PA 15-127—HB 6871

Labor and Public Employees Committee

AN ACT CONCERNING MINOR AND CLARIFYING CHANGES TO THE SUBSIDIZED TRAINING AND EMPLOYMENT PROGRAM AND OTHER STATUTES AFFECTING THE LABOR DEPARTMENT

SUMMARY: This act makes several changes in two Department of Labor (DOL) programs: the Subsidized Training and Employment Program (STEP) and the Unemployed Armed Forces Member STEP. By law, these programs provide grants to qualifying businesses and manufacturers to help offset the cost of training and compensating eligible new employees and previously unemployed veterans during their first 180 days on the job.

The act:

1. prohibits eligible businesses and manufacturers from receiving grants for new employees hired to replace workers they (a) currently employ or (b) terminated, unless they demonstrate just cause for replacing or terminating the workers;

2. (a) requires DOL to monitor the outside consultants or Workforce Investment Boards (WIB) it retains to run the programs, (b) allows it to pay for the monitoring with the funds set aside for covering the programs' marketing and operations costs, and (c) reduces the amount of funds set aside to cover such costs;

3. allows DOL to use certain funds set aside for the Unemployed Armed Forces Member STEP's administrative costs to cover transportation costs for eligible veterans;

4. renames the STEP “new apprentice” program the “preapprentice program” and expands the eligible employees for which businesses may receive STEP grants; and

5. specifies that the state and its political subdivisions do not qualify for STEP grants.

The act also eliminates obsolete provisions relating to the Fair Wage Board, which PA 13-140 repealed.

EFFECTIVE DATE: October 1, 2015, except for the provisions eliminating obsolete statutes, which are effective upon passage.

USE OF STEP FUNDS ALLOCATED FOR ADMINISTRATIVE COSTS

Prior law allowed DOL to use in FY 13 up to 4% of funds allocated for STEP and the Unemployed Armed Forces Member STEP to cover the programs' marketing and operations costs. The act (1) reduces, from 4% to 1%, the amount of the funds set aside for such purposes; (2) allows DOL to use the funds, at the commissioner's discretion, in any fiscal year; and (3) allows it to use the funds to also cover the cost of monitoring the outside consultants or WIBs it retains to run the programs.

The law establishes, under the STEP programs, separate 4% set-asides the DOL commissioner may use to pay the outside consultants or WIBs running the programs. Under the act, DOL may use the funds set aside under the Unemployed Armed Forces Member STEP program to cover the transportation costs for eligible veterans for whom businesses are receiving a STEP grant.

STEP PREAPPRENTICE PROGRAM

PA 14-38 created a “new apprentice” grant program under STEP to subsidize on-the-job training costs incurred by small businesses and manufacturers that hire high school or college students. The act expands the program to include individuals (1) age 18 or younger and (2) employed under a written agreement with an apprenticeship program sponsor for a training and employment period of up to 2,000 hours or 24 months. It also replaces the term “new apprentice” with “preapprentice.

By law, a preapprentice does not include someone employed (1) in Connecticut by a relative at an eligible small business during the previous 12 months or (2) on a temporary or seasonal basis by a retailer that sells goods primarily used for personal, family, or household purposes.

BACKGROUND

Businesses Qualifying for STEP and Unemployed Armed Forces Member STEP

STEP and the Unemployed Armed Forces Member STEP are open to different types of businesses. STEP is open to small businesses and manufacturers that (1) employed 100 or fewer people during at least half of their working days in the prior 12 months, (2) have operations in Connecticut, (3) have been registered to do business in Connecticut for at least 12 months, and (4) are current on all state and local taxes. The Unemployed Armed Forces Member STEP is open to businesses of any size that meet the other eligibility criteria.

WIBs

The state's five WIBs are responsible for oversight, strategic planning, and policymaking related to workforce development activities provided through local One-Stop CTWorks Career Centers.

OLR Tracking: DC: JKL: MS: bs