BILL ANALYSIS Ó Senate Committee on Labor and Industrial Relations Ted W. Lieu, Chair Date of Hearing: June 8, 2011 20011-2012 Regular Session Consultant: Alma Perez Fiscal:Yes Urgency: No Bill No: AB 554 Author: Atkins Version: As introduced February 16, 2011 SUBJECT Employment: workforce services KEY ISSUE Should the Legislature direct the state and local Workforce Investment Boards to 1) ensure that programs and services funded by the Workforce Investment Act are conducted in coordination with approved apprenticeship programs, and 2) to foster collaboration between community colleges and approved apprenticeship programs to provide training and continuing education? PURPOSE To encourage the coordination of WIA funded training with approved apprenticeship programs and to foster collaboration between educational and job-training entities. ANALYSIS The federal Workforce Investment Act (WIA) of 1998 provides for activities and programs for job training and employment investment in which states may participate, including work incentive and employment training outreach programs. Following passage of the federal WIA, the state established the California Workforce Investment Board (CWIB) and charged the board with the responsibility of developing a unified, strategic planning process to coordinate various education, training, and employment programs into an integrated workforce development system that supports economic development. Existing law requires the local chief elected officials in a local workforce development area to form, pursuant to specified guidelines, a Local Workforce Investment Board (Local WIB) to plan and oversee the workforce investment system at the local level. There are currently 49 local WIBs in the state. Additionally, existing law also requires each Local WIB to establish at least one full service One-Stop Career Center in the local workforce investment area that, among other things, provides access to career information, counseling, job search and placement assistance, training and other related services available in one location. WIA requires that 85 percent of the federal funds appropriated to states go to the local workforce investment boards, with the remainder allocated for state discretionary purposes Existing law provides a framework for promoting and developing apprenticeship training through the California Apprenticeship Council (CAC) and the Division of Apprenticeship Standards (DAS) within the Department of Industrial Relations (DIR). DAS enforces apprenticeship standards for, among other things, wages, hours, working conditions and the specific skills required for state certification as a journey person in an apprenticealbe occupation. The CAC was established to set policies for the DAS. All apprenticeship programs must be approved by the Chief of the DAS and are randomly audited every five years to ensure that programs are in compliance with Division standards. This Bill would direct the state and local Workforce Investment Boards to ensure that programs and services funded by WIA are conducted in coordination with apprenticeship programs and would encourage collaboration between community colleges and apprenticeship programs. Specifically, this bill: 1. Requires the California Workforce Investment Board (CWIB) and each local board to ensure that programs and Hearing Date: June 8, 2011 AB 554 Consultant: Alma Perez Page 2 Senate Committee on Labor and Industrial Relations services funded by WIA and directed to apprenticeable occupations, including preapprenticeship training, are conducted to the maximum extent feasible, in coordination with apprenticeship programs approved by DAS. 2. Requires the CWIB and each local board to develop a policy of fostering collaboration between community colleges and approved apprenticeship programs in their respective geographic areas to provide pre-apprenticeship training, apprenticeship training, and continuing education in apprenticeable occupations through approved apprenticeship programs. COMMENTS 1. Background on how Apprenticeship Programs work: As noted above, the Division of Apprenticeship Standards administers the state's apprenticeship laws and enforces apprenticeship standards for wages, hours, working conditions and the specific skills required for state certification as a journey person in an apprenticeable occupation. In general, apprenticeship programs provide instruction that combines a formal course of in-class instruction with practical "on-the-job" training. According to the federal Office of Apprenticeship Training, Employment, and Labor Services (OATELS), the purpose of a registered apprenticeship program is to enable employers to develop and apply industry standards to training programs that can increase productivity and improve the quality of the workforce. In California, industries and employers voluntarily participate in apprenticeship programs. For employers, participation in apprenticeship programs help eliminate the need for expensive recruitment, creates a diversified and flexible workforce and larger pool of employees with specific skills, reduces costs of high labor turnover and increases productivity. DAS notes that apprenticeship programs operate under training standards that are agreed to by labor and/or management in accordance with state and federal laws. Under these programs, an apprentice works with a skilled worker and Hearing Date: June 8, 2011 AB 554 Consultant: Alma Perez Page 3 Senate Committee on Labor and Industrial Relations gains on the job skills and "know-how" and in turn becomes an important part of the occupation and industry. DAS states that those crafts in which management and labor organizations exist, each selects an equal number of members to serve on the joint apprenticeship committee. The joint apprenticeship committee determines the standards for training of its occupation and supervises the training of apprentices. 2. Apprenticeship Programs in California : California's Eligible Training Provider List (ETPL) was established in compliance with WIA requirements for the purpose of providing customer-focused employment training for adults and dislocated workers. Apprenticeship programs are counted among the training providers who are eligible to receive Individual Training Accounts through WIA Title I-B funds. According to the Employment Development Department website, as of April 7, 2011, there are 14,517 approved programs (courses or combination of courses) that may lead to employment and 84 state approved apprenticeship programs on the ETPL. 3. Need for this bill? A report from the Institute for Research on Labor and Employment at the University of California, Berkeley, titled "California Workforce Education and Training Needs Assessment: For Energy Efficiency, Distributed Generation and Demand Response," (UCB Report) reports that California's workforce development system is extensive but fragmented. The UCB Report notes that there is limited coordination among WIBs, community colleges, apprenticeship programs, and other training and education agencies. The report asserts that the WIA system is currently driven by a "work first" mandate, with the bulk of resources going to the One-Stop Career Centers to help job seekers find a job quickly, rather than investing in training. The UCB Report also notes that community colleges alone have the most post-secondary training programs. Therefore, the UCB Report recommends system-wide collaboration between the state's community colleges and apprenticeship programs at the pre-apprenticeship, apprenticeship and continuing education levels. Hearing Date: June 8, 2011 AB 554 Consultant: Alma Perez Page 4 Senate Committee on Labor and Industrial Relations According to the author, many WIA funded programs for job training are not simultaneously connected to the programs that provide employment and training, such as apprenticeship programs. The author believes that the WIA funded programs compete with apprenticeship programs and are subsidizing programs that often fail to connect participants to clear career pathways and well-paying middleclass jobs. This bill would direct the CA WIB and local boards to ensure that programs and services, funded by WIA for apprenticeship occupations, are conducted to the maximum extent feasible, in coordination with apprenticeship programs approved by DAS. And additionally, the bill would require the CA WIB and each local board to develop a policy of fostering collaboration between community colleges and approved apprenticeship programs in their respective geographic areas. 4. Proponent Arguments : According to proponents, the remarkable success of recognized apprenticeship programs stems from their unique ability to simultaneously provide employment and training, setting workers on the path to living wage careers. The author argues that pre-apprenticeship, "green construction training," and other local training programs funded by WIA dollars fail to connect youth and adult participants to actual pathways to journeyperson certifications through state approved apprenticeship programs that lead to well-paying middle class careers. According to the author, there are millions of WIA funds which are not connected to programs that provide employment and training simultaneously. The author notes that, to address this disconnect, WIA funded training in apprenticeable occupations must be formally connected with one or more state approved apprenticeship programs. Proponents further argue that this bill will establish critical connections with apprenticeship programs and other labor-management training partnerships in growth sectors in order to make the most of taxpayer investment in workforce development. 5. Opponent Arguments : Hearing Date: June 8, 2011 AB 554 Consultant: Alma Perez Page 5 Senate Committee on Labor and Industrial Relations None received. 6. Prior Legislation : AB 2726 (B. Lowenthal) of 2010: Vetoed by Governor This bill would have allowed apprenticeship programs approved by DAS to be counted as job placement and directed WIA funds to DAS approved apprentice occupations. AB 2726 was vetoed by the Governor. In his veto message, the Governor stated that, "The California Workforce Investment Board is currently engaged with the local workforce investment boards, key stakeholder and partners in the collaboration and coordination of programs and services funded under the Workforce Investment Act of 1998. This bill would duplicate efforts; therefore, this legislation is unnecessary." SUPPORT California State Building and Construction Trades Council - Sponsor California Labor Federation OPPOSITION None received Hearing Date: June 8, 2011 AB 554 Consultant: Alma Perez Page 6 Senate Committee on Labor and Industrial Relations