E&W Blog

It’s been a busy news week, but one item hasn’t received the attention it deserves. The Employment and Training Administration (ETA) at the Department of Labor (DOL) issued guidance earlier this week regarding the use of “Pay for Performance” funds under the Workforce Innovation and Opportunity Act (WIOA).

What is WIOA?

WIOA is bipartisan, bicameral legislation that streamlines America’s workforce development system to get more Americans back to work. Specifically, it helps reduce unnecessary bureaucracy, close the skills gap, and provide greater accountability. The implementation of “Pay for Performance” strategies was a Republican-led priority in the 2014 reauthorization of WIOA and was included in the House passed and Rep. Foxx-authored SKILLS Act.

What does DOL’s guidance do?

DOL’s forward-looking guidance encourages workforce boards to pay for outcomes rather than just sending money out the door. Specifically, the guidance states that WIOA funds are allowed to be used for “Pay for Performance” contract strategies and related activities at the local level. It also clarifies that states may use the Governor’s Reserve funds on “Pay for Performance” activities.

Why is this a good thing?

This will allow for new and innovative providers and is more consistent with how privately funded philanthropic efforts function. Most importantly, the continued use and expansion of “Pay for Performance” allows our workforce system to better serve Americans all over the country who are looking to upskill and reskill by increasing both accountability and effectiveness.

Read more about the guidance here.