A New Opportunity for Evidence-Driven Workforce Innovation
The U.S. Department of Labor (DOL) recently released two new Training and Employment Guidance Letters (TEGLs) that allow states to modernize how they design, fund, and deliver workforce programs funded under the Workforce Innovation and Opportunity Act (WIOA). DOL uses TEGLs to set priorities and share official guidance on WIOA policy and operations to state and local workforce systems. TEGL 05-25 (Maximizing Innovation in WIOA Programs) encourages states to submit waivers from WIOA requirements in order to pursue new and innovative approaches to workforce development. TEGL 07-25 (Modification Requirements for WIOA State Plans for Program Years 2026 and 2027) outlines priorities for states to include in their two-year updates for WIOA Unified and Combined State Plans.
The Role of WIOA State Plans, New Waivers In Driving Better Workforce Outcomes
In both TEGL 05-25 and 07-25, DOL encourages states to align their WIOA State Plan updates and WIOA waiver requests with the five pillars articulated in the America’s Talent Strategy (Industry-Driven Strategies, Worker Mobility, Integrated Systems, Accountability, and Flexibility and Innovation) released by the Trump Administration in August 2025.
Both guidance letters from DOL create an important opportunity for states to more effectively use limited WIOA funds to meaningfully improve outcomes, and also pursue new and innovative approaches to service delivery.
RFA’s Recommendations to Support An Evidence-Driven State Workforce System through WIOA State Plan Updates and WIOA Waiver Requests
Results for America encourages states to consider the following recommendations to embed evidence in their state workforce systems through their WIOA State Plan and WIOA waiver requests. These recommendations draw upon efforts already underway at the state and local level in the workforce system, as well as our ideas for incorporating evidence and innovation into a potential WIOA reauthorization. We also include resources on how states and local areas can shift their workforce dollars towards proven workforce programs, which we outline in our Workforce Evidence-Based Spending Guide.
Strategy 1: Update the WIOA State Plan to Include Definitions for Evidence-Based Programs
States can update their WIOA State Plans to include a definition of “Evidence-based program” and “Evidence-building program” and describe how the state will prioritize its WIOA formula funds towards programs and workforce development strategies meeting these definitions. RFA’s list of evidence definitions from state and local governments and our proposed evidence definition language that Congress should include in any WIOA reauthorization can be starting points for states to develop their own evidence definitions.
DOL’s guidance to states on what they should include in their WIOA State Plan updates (TEGL 07-25) emphasizes workforce system accountability, calls on states to use measurable results to identify ineffective activities, and for states to redirect funding toward programs and service providers that demonstrate success. This aligns with current requirements in WIOA State Plans for states to describe how they will assess and improve their programs and what research and evaluation activities will be done to inform those assessments.
This creates a practical opening for states to go beyond general commitments to “data-driven decision-making,” and instead include clear evidence definitions and how the state will prioritize its workforce investments in evidence-based programs. By defining and prioritizing evidence-based programs, states are more likely to achieve improved outcomes for the workforce system customers they serve.
States can also include in their WIOA State Plans how they plan to prioritize workforce development programs and strategies that meet evidence definitions with their limited WIOA funds. States can prioritize evidence-based workforce programs within state and local grants and contracts in two key ways: (1) require the use of evidence-based approaches in service delivery; and/or (2) award preference points for the use of evidence during the application review process giving priority to programs that meet the state’s definition of “evidence-based program” or “evidence-building program.”
Evidence Definitions at Work: Pennsylvania and Texas developed evidence definitions and prioritization strategies as part of their work with RFA’s State and Local Workforce Fellowship that has allowed them to prioritize their limited resources towards evidence-based workforce programs.
Strategy 2: Request a WIOA Waiver to Expand Performance-Based Contracting
DOL encourages states in TEGL 05-25 to apply for waivers to increase the amount of WIOA Title I program formula funds (Adult, Dislocated Worker, and Youth) that can be used for Pay-for-Performance (PFP) contracts from 10 percent to up to 50 percent to increase the effectiveness of local workforce development board dollars. Pay-for-Performance is a type of performance-based contract strategy available to states that aims to ensure local workforce development boards pay for participant outcomes achieved and not just services delivered. The current WIOA rules governing PFP contracting authority, however, are on the whole administratively difficult for boards to implement, cap or no cap. No local workforce development board has managed to execute a PFP contract to date.
States interested in expanding local workforce development boards’ use of PFP contracts can consider submitting a waiver request to relax additional PFP-specific requirements, such as:
- Allowing hybrid PFP contracts in which a portion of funds goes toward partial cost reimbursement while the remainder rewards outcomes; or
- Allowing boards to reallocate unused PFP funds to other allowable Title I uses instead of solely allowing them to reallocate to other PFP contracts.
States could also expand local boards’ ability to do non-PFP performance-based contracts by requesting a waiver to allow all funds obligated for performance-based contracts (including non-PFP ones) to remain available until expended. This would give boards more time to complete a performance-based contract and assess and reward longer-term outcomes. While funds set aside for PFP contracts remain available until expended, the administrative challenges of PFP mean this benefit has gone unused.
Performance-Based Contracts at Work: Partner4Work (Allegheny County, PA) structured performance-based payments in its Industry Recognized Training Pipeline so providers receive 50 percent at enrollment and 50 percent at credential completion—a straightforward model that can be extended to include retention and earnings milestones when longer performance windows are available.
America Forward and Apprenticeships for America have detailed how performance-based funding can significantly expand the reach of apprenticeships to new sectors, new populations, and new providers.
Strategy 3: Request a WIOA Waiver to Create Supplemental Eligible Training Provider List for Programs with Demonstrated Evidence of Effectiveness
States can request a waiver that creates a “Supplemental Eligible Training Provider List” (SETPL) for programs that meet either the state’s evidence definition or include the core components of sector-specific job training programs that have demonstrated effectiveness in boosting employment and wage outcomes. The SETPL could be a separate list of training providers or a designation on the state’s existing ETPL that would identify those programs for WIOA customers and local workforce development boards which programs are likely to produce and achieve positive outcomes from WIOA training funds.
Providers who achieve high-bar, long-term outcomes often require more than two years to work with and follow up with job seekers to ensure success. Therefore, providers identified on the SETPL offer models with strong causal evidence of achieving outcomes should be rewarded by being made eligible to receive contract terms for five years, or longer on a case-by-case basis. This structure would allow WIOA providers that already have evidence of their model’s effectiveness more time to implement their programs with fidelity, and to track participants to verify achievement of outcomes. This approach could provide meaningful information for the field and allow for the scaling of high-impact programs.
States who do not develop an evidence definition but are still interested in the SETPL concept could also define “evidence-based sector-specific job training” using core elements that distinguish high-performing sector-specific job training models:
- Sector-specific occupational training leading to industry-recognized credentials
- Deep employer collaboration (employers co-design curriculum and commit to hiring—not just advisory input)
- Job placement assistance
- Wraparound/supportive services (includes soft skills/career readiness training, case management, and financial supports like childcare and transportation)
Effective Programs at Work: RFA’s Economic Mobility Catalog summarizes the evidence base for effective sector-specific training programs and provides states and local areas with guidance for modeling their training investments on these high-quality approaches.
Strategy 4: Request a WIOA Waiver to Make WIOA Funding More Flexible
Local workforce development boards must spend their WIOA allocations within two years; in the third year any unused funds revert to the states for statewide activities or for reallocation to eligible local areas for expenditure in that year.
States can request a waiver to allow local workforce development boards to extend the shelf life of any WIOA dollars going towards programs that meet the state definition of “evidence-based program” or “evidence-building program.” This would give boards longer timeframes to implement evidence-based programs with fidelity or longer timeframes for promising programs to yield outcome data for evaluations.
States can also request waivers to relax restrictions and requirements for WIOA funds that are blended if those funds go toward an evidence-based program. Output and outcome data tracking and reporting would have to cover the entire pool of blended funds, not just the WIOA dollars within that pool.
While funding streams that are braided maintain their separate identities, funding streams that are blended lose their separate identities. Restrictions and requirements on how WIOA funds are used and reported on may make it difficult for boards to blend funds in practice, even if doing so would offer them greater flexibility to implement evidence-based programs that will benefit their communities. This waiver and additional flexibility of braided and blended funds would support states and local areas make the most of limited WIOA and other workforce funding.
Innovative Funding Models at Work: In Cuyahoga County, the Ohio Department of Job and Family Services is piloting a program to braid WIOA and SNAP E+T services through the local Ohio Means Jobs network in order to provide targeted advancement pathways to SNAP enrolled participants. RFA’s Workforce Evidence-Based Spending Guide highlights several other examples from Delaware, Alabama, Wisconsin, and California on braiding and blending WIOA dollars with other sources to make the most of limited resources.
How RFA Supports States in Building an Effective Workforce System
RFA’s Workforce Development Team supports states and local areas develop policy recommendations and strategies on how to improve outcomes for job seekers and employers by investing federal, state, and local workforce dollars in evidence-based, results-driven solutions.
If your state is interested in getting support in submitting a waiver or drafting language in your WIOA State Plan, email [email protected] and our team will be in touch to provide assistance.
