Why the new rules of practice could be bad for business

Why the new rules of practice could be bad for business

The recent release of new federal practice rules is a historic event. The National Internship System Improvements, which span 180 pages, propose a significant expansion of regulations that oversee registered internships, 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 learning. Until recently, apprenticeships in America were hardly seen outside the construction profession. Even within the Department of Labor, they were a backwater with minimal funding.

But starting in 2015, three administrations and lawmakers began to recognize the practice’s potential to improve skills and expand opportunities at scale.

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

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

The new rules are very broad and lengthy. Many aim to increase protection for students. Others deal with how employers register their programs and how the Federal Apprenticeship Office determines an appropriate occupation for an apprenticeship. And some create an entirely new category of registered internships related to career and technical education (CTE) in high schools and postsecondary programs.

There is much to commend in these new rules. For example, they call for the construction of national occupational standards with the potential to reduce the burden on employers of having to develop and specify the skills they plan to teach themselves. They limit the power of state boards to slow program enrollments (although so far the Office of Practice has not enforced this provision). They also increase flexibility in the number of skilled workers (or journeymen) required compared to apprentices.

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

The negative effect can be particularly harmful for small businesses interested in the practice. Given the sheer amount of paperwork involved, one wonders if the rulemakers considered the trade-off between protecting learners and attracting employers to create apprenticeships. Regulators have no power to allocate money to practices. But without such funding, new requirements such as these are likely to discourage participation in the registered practice system.

The “new CTE studies” proposed in the rules are another example of a good idea gone bad. They are intended as a response to long overdue efforts to engage young people in practice; the countries most successful at scaling up apprenticeships start training apprentices at age 17 — well below the average age of US apprentices (30). However, instead of encouraging initiatives to begin apprenticeships in late high school, the Labor Department’s proposal would create an entirely alternative system, one that shifts from vocational competency to industry standards and increases learning in classroom and reduces work-based learning.

Using high school and community college CTE programs for the classroom component of internships makes sense, as does recruiting youth right out of high school. But we don’t need a special system to do this.

With these rules, the Department of Labor aims to ensure that all registered internships are of high quality and meet diversity goals. However, doing so by adding a number of new obligations on employers is likely to defeat the purpose of the apprenticeship scale. Building on today’s registered practices should involve simplifying rather than dramatically expanding the rules governing employers.

However well-intentioned, the new rules won’t be enough to scale the practices in the US.

Internships are not training programs, they are 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 sufficient funding to incentivize employers to hire enough apprentices for all Americans who want to attend one. Consider, for example, a “pay for internship” model that would provide funding to intermediary organizations that sell and arrange internships based on the number of interns that 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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