2022-10693. Clarification Regarding Self-Employment in the Context of “Employment” for VET TEC Training Programs

AGENCY:

Department of Veterans Affairs.

ACTION:

Notification of interpretation.

SUMMARY:

The Department of Veterans Affairs (VA) provides notice of a policy advisory released on January 19, 2022, by VA's Education Service. The policy advisory clarifies VA's previous regulatory interpretation of “employment” and also explains when “self-employment” will be considered “employment” for the purpose of paying training providers participating in the Veterans Employment Through Technology Education Courses (VET TEC) training program.

DATES:

May 24, 2022.

FOR FURTHER INFORMATION CONTACT:

Cheryl Amitay, Chief of Policy and Regulations Team, Education Service (225), Veterans Benefits Administration, Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, DC 20420, at 202-461-9800. This is not a toll-free number.

SUPPLEMENTARY INFORMATION:

On August 16, 2017, Public Law 115-48, the Harry W. Colmery Veterans Educational Assistance Act of 2017, was signed into law. Section 116 of this Act, codified at 38 U.S.C. 3001 note, requires the Secretary of Veterans Affairs to carry out a pilot program (commonly known as VET TEC) for 5 years to provide eligible Veterans who are entitled to educational assistance under 38 U.S.C. chapter 30, 32, 33, 34, or 35, or 10 U.S.C. chapter 1606 or 1607, with the opportunity to enroll in high technology programs of education intended to provide training and skills sought by employers in a relevant field or industry. Under section 116(c)(2)(C) of Public Law 115-48, VA must pay 50% of the cost of providing a high technology program of education to qualified providers upon “employment” of a Veteran in a certain field of study. Also, under section 116(c)(5)(B), VA is required to give preference to a qualified provider that offers tuition reimbursement for students who do not find full-time “meaningful employment” in their field of study within 180 days after completing their program.

Based on a review of employment information since the initial roll-out of VET TEC, VA issued a policy advisory on January 19, 2022, titled Clarification Regarding Self-Employment in the Context of “Employment” for VET TEC Training Programs Established under section 116 of Public Law 115-48, to clarify how self-employment satisfies the meaning of “employment” for the purposes of determining whether VA must pay qualified providers for training provided to Veterans and selecting qualified providers. The advisory establishes objective standards for determining under what circumstances VA will consider self-employment to be employment and is intended to maximize economic outcomes for VET TEC participants. The advisory states generally that VA considers a person to be “employed” if that person performs services for another individual and is compensated for such services. It further states that the nature of the relationship may be that of an employee/employer or contractor/client. More specifically, the advisory states that “employment” includes the following:

• Establishing a new employee/employer relationship in a career supported by the completed program of study; or,
• Promotion in the Veteran's current employee/employer relationship in a career supported by the completed program of study; or,
• Self-employment in a career supported by the completed program of study.

With regard to clarifying the job certification requirements surrounding what is deemed as acceptable and reasonable for the reporting of employment, including self-employment ( i.e., the minimum standards for declaring a Veteran has obtained employment), the advisory provides as follows:

The following documentation is required for payment of employment certifications that claim any form of employment (both “employment” under section 116(c)(2)(C) and “meaningful employment” under section 116(c)(5)(B)):

• Contract Jobs. Reports of Contract Jobs must be at least 6 months in length.

• Salary or hourly wages.
• Hours worked per week. Employment must be full-time. There is a minimum 30 hours per week requirement for all employment claims.
• Promotion in current job. Must be a monetary promotion. A promotion is NOT simply a job title change without an increase in salary.
• Offer letter and/or first pay stub. Documentation must be official and display the official company letterhead.

“Self-Employment” Criteria and Verification Regarding Self-Employment

VA supports self-employment and other entrepreneurial endeavors as viable paths to achieving meaningful employment. However, training providers should encourage students to explore all possible employment prospects and opportunities, and should not direct students towards self-employment as the primary option for employment. To ensure that individuals electing to pursue employment through self-employment are adequately equipped for success, the following documentation is required for payment of employment certifications that claim any form of self-employment:

• Proof of ownership of the business. These can include a Federal Tax ID Number; Articles of Organization, or Articles of Incorporation; copy of personal tax return with schedule C; a copy of the Doing Business As declarations, etc. It may also include a state tax ID Number or state business registration information.
• Copies of any valid personal licenses or certifications required for business operations.
• A bill and payment from a client to show proof of legitimate business transactions for the type of services being provided and/or products sold; and
• Other documents: VA may request additional documentation to support the claim if existing evidence provided is insufficient to make a determination.

To avoid a conflict of interest, neither the training provider, its subsidiaries, nor a parent company may become the client of the self-employed VET TEC student.

Implementation of the new policy began on February 1, 2022, and it is applicable to both VET TEC students and training providers, regardless of when the student began or graduated from their program. Compliance with the requirements specified in the new policy is part of the annual approval or reapproval process for training providers.

Signing Authority

Denis McDonough, Secretary of Veterans Affairs, approved this document on May 11, 2022, and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs.

Luvenia Potts,

Regulations Development Coordinator, Office of Regulation Policy & Management, Office of General Counsel, Department of Veterans Affairs.