What is the Employment and Training Fund Program?

In 1991, the Hawaii State Legislature created the Employment and Training Fund (ETF) Program as a way to improve the competitiveness of Hawaii's workforce in a global economy.  Funds are generated through assessments on employers payroll contributions to the unemployment compensation fund.  ETF's purpose is to "assist employers and workers through innovative programs, including, but not limited to, business specific training, upgrade training, new occupational skills, management skills, and support services to improve the long-term employability of Hawaii's people."

By 1997, the State Legislature had extended the program another four years and established an 18 month moratorium on ETF collections to provide relief to small businesses. By 1999, the State Legislature exempted ETF from state procurement code requirements under Chapter 103D and Chapter 103F, Hawaii Revised Statutes, to make delivery of training more accessible and the awarding of grants more efficient. The practical result of this legislative action has enabled clients to select from a wider range of authorized ETF training vendors. Over the past two years, ETF has solicited request for proposals (RFP) and approved an average of 24 public and private ETF training providers that are eligible to offer their training services to the business community under its Employer Referral (micro) Program.

The 2000 Hawaii State Legislature extended the program through year 2003, but phased out ETF's funding over a two-year period to once again provide relief to small businesses. The 2002 State Legislature passed Senate Bill 733, which made the ETF program permanent and required employers to contribute fifty per cent of the assistance provided by ETF for training (Act 248, Session Laws of Hawaii 2002). However, legislators could not come to an agreement in restoring the original assessment rate of .05 per cent.

Since the enactment of Act 248, the DLIR has restructured its policies and procedures to be in compliance with the new law and is currently in the process of soliciting its next RFP.

Why ETF?

The ETF program was created as part of a national movement that swept the country in the nineteen-eighties.  Our nation's leaders, particularly at state and local levels, were concerned about the United States workforce's ability to compete in the international economic arena. Investing in human capital to improve productivity and the nation's quality of goods and services became a top priority.  To enhance economic development or to attract new industries, 48 states, including Hawaii, enacted legislation to create over 60 training programs targeted to businesses.  The spending for such customized training in 1998 was 593 million dollars.  About ten states have programs similar to Hawaii in that they are supported by employer assessments through the unemployment insurance system.  Other states have other funding mechanisms, such as general funding or lotteries.  All of these states believe that such training helps them to be economically competitive.  Most federal training programs target those who face barriers in the work place, such as the long-term jobless, dislocated workers, and other disadvantaged groups.  In contrast, ETF provides upgrade training to individuals at all levels; workers, supervisors, managers, and owners.

Who is Eligible?

ETF serves industry groups, business associations, business consortia, individual businesses, and nonprofit corporations.  Government agencies are not eligible, but may partner with business or grant proposals to meet industry training needs.  As set forth in its statute, ETF may also serve unemployed individuals who are not otherwise eligible for federally-funded employment and training programs.

How does one access ETF funds?

There are two ways employers and employer groups can access ETF funds:

1)  Statewide and Countywide Training Grants (Macro Program)

ETF provides grants to consortia or employer groups for education and training projects that do not currently exist within the State.  The funding must serve as a catalyst, providing "seed" money for innovative education and training curricula and program design.

2)  Employer Referral Services (Micro Program)

Under certain conditions, employers and their employees can apply for tuition assistance and access existing short-term, non-credit training courses, such as those offered at any of the University of Hawaii Community Colleges or other ETF approved public and private training vendors.  The program is open to company owners, managers, supervisors, and workers.

ETF Directions and Priorities

The ETF program continues to maintain the following directions and priorities:

Supports workforce linked with economic development initiatives that enhance industry expansion.  The State Administration has targeted forestry and aquaculture as being promising industries with the potential for growth.  ETF has funded several projects in these two areas the past program year.  Over the years, ETF has funded other projects in promising industries with good potential for growth such as  aviation (pilot training) and fashion industry training.

Develops voluntary certification programs that incorporate national and state skill standards into training curricula.  In the past years, ETF has awarded grants to projects that lead to national or state certification in the retail, restaurant, tourist, and landscape industries.  Several have been nationally recognized.  These programs promote growth and development of a healthy workforce and establish standards and incentives for individuals striving for excellence.

Serves small businesses, helping to train their personnel to adjust to changes in technology, consumer tastes, and the economy.  Over the years, ETF has awarded grant funds to many projects that target small businesses. One of the most important criteria that the ETF program uses to decide on grant awards is whether the project plans to serve small businesses.

Targets small business in its Employer Referral Program.  Through an RFP process, ETF approved 24 vendors to be on its authorized vendor list and expanded its training providers and choice offerings for the Employer Referral Program.  Small business represents over ninety percent of the businesses served by ETF.