On-the-Job Training (OJT) is training by an employer that is provided to a paid participant while engaged in productive work to develop specific occupational skills or obtain specialized skills required by an individual employer that the participant does not already possess.

Local Workforce Development Boards (WDBs) must include in their local plan a description of the strategies and services that will be used in the local area to administer OJT, including other requirements as specified within this policy.

OJT Wages and Benefits  

Since OJT is employment, state and federal regulations governing employment situations apply. Participants in an OJT must be compensated at the same rates, including periodic increases, as trainees or employees who are situated in similar occupations by the same employer. Wages paid must not be less than the higher of federal or state minimum wage or the prevailing rates of pay for individuals employed in similar occupations by the same employer.

Participants in an OJT must be:

• Provided benefits and working conditions at the same level and to the same extent as other trainees or employees working a similar length of time and doing the same type of job.

• Covered by Worker's Compensation in accordance with State law.

OJT Employer Eligibility  

Temporary Staffing Agencies: OJTs may not be written with temporary staffing agencies or employee-leasing firms for positions that will be "hired out" to other employers for probationary seasonal, temporary or intermittent employment. The only exception is when the OJT position is with the staffing agency itself and not a position that will be "hired out."

Referring employers: In situations where an employer refers an individual to WIOA Title I services for eligibility determination with the intent of hiring that individual under an OJT contract, the individual referred to the program may be enrolled in an OJT with the referring employer only when the following is true:

• The referring employer has not already hired the individual.

• An objective assessment and an IEP or ISS have been completed which support the development of an OJT with the referring employer.

Excluded employers: Prior to re-contracting with an OJT employer, the past performance of that employer must be reviewed. An OJT contract must not be entered into with an employer who has previously exhibited a pattern of failing to provide OJT participants with continued long-term employment as regular employees with wages, benefits, and working conditions at the same level and to the same extent as similarly situated employees. OJT participants who voluntarily quit, are terminated for cause, or are released due to unforeseeable changes in business conditions need not result in termination of employer eligibility for future OJT contracts.

An employer that has been excluded from OJT contracting because of the requirement described above may again be considered for an OJT placement one year after that sanction was imposed. In this re-contracting situation, if the employer fails to retain the participant after the OJT ends, and there is no apparent cause for dismissing the employee, the employer must not receive any future OJT contracts.

OJT Payment and Training Length

Payment of WIOA Title I funds to employers is compensation for the extraordinary costs of training participants, including costs of classroom training and compensation for costs associated with the lower productivity of such participants.

A trainer must be available at the employment site to provide training under an OJT contract. For example, a truck driving position where the driver drives alone or without immediate supervision or training would not be appropriate for OJT.

Payment rate and rate considerations: The appropriate payment by WIOA Title I is 50 percent of the wages paid by the employer to the participant during the period of the training agreement. In limited circumstances, the reimbursement may be up to 75 percent of the wage rate of the participant when the following conditions are considered:

• The characteristics of the participants taking into consideration whether they are individuals with barriers to employment, length of unemployment, and current skill level.

• The size of the employer, with an emphasis on small and medium-sized businesses.

• The quality of employer-provided training and advancement opportunities, for example of the OJT contract is for an in-demand occupation and will lead to an industry-recognized credential; and

• Any additional factors the Local WDB determines to be appropriate, which may include, the number of employees participating in the training, wage and benefit levels of those employees (at present and anticipated upon completion of the training), and relation of the training to the competitiveness of a participant. The factors used to decide an increase of wage reimbursement above 50 percent must be documented within the IEP/ISS.

Wages are considered to be monies paid by the employer to the participant. Wages do not include tips, commissions, piece-rate based earnings or non-wage employer fringe benefits.

Payment for overtime hours and holidays is only allowable in accordance with local policies. Holidays may be used as the basis for OJT payments only if the participant actually works and receives training on the holiday.

OJT Contracts

An OJT contract with an employer can be written for a maximum of 1040 hours. Under no circumstances can an OJT contract be written for a participant if the hours of training required for the position in which the participant is to be trained is determined to be less than 160 hours.

The number of OJT training hours for a participant must be determined using the following standardized chart, unless the local plan contains an alternative methodology for determining the length of OJTs. The hours specified must be considered as a departure point for determining actual training hours. If the total number of training hours needed to successfully train a participant for the OJT position cannot be provided during the maximum contract length allowable, as many training hours as possible must be provided.

Source: SVP-Scaled Value of Proficiency (O*NET)

OJTs are designed to be limited in duration as appropriate to the occupation for which the participant is being trained, taking into account the content of the training, prior work experience of the participant, and the service strategy of the participant. The OJT training hours for a participant must be reduced if a participant has prior-related employment or training in the same or similar occupation. Previous training or experience, which occurred so long ago that skills gained from that experience are obsolete, may be disregarded to the extent that those skills need to be relearned or re-acquired.

The number of training hours for a participant may be increased based upon the individual circumstances of the participant, such as having a disability. Local plans will need to identify the circumstances for reduction/increase of length of an OJT.

The number of hours of training for any participant, as well as the process for extending or reducing those training hours from the basic method of determination must be documented in the participant's IEP/ISS.

OJTs for Employed Workers  

OJTs may be written for employed workers when the following additional criteria are met:

• The employee is not earning a self-sufficiency wage as defined in the local plan; and

• The OJT relates to the introduction of new technologies, introduction to new production or service procedures, upgrading to new jobs that require additional skills, workplace literacy or other appropriate purposes identified in the local plan.

Documentation of the appropriateness including the assessment (participant and employer/business), contract, training plan, progress, skill evaluation, invoices, and other financial records, etc. must be documented in the data management system.

 OJTs and Registered Apprenticeship

OJT contracts may be entered into with Registered Apprenticeship (RA) program sponsors or participating employers in registered apprenticeship programs for the OJT portion of the registered apprenticeship program.

Depending on the length of the RA and State and local OJT policies, these funds may cover some or all of the RA training. See the policy “Utilizing funding for a Registered Apprenticeship” for more details.