Department of Rehabilitation's On the Job Training (OTJ)

 

What is OJT?

OJT is a three-way “non-binding” among the Clients, the DOR Counselor, and the Business. “Non-binding” means when any party of the signed agreement is not happy that can terminate the contract and walk away without penalty. When the contract is terminated all monetary payments are stopped.

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What is the goal of OJT?

OJT is an incentive for businesses to hire DOR clients by providing a training stipend to offset the cost of training. The goal of the OJT is to provide direct placement where a business trains the clients and maintains a vested interest in the training process. This training investment demonstrates the clients’ ability and can lead to long-term placement.

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When does DOR use OJT?

OJT is used when negotiating employment for a client, and to assist the business with expenses related to the training of the clients. OJT is to be used strictly as a training stipend and should not be used to supplement wages. The clients must be receiving at least minimum wage when the contract is in effect.  The weekly work hours of the clients are flexible and should be agreed upon by the participants. DOR will need to set up a meeting with the hiring manager/owner to discuss the contract terms. Use the “On The Job Training Agreement” form to draw up the contract. The form titles: Payee Data Record STD 204, has to be used in conjunction with the OJT contract.  This form will verify that the employer has a Federal Employer Identification Number ad a taxpayer ID number.

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How much money can we offer to support OJT for clients?

DOR Counselors with post-approval have the ability to offer employer up to $4,999.99 for OJT without RS and DA involvement. The amount of the training stipend should not exceed the clients’ salary and should be based on the complexity of the job, and the number of hours the business will actively train the clients. The amount of the OJT is negotiated between DOR and the hiring manager to offset training coats. Highly skills jobs may require higher OJT funding as well as some clients who may need more training than usual. DOR and the hiring manager will negotiate the amount agreed upon.  If the amount is more than $4999.99, DA approval will be required. The amount of the agreed upon OJT will be paid to the business after the completion of each monthly training period outlined in the OJT Agreement.  The employer will submit an invoice and a monthly training report.

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How long should the contract last?

Employers will have a 90-day probationary period which can be used to factor in the length of the training period. Money is typically paid in the following increments: 1st month $2,500.00, 2nd month $1,500.00 and 3rd month $999.99 equals $4,999.99.

 

Does DOR pay worker’s compensation fees?

DOR cannot pay the fees for the employer to add an employee onto their worker’s compensation plan.

Attention employers If you hire an individual from a WOTC targeted group your company may be eligible for $1,200 to $9,600 in federal tax credits

 

What is the Work Opportunity Tax Credit (WOTC) Program?

WOTC is a federal income tax credit incentive provided to private sector employers. An employer may be eligible for WOTC when they hire from certain target groups of job seekers who face employment barriers. The WOTC tax credit is a one-time tax credit for each new hire – and there is no limit to the number of new hires who can qualify an employer for a tax credit. The requirements for this program are set by the Internal Revenue Service and the U.S. Department of Labor, Employment and Training Administration.

 

Why Employment-based Tax Credits Are A Win For You And Your Employees?

With the cost of doing business consistently on the rise combined with the increasing difficulty to find/retain great employees, there is no better time to pursue employment-based tax credits.  There are both federal and state employment-based credits available that can help businesses offset income tax liability.  Some of these programs are based on the creation of net new jobs, while others are offered to employers for employing individuals from specific target groups.  The most popular of these programs is the Federal Work Opportunity Tax Credit (WOTC).  The WOTC is a federal tax credit program that incentivizes employers to hire individuals who typically face barriers to employment such as ex-felons or Veterans.  The tax credit can range from a maximum of $1,200 to $9,600 for each qualified new hire depending upon the new hire’s target category and there are currently 14 different target categories under which an employee may qualify.