What is the purpose of the Michigan New Jobs Training Program (MNJTP)?
Under this State of Michigan legislation, employers can obtain training for new employees hired for new jobs. Designed as an economic development incentive, the Michigan New Jobs Training Program authorizes community colleges to issue debt on behalf of employers that are creating new jobs and/or expanding operations in Michigan for the purpose of funding a variety of training and employee development needs for those new positions.
How does this program work?
Eligible employers contact Grand Rapids Community College and submit an application. GRCC then will work with your business to identify your training needs and calculate the needed financial support to fund the training. preliminary agreements are used to "set the clock", or lock in the date from which new employees can be counted for the project and training expenses that may be reimbursed. This agreement is preliminary in nature and either the college or the employer can decide not to proceed. Final agreements require approval by GRCC’s board of trustees, but require no review or approval from the State. GRCC will then raise capital by either issuing debt in the form of bonds (by themselves or in a group issuance administered by the Michigan Municipal Bond Authority, or by using the colleges’ reserves or operating funds to self-fund projects. An alternative model is also available that allows the employer to pay for the training up front and be reimbursed over time. It is up to GRCC to determine the best approach and financing mechanism to fund the training. Finally, the College will administer the training funds and ensure employer needs are being met.
How is the debt repaid?
Community colleges issue debt on behalf of employers. Employers then repay the debt by diverting state withholding taxes to the College that are generated by the wages earned by the new employees. Funds available through the Michigan New Jobs Training Program are dependent upon training needs and projected withholding tax revenue available to repay the debt.
What are the benefits to participating employers?
The Michigan New Jobs Training Program allows employers to take a credit and divert those dollars to Grand Rapids Community College to repay the debt funding the training program. If an employer hires the number of new employees and pays the wages it certified to the college, the program costs the employer nothing. However, should the employer not hire the number they certify, or leave Michigan before the debt is retired through normal withholding diversion, the employer would still be liable for meeting the terms of the contract and repaying all expenses and administrative fees that were expended during the length of the contract.
What type of training services and program costs can be funded using the Michigan New Jobs Training Program?
A wide range of training can be offered, from highly specialized/customized training to basic skills instruction; Michigan New Jobs Training Program funds can be used for the following:
- Adult basic education and job-related instruction
- Developmental, readiness, and remedial education
- Vocational and skill assessment services and testing
- Training facilities, equipment, materials, and supplies
- Administrative expenses for the new jobs training program
- Subcontracted services with public universities and colleges in this state, private colleges or universities, or any federal, state, or local departments or agencies
- Contracted or professional services
Can the Michigan New Jobs Training Program pay for On the Job Training (OJT)?
No, On the Job Training is not included as an allowable expense under the Michigan New Jobs Training Program.
What happens if an employee resigns?
Michigan New Jobs Training Program funds follow the positions not the individuals hired into those positions. The employer is still liable for the amount of the withholding tax diversion for the certified positions under the contract.