Wage Replacement Expense Policy Guidance

MLTC Workforce Investment Program Wage Replacement Expense Policy

April 27, 2018

1. The total training dollars permitted to be used to cover back–fill or training incentive expenses shall not exceed 50% of the annual allotment of training dollars per LTC WIO per region.
2. For the purposes of the MLTC Workforce Investment Program ("Program"), back–fill expenses are defined as the expenses when current employees attend LTC WIO developed training to fulfill Program and DSRIP projects and goals; and that their absence from their assignments requires the additional expense of a temporary or covering worker. The additional expense is the allowable back–fill cost, specifically compensation of staff performing back–fill duties for the time that they are performing these duties while the participant is in training.
3. For the purposes of this Program, training incentive expenses are defined as the expenses reserved for current employees that attend Program related trainings which require additional hours beyond the normal work schedule. The additional compensation for such time in trainings is the allowable training incentive expense, specifically intended as compensation of staff attending trainings after hours or potentially in lieu of attending a second job. The training incentive expense must be at no more than the base, regular rate of pay of the employees.
   
   Update for Year 3 (April 2020 – March 2021) only: Training incentive expenses during the period April 1, 2020 through March 31, 2021 may be paid to the worker by the employer or directly to the worker by the WIO, consistent with all rules established for the use of training incentive expenses, if employers consent to such an arrangement. If paid directly by the WIO, the WIO is responsible for any legal obligations created by this payment structure. These legal obligations may include issuing any required tax forms and providing other information on these payments to the worker for their 2020 and/or 2021 taxes.
   
   Additionally, appropriate documentation must be maintained by the WIO to confirm upon audit that payments made to workers coincide with training attended and that training occurred outside the worker’s normal work hours.
4. All LTC WIOs pursuing a training strategy that intends to utilize a portion of their budget for back–fill or training incentive expenses should create a tracking system of funding back–fill and training incentive expenses based on the definitions cited above for the purposes of reporting and budget. LTC WIOs are welcome to leverage existing tracking systems for these efforts, but any system used must possess a mechanism to discretely track back–fill and training incentive expenses. Further, any tracking system should have all the necessary reviews and controls consistent with any invoicing and payment function for expenses claimed to assure funds are being reimbursed per the policy and definitions for back–fill and training incentive expenses related to MLTC Workforce Investment Program training.