Change 1 to Training and Employment Guidance Letter 02-25, Industry-Driven Skills Training Fund Grant Program

The Industry-Driven Skills Training Fund Grant Program is administered by the U.S. Department of Labor through its Employment and Training Administration. This program is designed to strengthen the workforce by supporting state-led initiatives that align training programs with employer-driven demand in critical industries. The funding opportunity represents a federal investment in workforce development under the Workforce Innovation and Opportunity Act, specifically authorized under section 169(c). The initiative emphasizes collaboration between State Workforce Agencies and private sector employers to ensure that training programs are responsive to evolving labor market needs and national economic priorities. The primary purpose of the grant program is to provide outcomes-based reimbursement to employers for training costs associated with upskilling incumbent workers and preparing new hires for in-demand occupations. The program prioritizes industries such as advanced manufacturing, artificial intelligence infrastructure, shipbuilding, aerospace, nuclear energy, domestic mineral production, and information technology. A portion of the total funding is specifically reserved for shipbuilding-related training, reinforcing targeted national workforce needs. Applicants are expected to design programs that create clear pathways to employment and career advancement while addressing workforce shortages in high-growth sectors. Funding is structured to reimburse employers for up to 80 percent of training costs, contingent on performance milestones. At least 90 percent of awarded funds must be used for direct training reimbursements, while up to 10 percent may be allocated to administrative and operational costs. Eligible training activities include classroom instruction, virtual learning, customized employer training, and work-based learning such as on-the-job training. Importantly, supportive services are not considered allowable training costs under this program. Employers must commit to training participants and reporting outcomes to qualify for reimbursement. Eligibility for this grant is limited to State Workforce Agencies, which serve as the primary applicants and administrators of the program. These agencies must demonstrate the capacity to manage funds, oversee employer partnerships, and ensure compliance with federal reporting and performance requirements. Employers participating in the program must operate within the state, align with targeted industries, and commit to hiring or upskilling workers. Eligible participants include individuals aged 17 or older who are either newly hired or currently employed by participating employers. The application process requires submission through Grants.gov and includes several components such as the SF-424 form, a detailed project narrative, a budget and budget narrative, and supporting attachments. The project narrative must address industry focus, service area, employer engagement strategies, and implementation plans. Applications are evaluated based on criteria including the strength of the proposed strategy, alignment with workforce needs, and evidence of innovation in workforce training. A technical review panel assigns scores, and final funding decisions may also consider geographic distribution and industry representation. The application deadline for this funding opportunity is August 17, 2026, with submissions required by 11:59 PM Eastern Time. Awards are expected to support projects with a 45-month period of performance beginning around October 1, 2026. This includes a mandatory 60-day planning phase during which grantees finalize their project design, budget, and performance targets in collaboration with the Department of Labor. Quarterly reporting on financials and participant outcomes is required throughout the grant period. Applicants are encouraged to review frequently asked questions and maintain communication with designated grant officials for clarification. Contact information for program staff is provided to support applicants during the submission process. This funding opportunity represents a significant federal effort to enhance workforce readiness through employer-led training models, emphasizing accountability, measurable outcomes, and alignment with economic priorities.

Ensure strong alignment with high growth industries; clearly define employer partnerships; provide data driven outcomes and measurable performance targets; demonstrate prior workforce training success