September 2, 2026
This analysis examines federal waivers requested by states and approved by the U.S. DOL under WIOA, highlighting efforts to reshape workforce systems and better serve workers, jobseekers, and employers nationwide.
Earlier this year, Jobs for the Future (JFF) highlighted a significant opportunity for states to use new federal waiver flexibility to rethink how the Workforce Innovation and Opportunity Act (WIOA) serves workers, jobseekers, and employers.
Now, we are beginning to see what states did with that opportunity, and where the U.S. Department of Labor (DOL) was willing to provide greater flexibility. Several of the most common waivers align directly with opportunities JFF encouraged states to pursue earlier this year; other popular requests offer important insights into how states are seeking to reshape their workforce systems—and where DOL ultimately landed.
As part of modifications to WIOA State Plans for Program Years 2026 and 2027, states submitted waiver requests to give workforce leaders greater flexibility in funding, governance, and service delivery. DOL has now released response letters for 40 states and territories, offering an early look at both the reforms states are pursuing, and the guardrails the federal government is maintaining.
And this timing matters. Rapid advances in artificial intelligence, changing skill requirements, and continued economic uncertainty are increasing pressure on workers and employers to adapt quickly. At the same time, both Congress and the administration are considering broader changes to the nation’s public workforce system, built for a different era. WIOA waivers cannot substitute for comprehensive reauthorization, but they offer an early signal of where states believe the existing WIOA statute may fall short, and an important opportunity to test reforms now and begin building an evidence base for what should come next in federal policy.
The latest waiver decisions offer an important window into where states believe the existing workforce system is too rigid—and where federal policymakers may want to look as they consider WIOA’s future.
One of the clearest areas of state interest is expanding how WIOA serves young people. For years, one of the most sought waiver requests has been to reduce the requirement that 75% of WIOA youth funding be spent on out-of-school youth. That interest has continued, with more than half of U.S. states and territories now receiving waivers for this requirement.
But states are also taking advantage of new opportunities to reach young people earlier. Following DOL’s waiver guidance released last fall, 23 states and territories have now received approvals allowing in-school youth to access Individual Training Accounts (ITAs), including: Alabama, Arizona, Arkansas, Connecticut, Florida, Hawaii, Illinois, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nevada, New Mexico, North Dakota, Northern Mariana Islands, Ohio, Puerto Rico, South Dakota, Texas, Utah, and Wisconsin.
JFF encouraged states to pursue this new opportunity. WIOA should absolutely remain a critical resource for young people who have become disconnected from school and work, but the workforce system should also have the flexibility to intervene earlier—before disconnection occurs. Giving in-school youth access to ITAs can help young people pursue occupational training and other career-connected opportunities while they remain attached to education. Combined with greater flexibility over youth funding, states can build a more preventive approach that connects young people to careers earlier while continuing to provide robust services to those facing the greatest barriers.
The breadth of state interest in waivers related to WIOA Title I youth funding raises a broader question for Congress: whether WIOA’s current youth funding requirements give states enough flexibility to reach young people earlier and prevent disconnection in the first place.
JFF also encouraged states to seek greater flexibility to help workers and employers respond to rapidly changing skill demands by expanding access to in-demand, employer-driven training through the public workforce system. This included giving states and local areas greater flexibility to leverage WIOA Title I funds for incumbent worker training (IWT) and increase reimbursement rates for on-the-job training (OJT). This flexibility will be particularly important as AI and other emerging technologies reshape jobs and accelerate the need for workers to continuously develop new skills, giving employers a critical tool to upskill their existing as well as future workforce as skill needs evolve.
And states followed suit. Under WIOA, local areas generally may use no more than 20% of their combined Adult and Dislocated Worker allocations for IWT. Missouri, New Mexico, and Puerto Rico received new waivers while Connecticut and Michigan got approval for continued waivers allowing local areas to exceed that threshold for IWT. Many of these states, along with Alabama and Illinois, also received flexibility regarding WIOA’s six-month employment requirement for IWT, making it easier for employers to provide training to workers who need to acquire new skills soon after starting a job.
States also looked beyond IWT. Hawaii, Illinois, Nevada, New Mexico, and Florida requested and received waivers increasing OJT reimbursements through WIOA Title I funds, with all but Florida requesting reimbursement of up to 90% for employers with 50 or fewer employees. Florida took a different approach, requesting reimbursement of up to 90% for all employers and up to 100% for businesses located in or employing individuals who reside in Opportunity Zones.
Hawaii, Illinois, Mississippi, and Nevada also requested waivers allowing states to redirect funding reserved for statewide Rapid Response activities toward broader employment and training activities. This flexibility gives states another tool to quickly direct resources toward emerging workforce needs and help workers and jobseekers build the skills needed to respond to economic change.
Taken together, these waivers point toward a more industry-responsive public workforce system. As AI and other technologies reshape jobs and skill requirements, states need tools to help current workers reskill before displacement, jobseekers gain the hands-on training they need to succeed in new roles, and employers develop the talent their industries need. Greater flexibility across IWT, OJT, and Rapid Response funding can help the workforce system respond earlier and more effectively—shifting from primarily responding to unemployment toward proactively supporting worker success, employer talent needs, and economic change.
Training is only one part of what workers need to successfully enter and remain in quality jobs. Transportation, child care, and other costs can create significant barriers to employment, particularly during the transition into a new job and as earnings begin to affect eligibility for public benefits. Recognizing this challenge, DOL allowed states to request flexibility to provide targeted supportive services to certain Adult and Dislocated Worker participants for up to 12 months after exit from WIOA.
States showed significant interest in this new flexibility. Alabama, Idaho, Illinois, Louisiana, Nevada, New Mexico, Rhode Island, South Dakota, Tennessee, and Puerto Rico all requested and received waivers allowing them to extend supportive services after a participant exits WIOA.
This is another flexibility JFF encouraged states to consider. Traditionally, the public workforce system’s ability to support individuals declines quickly after they enter employment—even though the first months on the job can be critical to long-term retention and economic stability. The breadth of state interest underscores a growing recognition that getting someone into a job is only one measure of success; helping them remain employed and advance is equally critical.
Beyond the flexibilities JFF specifically recommended, another notable theme in the latest waiver activity is the number of states exploring changes to the governance and physical infrastructure of their workforce systems.
Several states pursued waivers during this period related to state and local workforce board structures. One of the most transformative requests was allowing the state to perform functions traditionally carried out by local boards. Alaska, Hawaii, Idaho, Montana, Rhode Island, and Louisiana received approval, while DOL denied similar requests from other states. Another trend is greater flexibility around the physical footprint of the American Job Center system. States are exploring models in which not every local workforce area must maintain its own comprehensive one-stop center; Georgia, Idaho, Kansas, Louisiana, Missouri, Montana, North Carolina, Tennessee and Wisconsin all requested this waiver. DOL approved the requests but emphasized that individuals must continue to have meaningful access to the full range of required services through affiliate sites, virtual delivery, partnerships, or other approaches.
As states implement these major structural changes, it’s important to remember that flexibility cannot come at the expense of access to services. Whether a state changes its governance structure or physical footprint, individuals must continue to have access to high-quality workforce interventions. The ultimate measure of these reforms should not simply be whether they streamline administration or reduce physical infrastructure, but whether they improve access, service quality, and outcomes for workers and employers.
DOL’s decisions reveal another important dividing line: while the Department appears willing to give states significant flexibility over how they operate their workforce systems, it has maintained important guardrails around the information needed to understand whether those systems are working.
Several states sought waivers related to WIOA performance and reporting requirements, including requests that would have reduced federally required reporting or altered core performance requirements. DOL did not approve these requests—a reassuring signal that greater flexibility and innovation should not come at the expense of accountability.
At the other end of the spectrum, some states requested waivers to add measures beyond WIOA’s federal requirements to better assess the quality and performance of their workforce systems. States already have the authority to establish additional measures, making a waiver unnecessary. States should continue exploring measures like median wage gains, retention, and return on investment measures that can provide a fuller picture of whether workforce investments are delivering value.
Ultimately, innovation should increase our understanding of what works, not reduce it. As states receive greater flexibility over funding, governance, and service delivery, maintaining transparency into who is being served and the outcomes they achieve becomes even more important. DOL’s waiver approach reinforces this balance, requiring states seeking new waivers or extensions to demonstrate results. This same principle should inform future WIOA reauthorization efforts: greater state flexibility should be paired with strong accountability, using lessons from state innovation to inform what should ultimately be scaled or codified in federal law.
Some of the most promising changes are relatively straightforward: reach young people before they disconnect, give them access to training while they remain in school, help workers reskill before they lose their jobs, and continue critical supports as individuals transition into employment. Other changes, particularly around governance and system infrastructure, will require close attention to whether administrative restructuring translates into better experiences and outcomes for the people the system is intended to serve.
JFF looks forward to working with states as they implement these new flexibilities and continuing to elevate lessons for federal policymakers to demonstrate how these waivers can inform future WIOA reauthorization efforts and broader workforce system reform. Done well, this next phase of waiver implementation can help build the evidence toward a public workforce system that is more responsive to economic change, more accountable for outcomes, and better equipped to meet the needs of jobseekers and workers, employers, and communities across the country.
This report highlights policies and practices that align and strengthen federal workforce programs – improving outcomes and enhancing service delivery, spotlighting efforts in three leading states: Michigan, New Jersey, and Ohio. While the Workforce Innovation…
New DOL guidance expands WIOA waivers, creating more flexibility for states to modernize workforce systems. JFF highlights five strategies for using waivers to better meet today’s economic needs. 5. Modernize Service Delivery Models to Better…
In this brief, Jobs for the Future (JFF) presents our policy recommendations for overhauling the U.S. workforce development and postsecondary education systems—and putting millions more people on pathways to quality jobs. Recommendations Endnotes This…