This bill, known as the "Employer-Directed Skills Act," amends the Workforce Innovation and Opportunity Act (WIOA) to create a new mechanism for workforce development: employer-directed skills accounts. These accounts are designed to fund employer-selected training programs and on-the-job training, directly addressing specific skill demands identified by businesses. The goal is to enhance the responsiveness of workforce training to industry needs and improve employment outcomes.

The legislation defines "employer-sponsored skills development" as a program chosen by an employer to meet their specific skill demands, conducted under an agreement that includes a commitment to employ the individual upon completion. Employers are required to pay a portion of the program cost, ranging from 10 percent for small businesses (50 or fewer employees) to 50 percent for larger companies (over 100 employees). The Federal share of the cost is provided through the employer-directed skills account.

For an individual to receive training through these accounts, an employer must select a non-employee for either on-the-job training or employer-sponsored skills development. The employer must then establish and sign a training agreement and certify to the local board that the individual requires the training for employment and has the necessary qualifications. Local boards review and approve these agreements, prioritizing small businesses and programs that align with local workforce needs, especially those leading to recognized postsecondary credentials in in-demand industries.

Local boards are responsible for arranging payments to employers from the employer-directed skills accounts. For on-the-job training, reimbursement is based on documented wages earned by the individual, while for employer-sponsored skills development, the Federal share is reimbursed after the employer documents their payment of costs. This system offers an alternative to traditional individual training accounts, empowering employers to drive workforce training initiatives directly.