Labor Department Finalizes Regulations for a New Industry-Recognized Apprenticeship System

On March 11th, the U.S. Department of Labor (DOL) published a final rule setting the parameters for the Trump Administration’s new system of “industry-recognized apprenticeship programs” or IRAPs. The long-awaited rule, which will go into effect on May 11th, outlines the roles and responsibilities for “Standards Recognition Entities” (SREs), which are the organizations that DOL will authorize to approve and monitor IRAPs. In contrast to our existing national system of Registered Apprenticeship, which requires new programs be approved by governmental agencies at the state or federal level, IRAPs will be approved and monitored by non-governmental bodies, such as trade and industry associations, corporations, non-profit organizations, educational institutions, unions, and joint labor-management organizations. The new rule provides more clarity on DOL’s relationship with the SREs and the relationship between SRE’s and the industry-recognized apprenticeship programs they certify.

The administration and its supporters hope the new system will facilitate the expansion of apprenticeship opportunities in high-growth and emerging industries, such as information technology, healthcare, and advanced manufacturing, by streamlining the process for gaining formal recognition by the Department of Labor. But absent rigorous quality standards, it’s questionable whether IRAPs will translate into better earn-and-learn programs for workers. Furthermore, for an administration that prides itself on cutting through bureaucratic red tape, the IRAP system fails to present a streamlined program implementation process or address the legitimate challenges that employers face when standing up new apprenticeships, such as start-up funds.

What’s Changed from the Proposed Rule

Consistent with recommendations from New America, the final rule incorporates the following improvements to the IRAP regulatory framework outlined in the June 2019 notice of proposed rulemaking (NPRM).

• Apprentice protections. IRAPs must now maintain a written apprenticeship agreement for each apprentice that outlines the terms and conditions of the apprentice's employment and training.
• Stronger mentorship requirement. The final rule clarifies that mentorship must be ongoing, focused supervision and training by experienced instructors and employees, to ensure apprentices have additional guidance on the progress of their training and their employability.
• Greater evidence of SRE effectiveness. SREs must now demonstrate expertise in setting competency-based standards, however, there still isn’t a requirement that prospective SREs have experience setting and monitoring adherence to program requirements.
• Greater transparency about SREs and IRAPs. The final rule includes a number of changes that provide the public with more information about IRAPs. For example, SREs are required to disclose any fees they charge to the IRAPs that they accredit. DOL will publish information about active and suspended SREs and IRAPs.
• Heightened quality assurance requirements. SREs must conduct periodic compliance reviews to ensure that IRAPs are abiding by the standards established by DOL. Additionally, instead of simply making information about IRAPs publically available, SREs must now report program data to DOL, including information about training costs, demographic information, and credentials attained.
• Greater detail about the role of DOL. The final rule provides a bit more clarity about the quality assurance role that DOL will play. For instance, while the NPRM simply noted that the Administrator may request and review materials from SREs, the final rule states that the Administrator may conduct periodic compliance assistance reviews of SREs to ascertain their conformity with the requirements. But the frequency and intensity of these compliance checks are unknown.

Where the Final Rule Falls Short

While the soon-to-be final regulation includes some welcomed modifications to the NPRM, many of the shortcomings still exist.

• Potential for conflicts of interest. The new rule expands the range of organizations that can serve as SREs to include corporations, and industry certification and professional accreditation bodies. Yet the final rule, much like the NPRM, fails to prevent an SRE from creating and approving its own IRAP, which presents an obvious conflict of interest. While the rule requires prospective SREs to disclose any confirmed or potential partner who will play a role in recognizing IRAPs and any relationships that could reasonably impact its impartiality, DOL plans to leave it to individual SREs to prove that they will mitigate conflicts of interest. And while SREs must notify DOL if there are major changes that affect the operations of their programs, such as if they recognize programs in additional industries and occupations, conflicts of interest do not seem to constitute a major change. Additionally, DOL will now expressly allow SREs to charge fees to IRAPs they accredit, which could pose a disincentive to derecognize poor-quality apprenticeships that serve as a revenue stream for SREs.
• Duplicative standards. The final rule does little to ensure that SREs will not generate duplication and fragmentation of standards within industries and occupations. Other than requiring an SRE to notify the Department when they approve IRAPs in a new geographical area, DOL has not introduced any new requirements to mitigate the overlap of programs that follow conflicting or duplicative occupational standards. This means that two SREs operating in adjacent regions with similar labor market characteristics could require the IRAPs that they approve and monitor to abide by differing competency standards for apprentices. The Department does not appear to streamline or consolidate SREs within particular industries to avoid duplication, which will only cause confusion among employers.
• Lack of equal employment opportunity oversight and enforcement. Under the final rule, an SRE must have policies and procedures that require IRAPs adhere to applicable Federal, State, and local laws pertaining to equal employment opportunity (EEO) and a process for handling EEO and harassment complaints from apprentices. But SREs lack the civil rights enforcement authority of the government, not to mention that SREs that operate their own IRAPs might lack the incentive to take action against a program that is accused of an EEO violation. Apprentices now have the right to file a formal complaint against an SRE with DOL but how the Department will protect apprentices against EEO violations remains a mystery.

The Department has once again failed to provide a compelling reason to create a new, duplicative apprenticeship system, nor any evidence that the new system is likely to succeed in its stated goals. As our country faces a recession and an undetermined period of high unemployment and underemployment, apprenticeships will serve an even greater role in getting youth and adults into paid employment and on a family-sustaining career pathway. Now more than ever, it’s imperative that federal job training policies and investments support high-quality programs that protect and build the skills of workers.

Interested in staying up to date on education and workforce policy? Subscribe to our newsletter to receive updates on the latest from our experts.