Why new apprenticeship rules could have a negative impact on businesses and workers

The recent release of new federal regulations regarding apprenticeship training is a milestone. The 180-page Strengthening the National Apprenticeship System proposes significant expansion of regulations governing registered apprenticeships approved by the Department of Labor and state agencies and provided by employers.

In some ways, this initiative welcomes the nation's growing interest in apprenticeships. Until recently, apprenticeships in the United States received little attention outside of the construction industry. It was a remote part of the Ministry of Labor with minimal funding.

But since 2015, three administrations and legislators have begun to recognize the potential of apprenticeships to improve skills and expand opportunities at scale.

Federal spending on apprenticeships has soared from about $30 million a year to more than $250 million a year. And although apprenticeship funding remains small compared to other Department of Labor training allocations ($1.7 billion for Job Corps alone) and the scale of apprenticeships in the United States remains limited relative to other countries, apprenticeships have broad bipartisan support. We are gathering support.

But more attention is a double-edged sword. And in its latest effort to clarify the rules, the Labor Department may be creating an entirely new challenge.

The new rules are broad and lengthy. Many aim to strengthen protection for trainees. Other topics covered include how employers register for programs and how the Federal Apprenticeship Authority defines occupations eligible for apprenticeships. Some are also creating an entirely new category of registered apprenticeships related to career and technical education (CTE) in high school and higher education programs.

There's a lot to admire about these new rules. For example, they are calling for the creation of national occupational standards that have the potential to reduce the burden on employers of having to develop and specify the skills they plan to teach themselves. These limit the power of state legislatures to delay program enrollment (though, so far, the Department of Apprenticeship has not enforced this provision). It also provides more flexibility in the number of skilled workers (or artisans) needed compared to apprenticeships.

However, the rule goes too far in adding extensive new reporting requirements, including a requirement that employers demonstrate financial viability. This sounds good, but what kind of company would submit their accounts to the Department of Labor for the uncertain benefits of enrolling in a program?

This negative impact can be particularly detrimental to small businesses interested in apprenticeships. Given the enormous amount of additional red tape, one wonders whether the rule makers considered the trade-off between protecting apprentices and attracting employers to create apprenticeship programs. There is. Regulators do not have the power to allocate funds for apprenticeships. However, without such funding, these new requirements may preclude participation in the Registered Apprenticeship Scheme.

The new “CTE apprenticeship” system proposed in the rule is another example of a good idea gone awry. These are intended as a response to long-standing efforts to involve young people in apprenticeships. The countries most successful in expanding apprenticeships start apprenticeships by age 17. This is significantly lower than the average age of an apprentice in the United States (30 years). However, instead of encouraging efforts to begin registered apprenticeships in late high school, the Department of Labor's proposal would completely replace the alternative system of moving from vocational competencies to industry standards, increasing classroom instruction, and reducing work-based learning. This is to be established.

It makes sense to use high school and community college CTE programs for the classroom instruction portion of enrollment training, as well as hiring young people right out of high school. But you don't need a separate system for that.

With these regulations, the Ministry of Labor aims to ensure that all apprentices registered are of high quality and achieve diversity goals. However, doing so by adding a range of new obligations for employers is likely to conflict with the goal of expanding apprenticeships. To build on today's registered apprenticeship system, the rules guiding employers need to be simplified, not dramatically expanded.

Even with good intentions, the new rules will not go far enough to expand U.S. apprenticeships.

An apprenticeship is a job, not a training program. And unless employers are willing to hire untrained workers and pay them before they are fully productive, apprenticeship opportunities will remain limited. To realize their potential, the federal government must also provide sufficient funding to stimulate employers to hire enough apprentices for every American who wants a job. For example, consider a “pay for apprenticeship” model where an employer partner funds an intermediary organization that sells and organizes apprenticeships based on the number of apprentices it actually hires and trains. Such a policy would be a welcome carrot to offset rules that primarily add new sticks.

Robert I. Lerman is the president of the nonprofit organization Apprenticeships for America.