PRINTER'S NO. 3924
No. 2920 Session of 1994
INTRODUCED BY VEON, MUNDY, D. R. WRIGHT, CAPPABIANCA, SCRIMENTI,
BELARDI, BUXTON, WILLIAMS, FREEMAN, LEDERER, SERAFINI, COY,
GRUITZA, TRICH, LAUB, M. COHEN, MELIO, JAROLIN, DeWEESE,
COWELL, CURRY, PISTELLA, PRESTON, CARN, SURRA, MANDERINO,
TRELLO, STURLA, CAWLEY, WOZNIAK, VAN HORNE, TANGRETTI,
GIGLIOTTI, ROONEY, LAUGHLIN, STEELMAN, KELLER, HUGHES,
BISHOP, COLAFELLA AND CORRIGAN, JUNE 16, 1994
REFERRED TO COMMITTEE ON LABOR RELATIONS, JUNE 16, 1994
AN ACT
1 Amending the act of December 5, 1936 (2nd Sp.Sess., 1937
2 P.L.2897, No.1), entitled "An act establishing a system of
3 unemployment compensation to be administered by the
4 Department of Labor and Industry and its existing and newly
5 created agencies with personnel (with certain exceptions)
6 selected on a civil service basis; requiring employers to
7 keep records and make reports, and certain employers to pay
8 contributions based on payrolls to provide moneys for the
9 payment of compensation to certain unemployed persons;
10 providing procedure and administrative details for the
11 determination, payment and collection of such contributions
12 and the payment of such compensation; providing for
13 cooperation with the Federal Government and its agencies;
14 creating certain special funds in the custody of the State
15 Treasurer; and prescribing penalties," further providing for
16 contributions; establishing the Employment Training Board;
17 providing for the powers and duties of the Employment
18 Training Board, the Department of Labor and Industry and the
19 Department of Commerce; and establishing the Employment
20 Training Fund.
21 The General Assembly finds and declares as follows:
22 (1) There is an inadequate number of jobs in this
23 Commonwealth to meet the needs of those seeking employment.
24 (2) Despite the large number of unemployed job seekers, many
1 employers in new and expanding industries are having difficulty
2 finding the skilled workers they need. A similar problem exists
3 in industries where overall employment may not be expanding, but
4 where there is an acute need for skilled workers in particular
5 occupations.
6 (3) The intent of this act is to use a small portion of
7 employer unemployment insurance payments to put unemployment
8 insurance recipients to work by encouraging employers to locate
9 and expand facilities in this Commonwealth and by training
10 unemployment insurance recipients in skills needed by employers.
11 (4) The purpose of this act is to establish an employment
12 training program which shall foster job creation, minimize
13 employers' unemployment costs, and meet employers' needs for
14 skilled workers by providing literacy and skills training to
15 unemployment insurance claimants, persons who have recently
16 exhausted their benefits of unemployment insurance who have
17 remained unemployed and potentially displaced workers who would
18 otherwise become unemployment insurance claimants. It is the
19 intent of the General Assembly that all training funded through
20 this act result in new employment or creation of employment with
21 a current employer for those who successfully complete the
22 training.
23 (5) The funds made available by this act shall supplement,
24 but not displace, funds available through existing programs
25 conducted by employers themselves and by public agencies. In
26 addition, it is further the intention of the General Assembly
27 that programs developed pursuant to this act shall not replace,
28 parallel, supplant, compete with or duplicate in any way already
29 existing approved apprenticeship programs.
30 The General Assembly of the Commonwealth of Pennsylvania
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1 hereby enacts as follows:
2 Section 1. Section 301.7(c) of the act of December 5, 1936
3 (2nd Sp.Sess., 1937 P.L.2897, No.1), known as the Unemployment
4 Compensation Law, added October 19, 1988, (P.L.818, No.109) is
5 amended to read:
6 Section 301.7. Trigger Determination.--* * *
7 (c) Whenever the trigger percentage determined under
8 subsection (a) is less than fifty per centum (50%), the
9 secretary shall announce a reduction in the weekly benefit rate
10 under section 404(e)(4), but only to the extent that the dollar
11 amount of such reduction exceeds the dollar amount gained by the
12 Unemployment Compensation Fund under the reversion provision of
13 section 1315(d).
14 * * *
15 Section 2. The act is amended by adding an article to read:
16 ARTICLE XIII
17 EMPLOYMENT TRAINING PROGRAM
18 Section 1301. Definitions.--The following words and phrases,
19 as used in this article, shall have the following meanings
20 unless the context clearly requires otherwise.
21 (a) "Actual training costs" means those costs of providing
22 training to eligible participants, including salaries and
23 benefits of trainers, supervisors and others providing training,
24 and costs of necessary supplies, communications, equipment,
25 premises, utilities, housekeeping services, travel, printing and
26 indirect costs. Indirect costs shall not exceed ten per centum
27 of the cost of salaries and benefits. Cost of equipment shall
28 not exceed the cost of leasing such equipment for the term of
29 the contract or a pro rata share of the value of the equipment
30 based on the useful life of the equipment, whichever is less.
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1 (b) "Board" means the Employment Training Board.
2 (c) "Costs of program administration" means the expenses
3 which the council incurs in carrying out its responsibilities
4 under this article, including costs of marketing, outreach and
5 research provided under contract to the Employment Training
6 Board, and which are not included in contracts for the purpose
7 of providing employment training.
8 (d) "Council" means private industry council organized under
9 the Job Training Partnership Act (Public Law 97-300, 29 U.S.C. §
10 1501 et seq.).
11 (e) "Critical skills shortage" means a shortage of workers
12 training to perform the particular skills needed by employers
13 participating in the training.
14 (f) "Department" means the Department of Labor and Industry.
15 (g) "Eligible participant" means a person who, prior to
16 beginning training or employment pursuant to this article, was
17 either of the following:
18 (1) Unemployed and either receiving unemployment insurance
19 benefits, or had exhausted eligibility for unemployment
20 insurance benefits within the previous fifty-two weeks.
21 (2) Is employed, but is determined by the Employment
22 Training Board to be likely to be displaced and therefore
23 claiming unemployment insurance benefits because of reductions
24 in overall employment within a business, elimination of the
25 person's current job, or a substantial change in the skills
26 required to remain employed due to technological changes or
27 other factors.
28 (h) "Fund" means the Employment Training Fund.
29 (i) "In-kind contributions" means those direct and indirect
30 costs incurred by an employer that are attributable to a
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1 training project either as an actual training cost or a
2 reasonable administrative cost.
3 (j) "Jobs with definite career potential and long-term job
4 security" means full-time jobs of at least thirty-two hours per
5 week unsubsidized by government training funds in which long-
6 term tenure and advancement are customary. In addition, the jobs
7 must provide wages that are customary for the occupation and
8 industry in the geographic area where the employment will occur.
9 (k) "Persons likely to be displaced" means those persons who
10 are likely to be unemployed within two years because of
11 reductions in overall employment, elimination of the person's
12 current job or a substantial change in the skills required to
13 remain employed due to technological change or other factors.
14 The persons must be eligible for unemployment insurance benefits
15 if they are not retrained. In determining whether a person is
16 likely to be displaced, the Employment Training Board shall
17 require a statement from the person's employer stating the
18 reason for the likely displacement and stating that the person
19 is likely to be displaced and, therefore, to claim unemployment
20 insurance benefits if not retrained.
21 (l) "Progress payment" means those partial payments which
22 must be returned to the Employment Training Board unless
23 subsequently earned when a person has been placed and retained
24 in employment after training for at least ninety days in a job
25 directly related to the training provided.
26 (m) "Reasonable administrative costs" means those costs of
27 administering training to eligible participants incurred by
28 contractors, including salaries and benefits of management
29 personnel, supervisors and others providing training and costs
30 of necessary supplies, communications, equipment, premises,
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1 utilities, housekeeping services, travel, printing, indirect
2 costs and expenditures for marketing and research provided under
3 contract to the Employment Training Board for the purpose of
4 providing employment training which otherwise would have been
5 provided directly by the council. Indirect costs shall not
6 exceed ten per centum of the cost of salaries and benefits. The
7 cost of equipment shall not exceed the cost of leasing such
8 equipment for the term of the contract or a pro rata share of
9 the value of the equipment based on the useful life of the
10 equipment, whichever is less.
11 (n) "Retained in employment" means that the trainee has been
12 retained in a job with definite career potential and long-term
13 job security. The job must be directly related to the training
14 provided and must last for at least ninety days after the end of
15 training and must be with a single employer, except for those
16 occupations in which it is not customary for a worker to be
17 employed ninety consecutive days with a single employer. In
18 these latter cases "retained in employment" means retained in a
19 job that has a definite career potential and long-term job
20 security and that is directly related to the training provided,
21 for at least five hundred hours during a period of one hundred
22 fifty calendar days after the end of training. Upon a showing of
23 good cause the Employment Training Board may extend the one
24 hundred fifty day period provided for in this section.
25 (o) "Training" means any combination of classroom,
26 laboratory or structured, onsite training of at least one
27 hundred hours that prepares trainees for jobs with definite
28 career potential and job security. Upon a showing of good cause,
29 the Employment Training Board may approve training that is less
30 than one hundred hours.
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1 (p) "Training agency" means any private training entity or
2 local educational agency.
3 Section 1302. Employment Training Board.--There is hereby
4 established within the Department of Labor and Industry the
5 Employment Training Board which shall consist of the Secretary
6 of Labor and Industry, who shall serve as chairman; the
7 Secretary of Commerce, the Secretary of Education and the
8 Secretary of Public Welfare, a State official appointed by the
9 Governor, one member of the Senate, one member of the House of
10 Representatives, one member representing organized labor
11 appointed by the Governor and one member representing private
12 industry appointed by the Governor.
13 Section 1303. Duties and Responsibilities of Private
14 Industry Council.--The council shall review and recommend
15 proposals to the Employment Training Board for final approval.
16 Recommendations shall be based on the following:
17 (1) Local labor market demand.
18 (2) The capabilities and past performance of local training
19 agencies and employers.
20 (3) In-kind contributions by employers, including, but not
21 limited to, equipment, instructors and training facilities.
22 (4) The priorities established by the Employment Training
23 Board.
24 Section 1304. Annual Reports.--The Employment Training Board
25 shall submit to the General Assembly, by November 30, an annual
26 report on the status of projects operating during the previous
27 fiscal year. These annual reports shall provide all of the
28 following:
29 (a) Summaries of projects completed during the year,
30 including their individual and aggregate performance and cost.
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1 (b) Summaries of projects not completed during the year,
2 briefly describing each project and identifying approved
3 contract amounts by contract and for the category as a whole,
4 and identifying any projects in which funds are expected to be
5 disencumbered.
6 (c) Summaries of projects terminated prior to completion and
7 the reasons for the termination.
8 (d) Policy recommendations concerning the impact of job
9 training and the council's program on economic development,
10 labor-management relations, employment security, and other
11 related issues. To assist in preparation of the policy
12 recommendations, the chairman of the board may appoint an
13 advisory research council.
14 Section 1305. Form of Employment Training Contracts.--
15 Contracts entered into by the Employment Training Board for the
16 purpose of providing employment training shall be in the form of
17 fixed-fee performance contracts. Notwithstanding any provisions
18 of law to the contrary, contracts entered into pursuant to this
19 article shall not be subject to competitive bidding procedures.
20 No trainee shall receive employment training under this article
21 for a period of more than twenty-four months. Contracts for
22 training may be written for a period not to exceed twenty-four
23 months for the purpose of administration by the board and the
24 contracting employer of any group of employers acting jointly or
25 any training agency for the purpose of providing employment
26 training.
27 Section 1306. Allocation of Money in the Employment Training
28 Fund.--(a) The Employment Training Board may allocate money in
29 the fund for the following purposes:
30 (1) Reimbursement of actual training costs incurred by
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1 employers and training agencies for reasonable administrative
2 costs.
3 (2) Costs of program administration incurred under this
4 article.
5 (b) In determining the amount of training funds to allocate
6 for actual training costs and reasonable administrative costs in
7 accordance with subsection (a) of this section, the council
8 shall consider the following:
9 (1) A budget prepared by the contractor stating the
10 contractor's actual costs.
11 (2) The length and complexity of the training.
12 (3) The method of training, including proportion of
13 classroom, laboratory and structured, onsite training.
14 (4) The wage and occupation following training.
15 (5) Whether the trainees are unemployed or employed during
16 training and whether the training is targeted to a particular
17 group of trainees.
18 (6) Special factors that in the board's judgment could
19 affect the cost of training, including the size of the business
20 for which training is to be provided and the length of time the
21 business has been in operation.
22 (7) The administrative and other services to be provided by
23 the contractor.
24 (8) The cost of similar training that the board has funded
25 previously. As a guide to such costs, the board shall prepare at
26 least semi-annually a summary of all costs of training for
27 contracts provided within the previous twenty-four months. This
28 guide shall include the cost of training, the number of hours of
29 training and cost per hour of training provided, grouped by wage
30 following training and by retraining and new hire projects.
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1 Section 1307. Proposals for Training.--Proposals for
2 training shall include the following:
3 (a) A list of those employers who will hire and retain in
4 employment persons who successfully complete the training,
5 including a signed statement that the employers agreed to assist
6 in the development and operation of the training program. All
7 such employers shall be listed in the training contract, except
8 that, upon a showing of good cause to the Employment Training
9 Board, a contractor may substitute or add any other employer who
10 has hired a trainee no more than one hundred twenty days before
11 the termination date of the contract, but only if the new
12 employer and job provided meet all the other criteria of the
13 contract.
14 (b) A statement of the need for the purpose of the training.
15 (c) The number of jobs and a description of the jobs
16 available for persons who successfully complete the training.
17 (d) A statement of the background of the trainees and the
18 process by which they will be selected.
19 (e) A statement of the process and timetable by which the
20 contractor shall request certification from the board that
21 trainees selected for training are eligible for training.
22 Trainees must begin training within ninety days of the receipt
23 of such certification from the panel.
24 (f) A schedule for training.
25 (g) A plan for conducting the training that states the
26 subjects to be learned or practiced and the amount of time spent
27 learning or practicing each subject. The amount of time spent
28 learning or practicing each subject will usually be stated in
29 blocks of forty hours or less. The plan must document the
30 processes by which the trainee will acquire the minimum
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1 competencies to be performed in the occupation.
2 (h) The skills required to perform the job for which
3 training is provided.
4 (i) The wages that will be paid following training and a
5 description of the career potential and the long-term job
6 security offered by the employer following training.
7 (j) The fixed fee that will be paid for every person
8 trained, hired and retained in employment in a job with definite
9 career potential and long-term job security following training
10 and the method by which payments will be made. All payments are
11 earned only after the trainee has been trained, hired and
12 retained in employment in accordance with the terms of a
13 contract and of section 1309. At the discretion of the board,
14 contracts may provide that nonprofit organizations and
15 government entities may receive an advance of no more than
16 fifteen per centum of the amount of the contract. At the
17 discretion of the board, progress payments may be made during
18 training and upon placement of each trainee that has been
19 retained in employment in accordance with the provisions of
20 section 1309.
21 (k) A statement of standards for training that must be met
22 for payment to be made, including a statement of the minimum
23 hours of training that must be provided, the schedule for
24 training and the job following training.
25 (l) The plan for administering the agreement.
26 (m) If training is proposed for a new business locating in
27 this Commonwealth or for a significant expansion of an existing
28 business, the boards may request business plans and other
29 financial information sufficient to insure that the employer for
30 whom funding is provided is financially stable and able to
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1 provide jobs with definite career potential and long-term job
2 security.
3 (n) Contractors who seek approval of an outline and final
4 agreement at the same board meeting must demonstrate that they
5 are ready to start training.
6 (o) The contractor must provide detailed recruitment plans
7 to the board with the proposal. The plans will include list of
8 employment offices with which the contractor is working and
9 specific plans for direct mail and newspaper advertising to
10 recruit trainees. Additional information also will be sought on
11 plans to provide special recruitment aimed at women, minorities,
12 the disabled and veterans.
13 (p) Contractors who request repeat contracts or amendment
14 adding a substantial amount of additional funds to an existing
15 contract must make a showing that funds previously contracted
16 have been or will be fully used. In making such a showing, the
17 board will require a contractor to demonstrate that all or
18 nearly all of planned enrollments have taken place and that a
19 substantial number of trainees have been retained in employment
20 for the time period specified in the contract, except that the
21 panel may waive such a requirement if it makes a finding that
22 there is a reasonable probability that a substantial number of
23 trainees will be retained in employment for the time period
24 required in the contract.
25 Section 1308. Contracts with Training Agencies.--Contracts
26 shall be made with training agencies only if the training agency
27 can demonstrate all of the following:
28 (a) The training agency has a satisfactory record of past
29 performance in the placement and retention of former trainees
30 and employer satisfaction with former trainees.
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1 (b) The training agency can demonstrate labor market demand
2 for the proposed training. Proof shall include, but not be
3 limited to, the documented need of specific employers for the
4 workers proposed to be trained in the skills proposed by the
5 training agency.
6 (c) The training agency can demonstrate that the training
7 prepares trainees in a manner satisfactory to employers.
8 (d) The training agency can demonstrate that its accounting
9 systems include controls adequate to check the accuracy and
10 reliability of accounting data, promote operating efficiency,
11 and assure compliance with government requirements and generally
12 accepted accounting principles. The council shall have full
13 access at any time to these accounting systems to assure
14 compliance with these standards.
15 Section 1309. Limitations on Training and Payments.--(a)
16 Contracts shall only be made for job-linked training, including
17 literacy and basic skills training, which provides specific
18 skills for career advancement or which is preparatory for, and
19 leads directly to, jobs with definite career potential and long-
20 term job security. Not less than seventy per centum of contracts
21 shall be awarded to small businesses who employ less than two
22 hundred fifty workers.
23 (b) Payments shall be made in accordance with a performance
24 contract under which partial payments may be made during
25 training. A partial payment may be made on placement or
26 retention of each trainee, and not less than twenty-five per
27 centum of the negotiated fees is withheld until the trainee has
28 been retained in employment for ninety days after the end of
29 training with a single employer, except for those occupations in
30 which it is not customary for a worker to be employed ninety
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1 consecutive days with a single employer. In these latter cases,
2 the Employment Training Board may substitute a period similar to
3 the probationary period customary to the occupation. In no case
4 shall the probationary period amount to less than five hundred
5 work hours. In no case shall any payment be considered to have
6 been earned until the trainee has been retained in employment
7 for ninety days or the equivalent probationary period for an
8 occupation in which it is not customary for a worker to be
9 employed ninety consecutive days with a single employer.
10 (c) All requests for payments must be received by the board
11 no later than sixty days after the termination date of a
12 contract.
13 (d) All unearned advances and progress payments paid for
14 trainees who are not trained, hired after the completion of
15 training and retained in employment shall be returned to the
16 board no later than sixty days after the termination date of a
17 contract. At any time during the term of a contract when one or
18 more trainees have not been placed in a job within sixty days
19 after the completion of training, the board may request the
20 return of all advances and progress payments paid for such
21 trainees. In addition, interest at the rate established under
22 section 806.1 of the act of April 9, 1929 (P.L.343, No.176),
23 known as "The Fiscal Code," shall be paid on all funds returned
24 to the board under the provisions of this subsection from the
25 first day of the month following the date they are received from
26 the panel.
27 Section 1310. Audits of Training Contracts.--The Employment
28 Training Board shall provide for audits of training contracts.
29 These audits shall determine whether certification of
30 eligibility for training, enrollment in training, training,
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1 placement in a job, retention in that job and payments were made
2 in accordance with the contract. For purposes of determining
3 whether training has occurred, contractors shall maintain
4 records of attendance in training and documentation that the
5 plan for training was followed.
6 Section 1311. Role of Labor Organizations.--The relevant
7 labor organization representing workers under a collective
8 bargaining agreement for whom training is proposed shall be
9 notified during the development of all training programs and
10 shall have the opportunity to participate in such program
11 development. In addition, such labor organizations must agree in
12 writing to all training for workers covered by a collective
13 bargaining agreement.
14 Section 1312. Public Works Program.--The Department of Labor
15 and Industry shall develop a program to provide for employment
16 training in public works projects under the provisions of this
17 article.
18 Section 1313. Technical Assistance.--The Department of Labor
19 and Industry shall cooperate with the Employment Training Board
20 by offering necessary technical assistance, which may include,
21 but is not limited to, labor market information, projections of
22 occupational demand and information and advice on alternative
23 training strategies.
24 Section 1314. Duties of Department of Commerce.--(a) The
25 Department of Commerce shall determine those firms considering
26 locating or expanding business in this Commonwealth in order to
27 enable the Employment Training Board to expedite the processing
28 of contracts for these firms. The Department of Commerce shall
29 also provide technical assistance by marketing the Employment
30 Training Fund to newly locating or expanding businesses in this
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1 Commonwealth and by assisting in the packaging of employer
2 contracts for training of eligible participants from the
3 Employment Training Fund.
4 (b) The Employment Training Board and the Department of
5 Commerce shall agree within sixty days of the effective date of
6 this article to a statement of coordination and purpose relating
7 to the mutual assistance to be provided by the board and the
8 Department of Commerce pursuant to this article.
9 Section 1315. Employment Training Fund.--(a) There is
10 hereby created a special fund, separate and apart from all
11 public moneys or funds of the Commonwealth, to be known as the
12 Employment Training Fund. The moneys in the fund shall be used
13 exclusively to carry out the provisions of this article. Not
14 less than twenty-five per centum of the fund shall be dedicated
15 for purposes of the act of July 13, 1987 (P.L.346, No.66), known
16 as the "Dislocated Worker Training Assistance Act." The moneys
17 in the fund shall be continuously available for expenditure in
18 accordance with this article and shall not lapse at any time or
19 be transferred to any other fund.
20 (b) The total amount of wages upon which contributions are
21 calculated for any employer are hereby reduced by one-tenth of
22 one per centum.
23 (c) There is hereby imposed a tax upon each employer equal
24 to that employer's current contribution rate, upon one-tenth of
25 one per centum of that employer's total amount of wages. This
26 tax shall be collected under the provisions of Article III and
27 paid into the Employment Training Fund, except as provided under
28 subsection (d).
29 (d) If the trigger percentage determined by the secretary
30 under section 301.7 is less than fifty per centum, all funds
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1 collected under this section shall revert to the Unemployment
2 Compensation Fund, until such time as the trigger percentage
3 exceeds fifty per centum.
4 Section 3. This act shall take effect in 60 days.
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