Why the new apprenticeships rules could be bad for business 

The recent publication of new federal rules for apprenticeship is a landmark event. The National Apprenticeship System Enhancements, which spans 180 pages, proposes a substantial expansion of regulations overseeing registered apprenticeships, those approved by the Department of Labor and state agencies and offered by employers. 

In one sense, the effort is a welcome recognition of the nation’s growing interest in apprenticeship. Until recently, apprenticeships in America were hardly noticed outside the construction trades. Even within the Labor Department, they were a backwater with minimal funding.  

But starting in 2015, three administrations and lawmakers began to recognize the potential of apprenticeship to upgrade skills and expand opportunity at scale.  

Federal spending on apprenticeships has jumped from about $30 million to over $250 million per year. And while apprenticeship funding is still small compared to other Labor Department training allocations — Job Corps alone is $1.7 billion — and the scale of U.S. apprenticeships remains limited compared to other countries, apprenticeships have attracted widespread, bipartisan support.  

But more attention is a double-edged sword. And in its latest effort to clarify the rules, the Labor Department may be creating a whole new slate of challenges. 

The new rules are far reaching and lengthy. Many aim to increase protections for apprentices.  Others deal with the way employers register their programs and how the federal Office of Apprenticeship defines an occupation suitable for apprenticeships. And some create an entire new category of registered apprenticeships linked to career and technical education (CTE) in high schools and postsecondary programs.  

There’s much that’s commendable in these new rules. For instance, they call for building national occupation standards with the potential to reduce the burden on employers of having to develop and specify on their own the skills they plan to teach. They limit the power of state councils to slow program registrations (though so far the Office of Apprenticeship has not enforced this provision). They also increase flexibility in the required number of skilled workers (or journeypersons) relative to apprentices.  

But the rules overreach in adding extensive new reporting requirements, including the mandate that employers must demonstrate their financial viability. This sounds good, but what businesses will be eager to show their accounts to the Labor Department for the uncertain benefit of registering a program?  

The negative effect could be especially harmful to small businesses interested in apprenticeships. Given the sheer amount of added paperwork, one wonders whether rule writers considered the tradeoff between protecting apprentices and attracting employers to create apprenticeships. Regulators have no power to allocate money for apprenticeships. But without such funding, new requirements like these are likely to discourage participation in the registered apprenticeship system. 

The new “CTE apprenticeships” proposed in the rules are another example of a good idea gone awry. They’re meant as a response to the long overdue efforts to engage young people in apprenticeships; the countries most successful in scaling apprenticeship start the apprentice’s training by age 17 — well below the average age of U.S. apprentices (age 30). Yet, instead of encouraging initiatives to start registered apprenticeships in late high school, the Labor Department’s proposal would establish an alternative system entirely, one that shifts from occupational competence to industry standards and that increases classroom instruction and reduces work-based learning.  

Using high school and community college CTE programs for the classroom instruction component of registered apprenticeships makes sense, as does recruiting young people soon after leaving high school. But we don’t need a separate system to do so. 

With these rules, the Labor Department aims to make sure that all registered apprenticeships are of high quality and achieve diversity objectives. Yet, doing so by adding a range of new obligations on employers is likely to conflict with the goal of scaling apprenticeships. Building on today’s registered apprenticeships should involve simplifying, not dramatically expanding, the rules guiding employers.   

However well-intentioned, new rules won’t be enough to scale U.S. apprenticeships. 

Apprenticeships aren’t training programs, they’re jobs. And unless an employer is willing to hire an untrained worker and pay them before they become fully productive, apprenticeship opportunities will remain limited. To realize their potential, the federal government must also provide adequate funding to stimulate employers to hire enough apprentices for all Americans who want to pursue one. Consider, for instance, a “pay for apprenticeship” model that would provide funding for the intermediary organizations that sell and organize apprenticeships based on how many apprentices employer partners actually hire and train. Such a policy would be a welcome carrot to counterbalance a rule that mostly adds new sticks. 

Robert I. Lerman is chairman of the board at the nonprofit Apprenticeships for America. 

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