"step-up" program
questions and answers

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Subject: "Step-Up" Program - Questions and Answers (Issue #2)

The following Questions and Answers (Issue #2) provide additional guidance concerning "Step-Up". The questions addressed in this Issue were presented by Office of Public and Indian Housing (PIH) staff. The Issue was initially distributed to all Labor Relations field staff via CC:Mail on September 22, 1992. Future issues of "Step-Up" Q & A's will be developed and distributed through the LABOR RELATIONS LETTERS directives series, as needed.

Q1. Are wages earned by "Step-Up" participants in this program eligible for exclusion as income for rent determination purposes on the basis that the wages are earned pursuant to a HUD training program?

A1.Yes. PIH issued Notice PIH 92-48 (PHA) (Exclusion of income received under training programs) on October 16, 1992, which includes "Step-Up" among the training programs for which wages earned pursuant to the program are excluded from income for rent determination purposes.

Q2. Has an arrangement been developed whereby "Step-Up" participants, by virtue of the income earned, will not be denied other income-based benefits they may presently be receiving such as AFDC, food stamps, medical insurance, etc?

A2. At present, no automatic benefit-wide protection is available for "Step-Up" apprentices. However, we have learned that transitional benefits (up to one year) for medical coverage and child care (the most costly and significant of benefits provided) are available for persons who lose their entitlement to AFDC due to increased income. These transitional benefits can be arranged through local offices administering AFDC programs. The Office of Labor Relations is exploring other ways of minimizing disincentives arising from benefit reduction due to the income earned through "Step-Up" apprenticeship. A national "Step-Up" Advisory Council including the Department of Health and Human Services has been established to examine this issue along with other key objectives.

Q3. The "National Apprenticeship and Training Standards (Guidelines)" for NAHRO have been amended to include the "Step-Up" program. It is unclear whether only that section (Paragraph 24) is applicable to "Step-Up" or do the other provisions of the training standards kick-in. For example, the standards call for an apprenticeship agreement between the employee and the sponsor; is this required in "Step-Up"?

A3. All of the provisions of the training standards are applicable to the "Step-Up" program, including the apprenticeship agreement. However, it is important to recognize that the national guidelines cover a broad range of occupations and apprenticeship terms. Local program standards will be tailored to the type of program that will be administered by the housing authority (HA). Also, some aspects of locally-registered training standards may not be implemented during the "Step-Up" year. Please consult with Labor Relations if further clarification is required.

Q4. There is a one-year maximum term for a participant to remain in the special "Step-Up" status (i.e., before the participant must be placed in an appropriate apprenticeship or training program, or career-oriented employment). Is this one calendar year or 2080 hours of work?

A4.The one-year term is a calendar year. Please see also #6 (below) concerning appropriate placement for "Step-Up" apprentices.

Q5.The "Step-Up" Plan (Paragraph 4) speaks of the criteria for having a program approved. Who is the approving body?

A5. "Step-Up" programs will be jointly approved by HUD's Office of Labor Relations and the Department of Labor's Bureau of Apprenticeship and Training (BAT) or a BAT-recognized State apprenticeship agency, as appropriate.

Q6. Paragraph 9 (The "Step-Up" Plan) speaks of out-placement at the conclusion of the Step-Up status year. How binding a commitment must be made by the sponsor to the participant in this regard? We note that in the Chicago Housing Authority (CHA) program, the CHA makes no apparent promise of a placement -- they indicate the person will be given job referrals and placed in a job bank and the CHA will "actively pursue" apprenticeship opportunities. Are these good faith efforts sufficient to meet the requirements for placement?

A6. The sponsor is not expected to guarantee continuing apprenticeship or other employment to "Step-Up" apprentices after their "Step-Up" status year. The standard here, as in many apprenticeship programs, is the reasonableness of the efforts taken by the sponsor. We recognize that most HA's will not be in a position to hire the "Step-Up" apprentices directly on their own staff on a permanent basis. However, the sponsor must take all reasonable actions to identify as many placement opportunities as possible and to aggressively seek to successfully place "Step-Up" apprentices in continuing training or career-oriented positions. With respect to the Chicago "Step-Up" program, the CHA has made a substantial commitment to place "Step-Up" apprentices in CHA maintenance positions as well as in specific union trade apprenticeship programs.

Q7. Along the same lines, if a participant accepts a regular position with an outside party during the course of the "Step-Up" year, does that fulfill the placement requirement for the HA?

A7. Certainly. Employment with a contractor or other outside party is considered successful placement, and placement can occur at any time during the "Step-Up" year.

Q8. The program sponsor is required to provide or arrange for the provision of the necessary support services for the participants (daycare, education, work clothes, transportation, etc.). Are expenditures for these services eligible uses of CIAP money and Comp Grant money?

A8. We understand that some of these services may be eligible for CIAP and/or Comp Grant funding. Consultation with PIH about specific cases is recommended.

More information about "Step-Up" can be obtained from this office by calling (202)708-0370.

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