TEGL 10-25.pdf

EMPLOYMENT AND TRAINING ADMINISTRATION

ADVISORY SYSTEM

U.S. DEPARTMENT OF LABOR

Washington, D.C. 20210

CLASSIFICATION

WIOA/Wagner-Peyser

CORRESPONDENCE SYMBOL

OWI

DATE

April 28, 2026

RESCISSIONS

None

EXPIRATION DATE

Continuing

ADVISORY: TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 10-25

TO: STATE WORKFORCE AGENCIES

ALL STATE WORKFORCE LIAISONS

FROM: HENRY MACK, ED.D.

Assistant Secretary

SUBJECT: Workforce Innovation and Opportunity Act Adult, Dislocated Worker, and

Youth Activities Program Allotments for Program Year 2026; Program Year

Allotments for the Wagner-Peyser Act Employment Service Program; and

Program Year 2026 Allotments of Workforce Information Grants to States and Outlying Areas

1. Purpose. To provide information to states and outlying areas on Workforce Innovation and

Opportunity Act (WIOA) Title I Adult, Dislocated Worker, and Youth Activities program allotments for Program Year (PY) 2026; PY 2026 allotments for the Wagner-Peyser Act

Employment Service (ES) Program, as required by section 6(b)(5) of the Wagner-Peyser Act, as amended; and the allotments of Workforce Information Grants to states for PY 2026.

2. Action Requested. States and outlying areas must follow the requirements in this guidance to obtain the federal funds needed to manage their programs.

3. Summary and Background.

a. Summary - This document provides grantees with guidance and information including:

• How to obtain the federal funds covered by this Training and Employment Guidance

Letter (TEGL) and financial reporting requirements;

• The potential for reallotment of PY 2026 funds based on unobligated balances of PY

2025 funds in excess of 20 percent of their allotment at the end of PY 2025 (6/30/26);

• Requirements when calculating sub-state allocations to local areas;

• Funds set aside for evaluations, program integrity, and other department transfers;

• Salary caps at the Executive Level II;

• Waivers of the competition requirement for outlying areas; and

• Authority for outlying areas to submit an application for a single consolidated grant for

Adult, Dislocated Worker, and Youth funds.

b. Background - On February 3, 2026, the Consolidated Appropriations Act, 2026 was enacted and from this point forward, referred to as “the Act”.

The Act allows the Secretary of Labor (Secretary) to set aside up to 0.5 percent of each discretionary appropriation for activities related to program integrity and up to 0.75 percent of most operating funds for evaluations. Additionally, section 102 allows for up to 1 percent of discretionary funds in the Act to be transferred between programs, projects, or activities. For 2026, as authorized by the Act, the Department has set aside

$645,000 of the Training and Employment Services (TES) and $155,000 of the State

Unemployment Insurance and Employment Services Operations (SUIESO) appropriations impacted in this TEGL for these activities. Employment and Training

Administration (ETA) reserved these funds from the WIOA Adult, Youth, Dislocated

Worker, and Wagner-Peyser Act ES program budgets. Any funds not utilized for these reserve activities will be provided to the states.

The Act makes PY 2026 Youth Activities funds available for obligation on April 1, 2026, and funds the WIOA Adult and Dislocated Worker programs in two separate appropriations. The first appropriations for the Adult and Dislocated Worker programs become available for obligation on July 1, 2026; this portion is commonly referred to as

“base” funds. The second appropriations for the Adult and Dislocated Worker programs become available for obligation on October 1, 2026; this portion is commonly referred to as “advance” funds because they are provided in the appropriations act passed during the fiscal year immediately before the fiscal year when the funds are available. For example, funds for PY 2026 that will be made available on October 1, 2026, were appropriated during FY 2026, but not made available until FY 2027, and are called the FY 2027

“advance” funds. See Attachment A for details.

The Act also includes the specification that the Secretary may reserve no more than 10 percent of the Dislocated Worker National Reserve funds to provide technical assistance and carry out additional activities related to the transition to WIOA. Additionally, salary caps are imposed under the Act. The funds provided to grantees in the allotments discussed in this TEGL must not be used by a recipient or sub-recipient to pay the salary and bonuses of an individual, either as direct costs or indirect costs, at a rate in excess of

Executive Level II. The rates of basic pay for the Executive Schedule are found at https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/. States also may establish lower salary caps. See TEGL 10-24, Salary and Bonus Limitation Imposed by

Appropriations Language.

WIOA allotments for states are based on formula provisions contained in WIOA (see

Attachment B for WIOA and Wagner-Peyser Act formula descriptions). The Act waives the competition requirement regarding funding to outlying areas (i.e., American Samoa, Guam, Commonwealth of the Northern Mariana Islands, the Republic of Palau, and the

United States Virgin Islands). For PY 2026, outlying area grant amounts are based on the administrative formula determined by the Secretary that was used under the Workforce

Investment Act.

Additionally, the Act allows outlying areas to submit a single application according to the requirements established by the Secretary for a consolidated grant for Adult, Youth, and

Dislocated Worker funds. Subject to approval of the grant application and other reporting https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/ https://www.dol.gov/agencies/eta/advisories/tegl-10-24 requirements of the Secretary, the Act allows outlying areas receiving a consolidated grant to use those funds interchangeably between Adult, Youth, and Dislocated Worker programs or activities. Outlying areas must follow steps identified in Appendix VII if they want to consolidate those funds into a single grant. However, if outlying areas are not consolidating the Adult, Dislocated Worker, and Youth funds they must follow steps identified in Appendix VI.

WIOA specifically includes Palau as an outlying area, except during any period for which the Secretary of Labor and the Secretary of Education determine that a Compact of Free

Association is in effect and contains provisions for training and education assistance prohibiting the assistance provided under WIOA. No such determinations prohibiting assistance have been made (WIOA sec. 3(45)(B)), and therefore the Republic of Palau may obtain allotments.

In addition to this TEGL, ETA will publish the allotments and descriptions of the allotment formulas in the Federal Register. In this Federal Register notice, ETA will invite comments on the allotment formula for outlying areas.

4. WIOA PY 2026 Allotments. Please see Appendices I through VII for guidance and

Attachments A through L for formula descriptions and allotment tables.

Under WIOA sec. 128(a), Governors shall reserve not more than 15 percent of the WIOA

Adult, Dislocated Worker, and Youth allotments for statewide activities. In addition to the required statewide activities described in WIOA sec. 134(a)(2), Governors may use statewide activities funds for a wide range of allowable statewide employment and training activities described in WIOA sec. 134(a)(3) – a list which is illustrative not limited. Attachment L provides a table listing the estimated Governor’s reserve maximums for each state.

5. Inquiries. Questions regarding these allotments may be directed to the appropriate Regional

Office. Information on allotments and planning requirements may also be found on the ETA website at https://www.dol.gov/agencies/eta.

6. References.

• Consolidated Appropriations Act, 2026 (Pub.L. 119-75);

• Full-Year Continuing Appropriations and Extensions Act, 2025 (Pub.L. 119-4);

• Balanced Budget and Emergency Deficit Control Act of 1985, as amended (Title II of

Pub. L. 99-177;

• Bipartisan Budget Act of 2018 (Pub. L. 115-123);

• Budget Control Act of 2011 (Pub. L. 112-25);

• Data for Persons Defined as Disadvantaged Youth and Adults (2016-2020) https://www.dol.gov/agencies/eta/budget/formula/disadvantagedyouthadults;

• Workforce Innovation and Opportunity Act (Pub. L. 113-128);

• Wagner-Peyser Act, as amended (29 U.S.C. 49 et seq.);

• TEGL 10-24, Salary and Bonus Limitation Imposed by Appropriations Language, published January 17, 2025 https://www.dol.gov/agencies/eta/advisories/tegl-10-24;

https://www.federalregister.gov/ https://www.dol.gov/agencies/eta https://www.dol.gov/agencies/eta/budget/formula/disadvantagedyouthadults https://www.dol.gov/agencies/eta/advisories/tegl-10-24

• TEGL No.16-22, Revised ETA-9130 Financial Report Instructions and Additional

Guidance; published May 12, 2023 https://www.dol.gov/agencies/eta/advisories/tegl-16-

22;

• TEGL No. 01-23, Updated Disadvantaged Youth and Adult Data for use in Program

Year (PY) 2023 and future Workforce Innovation and Opportunity Act (WIOA) Youth and

Adult Within-State Allocation Formulas, published July 31, 2023 https://www.dol.gov/agencies/eta/advisories/tegl-01-23; and

• Local Area Unemployment Statistics (LAUS) Technical Memorandum No. S-25-17

Program Year 2026 Areas of Substantial Unemployment under the Workforce

Innovation and Opportunity Act, dated July 28, 2025.

7. Attachments.

• Appendix I – WIOA Youth Allotment Activities

• Appendix II – WIOA Adult Allotment Activities

• Appendix III – WIOA Dislocated Worker Allotment Activities

• Appendix IV – Wagner-Peyser Act ES Allotment Activities

• Appendix V – Workforce Information Grants Allotment Activities

• Appendix VI – Submission Requirements and Reporting

• Appendix VII – Submission Requirements and Financial Reporting for Outlying Areas

WIOA Title I Grant Consolidation

• Attachment A – Program Year 2026 Funding

• Attachment B – WIOA and Wagner-Peyser Statutory Formula Descriptions for State

Allotments

• Attachment C – WIOA Statutory and Discretionary Formulas for Sub State Allocations

• Attachment D – WIOA Youth Activities State Allotments, PY 2026 vs PY 2025

• Attachment E – WIOA Adult Activities State Allotments, PY 2026 vs PY 2025

• Attachment F – WIOA Adult Activities PY 2026 State Allotments, July 1, and October 1

Funding

• Attachment G – WIOA Dislocated Worker Activities State Allotments, PY 2026 vs PY

• Attachment H – WIOA Dislocated Worker Activities PY 2026 State Allotments, July 1, and October 1 Funding

• Attachment I – Employment Service (Wagner-Peyser) Allotments, PY 2026 vs PY 2025

• Attachment J – Workforce Information Grants to States Allotments, PY 2026 vs PY 2025

• Attachment K – WIOA Youth, Adult, and Dislocated Worker Outlying Areas Funding, PY 2026

• Attachment L – Estimated Governor's Reserve Maximums https://www.dol.gov/agencies/eta/advisories/tegl-16-22 https://www.dol.gov/agencies/eta/advisories/tegl-16-22 https://www.dol.gov/agencies/eta/advisories/tegl-01-23

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Appendix I – WIOA Youth Allotment Activities

State WIOA Youth Activities Funds: Title I--Chapter 2--Youth Activities.

A. State Allotments. The appropriated level for PY 2026 for WIOA Youth Activities totals

$948,130,000. After reducing the appropriation by $225,000 for set asides authorized by the Act and reserving $925,200 for Migrant and Seasonal Farmworker (MSFW) Youth, $946,979,800 is available for Youth Activities, which includes $14,204,697 for Native

American grantees, $930,443,165 for states, and $2,331,938 for outlying areas. The

WIOA Youth formula has a section in WIOA for a reservation for MSFW Youth if the appropriation exceeds $925,000,000. Per WIOA sec. 127(a)(1), ETA reserved 4 percent

($925,200) of the excess amount for MSFW Youth. Note that under WIOA the basis for calculating the 1/4 of one percent reserved for outlying areas is based on the total available for Youth Activities (after set asides authorized by the Act) after the MSFW

Youth and Native American reservations. The Native American reservation is calculated on the total available for Youth Activities (after set asides authorized by the Act) after the

MSFW Youth reservation. Attachment D contains a breakdown of the WIOA Youth

Activities program allotments by state for PY 2026 and provides a comparison of these allotments to PY 2025. Please note that the Department will provide information on the

MSFW and Native American Youth allotments in a separate TEGL.

Formula funds are allotted for PY 2026 Youth Activities among the states, in accordance with WIOA formula requirements. For reference, the Department allots these funds to the states based on the following data factors (summarized slightly):

1. The average number of unemployed individuals for Areas of Substantial

Unemployment (ASUs) for the 12-month period, July 2024 through June 2025, as prepared by the states under the direction of the Bureau of Labor Statistics (BLS), in each state compared to the total number of unemployed individuals in ASUs in all states;

2. The number of excess unemployed individuals or excess unemployed individuals in

ASUs (depending on which is higher) averages for the same 12-month period, July

2024 through June 2025, compared to the total excess individuals or ASU excess in all states; and

3. The number of disadvantaged youth (age 16 to 21, excluding college students not in the workforce and military) from special tabulations of data from the American

Community Survey (ACS) in each state compared to the total number of disadvantaged youths in all states. The Census Bureau collected the data used in the special tabulations for disadvantaged youth between January 1, 2016, and December

31, 2020.

Since the total amount available for states in PY 2026 is below the required $1 billion threshold specified in WIOA sec. 127(b)(1)(C)(iv)(IV), which was also the case in PY

2025, the Department did not apply the WIOA additional minimum provisions (see

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Attachment B). Instead, the minimums of 90 percent of the prior year allotment percentage and 0.25 percent state minimum floor apply, as required by WIOA. WIOA also maintains that no state may receive an allotment that is more than 130 percent of the allotment percentage for the state for the previous year.

B. PY 2026 Funding WIOA Agreement/Notice of Award (NOAs). Youth program funds are available to states to use once the PY 2026 WIOA Annual Funding Agreement/NOA is complete.

C. Sub-State Allocations. States must distribute WIOA Youth Activities funds among local workforce areas (subject to reservation of the 15 percent limitation for statewide workforce employment and training activities) in keeping with the provisions of WIOA sec. 128 and their approved Unified or Combined WIOA State Plan. In allocating Youth

Activities funds to local areas for PY 2026, states may use either the allocation formula described in WIOA sec.128(b)(2) or the discretionary allocation formula in WIOA sec.

128(b)(3) and ensure the state policy articulated in the approved State Plan remains consistent with this guidance. Consistent with sec. 182(e) of WIOA, sub-state allocations must be made available to local areas not later than 30 days after the date funds are made available to the state or 7 days after the date the local plan for the area is approved, whichever is later. See Attachment C for a description of sub-state allocation formulas.

1.Allocation Formula. Thirty-three and 1/3 percent of the total funds available for local allocations are allocated based on each local area’s relative share of each data factor listed below.

a. The relative number of unemployed individuals in Areas of Substantial

Unemployment (ASUs) in each local area, compared to the total number of unemployed individuals in ASUs in all local areas in the state. For this factor, the timeframe for comparison is the 12-month period, July 2024 to June 2025.

b. The relative excess number of unemployed individuals in each local area, compared to the total excess number of unemployed individuals in all local areas in the state. See the definition of “excess number” below which requires a comparison of the excess unemployed in ASUs with excess unemployed in all areas. For this factor, the timeframe for comparison is the 12-month period, July 2024 to June 2025.

c. The relative number of disadvantaged youth (age 16 to 21, excluding college students not in the workforce and military), in each local area, compared to the total number of disadvantaged youth in all local areas in the state. The number of disadvantaged youth comes from special tabulations of data from the ACS prepared in accordance with the definition provided in WIOA. The

Census Bureau collected this data between January 1, 2016, and December 31, 2020.

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For purposes of identifying ASUs for the Youth Activities sub-state allocation formula, states must use data made available by BLS (as described in Local Area

Unemployment Statistics (LAUS) Technical Memorandum No. S-25-17).

The term “excess number” means, used with respect to the excess number of unemployed individuals within a local area, the higher of (i) the number that represents the number of unemployed individuals in excess of 4.5 percent of the civilian labor force in the local area; or (ii) the number that represents the number of unemployed individuals in excess of 4.5 percent of the civilian labor force in ASUs in such local area.

In order to determine the number of disadvantaged youth for the sub-state Youth formula, states must use the special tabulations of ACS data available at https://www.dol.gov/agencies/eta/budget/formula/disadvantagedyouthadults.

ETA obtained updated data for use in PY 2023, and the same data must be used in PY

2026. ETA published this information in TEGL No. 1-23, Updated Disadvantaged

Youth and Adult Data for use in Program Year (PY) 2023 and future Workforce

Innovation and Opportunity Act (WIOA) Youth and Adult Within-State Allocation

Formulas.

States must utilize a minimum percentage (or stop loss) to ensure that no local area receives an allocation percentage that is less than 90 percent of the average allocation percentage received by the local area for the previous two years. An allocation percentage is the local area’s share or percentage of funds allocated to all local areas. States must not use 90 percent of the average amount allocated to the local area for the last two years. States must obtain amounts necessary to increase allocations to local areas to comply with the minimum percentage requirement by proportionately reducing the allocations to be made to other local areas.

States must not use a maximum percentage (or stop gain).

2. Discretionary Formula. Alternatively, a state may use a discretionary formula. When using a discretionary formula, a state distributes a portion that is at least 70 percent of the funds according to the allocation formula described in subparagraph C.1 of this

Appendix, and the remainder on the basis of a formula that incorporates additional factors relating to:

a. excess youth poverty in urban, rural, and suburban areas; and

b. excess unemployment above the state average in urban, rural, and suburban local areas.

Of the portion of funds distributed according to the allocation formula described in subparagraph C.1, a state must not assign unequal percentages to the ASU, excess unemployment, and disadvantaged data factors. These three data factors carry equal weights and must not total less than 70 percent of the formula.

https://www.dol.gov/agencies/eta/advisories/tegl-01-23

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Of the remainder, states may determine the percentage to allocate to data factors reflecting excess youth poverty and excess unemployment above the state average.

States also have flexibility in choosing what data they want to use related to youth poverty and excess unemployment above the state average. States may not reuse the allocation formula data factors (ASU, excess unemployment, and disadvantaged youth) to distribute the remainder. Using data factors such as high school dropout rate may be an acceptable reflection of youth poverty, but the state must articulate how such factors relate to youth poverty in the State Plan.

For the portion of funds distributed according to the allocation formula (which represent at least 70 percent of the distributed funds), the state must employ the minimum percentage (or stop loss), as described in subparagraph C.1 on the allocation formula. The state may choose whether to apply the minimum percentage to the remainder portion of funds that the state distributes according to the discretionary formula (which represent not more than 30 percent of the distributed funds).

The State Board must develop the discretionary formula, and the Secretary must approve it as part of the State Plan.

D. Transfer of Funds. Local workforce areas do not have the authority to transfer funds to or from the Youth Activities program.

E. Re-allotment of Funds. WIOA sec. 127(c) requires the Secretary of Labor to recapture and reallot Youth Activities program formula funds based on state obligation levels at the end of the first program year of use (ETA reallots in accordance with 20 CFR 683.135).

PY 2025 funds are only available for Federal obligation until the end of the program year, and so the Secretary does not have authority to reobligate PY 2025 funds after the first program year. Therefore, any reallotment of funds requires the use of PY 2026 funds. In other words, recapture and reallotment of PY 2026 funds is based on obligation levels of

PY 2025 funds at the end of PY 2025.

1. The obligation threshold a state must meet to avoid recapture under WIOA sec.

127(c)(2) is 80 percent. The term obligation is defined at 2 CFR 200.71. The funds that a state allocates to a local area are state obligations. WIOA requires states to allocate at least 85 percent of Youth Activities funds to local areas. Therefore, by making the required local allocations, the state has obligated more than 80 percent of its PY 2025 funds, and no further action is required regarding reallotment of PY 2026 funds.

2. States report the aggregate amount of allocations to the local areas on the Local

Youth ETA-9130 (B) financial reports, along with obligations by local areas of those funds. Additional guidance and information on the access and use of the PMS

Financial Reporting System for the submission of future ETA-9130 quarterly

I-5 financial reports is provided in Training and Employment Notice (TEN) No. 16-22.

The PMS Financial Reporting System training sessions will be recorded and available for future reference.

F. Small State Minimum Allotment States. WIOA sec. 129(a)(4)(B) allows a state that receives a small state minimum allotment under WIOA sec. 127(b)(1) (relating to the youth formula program) or 132(b)(1) (relating to the adult formula program) to submit a request for approval to the Department to decrease the percentage of funds spent on out-of-school youth (OSY) to not less than 50 percent in a local area. To determine if a state receives a small state minimum allotment, review the PY 2026 columns in Attachments

D and E. States that meet the criteria for PY 2026 as a minimum allotment state are those states that receive a PY 2026 WIOA Youth allotment of $2,326,108 or receive a PY 2026

WIOA Adult allotment of $2,183,228. If a state wishes to submit a small state OSY exception request, they must submit the request for PY 2026 by September 30, 2026.

The request must be submitted to the appropriate ETA Regional Administrator and contain the required justification outlined in the WIOA final rule at 20 CFR 681.410(b).

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Appendix II – WIOA Adult Allotment Activities

State Adult Employment and Training Activities Funds: Title I--Chapter 3--Adult and

Dislocated Worker Employment and Training Activities.

A. State Allotments. The total appropriated funds for Adult Activities in PY 2026 is

$875,649,000. After reducing the appropriated amount by $169,000 for set asides authorized by the Act, $875,480,000 remains for Adult Activities, of which $873,291,300 is for states and $2,188,700 is for outlying areas. Attachment E shows the PY 2026

Adult Employment and Training Activities allotments and a state-by-state comparison of the PY 2026 allotments to PY 2025 allotments.

The three formula data factors that the Department uses to distribute WIOA Adult

Activities funds among the states are the same as those used for the Youth Activities formula, except that data is used for the number of disadvantaged adults (age 22 to 72, excluding college students not in the workforce and military), rather than the number of disadvantaged youth. Since the total amount available for the Adult Activities program for states in PY 2026 is below the required $960 million threshold specified in WIOA sec. 132(b)(1)(B)(iv)(IV), as was also the case in PY 2025, the WIOA additional minimum provisions (See Attachment B) are not applicable. Instead, as required by

WIOA, the minimums of 90 percent of the prior year allotment percentage and 0.25 percent state minimum floor apply. Like for the Youth program, WIOA also provides that no state may receive an allotment that is more than 130 percent of the previous year allotment percentage for the state.

B. PY 2026 Funding WIOA Agreement/NOAs. For PY 2026, Congress appropriated funds for this program in two portions: $163,649,000 is available for obligation on July 1, 2026

(PY 2026), and $712,000,000 is available for obligation on October 1, 2026 (FY 2027).

After reductions for set asides authorized by the Act, the amount available for Adult

Activities on July 1, 2026 (PY 2026) is $163,649,000, and on October 1, 2026, is

$711,831,000. The Department prorated allotments to states and outlying areas based on these total amounts and will issue two NOAs (subject to the state submitting an approved

State Plan under secs. 102 or 103 of WIOA). The first NOA covers the period starting

July 1, 2026, under the PY 2026 WIOA grant agreement, and the other for October 1, 2026, also under the PY 2026 WIOA grant agreement (see Attachment F).

C. Sub-State Allocations. States must distribute WIOA Adult Activities funds for PY 2026 allotments among local workforce areas (subject to reservation of the 15 percent limitation for statewide employment and training activities) in accordance with the provisions in WIOA section 133 and the approved State Plan. States must calculate the up to 15 percent available for statewide activities on the total allotment for PY 2026. In allocating WIOA Adult funds to local areas for PY 2026, states may use either the allocation formula described in WIOA sec. 133(b)(2)(A) or the discretionary allocation formula in WIOA sec. 133(b)(3). Also, states must ensure the state policy articulated in the approved WIOA Unified or Combined State Plan remains consistent with this guidance. See Attachment C for a description of sub-state allocation formulas.

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1. Allocation Formula. Thirty-three and 1/3 percent of the total funds available for local allocations are allocated based on each local area’s relative share of each data factor listed below.

1. The relative number of unemployed individuals in ASUs in each local area, compared to the total number of unemployed individuals in ASUs in all local areas in the state. For this factor, the timeframe for comparison is the 12-month period, July 2024 to June 2025.

2. The relative excess number of unemployed individuals in each local area, compared to the total excess number of unemployed individuals in all local areas in the state. See the definition of “excess number” below which requires a comparison of the excess unemployed in ASUs with excess unemployed in all areas. For this factor, the timeframe for comparison is the 12-month period, July 2024 to June 2025.

3. The relative number of disadvantaged adults (age 22 to 72, excluding college students not in the workforce and military) in each local area, compared to the total number of disadvantaged adults in all local areas in the state. The

Census Bureau collected the data used in the special tabulations for disadvantaged adults between January 1, 2016, and December 31, 2020.

For purposes of identifying ASUs for the Adult Activities sub-state allocation formula, states should use data made available by BLS (as described in LAUS

Technical Memorandum No. S-25-17).

The term “excess number” means, used with respect to the excess number of unemployed individuals within a local area, the higher of (i) the number that represents the number of unemployed individuals in excess of 4.5 percent of the civilian labor force in the local area; or (ii) the number that represents the number of unemployed individuals in excess of 4.5 percent of the civilian labor force in ASUs in such local area.

In order to determine the number of disadvantaged adults for the sub-state Adult formula, states must use the special tabulations of ACS data available at https://www.dol.gov/agencies/eta/budget/formula/disadvantagedyouthadults.

ETA obtained updated data for use in PY 2023 and the same data must be used in PY

2026. ETA published this information in TEGL No. 1-23, Updated Disadvantaged

Youth and Adult Data for use in Program Year (PY) 2023 and future Workforce

Innovation and Opportunity Act (WIOA) Youth and Adult Within-State Allocation

Formulas.

States must utilize a minimum percentage (or stop loss) to ensure that no local area receives an allocation percentage that is less than 90 percent of the average allocation percentage of the local area for the previous two years. An allocation percentage is https://www.dol.gov/sites/dolgov/files/ETA/budget/pdfs/2016-2020/TEGL%2001-23.pdf

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the local area’s share or percentage of funds allocated to all local areas. States must not use 90 percent of the average amount allocated to the local area for the last two years. States must obtain amounts necessary to increase allocations to local areas to comply with the minimum percentage requirement by proportionately reducing the allocations to be made to other local areas.

States must not use a maximum percentage (or stop gain).

In accordance with sec. 182(e) of WIOA, states must make sub-state allocations available to local areas not later than 30 days after the date funds are made available to the state, or 7 days after the date the local plan for the area is approved, whichever is later.

2. Discretionary Formula. Alternatively, a state may use a discretionary formula. When using a discretionary formula, a state distributes a portion that is at least 70 percent of the funds according to the allocation formula described in subparagraph C.1 of this

Appendix, and the remainder on the basis of a formula that incorporates additional factors related to:

a. excess poverty in urban, rural, and suburban areas, and

b. excess unemployment above the state average in urban, rural, and suburban local areas.

Of the portion of funds distributed according to the allocation formula described in subparagraph C.1, a state must not assign unequal percentages to the ASU, excess unemployment, and disadvantaged data factors. These three data factors carry equal weights and must total at least 70 percent of the formula.

Of the remainder, states may determine the percentage to allocate to data factors reflecting excess poverty and excess unemployment above the state average.

States also have flexibility in choosing the data they want to use related to poverty and excess unemployment above the state average. States may not reuse the allocation formula data factors (ASU, excess unemployment, and disadvantaged adults) to distribute the remainder. Using data factors not directly describing poverty or excess unemployment may be acceptable, but the state must articulate how such factors relate to the statutory requirements in the State Plan.

The discretionary formula must also employ a minimum percentage, as described in subparagraph C.1 on the allocation formula. The minimum percentage may be applied to the 70 percent (or greater) portion or to the entire allocation.

The State Board must develop the discretionary formula, and the Secretary must approve it as part of the State Plan.

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D. Transfers of Funds. WIOA sec. 133(b)(4) provides the authority for local workforce areas, with approval of the Governor, to transfer up to 100 percent of the Adult Activities funds for expenditure on Dislocated Worker Activities, and up to 100 percent of

Dislocated Worker Activities funds for expenditure on Adult Activities.

E. Re-allotment of Funds. WIOA sec. 132(c) requires the Secretary of Labor to recapture and reallot Adult Activities program formula funds based on state obligation levels at the end of the first program year of use (ETA reallots in accordance with 20 CFR 683.135).

PY 2025 funds are only available for Federal obligation until the end of the program year, and so the Secretary does not have authority to re-obligate PY 2025 funds after the first program year. Therefore, any re-allotment of funds requires the use of PY 2026 funds.

In other words, re-allotment of PY 2026 funds is based on obligation levels of PY 2025 funds at the end of PY 2025.

1. The obligation threshold a state must meet to avoid recapture under WIOA sec.

132(c)(2) is 80 percent. The term obligation is defined at 2 CFR 200.71. The funds that a state allocates to a local area are state obligations. WIOA requires states to allocate at least 85 percent of Adult Activities funds to local areas. Therefore, by making the required local allocations, the state has obligated more than 80 percent of its PY 2025 funds and no further action is required regarding re-allotment of PY 2026 funds.

2. States report aggregate allocations to the local areas on the Local Adult ETA 9130

(D) financial reports, along with obligations by local areas of those funds. Additional guidance and information on the access and use of the PMS Financial Reporting

System for the submission of future ETA-9130 quarterly financial reports is provided in TEN No. 16-22. The PMS Financial Reporting System training sessions will be recorded and available for future reference.

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Appendix III – WIOA Dislocated Worker Allotment Activities

State Dislocated Worker Employment and Training Funds: Title I--Chapter 3--Adult and

Dislocated Worker Employment and Training Activities.

The amount appropriated for Dislocated Worker Activities in PY 2026 totals $1,396,412,000

The total appropriation includes formula funds for the states, while the National Reserve is used for National Dislocated Worker Grants, technical assistance and training, demonstration projects, Workforce Opportunity for Rural Communities, Community College Grants, and the outlying areas’ Dislocated Worker allotments. After reducing the appropriated amount by $251,000 for set asides authorized by the Act, a total of $1,396,161,000 remains available for Dislocated

Worker Activities. The amount available for outlying areas is $3,490,403, leaving $297,321,597 for the National Reserve and a total of $1,095,349,000 available for states.

A. State Allotments. Attachment G shows the PY 2026 Dislocated Worker Activities allotments and a state-by-state comparison of the PY 2026 allotments to PY 2025 allotments.

WIOA prescribes different data factors for the federal allotment of Dislocated Worker funds by the Department to the states, and for the sub-state allocation of Dislocated

Worker funds by the Governor within a state. The Department has allotted the PY 2026

Dislocated Worker program state allotments among the states in accordance with the factors required by WIOA. For reference, the three data factors that the Department considers in allocating these funds to the states are (summarized slightly):

1. The relative number of unemployed individuals in each state, compared to the total number of unemployed individuals in all states. For this factor, the timeframe for comparison is the 12-month period, October 2024 through September 2025.

2. The relative number of excess unemployed individuals in each state, compared to the total excess number of unemployed individuals in all states. For this factor, the timeframe for comparison is the 12-month period, October 2024 through September

2025. No comparison to ASU excess is performed for this data factor.

3. The relative number of individuals in each state who have been unemployed for 15 weeks or more, compared to the total number of individuals in all states who have been unemployed for 15 weeks or more. For this factor, the timeframe for comparison is the 12-month period, October 2024 through September 2025.

WIOA sec. 132(b)(2)(B)(iii)(I) requires the Dislocated Worker formula to adopt a 90 percent minimum of the prior year allotment percentage (stop loss). WIOA also provides that no state may receive an allotment that is more than 130 percent of the allotment percentage for the state for the previous year (stop gain) under section

132(b)(2)(B)(iii)(II).

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B. PY 2026 Funding WIOA Agreement/NOAs. For PY 2026, Congress appropriated funds for this program in two portions for both formula funds and National Reserve funds. For state formula funds, $235,553,000 is available for obligation on July 1, 2026 (PY 2026), and $860,000,000 is available for obligation on October 1, 2026 (FY 2027). For the

National Reserve, which includes funds for the outlying areas, $100,859,000 is available for obligation on July 1, 2026 (PY 2026), and $200,000,000 is available for obligation on

October 1, 2026 (FY 2027). After reductions for set asides authorized by the Act, the amount available for state formula funds on July 1, 2026 is $235,553,000 and on October

1, 2026 is $859,796,000. For the National Reserve, the amount available on July 1, 2026 is $100,859,000 and on October 1, 2026 is $199,953,000. Allotments to states and outlying areas are prorated based on the two amounts for formula funds and National

Reserve, respectively. ETA will issue allotments in two NOAs: one for July 1, 2026, under the PY 2026 WIOA grant agreement, and the other for October 1, 2026, also under the PY 2026 WIOA grant agreement (see Attachment H).

C. Sub-State Allocations. States will distribute Dislocated Worker Activities funds for PY

2026 among local workforce areas (subject to the Governor’s reservation of up to 25 percent for statewide Rapid Response activities under WIOA sec. 133(a)(2) and the 15 percent limitation for statewide employment and training activities), in accordance with the provisions in WIOA section 133 and the approved State Plan. States must calculate up to 15 percent for statewide activities on the total allotment for PY 2026.

In allocating WIOA Dislocated Worker funds to local areas for PY 2026, states must ensure the state policy articulated in the approved State Plan remains consistent with this guidance. See Attachment C for a description of sub-state allocation formulas.

Governors continue to prescribe the Dislocated Worker formula for sub-state allocations.

Under WIOA, the data factors that must be included are:

• insured unemployment data,

• unemployment concentrations,

• plant closing and mass layoff data,

• declining industries data,

• farmer-rancher economic hardship data, and

• long-term unemployment data.

A state may assign zero weight to a factor only where the state is able to demonstrate it does not have an appropriate data source to accurately reflect state needs for a given data factor. For example, the BLS no longer produces the plant closing and mass layoff data, one of the six data factors WIOA requires. ETA recognizes that an accurate source of such data is no longer available at the national level. Some states have sub-state administrative data available, and others do not. In order to assign a weight of zero to a data factor, such as the plant closing and mass layoff data factor, the state must include the following information in their WIOA Unified or Combined State Plan:

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• An inventory of available national or state-level data sources germane to the data factor.

• A discussion of why the available data sources are inadequate for the purposes of assigning a weight to a given data factor; and

• A description of how the Governor’s formula is appropriate to distribute funds equitably throughout the state.

(Note that weighting a data factor at zero percent is not allowable under any other circumstance.)

WIOA requires the use of a minimum percentage (or stop loss) (see WIOA sec.

133(b)(2)(B)(iii)). A local workforce area must receive an allocation percentage that is no less than 90 percent of the average allocation percentage of the local area for the two preceding years. In the event of a shortage of funds, states must obtain the amounts necessary to increase the allocations to local areas to comply with this provision by proportionately reducing the allocations to other local areas. The minimum percentage methodology states use for Dislocated Worker funds is the same minimum percentage methodology used in the sub-state Youth and Adult allocation formulas. States are not required to use a maximum percentage (or stop gain) but may use one if desired.

D. Transfers of Funds. WIOA sec. 133(b)(4) provides the authority for local workforce areas, with approval of the Governor, to transfer up to 100 percent of the Dislocated

Worker Activities funds for expenditure on Adult Activities, and up to 100 percent of

Adult Activities funds for expenditure on Dislocated Worker Activities.

E. Re-allotment of Funds. WIOA sec. 132(c) requires the Secretary of Labor to recapture and reallot Dislocated Worker program formula funds based on state obligation levels at the end of the first program year of use (ETA reallots in accordance with 20 CFR

683.135). PY 2025 funds are only available for Federal obligation until the end of the program year, and so the Secretary does not have authority to re-obligate PY 2025 funds after the first program year. Therefore, any re-allotment of funds requires the use of PY

2026 funds. In other words, the Department will reallot PY 2026 Dislocated Worker formula funds among states during PY 2026 based on state obligations of PY 2025 funds made during PY 2025. Likewise, obligation of PY 2026 funds will impact recapture and reallotment of PY 2027 funding.

1. WIOA sec. 134(a)(2)(A)(ii) gives states the flexibility to use PY 2025 Rapid

Response funds that are not obligated by the end of PY 2025 for statewide activities.

Per WIOA sec. 132(c), states must still obligate 80 percent of their PY 2025

Dislocated Worker program formula funds, which includes Rapid Response funds, by

June 30, 2026 or potentially have PY 2026 funds recaptured and re-allotted to states who have obligated 80 percent of their PY 2025 funds.

2. The term obligation is defined at 2 CFR 200.71. The funds a state allocates to local areas are state obligations. States report aggregate allocations to the local areas on the Local Dislocated Worker ETA 9130 (F) financial reports, along with obligations

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by local areas of those funds. Additional guidance and information on the access and use of the PMS Financial Reporting System for the submission of future ETA-9130 quarterly financial reports is provided in TEN No. 16-22. The PMS Financial

Reporting System training sessions will be recorded and available for future reference.

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Appendix IV – Wagner-Peyser Act ES Allotment Activities

Wagner-Peyser Act ES Final Allotments. The appropriated level for PY 2026 for grants for the ES programs totals was $675,052,000. After reducing the appropriated amount by $155,000 for set asides authorized by the Act, $674,897,000 is available for ES programs. After determining the funding for Guam and the United States Virgin Islands, ETA calculates allotments to states using the formula set forth at section 6 of the Wagner-Peyser Act (29 U.S.C.

49e). ETA based PY 2026 formula allotments on each state’s share of calendar year 2025 monthly averages of the Civilian Labor Force (CLF) and unemployment. The distribution of

Wagner-Peyser Act funds for PY 2026 includes $673,251,836 for states, as well as $1,645,164 for Guam and the United States Virgin Islands. Attachment I shows the distribution of PY 2026

ES formula amounts by state compared to PY 2025.

Section 7(a) of the Wagner-Peyser Act (49 U.S.C. § 49f(a)) authorizes states to use 90 percent of the funds allotted to a state for labor exchange services, and other career services such as job search and placement services to job seekers; appropriate recruitment services for employers;

program evaluations; developing and providing labor market and occupational information;

developing management information systems; and administering the work test for unemployment insurance claimants.

Section 7(b) of the Wagner-Peyser Act (49 U.S.C. § 49f(b)) states that 10 percent of the funds allotted to a state must be reserved for use by the Governor to provide performance incentives for public employment service offices and programs, provide services for groups with special needs, and provide for the extra costs of exemplary models for delivering services of the type described in section 7(a) and models for enhancing professional development and career advancement opportunities of state agency staff.

https://www.govinfo.gov/app/details/USCODE-2010-title29/USCODE-2010-title29-chap4B-sec49f

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Appendix V – Workforce Information Grants Allotment Activities

Workforce Information Grants (WIGs). Total funds for PY 2026 are $32,031,000. Funds are distributed to states by administrative formula with $176,874 for Guam and the United States

Virgin Islands. Guam and the United States Virgin Islands allotment amounts are partially based on CLF data from the BLS Current Population Survey. The remaining funds are distributed to the states with 40 percent distributed equally to all states, and 60 percent distributed based on each state’s share of the CLF for the 12 months ending September 2025. Attachment J contains the allotment amounts. Activities to be performed with money from WIGS will be described in a

TEGL published later this year.

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Appendix VI – Submission Requirements and Reporting

1. Submission Requirements. To achieve greater efficiency and as part of ETA’s ongoing effort to streamline the mandatory grant award process, all states are required to submit an electronically signed copy of an SF-424, Application for Federal Assistance, through

Grants.gov for each WIOA funding stream under Funding Opportunity Numbers. As noted in Section 3.b. of this TEGL, outlying areas that want to consolidate Adult, Dislocated Worker, and Youth funds into a single grant must follow steps identified in Appendix VII. However, outlying areas that do not choose to consolidate funds must follow the steps identified herein for states.

• ETA-TEGL-10-25-YOUTH [CFDA 17.259]

• ETA-TEGL-10-25-ADULT [CFDA 17.258]

• ETA-TEGL-10-25-DW [CFDA 17.278]

An electronically submitted SF-424 through Grants.gov constitutes an official signed document and must reflect the amount for each WIOA funding stream (Youth, Adult, and

Dislocated Worker). The closing date for receipt of each SF-424 is 30 days from the issue date of this TEGL.

The PY 2026 “base” allotment of WIOA Adult and Dislocated Worker funds will be awarded during the period of availability beginning July 2026. The FY 2027 “advance” allotment will be awarded in the period of availability starting October 2026. A copy of the executed PY

2026 WIOA Agreement will be available upon award of funds.

In addition, all states must submit an electronically signed SF-424, Application for Federal

Assistance, through Grants.gov for each Wagner-Peyser Act Employment Service (ES) program under Funding Opportunity Numbers:

• ETA-TEGL-10-25-ES [CFDA 17.207]

• ETA-TEGL-10-25-WIG [CFDA 17.207]

States must follow the instructions in this TEGL to receive Workforce Information Grants to

States (WIGS) funding, including submission of SF-424s. Note that WIGS have specific grant deliverable requirements not outlined in this document. A forthcoming TEGL will list these grant deliverable requirements.

An electronically submitted SF-424 through Grants.gov constitutes an official signed document and must reflect the amount for each ES program and WIGS. The closing date for receipt of each ES program SF-424 is 30 days from the issue date of this TEGL. ETA will award the ES program and WIGS funds in July 2026. A copy of the executed PY 2026 ES

Agreement will be available upon award of funds.

2. Grants.gov Submission Process. States must submit the SF-424, Application for Federal

Assistance, through Grants.gov. States needing to register with Grants.gov may do so here:

https://www.grants.gov/register http:// https:/www.grants.gov/register http:// https:/www.grants.gov/register https://www.grants.gov/register

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Registration is a one-time process, and states that already have a Grants.gov account do not need to register again. To submit the required SF-424s, states must:

• Select the SEARCH GRANTS tab on the Grants.gov homepage.

• Under the section, BASIC SEARCH CRITERIA, states enter the Funding Opportunity

Number referenced above in Section 1 of this appendix for each WIOA funding stream

(i.e. “ETA-TEGL”).

• Select the link to the applicable Opportunity Number provided in the search results.

• Select the PACKAGE tab.

• Under the ACTIONS column, select APPLY.

Submitting the SF-424 through Grants.gov constitutes an electronically signed SF-424, Application for Federal Assistance. For each funding stream, the Estimated Funding section of the SF-424 (item #18) must reflect the exact amount of the designated state allotment, referenced in the attachments to this TEGL. Additionally, Item #11 of the SF-424 must include the Catalog of Federal Domestic Assistance Number (CFDA) for the applicable

WIOA funding stream, which is referenced above in Section 1. Also, Item #15 of the SF-424 must indicate the amount of Indirect Costs claimed by the recipient. Example: “Indirect Costs for this award are estimated at $19,000.” (A dollar amount must be inserted even if it is $0).

This submission process can be complicated and time-consuming.