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11.18 Pay For Performance


Chapter 11.18.1 Resources

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11.18.1 Pay For Performance

Effective date: August 7, 2017

WIOA authorizes Local WDBs to utilize pay-for-performance contract strategies with its service providers.

Pay-for-Performance Strategy

This is a specific type of performance – based contract strategy that has four distinct characteristics:

  • It is a strategy to use WIOA Pay-for-Performance contracts. 1
  • Identifies a workforce development problem and target populations for which a local area would hope to achieve through a Pay-for-Performance contract relative to baseline performance and the acceptable cost to government associated with achieving these outcomes
  • It must include a method for independently validating the performance outcomes achieved under each contract within the strategy prior to payment occurring.
  • Include a description of how the local area will reallocate funds to other activities under the contract strategy in the event a service provider does not achieve performance benchmarks under a WIOA Pay-for-Performance contract.

Pay-for-Performance Contract

A type of performance based contract that a local WDB can be entered with eligible service providers to serve targeted populations for Adult/Dislocated Worker Training Services 2 and Youth Activities. 3


  • No more than 10% of the total Adult and Dislocated Worker annual allocation can be reserved for the implementation of WIOA Pay-for-Performance contract strategies for Adult and Dislocated Worker training services and 10% of the Youth annual allocation for youth activities.
  • Cost – plus a percentage contract is not authorized. 4


State DWD

  • Provide technical assistance to Local WDBs including assistance with
    • structuring WIOA Pay-for-performance contracting strategies;
    • performance data collection;
    • meeting performance data entry requirements; and
    • identifying levels of performance.
  • Collect and report to DOL; on the Pay-for-Performance Report Template with information on the performance of service providers entering into WIOA Pay-for-Performance contracts. The performance must be measured against the levels of performance benchmarks specified in the contract(s).
  • Collect and report to DOL, State and/or local evaluations of the design and performance of the WIOA Pay-for-Performance contract strategies, and where possible, the level of satisfaction with the strategies among employers and participants benefitting from the strategies.
  • Each year, monitor the Local WDB's use of WIOA Pay-for-Performance contract strategies to ensure compliance with §683.500 and the contract specifications in §683.510, and State procurement policies.
  • Monitor local areas' expenditures to ensure that neither no more than 10% of a local area's adult and dislocated worker allotments or no more than 10% of a local area's youth allotment is reserved and used for WIOA Pay-for-Performance contract strategies.
  • Requirements assigned to the state by the Secretary of Labor in future guidance.
  • Complete and send ETA Form 9174 to the federal departments annually.

Local Workforce Development Boards

When a Local WDB uses Pay-for Performance strategies, the board must:

  • Inform DET of the use of all WIOA Pay-for-Performance contracts;
  • Report in ASSET services delivered through a Pay-for-Performance contract. See the Performance TAG for instructions to report Pay-for-Performance services;
  • Provide ETA 9174 with a narrative to DWD within 30 days following the end of the Program Year.


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