Manufacturers often suffer from a mismatch between the skills their workers have, and the ones they must acquire for the company to survive and grow. Many companies will not open new facilities or expand existing ones if they find the local labor force incapable of staffing and servicing facilities or operating production lines.
Plant owners and managers must respond to new, often unexpected, and substantially different demands for job skills. Training, therefore, assumes an increasingly important role in manufacturing modernization strategies. Community colleges and vocational schools are leaders in the delivery of training programs; many have built the necessary expertise to respond quickly and adeptly to the needs of local companies.
In many areas, training programs have not approached their potential usefulness because public development agencies simply are not aware of their effectiveness, their appeal to private business operators, or their contribution to an overall economic development incentive package. Therefore, business development advocates, technology service providers, and technical information specialists need to be more aggressive in learning about and promoting training initiatives.
Most training programs are funded by federal resources channeled through the Job Training Partnership Act (JTPA). JTPA funds, in fact, support many state and local training efforts. However, given some of the statutory constraints of JTPA (in terms of service beneficiaries and eligible activities), many states have established creative training programs that complement JTPA offerings and address work-force preparation needs not covered by JTPA. Training incentives particularly well suited for manufacturers include:
Recruitment and referral. In this first case, employment and training agencies (often designated by the local Private Industry Councils, or PICs, that oversee JTPA projects) work with economic development staff to define the skills already in the area's labor force, identify firms needing these skills, and provide those firms with information on the appropriate workforce preparation options. Recruitment, assessment, testing, and referral services for persons meeting company requirements usually are provided free of charge.
Customized training programs. Tailored to the specific skills and job needs of a company, these programs are implemented in four phases. First, the company defines its work force needs, and documents the skills necessary to fill them. Next, a training program is devised to teach those skills, and a person or institution to deliver the service is selected. The PIC and company officials often develop the courses together, which may be offered at no charge to the participating business. Customized training initiatives often leverage state resources; many states supplement JTPA funds by underwriting the cost of designing special curricula at local community colleges; some states also reimburse expenses to a firm that conducts its own training on-site, even if offered by the company's own staff. Third, participants are selected to take the training and learn the necessary skills. Finally, the firm hires trainees who successfully complete the customized training program.
On-the-job training programs. The company, in this instance, provides training to persons it selects. The "public" role in on-the-job training is to reimburse the company for part of the employees' wages while they are training. On-the-job training programs are popular with small manufacturing companies. They offer the same design and content flexibility as customized training programs, but are better suited for firms needing only a few employees.
Providing training resources at low cost — or for free — can result in considerable cash savings for a manufacturer. A small operation with a few jobs to fill, for example, could save several hundred dollars on recruitment and assessment costs, and several thousand dollars on supplementary classroom and on-site training. Additional savings could be realized on the costs of equipment and advanced technical instruction tailored to a company's needs and offered via on-the-job training. These programs can be of tremendous help to small firms grappling with cash-flow difficulties and capitalization problems. Moreover, training programs can work as effectively for existing firms as for newly located or start-up companies.
Training incentives can attract new private investment and retain existing businesses. If the existing work force can adapt to changing job demands of new technology, companies are more likely to add new product or service lines.
This final chapter explores key training programs. Since the existence of training services can be a pivotal incentive for prospective or expanding employers, it is important for technical service providers to be aware of these services, and to provide information about them to manufacturers.
Job Training Partnership Act (JTPA)
| Objective: | To provide job training and related assistance to dislocated or economically-disadvantaged adults. Manufacturers can benefit through job placement services and shared-cost training programs. |
| Eligibility: | Any business hiring dislocated or economically-disadvantaged workers. |
| Cost: | Training for prospective employees often is free of charge; training for those already on- the-job carries a 50 percent reimbursement of employers' costs. |
| Services: | Worker training and other training-related assistance. |
Description
Congress established the Job Training Partnership Act (JTPA) in 1982 to provide job training and related assistance to dislocated and economically-disadvantaged individuals. Although the program is federally funded, its development, management, and administration are carried out by state and local governments. Governors have review authority over locally-developed programs and are responsible for monitoring program compliance. Most JTPA funds are distributed to local agencies through formula grants, with the remaining funds reserved for discretionary grants to address mass layoffs or plant closings.
JTPA efforts are targeted to unemployed individuals, and the program supports numerous services, including career counseling, training services, and job placement assistance. The job placement and training components can prove particularly important to manufacturers. Business firms looking for workers can access JTPA staff and resources to help locate and qualify eligible, unemployed individuals for company openings. Most worker testing, assessment, and similar services are free to prospective employers; training for those already on-the-job carries a 50 percent reimbursement of employer's costs.
Private Industry Councils (PIC) are the key organizations for providing JTPA services and for attracting private-sector input and involvement in job training programs. These entities — managed by representatives of business, education, labor, and government — develop and oversee all JTPA job and training programs within their service delivery area. Some PICs have staff that provide services directly to unemployed individuals and the business community; others contract with local organizations, often non-profit groups, to help provide job training and assistance.
Application Process
Manufacturers interested in hiring dislocated or disadvantaged persons from the local work force, and obtaining suitable training for them, can contact their local PIC. Once a contact is made, PIC staff or their designees meet with the manufacturer to discuss the types of jobs to be filled, prerequisites, types of employee skills needed, and other relevant factors. The PIC then will recommend individuals to the employer. If training is required, a contract is negotiated with a training organization — which may be the PIC, a local community college, or a professional training organization. For those employees already on-the-job, 50 percent of the costs of training are covered by the employer and 50 percent are JTPA funds allocated by the PIC from its federal grant.
Impact
In program year 1992, nearly 511,000 unemployed adults completed JTPA-supported training programs (through the so-called Title II regular program), and 62 percent of these participants entered employment. In the dislocated worker program (Title III), 311,876 individuals were trained in program year 1992, with 69 percent of them securing jobs.
Success Stories
1) In Lane County, Oregon, a local development association obtained JTPA funds to research the possibilities for promoting new industrial start-up firms within the county. The association also hired JTPA-eligible persons and trained them for the jobs created. JTPA funds also supported assessment of prospective workers and job referrals. As a result of these efforts, three new businesses began in the county, creating 45 jobs.
2) In Delaware, the Blue Collar Jobs Act provides state-supported, customized job training that complements the package of JTPA-funded incentives available to manufacturers expanding or locating within the state. This linked package is credited with creating at least 250 jobs as of mid 1995.
Future Prospects
As of November 1995, Congress was planning to integrate the JTPA program into a workforce development block grant, which will consolidate scores of small federal training and education programs into a flexible program to be administered by governors. The state offices listed below probably will continue to serve as the best access points for manufacturers seeking training assistance.
Contact
To locate the PIC responsible for local JTPA programs, a manufacturer can contact the local Chamber of Commerce, or key local elected officials such as the mayor or county supervisor. The State JTPA Liaison offices also can help identify the local PIC. A list of State JTPA Liaisons, with addresses and phone numbers, follows.
State Job Training Partnership Act Offices (as of July 1995) ALABAMA Alabama Department of Economic and Community Affairs Job Training Division P.O. Box 5690 Montgomery, AL 36103-5690 334-242-5893 (voice) 334-242-5855 (fax) ALASKA Alaska Department of Community and Regional Affairs Division of Community and Rural Development Anchorage, Alaska 99501-2341 907-269-4607 (voice) 907-269-4520 (fax) ARIZONA Division of Employment and Rehabilitation Services P.O. Box 6123 Phoenix, Arizona 85005 602-542-4910 (voice) 602-542-2273 (fax) ARKANSAS Arkansas Employment Security Dept Two Capitol Mall, Room 506 Little Rock, Arkansas 72203 501-682-2121 (voice) 501-682-3713 (fax) CALIFORNIA Employment Development Dept P.O. Box 826880 Sacramento, California 95814 916-654-8210 (voice) 916-657-5294 (fax) COLORADO Governor's Job Training Office 720 South Colorado Blvd, South Suite 550 Denver, Colorado 80222 303-758-5020 (voice) 303-758-5578 (fax) CONNECTICUT Connecticut Department of Labor 200 Folly Brook Boulevard Wethersfeld, Connecticut 06109 203-566-4280 (voice) 203-566-1520 (fax) DELAWARE Delaware Department of Labor Employment and Training P.O. Box 9499 Newark, Delaware 19714-9499 302-368-6810 (voice) 302-368-6995 (fax) DISTRICT OF COLUMBIA Training and Development Department of Employment Services 500 C Street, NW, Suite 600 Washington, D.C. 20001 202-724-7184 (voice) 202-639-1357 (fax) FLORIDA Department of Labor and Employment Security Tallahassee, Florida 32399-2152 904-922-7021 (voice) 904-488-8930 (fax) GEORGIA Georgia Department of Labor 148 International Boulevard, N.E. Sussex Place, Room 600 Atlanta, Georgia 30303 404-656-3011 (voice) 404-656-2683 (fax) HAWAII Department of Labor and Industrial Relations 830 Punchbowl Street, Room 321 Honolulu, Hawaii 96813 808-586-8844 (voice) 808-586-9099 (fax) IDAHO Idaho Department of Employment Boise, Idaho 83735-0001 208-334-6110 (voice) 208-334-6430 (fax) ILLINOIS Department of Commerce and Community Affairs JTPA Programs Division 620 East Adams, 6th Floor Springfield, Illinois 62701 217-785-6006 (voice) 217-785-6454 (fax) INDIANA Dept of Workforce Development Program Devel and Field Operations 10 North Senate Avenue, Room 302 Indianapolis, Indiana 46204 317-233-5661 (voice) 317-233-4793 (fax) IOWA Dept of Economic Development Division of Workforce Development 150 Des Moines Street Des Moines, Iowa 50309 515-281-9013 (voice) 515-242-4859 (fax) KANSAS Department of Human Resources Topeka, Kansas 66603-3182 913-296-7474 (voice) 913-296-0179 (fax) KENTUCKY Office of Training and Reemployment Workforce Development Cabinet 275 East Main Street, 2-West Frankfort, Kentucky 40621 502-564-5360 (voice) 502-564-7452 (fax) LOUISIANA Office of Labor P.O. Box 94094 Baton Rouge, Louisiana 70804-9094 504-342-7693 (voice) 504-342-7960 (fax) MAINE Maine Department of Labor P.O. Box 309 Augusta, Maine 04330 207-287-3788 (voice) 207-287-5292 (fax) MARYLAND Dept of Labor, Licensing & Regs Office of Employment and Training 1100 North Eutaw Street, Room 600 Baltimore, Maryland 21201 410-767-2400 (voice) 410-767-2986 (fax) MASSACHUSETTS Dept of Employment and Training Charles F. Hurley Building Government Center 19 Staniford Street Boston, Massachusetts 02114 617-727-6600 (voice) 617-727-0315 (fax) MICHIGAN Michigan Jobs Commission Bureau of Employment Training and Community Services 201 North Washington Square Lansing, Michigan 48913 517-335-5853 (voice) 517-335-5945 (fax) MINNESOTA Department of Economic Security Community Based Services 390 North Robert Street, 1st Floor St. Paul, Minnesota 55101 612-296-3700 (voice) 612-296-0994 (fax) MISSISSIPPI Department of Economic and Community Development Employment Training Division Jackson, Mississippi 39203-3089 601-949-2234 (voice) 601-949-2291 (fax) MISSOURI Dept of Economic Development Div of Job Development and Training P.O. Box 1087 Jefferson City, Missouri 65102 314-751-4750 (voice) 314-751-6765 (fax) MONTANA Department of Labor and Industry State Job Training Bureau P.O. Box 1728 Helena, Montana 59624 406-444-4500 (voice) 406-444-3037 (fax) NEBRASKA Department of Labor P.O. Box 94600 Lincoln, Nebraska 68509-4600 402-471-9000 (voice) 402-471-2318 (fax) NEVADA State Job Training Office 400 West King Street Carson City, Nevada 89710 702-687-4310 (voice) 702-687-3957 (fax) NEW HAMPSHIRE Job Training Coordinating Council 64B Old Suncook Road Manchester, New Hampshire 03301 603-228-9500 (voice) 603-228-8557 (fax) NEW JERSEY Department of Labor CN055 Trenton, New Jersey 08629-0055 609-292-2323 (voice) 609-633-9271 (fax) NEW MEXICO Department of Labor P.O. Box 1928 Albuquerque, New Mexico 87103 505-841-8409 (voice) 505-841-8491 (fax) NEW YORK State Department of Labor State Office Building Campus, Building 12, Room 500 Albany, New York 12240 518-457-2741 (voice) 518-457-6908 (fax) NORTH CAROLINA Division of Employment and Training Department of Commerce 111 Seaboard Avenue Raleigh, North Carolina 27604 919-733-6383 (voice) 919-733-6923 (fax) NORTH DAKOTA Job Service P.O. Box 5507 Bismarck, North Dakota 58506-5507 701-224-2836 (voice) 701-224-4000 (fax) OHIO Bureau of Employment Services Job Training Partnership-Ohio 145 South Front Street, 4th Floor Columbus, Ohio 43216 614-466-3817 (voice) 614-752-6582 (fax) OKLAHOMA Employment Security Commission Director of JTPA 2401 North Lincoln, Room 408 Oklahoma City, Oklahoma 73152 405-557-5329 (voice) 405-557-7256 (fax) OREGON Economic Development Department Salem, Oregon 97310-1600 503-373-1995 (voice) 503-581-5115 (fax) PENNSYLVANIA Department of Labor and Industry 7th and Forster Streets, Room 1700 Harrisburg, Pennsylvania 17120 717-787-3756 (voice) 717-787-8826 (fax) RHODE ISLAND Dept of Employment and Training Providence, RI 02903-3740 401-277-3600 (voice) 401-277-2731 (fax) SOUTH CAROLINA Employment Security Commission P.O. Box 1406 Columbia, South Carolina 29202 803-737-2617 (voice) 803-737-2642 (fax) SOUTH DAKOTA Department of Labor Pierre, South Dakota 57501-2277 605-773-3101 (voice) 605-773-4211 (fax) TENNESSEE Department of Labor Nashville, Tennessee 37243-0658 615-741-6772 (voice) 615-741-3003 (fax) TEXAS Department of Commerce Work Force Development Division 211 East 7th Street, Suite 1000 Austin, Texas 78701 512-936-0467 (voice) 512-936-0313 (fax) UTAH Office of Job Training Salt Lake City, Utah 84114-7162 801-538-8750 (voice) 801-359-3928 (fax) VERMONT Dept of Employment and Training Jobs and Training Division Montpelier, Vermont 05601-0488 802-828-4300 (voice) 802-828-4022 (fax) VIRGINIA Employment & Training Department The Commonwealth Building 4615 West Broad Street, 3rd Floor Richmond, Virginia 23230 804-367-9803 (voice) 804-367-6172 (fax) WASHINGTON Employment Security Department Training and Employment Analysis Division Olympia, Washington 98504-5311 206-438-4611 (voice) 206-438-3174 (fax) WEST VIRGINIA Bureau of Employment Programs Job Training Programs Division Charleston, WV 25305-0112 304-558-2630 (voice) 304-558-2992 (fax) WISCONSIN Department of Industry, Labor and Human Relations Division of Jobs, Employment and Training Services P.O. Box 7972 Madison, Wisconsin 53707 608-266-2439 (voice) 608-267-2392 (fax) WYOMING Department of Employment P.O. Box 2760 Casper, Wyoming 82602 307-235-3254 (voice) 307-235-3278 (fax)
| Objective: | To assist industry by providing workers with comprehensive training. |
| Eligibility: | Any U.S. business or group of businesses. |
| Cost: | No costs to register program or receive advice. |
| Services: | Assistance in setting up apprenticeship programs. |
Description
The Apprenticeship Program is a voluntary, industry-driven initiative sponsored by employer and labor groups. The federal government's role is to encourage and promote the establishment of apprenticeship programs and to provide technical assistance to program sponsors.
Field staff at the Bureau of Apprenticeship and Training (BAT) provide technical assistance for potential and existing program sponsors and apprentices. For industry sponsors and potential sponsors, this technical assistance can include: (a) analyzing training needs and developing apprenticeship standards; (b) helping develop worker recruitment procedures to meet equal opportunity and affirmative action requirements; (c) developing administrative procedures; (d) locating or developing related technical instruction curricula; (e) conducting program evaluations, quality assessment audits, and EEO compliance reviews; (f) compiling and disseminating labor market information on apprenticeship and national and local training needs; (g) registering sponsors' programs; (h) registering apprentices; (I) issuing completion certificates; (j) issuing Davis-Bacon job certifications on federally financed construction projects; and (k) providing veterans' assistance. Written agreements between the program sponsor and the apprentice prescribe the nature of the job, its rate of pay, and other specifics.
The program sponsor usually is an employer who needs highly skilled workers in a plant, office, or business. The sponsor may be in any industry, including manufacturing, transportation, communication, wholesale and retail, printing and publishing, finance, or insurance. Sponsors must show that there is a need for highly skilled workers, and that the employer is willing to invest the effort to obtain this type of employee.
Anyone at least 16 years old may be an apprentice, although some hazardous occupations require a participant to be 18 years. Some trades require an entry examination; others (but not all) require applicants to be high school graduates or possess a GED certificate. Apprentices are employees who are subject to the same rules and policies governing other employees in the firm or organization. Apprenticeships last from one to six years.
Apprentices earn, while they learn on the job, about half the journeymen's rate and progressing up to 95 percent of full pay near the end of their apprenticeship. As of September 1994, there were about 800 apprenticeable occupations, and the number continues to grow. A few of the skilled trades in which apprentices are being trained are automotive mechanic, baker, bricklayer, carpenter, electrician, machinist, operating engineer, optical technician, painter, roofer, sheet metal worker, structural steel worker, and tool and die maker.
Application Process
According to Department of Labor rules, a company interested in participating in the Apprenticeship Program can follow one of two courses, depending on whether or not their employees are organized. If there is no labor agreement, the company must follow the procedure below.
If the existing work force is covered by a labor agreement, the firm must follow the below procedures.
Impact
In fiscal 1993, 326,000 apprentices received training in more than 30,000 registered programs; approximately 63,000 new apprentices were registered. A total of 7.3 percent of the apprentices were women, and 22.6 percent were minorities. The Department of Labor estimates that more than 330,000 apprentices received training in fiscal 1994, and more than 335,000 in 1995.
Contact
For assistance in setting up and registering an apprenticeship program, a manufacturer should contact the state office of the U.S. Department of Labor's Bureau of Apprenticeship and Training (listed below), the local Job Service Office, or the state apprenticeship agency.
State Offices, Bureau of Apprenticeship and Training (as of June 1995) ALABAMA Berry Building, Suite 102 2017 Second Avenue North Birmingham, Alabama 35203 205-731-1308 ALASKA Calais Building 3301 C Street, Suite 201 Anchorage, Alaska 99513-7580 907-271-5035 ARIZONA Suite 302 3221 North 16th Street Phoenix, Arizona 85016 602-640-2964 ARKANSAS Federal Building, Room 3507 700 West Capitol Street Little Rock, Arkansas 72201 501-324-5415 CALIFORNIA Suite 1090-N 1301 Clay Street Oakland, California 94612-5217 510-637-2951 COLORADO U.S. Custom House 721 19th Street, Room 469 Denver, Colorado 80202 303-844-4793 CONNECTICUT Federal Building 135 High Street, Room 367 Hartford, Connecticut 06103 203-240-4311 DELAWARE Lock Box 36, Federal Building 844 King Street Wilmington, Delaware 19801 302-573-6113 FLORIDA City Centre Building, Suite 4140 227 North Bronough Street Tallahassee, Florida 32301 904-942-8336 FLORIDA Room 418 1371 Peachtree Street, N.E. Atlanta, Georgia 30367 404-347-4403 HAWAII Room 5113 300 Ala Moana Boulevard Honolulu, Hawaii 96850 808-541-2519 IDAHO Suite 128 3050 North Lakeharbor Lane Boise, Idaho 83703-6217 208-334-1013 ILLINOIS Room 708 230 South Dearborn Street Chicago, Illinois 60604 312-353-4690 INDIANA Federal Building and U.S. Courthouse 46 East Ohio Street, Room 414 Indianapolis, Indiana 46204 317-226-7592 IOWA 210 Walnut Street, Room 715 Des Moines, Iowa 50309 515-284-4690 KANSAS 444 SE Quincy Street, Room 247 Topeka, Kansas 66683-3571 913-295-2624 KENTUCKY Federal Building, Room 187-J 600 Martin Luther King Place Louisville, Kentucky 40202 502-582-5223 LOUISIANA Suite 133, Afton Village Condo 3535 Sherwood Forest Boulevard Baton Rouge, Louisiana 70816 504-389-0263 MAINE Federal Building 68 Sewall Street, Room 408-D Augusta, Maine 04330 207-622-8235 MARYLAND Federal Building, Charles Center 31 Hopkins Plaza, Room 1028 Baltimore, Maryland 21201 410-962-2676 MASSACHUSETTS 11th Floor One Congress Street Boston, Massachusetts 02114 617-565-2291 MICHIGAN Room 304 801 South Waverly Lansing, Michigan 48917 517-377-1640 MINNESOTA 316 Robert Street, Room 134 St. Paul, Minnesota 55101 612-290-3951 MISSISSIPPI Federal Building, Suite 410 100 West Capitol Street Jackson, Mississippi 39269 601-965-4346 MISSOURI 1222 Spruce Street, Room 9.102E Robert A. Young Federal Building St. Louis, Missouri 63103 314-539-2522 MONTANA Federal Office Building 301 South Park Avenue Room 396, Drawer #10055 Helen, Montana 59626-0055 406-449-5261 NEBRASKA Room 801 106 South 15th Street Omaha, Nebraska 68102 402-221-3281 NEVADA 301 Stewart Avenue, Room 311 Las Vegas, Nevada 89101 702-388-6396 NEW HAMPSHIRE 143 North Main Street, Room 205 Concord, New Hampshire 03301 603-225-1444 NEW JERSEY Parkway Towers Building E, 3rd Floor 485 Route #1, South Iselin, New Jersey 08830 908-750-9191 NEW MEXICO 505 Marquette, Room 830 Albuquerque, New Mexico 87102 505-766-2398 NEW YORK Leo O'Brien Federal Building Room 809 North Pearl & Clinton Avenue Albany, New York 12202 518-472-4800 NORTH CAROLINA Somerset Park, Suite 250 4407 Bland Road Raleigh, North Carolina 27609 919-790-2801 NORTH DAKOTA New Federal Building, Room 428 657 2nd Avenue, North Fargo, North Dakota 58102 701-239-5415 OHIO Room 605 200 North High Street Columbus, Ohio 43215 614-469-7375 OKLAHOMA Room 305 51 Yale Building 5110 South Yale Tulsa, Oklahoma 74135 918-496-6770 OREGON Federal Building, Room 629 1220 SW 3rd Avenue Portland, Oregon 97204 503-326-3157 PENNSYLVANIA State Director Federal Building 228 Walnut Street, Room 773 Harrisburg, Pennsylvania 17108 717-782-3496 RHODE ISLAND Federal Building 100 Hartford Avenue Providence, Rhode Island 02909 401-528-5198 SOUTH CAROLINA Strom Thurmond Federal Building 1835 Assembly Street, Room 838 Columbia, South Carolina 29201 803-765-5547 SOUTH DAKOTA Oxbow I Building, Room 204 2400 West 49th Street Sioux Falls, South Dakota 57105 605-330-4326 TENNESSEE Airport Executive Plaza 1321 Murfreesboro Road Suite 541 Nashville, Tennessee 37211 615-781-5318 TEXAS VA Building, Room 2102 2320 LaBranch Street Houston, Texas 77004 713-750-1696 UTAH Administration Bldg, Room 1051 1745 West 1700 South Salt Lake City, Utah 84104-3839 801-975-3650 VERMONT Federal Building 11 Elmwood Avenue, Room 629 Burlington, Vermont 05401 802-951-6278 VIRGINIA 700 Centre, Suite 546 704 East Franklin Street Richmond, Virginia 23219 804-771-2488 WASHINGTON Suite 100 1400 Talbot Road South Renton, Washington 98055 206-277-5214 WEST VIRGINIA Federal Building 550 Eagan Street, Room 303 Charleston, West Virginia 25301 304-347-5141 WISCONSIN Federal Center, Room 303 212 East Washington Avenue Madison, Wisconsin 53703 608-264-5377 WYOMING American National Bank Building 1912 Capitol Avenue, Room 508 Cheyenne, Wyoming 82001-3661 307-772-2448
| Objective: | To encourage employers to hire persons from groups with particularly high unemployment rates or difficult employment barriers.To encourage employers to hire persons from groups with particularly high unemployment rates or difficult employment barriers. |
| Eligibility: | All employers. |
| Cost: | Employers accept costs associated with filing a voucher to the state. |
| Services: | Tax credits and employment assistance. |
Description
The targeted jobs tax credit (TJTC) program provides tax incentives for employers who hire individuals from groups with unusually high unemployment rates or from groups that face difficult obstacles to employment. For an employer to be eligible for a tax credit, a local affiliate of a state employment service office typically must certify a worker. The certification "voucher" then is signed by the employer and sent to the state employment agency for review. If approved, a tax credit is given.
The targeted jobs tax credit program traditionally has aimed to improve the employment outlook of vocational rehabilitation referrals, economically disadvantaged youth, economically disadvantaged Vietnam- era veterans, SSI (Supplemental Security Income) recipients, general welfare recipients, youth participating in a cooperative education program, and economically disadvantaged ex-convicts.
The tax credit's value generally is 40 percent of the first-year wages of the hired individual, based on the first $6,000 earned. Wages above this amount are not applicable for tax credits. Certain exceptions to the amount of wages applicable exist: on-the-job training and wages supplemented by federal funds, social security payments, and payments for services during labor disputes. The wages applicable for youth participants usually are capped $3,000. Youth workers may get lower wages, but their participation may be subject to more restrictions.
Application Process
Employers should contact their state employment service to learn about process specifics, as well as state-imposed restrictions. Usually it is the responsibility of the employer to sign and submit to the state employment service the vouchers corresponding to individual employees. The employee is to obtain the voucher, although employers commonly assist with paperwork and explain the process.
Success Stories
1) Bay County, Florida, established partnerships with local and state universities and their affiliates to provide education and services to individuals with limited employment experience. Enrollment in such programs generally makes individuals eligible for JTPA and TJTC programs, and the program has excellent connections to local and state employers and training providers, both private and public.
2) The Indiana workforce development program provides self-directed job searches, individual assessments, skills testing and counseling. This program is involved heavily with the JTPA and TJTC programs.
Impact
Determining the impact of TJTC has been controversial. Detractors claim that many workers hired with the help of the credit would have been hired anyway. Supporters, however, maintain that the TJTC provides a critical edge that makes hard-to-place individuals more attractive to prospective employers.
Future Prospects
The TJTC program has no permanent authorization and has been receiving temporary extensions since Congress first enacted it in 1978. The program appears to be headed toward a further emphasis on the hiring of disadvantaged youth, with other eligibility categories likely to be dropped from the program.
Contact
Manufacturers interested in learning more about targeted job tax credits may contact the U.S. Department of Labor at the number and address below.
Office of Employment Security
Employment and Training Administration
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, D.C. 20210
202-219-4389