MCP Funding Guides
OJT & IWT Funding: Help Pay for Hiring and Training Your Workforce
An MCP guide for healthcare practices, skilled trades businesses, and schools exploring employer training funding.
Hiring takes more than filling a position. A new employee needs instruction, supervision, and time to become productive. Existing employees also need training as equipment, technology, and job responsibilities change.
Two workforce funding programs may help eligible employers manage those costs: On-the-Job Training, or OJT, and Incumbent Worker Training, or IWT.
Before you commit to your next training expense, find out whether either program fits your situation.
On-the-Job Training: Support for Developing Employees
OJT provides occupational training under an employer contract. It commonly supports eligible new hires who need additional skills to perform their jobs, although certain employed workers can also qualify.
Federal rules generally allow reimbursement of up to 50% of the participant’s wage rate during the approved training period. Under specified conditions, the rate can reach 75%.
The training period depends on the job’s requirements and the participant’s existing skills and experience. It is a defined period for developing proficiency, rather than an ongoing payroll subsidy.
For a dental practice, medical office, or trades employer, the practical question is: Does this employee need a structured training plan that the workforce board can approve?
Prepare a job description, identify the skills the employee needs to learn, and explain how you will teach and evaluate those skills.
What OJT Reimbursement Could Look Like
Consider this hypothetical example:
Hypothetical Example
An employee earns $20 per hour and completes 320 approved training hours. Wages for those hours total $6,400.
At an approved 50% reimbursement rate, the potential reimbursement would be $3,200.
This example illustrates the calculation—not a promised award. Your actual agreement determines eligible hours, the reimbursement rate, payment limits, and documentation.
Ask how and when reimbursement is paid so you can plan cash flow. Keep enough working capital to meet payroll while following the contract’s payment process.
Incumbent Worker Training: Support for Your Current Team
IWT focuses on employees already working for your business. Its purpose is to strengthen workforce competitiveness, retain skilled employees, or help avert layoffs.
Workers generally need at least six months of employment history with the employer. Federal rules include a cohort exception when a majority of employees in the training group meet that requirement. Confirm the applicable eligibility rules locally.
As a planning exercise, identify where your current team needs stronger skills. Possible proposals might involve new technology, equipment operation, advanced job responsibilities, or training connected to employee advancement.
Explain the business need and the benefit to employees. Ask your workforce contact whether the proposed training qualifies before purchasing a course or scheduling instruction.
How Much Must the Employer Contribute?
IWT requires employers to share the training cost. Federal minimum contributions depend on employer size:
50 or fewer employees: 10%
51–100 employees: 25%
More than 100 employees: 50%
Employer contributions may include cash or fairly evaluated in-kind contributions. Wages paid while employees attend training may count toward the required share, subject to applicable rules and documentation.
Ask the reviewer how your contribution must be calculated and documented. A minimum employer share does not automatically guarantee funding for the entire remaining balance.
Prepare a Training Plan Before You Apply
Start with a clear description of the problem your training will solve.
For a new employee, identify the gap between current abilities and the job’s requirements. For existing employees, explain what is changing and which skills they need to remain effective.
A useful preparation file includes:
Your Preparation File
✓ Employee positions and proposed participants
✓ Skills to be developed
✓ Training provider or instructor
✓ Schedule and training hours
✓ Itemized costs
✓ Expected results and evaluation methods
For example, “train staff on new equipment” is a starting point. A stronger plan identifies the equipment, tasks, instruction, and method for demonstrating proficiency.
This preparation also helps you compare training options and ask more specific funding questions.
Contact the Workforce Board Before Training Begins
Your local workforce development board or American Job Center business services team is a practical starting point.
Ask whether OJT or IWT funding is available, who handles applications, and what approvals must be completed before hiring, training, or spending.
Do not assume past training expenses can be reimbursed. Establish the required sequence with your contact and
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