Audit shows Jobs Act has done little for state unemployment

CHARLESTON, W.Va. — A legislative audit concludes the West Virginia Jobs Act, enacted to promote hiring West Virginia workers, is a big flop and worthy of repeal.

But the legislative leaders who make up the Post Audits Subcommittee disagreed with the recommendation and said it should be tweaked and allowed to work.

The subcommittee meeting held Tuesday was one of only two set for the June interims, to make room for the special session on education bills.

Adam Fridley, with the legislative auditor’s office, told the members this audit was a follow-up to a 2018 report that found compliance problems with the act.

The Jobs Act was enacted in 2001 with the goal of deriving at least 76% of workers on publicly funded improvement projects from the local labor force in order to address the state’s high unemployment.

But there have been obstacles; one is that the local labor market includes counties in all of West Virginia’s border states. West Virginia has only 55 of the 205 counties in the market, with only 9.5% of the total population in the market and 8% of the active labor force.

Another is that data is spotty and apparently discouraging. WorkForce West Virginia reports that it has made a total of 55 referrals to interested employers handling projects subject to the act – with a data gap from 2012 through 2015. It reports no hires based on those referrals but admits it has no data that would enable it to determine if any of those referrals got hired.

Collecting the data falls to the Division of labor, which offered various reasons for failing, including lack of staff, passive enforcement and public authorities failure to notify the division of projects and nonconformity to the act.

Enforcement is reactive, the division told the auditors, because enforcement — when it occurs at all — happens after jobs have been started or completed and payroll issued. Violations go unnoticed and unpenalized. Also, many out-of-state employers fail to comply with no consequences.

Tightening the act to favor in-state workers could fall afoul of the U.S. Constitution’s Privileges and Immunities Clause, which prohibits a state from discriminating against residents of other states.

For all those reasons, Fridley said, they recommend repealing the act.

The act contains a three-day window for WorkForce to procure qualified candidates for jobs, and House Minority Leader Tim Miley, D-Harrison, wondered if that’s an obstacle to getting people hired.

Fridley said WorkForce said it is an obstacle, as wait times to locate and contact candidates often exceed that window and miss project start dates.

Senate Minority Leader Roman Prezioso, D-Marion, raised the issue of Senate Bill 1, passed during the regular session. Senate Bill 1 sets up career training paths and offers last-dollar grants for community and technical college training geared to workforce needs.

“To say that you’re going to eliminate the Jobs Act,” he said, “doesn’t give us a chance to kick in Senate Bill 1.”

The possibility of repealing the act and losing part of a workforce training tool led him to move to reject the report. He said he made the motion because he didn’t want legislators to use the report as a tool to undermine Senate Bill 1 and any good the act might accomplish.

Miley said, “Instead of scrapping what may be a feeble operation and program,” it would be better to tweak it to make it work better.

The motion failed, but there was general agreement with Miley and Prezioso that the act could be fixed instead of scrapped.

Steve White, director of Affiliated Construction Trades told members that the act has other positive benefits; chiefly, it alerts employers that the state has an interest in promoting local jobs and they respond to that by hiring locally when they can.

No other action was taken on the report and no one suggested drafting a bill to repeal it.

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