On March 10, 2020, the U.S. Department of Labor published a Final Rule establishing a new system by which third parties may develop and operate apprenticeship programs in the United States. According to the DOL’s press release regarding this Final Rule, “apprenticeships are widely recognized to be a highly effective job-training approach for American workers and for employers seeking the skilled workforce needed in today’s changing workplace.” The DOL states that the Rule will increase the availability of apprenticeship programs in developing sectors of the economy where apprenticeship opportunities are not widespread, and will “address the diverse workforce needs of different industries and occupations.”
For many years, apprenticeship programs have been recognized through a registration process administered by the DOL’s Office of Apprenticeship, as well as certain State Apprenticeship Agencies. Such programs have been utilized, particularly within the construction industry, to provide job training and a pathway to employment. However, the DOL finds that despite these programs, apprentices constitute only about 0.2 percent of the U.S. workforce. The DOL also observes that of the 6.4 million jobs which were open at the end of 2019, many were unfilled due to a lack of candidates who possessed the necessary skills to perform the jobs. The DOL cites comments from industry groups which conclude that the lack of qualified job candidates due to this “skills gap” has effectively stalled business growth and undermined competitiveness of American companies in the global marketplace.
To address this skills gap, the DOL seeks to expand the availability of apprenticeships by authorizing third parties, such as trade and industry groups, corporations, non-profit organizations, and educational institutions, to develop and operate “Industry-Recognized Apprenticeship Programs” (IRAPs). In order to create an IRAP, the third party must first be approved and registered by the DOL as a “Standards Recognition Entity” (SRE). The Final Rule defines the requirements for SRE status and establishes the process by which an organization may apply to become a DOL-recognized SRE. Once recognized, the SRE can then work with employers and other entities to establish, recognize, and monitor an IRAP. The Final Rule also sets forth the required components of an IRAP, which include:
1) the program must train apprentices for jobs that require specialized knowledge and experience, and involve performance of complex tasks;
2) the program has a written training plan;
3) apprentices receive credit for prior knowledge and experience where appropriate;
4) apprentices receive industry-recognized credentials upon completion of the program;
5) the working environment complies with applicable safety laws;
6) the program provides structured mentorship opportunity;
7) apprentices are paid at least the applicable minimum wage;
8) the program complies with applicable equal employment opportunity laws;
9) apprentices receive advance notice of any program-related costs or expenses charged to them, such as costs for tools or educational materials;
10) the program maintains a written apprenticeship agreement for each apprentice, outlining the terms and conditions of the apprentice’s employment and training.
The DOL expects that the use of IRAPs will extend apprenticeship opportunities to industries where apprenticeships currently are not widely available, including telecommunications, health care, and cybersecurity. However, employers should note that the Final Rule prohibits SREs from recognizing IRAPs in the construction sector.
The Final Rule amends 29 C.F.R. part 29 (Labor Standards for the Registration of Apprenticeships), and is effective May 11, 2020. The DOL states that third parties may consult with the DOL for assistance regarding preparation of their applications for SRE status, so that applications are ready to submit as soon as the rule is effective. Additional information from the DOL is available at www.apprenticeship.gov.