Executive Order and Legislation on Apprenticeship Aim to Give Employers More Flexibility

The day after senators introduced bipartisan legislation to promote apprenticeships, President Trump signed an executive order to achieve the same end. On June 15, the president signed an executive order (EO): Expanding Apprenticeships in America. This EO declares:

It shall be the policy of the Federal Government to provide more affordable pathways to secure, high paying jobs by promoting apprenticeships and effective workforce development programs, while easing the regulatory burden on such programs and reducing or eliminating taxpayer support for ineffective workforce development programs.

Before signing the EO, President Trump said the purpose of the order will be to "remov[e] federal restrictions that have prevented many different industries from creating apprenticeship programs."

The order directs the Department of Labor to consider proposing rules to promote apprenticeships by third parties, which include trade and industry groups, companies, non-profit organizations, unions, and joint labor-management organizations. These regulations are to consider, among other things:

  • how qualified third parties can recognize high-quality apprenticeship programs;
  • guidelines or requirements for qualified third parties to follow to ensure the apprenticeship programs they recognize meet quality standards;
  • ensuring that any industry-recognized apprenticeship program may be considered for expedited and streamlined registration under registered DOL-administered apprenticeship programs; and
  • whether to keep the existing processes for registering apprenticeship programs for employers.

The EO states the DOL is to use "available funding" to carry out this directive.

Moreover, the EO calls for the creation of a DOL Task Force on Apprenticeship Expansion to identify ways to promote apprenticeships and develop strategies for encouraging private-sector involvement.

During a White House press briefing held earlier in the week, Labor Secretary Alex Acosta touted apprenticeships, commenting, "the private-private partnership where businesses come together with educational institutions to actually focus on demand-driven education, to focus education on the skills that business is demanding has worked in other sectors and can work throughout the economy."

When asked about the types of jobs subject to apprenticeship programs, Acosta explained:

Our program will be geared to all industries and all jobs.  The point here is to foster private-private partnerships between industry and educational institutions so that when students go to a community college, or when students are looking at apprenticeship programs in the building trades or in four-year institutions -- when they leave, they have the skills necessary to enter the workforce. 

Business groups appear to support efforts to boost apprenticeships. After the president signed the EO, International Franchise Association President & CEO Robert Cresanti said in a statement:

Franchise businesses have apprenticeship and workforce development programs in place and continue to work hard to address an emerging shortage of skilled workers. We stand ready to work with the Trump administration and Congress and create a pathway for Americans to have robust and successful careers. IFA is committed to creating new partnerships with government and universities to achieve these goals.

Apprenticeship Legislation

Meanwhile, in Congress, Senators Susan Collins (R-ME) and Maria Cantwell (D-WA) on June 14 introduced the Apprenticeship and Jobs Training Act of 2017 (S. 1352) to provide employers that participate in state or federal apprenticeship programs with a tax credit of up to $5,000 per individual based on wages. The credit would be available for up to three years per apprentice, and could be claimed once the individual has been employed for at least seven months.

Employers that participate in a multi-employer apprenticeship program would qualify for a tax credit in the lessor amount of $3 per hour for each individual, or $5,000. A multi-employer program is one in which multiple employers are required to contribute and that is maintained pursuant to one or more collective bargaining agreements.

In addition, the bill would allow veterans to apply their previous training and experience to the required training and education hours.

Finally, the measure includes provisions to promote mentoring. Certain workers who are 55 or older and approaching retirement would be able to draw from pensions early if they mentor or train new employees. Specifically, workers with reduced hours who spend at least 20% of their time mentoring employees or students could receive distributions from their pension plans without penalty. According to the bill's summary:

[b]y allowing employees to phase into retirement, it will allow those employees interested in cutting back their work schedules and focusing on mentoring younger workers, while still allowing those skilled employees to receive a partial salary and partial benefits from their retirement savings without any negative tax consequences.

In a statement, Sen. Cantwell said, "This bill kicks American apprenticeship into high gear by establishing the first ever national incentive for apprentice programs. It will help close our skills gap, get more Americans back to work, raise wages, and allow our companies to continue to make the best products in the world."

A section-by-section summary of the bill can be found here.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.