Call to Order and Roll Call
The 1st meeting of the Interim Joint Committee on Labor and Industry was held on Thursday, June 16, 2016, at 10:00 AM, in Room 131 of the Capitol Annex. Representative Rick G. Nelson, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Alice Forgy Kerr, Co-Chair; Representative Rick G. Nelson, Co-Chair; Senators Perry B. Clark, Carroll Gibson, Chris Girdler, Ernie Harris, Wil Schroder, Reginald Thomas, Mike Wilson, and Max Wise; Representatives Lynn Bechler, Linda Belcher, Regina Bunch, Larry Clark, Will Coursey, Jeffery Donohue, Jim DuPlessis, Dennis Horlander, Adam Koenig, Charles Miller, Jerry T. Miller, Terry Mills, Tom Riner, John Short, Jim Stewart III, and James Tipton.
Guests: Commissioner Beth Kuhn, Department of Workforce Investment, and Andy Hightower, Chief of Staff, Education and Workforce Development Cabinet.
LRC Staff: Carla Montgomery, Adanna Hydes, Andrew Manno, Sasche Allen, and Jay Jacobs.
Tour of Workforce Issues
Commissioner Beth Kuhn outlined the two main goals that the Department of Workforce Investment currently has in regards to Kentucky’s workforce, which include leveraging partnerships to build the state’s talent pipeline and building a service delivery system that represents excellence in customer service while reflecting budget realities. A strong partnership between the education system and employers in the workforce must be maintained to incentivize opportunities for those who may have barriers to employment and those who receive public benefits to join the workforce. With the assistance of the Kentucky Center for Education and Workforce Statistics, Kentucky has a unique supply data system that allows the transition between benefits coaching to career coaching. More demand data is needed, however to ensure that the needs of employers is being met. The Kentucky Career Center in conjunction with the department provides customer service for businesses and employers as well as for job seekers to offer services such as talent recruitment assistance, candidate pre-screening and assessment, access to local job openings, and professional resume services.
Unemployment Insurance Update
During the recession the Unemployment Insurance Trust Fund fell into the negative by almost $1 billion, but as of January 2016 Kentucky has a positive trust fund balance. It has been estimated by the end of 2016 there should be a net positive balance of $240 million. On September 30, 2016 the trust fund balance is likely to cause an increase in maximum benefits from $415 per week to approximately $450 per week, a decrease in employer contributions, and a freeze in the taxable wage base for four years. The commissioner expressed some legislative priorities for the department during the upcoming session such as the clarification of the surcharge period, modernization of the employer payment process, revision of the employer protest period for appeals that is currently out of compliance with Federal timeliness requirements, revision of the unemployment benefits for military spouses, and clarification of successorship regulations.
Worker Adjustment and Retraining Notification (WARN)
In 1988 Congress passed the WARN Act, which required employers to provide adequate notice, 60 days, to workers to seek other employment before losing their jobs in the event of a plant closing or mass layoff. The department encourages employers to notify the Kentucky Division of Workforce and Employment Services as quickly as possible so comprehensive WARN materials can be distributed and services referenced to workers and employers. There is a Rapid Response Team in each local workforce development area to assist employers with customized services. The Rapid Response team can provide services such as assisting dislocated workers apply for unemployment benefits or finding financial assistance for job training.
Workforce Innovation and Opportunity Act (WIOA) Implementation
WIOA was passed in 2014 and has a large focus on operating comprehensive, technology-enabled career centers; developing and expanding partnerships to provide seamless assistance; regionalizing planning and administrative/management structure when appropriate; providing greater technical assistance, training, and monitoring of local workforce development areas; and focusing on career coaching and employer services. Integrated services are emphasized through WIOA by making it mandatory to maintain partnerships between the Department of Workforce Investment, which includes the Office for Vocational Rehabilitation, the Office for Employment and Training, and the Office for the Blind, and the local workforce boards. WIOA also has data requirements called common measures that make it mandatory for all of these offices to report the same type of data. Some of WIOA’s major milestones include the establishment of a new Kentucky Workforce Innovation Board and the agreements completed amongst the local workforce development boards. Fiscal agents have been competitively procured for all of the local workforce areas and the contracts are currently being finalized. Once the Federal WIOA regulations are received local and regional plans can be established and WIOA performance measures can be put in place.
Newly Funded Initiatives
Andy Hightower gave the members details about the Workforce Investment Fund and the Dual Credit Expansion that were made possible by legislation passed in the 2016 Regular Session. The Workforce Investment Fund is a $100 million bond pool that will fund qualifying projects to invest in Kentucky’s workforce. The objective of the fund is to require local education institutions to partner with employers to develop training that is in demand amongst employers with the intentions to continue building Kentucky’s talent pipeline. The Dual Credit Expansion will create a seamless transition to postsecondary education into the workforce by making it possible for high school students to earn college credit or industry-recognized certification. Costs of tuition will be capped at 33 percent of KCTCS full tuition, which is about $154 per course.
In response to Representative DuPlessis, Mr. Hightower stated that the federal government has just announced a pilot program that will allow high school students to utilize Pell Grant funds for dual credit courses. He also said the cabinet is willing to have conversations about the effectiveness of KEES funds and other ways to expand opportunities.
Addressing Representative Charles Miller, Mr. Hightower said that there are already schools in the state that offer dual credit programs, but the idea behind the dual credit expansion is to offer the opportunity to all students across the state. Due to fund restrictions in the budget, the first year of implementation the dual credit program will only be offered to high school seniors. A school’s original allotment will be based on the number of seniors within the school, but Mr. Hightower explained that this is not a direct scholarship program. The program has been designed to reimburse schools for successful completion of the dual credit courses.
Responding to a question posed by Representative Bechler, Commissioner Kuhn said that the department is building the requirements for modernization of the unemployment insurance system and employment services. Security and privacy of data collected from employees and employers is pertinent, and there is a market scan being done for the best system to do so.
Representative Clark suggested that the employers should furnish equipment for job training in an effort to make a better use of funds. He also mentioned that he had met with Secretary Hal Heiner, Commissioner Stephen Pruitt, and Secretary Derrick Ramsey to discuss the possibility of KEES money being available for apprenticeship programs. Representative Clark said that one barrier our education system has is high school counselors not advocating technical training or apprenticeship programs to students. Lastly, he commended Hardin County schools for their Work Ethic Certificate program. Commissioner Kuhn commented, saying career oriented guidance counselors is an area of interest for the department to study.
Addressing a concern of Representative Nelson’s, Commissioner Kuhn said she would be in favor of discussing altering the number of days workers are given notice before a plant closing or mass layoff required under the WARN Act.
After comments and concerns from Representative Belcher, Mr. Hightower stated that the cabinet intends to advertise the schools taking advantage of the dual credit program in an effort to increase the number of participating schools. Commissioner Kuhn affirmed that the department is focused on all students, including those with disabilities. She pointed out that under WIOA there will be pre-employment transition services offered to individuals starting at age 14.
Representative Horlander made brief remarks about a dual credit program he participated in through Bellarmine University in 1968.
In response to Senator Thomas, Commissioner Kuhn described demand data as anticipated needs of employers. Mr. Hightower followed up by informing members that all data collected will be published and updated annually, including supply and demand data, in combination with data from the Kentucky Center for Education and Workforce Statistics and other partners.
Responding to Senator Gibson, Commissioner Kuhn explained that the unemployment insurance trust fund is maintained by a combination of state and federal regulations and requirements. Mr. Hightower reiterated that on September 30, 2016 the trust fund balance is likely to trigger a freeze in the taxable wage base for the next four years. Commissioner Kuhn concluded by restating that one issue the department wants to resolve during the upcoming session is the clarification of the surcharge period and where those funds are allocated after they are collected.
There being no further business, the meeting was adjourned at 11:18 a.m.