ETP was launched in 1983 by the state of California, and it’s been in operation long enough that a significant network of consultants has grown up around it. These companies will handle the paperwork and administration of the program, typically for some upfront fees and a percentage of the final reimbursement (pricing will vary). Going back to the Brookings Institute study, companies surveyed said ETP’s administrative processes and information systems were overly cumbersome, so many outsource the proposal process.
From 2012-2017, ETP awarded more contracts in the construction industry, but provided more funding to the manufacturing industry. ETP approved 40 percent of new funding for contracts in the manufacturing industry, 15 percent for construction, 12 percent for high-tech and technical services, and 10 percent for healthcare.
The program appears largely intended to reach trade and administrative workers who would benefit from additional skills training. The 200-hour cap would seem to focus this program on employees who can benefit from very specific training, which is why it’s largely used in manufacturing and construction.
The company foots all the costs until reimbursement is issued after the 90-day employment goal is reached. That means there’s a risk to the company in that a worker can receive training and then take a better job without staying 90 days. The company could have the worker sign a contract, but as a practical matter, enforcing it would be cost-prohibitive. So in general, the program doesn’t seem to be aimed at startups or early-stage companies. If you need information about tax credits that benefit startups, contact us.
Important Tax Dates for Startups