Apprentice Utilization Requirements

Apprentice Utilization Policies to Support Inclusive Workforces

Apprentice utilization policies are laws, ordinances, and contractual agreements that set goals or requirements for the use of apprentice labor (or apprentice utilization) on publicly funded construction projects. These policies spur demand for apprentice labor, which in turn helps ensure pipelines of skilled and experienced workers for future projects. The policies can also place the responsibility for hiring and training the future inclusive workforce on all developers and employers who launch projects within the policies’ scopes. Policies for apprentice utilization can reflect blanket approaches that apply to all public projects over a certain spending threshold or tailored approaches for individual projects.

Several states and many local governments have adopted overarching requirements for apprentice utilization on their public works projects. For instance, Washington State requires at least 15% of labor hours to be completed by apprentices on public works projects with an estimated cost of $1 million or more.^[2] Nevada’s requirements specify that public works projects must employ at least one apprentice for a minimum percentage of total labor hours for each type of work performed on the project.^[3] Likewise, Salt Lake City, Utah requires at least 10% of labor hours to be completed by apprentices from each trade working on the project.^[4]

Alternatively, requirements for apprentice utilization can adopt a per-project approach that employs a project labor agreement (PLA) or community benefits agreement (CBA). Many PLAs and CBAs include requirements for apprentice labor that specify a target percentage of project hours to be completed by workers in RAPs. These agreements often include local hiring goals and target thresholds for including people with disabilities, people of color, women, and veterans. Both PLAs and CBAs—plus their associated labor requirements—offer useful tools for creating diverse pipelines into construction careers with living wages.

Limited research has examined the use of PLAs and CBAs and the impact of both policies for apprentice utilization. Qualitative reports from projects that enforce apprentice utilization indicate that this approach shows strong potential to expand opportunities for job seekers, especially for people who are underrepresented in the workforce. However, the success of these requirements for apprentice utilization may rely upon their enforcement and support. Legislation, ordinances, other policies, and PLAs and CBAs may not effectively yield strong outcomes without aligned oversight, enforcement, and incentives that can lead developers to meet set goals for hiring apprentices.

Applying Apprentice Utilization Requirements to the Healthcare Sector

Research literature does not yield relevant findings for policies on apprentice utilization outside of construction and the sectors adjacent to construction, such as clean energy infrastructure. However, the recent interest at the federal and state level shows that utilization policies should be applied to non-construction sectors. The healthcare sector represents a particularly fruitful target for these policies. It has a strong and growing demand for skilled workers, a range of entry-level, middle-skill, and high-skill job positions, and a well-founded regulatory and funding relationship with federal and state agencies.

DOL’s Bureau of Labor Statistics (BLS) projects employment in healthcare occupations to grow by 15% by 2029, adding about 2.4 million new jobs.^[5] However, the healthcare industry faces many challenges to meet the growing demand. These challenges include an aging (retiring) workforce, limited training capacity, and rapidly changing technologies that can increase the need to upskill incumbent workers. The healthcare sector must meet the need to attract new talent that can attain the required education, skills, and credentials.^[6]

RAPs offer a practical solution to address many of these hiring challenges. The earn-and-learn nature of RAPs offers affordable postsecondary education and training in the healthcare sector, opens doors for a broader and more diverse workforce, and increases the supply of potential workers. The internal and transparent career pathways of RAPs incentivize new hires and incumbent employees to stay and upskill, reducing costs associated with employee turnover. Learning on the job from skilled mentors provides new employees with faster onboarding into their company’s culture, practices, and shared norms. This approach helps to reduce worksite accidents and errors and drives enhanced workplace performance. It also shifts the focus of training to classroom instruction and expands the healthcare workforce system’s overall capacity for job training.^[7],[8],[9] Better training solutions can help ensure that entry level jobs in the healthcare sector support pathways to middle- and high-skill jobs—along with corresponding higher wages.

The field of home health aides and personal care attendants comprises one of the fastest growing occupations in the healthcare industry; BLS projects that this occupation will add over a million new jobs in the U.S. by 2029. However, these jobs typically pay an average of $13.02 per hour;^[10] according to a recent report published by Massachusetts Institute of Technology (MIT), even “$15 an hour is not a living wage for most Americans.” Without clear career ladders to jobs that pay middle-class, good wages, entry-level workers will continue to struggle to provide for their families. In turn, employers will grapple with the constant churn of replacing a workforce that earns low salaries. RAPs can provide the answer for this problem by offering articulated pathways and routes to wage progression and skill-building that can bridge the entry-level workforce into middle-skill jobs.^[11]

Healthcare also represents a high-impact target to pursue requirements for apprentice utilization because of its close funding relationships with state and federal agencies. Medicaid and Medicare, which are both government programs for health insurance, are the two largest payers for healthcare in the U.S.^[12] As such, these programs have a strong position to incentivize and negotiate with healthcare employers to set high utilization standards.

Similar to requirements for apprentice utilization by state and local governments (through laws, ordinances, agreements, and incentives), Medicare, Medicaid, and their state-level partners throughout the U.S. can adopt apprentice utilization. Several key policy levers offer fruitful avenues to explore how to introduce these programs to employers:

The first policy lever entails changing the Conditions of Participation (CoPs) and Conditions for Coverage (CfCs) to require apprentice utilization. CoPs and CfCs are requirements that healthcare organizations must meet to begin and continue participating in the Medicare and Medicaid programs. CoPs and CfCs currently set some standards for labor, such as core requirements for credentialing. Adjusting the CoPs and CfCs requires an amendment to the Code of Federal Regulations through rulemaking implemented by the U.S. Secretary of Health and Human Services (HHS). These types of changes have far- and deep-ranging impacts on the healthcare system that can foster efforts to develop implementation models that produce data and measurable outcomes. These outcomes can provide evidence to support the broader use of policies for apprentice utilization and effective models for implementation. The following two policy levers drive incentives to pilot models for apprentice utilization.

A second policy lever involves incentivizing states to implement and enforce apprentice utilization by increasing the Federal Medical Assistance Percentage (FMAP) for Medicaid and Multiplier. States operate their own Medicaid programs and share the funding cost with the Federal Government. The FMAP rate affects the amount the Federal Government reimburses states for the federal share of most Medicaid expenditures. Each state has a different system in place to regulate and work with its healthcare employers. The Federal Government could incentivize states that agree to pilot, enforce, and study the effects of different policies and models for apprentice utilization, by increasing the FMAP to offset the associated costs. This approach would allow for customizing the policies for apprentice utilization to match the infrastructure, employer needs, and employer landscape of specific states.

Finally, the third policy lever would use the Innovation Center at the Centers for Medicare & Medicaid Services (CMS) to pilot policies for apprentice utilization and related programs with states and employers. The CMS Innovation Center supports the development and testing of innovative models to improve and enhance healthcare payments and the delivery of healthcare services. Through its role of overseeing, fostering, and funding innovation in the healthcare sector, the CMS Innovation Center could incentivize and study policies for apprentice utilization with volunteer states or employers. Similar to the option of increasing the FMAP, grants from the CMS Innovation Center would provide an incentive to states and employers willing to pilot and study different policies and models for apprentice utilization.

Forming new partnerships with key stakeholders to execute these strategies can help advance inclusive apprenticeships. In fact, partnerships among DOL, states, and healthcare businesses have resulted in widespread focused investments in apprenticeships for the healthcare sector, related system infrastructure, and industry intermediaries. In coordination, DOL, HHS, and their partners that advance apprenticeships in healthcare could offer tools, resources, and strategies to help implement key policies for apprenticeship utilization. These partnerships could propel new efforts to build inclusive skilled pipelines of apprentice labor.

Conclusion

Policies for apprentice utilization can support key priorities that emphasize skilled workers as a crucial part of building out infrastructure. Thus, public investments to support infrastructure should foster efforts to grow sources of new talent and inclusive pipelines of skilled workers. RAPs provide an integral model that can offer opportunities for diverse job seekers—particularly people who may experience barriers to attain postsecondary education and training—while also enabling employers to increase and retain skilled workers. The primary challenge facing our workforce and education system involves scaling RAPs so that they can carry support from system-level infrastructure. This pursuit underscores the goal to make RAPs a sustainable, affordable, and fruitful option for employers, and ensure that it is widely available for all diverse job seekers in the U.S.

Consequently, policies for apprentice utilization offer one tool to increase the number of opportunities to participate in RAPs. As we move forward to explore the adoption and use of apprenticeships in the healthcare sector, gathering data on effective policies and practices represents a critical next step. The research questions below can help guide this work:

• What can we learn from existing policies for apprentice utilization in the construction sector? Which types of enforcement mechanisms and supportive services (such as the use of pre-apprenticeships) make apprentice utilization an effective way to help diversify the construction workforce? How can these mechanisms and services help expand access for underrepresented job seekers, including people with disabilities?
• How can we effectively pilot apprentice utilization in the healthcare industry? How can employers, industry intermediaries for healthcare, and healthcare unions inform the next steps to design and enhance impactful pilot programs? Which key healthcare occupations have the highest demand and best alignment with an apprentice model? Which career ladders for healthcare sector apprenticeships are active and ready to test in a utilization pilot?

The widespread use of policies for apprentice utilization in the construction sector suggests that it offers an effective way to build demand for talented apprentices and inclusive pipelines for skilled labor. Collecting evidence on outcomes for apprentice utilization can help produce actionable information for how to apply these policies to emerging industries. This pursuit also helps create a cross-sector group of stakeholders who can serve as champions to expand inclusive apprenticeships in all sectors.