 29 U.S.C. 50. The Department promulgated
[[Page 58270]]
regulations to implement the NAA at 29 CFR part 30 (equal employment
opportunity (EEO) in apprenticeship) in 1963 and at 29 CFR part 29
(labor standards for the registration of apprenticeship programs) in
1977. The part 30 regulations prohibit discrimination in Registered
Apprenticeship based on race, color, religion, national origin, sex
(including pregnancy and gender identity), sexual orientation, age (40
or older), genetic information, and disability, and they require
sponsors of Registered Apprenticeship programs (RAPs) to promote equal
opportunity in such programs. The part 29 regulations set forth labor
standards designed to safeguard the welfare of apprentices in RAPs,
including: prescribing policies and procedures concerning the
registration, cancellation, and deregistration of apprenticeship
programs; recognizing State Apprenticeship Agencies (SAAs) as
Registration Agencies; and matters relating thereto. The Department
significantly updated 29 CFR part 29 in 2008 to ``increase flexibility,
enhance program quality and accountability, and promote apprenticeship
opportunity in the 21st century, while continuing to safeguard the
welfare of apprentices'' (73 FR 64402, Oct. 29, 2008, hereinafter ``the
2008 final rule''), and updated 29 CFR part 30 in 2016 ``to modernize
the equal employment opportunity regulations'' (81 FR 92026, Dec. 19,
2016). These regulations provide the framework for the Registered
Apprenticeship system.
On June 15, 2017, President Trump issued Executive Order (E.O.)
13801, ``Expanding Apprenticeships in America'' (82 FR 28229), which
directed the Secretary of Labor to consider issuing regulations that
promote the development of IRAPs by third parties. Section 8(b)(iii) of
E.O. 13801 also established a Task Force on Apprenticeship Expansion
(Task Force) to identify strategies and proposals to promote
apprenticeships, to include ``the most effective strategies for
creating industry-recognized apprenticeships.'' Based on E.O. 13801 and
the Task Force's recommendations, the Department issued a Notice of
Proposed Rulemaking (NPRM) on June 25, 2019 (84 FR 29970, hereinafter
``the 2019 IRAP NPRM''), which proposed amending 29 CFR part 29 by
adding a subpart (subpart B) containing a new regulatory framework
governing both the recognition and oversight of SREs by the Department,
and the recognition and oversight of IRAPs by Department-recognized
SREs. After considering approximately 326,000 written comments on the
2019 IRAP NPRM, the Department published a final rule in the Federal
Register on March 11, 2020 (85 FR 14294), entitled ``Apprenticeship
Programs, Labor Standards for Registration, Amendment of Regulations''
(hereinafter ``the 2020 IRAP final rule''), which established a new 29
CFR part 29, subpart B governing the recognition and oversight of SREs
and IRAPs, designated the Registered Apprenticeship regulations at 29
CFR 29.1 through 29.14 as subpart A under the heading ``Subpart A--
Registered Apprenticeship Programs,'' and made conforming edits to
subpart A to account for the addition of subpart B.
The 2020 IRAP final rule established a set of standards and
procedures under which the Administrator would evaluate and extend
recognition to SREs; these recognized SREs, in turn, were authorized
under the rule to evaluate and recognize IRAPs. The 2020 IRAP final
rule set forth in detail the requirements for third-party entities
applying for Departmental recognition as SREs. It also identified
certain requirements apprenticeship programs must meet to obtain
recognition from SREs as IRAPs. The 2020 IRAP final rule became
effective on May 11, 2020.
On February 17, 2021, President Biden issued E.O. 14016,
``Revocation of Executive Order 13801'' (86 FR 11089); section 2 of
this E.O. directed Federal agencies to ``promptly consider taking steps
to rescind any orders, rules, regulations, guidelines, or policies''
implementing E.O. 13801. Pursuant to E.O. 14016, on February 17, 2021,
the Department announced that it would initiate a review of the IRAP
system. The Department also suspended the acceptance and review of new
and pending SRE recognition applications.\1\ The Department advised
that all SREs recognized by the Department prior to the February 17,
2021 suspension, as well as all IRAPs recognized by an SRE prior to
that date, could continue to operate in accordance with the
requirements outlined in 29 CFR part 29, subpart B. At the time the
Department began the SRE pause and IRAP system review, there were 27
organizations recognized by the Department as SREs.
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\1\ DOL, ``U.S. Department of Labor Undertakes Several Actions
to Strengthen Registered Apprenticeship Program, Eliminate
Duplication,'' Feb. 17, 2021, <a href="https://www.dol.gov/newsroom/releases/eta/eta20210217">https://www.dol.gov/newsroom/releases/eta/eta20210217</a>.
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Consistent with E.O. 14016, the Department considered whether to
retain the 2020 IRAP regulation. After review, the Department concluded
that retaining the IRAP regulatory framework was not in the best
interest of apprentices or the Department. Accordingly, on November 15,
2021, the Department published an NPRM in the Federal Register (86 FR
62966, hereinafter ``the 2021 IRAP Rescission NPRM''), proposing to
rescind the 2020 IRAP final rule and to make necessary conforming
changes to the Department's Registered Apprenticeship regulations in 29
CFR part 29, subpart A (Registered Apprenticeship Programs).
In the 2021 IRAP Rescission NPRM, the Department explained the
rationale for adopting the 2020 IRAP final rule, acknowledged that the
proposed rescission represented a change in its position with respect
to the need for and the benefits of IRAPs, and explained why it
proposed to rescind the 2020 final rule. Commenters on the proposed
rescission largely supported the Department's proposal for the reasons
discussed at length in the proposal, as discussed in more detail in the
``Public Comments'' section below. Accordingly, the Department, for the
reasons discussed in the 2021 IRAP Rescission NPRM and the preamble to
this final rule, is finalizing the rule as proposed.
The Department is rescinding the 2020 IRAP final rule because it
has determined that the Department's efforts and resources should be
focused on Registered Apprenticeship, which has proven to be highly
successful for both industry and workers and incorporates valuable
quality standards and worker protections. This is consistent with the
Administration's priority to expand Registered Apprenticeship because
of its success as a pathway to the middle class and ability to connect
a diverse workforce to family-supporting jobs.\2\ Further, it aligns
with the Department's priority to use ``Registered Apprenticeship [to]
provide pathways to strengthen our workforce and our economy.'' \3\
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\2\ <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2021/02/17/fact-sheet-biden-administration-to-take-steps-to-bolster-registered-apprenticeships/">https://www.whitehouse.gov/briefing-room/statements-releases/2021/02/17/fact-sheet-biden-administration-to-take-steps-to-bolster-registered-apprenticeships/</a>.
\3\ <a href="https://www.dol.gov/newsroom/releases/eta/eta20210217">https://www.dol.gov/newsroom/releases/eta/eta20210217</a>.
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In contrast, and as explained in detail in the 2021 IRAP Rescission
NPRM, the Department now believes the 2020 IRAP final rule does not
align with the Department's priorities of providing high-quality
training with an emphasis on apprentice safety and welfare. 86 FR
62968-71. This is due to the 2020 IRAP final rule's fewer quality
training and worker protection standards as compared to Registered
Apprenticeship's on-the-job learning and related instruction
requirements and apprentice protections, such as
[[Page 58271]]
enhanced safety standards, a progressive wage requirement, and EEO
regulations. Within the Registered Apprenticeship regulations, there is
also greater accountability because the Department can exercise direct
oversight to ensure employers provide industry-established prevailing
wages, ensure stringent safety standards are in place, and monitor
program quality to protect workers. By contrast, the Department's
limited, indirect oversight role of IRAPs under the 2020 IRAP final
rule constrains its ability to ensure that IRAPs are providing quality
training and worker protection, leading to potentially inequitable
access to higher quality training and worker protections among program
participants. Accordingly, the Department no longer believes the IRAP
model is a reasonable or effective alternative to the training
standards, worker protection, and oversight that are the cornerstones
of Registered Apprenticeship. 86 FR 62968-71.
The Department also determined that two of the key justifications
for issuing the 2020 IRAP final rule--the purported inflexibility in
the Registered Apprenticeship system and the administrative burdens
hindering Registered Apprenticeship's ability to meet the needs of
different industries--are fundamentally flawed. As discussed at length
in the 2021 IRAP Rescission NPRM, the assertion that the Registered
Apprenticeship system is inflexible and administratively burdensome is
belied by the demonstrated success of Registered Apprenticeship for
industry and workers alike, and by Registered Apprenticeship's
continued growth and expansion into new industries and occupations.
Indeed, Registered Apprenticeship has continued to show strong growth
since its establishment, including the latest data reflecting strong
growth in 2020 and 2021, during the height of the COVID-19
pandemic.<SUP>4 5</SUP> RAPs are a flexible training strategy, with
vital quality controls, that can be customized to meet the business
needs for a skilled workforce. As the Department discussed in the 2021
IRAP Rescission NPRM, the most recent data reflects that Registered
Apprenticeship has not only continued to grow but has also expanded
into ``non-traditional'' industry sectors, such as healthcare,
cybersecurity, transportation, and advanced manufacturing, through a
variety of initiatives (e.g., Department's 2015 American Apprenticeship
Initiative (AAI)) and has demonstrated success in those sectors. 86 FR
62971-72.
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\4\ OA 2020 Data and Statistics, available at <a href="https://www.dol.gov/agencies/eta/apprenticeship/about/statistics/2020">https://www.dol.gov/agencies/eta/apprenticeship/about/statistics/2020</a>.
\5\ OA 2021 Data and Statistics, available at <a href="https://www.dol.gov/agencies/eta/apprenticeship/about/statistics/2021">https://www.dol.gov/agencies/eta/apprenticeship/about/statistics/2021</a>.
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The Department also determined that the 2020 IRAP final rule's
justification that IRAPs were necessary to address a purported ``skills
gap'' was based on faulty reasoning. As discussed in the 2021 IRAP
Rescission NPRM, the Department no longer believes the purported
``skills gap,'' as referenced in the 2020 IRAP final rule, to be the
major challenge facing the labor market. 86 FR 62971. Rather, the
Department now believes that there are additional factors that have a
bearing on industry labor needs, such as employer investments in
workforce development, competitive and rising wages to attract and
retain workers, commitments to opportunity and diversity, and worker
empowerment.<SUP>6 7</SUP> These are factors that the RAP framework
supports and is well-positioned to address, thereby providing a more
promising and effective framework for addressing and closing persistent
inefficiencies in the labor market. In contrast, the 2020 IRAP final
rule is deficient in incorporating these factors, and its deficiencies
in job quality and worker protection requirements (particularly with
respect to EEO and progressive wages for apprentices) reduce the
ability of IRAPs to address any current or future labor shortages.
Further, the IRAP final rule's deficiencies in ensuring quality
standards for workers undermine both the RAP framework and the
Administration's commitment to promoting good quality, family-
sustaining jobs for all workers, including apprentices.
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\6\ Annelies Goger and Luther Jackson, ``The labor market
doesn't have a `skills gap'--it has an opportunity gap,'' Sept. 9,
2020, <a href="https://www.brookings.edu/blog/the-avenue/2020/09/09/the-labor-market-doesnt-have-a-skills-gap-it-has-an-opportunity-gap/">https://www.brookings.edu/blog/the-avenue/2020/09/09/the-labor-market-doesnt-have-a-skills-gap-it-has-an-opportunity-gap/</a>.
\7\ Kate Bahn, `` `Skills gap' arguments overlook collective
bargaining and low minimum wages,'' May 9, 2019, <a href="https://equitablegrowth.org/skills-gap-arguments-overlook-collective-bargaining-and-low-minimum-wages/">https://equitablegrowth.org/skills-gap-arguments-overlook-collective-bargaining-and-low-minimum-wages/</a>.
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Finally, through the experience of administering the IRAP system,
the Department has determined that the IRAP system is redundant of
Registered Apprenticeship and that such redundancy creates confusion
and reduces resources that would be better used to support the
continued success and growth of Registered Apprenticeship across
industries and occupations. As discussed in the 2021 IRAP Rescission
NPRM, the Department observed significant duplication of occupations
covered by RAPs and IRAPs. 86 FR 62972. The Department notes that the
flexible RAP model has continued to expand into emerging occupations
and sectors; accordingly, as discussed above and in the 2021 IRAP
Rescission NPRM, there is a significant overlap in the industry sectors
served by RAPs and IRAPs. Further, the administration of the IRAP
system has generated duplicative work and costs for the Department,
created inconsistent standards for quality training, reduced worker
protections such as EEO, and committed limited resources that could
have been better utilized by the Department to partner with industry to
expand the existing Registered Apprenticeship system. 86 FR 62971-72.
Public Comments
The 2021 IRAP Rescission NPRM invited written comments from the
public concerning the proposed rulemaking; the comment period closed on
January 14, 2022. During the 60-day public comment period, the
Department received a total of 20 public comment submissions (including
18 unique submissions, one duplicate submission, and one submission
that was outside the scope of the rulemaking). The comments received on
the 2021 IRAP Rescission NPRM may be viewed at <a href="https://www.regulations.gov">https://www.regulations.gov</a> by entering docket number ETA-2021-0007.
The commenters represented a range of stakeholders from the public,
private, and not-for-profit sectors, including: six labor
organizations; three trade associations; two advocacy organizations;
two SAAs; one organization that represents SAAs; one SRE; and one IRAP.
The Department also received comments from two individuals. After
careful consideration of the comments received and for the reasons
explained below, the Department is adopting this final rule, which
rescinds the regulatory framework for SREs and IRAPs codified at 29 CFR
part 29, subpart B, and makes necessary conforming changes to the
Department's Registered Apprenticeship regulations in 29 CFR part 29,
subpart A, as proposed (including removing the subpart A designation).
General Support for and Opposition to the 2021 Proposal To Rescind the
2020 IRAP Final Rule
Several commenters discussed their general support for the proposal
to rescind the 2020 IRAP final rule and thereby remove the regulatory
framework for SREs and IRAPs under 29 CFR part 29, subpart B. Some
commenters expressed agreement with the proposal and further supported
the proposal's focus on strengthening and modernizing the current
Registered
[[Page 58272]]
Apprenticeship system, ensuring that apprentices are protected from
abuse and properly trained by their chosen apprenticeship program, and
safeguarding the welfare of apprentices. Other commenters expressed
support for the proposal and argued that the Registered Apprenticeship
system should be supported and expanded to new industries and that,
``if allowed to remain in place, the 2020 IRAP final rule would
threaten to undo more than eight decades of highly effective
apprenticeship programs validated by public entities.'' A commenter
conveyed its support for the removal of subpart B because doing so
would ensure that construction industry apprenticeships continue as the
``gold standard'' for apprenticeship programs throughout the United
States and to serve as an example to other industries to emulate.
Another commenter urged the Department to ensure that the proposal only
strengthen RAPs and maintain the high quality of the Registered
Apprenticeship system.
The Department appreciates the commenters' support of the proposal
and agrees that the RAP model is effective and has proven successful
for both industry and workers for more than 80 years. The Department
shares the view of the commenters who believe that the Department
should focus its efforts on bolstering and modernizing the Registered
Apprenticeship system and facilitating the expansion of RAPs into new
and emerging industries and sectors. The Department appreciates the
commenter's assertion that the rescission of 29 CFR part 29, subpart B
would ensure that construction industry apprenticeships continue as the
``gold standard'' for apprenticeship programs, however, the Department
also notes that the rescission of this subpart would ensure that all
apprenticeship programs, including construction industry
apprenticeships, maintain high-quality labor standards in connection
with the Registered Apprenticeship framework. The Department recognizes
the value of the Registered Apprenticeship system and has prioritized
investing in the RAP model to rebuild the economy, expand economic
opportunities and workforce access for underrepresented populations and
communities, and advance racial and gender equity. By adopting this
proposal, the Department preserves high-level requirements for
apprentice training and safety. These requirements are vital to
establishing quality RAP opportunities that lead to good-quality jobs,
and careers for workers, while also helping fulfill labor market
demands and support economic growth.
The Department received comments expressing general support for the
IRAP model, based on commenters' use of the model, and discussing some
of the benefits of their use of the IRAP model. One commenter described
the process by which it developed an SRE and its process to create
criteria to evaluate IRAPs. The commenter described its process as
fair, valid, impartial and well-received by the IRAP that it
recognized. Another commenter asserted that IRAPs can help close the
growing skills gap, creating a bridge between business leaders and
career seekers. The commenter further argued that IRAPs help rebuild
the workforce by shortening the amount of time required to enter or
upskill in a given industry. The commenter also highlighted the
internal and external program evaluation elements in their IRAP that
cover validation of need, validation of competencies, qualifications of
personnel, apprentice selection, and program effectiveness.
The Department acknowledges these comments in general support of
IRAPs and appreciates that there can be instances of success in IRAPs.
Nevertheless, as stated in the 2021 IRAP Rescission NPRM, the
Department views the 2020 IRAP final rule as inconsistent with the
Department's goal of expanding quality apprenticeships in a manner that
both ensures a high level of quality for apprentices and industry while
also retaining the necessary flexibility to adapt apprenticeships to
different industries and occupations. Further, the Department views the
IRAP system as duplicative of the Registered Apprenticeship system,
though with fewer quality standards and less oversight, and the IRAP
system is not a prudent use of Government resources and would diminish
the quality and coherence of the Department's apprenticeship efforts.
In response to the commenter who asserted that IRAPs can help
address the skills gap in the American workforce, the Department
disagrees with this view. In the 2021 IRAP Rescission NPRM, the
Department explained why the IRAP model is not poised to address the
existing challenges and inefficiencies in the labor market.
Specifically, while providing training to job seekers is a key
component to addressing any ``skills gaps'' or ``skills mismatches,''
evidence suggests that training alone is not the answer. Employer
investments in workforce development, competitive and rising wages to
attract and retain workers, commitments to opportunity and diversity,
and worker empowerment are key factors to addressing industry labor
needs.<SUP>8 9</SUP> The well-established RAP model provides a more
promising and effective framework for addressing and closing persistent
inefficiencies in the labor market.
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\8\ Annelies Goger and Luther Jackson, ``The labor market
doesn't have a `skills gap'--it has an opportunity gap,'' Sept. 9,
2020, <a href="https://www.brookings.edu/blog/the-avenue/2020/09/09/the-labor-market-doesnt-have-a-skills-gap-it-has-anopportunity-gap/">https://www.brookings.edu/blog/the-avenue/2020/09/09/the-labor-market-doesnt-have-a-skills-gap-it-has-anopportunity-gap/</a>.
\9\ Kate Bahn, `` `Skills gap' arguments overlook collective
bargaining and low minimum wages,'' May 9, 2019, <a href="https://equitablegrowth.org/skills-gap-arguments-overlook-collective-bargaining-and-low-minimum-wages/">https://equitablegrowth.org/skills-gap-arguments-overlook-collective-bargaining-and-low-minimum-wages/</a>.
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The Department's Role in Administering the National Apprenticeship Act
and Implementing Its Regulations
The Department received several comments that questioned whether
the 2020 IRAP final rule's issuance was consistent with the NAA,
referring to the legislative history and purpose of the NAA. One
commenter, in describing the NAA's legislative history, highlighted
congressional comments about Federal intervention to halt the
exploitation of apprentices. Several commenters remarked that the 2020
IRAP final rule constituted an improper delegation of the Department's
authority under the NAA. One commenter stated that Congress did not
enable the Secretary to delegate the authority to approve
apprenticeships or apprenticeship standards to an outside party.
Similarly, another commenter stated that the 2020 IRAP final rule
shifts the authority from the Department to third-party SREs in
contravention of the Department's responsibility under the NAA to
determine whether statutory requirements have been met. Another
commenter stated that IRAPs created under the 2020 IRAP final rule do
not feature the level of standardization demanded by the NAA. A
commenter asserted that the 2020 IRAP final rule unlawfully delegated
EEO oversight to SREs, contrary to the Department's goals in the 29 CFR
part 30 regulations to address discrimination and inequitable
participation of women and minorities in apprenticeships. Another
commenter asserted that the 2020 IRAP final rule eliminated protections
for apprentices established by the 2008 final rule, including: (1) the
requirement that a State Apprenticeship Agency serving as a
Registration Agency recognized by the Department under 29 CFR part 29
must be a Government entity; (2) the provisional registration of new
apprenticeship programs; (3) minimum standards for instructor
qualifications; and (4) a cap on the length of an apprentice's
probationary period. The commenter argued that rescinding the
[[Page 58273]]
IRAP regulations would restore these important protections as well as
other safeguards that preceded the 2008 final rule, such as the minimum
number of hours of related instruction (RI), for all apprentices.
The Department acknowledges these comments and appreciates their
support for the 2021 IRAP Rescission NPRM. As the Department explained
in the 2020 IRAP final rule (85 FR 14295-14296, Mar. 11, 2020), the NAA
provides a general authorization and direction for the Secretary to
create and promote standards of apprenticeship, including through
contracts, and to interface with employers, labor, and States to create
apprenticeships and apprenticeship standards. See 29 U.S.C. 50. The
2020 IRAP final rule does not exceed or conflict with the broad
authority granted by Congress to the Secretary in the NAA. However, the
Department agrees that IRAPs created under the 2020 IRAP final rule do
not provide adequate standards for high-quality training or safety and
welfare protections, including sufficient EEO protections. As stated in
the 2021 IRAP Rescission NPRM, the 2020 IRAP final rule ``does not
provide adequate focus on worker needs and protections, does not ensure
adequate program quality standards, does not provide sufficient [EEO]
protections for apprentices, and does not provide a proven pathway to
family-sustaining jobs'' (86 FR 62967, Nov. 15, 2021).
With regard to the comment that the 2020 IRAP final rule eliminated
protections for apprentices established by the 2008 final rule, the
Department clarifies that the 2020 IRAP final rule did not propose any
revisions to the 29 CFR part 29 requirements that a State
Apprenticeship Agency serving as a Registration Agency must be a
Government entity, the provisional registration of new apprenticeship
programs, the minimum standards for instructor qualifications, and a
cap on the length of an apprentice's probationary period. Rather, the
2020 IRAP final rule made technical amendments to subpart A to account
for subpart B. The 2021 IRAP Rescission NPRM proposed to remove subpart
B, to make conforming technical edits to what had been subpart A, and
to remove the distinctions of subparts because they would no longer be
necessary with the removal of subpart B. Therefore, no changes are
required in response to these comments.
II. The Registered Apprenticeship System Is Highly Successful for
Industry
A skilled workforce is foundational to a strong economy, and RAPs
provide a proven avenue by which to deliver much needed talent
development to various industry sectors. For over 80 years, the
Registered Apprenticeship system has been successful in providing
industry with high-quality work-based learning. RAPs combine paid on-
the-job learning (OJL) with RI to progressively increase workers' skill
levels and wages. With this ``earn and learn'' model, apprentices are
employed and earn wages from the first day on the job. Additionally,
employers have continued to turn to Registered Apprenticeship to hire
and train new employees, with over 241,000 new apprentices in RAPs in
Fiscal Year (FY) 2021 across several industries, including
cybersecurity, healthcare, advanced manufacturing, transportation,
energy, and information technology (IT).\10\ Industries that have
adopted RAPs as part of their work-based learning models have cited the
standards, skillsets, and retention offered by skilled workers
associated with RAPs as advantageous to their bottom line. In one
survey, nearly three-fourths of surveyed employers stated that RAPs
drove increased worker productivity.\11\ RAPs are a flexible training
strategy, with vital quality controls, that can be customized to meet
the business needs for a skilled workforce. These strategies include
allowing employers to partner with workforce partners and educators to
develop and apply industry standards to training programs, thereby
increasing the quality and productivity of the workforce.
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\10\ The 25 federally administered States and 18 federally
recognized SAAs use the Employment and Training Administration's
Registered Apprenticeship Partners Information Database System
(RAPIDS) to provide individual apprentice and sponsor data. These
data represent Registered Apprenticeship national results for FY
2021 (Oct. 1, 2020-Sept. 30, 2021), as reported by these entities,
and are available at <a href="https://www.dol.gov/agencies/eta/apprenticeship/about/statistics/2021">https://www.dol.gov/agencies/eta/apprenticeship/about/statistics/2021</a> (last visited May 19, 2022).
\11\ Urban Institute Research Report, ``The Benefits and
Challenges of Registered Apprenticeship: The Sponsors'
Perspective,'' June 12, 2009, <a href="https://www.urban.org/research/publication/benefits-and-challenges-registered-apprenticeship-sponsors-perspective">https://www.urban.org/research/publication/benefits-and-challenges-registered-apprenticeship-sponsors-perspective</a>.
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Most commenters agreed with the Department's position in the NPRM
that RAPs are highly successful for industry. One commenter noted the
eight successful decades of the Registered Apprenticeship system and
credited RAPs with continued success in expanding their presence in
high-growth sectors (e.g., advanced manufacturing, healthcare,
transportation, and IT) and ``in industries not traditionally
associated with apprenticeship.'' Another commenter encouraged the
Department to ``embrace and bolster'' the RAP model. Several commenters
referred to RAPs as the ``gold standard'' for apprenticeship that
creates a highly trained workforce. The Department appreciates these
commenters' support for RAPs and agrees that the Registered
Apprenticeship system has had a robust and successful history.
Notably, these same commenters who lauded RAP as beneficial to
industry also expressed their views that IRAPs are harmful to industry.
One commenter expressed concern that the 2020 IRAP final rule's lack of
uniform standards disincentivizes the creation of apprenticeship
programs because apprentices are easily ``poached'' due to minimal
standards and less program transparency. The commenter also stated that
the Department's decision to create IRAPs was counter to the Task
Force's recommendation to start with a pilot program to determine
industry interest, leading to a hastily created apprenticeship model
without evidence that it would be embraced by industry or successful as
a viable alternative to RAPs.
Commenters also expressed the view that the 2020 IRAP final rule
was detrimental to the construction industry, despite the exclusion of
construction activities from the 2020 IRAP final rule. A commenter also
noted that future administrations could remove the construction
exclusion from the 2020 IRAP final rule, thereby undermining RAPs in
the construction industry, and jeopardizing RAPs as the ``premier
method for preparing its future workforce.''
The Department appreciates the support received to rescind the 2020
IRAP final rule. The Department acknowledges the commenters' assertions
that IRAPs would create disincentives to setting up apprenticeship
programs or an overall negative impact on industry, including the
construction industry. The Department's rationale for rescinding the
2020 IRAP final rule does not rely upon general concerns about the
potential detrimental effect to industry generally and the construction
industry particularly, but the Department appreciates these concerns
and notes that the rescission of the 2020 IRAP final rule in its
entirety obviates such concerns.
Conversely, a commenter in support of the IRAP system noted their
[[Page 58274]]
opposition to the Department's exclusion of the construction industry
from recognition under the IRAP regulatory framework.\12\ This
commenter argued that the construction industry was ripe for an
expansion of apprenticeship opportunities. While the commenter
applauded efforts to recruit, retrain, and upskill workers in the
Registered Apprenticeship system, the commenter asserted that ``new and
innovative apprenticeships'' are necessary in the construction sector
as it recovers from the negative economic impacts of the Coronavirus
Disease 2019 (COVID-19) pandemic. The commenter specifically
highlighted the residential construction industry as one that could
benefit from these new approaches to apprenticeship. The commenter
urged the Department, when designing and implementing apprenticeship
and job training opportunities, to target those industries with the
highest number of job openings and conduct greater outreach efforts to
identify the individual sectors that are underrepresented. The
commenter also encouraged the Department to take steps to distinguish
between types of construction activities (such as residential
construction) and collaborate with the different segments of the
construction industry ``to develop and expand [RAPs] through companies,
educational organizations, and other nonunion groups that better
represent the demographics of the workforce.''
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\12\ The 2020 IRAP final rule at Sec. 29.30 excluded SREs from
not recognizing as IRAPs programs that seek to train apprentices to
perform construction activities as defined in Sec. 29.30.
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In response to the comment reiterating opposition to the
construction industry's exclusion in the 2020 IRAP final rule, the
Department has concluded that the rescission of the 2020 IRAP final
rule should have a beneficial impact across all industries by restoring
a unitary regulatory framework for quality apprenticeship programs,
both in sectors where such programs are widespread (such as
construction) and in a wide range of high-growth and emerging
occupations (such as healthcare, IT, cybersecurity, advanced
manufacturing). While the Department notes the commenter's concerns
about a current shortage of workers in the residential construction
sector, it does not believe that preserving a parallel system of
apprenticeship that lacks quality control and oversight is the
appropriate solution for addressing such a worker shortage. Moreover,
the Department notes that it has registered nonunion programs in the
construction sector, which demonstrates the RAP model can be
successfully utilized across all parts of an industry. The Department
notes further that the IRAP system is not necessary to expand the reach
of apprenticeship to new and different industries as RAPs have proven
to be successful across a wide range of industry sectors. The
Department continues to be interested in expanding and strengthening
the RAP model in all industry sectors, including residential
construction and other construction-related activities.
III. The Registered Apprenticeship System Is Highly Successful for
Workers
A. Registered Apprenticeships Uniformly Provide More Rigorous, Higher
Quality Training
In addition to the demonstrated success of the Registered
Apprenticeship system as a workforce training model for industry, it
has proven to be highly successful and beneficial to workers because of
its emphasis on both high-quality training and apprentice safety and
welfare. RAPs are designed to ensure high-quality training through
structured OJL, mentorship, and RI, while also prioritizing safety,
wage progression, and EEO for apprentices. RAPs implement federally
approved industry standards for training apprentices for skilled
occupations in the workplace; specifically, these programs must abide
by regulatory provisions for supervision and training of apprentices to
further enhance safety in the workplace. During training, apprentices
are guaranteed progressive wage increases, and research shows that RAP
completers earn over $300,000 (including benefits) more over their
lifetimes as compared with individuals who do not complete a RAP.\13\
Further, the Department has taken significant steps to increase the
participation of women and individuals from underrepresented groups
through the robust requirements in 29 CFR part 30. With Registered
Apprenticeship, there is also an added level of accountability because
the Department can intervene and ensure employers provide progressive
wages established in their approved Registered Apprenticeship
standards, ensure stringent safety standards are in place, address
discrimination and issues of equal opportunity, and monitor program
quality to protect workers.
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\13\ See, e.g., Mathematica Policy Research, ``An Effectiveness
Assessment and Cost-Benefit Analysis of Registered Apprenticeship in
10 States: Final Report,'' July 25, 2012, <a href="https://wdr.doleta.gov/research/FullText_Documents/ETAOP_2012_10.pdf">https://wdr.doleta.gov/research/FullText_Documents/ETAOP_2012_10.pdf</a>. The study cautions
against interpreting its results, which do not control for
unobservable skill or motivation, as having conclusively identified
the effects of Registered Apprenticeship on earnings. Moreover, the
estimates do not represent increments between RAPs and IRAPs (the
latter not having been implemented at the time the study was
conducted).
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Commenters agreed with the Department that the RAP model is highly
successful because of its emphasis on both high-quality training and
apprentice safety and welfare and agreed with the Department's position
that IRAPs are not designed to uniformly promote these core elements of
quality apprenticeship programs. For example, several commenters, in
expressing support for the Department's 2021 IRAP Rescission NPRM,
remarked that RAPs offer protection and standards to ensure quality
among the hallmarks of apprenticeship--high-quality training, including
OJL and RI, safety and welfare, progressive wages, EEO protections, and
worker empowerment. One commenter argued that Registered Apprenticeship
is a proven model that consistently provides quality training and
employment opportunities, and another commenter stated that the RAP
model's balance of regulatory oversight and standardized training
requirements produces workers with skillsets that lead to family-
sustaining careers. In addition, in noting their support for the
Department's 2021 IRAP Rescission NPRM, several commenters compared the
RAP model with that of IRAPs, agreeing with the Department's
determination that the IRAP model neither adequately ensures high-
quality training nor apprentice safety and welfare.
Commenters also provided suggestions on how to improve Registered
Apprenticeship. One commenter suggested that the Department use lessons
learned from the IRAP model to strengthen Registered Apprenticeship,
specifically recommending that the RAP model should emphasize the
assessment of competencies, use third-party capstone industry-
recognized certifications, and require a program evaluation component
with an emphasis on outcomes. Another commenter, in expressing support
for the 2021 IRAP Rescission NPRM, suggested that resources be
refocused on aggressive oversight of RAPs to ensure the protection of
apprentices, including investigation into the amount and source of
funding for the operation of a RAP; the adequacy of the facilities and
equipment used for training; adequacy of plans for retraining graduates
to upgrade skillsets; the track record of the RAP sponsor; and whether
the sponsor has the ability to provide broad-based training that will
prepare apprentices to
[[Page 58275]]
be marketable in an industry-recognized occupation.
The Department appreciates these comments that support its 2021
IRAP Rescission NPRM. The Department also appreciates and agrees with
the comments characterizing the RAP model as highly successful because
of its emphasis on protections and standards that ensure high-quality
training and apprentice safety and welfare. The Department agrees with
the comments that assert that the IRAP model does not adequately ensure
high-quality training or apprentice safety and welfare. With respect to
the suggestions on how to improve Registered Apprenticeship, the
Department acknowledges these comments and continues to be interested
in ideas to expand Registered Apprenticeship while elevating important
quality standards and promoting advancement opportunities for workers.
The Department notes that the 2020 IRAP final rule does not mandate
industry capstone certifications and that such mechanisms are not
prohibited under the Registered Apprenticeship regulations. The
Department continues to be interested in exploring ideas for
strengthening the Registered Apprenticeship system and training model,
and the Department appreciates these suggestions on how to make
Registered Apprenticeship more successful for all workers and
industries.
A structured OJL model is a hallmark of a high-quality
apprenticeship program, as this framework provides standardized
evaluation of apprentice proficiency using a time-based model,
competency-based model, or a hybrid of both, with benchmarks that
ensure mastery in the apprentice's respective occupation and
flexibility in the approach used that ensures apprenticeships can be
developed and customized to a variety of occupations.\14\ OJL is a
critical component for the apprentice's learning experience, and the
Department considers a structured mentorship requirement as a strength
for high-quality apprenticeship programs. RAPs pair apprentices with
experienced employees (also referred to as journeyworkers) who have
already mastered the skills and competencies associated with the
occupation such that these individuals can mentor apprentices with on-
the-job guidance and direction that ensures safety and quality
training. In contrast, the IRAP regulations lack a structured,
standardized framework for OJL, resulting in inconsistent training
across all SREs and IRAPs.
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\14\ RAP regulations at 29 CFR 29.5(b)(2) set forth the
requirements for the term of apprenticeship, which for an individual
apprentice may be measured either through the completion of the
industry standard for OJL (at least 2,000 hours) (time-based
approach), the attainment of competency (competency-based approach),
or a blend of the time-based and competency-based approaches (hybrid
approach).
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Another critical component of a RAP is RI.\15\ This RI provision is
designed to ensure that apprentices uniformly receive meaningful and
substantive knowledge in their respective occupations, creating a well-
rounded training experience that provides the educational foundation
necessary for success in practical settings, while also retaining
flexibility based on different industries and occupations that may
require varying amounts of RI. In contrast, the IRAP regulations lack
standards on minimum RI hours, and do not articulate how SREs monitor
or evaluate RI.
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\15\ RI is an organized and systematic form of instruction
designed to provide the apprentice with the knowledge of the
theoretical and technical subjects related to the apprentice's
occupation. Such instruction may be given in a classroom, through
occupational or industrial courses, or by correspondence courses of
equivalent value, electronic media, or other forms of self-study
approved by the Registration Agency. 29 CFR 29.2. Under 29 CFR
29.5(b)(4), a minimum of 144 hours of RI is recommended for
Registered Apprenticeship; many RAPs exceed this 144-hour
recommendation.
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The Department received several comments concerning OJL and RI.
Several commenters, in expressing their support for the Department's
2021 IRAP Rescission NPRM, agreed with the Department's assertion that
the IRAP model lacks OJL and RI standards that are necessary to ensure
high-quality training. One commenter argued that the 2020 IRAP final
rule's lack of robust OJL requirements means that many IRAPs would not
include this essential aspect of quality apprenticeship programs.
Another commenter lauded the current OJL and RI requirements in the
Registered Apprenticeship regulations \16\ and agreed with the
Department's assertion that the 2020 IRAP final rule's requirement of
only a written training plan \17\ means that IRAPs cannot create a
standardized framework for quality training since quality of training
can vary across SREs. Another commenter suggested that the RAP model
benefits apprentices through robust requirements for OJL, which
provides a holistic understanding of their specific field; the
commenter also asserted that the RAP model is generally supported by a
recommended minimum requirement for RI, which provides theoretical and
technical education associated with an apprentice's profession. The
same commenter argued that the absence of minimum standards and an
articulated approach to evaluation for RI in the 2020 IRAP final rule
results in subpar IRAP training relative to RAPs and a lower quality
experience for employers and apprentices. Another commenter agreed with
the Department and stated that the 2020 IRAP final rule's approach to
OJL and RI is amorphous and inadequate. The commenter also referred to
the Department's recent updates to its RAP guidance \18\ around
flexibilities available in the delivery of OJL and RI to demonstrate
that the RAP model can be flexible while still adhering to quality
standards.
---------------------------------------------------------------------------
\16\ See 29 CFR 29.5(b)(1) through (3) for OJL and 29.5b(4) for
RI.
\17\ See 29 CFR 29.22(a)(4)(ii).
\18\ OA issued Circular 2021-01, Flexibilities Available for the
Delivery of On-the-Job Learning (OJL) and Related Instruction (RI)
by Registered Apprenticeship Programs (RAPs), on December 16, 2020.
It is available at <a href="https://www.apprenticeship.gov/about-us/legislation-regulations-guidance/circulars">https://www.apprenticeship.gov/about-us/legislation-regulations-guidance/circulars</a>.
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Another commenter, in expressing support for the proposed
rescission, argued that the IRAP model also failed to incorporate
apprenticeability standards, which appear at 29 CFR 29.4.\19\ The
commenter argued that rescission of the 2020 IRAP final rule is
important to ensure that apprentices receive broad-based training for
in-demand skills because the 2020 IRAP final rule fails to account for
apprentices' need to affordably retrain and update their skillsets. The
commenter referred to three States--Delaware, New York, and
Pennsylvania--that have included language in their apprenticeability
standards that ensures skill development is not restricted to a single
organization. Further, the commenter referred to Washington State's
apprenticeability standard as one of the most stringent.
---------------------------------------------------------------------------
\19\ Registered Apprenticeship regulations at 29 CFR 29.4 set
forth criteria for determining when an occupation qualifies as
apprenticeable.
---------------------------------------------------------------------------
While not expressly opposing the Department's 2021 IRAP Rescission
NPRM, two commenters, nevertheless, expressed their support of the
general IRAP approach to OJL and RI, and suggested improvements to the
RAP model based on the 2020 IRAP final rule. One of these commenters
developed an IRAP-recognition procedure that the commenter described as
``based on national and international standards [. . .] that, in turn,
incorporate adult learning principles, validate content in alignment
with industry, and produce rigorous and
[[Page 58276]]
validated assessment tools and personnel who are qualified to
facilitate learning in the work environment.'' This commenter expressed
the view that incorporating such a competency-based approach could
strengthen outcomes for RAP apprentices by assuring industry and
employers that competencies have been attained. The commenters
recommended that all apprenticeships be based on competency and
performance criteria rather than having the option of a time-based
approach, and they stated that the Department should incorporate
positive features of the 2020 IRAP final rule into a new, modified
Registered Apprenticeship system. To this end, one of the commenters
recommended that RAPs emphasize the assessment of competencies by using
a third-party capstone industry-recognized certification and by
requiring a program evaluation component with an emphasis on outcomes.
The other commenter opined that the IRAP model's competency-based
approach to learning is more cost effective than apprenticeship
programs that are time-based. The commenter further asserted that IRAPs
provide credit for prior knowledge for all workers, allowing
individuals to complete apprenticeships more quickly. The same
commenter stated that its IRAP ensures quality of OJL and apprentices'
instruction by specifically using an assessment model tiered with
several levels of quality assurance.
The Department appreciates and agrees with the comments asserting
that, when compared to Registered Apprenticeship, the IRAP model lacks
OJL and RI requirements that are necessary to ensure high-quality
training. The Department agrees with the comments that laud the RAP
model's approach to OJL and RI, which provide a holistic understanding
of a specific field and are generally supported by a recommended
minimum requirement for RI that provides theoretical and technical
education associated with an apprentice's profession. The Department
also agrees that the standards and approach to evaluation for RI in the
2020 IRAP final rule results in subpar training relative to RAPs and a
lower quality experience for employers and apprentices. The Department
concurs that the existing approach to OJL and RI in RAPs has proven
effective in striking an appropriate balance between the structure
necessary to ensure high-quality training and the flexibility necessary
to adapt the apprenticeship model to different industries and
occupations.
In response to the comment that notes the 2020 IRAP final rule
failed to incorporate apprenticeability standards, the Department
concurs that the omission of the apprenticeability requirements from
the 2020 IRAP final rule was problematic. The Department agrees that
this omission is further support for the proposed rescission, as
apprenticeability standards are a key component in determining whether
an occupation's training is responsive to the needs of industry. The
RAP model's incorporation of apprenticeability standards to determine
whether proposed training is suitable for an occupation and responsive
to industry needs underscores the quality of the existing RAP model.
In response to the comments that expressed support of the IRAP
model's approach to OJL and RI, the Department maintains that IRAPs do
not have the same rigorous training standards for minimum skill level
or competency baselines in their respective occupations when compared
to RAPs. Regarding the commenter that stated that the IRAP model's
competency-based approach to learning is more cost effective than
apprenticeship programs that are time-based, the Department notes that
the RAP model allows for a competency-based approach to OJL (see 29 CFR
29.5(b)(2)(ii)) and permits RAP sponsors the ability to choose the
approach--time-based, competency-based, or hybrid--that is best suited
for their industry, programs, and apprentices. Regarding the same
commenter's further assertion that IRAPs provide credit for prior
knowledge for all workers, allowing individuals to complete
apprenticeships more quickly, the Department notes that the RAP model
also permits sponsors to grant advanced standing or credit for
demonstrated competency (see 29 CFR 29.5(b)(12)). Finally, in response
to the same commenter that stated its IRAP ensures quality of OJL and
apprentices' instruction by specifically using an assessment model
tiered with several levels of quality assurance, the Department
acknowledges that while the commenter's specific IRAP may implement
several levels of quality assurance for its OJL and RI, the 2020 IRAP
final rule fails to ensure that all IRAPs include such quality
standards for OJL and RI.
In response to the comments that suggest improvements to the RAP
model's approaches to OJL and RI, the Department appreciates the
commenters' recommendation concerning the assessment of competencies as
a key measure for evaluating the successful completion of a RAP by an
apprentice but notes that adoption of these suggestions are outside the
scope of this rulemaking. The Department also notes that the RAP
regulations at 29 CFR 29.2 define ``competency'' as ``the attainment of
manual, mechanical or technical skills and knowledge, as specified by
an occupational standard and demonstrated by an appropriate written and
hands-on proficiency measurement.'' Accordingly, competency attainment
is the basis for advancement through and successful completion of both
the competency-based and hybrid approaches in RAPs. The Department is
committed to expanding competency attainment models as a feature of
RAPs while also ensuring the acquisition of critical structured OJL
necessary to acquire these competencies. Such models should include
sufficient mentoring opportunities for apprentices to obtain
proficiency in the skilled occupation.
The Department acknowledges this comment regarding the utility of
third-party evaluation of an apprentice's competencies in
apprenticeship program design and is committed to continuing to study
effective RAP models, identify research and evidence-based practices,
and evaluate their outcomes.
B. Registered Apprenticeships Provide Better Safety and Welfare
Protections
The importance of apprentice safety and welfare cannot be
overstated. As discussed in the 2021 IRAP Rescission NPRM and
reiterated below, the Registered Apprenticeship system includes
enhanced requirements related to safety, EEO, progressive wages, and
other worker protections that provide apprentices with meaningful
employment opportunities while also guaranteeing rights and protections
on the job. In contrast, the requirements of the 2020 IRAP final rule
fall short in these areas. That final rule's requirements include basic
compliance with existing laws but do not create additional obligations
that focus on safeguarding the welfare of apprentices, especially with
respect to progressively increasing wages, safety requirements, and EEO
protections and requirements. The 2021 IRAP Rescission NPRM also noted
that the 2020 IRAP final rule dilutes the Department's role in
overseeing apprenticeships, tasking SREs with this oversight role
instead, and retaining only a minimal role in overseeing the SREs. The
Department received several comments regarding these issues, which are
discussed below.
[[Page 58277]]
1. Workplace Safety
RAPs require several safety protections designed to both teach
apprentices how to work safely within their occupation and create safe
workplaces for apprentices.\20\ These safety requirements focus on both
physical workplace safety and safety through training and mentorship.
Further, they are meant to protect the safety of apprentices in each
RAP by being tailored to the specific conditions in which those
apprentices will be working and learning. In contrast, IRAPs are not
covered by enhanced safety standards beyond generally applicable
Federal, State, and local safety laws and regulations and any
additional safety requirements of the SRE.
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\20\ See 29 CFR 29.5(b)(7) and (9).
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Several comments in support of the 2021 IRAP Rescission NPRM
discussed the strength of Registered Apprenticeship's worker safety
protections. For example, one commenter noted that the Registered
Apprenticeship safety framework has proven effective in striking the
right balance between safety, quality, and flexibility across
industries. Further, the commenter highlighted the strength of
Registered Apprenticeship's safety parameters, to include ratios,
supervision, and training requirements. Another commenter highlighted
the importance of a safe training environment for apprentices in RAPs,
with an emphasis on data from the construction industry about the
inherent dangers to younger, less experienced workers. The commenter
described how RAPs include extensive safety training as well as
supervision and on-the-job training to ensure the work environment is
safe. These commenters also contrasted the Registered Apprenticeship
safety protections with the 2020 IRAP final rule. One commenter
highlighted the lack of required safety training in the 2020 IRAP final
rule and offered that a mere pledge to comply with workplace safety
laws was insufficient to adequately protect apprentices. Another
commenter acknowledged the construction industry exclusion from the
2020 IRAP final rule but expressed concern that some industry programs
could still be recognized as IRAPs, which in the commenter's view would
create parallel systems that would dilute safety requirements and
affect overall industry safety for apprentices, journeyworkers, and the
public. A commenter faulted the 2020 IRAP final rule for merely
requiring IRAPs to abide by Federal, State, and local safety laws and
for providing SREs with too much discretion to establish their own
safety standards, leading to less rigorous safety requirements that
could result in unsafe training programs and high-risk workplaces.
Finally, a commenter contrasted the safety requirements for RAPs in the
Registered Apprenticeship regulations at 29 CFR 29.5 with the lack of
an apprentice-to-journeyworker ratio in the 2020 IRAP final rule at 29
CFR 29.22 to ensure a level of supervision necessary for apprentice
safety.
The Department appreciates these comments and agrees that
Registered Apprenticeship's worker safety provisions are designed to
provide stronger protections than provided in the 2020 IRAP final rule.
The Department views the enhanced safety requirements in Registered
Apprenticeship regulations as an essential element of a successful
apprenticeship program, given the nature of apprenticeship as OJL and
training. The focus in the Registered Apprenticeship regulations on
both workplace safety standards and safety through training and
mentorship provides a multi-pronged approach to worker safety. 29 CFR
29.5(b)(7) and (9). The Department agrees with the commenters'
assessments that the safety requirements in Registered Apprenticeship
are rigorous enough to provide essential protection and training for
apprentices as well as flexible and adaptable enough to each workplace
and industry needs. The Department also agrees with commenters'
assessments of the 2020 IRAP final rule requirements at Sec.
29.22(a)(4) as being insufficient to provide a safe training
environment for apprentices. Likewise, the Department agrees that the
2020 IRAP final rule instead inadvisably gives discretion to the SRE on
the important matter of apprentice safety, potentially leading to both
inconsistencies and deficient safety requirements across IRAPs even
within the same industry. With respect to the construction industry
exclusion from the 2020 IRAP final rule in Sec. 29.30, the Department
acknowledges concerns that IRAPs could have been recognized in the
construction industry despite the exclusion in the 2020 IRAP final
rule. Although the Department views the explicit construction industry
exclusion from the 2020 IRAP final rule as an appropriate safeguard
against such potential outcomes, the Department's decision to rescind
the 2020 IRAP final rule resolves concerns about potential weaknesses
in the 2020 IRAP final rule's construction industry exclusion.
2. Progressive Wages
It is a priority of the Department to grow opportunities to help
workers access family-sustaining jobs. The RAP earn-as-you-learn model
accomplishes this priority by providing for progressively increasing
wages for apprentices as they progress in their apprenticeship
experience, learning, and skills. In Registered Apprenticeship, the
graduated scale of wages and any compensation for RI is set forth in
the apprenticeship agreement required for each apprentice. Not only is
this type of wage progression guaranteed per the terms of the
apprenticeship agreement, but it also serves as an important incentive
to attract apprentices and sets them on a path to family-sustaining
careers. In contrast, there is no such guaranteed wage progression for
apprentices of IRAPs--an apprentice could be earning the same wages
over the course of the apprenticeship, and any wage progression is
solely at the discretion of the IRAP.
Several commenters in support of the 2021 IRAP Rescission NPRM
discussed the importance of Registered Apprenticeship's progressive
wage requirements. A couple of commenters cited research showing that
apprentices who successfully complete RAPs accrue, over the course of
their careers, approximately $300,000 more in salary and benefits than
similarly situated workers who have not completed a RAP.\21\ Another
commenter described RAPs as providing ``a pathway to the middle class''
because apprentices are guaranteed to receive higher wages as they
advance and complete training requirements.
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\21\ See, e.g., Mathematica Policy Research, ``An Effectiveness
Assessment and Cost-Benefit Analysis of Registered Apprenticeship in
10 States: Final Report,'' July 25, 2012, <a href="https://wdr.doleta.gov/research/FullText_Documents/ETAOP_2012_10.pdf">https://wdr.doleta.gov/research/FullText_Documents/ETAOP_2012_10.pdf</a>. The study cautions
against interpreting its results, which do not control for
unobservable skill or motivation, as having conclusively identified
the effects of Registered Apprenticeship on earnings. Moreover, the
estimates do not represent increments between RAPs and IRAPs (the
latter not having been implemented at the time the study was
conducted).
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These commenters also faulted the IRAP model for failing to require
progressive wage increases for participants. One commenter expressed
concern that failing to require progressive wages would decrease the
attractiveness of IRAPs, lead to lower completion rates, and worsen
employee loyalty. One commenter expressed that the 2020 IRAP final
rule's lack of progressive wage requirement undermined the pathway to
the middle class because IRAPs are permitted to
[[Page 58278]]
offer a single wage rate that never increases, even after apprentices'
complete months or years of training.
A commenter expressed concern that IRAPs could subvert Davis-Bacon
Act provisions that provide exemptions for apprentices in RAPs to be
paid at an amount commensurate with their skill level for Federal
construction contract positions. The commenter noted that this
exemption allows an apprentice to gain firsthand experience through a
robust training program with mentorship. Citing research, a commenter
remarked that ``robust'' prevailing wage laws help States attract more
apprentices and lead to improved safety on construction work sites.
The Department agrees with the commenters that progressive wages
are a critical element in successful apprenticeship programs both
because they guarantee increases commensurate with the apprentice's
experience and proficiency and because they lead apprentices on a path
to higher lifetime earnings. The Department also agrees with these
commenters that the absence of a requirement for a progressively
increasing schedule of apprentice wages in the 2020 IRAP final rule is
a fundamental shortcoming and is inconsistent with the Department's
role in promoting the highest quality apprenticeship programs. The
Department acknowledges one commenter's concern regarding Davis-Bacon
wages and related concern that IRAPs could subvert these wage
provisions to create instability in the construction apprenticeship
program. The Department does not share this view, however, because the
construction industry exclusion in the 2020 IRAP final rule was
specifically designed to address this concern. Moreover, the
Department's decision to rescind the 2020 IRAP final rule in its
entirety will obviate any concerns about its potential negative impact
on construction industry wages.
One commenter in support of the 2020 IRAP final rule stated that
IRAPs provide opportunities for job seekers to obtain profitable
employment while earning a credential and developing ``specific
industry-related skill sets.'' The commenter remarked that its practice
was to create apprenticeship programs that pay a living wage, as
determined by local workforce development boards.
The Department acknowledges and appreciates that IRAPs may
structure their programs to provide a path to family-sustaining
employment, and that the commenter's particular IRAP may be one that is
beneficial to its apprentices. The issue with the 2020 IRAP final rule,
however, is that it does not set requirements in this regard--other
than adherence to applicable laws--and therefore, IRAPs' wage
structures may vary widely. IRAPs have broad discretion to structure
their wages as they please and to include stagnant wages that do not
provide a viable path to family-sustaining employment. For this reason,
the Department does not view IRAPs' wage requirements as sufficiently
meeting the Department's goal of ensuring high-quality apprenticeship
programs.
3. Equal Employment Opportunity
The Department views equity and equal opportunity as essential to
the success of an apprenticeship program, and it notes its
responsibility under E.O. 13985, ``Advancing Racial Equity and Support
for Underserved Communities Through the Federal Government,'' 86 FR
7009 (Jan. 20, 2021), to advance equity, civil rights, racial justice,
and equal opportunity. Accordingly, the Registered Apprenticeship
system has structured and specific requirements regarding equal
opportunity, anti-harassment, affirmative action, utilization analyses
and goals, targeted recruitment, outreach and retention, compliance,
and enforcement. In contrast, the 2020 IRAP final rule only requires
IRAPs to affirm their adherence to applicable Federal, State, and local
laws and regulations pertaining to EEO.
Commenters in support of the Department's 2021 IRAP Rescission NPRM
highlighted the strength of the Registered Apprenticeship system's EEO
requirements. One commenter remarked that the Registered Apprenticeship
system's EEO requirements are especially important for women, people of
color, and veterans.\22\ Another lauded the Registered Apprenticeship
system's requirements to take affirmative steps to ensure EEO in
apprenticeship. One commenter specifically noted the Registered
Apprenticeship system's requirements to develop and maintain an
extensive affirmative action plan, comprehensive recordkeeping, and
complaint and enforcement provisions.
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\22\ Pursuant to 29 CFR 30.3, all apprentices and applicants for
Registered Apprenticeship are protected against discrimination on
the bases of race, color, religion, national origin, sex, sexual
orientation, age (40 or older), genetic information, or disability.
While the EEO in apprenticeship regulations do not specify veterans
as a protected group, sponsors may specifically seek out veterans or
give them preference in hiring as long as doing so does not
discriminate on the basis of any of the protected characteristics
covered by 29 CFR 30.3.
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Commenters were also critical of the 2020 IRAP final rule's lack of
enhanced EEO provisions. One commenter faulted the 2020 IRAP final rule
for failing to ensure EEO in its apprenticeship programs for
underrepresented groups, including women, minorities, and individuals
with disabilities. The commenter stated that merely requiring SREs to
develop outreach strategies was insufficient because there was no
requirement to implement such strategies. Another commenter similarly
faulted the 2020 IRAP final rule for failing to require programs to
comply with Registered Apprenticeship's EEO regulations at 29 CFR part
30 and instead only requiring IRAPs to practice ``passive
nondiscrimination'' and comply with a ``patchwork'' of Federal, State,
and local antidiscrimination laws. Because of this, the commenter
asserted that IRAPs do not comply with the Biden Administration's E.O.
13985, ``Advancing Racial Equity and Support for Underserved
Communities Through the Federal Government.'' The commenter argued that
the 2020 IRAP final rule undermined diversity efforts in its industry
and fails to protect minorities and other disadvantaged populations
that would otherwise benefit from apprenticeship programs in its
industry. By rescinding the 2020 IRAP final rule and redirecting
resources to expansion of the Registered Apprenticeship system, the
commenter said the Department would promote equity and equal
opportunities to participate in training programs with a ``proven
record of leading to middle-class jobs for all Americans.'' Similarly,
another commenter agreed that IRAPs would not successfully expand
opportunities to participate in apprenticeship programs to underserved
populations because programs under the IRAP model are only required to
affirm they will adhere to Federal, State, and local EEO laws and
regulations. A commenter also noted the benefits of building upon and
strengthening the successful Registered Apprenticeship program rather
than allowing a parallel model ``to evolve through the shedding of
strong EEO commitments, obligations, [and] accountability.''
The Department appreciates and agrees with the comments in support
of the Registered Apprenticeship system's part 30 regulations. The
Department also agrees with the comments faulting the 2020 IRAP final
rule for falling short by only requiring the bare minimum under
applicable laws and minimal additional outreach responsibilities by the
SREs that do not include a mechanism for accountability. The Department
also agrees with the commenter who stated that the Department's focus
on building and strengthening Registered
[[Page 58279]]
Apprenticeship would be the most effective path in ensuring successful
apprenticeship programming for all U.S. workers.
Conversely, a commenter opposed to the proposed rescission asserted
that both IRAPs and RAPs are required to take affirmative steps to
ensure EEO, and that IRAPs promote increased apprenticeship
opportunities while continuing to safeguard the welfare of apprentices.
The Department disagrees with this assertion. As noted in the 2021
IRAP Rescission NPRM, the current regulations governing EEO in
Registered Apprenticeship under 29 CFR part 30 require program sponsors
to take affirmative steps to promote diversity and equity in
apprenticeship and provide sponsors with the tools needed to reduce
barriers to equal opportunity within their programs. The structured and
specific EEO requirements in Registered Apprenticeship regarding equal
opportunity, anti-harassment, affirmative action, utilization analyses
and goals, targeted recruitment, outreach and retention, compliance,
and enforcement are absent from the IRAP model. The IRAP model simply
requires programs to affirm their adherence to applicable Federal,
State, and local laws and regulations pertaining to EEO, but provides
no specific mechanisms by which to measure effort and outcomes.
4. Worker Empowerment
As mentioned in the 2021 IRAP Rescission NPRM, the Department
generally believes the relationship between workers and employers must
be balanced so workers have a voice in ensuring fair and safe work
conditions. The requirement that Registered Apprenticeship agreements
include specific terms ensures the apprentices have knowledge of their
rights and responsibilities and empowers them to be informed
participants in the program and employment relationship. Although the
IRAP regulation at 29 CFR 29.22(a)(4)(x) also contains a written
apprenticeship agreement requirement, each IRAP may determine which
terms and conditions to include as long as the agreement is consistent
with the SRE's requirements. Without parameters, this requirement
contains little more than an honor system to ensure apprentices have
meaningful information about the terms and conditions of their
apprenticeship and how they can voice their concerns.
Commenters in support of the Department's 2021 IRAP Rescission NPRM
praised the Department's attention to worker empowerment. One commenter
proposed that RAPs be further strengthened to empower workers in
industries that lack union representation and achieve the Biden
Administration goal of creating jobs ``to be filled by diverse, local,
well-trained workers who have a choice to join a union.'' The commenter
also agreed with the Department's reasoning that the apprenticeship
agreement is crucial to ``articulating the standards of apprenticeship
and the terms and conditions of employment'' given the required
elements of the apprenticeship agreement. The commenter additionally
praised RAPs for protecting apprentices by requiring periodic
performance evaluations and only canceling an apprenticeship for ``good
cause'' after a reasonable and time-limited probationary period that
counts toward completion of the program. Other commenters similarly
praised the RAP apprenticeship agreement requirements as a crucial tool
for worker empowerment and success.
Commenters highlighted the 2020 IRAP final rule's lack of worker
empowerment provisions. One commenter faulted the 2020 IRAP final rule
for failing to comply with the NAA's directive to safeguard
apprentices' welfare by leaving undue discretion to SREs, failing to
``establish the minimum standards necessary'' to ensure industries do
not exploit new entrants to an industry, and failing to clarify the
process for employee grievances or complaints. A commenter similarly
stated that the 2020 IRAP final rule fails to appropriately empower
workers through the lack of clarity on grievance procedures. A
commenter also agreed with the Department's reasoning that the IRAP
model's ``hands-off approach'' enables employers to ignore apprentice
needs and asserted that apprentices participating in IRAPs would be at
risk of sudden, arbitrary cancellation of their participation in a
program. Commenters noted that there were no uniform requirements for
IRAP apprenticeship agreements to include apprentice work plans and
number of classroom hours needed for program completion.
The Department views an apprenticeship agreement as a foundational
requirement for worker empowerment and agrees that the RAP requirements
for apprenticeship agreements provide apprentices with knowledge and
awareness of the terms of their employment and training during the
apprenticeship. As commenters noted, unlike in the 2020 IRAP final
rule, the apprenticeship agreement for RAPs must contain specific
terms, including a statement of the occupation for which the apprentice
is training, the duration of the apprenticeship, the number of hours in
the program (to include RI hours), the schedule of work processes, the
graduated scale of wages to be paid, the standards of the
apprenticeship program, dispute resolution, and an EEO statement. See
29 CFR 29.7. Registered Apprenticeship agreements must also set forth
the requirement that the apprenticeship agreement be canceled for
``good cause,'' which provides additional protection for apprentices,
as does the requirement to include information on grievance procedures.
These elements of an apprenticeship agreement are not required in the
2020 IRAP final rule, and the Department views their absence as a
detriment to apprentices.
The Department further agrees with commenters that the 2020 IRAP
final rule's requirement for an IRAP apprenticeship agreement is
insufficient to guarantee that apprentices are fully informed of the
terms and conditions of their apprenticeship because the IRAP can
determine which terms to include as long as the IRAP is consistent with
its SRE's requirements. Because there are two levels of discretion for
IRAP apprenticeship agreements--the SRE decides its required parameters
and the IRAP determines which terms and conditions to include--
apprenticeship agreements can vary widely among IRAPs and may not
include all provisions the Department thinks are necessary to protect
the interests of apprentices.
A commenter who supported IRAPs stated that the IRAP model does
meet workers' needs by providing them with a clear sense of career
trajectory and increased job satisfaction while also increasing loyalty
and reducing turnover for employers. The Department acknowledges that
an individual IRAP may structure its program to lead to such results.
However, the Department does not view the requirements in the 2020 IRAP
final rule as sufficient to provide apprentices with the information
needed to make informed decisions or be knowledgeable about their
rights and responsibilities during their apprenticeship.
5. Departmental Oversight
In support of its proposal, the Department noted its concern with
the oversight structure set forth in the 2020 IRAP final rule because
the required safety and welfare provisions of the 2020 IRAP final rule
are primarily overseen and enforced by SREs. The Department also
described its limited ability to intervene in any disparities in worker
protections or outcomes among IRAPs.
[[Page 58280]]
Commenters agreed with these concerns, faulting the 2020 IRAP final
rule for failing to ensure adequate Departmental oversight. For
example, a commenter noted that the 2020 IRAP final rule provided the
Department with almost no basis for evaluating SRE standards or IRAP
recognition. Another commenter stated that the requirement for
``reasonable'' and ``effective'' quality control between the SREs and
IRAPs was not sufficient to ensure IRAP compliance with the minimal
requirements of the 2020 IRAP final rule. This commenter also noted
that SREs and IRAPs would have no reason to comply with the higher
fiduciary standards under the Employee Retirement Income Security Act
of 1974 (ERISA), in contrast to the majority of apprentices in RAPs
being protected by ERISA. A commenter also expressed concern that the
2020 IRAP final rule lacked an adequate quality assurance framework and
that vesting oversight responsibilities with SREs would lead to
disparities in the quality of IRAPs available, noting that there were
few, if any, consequences for low-performing IRAPs. One commenter
referenced the 2008 final rule, in which the Department concluded that
delegation of oversight responsibilities to State Apprenticeship
Councils failed to meet its obligation under the NAA, to argue that the
Department similarly should conclude that delegation of oversight to
SREs is prohibited under the NAA.
The Department generally agrees that tasking SREs with oversight in
the manner set forth in the 2020 IRAP final rule dilutes the
Department's role in overseeing apprenticeship and concurs with the
notion that the 2020 IRAP final rule's oversight provisions are less
rigorous than those in the Registered Apprenticeship framework due to
the Department's more limited role. The Department agrees that the lack
of uniformity in the 2020 IRAP final rule could lead to disparities in
IRAP quality that may go unchecked. The Department also acknowledges
that the Department's reduced role in the 2020 IRAP final rule could
present compliance challenges and, in combination with the insufficient
apprentice safety and welfare provisions, could lead to less protection
for apprentices--a fundamental reason for the Department's proposed
rescission. The Department disagrees, however, that it inappropriately
delegated its oversight responsibilities to SREs and that it did so in
a manner inconsistent with the NAA. The Department considered this
issue in developing the 2019 IRAP NPRM and the 2020 IRAP final rule and
views the oversight provisions in the 2020 IRAP final rule, which
include SRE reporting requirements and the Department's oversight of
SREs, to be consistent with the NAA. That said, in rescinding the 2020
IRAP final rule, the Department has determined that, for the reasons
discussed in the NPRM and provided by the commenters, the better
approach is for the Department to have a more direct oversight role
than provided for in the 2020 IRAP final rule.
6. Other Worker Protection Concerns
The Department received comments in support of the proposed IRAP
rescission offering additional criticisms that the 2020 IRAP final rule
fails to protect apprentices and proposing additional bases for the
rescission of the 2020 IRAP final rule. Commenters raised several
concerns, in addition to the reasons set forth by the Department in the
2021 IRAP Rescission NPRM, related to IRAPs' impact on apprentice
safety and welfare. One commenter expressed the view that the SRE
recognition process was flawed because it did not provide for adequate
input from industry experts, stakeholders, or members of the public in
reviewing SRE applications and did not provide for their subsequent
involvement in SRE recognition of IRAPs. The commenter noted that the
2020 IRAP final rule's processes for suspension or derecognition of an
SRE are an ``inadequate remedy'' to protect apprentices who have spent
their time and money on a poor-quality program. This commenter also
expressed the view that allowing IRAPs to maintain their status for 1
year despite their SRE's derecognition further deprives apprentices of
protection without recourse with the IRAP regardless of the quality of
the program that the derecognized SRE recognized.
The Department generally agrees with the comment about the lack of
effective industry and public involvement in the IRAP framework; such
engagement can be instrumental to ensuring a high-quality
apprenticeship system that is responsive to industry, employer, and
worker needs. For example, as noted above, the apprenticeability
process for RAPs under 29 CFR 29.4 is one instance in which interested
stakeholders and industry are invited to share their expertise about
the suitability of certain occupations for apprenticeship training. The
Department also agrees that the 2020 IRAP final rule lacked protections
for apprentices if SREs were suspended or derecognized, particularly by
allowing IRAPs to maintain their status for 1 year after SRE
derecognition without any additional protections for their apprentices.
Some commenters noted that the design of SRE-IRAP recognition in
the 2020 IRAP final rule led to inherent conflicts of interest that
would leave apprentices vulnerable. One commenter argued that SREs and
IRAPs were incentivized to do only the bare minimum necessary to comply
rather than seeking to satisfy higher standards and requirements. This
commenter also expressed the view that there were inadequate safeguards
against self-dealing between SREs and their affiliates and that SREs
were responsible for policing their own conflicts of interest. This
commenter expressed the belief that IRAPs' on-the-job training could
lead to an apprentice being treated as an independent contractor and
that the IRAP model fails to ensure participants are protected by
ERISA. A commenter also asserted that SREs could not be impartial in
their recognition of IRAPs because of the industry-driven nature of the
2020 IRAP final rule and wide flexibility in recognition of SREs and
IRAPs.
The Department appreciates the commenters' concerns about these
perceived deficiencies in the 2020 IRAP final rule. The Department
generally agrees with the commenters that IRAPs provide insufficient
protection for apprentices, as discussed in the NPRM and above. The
Department also generally agrees that the 2020 IRAP final rule does not
eliminate risks of conflicts of interest or apprentice
misclassification. Nonetheless, the Department does not view the
concerns raised about conflicts of interest or apprentice
misclassification as additional bases for rescission of the 2020 IRAP
final rule. With respect to conflicts of interest, the Department notes
that it discussed conflicts of interest at length in the 2020 IRAP
final rule and added specific provisions to increase transparency and
mitigate against conflicts of interest during the SRE recognition
process. See 85 FR 14309-14312, 14336-14339 (Mar. 11, 2020).
Additionally, the apprenticeship agreement requirement in the 2020 IRAP
final rule provides some protection against apprentice
misclassification, though the Department acknowledges that it does not
eliminate the risk of such misclassification. As discussed above, the
Department does not view the apprenticeship agreement requirement in
the 2020 IRAP final rule as sufficient to inform apprentices of the
terms and conditions of their apprenticeship. Finally, ERISA
requirements are binding on all employee benefit plans, and the
[[Page 58281]]
2020 IRAP final rule does not allow SREs or IRAPs that constitute such
plans to circumvent ERISA's obligations. While the Department does not
agree with these commenters' specific concerns as the bases for IRAP
rescission, these features of the 2020 IRAP final rule do not overcome
the deficiencies that have led the Department to rescind the 2020 IRAP
final rule.
IV. The IRAP System Is Redundant of the Registered Apprenticeship
System
In the 2021 IRAP Rescission NPRM, the Department asserted that a
key premise justifying the establishment of the IRAP alternative
framework--that the Registered Apprenticeship system is too inflexible
and administratively burdensome to sufficiently accommodate the needs
of both industry and workers--is contradicted by the notable gains made
in the RAP model through such strategies as the Industry Intermediaries
concept \23\ and the AAI grants.\24\
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\23\ Since 2016, the Department has launched funding
opportunities for Industry Intermediaries to develop, promote, and
expand the availability of and access to Registered Apprenticeships
across the United States. See <a href="https://www.apprenticeship.gov/investments-tax-credits-and-tuition-support">https://www.apprenticeship.gov/investments-tax-credits-and-tuition-support</a> (last visited May 19,
2022). Through these investments, Industry Intermediaries have
expanded Registered Apprenticeship into new industry sectors and
occupations, worked with sponsors to ensure that diverse and
underrepresented populations are connected to Registered
Apprenticeship opportunities, and promoted Registered Apprenticeship
as a workforce solution. An OA fact sheet highlighting the
accomplishments these entities have made to accommodate the needs of
workers and industry is available at <a href="https://www.apprenticeship.gov/sites/default/files/Industry-and-Equity-Intermediary-Accomplishment-Fact-Sheet.pdf">https://www.apprenticeship.gov/sites/default/files/Industry-and-Equity-Intermediary-Accomplishment-Fact-Sheet.pdf</a> (last visited May 19, 2022).
\24\ In 2015, the Department launched the AAI to expand
Registered Apprenticeship in the United States, particularly in
high-growth and high-tech industries, such as healthcare, IT, and
advanced manufacturing, as well as to populations traditionally
underrepresented in apprenticeship, including women, people of
color, and individuals with disabilities. Through AAI, AAI grantees
have successfully expanded the RAP model into new industries and
extended it to more diverse populations. For more information, see
National Governors' Association Report, ``Registered Apprenticeship
Reimagined: Lessons Learned from the American Apprenticeship
Initiative,'' Nov. 9, 2020, available at <a href="https://www.nga.org/center/publications/registered-apprenticeship-reimagined">https://www.nga.org/center/publications/registered-apprenticeship-reimagined</a>.
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Commenters in support of the Department's 2021 IRAP Rescission NPRM
expressed concerns that the 2020 IRAP final rule would, over time,
undermine the integrity of Registered Apprenticeship, create confusion,
and generate unnecessary duplication. One commenter remarked that
creating two distinct apprenticeship systems with different policies
and regulations could lead to inconsistent training for apprentices,
which would negatively impact their skills and marketability. The
commenter also viewed the IRAP framework as devaluing apprenticeship.
Another commenter echoed these concerns and asserted the establishment
of a duplicative, parallel system, which is not responsive to employers
or workers, would lead to confusion and disparate outcomes for
apprentices. A number of commenters expressed concern that the IRAP
model undermines investments in the proven RAP model and could
disincentivize the creation of new apprenticeship programs.
The Department agrees with the concerns expressed by these
commenters. The inherent confusion and redundancy created by parallel
systems was a significant factor in the Department's proposal to
rescind the 2020 IRAP final rule, as was the Department's concern about
disparate outcomes resulting from a lack of uniformity across programs.
V. The Effect of the Department's Rescission of the 2020 IRAP Final
Rule
For the reasons discussed above, the Department has determined that
the IRAP model established in the 2020 IRAP final rule does not ensure
access to high-quality job skills and training to American workers, nor
does it adequately safeguard the welfare of apprentices. The Department
has further concluded that because the IRAP system duplicates the
Registered Apprenticeship system, though with less quality standards
and oversight, continuing to operate the IRAP system is not a prudent
use of Government resources and would diminish the quality and
coherence of the Department's apprenticeship efforts.
In considering alternatives, the Department also has determined
that amending, rather than rescinding, the 2020 IRAP final rule would
not address these issues. As discussed in detail above, Registered
Apprenticeship provides for apprentice safety and welfare and continues
to nurture apprenticeship opportunities without sacrificing crucial
requirements for quality or worker protections. Amending the 2020 IRAP
final rule to align with the Department's goals and priorities so that
the IRAP model possesses more of the qualities of Registered
Apprenticeship, however, would simply recreate the RAP model with less
oversight by the Department. Rather than administer two parallel
programs, the Department can better utilize its resources and provide
better service to the public by supporting and strengthening one robust
apprenticeship system that has been designed to incorporate the needs
of both industry and the workforce. The Department therefore has
decided to adopt the NPRM as proposed.
As stated in the 2021 IRAP Rescission NPRM, the Department
acknowledges this final rule does immediately affect current SREs,
IRAPs, and the apprentices participating in IRAPs. The Department
understands SREs devoted resources to developing their applications and
the infrastructure necessary to operate effectively for a period of 5
years, and IRAPs and their apprentices may have been drawn to the
program given the indication of approval from the Department. However,
the impact of this rescission will be limited. Over the 9-month period
between May 2020, when the 2020 IRAP final rule became effective, and
February 2021, when the Department paused the consideration of SRE
applications, the Department received a total of 45 SRE applications,
including from two organizations that resubmitted applications. Of
these applications, the Department ultimately recognized 27 SREs.\25\
For FY 2021, covering the period of October 1, 2020, through September
30, 2021, 6 of the 27 recognized SREs recognized 178 IRAPs, which
served 23,975 apprentices. A single SRE recognized the majority of the
IRAPs (167).\26\ The rescission of the 2020 IRAP final rule does not
require that the SREs and the IRAPs they have recognized cease their
operations; rather, this action only requires that these entities cease
indicating that they are recognized by or associated with OA. The
apprentices enrolled in the existing IRAPs can continue to receive
training from the program uninterrupted. Alternatively, those
apprenticeship programs can seek registration with a Registration
Agency (either OA or a recognized SAA). Even if the IRAP does not seek
such registration, those apprentices currently enrolled in an IRAP can
seek to transfer into a RAP. In addition, IRAP apprentices moving into
a RAP, either on their own or because their IRAP has been registered as
a RAP with a Registration Agency, may qualify for
[[Page 58282]]
advanced standing or credit in those RAPs. Moreover, as the 2020 IRAP
final rule requires only basic compliance with existing federal, state,
and local laws governing employees, and does not provide any further
protections that would enhance the safety and welfare of apprentices,
the Department believes that the issuance of this final rule will not
adversely affect the existing rights and protections of IRAP
apprentices impacted by this rescission.
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\25\ Applications received by the Department for SREs. Approved
SREs published at <a href="https://www.apprenticeship.gov/employers/industry-recognized-apprenticeship-program/approved-standards-recognition-entities">https://www.apprenticeship.gov/employers/industry-recognized-apprenticeship-program/approved-standards-recognition-entities</a> (last visited May 19, 2022).
\26\ According to the IRAP Program and Performance Reporting
System, as of September 30, 2021, of the 175 IRAPs approved, 167
were recognized by the same SRE. See <a href="https://www.apprenticeship.gov/sites/default/files/SRE-FY21-performance-data.pdf">https://www.apprenticeship.gov/sites/default/files/SRE-FY21-performance-data.pdf</a> (last visited
September 6, 2022).
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Several commenters referred to the Department's acknowledgement
that rescinding the 2020 IRAP final rule would affect current SREs,
IRAPs, and any apprentices participating in IRAPs. Two commenters
agreed with the Department's position that the overall impact of the
rescission to SREs, IRAPs, and apprentices in IRAPs would be minimal
based on the reported data. Of these comments, one commenter said the
data suggest that IRAPs have not been widely adopted and therefore will
not likely be effective or successful. One commenter presented an
alternative view, suggesting that the number of recognized SREs and
IRAPs since the issuance of the 2020 IRAP final rule is significant
relative to the amount of time for which the rule has been effective.
Another commenter remarked that the number of recognized SREs and IRAPs
since the issuance of the 2020 IRAP final rule should not be understood
as a lack of interest from the business community but rather as a
reflection of the broader impact of the COVID-19 pandemic on industry.
The Department appreciates the comments supporting its analysis in
the 2021 IRAP Rescission NPRM of the potential impact of the rescission
of the 2020 IRAP final rule for SREs, IRAPs, and any apprentices
participating in IRAPs. The Department acknowledges the comment
suggesting the number of recognized SREs and IRAPs since the issuance
of the 2020 IRAP final rule is significant relative to the amount of
time for which the rule has been effective. As discussed below in
Section VI.A.2, Economic Analysis of Executive Orders 12866 (Regulatory
Planning and Review and 13563 (Improving Regulation and Regulatory
Review), the Department notes that the actual number of recognized SREs
and IRAPs is lower than anticipated in Economic Analysis of the 2020
IRAP final rule (85 FR 14357-14358, Mar. 11, 2020). However, regardless
of the number of current SREs and IRAPs, the Department, for the
reasons discussed above, has concluded that rescission of the IRAP
regulation is appropriate. The rescission of the 2020 IRAP final rule
does not require that the SREs and the IRAPs they have recognized cease
their operations. This rescission only requires that these entities
cease indicating that they are recognized by or associated with OA.
Further, as stated above, there are multiple avenues for IRAPs to
continue operation, either as independent apprenticeship programs or by
seeking registration with OA, and for apprentices to receive training,
either in their current program or in a RAP. Thus, the Department
maintains that the impact of the rescission will be limited and
outweighed by the benefits of rescission discussed above.
The Department also acknowledges that the COVID-19 pandemic had
broad societal impacts, including on the business community, which may
have had an impact on both RAPs and IRAPs. While the COVID-19 pandemic
may have had a negative impact on IRAPs, as the commenter asserted, in
contrast, despite the COVID-19 pandemic, FY 2021 represented the
fourth-highest year of new RAP development over the past decade, with
over 2,800 new RAPs developed.\27\
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\27\ These figures reflect Registered Apprenticeship national
results and are available at <a href="https://www.dol.gov/agencies/eta/apprenticeship/about/statistics/2021">https://www.dol.gov/agencies/eta/apprenticeship/about/statistics/2021</a> (last visited September 6,
2022).
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In the 2021 IRAP Rescission NPRM, the Department considered other
options with respect to the currently recognized SREs or IRAPs,
including a proposed ``sunset'' period during which SREs and IRAPs
would operate for a set number of years before the Department ceased
its recognition, and recasting IRAPs as Certified Work-Based Learning.
The Department did not receive any specific comments on these two
options. One commenter stated that returning to a single RAP model and
``[i]mmediate rescission of the [2020 IRAP final rule] is superior to
any other alternative course of action.'' The commenter noted that,
based on the reported data at the time of the NPRM, it was evident that
private industry has rejected IRAPs as a vehicle for training workers.
As such, the commenter asserted there are no disadvantages to
rescinding the 2020 IRAP final rule now. The Department agrees that
rescinding the 2020 IRAP final rule and immediate cessation of
recognition for currently recognized SREs or IRAPs is appropriate in
light of the concerns discussed above.
Transition to and Implementation of the Final Rule
In the 2021 IRAP Rescission NPRM, the Department sought comments on
how to address the effects of the proposed immediate cessation of
recognition on SREs, IRAPs, and apprentices in IRAPs, including
comments on the alternatives considered, but ultimately not adopted, by
the Department. One commenter suggested the Department continue to
explore efforts to develop industry-driven apprenticeship programs and
continue to establish and strengthen workforce development initiatives
that partner with business. Another commenter recommended that the
Department provide technical assistance to build the capacity of SREs
and IRAPs to offer high-quality apprenticeships, even if they operate
outside of the Registered Apprenticeship system.
The Department, as noted, is rescinding its recognition of SREs
under this final rule; however, it continues to expand and further
develop the Registered Apprenticeship system as a premier workforce
development strategy. The Department appreciates the suggestions that
it continue to develop workforce development initiatives that partner
with business and industry, and it notes their integral role in the
Registered Apprenticeship system. This final rule does not prevent
IRAPs from continuing to offer a range of training options to job
seekers. The Department is interested in continuing to promote more
work-based learning strategies in its employment and training programs,
with an increased emphasis on RAP models as a proven solution for both
career seekers and business.
Additionally, the Department has provided and will continue to
provide technical assistance and support to SREs or IRAPs that are
interested in becoming program sponsors or intermediaries under the
Registered Apprenticeship system. Similarly, as a component of the
Department's technical assistance to SREs, the Department will provide
SREs and IRAPs with information and resources the SREs can share with
any apprentices in IRAPs who may seek placement in a RAP.
VI. Regulatory Analysis and Review
A. Executive Orders 12866 (Regulatory Planning and Review) and 13563
(Improving Regulation and Regulatory Review) and Subtitle E of the
Small Business Regulatory Enforcement Fairness Act of 1996
Under E.O. 12866, the Office of Management and Budget's (OMB)
Office of Information and Regulatory Affairs (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
[[Page 58283]]
(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. OIRA has determined that this
final rule is an economically significant regulatory action under
section 3(f) of E.O. 12866.
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.
Pursuant to Subtitle E of the Small Business Regulatory Enforcement
Fairness Act of 1996, also known as the Congressional Review Act (5
U.S.C. 801 et seq.), OIRA designated this rule as a ``major rule,'' as
defined by 5 U.S.C. 804(2).
1. Public Comments
In the preliminary economic analysis in the 2021 IRAP Rescission
NPRM, the Department invited written comments from the public
concerning the potential number of SREs and IRAPs in the absence of the
proposed rule and the removal of the February 17, 2021, suspension, as
well as on possible alternatives to the proposed rule. Only one
commenter submitted comments pertaining to the preliminary economic
analysis. The commenter stated that the rescission of the 2020 IRAP
final rule will result in cost savings in excess of those set forth in
the proposed rule; in particular, savings will be realized when
Government grant money that would otherwise go to ``ineffective IRAPs
and SREs'' is better used by RAPs. The commenter stated that, if
resources are used for RAPs instead of ``wasted on IRAPs,'' workers
will be safer, better protected, and more justly compensated, plus
society will benefit from a greater diversity of apprentices, a larger
tax base, increased employee loyalty, higher productivity, and
additional skilled labor that will help address labor market demands.
The commenter suggested that the monetary value of those additional
benefits should be factored into the cost analysis.
The Department appreciates the commenter's recognition of the
benefits of RAPs to the U.S. economy and workforce. The Department
agrees that supporting RAPs is a better use of grant funds than
supporting IRAPs; accordingly, the Department has not issued grant
funding specifically for IRAPs and does not plan to do so. The
Department agrees that RAPs provide numerous benefits to apprentices,
employers, taxpayers, and society, and that a quantification of these
benefits would be ideal to include in the economic analysis. Due to
data limitations, however, the Department cannot quantify the benefits
listed by the commenter and has maintained a qualitative discussion in
this final rule.
The same commenter stated that returning to a single RAP model is
the best course of action and rescinding the 2020 IRAP final rule is
superior to any alternative. The commenter anticipates that the cost of
transferring current IRAP participants to RAPs will be minimal and will
be offset by the increased benefits that will accrue to IRAP trainees
when they become RAP apprentices. The Department agrees that rescinding
the 2020 IRAP final rule is the best course of action.
2. Economic Analysis
E.O. 14016, ``Revocation of Executive Order 13801,'' instructed the
Director of OMB and the heads of executive departments and agencies to
``promptly consider taking steps to rescind any orders, rules,
regulations, guidelines, or policies, or portions thereof, implementing
or enforcing'' E.O. 13801. Accordingly, the Department identified for
review the 2020 IRAP final rule. The Department is issuing this final
rule because the Department has determined that a single apprenticeship
system, namely, the Registered Apprenticeship system, will provide
clearer messaging and more consistent outcomes than two parallel
apprenticeship systems that likely would lead to disparate outcomes and
incur duplicative costs.
In accordance with the regulatory analysis guidance articulated in
OMB Circular A-4 and consistent with the Department's practices in
previous rulemakings, this regulatory analysis focuses on the likely
consequences of this final rule. The Department anticipates that this
final rule will result in cost savings for SREs and IRAPs since they
will no longer need to comply with the provisions of the 2020 IRAP
final rule.
The Department has estimated the cost savings of this final rule
relative to the existing baseline (i.e., 27 SREs and 178 IRAPs). The
analysis covers 10 years to ensure it captures the major cost savings
that are likely to accrue over time. The Department expresses the
quantifiable impacts in 2021 dollars and uses discount rates of 3 and 7
percent, pursuant to OMB Circular A-4. The Department also considered
an alternative baseline in which the Department's February 17, 2021,
suspension of consideration of SRE applications was temporary and would
be removed. That analysis is discussed qualitatively in the Total Cost
Savings section below.
a. Number of SREs, IRAPs, and Apprentices
To calculate the annual cost savings, the Department first needed
to estimate the number of SREs, IRAPs, and apprentices over the 10-year
analysis period. The Department used the number of SREs (27), the
number of IRAPs (178), and the number of apprentices in IRAPs (23,975)
as of September 30, 2021, for this analysis.
b. Compensation Rates
The compensation rates used to quantify the cost savings of this
final rule are based on the compensation rates in the 2020 IRAP final
rule. The Department updated the compensation rates with 2021 data. The
Department anticipates that the bulk of the workload for private sector
workers would have been performed by employees in occupations similar
to those associated with the following Standard Occupational
Classification (SOC) codes: SOC 11-3131 (Training and Development
Managers) and SOC 43-0000 (Office and Administrative Support
Occupations).
According to the U.S. Bureau of Labor Statistics (BLS), the mean
hourly wage rate for Training and Development Managers in May 2021 was
$61.92.\28\ For this analysis, the Department used
[[Page 58284]]
a fringe benefits rate of 45 percent \29\ and an overhead rate of 54
percent,\30\ resulting in a fully loaded hourly compensation rate for
Training and Development Managers of $123.22 [= $61.92 + ($61.92 x
0.45) + ($61.92 x 0.54)].
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\28\ BLS, ``Occupational Employment and Wages, May 2021,''
<a href="https://www.bls.gov/oes/current/oes113131.htm">https://www.bls.gov/oes/current/oes113131.htm</a> (last updated March
31, 2022).
\29\ BLS, ``Employer Costs for Employee Compensation'' (ECEC),
<a href="https://www.bls.gov/ncs/data.htm">https://www.bls.gov/ncs/data.htm</a> (last visited May 19, 2022). Wages
and salaries averaged $27.22 per hour worked in 2021, while benefit
costs averaged $12.24, which is a benefits rate of 45 percent.
\30\ U.S. Department of Health and Human Services (HHS),
``Guidelines for Regulatory Impact Analysis,'' 2016, <a href="https://aspe.hhs.gov/system/files/pdf/242926/HHS_RIAGuidance.pdf">https://aspe.hhs.gov/system/files/pdf/242926/HHS_RIAGuidance.pdf</a>. In its
guidelines, HHS states, as ``an interim default, while HHS conducts
more research, analysts should assume overhead costs (including
benefits) are equal to 100 percent of pre-tax wages.'' HHS explains
that 100 percent is roughly the midpoint between 46 and 150 percent,
with 46 percent based on ECEC data that suggest benefits average 46
percent of wages and salaries, and 150 percent based on the private
sector ``rule of thumb'' that fringe benefits plus overhead equal
150 percent of wages. To isolate the overhead costs from HHS's 100-
percent assumption, the Department subtracted the 46-percent
benefits rate that HHS references, resulting in an overhead rate of
approximately 54 percent.
---------------------------------------------------------------------------
According to BLS, the mean hourly wage rate for Office and
Administrative Support Occupations in May 2021 was $20.88.\31\ The
Department used a fringe benefits rate of 45 percent and an overhead
rate of 54 percent, resulting in a fully loaded hourly compensation
rate for Office and Administrative Support Occupations of $41.55 [=
$20.88 + ($20.88 x 0.45) + ($20.88 x 0.54)].
---------------------------------------------------------------------------
\31\ BLS, ``Occupational Employment and Wages, May 2021,''
<a href="https://www.bls.gov/oes/current/oes430000.htm">https://www.bls.gov/oes/current/oes430000.htm</a> (last visited May 19,
2022).
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The Department estimated the compensation rate for a Program
Analyst in OA using the midpoint (Step 5) for Grade 13 of the General
Schedule (GS), which is $56.31 in the Washington, DC, locality
area.\32\ The Department used a fringe benefits rate of 69 percent \33\
and an overhead rate of 54 percent, resulting in a fully loaded hourly
compensation rate for Program Analysts of $125.57 [= $56.31 + ($56.31 x
0.69) + ($56.31 x 0.54)].
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\32\ Office of Personnel Management, ``General Schedule (GS)
Locality Pay Tables,'' <a href="https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2021/DCB_h.pdf">https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2021/DCB_h.pdf</a> (last
visited May 19, 2022).
\33\ Congressional Budget Office, ``Comparing the Compensation
of Federal and Private-Sector Employees, 2011 to 2015,'' Apr. 25,
2017, <a href="https://www.cbo.gov/publication/52637">https://www.cbo.gov/publication/52637</a>. The wages of Federal
workers averaged $38.30 per hour over the study period, while the
benefits averaged $26.50 per hour, which is a benefits rate of 69
percent.
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c. Time Estimates
The hourly time burdens used to quantify the cost savings of this
final rule are based on the Department's time estimates in the 2020
IRAP final rule. The following time burdens are annual estimates.
Cost Savings Components for SREs
<bullet> Notifying the Administrator of any major change to processes
or programs: 10 hours (50 percent of SREs)
<bullet> Informing the Administrator of IRAP recognition, suspension,
or derecognition: 30 minutes
<bullet> Provision of data or information to the Administrator: 2 hours
(10 percent of SREs)
<bullet> Provision of written attestation to the Administrator: 10
minutes per IRAP
<bullet> Disclosure of the credentials that apprentices will earn: 30
minutes
<bullet> Quality control of IRAPs: 4 hours per IRAP
<bullet> Submission of performance data to the Administrator: 4 hours
per IRAP
<bullet> Making publicly available IRAP performance data: 2 hours per
IRAP
<bullet> Recordkeeping: 20 hours per IRAP
Cost Savings Components for IRAPs
<bullet> Submission of performance data to the SRE: 25 hours
<bullet> Preparation of written apprenticeship agreement: 10 minutes
per apprentice
Cost Savings Components for the Federal Government
<bullet> Compliance assistance reviews of SREs: 10 hours per SRE (5
percent of SREs)
<bullet> Maintenance of online application form and internal review
system: $125,000
<bullet> Maintenance of online resource for performance measures:
$245,909
<bullet> Maintenance of online resource for list of SREs and IRAPs:
$18,000
d. Total Cost Savings
Exhibit 1 shows the total estimated cost savings of the final rule
over 10 years (2022-2031) at discount rates of 3 and 7 percent. The
final rule is expected to have first-year cost savings of $1.8 million
in 2021 dollars. Over the 10-year analysis period, the annualized cost
savings are estimated at $1.8 million at a discount rate of 7 percent
in 2021 dollars. In total, over the first 10 years, the final rule is
estimated to result in cost savings of $12.9 million at a discount rate
of 7 percent in 2021 dollars.
[GRAPHIC] [TIFF OMITTED] TR26SE22.007
The Department also contemplated including an alternative baseline
that assumed the Department's February 17, 2021, suspension of
consideration of SRE applications would be removed. If the suspension
were to be removed, there could be additional SREs and IRAPs in future
years. OMB Circular A-4 defines a no action baseline as ``what the
world will be like'' if the rule is not adopted. If the world did not
include this rule, but included the removal of
[[Page 58285]]
the February 17, 2021, suspension as well as decision making by
potential SREs in the manner anticipated in the 2020 IRAP final rule,
it is possible that there would be more than 27 SREs and 178 IRAPs in
each year of the analysis period. Given the potential temporary nature
of the February 17, 2021, suspension, some members of the public may
believe there will be an opportunity to participate in the program
again in the absence of this rule. Under such a scenario, 27 SREs and
178 IRAPs may be only fractions of the numbers of SREs and IRAPs that
would come into existence, and perhaps those numbers would continue to
grow throughout the analysis period. As such, this rule would then
prevent some of the eventual effects of the 2020 IRAP final rule.
The Department is unable, however, to provide a quantitative
analysis of this alternative baseline. The Department does not have a
way to accurately estimate the number of SREs or IRAPs that would be
established in the absence of this rule and the removal of the February
17, 2021, suspension. Specifically, the Department is unable to
estimate a reasonable growth rate for SREs over the analysis period or
a realistic number of IRAPs per SRE each year. Without these two key
data points, a quantitative analysis is not possible.
The Department believes that the numbers of SREs and IRAPs
estimated in the 2020 IRAP final rule are not an appropriate source for
quantifying an alternative baseline in this final rule. Over the 9-
month period between May 2020, when the 2020 IRAP final rule became
effective, and February 2021, when the Department paused the
consideration of SRE applications, data indicate that participation was
far lower than what was projected in the 2020 IRAP final rule. To begin
with, the number of SRE applications was far fewer than the number
anticipated in the 2020 IRAP final rule. For the 2020 IRAP final rule,
the Department used the number of entities that submitted grant
applications under the AAI grant program in FY 2016 as a guidepost for
estimating the number of SRE applications. It now seems that this
guidepost was unrealistic because millions of dollars were awarded to
each successful AAI grant application whereas similar grant funds were
not available to SREs. The lack of Federal funding may largely explain
the low number of SREs (27) and IRAPs (178) compared to the numbers
anticipated in the 2020 IRAP final rule (203 SREs and 2,030 IRAPs in
Year 1).
While the estimated number of SRE applications in the 2020 IRAP
final rule was based on the number of entities that submitted AAI grant
applications, the estimated number of IRAPs was not based on a specific
source of data because the IRAP system was a new concept in the United
States. Accordingly, the Department does not have a guidepost to
realistically estimate the number of IRAPs for an alternative baseline
that assumes the absence of this rule and the removal of the February
17, 2021, suspension.
Without a reasonable way to estimate the number of SREs and IRAPs
or to quantify the cost savings, benefits, and transfer payments, the
Department acknowledges that this rule may have an annual effect on the
economy of $100 million or more; therefore, this rule has been
designated as an economically significant regulatory action under
section 3(f) of E.O. 12866.
e. Nonquantifiable Effects
The Department is rescinding the 2020 IRAP final rule and, instead,
refocusing its efforts on expanding, modernizing, strengthening, and
diversifying the Registered Apprenticeship system. As explained in the
previous sections, the Registered Apprenticeship system is highly
successful for industry. Industries that have adopted RAPs have cited
the standards, skillsets, and retention offered by skilled workers
associated with RAPs as advantageous to their bottom line. In one
survey, nearly three-fourths of surveyed employers stated that RAPs
drove increased worker productivity.\34\ A skilled workforce is
foundational to a strong economy, and Registered Apprenticeship
provides a proven avenue by which to deliver talent development to
various industry sectors.
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\34\ Urban Institute Research Report, ``The Benefits and
Challenges of Registered Apprenticeship: The Sponsors'
Perspective,'' June 12, 2009, <a href="https://www.urban.org/research/publication/benefits-and-challenges-registered-apprenticeship-sponsors-perspective">https://www.urban.org/research/publication/benefits-and-challenges-registered-apprenticeship-sponsors-perspective</a>.
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In addition to the demonstrated success of RAPs as a workforce
training model for industry, RAPs have proven to be highly beneficial
to workers because of their emphasis on high-quality training as well
as apprentice safety and welfare. During training, apprentices are
guaranteed wage increases, and research shows that RAP completers earn
over $300,000 (including benefits) more over their lifetimes as
compared with similar individuals who do not complete a RAP.\35\
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\35\ See, e.g., Mathematica Policy Research, ``An Effectiveness
Assessment and Cost-Benefit Analysis of Registered Apprenticeship in
10 States: Final Report,'' July 25, 2012, <a href="https://wdr.doleta.gov/research/FullText_Documents/ETAOP_2012_10.pdf">https://wdr.doleta.gov/research/FullText_Documents/ETAOP_2012_10.pdf</a>. This report
categorizes reduced payments of unemployment insurance, welfare, and
food stamps as benefits (separate from productivity increases)
associated with Registered Apprenticeship; however, for purposes of
this E.O. 12866 analysis, adding these effects would constitute
double-counting and they should instead be presented as an
assessment of who, other than workers themselves, receives some
portion of productivity benefits. Moreover, as noted earlier in this
regulatory preamble, the report does not speak to the relative
effects of RAPs and IRAPs.
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The Registered Apprenticeship system has successfully been adopted
across a diverse range of sectors, with significant growth in recent
years. The expansion of the Registered Apprenticeship system into
``nontraditional'' sectors indicates that the IRAP model may be
superfluous and not a good use of Government resources that could
support the proven activities of the Registered Apprenticeship system.
3. Regulatory Alternatives
OMB Circular A-4 directs agencies to analyze alternatives if such
alternatives best satisfy the philosophy and principles of E.O. 12866.
Accordingly, the Department considered two regulatory alternatives.
Under the first alternative, the Department would allow the SREs and
any related IRAPs to operate with the Department's recognition for a
transitional period not to exceed the previously approved 5-year
period. As noted above, the approach of permitting the continued
recognition of SREs and any related IRAPs would continue to temporarily
retain a parallel system that does not ensure sufficient protections
for apprentices, would diminish Departmental resources available for
expansion of Registered Apprenticeship, and would generate confusion
among both entities interested in establishing apprenticeship programs
and the potential apprentices in such programs. This alternative would
result in lower cost savings over the 10-year analysis period than the
cost savings presented in Exhibit 1 because SREs and IRAPs would be
obligated to follow the provisions of the 2020 IRAP final rule for a
longer period of time. Therefore, the costs of the 2020 IRAP final rule
would accumulate for a longer duration and the cost savings would be
delayed.
Under the second alternative, the Department would recast IRAPs as
Certified Work-Based Learning. The Department considers the most
effective and efficient use of its resources is to oversee a national
system of Registered Apprenticeship that is more protective of the
welfare of apprentices and that
[[Page 58286]]
has demonstrated its capacity to grow and adapt across a range of
industries and sectors. Similarly, recasting IRAPs as a type of
Certified Work-Based Learning would not address the concerns identified
in the discussions above regarding an indirect and insufficient
oversight role for the Department in IRAPs. This alternative would also
result in lower cost savings over the 10-year analysis period than the
cost savings presented in Exhibit 1 because SREs and IRAPs would incur
costs under the revised program. The Department cannot estimate the
costs without details about the provisions of such a program.
B. Regulatory Flexibility Act and Executive Order 13272 (Proper
Consideration of Small Entities in Agency Rulemaking)
In accordance with the Regulatory Flexibility Act, 5 U.S.C. ch. 6
(as amended), the Department examined the regulatory requirements of
this final rule to determine whether they will have a significant
economic impact on a substantial number of small entities. As explained
in the E.O. 12866 economic analysis above, this final rule is expected
to lead to cost savings for IRAPs because these entities will no longer
be required to comply with the provisions of the 2020 IRAP final rule.
Cost savings for IRAPs will primarily arise from no longer needing to
submit performance data to the SRE and no longer needing to prepare or
sign a written apprenticeship agreement with each apprentice.
In the 2020 IRAP final rule, the Department estimated that it would
take IRAPs approximately 25 hours per year to collect and provide the
relevant performance data. To estimate the cost savings per IRAP under
this final rule, the Department multiplied the number of IRAPs (178) by
25 hours and by the hourly compensation rate for Training and
Development Managers ($123.22 per hour). In the 2020 IRAP final rule,
the Department estimated that it would take IRAPs approximately 10
minutes per apprentice to prepare and sign a written apprenticeship
agreement. To estimate the cost savings per IRAP under this final rule,
the Department multiplied the number of apprentices (23,975) by 10
minutes and by the hourly compensation rate for Training and
Development Managers ($123.22 per hour). In total, the first-year cost
savings per IRAP is estimated at $5,516 at a discount rate of 7
percent. The annualized cost savings per IRAP is estimated at $5,902 at
a discount rate of 7 percent.
As of September 30, 2021, the number of IRAPs recognized by SREs
stood at 178. Of the 178 IRAPs, 167 are in the health care industry;
specifically, the vast majority of the 167 IRAPs are associated with
hospitals and medical centers. As shown in Exhibit 2, the first-year
and annualized cost savings for IRAPs in the hospitals subsector are
not expected to have a significant economic impact (3 percent or more)
on small entities of any size.
[GRAPHIC] [TIFF OMITTED] TR26SE22.008
Similarly, the final rule will result in cost savings for SREs. The
cost savings will arise from SREs no longer needing to perform the
activities listed in the E.O. 12866 economic analysis above: notifying
the Administrator of any major change to processes or programs;
informing the Administrator of IRAP recognition, suspension, or
derecognition; provision of data or information to the Administrator;
provision of written attestation to the Administrator; disclosure of
the credentials that apprentices will earn; quality control of IRAPs;
submission of performance data to the Administrator; making publicly
available IRAP performance data; and recordkeeping. The first-year cost
savings per SRE is estimated at $13,555 at a discount rate of 7
percent. The annualized cost savings per SRE is estimated at $14,504 at
a discount rate of 7 percent.
The Department has recognized 27 SREs. Only 6 of the 27 SREs have
recognized IRAPs, and of those 6 SREs, 1 has 99.2 percent of all
apprentices in IRAPs (23,781 out of 23,975 apprentices). This
particular SRE is unlikely to be considered a small entity based on its
annual revenue,\36\ which exceeds the Small Business Administration's
Small Business Size Standard of $20.5 million for professional
organizations (North American Industry Classification System code
813920).\37\
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\36\ IRS Form 990 filing data available from the Internal
Revenue Service, ``Tax Exempt Organization Search,'' <a href="https://apps.irs.gov/app/eos">https://apps.irs.gov/app/eos</a> (last visited May 19, 2022).
\37\ U.S. Small Business Administration, ``Table of Small
Business Size Standards,'' <a href="https://www.sba.gov/document/support-table-size-standards">https://www.sba.gov/document/support-table-size-standards</a> (last updated May 2, 2022).
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[[Page 58287]]
Accordingly, the Department certifies that this final rule will not
have a significant economic impact on a substantial number of small
entities. Moreover, any economic impact experienced by IRAPs or SREs
will be cost savings.
C. Paperwork Reduction Act
As explained in the ``Background'' section above, the Department is
rescinding subpart B, ``Standards Recognition Entities of Industry-
Recognized Apprenticeship Programs,'' from 29 CFR part 29, the
regulatory framework for the Department's recognition of SREs and SREs'
role in recognizing IRAPs.
As part of the implementation and rollout of the 2020 IRAP final
rule, the Department developed and received OMB approval for two
information collections (ICs), an application form and a performance
report. The first active IC is entitled ``Industry-Recognized
Apprenticeship Program Standards Recognition Entity Regulation and
Application'' (OMB Control Number 1205-0536) and includes an annual
approved burden of 141,819 responses and 285,310 hours. The second
active IC is entitled ``IRAP Program and Performance Report for
Standards Recognition Entities'' (OMB Control Number 1205-0545) and
includes an annual approved burden of 12,447 responses and 111,118
hours. This rule does not result in any additional cost burden for
either IC.
Because this final rule rescinds subpart B, which is the authority
for these information collections, the Department will no longer use
the ``Industry-Recognized Apprenticeship Program Standards Recognition
Entity Regulation and Application'' IC and the ``IRAP Program and
Performance Report for Standards Recognition Entities'' IC.
The Department has submitted requests to discontinue both OMB
Control Number 1205-0536 and OMB Control Number 1205-0545, eliminating
all paperwork burden associated with the ICs. These ICs will
discontinue upon the effective date of this final rule.
D. Executive Order 13132: Federalism
This final rule does not have federalism implications because it
does not have substantial direct effects on the States, on the
relationship between the National Government and the States, or on the
distribution of power and responsibilities among the various levels of
Government. Accordingly, E.O. 13132, Federalism, requires no further
agency action or analysis.
E. Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2
U.S.C. 1532, requires each Federal agency to prepare a written
statement assessing the effects of any Federal mandate in a proposed
agency rule that may result in $100 million or more in expenditures
(adjusted annually for inflation) in any one year by State, local, and
tribal Governments, in the aggregate, or by the private sector.
This final rule does not exceed the $100-million expenditure in any
one year when adjusted for inflation, and this rulemaking does not
contain such a mandate. The requirements of title II of UMRA,
therefore, do not apply, and the Department has not prepared a
statement under the Act.
F. Executive Order 13175 (Indian Tribal Governments)
The Department has reviewed this final rule in accordance with E.O.
13175 and has determined that it does not have tribal implications. The
final rule does not have substantial direct effects on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.
List of Subjects in 29 CFR Part 29
Apprenticeability criteria, Apprentice agreements and complaints,
Apprenticeship programs, Program standards, Registration and
deregistration, Sponsor eligibility, State Apprenticeship Agency
recognition and derecognition.
For the reasons stated in the preamble, the Department amends 29
CFR part 29 as follows:
PART 29--LABOR STANDARDS FOR THE REGISTRATION OF APPRENTICESHIP
PROGRAMS
0
1. The authority citation for part 29 is revised to read as follows:
Authority: 29 U.S.C. 50; 40 U.S.C. 3145; 5 U.S.C. 301; 5 U.S.C.
App. P. 534.
0
2. Remove the subpart A heading.
0
3. Amend Sec. 29.1 by:
0
a. Revising the section heading; and
0
b. In paragraph (b), removing the word ``subpart'' and adding the word
``part'' in its place.
The revision reads as follows:
Sec. 29.1 Purpose and scope.
* * * * *
Sec. 29.2 [Amended]
0
4. Amend Sec. 29.2 by:
0
a. In the introductory text, removing the word ``subpart'' and adding
the word ``part'' in its place;
0
b. In the definitions of ``Apprenticeship program'' and ``Registration
agency'', removing the citation ``29 CFR part 29 subpart A, and part
30'' and adding the citation ``this part and 29 CFR part 30'' in its
place; and
0
c. In the definition of ``Technical assistance'', removing the word
``subpart'' and adding the word ``part'' in its place.
Sec. 29.3 [Amended]
0
5. In Sec. 29.3 amend paragraphs (b)(1), (g) introductory text, and
(h) by removing word ``subpart'' and add in its place the word
``part''.
Sec. 29.6 [Amended]
0
6. In Sec. 29.6 amend paragraph (b)(2) by removing word ``subpart''
and add in its place the word ``part''.
Sec. 29.10 [Amended]
0
7. In Sec. 29.10 amend paragraph (a)(2) by removing word ``subpart''
and add in its place the word ``part''.
Sec. 29.11 [Amended]
0
8. In Sec. 29.11 amend the introductory text removing word ``subpart''
and add in its place the word ``part''.
Sec. 29.13 [Amended]
0
9. Amend Sec. 29.13 by:
0
a. In paragraph (a)(1), removing the citation ``29 CFR part 29 subpart
A, and part 30'' and adding the citation ``this part and 29 CFR part
30'' in its place;
0
b. In paragraph (b)(1), removing the citation ``29 CFR part 29 subpart
A'' and adding ``this part'' in its place;
0
c. In paragraphs (c) and (e) introductory text, removing the word
``subpart'' and adding the word ``part'' in its place; and
0
d. In paragraph (e)(4), removing the citation ``part 29 subpart A'' and
adding ``this part'' in its place.
Sec. 29.14 [Amended]
0
10. Amend Sec. 29.14 by:
0
a. In the introductory text, removing the citation ``part 29 subpart A,
and part 30'' and adding the citation ``this part and 29 CFR part 30''
in its place; and
0
b. In paragraphs (e)(1) and (i), removing the word ``subpart'' and
adding the word ``part'' in its place.
[[Page 58288]]
Subpart B--[Removed]
0
11. Remove subpart B, consisting of Sec. Sec. 29.20 through 29.31.
Brent Parton,
Acting Assistant Secretary for Employment and Training, Labor.
[FR Doc. 2022-20560 Filed 9-23-22; 8:45 am]
BILLING CODE 4510-FR-P
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</html>Indexed from Federal Register on September 26, 2022.
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