Well educated and highly trained employees are critical to companies trying to compete in today’s global market. When it comes to preparing the workforce for employment, Kellogg Community College is poised to help businesses in Michigan. We offer a competitive edge to companies because we’re working with the Michigan New Jobs Training Program.
Frequently Asked Questions
Q. What is the Michigan New Jobs Training Program?
A. Designed as an economic development tool, the Michigan New Jobs Training Program allows community colleges to provide free training for employers that are creating new jobs and/or expanding operations in Michigan. The training for the newly hired workers is paid by capturing the state income tax associated with the new employees’ wages.
Q. What is the purpose of the Michigan New Jobs Training Program (MNJTP)?
A. Under MCL 389.161 – 389.166, employers can obtain training for new employees hired for new jobs under the Michigan New Jobs Training Program. Designed as an economic development tool, the MNJTP authorizes community colleges to work with employers that are creating new jobs and/or expanding operations in Michigan to receive diverted income tax withholding for newly hired workers for the purpose of funding a variety of training and employee development needs for those new positions.
Q. Who is eligible for this program?
A. If you are engaged in business and have employees in the state of Michigan, you may be eligible to take advantage of the MNJTP. Employers in Michigan may enter into an agreement under the program if they are creating new jobs in this state that:
- Are full-time, in a new, existing, or expanding business of the employer.
- Are not jobs of recalled workers, replacement jobs, or any other job that existed in the employer’s business within the 1-year period preceding the date of an agreement.
- Are new jobs that pay at least 175% of the current minimum wage.
- Are new jobs that result in a net increase in employment in Michigan for the employer.
Q. How is the training paid for?
A. Once the training agreement is in place between Kellogg Community College and the employer, the employer then diverts to the community college, for the length of the agreement, the State income tax withholding generated by the wages of the new employees receiving the training. Funds available through the MNJTP are dependent upon training needs and projected withholding tax revenue available to pay for the training.
Q. What is the process for acquiring funding?
A. To acquire funding:
- Employers should contact Workforce Solutions at Kellogg Community College to explore the possibilities available to them and determine eligibility.
- Preliminary agreements called “Intent to Engage” will be established to “set the clock” and lock in the date from which new employees can be counted for the project and training expenses may be reimbursed. These preliminary agreements can be cancelled if the college or the employer decides not to proceed. This non-binding agreement puts you in the queue, as the system is based on a first come, first serve basis.
- Workforce Solutions will work with the employer to identify their training needs and to calculate the amount of funding available from the MNJTP.
- Once the funding is available, KCC will establish a contract with the employer.
- KCC will work with the employer to set up a pay-as-you-go reimbursement model.
- The employer will begin diverting the new employee’s withholding taxes away from the State, sending them to KCC. KCC will then divert the State withholding taxes back to the employer as training is completed.
- As the program progresses, KCC will administer the training funds and will ensure that the employer training needs are met.
Q. What happens if an employee resigns?
A. The MNJTP funds follow the position, 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. Once the position is backfilled, the employer can then continue to divert the withholding for that position for the length of the contract.
Q. What can the funds be used for?
A. The funds can be used for any direct training expense, including:
- 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.
- Subcontracted services with public universities and colleges in this state, private colleges or universities, or any federal, state, or local departments or agencies; and
- Contracted or professional services.
Q. How are diversions calculated?
A. Below is a sample calculation for training agreements based on a 3.9% state income tax for a three year period.
|New employees to be trained||Hourly wage of new employees||Annual wage of new employees||Aggregate Annual Incremental Income Tax Capture of new hires*||Max. amount of diversion for contract|