State tightens some training incentives

Call centers to see longer clawback

New Mexico has made several changes to its Job Training Incentive Program, including a longer clawback period for call centers and an altered definition of “retail trade” that narrows the pool of companies eligible for state funding.

The new rules do not include a reduced reimbursement rate for call centers, a policy that had been under consideration.

The program, commonly known as JTIP, compensates businesses for between 50 and 75 percent of employee wages associated with newly created positions for up to six months. Those incentives have supported more than 46,000 jobs in the state since 1972, according to information from the state Economic Development Department.

Barbara Brazil, deputy cabinet secretary, said the agency makes annual adjustments to the program to reflect changes in the economy and various industries. The department issued a request for public comment on proposed rule changes in April and conducted a public hearing in May.

Among the new guidelines that went into effect July 1:

The period for which call centers must retain their JTIP employees or else return the funding associated with those hires has been extended from one to two years. For contractbased call centers – those that communicate information on behalf of their clients – the department will now calculate head counts on a four-year basis instead of two years, to determine whether the company is expanding and therefore eligible for JTIP.

A revised definition of “retail trade” includes vendors that sell goods and services through the internet, online catalogs, portable stalls and infomercials. Retailers are prohibited from participating in JTIP, so businesses that engage in those activities as their primary source of revenue are now ineligible for the program. The agency also removed a policy that required manufacturers to export 50 percent of their products in order to participate.

This is the last fiscal year for which the state will provide an additional 5 percent reimbursement for companies that use the WorkKeys in their hiring pro-

cess. WorkKeys is a skills assessment tool from testing company ACT.

The JTIP board is now permitted to entertain extensions to the sixmonth period after which businesses are required to submit a hiring report and have the funds in their contract adjusted. A statement prohibiting such an extension was stricken from the procedural guidelines. The agency had considered reducing the reimbursement rate for call centers, but ultimately the policy was not adopted. “There was some appetite to see the average wage for JTIP positions go up across all industries,” said Brazil. “But (call centers) often provide work for the entry level . . . we need a wide spread of position types.” JTIP Program Manager Sara Gutierrez said a study by the department showed that after one year, an average of 84 percent of JTIP workers across all sectors were still employed and 76 percent had received a raise.

Lawmakers appropriated a total of $9 million for the program for this year. That includes $4 million in recurring funding, an increase from $2 million the year before, as well as a $5 million special appropriation.