DOL Opens Up Industry-Run Apprenticeships

The Trump administration’s goal to create a separate channel of employer-managed apprenticeships is set to be a reality.

The U.S. Department of Labor (DOL) issued a final rule Mar. 11 establishing Industry-Recognized Apprenticeship Programs (IRAPs) to exist alongside the current DOL-regulated system.

The rule, which goes into effect May 11, outlines the process by which third parties, known as Standards Recognition Entities (SREs), will evaluate and recognize IRAPs.

The release of the rule comes 33 months after President Donald Trump signed an executive order in June 2017 instructing the DOL to create guidelines meant to encourage greater industry participation in expanding work-based learning programs.

“The IRAP initiative is evidence of the need to modernize apprenticeship, expand access to workers to earn industry-recognized credentials and allow businesses to play more of a role in helping tailor the kind of training their workers receive to meet their specific needs,” said Katie Spiker, director of government relations at the National Skills Coalition, a Washington, D.C.-based public-policy research and advocacy group.  

The DOL’s registered apprenticeships have proven successful when used, but only about 0.2 percent of the U.S. workforce has taken advantage of the programs, primarily in trades and construction. The agency contends that the new system will effectively expand apprenticeship in telecommunications, health care, cybersecurity and other sectors where it’s currently not widely used.

“SHRM is excited about the potential IRAPs have to create new pathways to employment, especially in careers like HR and others that have not yet embraced apprenticeships to fill their talent needs,” said Nancy Hammer, vice president of regulatory and judicial engagement at the Society for Human Resource Management.

Expanding and promoting learn-while-you-earn credential programs in lieu of four-year college degrees has been a signature effort of the Trump administration, which has argued that for some, learning relevant hire-ready skills on the job can be more valuable than a college education.

“The [IRAPs] rule is an important step in opening up more nontraditional and affordable education opportunities that could particularly benefit younger Americans who have been left behind by America’s higher-education system, as well as current workers who have been negatively impacted by changes in industry and technology,” said Rachel Greszler, senior policy analyst at The Heritage Foundation in Washington, D.C. “It’s not in everyone’s best interest to pursue an expensive four-year college education, and these types of apprenticeships make it possible for individuals to obtain the education they need for a promising career without taking on debt, and instead, actually being paid in the process.”  

The expansion of employer-led apprenticeships does not change any requirements of the traditional DOL-regulated apprenticeship programs, which would exist alongside the industry-crafted channel. But critics of the IRAPs contend that by replacing government oversight with industry-run accreditation, the programs will lack the worker protections of the registered apprenticeship system.

“The Department of Labor is walking away from a clear record of success [with registered apprenticeships] and wasting taxpayer money by setting up an entirely untested and unproven system,” said Rep. Bobby Scott, D-Va. “This rule will expose apprentices to low-quality programs and undermine the integrity of the existing registered apprenticeship system.”

Under the rule, oversight and credentialing authority would effectively be shifted to SREs—trade associations, corporations, nonprofits, professional certification and accreditation bodies, schools, and unions. Once recognized by the DOL, SREs will work with employers to develop and manage paid apprenticeship programs that best serve their industries and lead to recognized credentials. But many remain concerned that the regulations do not adequately outline quality assurance for IRAPs.

DOL is in effect outsourcing quality control of IRAPs to SREs without clear requirements for how these external entities will monitor them, or take action against noncompliant programs, according to New America, a Washington, D.C.-based public-policy think tank.

“The quality-assurance process risks opening the door to low-quality programs and introducing considerable risk to apprentices and their employers,” said Mary Alice McCarthy, director of the Center on Education and Skills at New America.

Spiker agreed that regulations governing SREs and IRAPs are not held to as high a standard as registered programs. “For example, the final rule would not require that IRAPs provide workers with wage increases commensurate with their skills gain,” she said. “Those increases are one of the hallmarks of registered programs and an important retention tool for businesses.”  

In addition, IRAPs, though subject to federal and state equal employment opportunity laws, would not be required to conduct targeted outreach to underrepresented populations in the local labor market as registered programs are, and the DOL decided not to prohibit SREs from recognizing their own apprenticeship programs which could present conflicts of interest.

The DOL did however, make several updates to the proposed version of the rule in response to concerns about oversight. The final rule mandates SREs to conduct periodic compliance reviews of their programs and beefs up reporting requirements. “This is critical in order to see how effective the programs are for businesses and workers and improves alignment with the nation’s workforce development system which tracks performance measures under the Workforce Innovation Opportunity Act,” Spiker said.

She added that one of the biggest changes from the proposed rule is that programs will be required to have a written agreement with each apprentice outlining the terms and conditions of employment and training. “In order for the IRAPs to be high-quality, they needed to offer both workers and employers transparency about the credentials workers will earn, and about the process by which they will earn those credentials,” she said.

The DOL stated that SREs would have to ensure that apprenticeships meet certain criteria such as being paid at least the applicable minimum wage; include a structured work experience designed to teach competency and industry-essential skills; adhere to all applicable safety and equal employment opportunity requirements; provide mentorship; and deliver an industry-recognized credential upon completion of the program.

Construction Left Out

The final rule excludes the construction industry from participating in IRAPs, to the dismay of employers in that sector. Builders will instead be able to continue offering registered apprenticeships through programs co-run with trades unions.

The unions had argued that allowing IRAPs in construction would undermine their job-training programs under the registered apprenticeship system. The DOL agreed, deciding that there wasn’t any need to upset current arrangements in which about 65 percent of registered apprenticeship programs are already construction related. “The department’s goal in this rulemaking is to expand apprenticeships to new industry sectors and occupations…there is no need to take the risk of disrupting or displacing registered construction programs,” said John Pallasch, DOL assistant secretary for employment and training.  

That decision doesn’t sit well with groups like the Associated Builders and Contractors, a construction trade association, which lobbied for inclusion in the new system. “All U.S. workers should have the opportunity to participate in DOL’s new industry programs, particularly as federal registered apprenticeship programs supply only a small fraction of the construction industry’s workforce,” said Greg Sizemore, the organization’s vice president of health, safety, environment and workforce development.

“By excluding construction from the IRAPs rule, the DOL is creating a perverse disincentive to increased education opportunities and is prolonging the skills shortage in the construction industry,” Sizemore said. He added that the construction sector averages about 144,000 registered apprentices per year, among a workforce of over 8 million who are “overwhelmingly developed through industry-recognized and market-driven apprenticeships sponsored by companies. Carving our sector out of the rule communicates a negative and exclusionary message that the only way to be competent or be successful in the U.S. construction industry is through a DOL-registered apprenticeship program, which is simply not the case.”

Funding Uncertain

Federal money for the IRAPs is a big potential problem. Congress has yet to provide any funding specifically for the new system, and House Democrats say they have no intentions to do so.

The Trump administration’s fiscal year 2021 budget includes $200 million for apprenticeship programs—up $25 million from last year—but that money is earmarked for registered programs and not intended for IRAPs.

Rep. Rosa DeLauro, D-Conn., the lead House appropriator for the DOL, said Democrats will fight any attempt to use congressional funding for industry-run apprenticeships.

The DOL plans to use H-1B visa fees and some flexible general funding to support the industry apprenticeships and get SREs up and running, before financing the programs is largely shifted to the SREs themselves, who will likely move the cost to participating employers. But experts say that without any dedicated federal funds, the administration’s goal of massively upscaling apprenticeships will be very difficult.

Democrats have also suggested that their recent efforts to reauthorize the 83-year-old National Apprenticeship Act (NAA), which regulates apprenticeship and on-the-job training programs, is another way to block the IRAP initiative. Rep. Donald Norcross, D-N.J., said Democrats won’t include support for IRAPs through the legislation.

“The IRAP rule comes at a time when modernizing apprenticeship has become increasingly partisan,” Spiker said. “The Democrats’ draft proposal to reauthorize the NAA was a product of bipartisan negotiations, but I’ve heard that the administration has urged Republicans to step away from the bill in part because it does not include provisions on IRAPs. Without that bipartisan agreement in the House, it is unlikely to gain traction in the Senate.”

For more information on getting started with any of the DOL’s apprenticeship programs, please visit www.apprenticeship.gov.