Rule2023-25372
Wagner-Peyser Act Staffing
Primary source
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Published
November 24, 2023
Effective
January 23, 2024
Issuing agencies
Labor DepartmentEmployment and Training Administration
Abstract
The U.S. Department of Labor (Department or DOL) is issuing a final rule that requires States to use State merit staff to provide Wagner-Peyser Act Employment Service (ES) services. In the notice of proposed rulemaking (NPRM), the Department proposed that this requirement would apply to all States. However, the Department recognizes three States that have been approved by the Department to administer ES services using alternative staffing models for decades and is allowing only these three States to continue using the alternative staffing models. The requirement to use State merit staff to provide all ES services applies to all other States, including those States that implemented staffing flexibility under the 2020 Final Rule. The Department additionally is revising the ES regulations to strengthen the provision of services to migrant or seasonal farmworkers (MSFWs) and to enhance the protections afforded by the Monitor Advocate System and the Employment Service and Employment-Related Law Complaint System (Complaint System). States have 24 months to comply with this final rule.
Full Text
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<title>Federal Register, Volume 88 Issue 225 (Friday, November 24, 2023)</title>
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[Federal Register Volume 88, Number 225 (Friday, November 24, 2023)]
[Rules and Regulations]
[Pages 82658-82737]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-25372]
[[Page 82657]]
Vol. 88
Friday,
No. 225
November 24, 2023
Part III
Department of Labor
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Employment and Training Administration
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20 CFR Parts 651, 652, 653, et al.
Wagner-Peyser Act Staffing; Final Rule
Federal Register / Vol. 88, No. 225 / Friday, November 24, 2023 /
Rules and Regulations
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DEPARTMENT OF LABOR
Employment and Training Administration
20 CFR Parts 651, 652, 653, and 658
[Docket No. ETA-2022-0003]
RIN 1205-AC02
Wagner-Peyser Act Staffing
AGENCY: Employment and Training Administration, Labor.
ACTION: Final rule.
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SUMMARY: The U.S. Department of Labor (Department or DOL) is issuing a
final rule that requires States to use State merit staff to provide
Wagner-Peyser Act Employment Service (ES) services. In the notice of
proposed rulemaking (NPRM), the Department proposed that this
requirement would apply to all States. However, the Department
recognizes three States that have been approved by the Department to
administer ES services using alternative staffing models for decades
and is allowing only these three States to continue using the
alternative staffing models. The requirement to use State merit staff
to provide all ES services applies to all other States, including those
States that implemented staffing flexibility under the 2020 Final Rule.
The Department additionally is revising the ES regulations to
strengthen the provision of services to migrant or seasonal farmworkers
(MSFWs) and to enhance the protections afforded by the Monitor Advocate
System and the Employment Service and Employment-Related Law Complaint
System (Complaint System). States have 24 months to comply with this
final rule.
DATES:
Effective Date: This final rule is effective January 23, 2024.
Compliance Date: All States will have 24 months from the effective
date to comply with the requirements of this final rule. The compliance
date of the final rule is January 22, 2026.
FOR FURTHER INFORMATION CONTACT: Kim Vitelli, Administrator, Office of
Workforce Investment, Employment and Training Administration, U.S.
Department of Labor, 200 Constitution Avenue NW, Room C-4526,
Washington, DC 20210, Telephone: (202) 693-3980 (voice) (this is not a
toll-free number). For persons with a hearing or speech disability who
need assistance to use the telephone system, please dial 711 to access
telecommunications relay services.
SUPPLEMENTARY INFORMATION:
Preamble Table of Contents
I. Acronyms and Abbreviations
II. Executive Summary
III. Background and Justification
IV. General Comments on the Proposed Rule
V. Section-by-Section Discussion of Final Rule
A. Technical Amendments and Global Edits
B. Part 651--General Provisions Governing the Wagner-Peyser Act
Employment Service
C. Part 652--Establishment and Functioning of State Employment
Service
D. Part 653--Services of the Wagner-Peyser Act Employment
Service System
E. Part 658--Administrative Provisions Governing the Wagner-
Peyser Act Employment Service
VI. Rulemaking Analyses and Notices
A. Executive Orders 12866 (Regulatory Planning and Review),
13563 (Improving Regulation and Regulatory Review), and 14094
(Modernizing Regulatory Review) and Subtitle E of the Small Business
Regulatory Enforcement Fairness Act of 1996
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 of 1995
D. Executive Order 13132 (Federalism)
E. Unfunded Mandates Reform Act of 1995
F. Executive Order 13175 (Indian Tribal Governments)
G. Plain Language
I. Acronyms and Abbreviations
2020 Final Rule Wagner-Peyser Act Staffing Flexibility; Final Rule, 85
FR 592 (Jan. 6, 2020)
AJC(s) American Job Center(s) (also known as one-stop(s) or one-stop
center(s))
AOP(s) Agricultural Outreach Plan(s)
ARS Agricultural Recruitment System
BFOQ bona fide occupational qualification
BLS U.S. Bureau of Labor Statistics
CARES Act Coronavirus Aid, Relief, and Economic Security Act
CFR Code of Federal Regulations
Complaint System Employment Service and Employment-Related Law
Complaint System
COVID-19 coronavirus disease 2019
CRC DOL Civil Rights Center
CSRA Civil Service Reform Act
Department or DOL U.S. Department of Labor
EEOC Equal Employment Opportunity Commission
E.O. Executive Order
EO Officer(s) Equal Opportunity Officer(s)
ES Wagner-Peyser Act Employment Service
ETA Employment and Training Administration
FR Federal Register
FTE(s) full-time equivalent(s)
FY(s) Fiscal Year(s)
IC(s) information collection(s)
ICR(s) information collection request(s)
IPA Intergovernmental Personnel Act of 1970
IT information technology
LEP limited English proficiency
MOU(s) Memorandum/a of Understanding
MSFW(s) migrant or seasonal farmworker(s)
MSPA Migrant and Seasonal Agricultural Worker Protection Act
NAICS North American Industry Classification System
NFJP National Farmworker Jobs Program
NMA National Monitor Advocate
NPRM or proposed rule notice of proposed rulemaking
O*NET Occupational Information Network
OALJ Office of Administrative Law Judges
OFLC Office of Foreign Labor Certification
OIRA Office of Information and Regulatory Affairs
OMB Office of Management and Budget
OPM Office of Personnel Management
OSHA Occupational Safety and Health Administration
OWI Office of Workforce Investment
PIRL Participant Individual Record Layout
PRA Paperwork Reduction Act of 1995
Pub. L. Public Law
PY(s) Program Year(s)
QCEW Quarterly Census of Employment and Wages
RA(s) Regional Administrator(s)
RESEA Reemployment Services and Eligibility Assessment
RFA Regulatory Flexibility Act
RIN Regulation Identifier Number
RMA(s) Regional Monitor Advocate(s)
Secretary Secretary of Labor
SMA(s) State Monitor Advocate(s)
SNAP Supplemental Nutrition Assistance Program
SOC Standard Occupational Classification
SSA Social Security Act
Stat. United States Statutes at Large
SWA(s) State Workforce Agency/ies
TAA Trade Adjustment Assistance
TANF Temporary Assistance to Needy Families
UI unemployment insurance
UMRA Unfunded Mandates Reform Act of 1995
U.S.C. United States Code
WHD Wage and Hour Division
WIA Workforce Investment Act of 1998
[[Page 82659]]
WIOA Workforce Innovation and Opportunity Act
II. Executive Summary
The Department is amending its regulations regarding Wagner-Peyser
Act staffing to require that States use State merit staff to provide ES
services, except three States--Colorado, Massachusetts, and Michigan--
that have longstanding reliance interests in using alternative staffing
models. The final rule requires these three States to participate in
rigorous multistate evaluation activities to be conducted by the
Department to determine whether such models are empirically supported.
This evaluation will include review of services delivered by States
that use State merit-staffing, as necessary.
In the NPRM, the Department proposed to require that all States use
State merit staff to deliver ES services. The Department determined
that it is vital for the ES to be administered so that States deliver
services effectively and equitably to unemployment insurance (UI)
beneficiaries and other ES customers, including services provided to
MSFWs. In the NPRM, the Department reasoned that the demands placed on
State UI systems by the economic impact of the coronavirus disease 2019
(COVID-19) pandemic highlighted the necessity of States to be able to
rely on eligible ES State merit staff to be deployed to assist with UI
activities that must be performed by State merit staff.\1\ The
Department noted that States also have experienced the benefits of
deploying ES State merit staff to assist with UI activities in response
to recessions, the onset of natural disasters, and mass regional
layoffs. The Department also noted that requiring States to utilize
State merit staff to deliver ES services would help to ensure that ES
services are delivered by qualified, nonpartisan personnel. These
professionals would be required to meet objective professional
qualifications, trained to assure high-quality performance, and
expected to maintain certain transparent standards of performance.
States would be required to assure that employees are treated fairly
and protected against partisan political coercion. This final rule
adopts the proposal that States are required to use State merit staff
to deliver ES services, with one change explained in the following
paragraph.
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\1\ <a href="https://www.dol.gov/agencies/eta/advisories/unemployment-insurance-program-letter-no-12-01-change-2">https://www.dol.gov/agencies/eta/advisories/unemployment-insurance-program-letter-no-12-01-change-2</a>.
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While the Department maintains its position that aligning ES and UI
promotes efficiency and uniformity in the operation of the ES, the
Department also recognizes that three States--Colorado, Massachusetts,
and Michigan--have been approved by the Department for decades to
deliver ES services using staffing models alternative to full State
merit-staffing. The Department received many comments on the NPRM
regarding the longstanding reliance interests of these States and the
potential disruptions to service delivery in these States specifically
that could result from having to implement a complete State merit-
staffing requirement. Based on these comments, the Department is
permitting these three States, which were authorized to use alternative
staffing models since the 1990s, to use the staffing model consistent
with that previously authorized for that State. These three States may
use the merit-staffing flexibility only to the same extent the
Department previously authorized prior to February 5, 2020. Also, the
final rule requires these three States to participate in rigorous
evaluation activities to be conducted by the Department to determine
whether such models are empirically supported. The Department is
requiring that State Monitor Advocate (SMA) functions be performed by
State merit staff in all States because SMAs monitor the State
Workforce Agency (SWA), must report on SWA compliance to the State
Administrator, and liaise between the SWA and external groups. Because
the SMA position requires overseeing State agency functions and
creating accountability for those functions, including discussing
needed process improvements with State officials and ETA's Regional and
National Monitor Advocates, such oversight functions are more
appropriately performed through State merit-staffing.
The Department is additionally revising the ES regulations to
strengthen the provision of services to MSFWs and to enhance the
protections afforded by the Monitor Advocate System and the Complaint
System. These changes include the following:
<bullet> Better serving MSFWs and promoting equity in the workforce
system, including requiring States to use State merit staff to provide
ES services to MSFWs.
<bullet> Revising several defined terms related to the provision of
ES services to MSFWs to modify the criteria for designating significant
MSFW one-stop centers and significant MSFW States, and to ensure that
full-time students who otherwise meet the criteria set forth in the
definitions will be afforded the same benefits and protections under
the ES as other MSFWs.
<bullet> Strengthening the role and status of SMAs, including
requirements to help to ensure that States employ highly qualified
candidates, that SMAs have the appropriate authority necessary to
effectively carry out their duties, and that SMAs are not assigned
duties that are inconsistent with their role to provide oversight.
<bullet> Prohibiting the State Administrator or ES staff from
retaliating against staff, including against the SMA, for monitoring or
raising any issues or concerns regarding non-compliance with the ES
regulations.
<bullet> Requiring SMAs to conduct onsite reviews of one-stop
centers regardless of whether the one-stop center is designated as a
significant MSFW one-stop center.
<bullet> Requiring the SMA to establish an ongoing liaison with the
State-level Equal Opportunity Officer (E.O. Officer) to enhance equity
and inclusion for farmworkers.
<bullet> Further specifying SWA staffing requirements for
significant MSFW one-stop centers.
<bullet> Requiring SWAs to collect and report data on the number of
reportable individuals who are MSFWs to help SWAs, SMAs, and ETA
monitor equity in the provision of ES services to MSFWs.
<bullet> Aligning the ES regulations with the language access
requirements of the Workforce Innovation and Opportunity Act (WIOA)
nondiscrimination regulations at 29 CFR 38.9 to reduce duplication and
to ensure States provide the broadest language access protections
available for MSFWs with limited English proficiency (LEP).
<bullet> Strengthening outreach to MSFWs by, among other things,
requiring SWAs to conduct outreach to MSFWs on an ongoing basis;
specifying that all States must have some degree of outreach at all
times and full-time outreach staff must spend 100 percent of their time
on the outreach responsibilities described at Sec. 653.107(b);
requiring SWAs to employ enough outreach staff to contact a majority of
MSFWs in their States annually; prohibiting SWAs from relying on
National Farmworker Jobs Program (NFJP) grantee activities as a
substitute to meet outreach obligations; specifying that SWAs must
ensure hiring officials put a strong emphasis on hiring qualified
candidates for outreach staff positions; and requiring outreach
staffing levels to align with and be supported by information in the
Agricultural Outreach Plan (AOP) that a State must submit pursuant to
Sec. 653.107(d).
<bullet> Changing the record retention requirement for outreach
logs from 2
[[Page 82660]]
years to 3 years to align with the Office of Management and Budget
(OMB) Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal awards to non-Federal Entities (Uniform
Guidance) record retention requirements at 2 CFR 200.334.
<bullet> Amending the information SWAs must include in their AOP to
include the number of full-time and part-time outreach staff that the
State will employ and a description of how the SWA intends to staff
significant MSFW one-stop centers in accordance with Sec. 653.111.
<bullet> Removing ``random'' from the definition of field check to
ensure SWAs are able to target the field checks that they conduct in
response to known or suspected compliance issues.
<bullet> Revising several regulations within part 658, subpart E,
to conform with proposed revisions to definitions listed at Sec.
651.10, remove redundancies and make other non-substantive technical
edits, clarify or modify certain requirements, and improve equity and
inclusion for MSFWs in the ES system.
<bullet> Revising requirements for how ETA regional offices process
complaints to align with the revised process SWAs must follow in
referring nondiscrimination complaints under Sec. 658.411(c) and to
refine other requirements applicable to regional offices.
The Department also is making technical amendments and global edits
to modernize the ES regulations, to clarify and use plain language, and
to further promote equity by using gender-inclusive language throughout
the regulations.
In the NPRM, the Department proposed an 18-month transition period
for States to comply with the requirements in this rulemaking. Based on
comments received on the NPRM indicating that States would need more
time to comply, the Department is providing 24 months to comply with
the provisions of the final rule.
The final rule adds severability provisions in parts 652, 653, and
658.
This final rule reflects changes made in response to public
comments received on the NPRM that was published on April 20, 2022, at
87 FR 23700. The Department received many comments from the public and
nonprofit sectors, as well as private citizens. The Department
considered these comments in determining this final rule, and the
changes made to the regulatory text are detailed below in the
Department's responses to related comments.
III. Background and Justification
The Wagner-Peyser Act of 1933, 29 U.S.C. 49 et seq., established
the ES program, which is a nationwide system of public employment
offices that provide public labor-exchange services. The ES program
seeks to improve the functioning of the nation's labor markets by
matching job seekers with employers that are seeking workers. Section
3(a) of the Wagner-Peyser Act directs the Secretary of Labor
(Secretary) to assist States by developing and prescribing minimum
standards of efficiency and promoting uniformity in the operation of
the system of public employment offices. See 29 U.S.C. 49b(a). This
final rule amends regulations in 20 CFR parts 651, 652, 653, and 658.
With limited exceptions, the final rule requires States to use State
merit staff to provide ES services, including services and activities
under parts 653 and 658. The Department also is targeting revisions to
the regulations at parts 651, 653, and 658. These revisions are
intended to ensure that SWAs provide MSFWs with adequate access to ES
services and that the role of the SMA is effective. In addition, this
final rule amends parts 651, 652, 653, and 658 to further integrate
gender-inclusive language. Finally, the Department is making technical
corrections to these CFR parts to improve consistency across the parts
and to make them easier to understand.
Historically, the Department relied on its authority in secs. 3(a)
and 5(b) of the Wagner-Peyser Act to require that ES services,
including Monitor Advocate System activities for MSFWs and Complaint
System intake, be provided by State merit-staff employees.\2\ The
Department consistently applied this requirement, with limited
exceptions, until 2020. Specifically, beginning in the early 1990s, the
Department authorized demonstration projects in which it allowed
Colorado and Massachusetts limited flexibility to set their own
staffing requirements for the provision of ES services. Colorado was
authorized to use county and State merit staff to deliver ES services.
The State contracts for these services with county and State sub-
recipients, but has not allowed further sub-contracting by the sub-
recipients. Massachusetts was approved to use non-State-merit staff to
provide ES services in just four of the State's 16 local areas. In
these local areas, the State has generally relied on local one-stop
career center/American Job Center (AJC) staff for ES services. In 1998,
the Department permitted Michigan to use State and local merit-staff
employees to deliver ES services, pursuant to a settlement agreement
arising out of Michigan v. Herman, 81 F. Supp. 2d 840 (W.D. Mich.
1998). Michigan was still required to use State merit staff for
services to MSFWs, veterans, and individuals with disabilities. All
three States continued to operate with staffing flexibility through
their approved State plans,\3\ though all three also used State merit
staff for the SMA position. Through rulemaking effective February 5,
2020, the Department removed the requirement that ES services be
provided only by State merit staff. See Wagner-Peyser Act Staffing
Flexibility; Final Rule, 85 FR 592 (Jan. 6, 2020) (2020 Final Rule). In
the preamble to the 2020 Final Rule, the Department explained that it
sought to allow States maximum flexibility in staffing arrangements.
Ibid. Accordingly, under the regulations in effect under the 2020 Final
Rule, several States were approved to use a variety of staffing models
to provide ES services, as described in their approved State plans.
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\2\ Workforce Innovation and Opportunity Act; Department of
Labor; Final Rule, 81 FR 56072 (Aug. 19, 2016) (WIOA DOL-only Rule)
(see 20 CFR 652.215, 653.108, 653.111, 658.602).
\3\ See WIOA DOL-only Rule, 81 FR at 56267 and 56341 (2016).
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In light of the events of the last few years, the Department has
reassessed the approach adopted in the 2020 Final Rule and determined
instead to reinstate the requirement that States use State merit staff
to deliver ES services. State merit-staffing is a generally reliable
method to ensure quality and consistency in ES delivery, and the
demands placed on State UI systems by the economic impact of the COVID-
19 pandemic highlighted the necessity of States to be able to rely on
eligible ES State merit staff to be deployed to assist with UI
activities as needed.
In adopting this State merit-staffing requirement, the Department
relies on its authority under secs. 3(a) and 5(b)(2) of the Wagner-
Peyser Act, as well as authority under sec. 208 of the
Intergovernmental Personnel Act (IPA), 42 U.S.C. 4728, as amended. Each
of these provisions, standing alone, provides the Department with the
authority to require States to use State merit staff to provide ES
services.
Specifically, sec. 3(a) of the Wagner-Peyser Act requires the
Secretary to assist in coordinating the ES offices by ``developing and
prescribing minimum standards of efficiency.'' 29 U.S.C. 49b(a). As the
court in Michigan v. Herman concluded, ``the language in [sec. 3(a)]
authorizing the Secretary to develop and prescribe `minimum standards
of efficiency' is broad enough
[[Page 82661]]
to permit the Secretary of Labor to require merit staffing.'' 81 F.
Supp. 2d at 848.
In addition, sec. 5(b)(2) of the Wagner-Peyser Act provides that
the Secretary shall from time to time certify to the Secretary of the
Treasury for payment to each State that, among other things, ``is found
to have coordinated the public employment services with the provision
of [UI] claimant services.'' 29 U.S.C. 49d(b). As explained previously,
the State merit-staffing requirement would align the staffing of ES
services with the staffing that States are required to use in the
administration of critical UI services. Therefore, it is reasonable for
the Department to base the finding required by sec. 5(b)(2) of the
Wagner-Peyser Act, in part, on a State's agreement to use State merit
staff to administer and provide ES services.
Furthermore, sec. 208 of the IPA authorizes Federal agencies to
require, as a condition of participation in Federal assistance
programs, systems of personnel administration consistent with personnel
standards prescribed by the Office of Personnel Management (OPM).\4\ In
accordance with 5 CFR 900.605, the Department submitted the proposed
rule to OPM for review and received approval prior to the publication
of the NPRM.
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\4\ 42 U.S.C. 4728(b); see also 5 CFR 900.605 (authorizing
Federal agencies to adopt regulations that require the establishment
of a merit personnel system as a condition for receiving Federal
assistance or otherwise participating in an intergovernmental
program with the prior approval of OPM).
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In the IPA, 42 U.S.C. 4701, et seq., Congress found that the
quality of public service could be improved if government personnel
systems are administered consistent with certain merit-based
principles. Requiring States to employ the professionals who deliver ES
services in accordance with these principles would help ensure that ES
services are delivered by qualified, non-partisan personnel who are
directly accountable to the State. Among other things, such
professionals would be required to meet objective professional
qualifications, be trained to assure high-quality performance, and
maintain certain standards of performance. See 42 U.S.C. 4701. They
would also be prohibited from using their official authority for
purposes of political interference, and States would be required to
assure that they are treated fairly and protected against partisan
political coercion. Ibid.
The Department acknowledges that this constitutes a change in its
position taken under the 2020 Final Rule and requires certain States to
adjust how they deliver ES services. The Department notes that Federal
agencies are permitted to change their existing policies if they
acknowledge the change and provide a reasoned explanation for the
change. See, e.g., Encino Motorcars, LLC v. Navarro, 579 U.S. 211, 221-
22 (2016). In the NPRM, the Department acknowledged the proposed policy
change and explained the reason for the change. The ES system is
designed to ``promote the establishment and maintenance of a national
system of public employment service offices,'' 29 U.S.C. 49, and the UI
and ES systems together provide a basic level of employment support for
more than 4 million job seekers per year to enter and re-enter the
workforce. The Department believes that it is vital that the ES be
administered so that services are delivered effectively and equitably
to UI beneficiaries and other ES customers. The COVID-19 pandemic and
the ensuing demand placed on the UI system demonstrated a need for
centrally trained, high-quality staff to be able to step in to assist
States as needed. Further, the ES is a universal access program, and it
is critical that it be administered by nonpartisan personnel held to
transparent, objective standards designed to assure high-quality
performance. A State merit-staffing requirement is a generally reliable
method to ensure quality and consistency in delivery of ES services and
supports the well-established connection between ES and UI services. As
explained further in this preamble, the Department believes an
evaluation of the alternative staffing models, though not legally
required, is prudent to determine whether use of such alternative
staffing models is empirically supported.
The Department is further adjusting its position to account for the
unique history of three States' administration of ES services.
Colorado, Massachusetts, and Michigan have been allowed by the
Department to use various forms of non-State-merit staff models to
deliver ES services since the 1990s. The Department acknowledges the
longstanding reliance interests of these three States. The final rule
allows these States to continue to use those alternative staffing
models, but the States must continue to use merit staff to the same
extent they were using it prior to February 5, 2020, the effective date
of the 2020 Final Rule. Those are the staffing models on which the
three States have decades-long reliance. Adopting a standard that
preserves the level of merit-staffing each of the three States had been
implementing since the 1990s is reasonable and consistent with the
final rule's overall State merit-staffing requirement.
Establishing a different standard for these three States is
supported by the text of section 3(a) of the Wagner-Peyser Act, which
permits the Department to establish ``standards of efficiency.'' The
Department's history of allowing these States to use alternative
staffing models since the 1990s has created the present reality that
requiring complete State merit-staffing in these three States would
have a harmful effect on the States' ES services and program
participants. While the final rule explains above the benefits of
requiring all the other States to use State merit staff to deliver all
ES services, and the proposed rule articulated the strong preference
for uniformity in staffing across all States, those interests are
outweighed by the disruptive and negative effects that a complete State
merit-staffing requirement would have on these States' programs that
have such long reliance on alternative staffing models.
These three States have provided some initial justification and
data for being able to continue using their longstanding alternative
staffing models. These three States also provided information about the
service disruption that would result from having to upend their
longstanding service delivery models. However, the justifications and
data presented do not provide clear evidence of causation. Therefore,
the Department will further examine various staffing models and methods
of delivering labor exchange services through a rigorous evaluation.
Given the Department's clear and supported policy preference for State
merit-staffing in the ES program, it logically follows that the
Department believes it is prudent to evaluate whether alternative
staffing models are empirically supported. The rule requires these
States' participation in any evaluation activities about merit-
staffing, which will likely consist of a single evaluation but may span
more than one study, including any data collection associated with
those evaluation activities. The Department will seek required
approvals under the Paperwork Reduction Act for data collection, as
necessary. This plan for evaluations is consistent with the Secretary's
authority under section 3(c)(2) of the Wagner-Peyser Act, which
requires the Secretary to ``assist in the development of continuous
improvement models for [the nationwide system of labor exchange
services] that ensure private sector satisfaction with the system and
meet the demands of jobseekers relating
[[Page 82662]]
to the system, and identify and disseminate information on best
practices for such system.'' 29 U.S.C. 49b(c)(2). The Department will
conduct this evaluation of the three States' provision of ES services,
including review of services of other States that participate, as
necessary, to determine whether such models are empirically supported.
In the section-by-section discussion, the Department further
explains why it is requiring that States use State merit staff to
provide ES services.
Comments Expressing Support for the Department's Legal Authority for
the State Merit-Staffing Requirement
Comment: Some commenters, including unions, a State employee
association, an advocacy organization, and private citizens, expressed
support for the Department's authority to institute a nationwide merit-
staffing requirement in the Wagner-Peyser Act regulations for ES
services. In particular, a State employee association, an advocacy
organization, and private citizens agreed with the Department that
clear legal authority for reinstituting a nationwide ES merit-staffing
requirement is found under secs. 3(a) and 5(b) of the Wagner-Peyser
Act, which give the Department authority to develop and prescribe
minimum standards of efficiency for ES services and to promote
uniformity in their administrative procedures. A union argued that the
statutory requirement to prescribe minimum standards of efficiency and
promote uniformity requires that States use merit staff to administer
ES programs, citing studies the commenter said show that State merit-
staffed ES offices deliver services more equitably and effectively.
An advocacy organization and a State employee association argued
that the proposed merit-staffing requirement is supported by the
historical record and reinstates the Department's longstanding
requirement that ES services be administered by State merit staff.
Specifically, according to these commenters, the Wagner-Peyser Act
establishes ``a national system of public employment service offices''
and, because a principal component of a public system is State
government employees who are hired and promoted on a merit basis under
a civil service system, the Department argued in Michigan v. Herman
that merit-based staffing is required by the Wagner-Peyser Act because
Congress intended merit-staffing to be a key component of ``public''
employment service.
Similarly, a private citizen argued that the Wagner-Peyser Act's
use of the word ``public'' clearly falls within the word's common
dictionary usage as something ``of or relating to government.'' Given
that the Wagner-Peyser Act defines ``employment service office'' as ``a
local office of a State agency,'' this commenter concluded that the
Wagner-Peyser Act created a network of State governmental ES offices.
Similarly, the commenter argued that the statutory text does not
envision using local agencies to provide ES services. Referencing 1998
and 2014 amendments to the Wagner-Peyser Act, this commenter said that
Congress has never altered the language providing authority for the
Secretary to require merit-staffing for ES services. In conclusion,
this commenter argued that ``claims of flexibility do not give the
Department sufficient legal authority to permit local agencies,
community colleges, local governments, or other entities to [provide]
ES [services] in substitution of state agency merit-staffed
employees,'' although a State is free to provide additional resources
to job seekers beyond ES-staffed services.
A union commented that the Wagner-Peyser Act's creation of
nationwide ES offices was intended to displace and transform the
ineffectual system of employment placement services available to the
jobless that existed prior to the Act's passage. The commenter
described that system as a patchwork, fragmented, and inequitable
system that consisted primarily of private agencies, which the
commenter said were usually exploitative, predatory, and corrupt, as
well as a handful of local public employment offices, which the
commenter asserted were tainted by underfunding, patronage hiring, and
political influence.
Asserting that Congress has reaffirmed the Wagner-Peyser Act's
requirement of merit-staffing over time, an advocacy organization said
that the Intergovernmental Personnel Act of 1970 (IPA) specifically
named the Wagner-Peyser Act as one of two acts administered by the
Department that transferred merit authority to the Civil Service
Commission (succeeded by OMB). Further, according to the commenter, the
Civil Service Reform Act (CSRA) in 1978 amended the IPA to make clear
the intent that merit system guarantees for public employees are to
remain a condition of Wagner-Peyser Act funding to States. In support
of this assertion, one of the commenters cited Pub. L. 95-454 (Oct. 13,
1978), 92 Stat 1111, which the commenter stated added subsection (h) to
42 U.S.C. 4271 to exempt the Wagner-Peyser Act's merit-staffing
requirement, among others, from the CSRA provision otherwise abolishing
all statutory personnel requirements established as a condition of the
receipt of Federal grants-in-aid by State and local governments.
Additionally, a State employee association asserted that the State
merit-staffing requirement is rooted in the Wagner-Peyser Act's
provisions giving the Department the authority to develop and prescribe
minimum standards of efficiency for public employment services and to
promote uniformity in their administrative procedure. Finally, these
commenters remarked that, when the Department attempted to change its
legal interpretation of the Wagner-Peyser Act in 2006, Congress
reaffirmed its position by blocking the proposal by including language
in the Fiscal Year (FY) 2007 and subsequent annual appropriations to
prohibit the Department from taking such action. A State employee
association commented that this 90-year history of the ES State merit-
staffing requirement remaining in place through statutory amendments
and court decisions is highly suggestive of a Congressional intent to
require the delivery of ES services by merit-based employees.
An advocacy organization and a State employee association discussed
additional components of the Wagner-Peyser Act historical record that
they said supported the necessity of delivery of ES services by
qualified, non-partisan personnel who are directly accountable to the
State. For example, the commenters said the first ES director concluded
that, to avert patronage and favoritism in hiring, State ES programs
were legally required to adopt merit personnel systems for appointments
and promotions. These commenters and a union also stated that, as
States adopted companion laws to conform with the Wagner-Peyser Act in
the 1930s, the Department withheld certification of nine States until
they provided assurances that they would merit staff any State-
administered public employment office.
A State employee association quoted the CSRA implementing
regulations as describing the Wagner-Peyser Act merit-staffing
requirement as ``a statutory requirement for the establishment and
maintenance of personnel standards on a merit basis'' in Wagner-Peyser
Act-funded programs (5 CFR part 900, subpart F, Appendix A). Further,
this commenter quoted the final rule implementing the Workforce
Investment Act of 1998 (WIA) in which the Department responded to
inquiries asking if States may seek a waiver of the merit-staffing
requirement for its ES program by stating, ``The requirement that
Wagner-Peyser Act services be
[[Page 82663]]
provided by State merit staff employees derives from sections 3 and
5(b)(1) of the Wagner-Peyser Act. Accordingly, we do not intend to, nor
do we have authority to entertain or grant waivers of the Wagner-Peyser
Act merit-staffing requirement.'' 65 FR 49294, 49306 (Aug. 11, 2000).
Citing the public comment it submitted on the 2019 proposal to
allow ES services to be provided under flexible staffing models, an
advocacy organization said that, for more than 85 years, Congress acted
many times to require merit-staffing in the ES program to guarantee
workers receive unbiased and high-quality employment services.
Response: The Department generally agrees with these commenters
that the Department has authority to require State merit-staffing under
the Wagner-Peyser Act and the IPA. The Department also generally agrees
that Congressional actions over time have affirmed the Department's
authority to require State merit-staffing. The Department weighed this
authority and historic precedent when it proposed uniform State merit-
staffing in the NPRM. As explained above, the Department also weighed
the public comments that described the detrimental effects that the
uniform requirement would have on the three States with longstanding
reliance on using alternative staffing models. Congress' decision not
to disturb these three States' alternative staffing models when it
passed both WIA and WIOA suggests Congressional acquiescence with these
States' arrangements. The Department is therefore returning to the
longstanding requirement of State merit-staffing for ES, with the
limited exception that Colorado, Massachusetts, and Michigan may
continue to use the alternative staffing models they had been using
before the 2020 Final Rule became effective. This includes the
requirement that these three States use merit-staffing to deliver ES
services to the same extent they had been using it.
Comments Expressing Concerns About the Department's Legal Authority
Comment: Some commenters, including an association of workforce
boards, a think tank, and a one-stop center employee, expressed doubts
about the Department's interpretation of its legal authority to require
nationwide merit-staffing for ES services. In particular, an
association of workforce boards and a think tank commented that the
Wagner-Peyser Act does not mandate a one-size-fits-all staffing model.
Specifically, an association of workforce boards asserted that the
Wagner-Peyser Act does not explicitly require that ES staff in States
be merit-based, nor do existing statutes speak specifically to State
merit-staffing requirements for ES offices. This commenter stated that
the Michigan v. Herman court suggested that the Department may
interpret section 3(a) of the Wagner-Peyser Act to permit staffing
flexibility, based on the court's statements that the Wagner-Peyser Act
``does not explicitly require merit-staffing'' and that the language of
section 3(a) is ``broad enough to permit [the Department] to require
merit-staffing.'' Further, the commenter remarked that, since the
Michigan v. Herman ruling, the Department has twice affirmed that
Federal law does not require delivery of ES services by State merit
staff: (1) allowing existing exemptions from ES State merit-staffing
requirements to continue (2016), and (2) the 2020 Final Rule. The
commenter concluded that dictating to States and local communities how
to appropriately staff ES offices is a Departmental interpretation that
will cause significant disruption and harm to the workforce system.
Response: The Department proposed in the NPRM to require that all
States use State merit staff to provide ES services. The Department has
considered the alternative viewpoints provided. As these commenters
noted, the Wagner-Peyser Act does not require the use of State merit
staff for ES services, but the Act does provide the Secretary with
discretion to require State merit-staffing, as explained above. State
merit-staffing for ES services is widely used in many States and its
requirement will not create disruption for the vast majority of States.
Upon consideration of the public comments that described the
detrimental effects that the State merit-staffing requirement would
have on the three States with longstanding reliance on alternative
staffing models, the Department will allow the three States with such
reliance to continue use of the models they had been using prior to
February 5, 2020, the effective date of the 2020 Final Rule. Further,
the Department is committed to evaluating ES programs in these States
to determine whether such models are empirically supported. With
respect to States that may have adopted ES staffing flexibilities as a
result of the 2020 Final Rule, the Department understands there may be
some additional costs associated with the transition from non-merit
staff to State merit staff. In response to comments, the Department is
providing a 24-month compliance period from the effective date of this
final rule to minimize disruption of services in those States.
IV. General Comments on the Proposed Rule
The NPRM, published on April 20, 2022, invited written comments
from the public concerning the proposed rulemaking; the comment period
closed on June 21, 2022. The comments received on the NPRM may be
viewed at <a href="https://www.regulations.gov">https://www.regulations.gov</a> by entering docket number ETA-
2022-0003.
The Department received timely comment submissions from 1,090
commenters, of which 776 were unique. The Department identified 12 form
letter campaigns, which were read and considered with the other
comments received. The Department also received additional comments
that were duplicates or not related to the subject of this rule. The
commenters represented a range of stakeholders from the public and
nonprofit sectors. Public sector commenters included State and local
government agencies, local workforce development boards, and one-stop
operators. Nonprofit sector commenters included public policy
organizations, advocacy groups, national and local labor unions, and a
trade association. Of the unique comments, nearly one-third came from
SWAs. The Department also received several comments from private
citizens.
These comments are addressed in the summary of general comments and
the section-by-section discussion. About half of the unique comments
supported aspects of the proposal but opposed others, while a smaller
number conditioned their support for the proposal on the Department
adopting certain changes in this final rule.
Summary of General Comments on the Proposed Rule
Comment: A State government agency expressed its support for the
rule on the grounds that the State already provides ES services with
State merit staff only and thus the rule would require no change in its
operations.
Several commenters, mostly private citizens, expressed general
support for the proposed merit-staffing requirement without providing
detailed rationale or supporting data. Some arguments provided by
commenters supporting the rule included:
<bullet> States are better equipped than local areas or contractors
to administer ES services professionally, consistently, and with
greater transparency and accountability.
<bullet> A State merit-staffing requirement would ensure the (UI)
system remains effective in times of need.
<bullet> State merit staff have consistently provided job seekers
with career
[[Page 82664]]
enhancement and reemployment services to ensure they have productive
lives.
A union called the proposed rule a policy correction from the 2020
Final Rule and agreed the proposed rule is appropriate, given the
environment in which that rule was developed (historically low demand
for ES services and UI) and the subsequent severe labor market impacts
of the COVID-19 pandemic that sent demand for ES and UI services
surging. Similarly supporting the return to the pre-2020 standard for
ES staffing, a farmworker advocacy organization commented that the
decision to depart from a merit-based staffing model was unsupported by
the Department's own findings on the efficiency of merit-based
staffing. Specifically, this commenter cited a 2004 ETA study that they
said compared merit-based ES staffing models with non-merit models, and
it found that the States with non-merit models listed significantly
fewer jobs and fewer referrals and job placement than merit-based
staffing States.
Response: The Department is adopting the proposed State merit-
staffing requirement as a generally reliable method to ensure quality
and consistency in ES delivery and one that supports the well-
established connection between ES and UI services. The Department notes
that it has allowed three States to use alternative staffing models for
decades, and these States have provided some justification and data for
being able to keep such models. The States also provided information
about the service disruption that would result from having to upend
their longstanding service delivery models. However, the justifications
and data presented do not provide clear evidence of causation; that is,
no compelling data emerged in the public comment period or in previous
research that showed that alternative staffing models are the cause of
higher or more consistent employment outcomes. While the Department
recognizes the decades-long practice on which three States rely, such
partial and correlation-only data are not sufficient to expand these
models to other States, especially not when, as explained in the NPRM,
fluctuations in UI demand from a pandemic or natural disasters clearly
show a need for centrally trained, high-quality staff to be able to
step in to bolster State review of UI claims and appeals if needed.
Therefore, the Department is adopting the State merit-staffing
requirement as proposed with a partial adjustment: the final rule is
requiring all States, except Colorado, Massachusetts, and Michigan, to
use State merit staff to provide ES services. The Department will
further examine various staffing models and methods of delivering labor
exchange services through a rigorous evaluation, as discussed above.
Given the Department's clear and supported policy preference for State
merit-staffing in the ES program, the Department believes it is prudent
to evaluate the delivery of ES services using the experience of States
operating longstanding alternative staffing models to determine whether
such models are empirically supported. The three States with decades-
long reliance on using alternative staffing models may use the same
service-delivery models they used prior to February 5, 2020, and will
be required to participate in this forthcoming evaluation activities.
All other States will have 24 months to comply with the requirement to
use State merit staff to provide all ES services.
Comment: Several commenters, including one-stop center staff and
private citizens, opposed the proposed merit-staffing requirement. Some
arguments provided by commenters against the proposed merit-staffing
requirement included:
<bullet> Commenters from States operating longstanding alternative
staffing models stated that they view local resource centers and the
services they provide as essential.
<bullet> Commenters from States operating longstanding alternative
staffing models stated that the change would ruin the one-stop service
model that provides seamless, equitable services that facilitate real-
time, meaningful referrals.
<bullet> Commenters stated that the Federal government has
consistently demonstrated inadequacy when it comes to administration of
programs that directly affect those at the local level.
<bullet> Commenters from States operating longstanding alternative
staffing models stated that there is great value in staffing local
offices with local staff rather than State merit employees. Each
individual and business has their own unique challenges to progress,
development, and success, which can only be understood and addressed at
the local level.
<bullet> Commenters from States operating longstanding alternative
staffing models stated that the proposed change would redirect
responsibilities and funds to the State, which would be a mistake. The
commenters said that the current system at the local level is working
well without any issues.
<bullet> Commenters from States operating longstanding alternative
staffing models stated that the proposed change would harm job seekers
and businesses, resulting in lower quality and fewer services being
provided, including services to veterans, immigrant and refugee
navigator services, Clean Slate services for formerly incarcerated
people, support navigating the UI benefits process, job training,
career events, job fairs, and industry led collaboratives.
<bullet> Commenters from States operating longstanding alternative
staffing models stated that the proposed rule would have a negative
impact on local communities, including causing job centers to close and
the loss of many jobs. The loss of centers would also impact students
who rely on local offices to assist with educational support and other
assistance.
Many private citizens from States operating longstanding
alternative staffing models provided personal experiences asserting the
value and need for services at one-stop centers, which they stated
would be impacted if a State merit-staffing requirement changed the
availability of services or the number of one-stop centers. Other
commenters, including one-stop center staff, described their experience
as local merit staff or working with the workforce development system
and the positive impact on the community.
Response: The Department proposed to require that all States use
State merit staff to provide ES services and has considered reasons
provided by these commenters for opposing the proposed rule. The
proposal to require State merit staff does not preclude the State from
providing services locally, and the vast majority of States provide
high quality services in one-stop centers with a mix of State merit
staff delivering ES locally and other staff providing other services
locally. Without evidence that alternative staffing models directly
cause higher employment outcomes, balanced against widespread success
in delivering services while maintaining State merit staff for ES, and
further balanced by the need for ES State merit staff to be available
for surges in UI claims and appeals, the Department is generally
adopting the proposed requirement that States use State merit staff to
provide ES services.
However, the Department recognizes that three States (Colorado,
Massachusetts, and Michigan) have been allowed to administer ES
services using alternative staffing models for decades. The Department
understands that these States' long experience with their particular
models results in an affinity and preference for their model. During
the comment period, these States
[[Page 82665]]
provided information that the State merit-staffing requirement proposed
to be applied to all States would have extremely detrimental impacts on
the provision of ES services in these three States because of the facts
and circumstances, particularly the decades-long reliance interests, in
these States. Based on this information, the Department is adjusting
the final rule from the original proposal. The final rule requires all
States, except the three States with decades-long reliance on using
alternative staffing models, to use State merit staff to provide ES
services. The expansion of alternative staffing models to additional
States occurred without study, before the landscape-altering impact of
the pandemic on the UI and workforce system. The Department will
require the three States to participate in a rigorous evaluation of the
services provided in the three alternative States to determine if using
alternative models benefit ES service delivery. All other States will
have 24 months to comply with the requirement to use State merit staff
to provide ES services.
Comment: Several commenters, including private citizens, presented
a mixed stance or unclear position on the proposed rule. Many
commenters, including private citizens, employers, and one-stop center
staff, discussed Michigan's public workforce system, known as Michigan
Works!, without addressing the proposed rule. Other commenters,
including a trade association, career service provider, and employer,
generally discussed the importance of programs or ``communities.'' A
one-stop center employee commented that ES services offer job seekers
help navigating the UI process.
Response: The Department agrees that one-stop centers are valuable
assets in a community, often provide services to a wide range of
individuals, and are instrumental in shaping a local workforce's skills
as part of larger economic development. The Department also notes that
one-stop centers play this role across the country, including in the
vast majority of States that maintain State merit staff in delivering
ES services. Changes in how a one-stop center operates can impact a
local community, and thus the Department weighs such impacts very
carefully in its regulations. The Department recognizes the significant
challenges that a return to State merit-staffing would present for
States with decades-long reliance on using alternative models.
Therefore, after serious consideration of comments received from the
public, the Department is requiring all States to use State merit staff
to deliver ES services, except the three States that have been allowed
to use alternative staffing models for decades. Due to their
longstanding reliance, these States are permitted to use merit-staffing
flexibility to the same extent the Department allowed them to use it
before the 2020 Final Rule became effective, but the Department is not
permitting them to expand their staffing flexibility any further.
Comment: An anonymous commenter asked whether State merit staff
will be required to colocate in one-stop centers.
Response: WIOA requires ES offices to be colocated in AJCs, also
known as one-stop centers, regardless of the staffing model used. This
is unchanged under this final rule.
Comment: An anonymous commenter asked whether Federal
appropriations will provide adequate resources to support the
recruitment, hiring, and training of ES State merit staff or if the
costs will be assumed by the States.
Response: Recruiting, hiring, and training ES staff is an allowable
cost for ES grants to States. In considering this comment, the
Department determined that a greater amount of Federal funding is
available now compared to other years. The FY 2022 and FY 2023
appropriations each provided an increase for Wagner-Peyser Employment
Service grants to States over the years prior. In FY 2023, Congress
appropriated $5 million more than in FY 2022 for the ES formula grants
to States, which are the grants allotted to States to operate the ES.
With the increased funding, the Department expects the ES to serve
approximately 20,000 more individuals nationwide in 2023 (2,913,438).
The estimates are not dependent on the type of staffing model a State
uses to deliver ES services. The States' latest financial reports show
that many States, including those States that must make changes to come
into compliance with the final rule's State merit-staffing requirement,
still have previous years' ES grant funds not yet expended. One of
these States has expended under half of its Program Year (PY) 2022
allotment, and all of these States had lower expenditure rates in PY
2022 than in previous years. The Department notes that many States have
used general funds made available under the American Rescue Plan Act
and other resources to bolster overall workforce development services.
Therefore, compared to other years, this is an appropriate time for a
transition back to the use of State merit staff because of the above
average resources available.
Comment: An anonymous commenter asked what impact implementation of
the proposed rule will have on the monitor advocate requirements.
Response: Because the Monitor Advocate System is a part of the
Wagner-Peyser ES, the requirement for States to use State merit staff
for ES services also applies to Monitor Advocate services described at
parts 653 and 658. Aside from Colorado, Massachusetts, and Michigan,
the Department is requiring States to use State merit staff to conduct
outreach to MSFWs, as described at Sec. 653.107. Colorado,
Massachusetts, and Michigan must use merit-staffing for MSFW outreach
to the same extent authorized in their approved longstanding
alternative staffing model. This means that if the State was required
to use State merit staff for MSFW outreach (as in the case of Michigan)
prior to February 5, 2020, then the State must continue to use State
merit staff for MSFW outreach. If the State was permitted to use a
combination of local merit staff and State merit staff for MSFW
outreach prior to February 5, 2020, then the State must continue using
merit staff for MSFW outreach. The Department is also requiring all
States to use State merit staff to fulfill their SMA responsibilities,
as described at Sec. 653.108. Colorado, Massachusetts, and Michigan
all use State merit staff for the SMA position as part of their
longstanding staffing model and are required to continue doing so. All
States will have 24 months to comply with this final rule.
Comment: The Department received several comments that were beyond
the scope of the proposed rule and included issues with the processing
of UI claims, the politics of social justice campaigns, the status of
pandemic unemployment assistance, and the actions of President Biden's
administration generally.
Response: These are issues that cannot be resolved or implemented
through this regulatory process or are not within the Department's
purview.
V. Section-by-Section Discussion of Final Rule
The discussion below details the decisions the Department made in
adopting the final rule text. It responds to section-specific comments
and explains any changes made in response to those comments. If the
Department did not receive comments regarding a particular section,
that section is not discussed in detail below, and the final rule
adopts that section as proposed for the reasons set forth in the NPRM.
The Department also has made nonsubstantive changes to the
[[Page 82666]]
regulatory text to correct grammatical and typographical errors, in
order to improve the readability and conform the document
stylistically, that are not discussed in detail below.
A. Technical Amendments and Global Edits
In the NPRM, the Department proposed several technical amendments
and global changes, as discussed in detail below. The Department did
not receive substantive comments on these proposed changes, and it
adopts them as proposed in the final rule.
To conform with the proposed changes to the definition of Wagner-
Peyser Act Employment Service (ES) also known as Employment Service
(ES) in Sec. 651.10, the Department is making technical changes to
replace the phrases ``employment services,'' ``Wagner-Peyser Act
services,'' and ``services provided under the Wagner-Peyser Act'' with
``ES services.'' Changes also have been made to replace the phrase
``employment office'' with ``ES office,'' and ``Wagner-Peyser Act
participants'' with ``ES participants.'' These changes will simplify
and standardize the use of terminology. The language is also intended
to improve usage of plain language within the regulations. Technical
changes to articles, specifically changing ``a'' to ``an'' where
necessary, have been made as well when preceding ``ES office.'' These
changes have been made in Sec. 651.10 within the definitions of
applicant holding office, Employment Service (ES) office, field visits,
outreach staff, placement, and reportable individual, in addition to
the changes in the definition of Wagner-Peyser Act Employment Service
(ES) also known as Employment Service (ES). Conforming changes have
also been made to the subpart heading at part 652, subpart C, and
within the regulatory text at Sec. Sec. 652.205, 652.207, 652.215,
653.107, 653.108, 658.411, 658.502, 658.602, and 658.603.
The Department is adopting several technical edits to refine
gender-inclusive language within the regulatory text while maintaining
plain language principles. Throughout parts 651, 653, and 658, the term
``he/she'' was used to denote an individual of unknown gender. Using
terms with a slash may not be in keeping with plain language principles
and may also exclude people who are nonbinary. The Department has made
three technical edits to replace ``he/she'' with more inclusive
language employing plain language principles.
First, where ``he/she'' refers to an individual in their
professional capacity, the Department uses their job title instead of a
pronoun. These edits largely affect regulations impacting the National
Monitor Advocate (NMA) or the Regional Monitor Advocate (RMA). In these
cases, ``he/she'' has been replaced with ``the NMA'' or ``the RMA'' as
appropriate and ``his/her'' with the possessive pronoun ``their.''
These edits are made as proposed at Sec. Sec. 658.602 and 658.603.
Second, where ``he/she'' refers to an employer that is not an
individual person, the Department uses the pronoun ``it.'' Where the
possessive pronouns ``his/her'' were used, the Department proposed
using ``its.'' This is appropriate because employers are entities, not
individuals, and the proper pronoun is ``it.'' This edit is made as
proposed at Sec. Sec. 658.502 and 658.504.
In all other cases where ``he/she'' was used, the Department uses
the pronoun ``they'' in its capacity as a gender-inclusive third-person
singular pronoun but conjugated with third-person plural verbs. Where
the possessive pronouns ``his/her'' were used, the Department proposed
using ``their.'' These changes are designed to remove binary gender
language so that the regulatory text is gender inclusive. The
Department makes these changes as proposed in Sec. 651.10 in the
definition of seasonal farmworker. Edits are also made as proposed to
Sec. Sec. 653.107, 653.108, 653.111, 653.501, 653.502, 658.400,
658.410, 658.411, 658.421, 658.422, 658.602, 658.603, 658.702, 658.705,
658.706, and 658.707.
In addition, the Department replaces the words ``handle'' and
``handled'' with ``process'' and ``processed,'' as appropriate, to
clarify that actions by ES staff and Federal staff must follow the
processing requirements listed throughout part 658, subparts E and H,
which use the word ``process.'' The word ``handle'' does not have a
specific meaning in the regulatory text and may be unclear to SWAs.
In some instances, the Department also made conforming technical
amendments to correct grammar in the regulations, as needed, because of
these changes. In addition to such conforming technical amendments, the
Department added and removed commas throughout the regulatory text to
improve clarity and readability. These global changes and technical
amendments described in this section are not explicitly identified
later in the section-by-section discussion.
Finally, the Department is correcting the citation for its
rulemaking authority for parts 651 and 652.
B. Part 651--General Provisions Governing the Wagner-Peyser Act
Employment Service
Part 651 (Sec. 651.10) sets forth definitions for parts 652, 653,
654, and 658. In the NPRM, the Department proposed to define several
new terms in this section and to make revisions to a number of other
terms that were already defined in this section. The Department
received comments on some of the proposed additions and revisions.
After carefully considering these comments, the Department has decided
to adopt most of the additions and revisions as proposed, with
exceptions, as discussed in detail below.
Apparent Violation
The Department proposed to add a definition for apparent violation
to clarify that the term means a suspected violation of employment-
related laws or ES regulations, as set forth in Sec. 658.419.
Comment: A State government agency appreciated the Department's
efforts to define apparent violation but felt that additional
clarification was required to aid implementation. This commenter
suggested that the Department clarify the proposed definition of
apparent violation by adding the following language at the end: ``for
which ES staff observes, has reason to believe, or is in receipt of
information that a violation has occurred.''
Response: The Department agrees that the proposed definition for
this term should be clarified by specifying that ES staff process
apparent violations. In reviewing the commenter's suggestion, the
Department further identified that it would be beneficial to include in
the definition that apparent violations relate to information received
about suspected employer noncompliance, as Sec. 658.419 has
historically described. Additionally, upon further review of the NPRM,
the Department is further clarifying the definition of apparent
violation to state explicitly that the definition does not include
complaints as defined in Sec. 651.10. This change is meant to make the
distinction between complaints and apparent violations clearer. The
Department is also removing the parenthetical ``as set forth in Sec.
658.419 of this chapter'' because it is unnecessary with the changes
the Department is making in Sec. 658.419 to be more clearly consistent
with this definition. Accordingly, the Department has decided to amend
the definition of apparent violation adopted in this final rule to mean
``a suspected violation of employment-related laws or employment
service (ES) regulations by an employer, which an ES staff member
[[Page 82667]]
observes, has reason to believe, or regarding which an ES staff member
receives information (other than a complaint as defined in this
part).''
Applicant Holding Office
The Department proposed to amend the definition of applicant
holding office to replace ``a Wagner-Peyser Employment Service Office''
with ``an ES office,'' and did not receive any comments on this
proposed change. This change is consistent with the changes proposed to
the definition of Wagner-Peyser Employment Service (ES) also known as
Employment Service (ES). The Department adopts the revision to
``applicant holding office'' as proposed.
Bona Fide Occupational Qualification (BFOQ)
As noted in the preceding section on technical amendments and
global edits, the Department added commas throughout the regulatory
text to improve clarity and readability, including in the first
sentence of the definition of bona fide occupational qualification
(BFOQ). The Department did not receive any comments on this proposed
change. In this final rule, the Department adds a necessary cross-
reference to the EEOC's regulation regarding national origin found at
29 CFR part 1606 and corrects the cross-reference to the EEOC's BFOQ
regulation found at 29 CFR part 1627.
Career Services
The Department proposed to amend the definition of career services
to refer to WIOA by its acronym rather than its full title because the
full title is previously spelled out at the beginning of this section.
The Department did not receive any comments on this proposed change and
adopts it as proposed.
Clearance Order
The Department proposed to amend the definition of clearance order
to add a citation to the Agricultural Recruitment System (ARS)
regulations at part 653, subpart F. The purpose of this addition is to
clearly identify the ARS regulations to which the term refers. The
Department did not receive any comments on this proposed change and
adopts it as proposed.
Complaint System Representative
The Department proposed to amend the definition of Complaint System
Representative to specify that the Complaint System Representative must
be trained. The addition of the word ``trained'' makes the definition
consistent with the requirement in Sec. 658.410(g) and (h) that
complaints are processed by a trained Complaint System Representative.
The Department also proposed to remove the words ``individual at the
local or State level'' due to proposed changes to the definition of ES
staff. The Department did not receive any comments on the changes
proposed to the definition of complaint system representative. While
the Department is not adopting the changes that it proposed to the
definition of ES staff, the reference to an ``individual at the local
and State level'' in the definition of complaint system representative
is not necessary regardless of whether the Department revises the
definition of ES staff. Accordingly, the Department adopts the proposed
revisions to the definition of complaint system representative,
including the removal of these words, without change.
Decertification
The Department proposed to amend the definition of Decertification
to specify that the Secretary to which this definition refers is the
Secretary of Labor. The Department did not receive any comments on this
proposed change and adopts it as proposed.
Employment and Training Administration
The Department proposed to amend the definition of Employment and
Training Administration (ETA) to remove the words ``of Labor'' after
``Department'' because Department is previously defined in this section
as ``the United States Department of Labor.'' The Department did not
receive any comments on this proposed change and adopts it as proposed.
Employment Service (ES) Office and Employment Service (ES) Office
Manager
The Department proposed to amend the definition of Employment
Service (ES) office to replace ``Wagner-Peyser Act'' with ``ES,'' to
align with other proposed changes to the regulatory text. The
Department further proposed to amend the definition of Employment
Service (ES) Office Manager to replace the phrase ``all ES activities
in a one-stop center'' with the phrase ``ES services provided in a one-
stop center,'' to align with other proposed changes to the regulatory
text. In the same definition, the Department also proposed to replace
``individual'' with ``ES staff person'' to clarify that the ES Office
Manager must be ES staff, as defined in this section.
Comment: Several commenters, including a one-stop center employee,
supported the requirement in the definition of Employment Service (ES)
office that it be colocated in a one-stop center, saying this is part
of Michigan's current practice. However, the commenters expressed
concern about the term Employment Service (ES) Office Manager, arguing
that it is misleading and implies greater authority than may be
appropriate for onsite one-stop center ES staff.
Response: The Department acknowledges the comment but notes that
there is no requirement for the ES Office Manager to be located onsite.
ES Office Managers are responsible for all ES services provided in a
one-stop center. It is possible for one ES Office Manager to manage
more than one ES Office; however, each ES Office must have an assigned
ES Office Manager. The Department adopts the change as proposed.
Employment Service (ES) Staff
The Department proposed to amend the definition of Employment
Service (ES) staff in two ways: first, by replacing the phrase
``individuals, including but not limited to State employees and staff
of a subrecipient,'' with ``State government personnel who are employed
according to the merit system principles described in 5 CFR part 900,
subpart F--Standards for a Merit System of Personnel Administration,
and'' to conform with the imposition of the merit-staffing requirement
proposed in Sec. 652.215; and, second, by deleting the phrase ``to
carry out activities authorized under the Wagner-Peyser Act,'' because
this language is unnecessary as parts 652, 653, and 658 describe the
activities and services that ES staff may or must carry out. The
proposal also added that ES staff includes a SWA official.
Comment: Multiple commenters, including a trade association, a one-
stop center employee, and an advocacy organization, recommended the
Department expand the definition of Employment Service (ES) staff to
include local merit staff in addition to State merit staff. The trade
association reasoned that a more expansive definition is needed in
light of the nationwide employment crisis and to enable the hiring of
qualified local personnel. A group of Colorado local government
employees also in favor of expanding the definition described the
braided services they provided to a job seeker who needed extra
support, arguing that the individual likely would not have received the
same opportunities from State merit staff. Some commenters and a one-
stop center employee asked the Department to explicitly state in the
final rule that ES
[[Page 82668]]
staff should be a part of the local AJC, arguing that standalone ES
offices undermine the WIOA one-stop concept and hinder access to
comprehensive services for job seekers and employers.
A State government agency requested guidance on which
classifications of ES staff would need to be cross-trained, noting that
the NPRM only defines ES staff as those who are funded, in whole or in
part, by Wagner-Peyser Act funds. The commenter stated that in their
State, some workers may meet this definition of ES staff but only
perform administrative functions.
Response: The Department has considered the comments recommending
expanding the definition of ES staff to include local merit staff and
requesting clarification regarding which staff are included in the
definition. Because the Department is adopting the proposed State
merit-staffing requirement with the limited exception that Colorado,
Massachusetts, and Michigan may continue to use alternative staffing
models, the Department is removing the reference to merit system
principles from the definition of ES staff. The final rule defines ES
staff to mean ``Individuals who are funded, in whole or in part, by
Wagner-Peyser Act funds to carry out activities authorized under the
Wagner-Peyser Act.'' The Department is not adopting the proposal that
would have added that ES staff includes a SWA official because SWA
officials may include individuals funded by programs other than Wagner-
Peyser. In response to the comment stating the final rule should
require that ES staff be a part of the local AJC because stand-alone ES
offices undermine the WIOA one-stop concept, the Department notes that
the existing regulations at 20 CFR 652.202 and 678.315 state that
stand-alone ES offices are not permitted, and States must colocate ES
offices with one-stop centers. In response to the comment inquiring
about cross-training, the Department notes that, while there are
benefits to cross-training, the NPRM did not propose requiring States
to cross-train employees nor does this final rule require cross-
training.
Field Checks
The Department proposed several amendments to the definition of
field checks. First, the Department proposed to replace the term ``job
order'' with ``clearance order,'' which is more accurate because field
checks must be conducted on clearance orders as defined in Sec.
651.10. Second, the Department proposed to clarify that field checks
may be conducted by non-ES State staff, in addition to ES or Federal
staff, where the SWA has entered into an arrangement with a State or
Federal enforcement agency (or agencies) for their enforcement agency
staff to conduct field checks. Third, the Department proposed to remove
the word ``random'' from the existing definition to clarify that the
selection of the clearance orders on which the SWA will conduct field
checks need not be random, though random field checks may still occur,
and to clarify that field checks may be targeted, where necessary, to
respond to known or suspected compliance issues.
Comment: A State government agency supported the revised definition
of field checks but requested that the Department clarify in the rule
or guidance either the circumstances that warrant targeted field checks
or the responsibility of States to define the circumstances in policy.
Another State government agency stated that the proposal to amend the
definition of field checks to allow non-ES State staff to conduct field
checks would necessitate coordination, training, and reporting to
ensure that non-ES staff perform field checks properly and timely. The
agency recommended that the Department remove the language allowing
non-ES staff to perform field checks. A farmworker advocacy
organization also supported the proposal to remove the word ``random''
from the definition of field checks, which it said would help improve
protections for farmworkers. The organization stated that it believed
the Department should go further to expand the definition of field
checks to include locations beyond where ES placements have been made,
stating that the ES placement limitation significantly reduces the
number of worksites eligible for these essential compliance checks and
incentivizes employers to hire H-2A workers--whose employment does not
currently create the possibility of a field check--instead of hiring
U.S. workers through the ES.
Response: Regarding the request for clarification on the
circumstances that warrant targeted field checks, the Department
clarifies that the circumstances must relate to the terms and
conditions on the clearance order. Thus, where it is known or suspected
that wages, hours, and working and housing conditions are not being
provided as specified in the clearance order, a targeted field check
may be warranted. The Department will issue guidance on this change.
Regarding the recommendation that the Department remove the
language allowing non-ES staff to perform field checks, the Department
notes that this proposed revision to the definition of field checks is
not a new requirement. Rather, it is intended to align the definition
with the existing regulation at Sec. 653.503(e), which allows SWA
officials to enter into formal or informal arrangements with
appropriate State and Federal enforcement agencies where the
enforcement agency staff may conduct field checks instead of and on
behalf of the SWA, as described in Sec. 653.503(e). The Department,
therefore, declines to adopt this recommendation, and maintains that
non-ES staff may conduct field checks under certain circumstances.
Regarding the recommendation that the Department expand field
checks to locations beyond where ES placements have been made, the
Department acknowledges the concerns raised by the farmworker advocacy
organization regarding the limited instances in which a SWA may conduct
field checks to evaluate employer compliance but disagrees that
existing field check requirements incentivize employers to hire H-2A
workers over U.S. workers. The Department agrees that compliance
monitoring is essential, but notes that field checks are not the sole
means by which such monitoring occurs, and employers are prohibited
from rejecting able, willing, and qualified U.S. workers (referred to
them through the ES or otherwise) in favor of H-2A workers. The
Department further notes that field checks only pertain to placement of
U.S. workers via the ARS. The Department's Wage and Hour Division (WHD)
conducts investigations and evaluates agricultural employers'
compliance with the terms and conditions of the H-2A program (including
H-2A employers' compliance with the terms and conditions that they
offer in clearance orders) (see 29 CFR part 501). To the extent the
advocacy organization is recommending field checks for H-2A employment,
the operative regulations are outside the scope of this rulemaking and
the Department declines to adopt this recommendation. The Department
adopts the changes to this definition as proposed in the NPRM.
Field Visits
The Department proposed several amendments to the definition of
field visits. First, the Department proposed to clarify that field
visits are announced appearances by SMAs, RMAs, the NMA, or NMA team
members, in addition to outreach staff, to clarify which Monitor
Advocates may conduct field visits and that the appearances are
announced (and not unannounced, as with the proposed definition of
field checks). Second, the Department proposed to
[[Page 82669]]
replace the reference to ``employment services'' with ``ES services''
to conform with the use of the ``ES'' abbreviation throughout the
regulatory text. Third, the Department proposed an amendment to specify
that field visits include discussions on farmworker rights and
protections, to help ensure that these issues are consistently
addressed.
Comment: A farmworker advocacy organization supported the proposal
to amend the definition of field visits to include discussions on
farmworker rights and protections. The organization agreed with the
Department's observation that outreach staff and SMAs do not always
discuss farmworker rights and protections during field visits as part
of broader discussions on ES services. A State government agency
requested that the Department clarify the role of monitor advocates
with respect to field visits. The agency stated that the Department's
intent to refocus monitor advocate responsibilities on monitoring
appears to be contradicted by its expectation that monitor advocates
conduct more field visits, which is not a monitoring activity. The
commenter asked the Department to clarify that the monitor advocate's
role in field visits is to monitor that ES staff conduct field visits
in accordance with part 653.
Response: The Department appreciates the advocacy organization's
support for the inclusion of discussions of farmworker rights and
protections in the definition of field visits. Regarding the State
agency's request for clarification on monitor advocate roles in field
visits, the Department notes that the proposed revisions do not require
additional field visits, but instead clarify that the monitor advocates
who may conduct field visits include SMAs, RMAs, and the NMA and NMA
staff. The existing regulations provide that SMAs conduct field visits
in accordance with Sec. 653.108(o) and (q), the NMA (and NMA staff) in
accordance with Sec. 658.602(n), and RMAs in accordance with Sec.
658.603(p). As part of their monitoring duties, the NMA (and NMA staff)
and RMAs accompany selected outreach workers on field visits as part of
their review and assessment responsibilities in Sec. Sec. 658.602 and
658.603. For SMAs, the Department proposed in Sec. 653.108 to clarify
that the purpose of a SMA field visit is to discuss the SWA's provision
of ES services and obtain input on the adequacy of those services from
MSFWs, crew leaders, and employers. The SMA is not responsible to
provide direct employment services during field visits or other
activities. Instead, the SMA's field visits are designed to gather
information the SMA needs to evaluate how the SWA is currently serving
MSFWs, which the SMA uses to assess SWA compliance and to advocate for
improvements.
After carefully reviewing the comments, the Department has decided
to update the definition of field visits to cross reference the
citations that describe activities Monitor Advocates and outreach staff
perform during field visits. To further clarify the role of monitor
advocates with respect to field visits, the Department has decided to
remove the proposed reference to NMA team members and instead refer to
NMA staff, as identified in Sec. 658.602(h).
During consideration of the comments, the Department noticed that
the proposed definition did not specify that field visits may occur at
the gathering places of MSFWs, which is necessary to align the
definition with the requirement in Sec. 653.107(b)(1) that outreach
staff must explain certain information and services to MSFWs at their
working, living, or gathering areas. To align the definition with Sec.
653.107(b)(1), the Department is further revising the definition of
field visits to include that field visits may occur at places where
MSFWs gather, in addition to working and living locations.
Hearing Officer
The Department proposed to amend the definition of Hearing Officer
to remove the words ``of Labor'' because Sec. 651.10 previously
defines ``Department'' as ``the United States Department of Labor.''
The Department did not receive any comments on this proposed change and
adopts it as proposed.
Interstate Clearance Order
The Department proposed to amend the definition of interstate
clearance order to indicate that it is an agricultural ``clearance''
order for temporary employment instead of a ``job'' order. This change
aligns the definitions of job order and clearance order. The Department
did not receive any comments on this proposed change and adopts it as
proposed.
Intrastate Clearance Order
The Department proposed to amend the definition of intrastate
clearance order in two ways: first, by indicating that it is an
agricultural ``clearance'' order for temporary employment instead of a
``job'' order, to align the definition with the definitions of job
order and clearance order in this part; and, second, by clarifying that
the term means an agricultural clearance order for temporary employment
describing one or more hard-to-fill job openings that an ES office uses
to request recruitment assistance from all other ES offices within the
State, to help SWAs understand that an intrastate clearance order must
be circulated to all ES offices within the State.
Comment: A State government agency said that amending the
definition of interstate clearance order to require an ES office to
request recruitment assistance from all ES offices (not just
significant MSFW one-stop centers) will necessitate changes to the
review tool its monitor advocate office uses to conduct annual reviews
(i.e., to reflect that all offices must conduct recruitment). Another
State government agency asked the Department to clarify what
recruitment assistance means in the definition of intrastate clearance
order.
Response: The Department acknowledges that the changes may require
some SWAs to update their review tools and notes that intrastate
recruitment, not interstate recruitment, involves recruitment
assistance from all other ES offices within the State. However, the
Department believes that the majority of SWAs will not need to update
review tools or other processes because the revised definition is
consistent with their current practices. The Department has found
through monitoring that the majority of SWAs place intrastate clearance
orders into their web-based labor exchange systems and make them
available for recruitment throughout the entire State. Most SWAs do not
direct recruitment efforts to specific ES offices because their labor
exchange systems are not programmed to do so. Therefore, this change
will not increase burden for most SWAs.
The Department has considered the impact of updating the definition
to specify that intrastate clearance orders request recruitment
assistance from all other ES offices in the State and finds it to be
beneficial. Specifically, requesting recruitment assistance from all
other ES offices increases the likelihood that the employer will find
the workers it needs. Because the definition applies to criteria and
non-criteria clearance orders, the description also allows the employer
and SWA to recruit as broadly as possible and assists ETA in assessing
the need for interstate clearance requests, including requests
connected to the H-2A visa program. The intended result is that
intrastate clearance will be more likely to result in employment of
U.S. workers.
The Department adopts the definition as proposed and will provide
guidance and technical assistance, as needed,
[[Page 82670]]
including how other ES offices provide recruitment assistance.
Migrant Farmworker and Seasonal Farmworker
The Department proposed to amend the definition of migrant
farmworker by removing the exclusion of full-time students who are
traveling in organized groups, to make available to these individuals
the benefits and protections of the Monitor Advocate System, including
ES service requirements and safeguards built into the Complaint System.
Relatedly, the Department proposed to remove the exclusion of non-
migrant full-time students from the definition of seasonal farmworker,
to allow full-time students who work in seasonal farmwork to be
considered seasonal farmworkers and to make the definition of seasonal
farmworker consistent with the definition of migrant farmworker. The
Department adopts these definitions as proposed.
Comment: Referencing the Department's proposal to remove the
exclusion of non-migrant full-time students from the definition of
seasonal farmworker, thus making the definition of seasonal farmworker
consistent with the definition of migrant farmworker, an anonymous
commenter remarked that seasonal farmworkers (such as non-migrant full-
time students) are not the same as migrant farmworkers (who they said
are usually noncitizens admitted to the United States for specific
timeframes with green card status). The commenter also mentioned an ES
office in Traverse City, Michigan, with a specific division for
assisting migrant farmworkers and stated that hiring extra migrant
farmworkers may not suffice for fresh produce processing of their
State's agriculturally diverse crops.
Response: The proposed changes maintain two separate definitions
for seasonal farmworkers and migrant farmworkers and remove the
exclusion of full-time students from both definitions to ensure MSFW
students have access to the benefits and protections of the Monitor
Advocate System.
Removal of Migrant Food Processing Worker
The Department proposed to remove the definition of migrant food
processing worker because migrant food processing worker status has not
been a separately tracked part of the MSFW definition since the ES
regulations were updated in the WIOA final rule promulgated in 2016.
See 81 FR 56071 (Oct. 18, 2016). Current ETA reporting does not require
States to document migrant food processing workers as a particular type
of MSFW and this definition is unnecessary because the existing MSFW
definitions are inclusive of individuals who perform work as migrant
food processors. The Department did not receive any comments on its
proposal to remove this defined term and adopts its removal as
proposed.
Occupational Information Network (O*NET)
The Department proposed to amend the definition of Occupational
Information Network (O*NET) to remove the word ``system'' from the
definition, as it is not needed to describe O*NET. The Department did
not receive any comments on this proposed change. The Department adopts
the change as proposed.
O*NET-SOC
The Department proposed to amend the definition of O*NET-SOC to
remove the words ``of Labor'' after ``Department'' because Department
is previously defined in this section as ``the United States Department
of Labor.'' The Department did not receive any comments. The Department
adopts the change as proposed.
Outreach Staff
The Department proposed to amend the definition of outreach staff
to clarify that an SMA is not ``outreach staff'' for purposes of Sec.
653.107. While an SMA may join outreach staff on field visits, an SMA
cannot fulfill a SWA's responsibility under Sec. 653.107(a) to provide
outreach staff. This aligns with a revision in Sec. 653.108(d) to
specify that the SMA and their staff cannot assist with outreach
responsibilities, which is further discussed in the section-by-section
analysis for Sec. 653.108. The Department did not receive any comments
on the clarification proposed to the definition, and it adopts the
revision to this definition as proposed.
Participant and Reportable Individual
To align with the proposed changes to replace references to
``employment services,'' ``Wagner-Peyser Act services,'' and ``services
provided under the Wagner-Peyser Act'' with ``ES services'' and ``ES,''
the Department proposed to amend the definition of participant by
replacing the phrase ``Wagner-Peyser Act participants'' with ``ES
participants'' and to amend the definition of reportable individual by
replacing the phrase ``Wagner-Peyser Act services'' with ``ES
services.'' The Department did not propose any other changes to these
definitions. The Department received one comment related to the
definitions for each of these terms, which is summarized and responded
to below. After consideration of this comment, the Department adopts
the revisions to both of these definitions as proposed.
Comment: A State government agency suggested the Department should
define reportable individual versus participant for States to
accurately collect and report information on these groups.
Response: The Department appreciates the comment requesting that
the Department clarify who is considered reportable individuals or
participants. The Department's existing regulations in part 651 provide
definitions for reportable individual and participant at Sec. 651.10.
This final rule adopts only minor revisions to each term to replace
existing references to the ``Wagner-Peyser Act'' with ``ES.'' As noted
in Sec. 651.10, participant means a reportable individual who has
received services other than the services described in Sec.
677.150(a)(3) of this chapter, after satisfying all applicable
programmatic requirements for the provision of services, such as
eligibility determination (see 20 CFR 677.150(a)). This definition
notes that individuals who use only self-services or information-only
services or activities are not considered participants. As outlined in
Sec. 677.150(a)(4) of this chapter, programs must include participants
in their performance calculations.
Placement
The Department proposed to amend the definition of placement (along
with other terms) to replace the phrase ``employment office'' with ``ES
office.'' The Department did not propose any other changes to this
definition. The Department did not receive any comments on this
proposed definition and adopts it as proposed.
Respondent
The Department proposed to revise the definition of respondent by
removing the parenthetical language ``including a State agency
official'' because the term ``State agency'' is assumed to include
``State agency officials'' and is therefore unnecessary to clarify. The
Department did not receive any comments on this proposed change and
adopts it as proposed.
Significant MSFW One-Stop Centers and Significant MSFW States
The Department proposed to revise the definition of significant
MSFW one-stop centers in two ways: first, by removing the text stating
these designations are made annually; and,
[[Page 82671]]
second, by adding to the criteria by which the Department designates
significant MSFW one-stop centers, so that they will include ES offices
where MSFWs account for 10 percent or more of reportable individuals in
the ES annually. First, as explained in the NPRM, the Department
proposed to remove the text stating that significant MSFW one-stop
centers are designated annually, because in making the designation, the
Department relies on multiple data sources that are published in
intervals up to every 5 years. Based on the Department's analysis, the
data do not change significantly on an annual basis, and therefore it
is often unnecessary to change the designations. This change in the
definition would allow the list of significant MSFW one-stop centers to
remain the same if there is no compelling reason to make a change. Also
as proposed, the designation of significant one-stop centers would
include ES offices where MSFWs account for 10 percent or more of
participants or reportable individuals who are served by that ES office
annually, and any other ES offices that the Office of Workforce
Investment (OWI) Administrator includes due to special circumstances
such as an estimated large number of MSFWs in the service area. The
Department proposed to add reportable individuals to the criteria it
considers in making this designation so that the one-stop centers
designated as significant MSFW one-stop centers also account for the
number of MSFWs in the area who are likely to benefit from access to ES
services.
The Department similarly proposed to revise the definition of
significant MSFW States in two ways: first, by removing the text
stating that these designations will be made annually; and second, to
change the basis on which this designation is made from the 20 States
with the highest number of MSFW participants to the 20 States with the
highest estimated total number of MSFWs. The Department proposed to
change the basis on which it makes this designation so that it will
reflect States with the highest total estimated MSFW activity--rather
than the highest numbers of MSFW ES participants--so that the
designation will better reflect the 20 States with the highest numbers
of MSFWs who may ultimately seek assistance from the ES, rather than
just those States with the highest numbers of MSFWs who have already
sought such assistance.
The Department received a few comments that address the revisions
proposed to these definitions. A summary of these comments and the
Department's response is below. After thoroughly considering the issues
and questions that these commenters presented, the Department has
decided to adopt the revisions as proposed, with a clarification to the
definition of significant MSFW one-stop centers as described below.
Comment: A couple of State government agencies expressed concern
that the Department planned to designate significant MSFW one-stop
centers and significant MSFW States based on a blend of data from the
Quarterly Census of Employment and Wages (QCEW) and Census of
Agriculture, because, as they explained, the QCEW and the Census of
Agriculture use disparate definitions and methodologies. Both
commenters recommended that the Department use only QCEW data, from
which they assert the Department could derive annual variable
employment using a time series decomposition model that disaggregates
covered employment by industry in States, agriculture reporting areas,
and counties.
One of these State agencies noted that it did not object to the
proposal to remove annual designations of significant MSFW one-stop
centers and significant MSFW States, but sought confirmation that
States would still be able to submit annual amendments to add or remove
a designated office as warranted by data or due to ES-staffing
challenges in specific offices, site closures, and/or challenges posted
by the Americans with Disabilities Act. This State agency also asked
whether the proposed change would affect the use of Special
Circumstance MSFW one-stop centers, and expressed concern that the
proposed revisions could increase the number of one-stop centers
designated as significant MSFW one-stop centers, which would create a
need for additional resources and State merit staff in offices so
designated.
A farmworker advocacy organization supported the Department's
proposal to designate significant MSFW one-stop centers based on the
percentage of reportable individuals (not just participants) who are
MSFWs, reasoning that many farmworkers who do not participate in the ES
rely on other SWA services and are affected by the SWA's outreach and
monitoring activities.
Response: The Department appreciates the commenters' recommendation
to use QCEW data. The changes will not limit the Department's
consideration to the Census of Agriculture; therefore, the Department
may also consider QCEW data. The Department disagrees with the
commenters that using QCEW and the Census of Agriculture data is
problematic even though they use disparate definitions and
methodologies. The Department often consults multiple data sources to
develop planning estimates and will take differences in source
methodologies while making determinations for significant MSFW one-stop
centers.
In response to the commenter's question regarding whether States
may submit annual updates regarding significant MSFW one-stop center
activity levels, the Department confirms that States may submit such
information and the Department will consider the information to
determine if an update is appropriate. As mentioned in the NPRM, if
annual adjustments are warranted by the data, the Department will make
adjustments. This change would allow the list of significant MSFW one-
stop centers to remain the same if there is no compelling reason to
make a change.
The Department notes that the revised methodology will apply to all
significant MSFW one-stop center designations, including those
significant MSFW one-stop centers that are designated due to special
circumstances and may increase the number of significant MSFW one-stop
centers in some States. An increase in the number of significant MSFW
one-stop centers will not create a need for additional State merit
staff in offices so designated. It would, however, require the SMA to
monitor additional offices onsite.
After further consideration, the Department identified a need to
clarify that the administrator who determines which ES offices must be
included as significant MSFW one-stop centers based on special
circumstances is the OWI Administrator. Accordingly, the Department
adopts the changes as proposed, except to add that the OWI
Administrator makes the determinations.
Removed Definition of Significant Multilingual MSFW One-Stop Centers
The Department proposed to delete the definition of significant
multilingual MSFW one-stop centers because proposed changes to Sec.
653.102 would remove specific requirements for offices that meet this
definition. The Department proposed to remove specific requirements for
significant multilingual MSFW one-stop centers in part 653, because all
one-stop centers must comply with the comprehensive language access
requirements in 29 CFR 38.9, which prohibit discrimination on the basis
of national origin, including LEP, and establish that language access
requirements apply to services that ES
[[Page 82672]]
recipients provide to all individuals with LEP at all one-stop centers
and are broader than the existing requirements for significant
multilingual MSFW one-stop centers.
The Department received two comments that address its proposed
removal of the definition of significant multilingual MSFW one-stop
centers. Both comments and the Department's response are discussed
below. After thoroughly considering these comments, the Department has
decided to remove this definition as proposed.
Comment: Agreeing with the Department's proposal to remove specific
requirements for significant multilingual MSFW one-stop centers (e.g.,
removing the definition of significant multilingual MSFW one-stop
centers) because all one-stop centers must comply with language access
requirements, commenters including a one-stop center employee remarked
that Michigan's one-stop centers have multilingual staff to provide
their customers access to a broader set of services. In contrast, a
State government agency expressed concern that the proposal would
result in ES offices with no bilingual staff at present needing to hire
additional staff who can assist participants with LEP.
Response: The Department notes that all ES offices must meet the
language access requirements in 29 CFR 38.9, regardless of how many
significant multilingual MSFW one-stop centers exist in a State.
Pursuant to 29 CFR 38.9, SWAs must make services available in all
needed languages. SWAs may use bilingual staff to meet this
requirement, but other alternatives are available, such as in-person
interpretation or telephone interpretation services.
State Workforce Agency (SWA) Official
The Department proposed to remove the definition of State Workforce
Agency (SWA) official, because SWA officials would be considered ES
staff based on the Department's proposed revisions to the definition of
ES staff in this rulemaking.
Comment: Two State government agencies and an anonymous commenter
warned that confusion and inconsistency could result from the
Department's proposal to remove the definition of State Workforce
Agency (SWA) official but continue using the SWA naming convention
elsewhere in the regulatory text. The commenters recommended the
Department keep State Workforce Agency (SWA) official as a defined
term, similar to how title I of WIOA defines chief elected official,
while clarifying that a SWA official is also considered ES staff.
Response: The Department appreciates the comments regarding the
potential for confusion or inconsistency related to the use of SWA
official. The Department agrees with these comments. Although the
Department proposed to remove the definition of SWA official, the final
rule maintains the definition of SWA official in existing Sec. 651.10,
which means an individual employed by the SWA or any of its
subdivisions.
Wagner-Peyser Act Employment Service (ES) Also Known as Employment
Service (ES)
The Department proposed to amend this definition to replace the
phrase ``employment services'' with ``ES services.'' The Department
also proposed to remove the words ``and are'' from the definition for
greater clarity. The Department did not receive any comments on this
proposed definition and adopts it as proposed.
C. Part 652--Establishment and Functioning of State Employment Service
1. Subpart A--Employment Service Operations
Subpart A of part 652 includes an explanation of the scope and
purpose of the ES; the rules governing allotments and grant agreements;
authorized services; administrative provisions; and rules governing
labor disputes. The changes to this subpart focus on administrative
provisions governing nondiscrimination requirements. This final rule
also includes a severability provision for part 652 in subpart A.
Section 652.8 Administrative Provisions
The Department proposed to amend Sec. 652.8(j)(2) to correct the
statutory reference regarding the BFOQ exception currently listed in
the regulation as 42 U.S.C. 2000(e)-2(e) to 42 U.S.C. 2000e-2(e).
However, there was a typographical error in the proposed regulatory
text. The final rule reflects the correct statutory reference, 42
U.S.C. 2000e-2(e). The final rule also adds a necessary cross-reference
to the EEOC's regulation regarding religion found at 29 CFR part 1605.
The Department proposed to amend Sec. 652.8(j)(3) to remove an
outdated reference to affirmative action requests to make the
Department's regulation consistent with U.S. Supreme Court
jurisprudence on race-based affirmative action.\5\ The proposed
revision clarifies that the States' obligation is to comply with 41 CFR
60-300.84. The regulation at 41 CFR 60-300.84 requires ES offices to
refer qualified protected veterans to fill employment openings required
to be listed with ES offices by certain Federal contractors; give
priority to qualified protected veterans in making such referrals; and,
upon request, provide the Office of Federal Contract Compliance
Programs with information as to whether certain Federal contractors are
in compliance with the mandatory job listing requirements of the equal
opportunity clause (41 CFR 60-300.5).
---------------------------------------------------------------------------
\5\ See, e.g., Ricci v. DeStefano, 557 U.S. 557, 585 (2009);
Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 238 (1995);
Richmond v. J.A. Croson Co., 488 U.S. 469, 507 (1989).
---------------------------------------------------------------------------
Comment: A one-stop operator and an advocacy organization expressed
concern that, in appearing to prioritize UI recipients over job seekers
as a whole, the proposed rule may not strengthen nondiscrimination
requirements but rather could be discriminatory toward certain classes
of individuals, such as people on public assistance, immigrants and
refugees, people experiencing homelessness, second-chance customers,
people with disabilities, and other groups with historically lower
labor market participation rates. Similarly, a private citizen stated
that staffing flexibility has allowed Colorado to promote and deliver
equitable access to the ES for marginalized and underserved populations
(i.e., priority populations under WIOA) but the proposed rule
emphasizes UI above other services. Several other commenters also
stated that staffing flexibility led to more localized services that
better met the needs of marginalized communities.
A one-stop center employee and other commenters stated that
Michigan satisfies the requirement to give priority to qualified
protected veterans through a 24-hour hold on all job orders. The
comments also discussed how Michigan meets its affirmative outreach
obligation to ensure equal access to services and activities by
coordinating with WIOA partners on outreach and accommodating
individuals with LEP. The comments argued that the proposed changes
would result in staffing cuts, reduced hours, and office closures that
could threaten Michigan's proven record of adhering to
nondiscrimination requirements and providing universal access to ES
services. The commenters added that these impacts would be felt most by
people in rural areas and individuals with LEP.
Response: The changes to this section were made to correct a
statutory reference and to remove an outdated reference to affirmative
action requests
[[Page 82673]]
to ensure that the Department's regulations are consistent with U.S.
Supreme Court jurisprudence on race-based affirmative action. The
changes do not constitute a change in the Department's policies or
treatment of individuals. Just as the previous longstanding State
merit-staffing requirement, which was based in part on the close
relationship between the ES and UI programs, did not violate the
nondiscrimination obligations of the Department and States in
administering the ES program, the reinstatement of the State merit-
staffing requirement in this final rule for similar reasons does not
run afoul of the nondiscrimination obligations of the Department and
States administering the ES program. In re-aligning ES and UI, the
Department is not prioritizing individuals eligible for UI benefits
over individuals in historically underserved or marginalized
populations. The ES is a universal access program. In the Department's
view, reinstating a State merit-staffing requirement not only supports
the historical alignment between ES and UI, but it also helps to
maintain universal access and helps to protect the integrity of the ES
program. As articulated further in discussion of Sec. 652.215 of this
preamble, a State merit-staffing requirement helps to ensure that ES
services are delivered by nonpartisan personnel held to transparent,
objective standards designed to assure high quality performance. In
response to the NPRM, three States--Colorado, Massachusetts, and
Michigan--provided initial justification and data to support use of
their longstanding staffing model and provided information about
significant service disruption that would result from having to upend
their longstanding ES staffing model. However, the initial
justifications and data presented do not provide clear evidence of
causation. Without evidence that alternative staffing models directly
cause higher employment outcomes, balanced against widespread success
in delivering services while maintaining State merit staff for ES, and
further balanced by the need for ES State merit staff to be available
for surges in UI claims and appeals, the Department is generally
adopting the proposed requirement that States use State merit staff to
provide ES services. The three States with longstanding reliance
interests are permitted to continue using the staffing model consistent
with the model the Department previously authorized for that State. The
Department will conduct an evaluation of the three States' provision of
ES services, including review of services of other States that
participate, as necessary, to determine whether such models are
empirically supported and must participate in an evaluation to
determine whether alternative staffing models are empirically
supported. The commenters who indicated that Wagner-Peyser staffing
flexibility allowed States to provide better services to marginalized
communities did not include any data that demonstrates causal evidence
to support this claim. Likewise, the Department has not identified such
evidence to support it.
The Department reminds SWAs that they have an affirmative outreach
obligation under 29 CFR 38.40 that requires them to take appropriate
steps to ensure they are providing equal access to services and
activities authorized under the Wagner-Peyser Act, as well as any other
WIOA title I-financially assisted programs and activities. As outlined
in that regulation, these steps should involve reasonable efforts to
include members of the various groups protected by the WIOA sec. 188
regulations, including but not limited to persons of different sexes,
various racial and ethnic/national origin groups, members of various
religions, individuals with LEP, individuals with disabilities, and
individuals in different age groups.
Section 652.10 Severability
Given the numerous and varied changes the Department proposed and
is adopting, the Department intends the provisions of this rule to be
severable and is including a severability provision in parts 652, 653,
and 658 in this final rule. That intent was reflected in the structure
of and descriptions in the proposed rule. The inclusion of severability
provisions in this final rule confirms the Department's belief that the
severance of any affected provision will not impair the function of the
regulation as a whole and that the Department would have proposed and
implemented the remaining regulatory provisions even without any
others. To the extent that a court holds any provision, or any portion
of any provision, of part 652 invalid, the provision will be construed
so as to continue to give the maximum effect to the provision permitted
by law, unless such holding is one of total invalidity or
unenforceability, in which event the provision will be severable from
this part and will not affect the remainder thereof.
2. Subpart C--Employment Service Services in a One-Stop Delivery System
Environment
Subpart C of part 652 discusses State agency roles and
responsibilities; rules governing ES offices; the relationship between
the ES and the one-stop delivery system; required and allowable ES
services; provision of services for UI claimants; and State planning.
Among other changes, the changes to the regulations under subpart C are
tailored to require all States to use State merit staff to provide ES
services, except the three States using longstanding alternative
staffing models previously authorized by the Department. As was true
when the regulations were changed in 2020, none of the changes in this
section will impact the personnel requirements of the Vocational
Rehabilitation (VR) program, one of the six core programs in the
workforce development system. Title I of the Rehabilitation Act of 1973
(Rehabilitation Act), as amended by title IV of WIOA, which authorizes
the VR program, has specific requirements governing the use of State VR
agency personnel for performing certain critical functions of the VR
program.
Section 652.204 Must funds authorized under the Wagner-Peyser Act
Governor's Reserve flow through the one-stop delivery system?
The Department proposed to simplify the section heading to remove
reference to the Wagner-Peyser Act because reference to the Governor's
Reserve is adequate. The Department also proposed amending this section
to reference professional development and career advancement of ES
staff instead of SWA officials. After further consideration, the
Department is not finalizing the proposed change to the section heading
in order to differentiate the Wagner Peyser Act Governor's Reserve from
the WIOA Governor's Reserve. Instead, the Department is making a slight
revision to the current section heading. The new section heading reads,
``Must funds authorized through the Wagner-Peyser Act Governor's
Reserve flow through the one-stop delivery system?'' In addition,
because of the Department's change to the NPRM's proposed definition of
``ES staff'' in this final rule, the Department retains the text of the
existing regulation for this section.
Section 652.215 Can Wagner-Peyser Act-funded activities be provided
through a variety of staffing models?
The Department proposed to amend Sec. 652.215 to require all
States to use
[[Page 82674]]
State merit staff to provide ES services and proposed giving States 18
months to comply with this requirement. After further consideration,
the Department adopts a rule requiring all States to use State merit
staff to deliver ES services, except the three States using
longstanding alternative staffing models previously authorized by the
Department. States authorized to use alternative staffing models will
be required to participate in evaluation(s) of their delivery of ES
services to be conducted by the Department. While the Department plans
on conducting a single evaluation, the rule requires these States'
participation if evaluation activities span more than one study,
including any data collection associated with those evaluation
activities. The Department will conduct this evaluation of the three
States' provision of ES services, including review of services of other
States that participate, as necessary, to determine whether such models
are empirically supported. All States have 24 months to comply with the
staffing requirements in this section.
The Department believes that a State merit-staffing requirement is
a generally reliable method to ensure quality and consistency in ES
services and supports the well-established connection between ES and UI
services. Paragraph (a) of Sec. 652.215 provides that except as
provided in paragraph (b) of Sec. 652.215, all States must deliver
labor exchange services described in Sec. 652.3 using State merit-
staff employees employed according to the merit-system principles
described in 5 CFR part 900, subpart F--Standards for a Merit System of
Personnel Administration. This staffing requirement also applies to the
provision of services and activities under parts 653 and 658.
The Department also recognizes the longstanding reliance interests
of three States that had been authorized to use alternative staffing
models in the 1990s. These States provided initial justification and
data to support use of their longstanding staffing model and provided
information about significant service disruption that would result from
having to upend their longstanding ES staffing model. These three
States have built systems, developed partnerships, and established a
service delivery model that could be reversed only at significant cost
to the State and with significant harm to job seekers and employers.
Accordingly, in paragraph (b) the Department permits only these three
States authorized to use alternative staffing models prior to February
5, 2020, the effective date of the 2020 Final Rule, to continue using
the staffing model consistent with the model the Department previously
authorized for that State. It is the use of a particular staffing model
in each State that engendered each State's strong reliance interest.
Therefore, paragraph (b) also provides that these States may use merit-
staffing flexibility only to the same extent that the Department
authorized it prior to February 5, 2020. This means that if any of the
States covered by paragraph (b) sought to use the 2020 Final Rule to
expand flexibility beyond what was previously authorized in that State,
that State must return to the staffing model in use as authorized by
the Department prior to February 5, 2020.
Paragraph (c) requires that the States permitted to use an
alternative staffing model must participate in evaluations of their
delivery of ES services to be conducted by the Department. The
Department's goal will be to assess ES service delivery in several
States. Requiring the three States authorized to use their longstanding
alternative staffing models to participate in evaluation activities
will enable the Department to determine whether alternative staffing
models are empirically supported.
In response to comments, paragraph (d) lengthens the proposed
transition period, requiring all States to comply with the staffing
requirements in Sec. 652.215 no later than 24 months after the
effective date of this final rule. The Department recognizes that
States will need time to address issues, such as obtaining any
necessary State authorization, procurement, collective bargaining,
hiring, and training.
The following discussion further details the Department's decision.
Potential Impacts of the Rule on the Provision of ES
Benefits of Using State Merit Staff To Deliver ES Services
Comment: Two State government agencies expressed support for the
proposed merit-staffing requirement because it would promote Statewide
uniformity and consistency of employment security services. In
particular, one of these commenters stated the ability to have
consistent hiring practices, standardization of staff onboarding and
training, and continuous professional development training throughout
the State merit staff's employment life cycle ensure the most
consistent and best customer service possible across the State.
Similarly, two anonymous commenters expressed concern about the lack of
consistent ES services throughout Michigan, which one of these
commenters said is a byproduct of local control. These commenters
argued that a consistent service delivery model of providing ES
services through State merit staff would benefit Michigan job seekers
and provide greater transparency and accountability to Michigan
residents.
A State employee association commented that, in passing the Wagner-
Peyser Act, Congress envisioned a federally supported but State-
administered merit system, subject to consistent rules and oversight,
to prevent favoritism and promote equality in the delivery of
employment services.
Response: The Department agrees that using State merit staff to
deliver ES services helps to promote statewide stability and
consistency in service delivery. The Department further agrees that
using State merit staff helps ensure that employment services are
delivered in an equitable manner and on a nonpartisan basis. As noted
earlier in this preamble, in the IPA Congress found that the quality of
public service could be improved by administering programs according to
merit-based principles. Because the ES is a universal access program,
it is critical that it be administered by nonpartisan personnel held to
transparent, objective standards designed to assure high quality
performance.
The Department acknowledges the comments regarding ES service
delivery in Michigan. As noted elsewhere in this preamble, Michigan is
one of three States that the Department authorized to use an
alternative staffing model beginning in the 1990s. Due to the State's
strong reliance interest developed from longstanding use of a
particular service delivery model and the potential service disruption
that would ensue if the State is required to adopt a full State merit-
staffing model, the Department is permitting Michigan to continue using
its longstanding alternative staffing model. The Department is
requiring the State to participate in an evaluation of service delivery
in the State to be conducted by the Department.
Potential Cost Increases of State Merit Staff That May Reduce the
Availability of ES Staff
Comment: Numerous commenters, including an association of State
elected officials, Michigan, Colorado, and Delaware State government
agencies, and Michigan and Colorado local governments, expressed
concern that the proposed rule could make the provision of employment
services less efficient in States that use flexible staffing models and
may reduce access
[[Page 82675]]
to critical workforce resources for job seekers and employers because
the proposal would reduce the number of available ES staff. In
contrast, a private citizen argued that there is little evidence that
the proposed rule would reduce access to workforce resources, reasoning
that in Michigan, if there is a threat of service reduction it is
because the State has used ES funding as a substitute for WIOA funding,
for local staff, or for overhead costs for staff not fully dedicated to
providing ES services.
Many commenters, including Michigan and Colorado State elected
officials, Michigan, Colorado, and Delaware State government agencies,
and Michigan and Colorado local governments, argued that the rule would
cause a significant reduction in ES staff in States that use flexible
staffing models, as well as the closure of many one-stop employment
centers, with the greatest losses occurring in rural areas.
Response: The Department acknowledged in the NPRM that there would
be costs to some States to transition to using State merit staff to
deliver ES services, requested feedback on the transition costs, and
requested feedback on the proposed 18-month transition period. The
Department notes that information that is supported with evidence and
data sources is more strongly considered than information that is
unsubstantiated. The States of Delaware, Michigan, and Colorado
provided new information in their comments on the NPRM that are
relevant to the NPRM's regulatory impact analysis. These States
detailed impacts on existing contracts and procurement, recruitment,
training, staffing, collective bargaining, technology costs,
infrastructure changes, funding, and the extent of service disruptions
that would result from imposition of a State merit-staffing requirement
because these States have utilized approved alternative staffing models
for many years. Some commenters provided information based on a survey
stating that there will be job losses and center closures as a result
of the State merit-staffing requirement. A few additional States
responded to indicate that they may be utilizing staffing flexibility,
although the Department was previously not aware they intended to
utilize the staffing flexibility provided by the 2020 Final Rule. Those
States did not estimate transition impacts as requested by the
Department in the NPRM.
The Department has considered the comments opposing the
reinstatement of the State merit-staffing requirement and found the
comments from Colorado, Massachusetts, and Michigan the most compelling
due to their longstanding reliance interests on using alternative
staffing models. Based on these comments the Department has determined
that States are required to use State merit staff to provide ES
services, except Colorado, Massachusetts, and Michigan. The final rule
is allowing these three States to use merit-staffing flexibility to the
same extent previously allowed by the Department prior to February 5,
2020, the effective date of the 2020 Final Rule. As discussed above,
the Department is requiring these States to participate in an
evaluation of ES service delivery staffing models. All States will have
24 months to comply with the requirements in this final rule.
ES Service Delivery and Customer Impacts
Comment: Many commenters described the services made available
through Wagner-Peyser Act funding and expressed concern about a
disruption or outright elimination of such services due to the proposed
merit-staffing requirement, as described below.
Many Michigan commenters, including private citizens and one-stop
center staff, discussed the value of the supportive services they have
received or provided through Michigan Works! offices, including
assistance with important tasks for job seekers such as developing a
resume, strengthening interviewing skills, and performing job searches;
some of these commenters, including one-stop center employees, stated
that local center staff help alert customers to the availability of
such services. A one-stop center employee stated that local ES workers
have the best understanding of community needs and are often the first
point of contact to help customers navigate available programs.
Many commenters, including Michigan and Massachusetts State
government agencies, Michigan and Colorado local governments, and
advocacy organizations, went on to more specifically describe one-stop
employment centers' role in preparing job seekers for employment and
connecting them with employers who want to hire them, including
services such as facilitating training programs, hosting job fairs and
career awareness events, organizing industry collaboratives, helping
craft resumes, and providing job searching and interviewing tips.
According to some of these commenters, including Michigan local
governments, a key benefit of staffing flexibility is strong local
strategic relationships with businesses, higher education, nonprofits,
childcare, elementary and secondary education, adult education
providers and other partners, which allows for more efficient customer
service to connect job seekers to in-demand jobs and training
opportunities.
Furthermore, many commenters, including Michigan and Colorado State
elected officials, Michigan and Colorado local governments, and
advocacy organizations, claimed that the status quo staffing
flexibility has helped States and localities achieve specific, positive
outcomes in terms of newly employed individuals, employment rates,
average worker earnings, numbers of employers served, total economic
impact, increased tax revenue, and returns on investment.
Response: The Department appreciates the concerns raised by
commenters and agrees that the quality of ES services is important. The
commenters highlighted the benefits of the services provided to
participants but did not provide evidence that the staffing model is a
causal factor in the quality of those services. Though the Department
agrees that local relationships are important in business services,
local areas in States across the country using State merit staff for ES
manage to develop such relationships. Commenters did not provide any
evidence that strong local relationships are only possible with
alternative staffing models, or that using a non-State-merit staffing
model is a causal factor in developing strong business relationships.
Without such evidence, balanced against the benefits of State merit-
staffing described above, the Department will not extend the ability to
use alternative staffing models to other States besides Colorado,
Massachusetts, and Michigan. Therefore, the Department has determined
that States are required to use State merit staff to provide ES
services, except the three States that have long been allowed to use
alternative staffing models.
Comment: A State workforce development board said that data shows
that former demonstration States using local merit and non-merit staff
to deliver ES services have been successful and argued that all States
should examine strategies to further service integration. Another State
workforce development board and a professional association stated that
it appreciated the approach ``created by Congress'' wherein the Federal
government partners with State and local workforce program, providing
performance goals and broad working parameters, but leaves States to
manage their operations based on the diverse needs of businesses and
workers in their
[[Page 82676]]
communities. These commenters urged the Department to permanently
codify staffing flexibility.
Response: As explained earlier in the preamble, the Act gives the
Secretary discretion to require that States use a staffing model that
will promote the goals of the ES program. For reasons articulated in
the NPRM and this final rule, the Department has determined that that
model is State merit-staffing. Three States using longstanding
alternative staffing models presented arguments in support of retaining
those models, but the information provided did not show a causal impact
of the staffing model in these States and performance. Accordingly, the
Department declines to extend staffing flexibility to all States. The
Department reinstates a State merit-staffing requirement for ES
services with the exception of the three States with longstanding
reliance interests. These States are required to participate in
evaluation of their delivery of ES services conducted by the
Department, including review of services of other States that
participate, as necessary, to determine whether such models are
empirically supported.
Comment: Some commenters, including one-stop operators, private
citizens, and others, listed several potential impacts on customer
service as reported by stakeholders concerned about the proposal,
including closure of ES offices (particularly in rural areas), reduced
hours of operation for offices, disruption of referrals, curtailed
services to immigrants, veterans, and other vulnerable populations,
fewer opportunities for career awareness events or job fairs, and
reduced access to technology. Many commenters, including Michigan local
governments, a Michigan State elected official, and Michigan one-stop
operators, also warned that the rule would cause one-stop centers to
reduce or eliminate their job seeker and employer workshops, career
fairs, and career awareness events, as well as their efforts to
facilitate job seekers' enrollment in and funding for schools and
training programs. Some commenters, including Michigan one-stop
operators, Michigan one-stop center staff, and an employer, warned that
with the reduced staffing flexibility under the rule, customer service
in employment services would decline, with reductions in virtual
services, less personal services, and with services only provided by
appointment to customers who meet specific criteria. Several
commenters, including a one-stop center employee, private citizens, and
a Michigan State government agency, asserted that Michigan Works! staff
anticipate disruptions to the ``more than 3,600 services'' provided to
industry-led collaboratives, 7,500 job fairs, and other services that
have been successfully delivered over a 25-year period.
Several commenters referred to the minimum services required by
Sec. 652.3 noted in the NPRM (including facilitating the connection
between job seekers and employers) and questioned how their State would
continue to provide these essential services with just an estimated 25
percent of their current staffing level. The commenter asked whether a
certain service or customer sector would take priority in cases where
staffing shortages impact service availability, and further questioned
how robust services would be provided if ES staff are reassigned to UI.
A few one-stop center employees and a local government remarked that
the proposal would disrupt convenience or would lengthen ``turnaround
time'' for service delivery to job seekers, an outcome that the
commenters warned would adversely impact job seekers, employers, and
the local community.
A local workforce development board described how ES staff work
with job seekers to determine their unique needs, increase their
marketability in the labor market, or otherwise provide ``intensive job
search assistance.'' The commenter said these comprehensive services
would be disrupted, causing a gap in service provision, and adversely
affecting job seekers. The commenter provided figures to demonstrate
the economic value of participation in the WIOA's adult and youth
programs and expressed concern that these economic impacts would be
reduced or lost if existing ES staff are unable to support the
comprehensive set of services they currently provide. A private citizen
said ES customers need career services to build a sustainable work
history.
Several commenters asserted that one-stop organizations in its area
take pride in providing quality customer service and argued that local
control over Wagner-Peyser Act ES programs is critical to positive
impacts associated with its workforce development programs, citing
statistics about the numbers of individuals and businesses served,
numbers of workshops and hiring events hosted, and economic figures
demonstrating economic impact and an overall return on investment.
A State government agency recommended that the Department maintain
staffing flexibility to avoid service disruption during emergencies. An
anonymous commenter expressed concern that changing a system that works
well will place ``stress'' on their State government, which is dealing
with challenges related to the pandemic and unemployment.
Some commenters, including a Michigan State government agency and
an employer, asserted that the proposal would result in the loss of
many full-time employees and expressed concern about the ability of
fewer State merit staff to handle the leftover caseload. The Michigan
State agency asserted that this staffing shortfall would cause one-stop
customers to experience increased delays, inefficiencies due to remote
service delivery or multiple case managers, and challenges in
scheduling appointments (potentially resulting in increased
transportation or childcare costs).
Response: The Department appreciates the concerns raised by the
commenters. Commenters' concerns appear to generally stem from an
assumption that the use of State merit staff for ES services would be
more expensive and thus result in the closure of one-stop centers,
reduction of one-stop hours, and programming cuts. While the commenters
provided no evidence that the rule change would result in these
reductions or closures, the Department understands that there may be
costs and disruption associated with a transition to State merit staff,
particularly for the three States that have longstanding reliance on
being able to use alternative staffing models, as described above.
Therefore, the Department will permit alternative staffing models in
the three States with long-time reliance on such models.
Service to Specific Populations or Vulnerable Populations
Comment: Many commenters, including a Colorado State government
agency, Colorado local government agencies, and advocacy organizations,
warned that the rule would cause reductions in ES services in States
that use flexible staffing models. These commenters expressed concern
that such reductions would be associated with services that are
designed specifically to aid vulnerable populations, or those who
otherwise have significant difficulty in finding employment, thus doing
them particular harm. In this category of vulnerable populations,
commenters included groups such as veterans, immigrants, refugees,
youth, people living in rural areas, people with disabilities, formerly
incarcerated people, and other vulnerable job seekers.
Several commenters, including private citizens, advocacy
organizations, a local government, and others, stated that local
Michigan Works! offices serve
[[Page 82677]]
the most vulnerable populations in a given community, including
veterans, low-income adults, dislocated workers, individuals with
intellectual disabilities, older workers, youth, and immigrants and
refugees, and expressed concern that the proposal would disrupt or
eliminate services to the detriment of these vulnerable populations. A
one-stop center employee similarly referred to these population groups
and expressed concern that the proposal would delay service delivery
for these groups and would adversely impact ``follow through'' and
information sharing between States and agencies. Some commenters,
including a Michigan State government agency, a Colorado local
government agency, and many Michigan one-stop center staff, also
described the specific needs of the people generally served by one-stop
centers; in general, these are vulnerable and low-income populations,
in need of significant support in the job seeking process, including
transportation, clothing, food, childcare, technology assistance,
substance abuse counselling, and medical care.
An academic commenter described their organization's strong
relationship with a local Michigan Works! office and expressed concern
that the proposal would disrupt services to the most vulnerable
communities in their area. The commenter said their organization
benefits from employment and training services for immigrants and
students and expressed particular concern about the potential
elimination of the Teach Talent Thrive program that promotes lifelong
learning and career readiness.
An adult education provider stated that their organization partners
with the local Michigan Works! office to provide career training and
education services to adults and students, including coaching for
career readiness, job searching, and aligning skills with a desired
career pathway. The commenter also said the proposal would
``compromise'' Governor Whitmer's Sixty by 30 plan that seeks to close
socioeconomic gaps for vulnerable populations, including the
economically vulnerable adults served by the commenter's organization.
Some commenters, including an employer, an advocacy organization,
and a private citizen, expressed concern that the proposal would
disrupt services for veterans, including programs that support
employment for veterans with employment barriers, services for active-
duty military members, and military spousal services.
An advocacy organization expressed concern that ``impactful''
programs such as the Clean Slate program (which provides supportive
services for formerly incarcerated individuals or individuals with
criminal records) and the Going Pro Talent Fund (which provides skills-
based certificate training) would be adversely affected by the
proposal. A local workforce development board stated that local ES
staff partner with programs like the Disability Program Navigator to
enhance local capacity to provide services for people with
disabilities, including helping such individuals navigate available
services. A private citizen described how receiving supportive services
from their local Michigan Works! service center has benefited their
family member with intellectual disabilities and remarked that such
services are difficult to find.
A private citizen concerned about a disruption of critical services
to vulnerable populations remarked that Michigan Works! has proven it
is ``best in class'' as an ES provider, citing figures from 2018 and
2019 that showed Michigan was among the 10 States with the lowest costs
of career services per participant served.
Response: The Department appreciates the concerns raised by
commenters and agrees that the quality of ES services is important,
particularly for vulnerable populations. The ES is a universal access
program. The Department prioritizes the needs of vulnerable populations
in this rulemaking and believes that changes in this rulemaking further
the goal of universal access. Requiring States to use State merit staff
to provide ES services will better protect vulnerable individuals
because State merit staff are employees of the State who are subject to
merit system principles and are thus directly accountable to the State
and administer the ES with greater transparency and accountability than
other staffing models.
The staffing requirements in part 652 apply to the delivery of
services and activities under parts 653 and 658. Using State merit
staff for these services is appropriate because these staff positions
perform worker protection functions for MSFWs, who are particularly
vulnerable to employment-related abuses. These staff require
centralized training and management from the State to ensure they are
equipped to assess and respond to farmworker needs, including
responding to complaints and apparent violations in the field, which
may include highly sensitive subject matter like human trafficking.
As stated above, the Department also recognizes the longstanding
reliance interests of three States--Colorado, Massachusetts, and
Michigan--and based on comments received about the negative impacts
that requiring these States to change their ES service delivery models
would have on service delivery, the final rule is allowing these three
States to use the staffing models they have been allowed to use since
the 1990s. Adjusting to avoid negative impacts to these three States'
service delivery caused by the transition costs involved in changing
decades-long practice is aligned with the Department's prioritization
of the service delivery needs of vulnerable populations.
Business Services and Partnerships
Comment: In addition to comments focused on the rule's detrimental
effects on job seekers, many commenters, including Michigan local
governments, a Michigan State elected official, and Michigan one-stop
operators, also expressed concern that the rule would have a
significant negative effect on businesses and employers, primarily by
reducing recruiting services to businesses seeking help in filling
vacancies, as well as reduced job retention efforts. Numerous
commenters, including an association of State elected officials,
Michigan, Colorado, Massachusetts, and Delaware State government
agencies, and Michigan and Colorado local governments, argued that the
one-stop employment centers, operated by local merit staff, deliver
high-quality, cost-effective services to job seekers, and that existing
staffing flexibility enables local centers to create strategic
partnerships with businesses, schools, and nonprofits, all of which
help better serve job seekers and businesses. Some commenters,
including Michigan local governments, a Michigan State elected
official, Michigan one-stop operators, and others, also warned that the
rule would force one-stop centers to cut their industry-led
collaboratives. Some commenters from Massachusetts, including a State
government agency, local workforce development boards, and a local
government employee, argued that implementing the rule would undermine
business commitments and partnerships with ES services in States that
use flexible staffing models because of the appearance of political
instability and unnecessary bureaucratic change.
Several commenters, including employers, one-stop center employees,
and a local workforce development board, described how ES services
benefit businesses, such as through job fairs, retention services,
online job postings, and other programs that connect job seekers and
employers. The
[[Page 82678]]
commenters expressed concern that the proposal would disrupt such
services. Some commenters, including a private citizen and an employer,
remarked that many businesses are struggling to find employees and
credited local services that use Wagner-Peyser Act funding with
providing critical assistance connecting employers and employees.
Several commenters stated that Michigan Works! has provided ``more than
141,000 services to businesses'' and cited responses from program
stakeholders who believed these services would be reduced or eliminated
if reinstating merit-staffing impacted uses of Wagner-Peyser Act
funding. A private citizen remarked that Michigan Works! services in
their area assist employers with upskilling and retention of employees.
A Colorado State government official asserted that the use of local
merit staff for Wagner-Peyser Act programs has allowed Colorado to
fully implement the ``primary vision'' of WIOA, effectively emphasize
employer engagement, encourage work-based learning, and maximize
support for local businesses based on local community and competitive
needs.
Some commenters, including a Colorado local workforce development
board, an employer, and a one-stop center employee, specifically
claimed that one-stop centers have been particularly helpful in
connecting employers with skilled employees in the manufacturing
sector, as well as facilitating training; thus, the implementation of
this rule would do particular harm to the struggling manufacturing
sector in the States that use flexible staffing models.
Several commenters, including a Colorado State government, local
governments, employers, and private citizens, asserted that the
proposal would fracture relationships forged at the local level,
harming both job seekers and employers. A Colorado local government and
a local workforce development board said strong relationships between
ES staff and local employers has resulted in a Subsidized Employment
program that connects employers and entry level workers and expressed
concern that this program and other comprehensive wrap around services
would be lost due to the State merit-staffing requirement. An anonymous
commenter remarked that local residents consider the local one-stop
center to be a ``neutral third party'' for businesses and job seekers,
and expressed concern that this would be disrupted due to the merit-
staffing requirement.
A local workforce development board stated that their State's
current one-stop delivery model works well for businesses by connecting
them with job seekers as well as training resources. Some commenters
asserted that as a result of the proposal, employers will lose access
to support for posting job orders and connecting with job seekers.
A one-stop center employee argued that serving business requires
staff ``out in the field'' and remarked that one-stop workers must seek
out businesses, not the other way around. A trade association similarly
remarked that the proposal would make it harder for businesses to
engage with the workforce system and could result in the cancellation
of contracts or other transition costs.
A private citizen remarked that their local Michigan Works! office
has effectively helped businesses attract and develop their workforces,
including assisting businesses in securing grants to train and invest
in current employees and add new staff. Similarly praising Michigan
Works! employees' support for local businesses, another private citizen
expressed concern that the proposed merit-staffing requirement would
negatively impact local communities at a time when labor concerns
hinder businesses across the State.
Some commenters, including State and local workforce development
boards from Colorado, a trade association, a commenter from academia,
and an employer, discussed the value of working with local ES staff due
to their expertise in the local economy and knowledge of competitive
factors in a given area, arguing that the ability to provide ES
services using local merit staff maximizes the level of support
provided to local businesses. A local government expressed concern that
the proposal would disrupt established relationships between local
staff and employers and economic development organizations at the
community level.
Some commenters, including an advocacy organization, a trade
association, a Colorado local government, and private citizens,
discussed the value of local knowledge in serving the needs of local
businesses and job seekers, with some discussing the varied needs of
businesses and job seekers in urban and rural areas. A Colorado local
government and a Colorado one-stop operator similarly argued that
employers benefit from working with staff who have a regional
perspective on what businesses need. A Colorado local workforce
development board similarly discussed the value of local control of ES
services and the knowledge of local and regional economic conditions,
including whether the economy is prosperous, whether employers are
facing labor shortages or scarcity, and whether unemployment rates are
high or low. The commenter said removing local control would result in
slower services and a less nuanced and dynamic response to citizen and
business needs.
An advocacy organization described the value of local industry-led
initiatives in serving employers' unique regional needs and expressed
concern about such initiatives' continued success if ES staff are
reduced or reassigned. A Colorado local workforce development board
described sectoral partnerships developed by local staff working in the
communities they serve, including partnerships in the healthcare,
information technology (IT), construction, and transportation sectors.
A different Colorado local workforce development board expressed
concern that the proposal would ``dismantle'' successful regional
industry sector work that has developed over the past decade. A private
citizen and an anonymous commenter described services provided to
businesses made possible by local staff's relationships with those
businesses and expressed concern that the proposal would result in the
loss of ``local control.''
A Colorado employer and a few private citizens argued that county
merit staff have developed expertise on the local economy and community
needs, asserting that State or Federal employees are less capable of
developing successful local connections with local businesses.
Several commenters, including trade associations, private citizens,
a one-stop center employee, an advocacy organization, and Colorado
local workforce development boards, argued that local workforce staff
have the necessary local and regional understanding to establish
effective partnerships with local partners and organizations. Several
commenters, including a Michigan State elected official, a Michigan
local elected official, Michigan local workforce development boards,
one-stop operators, and Michigan local governments, similarly remarked
that the ability to develop strategic partnerships with local
nonprofits, businesses, educational institutions, and other
organizations is a key benefit of ES staffing flexibility because these
relationships facilitate connections between students, job seekers,
training providers, and local employers.
A private citizen remarked that staff in their local Michigan
Works! office had a knowledge of local business needs
[[Page 82679]]
and hiring trends that was critical in accessing the right services for
the commenter to remain competitive in the local job market.
Response: The commenters highlighted the benefits of the services
provided to businesses, and the Department agrees that business
services and partnerships with businesses are important. However, the
commenters did not explain why the ES staffing model is a causal factor
in the quality of those business services and partnerships. Many other
States use State merit staff to successfully provide services to
businesses and job seekers. The Department recognizes the longstanding
reliance interests of Colorado, Massachusetts, and Michigan, and will
therefore allow these States to utilize the longstanding alternative
staffing models the Department previously allowed them to use. These
States may exercise merit-staffing flexibility to the same extent
previously authorized by the Department for that State prior to
February 5, 2020, the effective date of the 2020 Final Rule. The
Department also is requiring these three States to participate in
evaluations of their ES service delivery model to be conducted by the
Department.
Access--Transportation and Virtual Services
Comment: Some commenters, including an anonymous commenter, a one-
stop center employee, a local workforce development board, and a
private citizen, stated that their local service office has offered
assistance in using technologies or online services that are vital to
employment and expressed concern about losing access to such support.
Some commenters, concerned about the disruption or closure of
Michigan Works! offices in their area, including a local workforce
development board and a one-stop center employee, worried that
customers would need to travel longer distances to access needed
services, with many stating that rising gas prices and other
complications (such as the sparse availability of public transportation
in certain areas) will make transportation particularly challenging for
many one-stop center customers.
Response: The COVID-19 pandemic highlighted the need for States to
have staff to serve as surge capacity for times of high demand for UI
claims. The Department agrees that in-person services are valuable,
even as technology makes virtual services easier to develop and
deliver. States across the country, the vast majority of which use
State merit staff, have successfully used a combination of
comprehensive and affiliate AJCs, access points, mobile AJCs, and
online and virtual services to a reach geographically distant job
seekers and those without reliable transportation. Data do not show a
relationship between staffing models and the number of AJCs or access
points per capita in the State. The Department also recognizes the
longstanding reliance interest that Colorado, Massachusetts, and
Michigan have in using alternative staffing models authorized by the
Department. The Department is permitting these States to continue using
the longstanding staffing models the Department allowed them to use in
the 1990s. These States may use merit-staffing flexibility to the
extent permitted by the Department in that State prior to February 5,
2020, the effective date of the 2020 Final Rule. All other States,
including those that began using the staffing flexibility provided by
the 2020 Final Rule, are required to use State merit staff to provide
ES services. The Department will further examine various staffing
models and methods of delivering labor exchange services, including
evaluation activities for which the Department will require the
participation of the three alternative staffing model States. All other
States will have 24 months to comply with the requirement to use State
merit staff to provide ES services. No additional States are permitted
to pursue adoption of an alternative staffing model during the
transition period; the final rule is effective 60 days after
publication in the Federal Register. The 24-month transition period for
complying with the State merit-staffing requirement is intended only
for those few States that began using staffing flexibility in response
to the 2020 Final Rule and now must transition back to using State
merit staff.
Training and Other Considerations for Employees Delivering Services
Comment: A think tank remarked that many State agencies face
multiple challenges, including staffing shortages, funding shortfalls,
and backlogs, and warned that the proposal could exacerbate these
issues because contract staffing or other staffing flexibilities offer
workable solutions. A local government expressed concern about forcing
programs to re-structure existing staffing models, stating that the
proposed rule could result in laid off staff, damage to staff morale,
and a reduction of ``vital employment services'' like labor exchange
services, career workshops, and services related to community
engagement and service navigation.
Some commenters, including a one-stop center employee and a private
citizen, warned that hiring or training new staff could lead to
discrimination or bias against existing staff or entry-level staff. A
private citizen remarked that local agencies may have different
retirement or healthcare benefits for staff based on agreements with
local or country governments, and expressed concern that changing
staffing arrangements could disrupt pension or healthcare benefits for
some workers. A one-stop operator acknowledged that ensuring employees
receive fair wages and benefits was a motivation for the NPRM and
remarked that the retirement and medical benefits available for public
employees in its county are among the top plans nationwide.
An anonymous commenter argued that it would not make sense to train
new individuals to replace the current staff in Workforce Centers, who
have already developed relationships with customers.
A private citizen remarked that Colorado's current staffing model
creates a greater level of oversight because county merit-staff
employees are accountable to both the State and county government. A
State government referred to the Department's rationale about State
merit staff's accountability and asserted that county merit employees
are already sufficiently accountable to their local county government.
An advocacy organization stated that currently employee performance is
assessed and measured using customer service metrics and they expressed
concern that the proposal would alter and complicate performance
assessments.
Response: The Department recognizes that there will be transition
costs to some States, which was included in the NPRM's regulatory
impact analysis. New information regarding transition costs and impacts
was provided in comments to the NPRM from States utilizing alternative
staffing models. The Department considered these comments in developing
the final rule but, for the reasons discussed throughout, the
Department has decided to require that States use State merit staff to
provide ES services, with limited exception. The Department is allowing
the three States with longstanding reliance interests--Colorado,
Massachusetts, and Michigan--to continue to utilize their longstanding
alternative staffing models for ES services and is requiring their
participation in an evaluation to be conducted by the Department.
[[Page 82680]]
Transition Period
Comment: In addition to reduced future employment services, some
commenters, including an association of State elected officials, a
Colorado State government agency, Colorado local government agencies,
and others, claimed that there will be significant transition costs and
logistical challenges for States to transition to a model by which
employment services are only provided by State merit staff.
During this transition period and for some time after, a Colorado
State elected official and State government agency warned that
compliance and performance standard failures will likely become more
common.
While most commenters wrote about the effects the rule would have
if implemented, some commenters, including a Colorado State elected
official, a Colorado local government agency, and a one-stop center
employee, argued that the proposed merit-staffing requirement has
already had a chilling effect, with former demonstration State one-stop
centers and localities unable to approve budgets, not knowing what
future grant levels will be, and with one-stop center staff already
seeking employment elsewhere in anticipation that their positions will
be terminated soon anyway.
A State government agency discussed the challenging logistics of
implementing a State merit-staffing model within 18 months,
anticipating additional staffing needs as well as a challenging
timeline for State legislature approval of additional funding for
additional staff. The commenter requested a 3-year implementation
timeframe to make requests for additional staff and funding during the
State legislature's budget cycle.
Conversely, several unions who supported the proposal agreed with
the proposed 18-month transition timeline and recommended that the
Department provide assistance and support to any States using
alternative or flexible staffing models, reasoning that such assistance
would help prevent disruptions to Wagner-Peyser Act services. One union
suggested that the Department ``require sufficient staffing to monitor
and support'' the transition in States using flexible staffing models.
State and local workforce development boards, a Colorado State
government agency, and a Colorado local government requested a 36- to
40-month transition timeline (depending on if and when the rule is
finalized) allowing for full compliance by December 31, 2025. The
commenters cited the State legislative process and funding needs to
both maintain quality services and hire and cross-train new staff as
factors that necessitate a longer transition period.
A Colorado State government agency and State and local workforce
development boards said State legislation would be needed to allow
Colorado to come into compliance with the Federal rule and anticipated
that current staff may leave their posts as soon as the rule is
finalized (which, the commenters asserted, would require time and
funding to find and train their State merit-staff replacements). The
commenters also stated that the funding and effort required to hire and
train new State merit staff would require funding from the PY 2024
Wagner-Peyser Act allocation as the PY 2023 amount likely would not be
sufficient.
A Colorado one-stop operator argued that the transition timeline is
``irrelevant'' because the proposal will cause impacts immediately. The
commenter argued that the proposal has already created concerns among
local employees about their job security and, thus, announcement of a
finalized nationwide merit-staffing requirement would result in
immediate departure of ES staff, concluding that Wagner-Peyser Act
services will ``cease immediately'' if the proposal becomes final.
A Michigan State government agency requested an extension of the
implementation period from 18 months to 3 years, arguing that
modifications to State departments' structure, State budget processes,
and public sector recruitment, hiring, and training functions will take
time. The commenter anticipated that 90 new staff members would need to
be hired and trained and remarked that this would require the State
legislature to approve a staffing structure modification (adding that
their State legislature is ``extremely resistant'' to adding new full-
time employees to State departmental budgets). The commenter said the
longer implementation period would be necessary to ensure there are no
disruptions to service delivery and reorient the local workforce
development structure. If the Department finalizes the merit-staffing
requirement as proposed, this commenter also requested a 3-year
reprieve from Wagner-Peyser Act and WIOA title I performance reporting
and suggested that a new performance baseline would need to be
negotiated and established.
Opposing the proposed merit-staffing requirement, several
commenters, including a one-stop center employee, argued that 18 months
was insufficient to ``revamp'' an ES delivery system that has been
constructed over the past 25 years and requested that, if the proposal
is finalized, more than 18 months be provided for transition and
transition should align with a new program year. These commenters
described the ``painful'' impacts of Michigan's 1998 transition from
State merit staff to local merit staff, including lack of coordination
in program delivery and diminished customer service.
A Massachusetts State government agency opposed to the proposal
requested a ``significantly longer timeline'' to assess, plan for, and
implement the merit-staffing requirement, asserting this would require
the conversion of more than 40 local Wagner-Peyser Act staff into State
merit staff. The State government listed difficulties associated with
an anticipated ``major infrastructure change,'' including facilitating
staff turnover and hiring new staff, negotiating with unions, approval
of ``spending controls,'' and considerations of lease or other
contractual agreements. The commenter also mentioned that the
forthcoming WIOA reauthorization potentially complicates the overall
timeline. Ultimately, the commenter requested that the implementation
period should last until at least January 2025.
Describing the proposal as a major disruption to Colorado's
workforce system, the commenter discussed how the staffing transition
would impact program offices in Colorado, including ``mass layoffs'' of
145 county staff (and associated negative impacts on morale), fewer
full time Wagner-Peyser Act staff resulting in scaled back services for
vulnerable populations, lost productivity, customer service
disruptions, increased errors by ``unseasoned staff,'' and potential
lawsuits or other complications due to union representation of State
staff.
Several commenters remarked that, based on average turnover rates,
Michigan's local offices may have 18 open ES positions at any given
time. A Colorado State government agency asserted that the proposal
would make it difficult to hire new outreach staff. Additionally, a
Delaware State government agency further warned that the process to
replace Wagner-Peyser Act contractors and local staff with State merit
staff will be procedurally challenging and time consuming, with no
guarantee that the staff requests will be approved by the relevant
State government bodies. A local workforce development board remarked
that its local service center could not move forward with planning
programming and strategies for the forthcoming
[[Page 82681]]
program year (which begins on July 1st of this year) because they are
unclear as to the financial implications of the proposal. Similarly, a
Colorado State government agency expressed concern about changing
regulations during ``the current 2020-2023 demonstration period''
because neither former demonstration States nor the Department would
have enough time to provide evaluative data on the benefits and
challenges with the flexible staffing model approach.
Response: The Department proposed an 18-month transition period for
States to comply with the requirement to use State merit staff to
provide ES services and estimated transition costs in its regulatory
impact analysis. In the proposed rule the Department specifically
requested information regarding States' transition costs and the
proposed 18-month transition period should this requirement be
implemented for all States. The Department received comments regarding
the length of the transition period, with some commenters suggesting a
2-year transition period, while others suggested a longer or
unspecified period of time. The three States with longstanding reliance
interests requested a 3- to 4-year transition period. As noted
throughout this preamble, based on information provided by these three
States in response to the NPRM, the Department is allowing these States
to continue to use the alternative staffing models consistent with the
models previously approved by the Department in these States. The
Department is requiring these three States to participate in
evaluations of their ES service delivery models. The Department
recognizes that there are certain transition costs associated with
shifting back to the use of State merit-staffing, which may include
State legislation, budget restructuring, and hiring, and these
processes, particularly those that require State legislative action,
may take longer than 18 months. Therefore, the Department is requiring
all other States, including States that began using alternative
staffing models following the 2020 Final Rule, to comply with the
requirement to use State merit staff for ES services within 24 months
of the effective date of this final rule. This includes the requirement
to use State merit staff to conduct outreach and provide other services
to MSFWs under parts 653 and 658.
Relationship Between Employment Services and Unemployment Insurance
Consequences of Having the Same Staff Manage ES and UI in States That
Are Currently Operating Flexible Staffing Models
Comment: Many commenters, including a Michigan State elected
official, a Massachusetts State government agency, and Colorado local
governments, articulated that local merit staff at one-stop centers in
former demonstration States already provide significant resources,
guidance, and other support to UI claimants, many of whom face
technological and transportation barriers in making successful
unemployment claims, and claimed this role was particularly important
during the UI demand surge caused by the COVID-19 pandemic.
Some commenters, including one-stop center staff and a private
citizen, warned that assigning ES staff to UI adjudications during UI
surges would unnecessarily burden ES staff and cause the quality of
employment services in the States that use flexible staffing models to
degrade even further during UI surges.
An advocacy organization argued that the relatively small number of
new State merit staff this rule would create in States that use
flexible staffing models would not make the States significantly more
prepared to handle UI surges. Similarly, a Colorado State elected
official and a Colorado local workforce development board argued that
States that already require Wagner-Peyser Act ES services to be
provided by State merit staff did not perform any better in processing
UI claims during the UI surge caused by the COVID-19 pandemic than the
former demonstration States.
A one-stop center employee similarly argued that the rule could
actually decrease the number of staff available to assist with UI
claims during a UI surge in States that use flexible staffing models;
this commenter argued that because one-stop center staff in former
demonstration States are already assisting with the UI claims process,
by causing an overall reduction in ES staff, such States would lose
this surge capacity.
Some commenters, including one-stop center employees, trade
associations, and a private citizen, expressed concern about skill
misalignment and warned that the proposal would require retraining
workers who provide employment services to perform tasks related to
adjudicating UI claims, functions the commenters argued require
different skill sets and workstyles. A one-stop center employee
expressed concern about ES staff taking on the duties of UI staff and
argued that ES staff will not be familiar with practices critical to
the management of UI benefits (such as timely administration of the
``work test.'') A private citizen remarked that Michigan's local ES
offices have been successful in providing a wide range of services to
both job seekers and businesses seeking employees while, in their view,
the merit-staffed State UI program has been ``a debacle.''
A Colorado State government agency expressed concern about the
effort and funding required to onboard or cross-train staff and
remarked that new hires may not be available to provide services
throughout their first year due to the time needed to complete required
trainings for both UI and Wagner-Peyser Act programs.
Response: The Department proposed to require that States use State
merit staff to provide ES services, which aligns the provision of ES
services with the requirement that States administer certain UI
activities with State merit staff. The Department notes that the NPRM
did not propose requirements on States to train or use their ES staff
for UI activities. Neither is the Department requiring that States
cross-train ES staff for UI activities in this final rule. However, the
ability for States to cross-train would generally better equip States
to be able to use ES staff for certain UI activities that require State
merit staff in times of high need. While the Department encourages
States to plan for increases in UI demand including through cross-
training, a State can develop cross-training that it wishes to
implement at its own pace. The Department recognizes the role that
other staff in an AJC may play in connecting job seekers with UI
services, but also notes that the ES has specific duties to assist UI
claimants to become reemployed. Providing information and meaningful
assistance in filing a claim for unemployment compensation is an
allowable cost under the Wagner-Peyser Act. The Department also
recognizes the longstanding reliance interests of Colorado,
Massachusetts, and Michigan, in utilizing alternative staffing models
and that a requirement to use State merit staff may impact these States
differently than other States. Therefore, the Department is allowing
these three States to continue to use the longstanding alternative
staffing models previously approved by the Department in these States.
The Department is requiring these three States to participate in
evaluations of ES service delivery and alternative staffing models.
[[Page 82682]]
Support Ability of State Merit Staff To Provide Surge UI Claims
Processing Capacity
Comment: Many commenters, including unions, advocacy organizations,
think tanks, and a State government agency, expressed support for the
proposed ES merit-staffing requirement because of State merit staff's
ability to play roles in administering UI programs and connecting
jobless workers to UI benefits. Specifically, some of these commenters
remarked that, because only State merit staff can legally adjudicate UI
claims, requiring ES staff to be hired on a merit basis would permit
States to rely on them to process and adjudicate UI claims. Some
unions, advocacy organizations, think tanks, and a State employee
association commented that reinstating the merit-staffing requirement
in all States and realigning ES services with the UI program will
ensure that workers can continue to receive unbiased, high-quality
employment services and effective, qualified help in claiming UI
benefits during economic crises ``without the threat of partisan
political coercion hanging over them.''
Several unions, a State government agency, and a think tank agreed
with the Department's assessment that any value gained by allowing the
ES to be staffed at the local level is outweighed by the benefits of
aligning ES staffing with UI administration and adjudication, which
would allow ES staff to provide surge capacity for UI during times of
high need. As framed by one union, cross-training State merit ES staff
enhances the resiliency of UI service delivery. Citing the pandemic and
natural disaster emergencies (e.g., Hurricane Sandy) as the best
examples of the need for cross-training State merit ES staff to assist
UI claimants in periods of high demand, many commenters, including
unions, advocacy organizations, and think tanks, argued that, because
the frequency of such extreme events is likely to increase, alignment
of ES and UI staff is even more important. Several of these commenters
reported that during the pandemic, Great Recession, and recent natural
disasters, States have relied on State merit ES staff to support UI
work, which helped to address historic UI claims surges.
According to unions, advocacy organizations, think tanks, and a
State employee association, the U.S. experience with temporary
privatization of UI administration permitted by Congress during the
pandemic reinforces the importance of reinstating ES merit-staffing.
These commenters asserted that the temporary exemption from the
requirement that UI adjudicators be merit-staffed resulted in many
States contracting with private companies that hired low paid, poorly
trained non-State-merit staff to administer traditional and new
temporary UI programs. Citing a May 2022 working paper, these
commenters said that this use of non-State-merit staff led to high
turnover among contracted staff; corruption in the hiring of staff and
in job and training referrals and placements; and poor service and long
payment delays for claimants. A State employee association and a union
added that incomplete and deficient work by outsourced staff increased
the workload for State merit-staff UI adjudicators, who were forced to
correct vendor staff errors.
Further, unions, an advocacy organization, a think tank, and a
State employee association discussed a State audit of Michigan's UI
experience during the pandemic, which they asserted found that
insufficient worker onboarding and offboarding practices (e.g., only
one-fifth of workers completed required training before starting their
duties) resulted in a total of $3.8 million in UI fraud committed by
vendor staff; purchase order delays; conflicts and ethics violations;
and unsafe computer sanitization practices. A State employee
association and an advocacy organization added that the Michigan audit
also found that nearly half of the sampled vendor staff still had
access to the State's automated UI system long after they no longer
worked for the contractor, which the commenter said created unnecessary
risk to the data and systems. Citing the Michigan audit report, an
advocacy organization said that contractors also failed to comply with
criminal history background checks for their workers.
Also asserting that Michigan UI claimants in particular suffered
during the pandemic, an advocacy organization commented that hundreds
of claimants reported to legal advocates that they received little to
no help from the frontline staff who were hired to handle the surge of
claims during the pandemic. Asserting that non-merit UI workers hired
during the pandemic did not receive adequate training, unions and a
State employee association agreed with the Department's statement in
the NPRM that providing adequate training for UI adjudicators takes
several months to a year. A think tank commented that State UI offices
increasingly are using contractors for identity verification, which is
delaying benefits and creating backlogs for unemployed workers, which
is impacting individuals of color and their communities.
An advocacy organization and a private citizen commented that
cross-training ES merit staff would alleviate a lot of the pressure on
UI merit staff during crises. Citing a lag of increased UI
administrative funding at the start of economic downturns, another
advocacy organization argued that cross-training State merit ES staff
allows ES staff to fill this gap before the Department is able to
distribute additional funds to respond to increased administrative
needs.
A think tank commented that it has heard from a wide range of legal
aid and UI advocates that State UI systems are overwhelmed and fighting
cyber fraud due to staffing shortages. Citing a 2020 news article about
a Michigan UI agency employee committing fraud, an advocacy
organization argued that cross-training ES State merit staff to provide
UI services during surges--rather than relying on contractors or new
hires--could limit the risk of fraud and ensure the program is run with
high integrity and efficiency.
Some commenters, including unions, advocacy organizations, and
think tanks, remarked that merit-based State ES employees provide
professional, unbiased ES services to job seekers and employers and
help UI claimants navigate the job market and comply with work search
requirements to initiate and remain eligible for UI benefits.
Specifically, an advocacy organization commented that ES staff are
already familiar with the local worker populations and understand the
conditions on the ground. Because ES staff administer the work test to
ensure that UI claimants are able to work and are available for and
actively seeking work, which is a federally required condition of State
UI eligibility, a State employee association asserted that this
gatekeeper function makes the role of ES staff ``inherently
governmental.'' Citing increased mandatory UI work test duties imposed
over time, a private citizen argued that additional State merit ES
staff should be physically available in one-stop centers to assist the
UI component in a variety of expanded work test functions.
An advocacy organization argued that, to support a unified delivery
model in which job seekers can apply for UI benefits through the same
agency providing reemployment services, ES and UI programs should work
together to ensure that services are provided by conflict-free, public
service professionals, so that workers receiving UI benefits can find
suitable replacement jobs efficiently. Similarly, a private citizen
commented that required
[[Page 82683]]
merit-staffing for ES services may promote better coordination between
UI staff and ES staff, which is much needed. Commenting that the ES
program performs important labor exchange functions that connect
employers with qualified workers and help employees gain reemployment
more rapidly, a private citizen argued that the ES must be closely
involved with UI. A think tank argued that, as new technology will be
deployed over the next few years to address UI modernization, it is
critical that State level staff are career employees with decent pay
and benefits, which ``will also help ensure a more equitable UI system
for all workers and address the racial inequities.''
Asserting that allowing non-State employees in some States to
operate ES and UI services was not a wise policy practice, a private
citizen reasoned that deficient or hard-to-manipulate computer-based
registration, job finding and placement services, and claims processing
often result in frustration, leaving some jobless to abandon government
assistance, which erodes overall trust in government services. This
commenter concluded that the best way to reestablish the trust of job
seekers and UI claimants in the delivery of public services is to
improve the national standards of quality and professionalism in
staffing of State workforce agencies by hiring superior individuals
under merit standards.
Also expressing concern about non-State-merit ES staff causing
frustration for UI claimants, an advocacy organization argued that
cross-training ES State merit staff, and allowing them limited access
to UI claims information, could go a long way towards rebuilding these
relationships, and would provide claimants with the in-person access to
information that they want. Specifically, this commenter said that most
of its clients have limited access to technology and struggle to
navigate the UI technology system on their phones, and one-stop center
staff cannot help claimants with filing claims or navigating the online
portal. Therefore, the commenter remarked that cross-training ES staff
and allowing them to provide minimal UI support could help alleviate
claimant frustrations, provide better access to UI, and prevent many
mistakes that claimants make when filing that later lead to improper
payments. Finally, this commenter argued that, because the majority of
its clients who seek help at State one-stop centers are from
underserved populations, allowing ES State merit staff to provide basic
information about UI claim status and assist with navigating the online
systems would ensure greater equity in access to benefits.
A union, a State employee association, an advocacy organization,
and a private citizen argued that the history of the ES and UI programs
supports the NPRM's reliance on the ES-UI relationship and the
appropriateness of aligning these programs via the State merit-staffing
requirement. Specifically, a union and a State employee association
commented that these programs originated as intertwined prongs of the
New Deal response to mass unemployment and Congress subsequently
integrated the funding structure of ES and UI, tasked ES with
administering the UI work test, and encouraged the colocation of ES and
UI staff to support unified service delivery, all of which also bind
these programs together and support alignment.
In particular, because the UI program was created in the Social
Security Act (SSA) less than 2 years after passage of the Wagner-Peyser
Act, a private citizen stated that Congress developed the UI program
with full knowledge of the existing ES public labor exchanges. The
commenter described the origins of the UI statutory merit-staffing
requirement and asserted that this legislative history provides support
for the Department's linkage of UI and ES. In summary, according to
this commenter, the UI merit-staffing requirement was not in the
original SSA of 1935, even though the President's Committee that
designed the programs recommended that the selection of administrative
personnel for the program be on a merit basis. In 1938, the commenter
said, based on an initial UI program review by the Social Security
Board, a recommendation was made to require merit-staffing in the UI
program for all States, which was implemented by Congress in 1939,
while leaving early Federal administrative interpretations requiring
merit-staffing for the ES program in place. Therefore, this commenter
concluded that the linked historical background of ES and UI
demonstrates that the absence of an explicit merit-staffing requirement
in the Wagner-Peyser Act does not demonstrate that merit-staffing is
beyond the Secretary's authority, and the record of consistent use of
merit-staffing in both ES and UI programs supports the adoption of the
proposed merit-staffing requirement.
Asserting that the founders of the unemployment security system
felt strongly that ES and UI services should be administered by State
merit-staffed employees, a private citizen commented that, without
State merit-staff ES employees, the public character of the one-stop
center is ceded to private control, contrary to the intent of the
Wagner-Peyser Act. This commenter urged the Department to strengthen
its argument for uniform required State merit-staffing for ES services
by indicating that it is based on longstanding Department policy,
research findings, and relevant recent experience.
A union argued that aligning the staffing requirements of the ES
and UI programs would further facilitate their integration and promote
their joint aim of alleviating the deleterious effects of unemployment
and foster reemployment.
Response: The Department proposed to require that all States use
State merit staff to provide ES services due in part to the critical
need for alignment between the ES and UI programs. The Department
appreciates the comments supporting this alignment. It is vital that
the ES be administered so that services are delivered effectively and
equitably to UI beneficiaries and other ES customers. The Department's
proposal and justification was supported by these commenters, including
that States would be better equipped to handle surges in UI claims with
cross-trained ES staff. As the Department noted in the NPRM,
emergencies such as natural disasters are occurring with increased
frequency such that a need for surge capacity and cross-trained staff
is becoming increasingly necessary. The Department further noted that
historical data from 1971 through 2021 indicate regular and periodic
increases in the number of UI initial claims and first payments, for
which having ES staff who are already cross-trained or able to be
quickly cross-trained to assist UI claimants would be beneficial.
Requiring States to use State merit staff also helps to support
universal access to ES services and helps to ensure that services are
delivered by qualified, non-partisan personnel who are directly
accountable to the State. Such professionals would be required to meet
objective professional qualifications, be trained to assure high-
quality performance, and maintain certain standards of performance.
They would also be prohibited from using their official authority for
purposes of political interference, and States would be required to
assure that they are treated fairly and protected against partisan
political coercion.
The Department further agrees that UI and ES are two mutually
reinforcing elements of the Federal government's commitment to workers
and that the legislative history of the two programs
[[Page 82684]]
strengthens the Department's authority to require State merit ES staff.
The alignment of these two programs remains a core goal of the
Department, with the RESEA program's emphasis on connecting UI
claimants to Wagner-Peyser and WIOA services being the latest step
toward further integration.
Undue Prioritization of UI Services
Comment: Some commenters, including a Colorado State government
agency, a one-stop operator, private citizens, and an anonymous
commenter, critiqued the proposal over what they perceived as an undue
prioritization of UI services over ES and argued that in doing so, the
Department would be restricting vulnerable populations' access to
needed employment assistance programs because many individuals who
would benefit from ES are not eligible for UI. Several commenters,
including a Colorado local government employee and an anonymous
commenter, argued that the proposal presented ``discrimination and
civil rights issues'' in shifting focus from ES to UI services because
the latter does not provide a comprehensive set of services to enable
job seekers to find and secure a job. Several commenters, including a
Colorado State government agency and a trade association, similarly
discussed inequity and civil rights concerns associated with the
proposal ``prioritizing the delivery of UI services'' over ES, arguing
that this places increased importance on customers eligible for UI and
diminishes the availability of services for vulnerable populations
(such as communities of color, people with disabilities, people
experiencing homelessness, and self-employed or gig workers) who need
employment assistance but may be ineligible for UI.
A trade association remarked that shifting ES staff to UI services
would promote benefit payments over assisting customers with employment
and would cause the community to perceive AJCs as ``the unemployment
office'' rather than a site to receive employment services.
A one-stop center argued that prioritizing UI services over ES
would be harmful to employers. A private citizen stated that the
staffing status quo in Colorado enables an equitable delivery of UI and
ES services and cited data from 2021 about the numbers of people who
accessed such services in their area in asserting that 9,000 people
would receive ``subpar'' ES due to the proposal's undue prioritization
of UI.
A State government discussed challenges associated with a rapidly
changing labor market and encouraged the Department to keep flexible
staffing models in place, arguing that States need flexibility to
effectively deliver UI and reemployment services, in part due to the
decrease in Federal Wagner-Peyser Act funding ``over the past
decades.'' The commenter said reemployment services require a wide
range of ``tools, sites, and strategies'' and argued that staffing
flexibility helps some States deliver such services effectively. A
group of local government employees remarked that many of the
individuals served in their local area are not eligible for UI benefits
but need access to ES services. The commenter said such individuals
feel comfortable coming into a local office and expressed concern about
a disruption of the equitable and ``seamless'' delivery of services to
marginalized populations, citing an anecdotal example.
Many commenters asserted that it would be counterproductive to
require States to use State merit staff to provide ES services and
cross-train these employees to process UI claims.
Several commenters, including a Colorado State agency, a trade
association, and an advocacy organization, argued that shifting ES
staff to perform UI services would repurpose staff to perform duties
outside their scope of work, therefore hampering staff abi
[…truncated; see source link]Indexed from Federal Register on November 24, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.