Source + trust record
Source checked as of September 18, 2026. Primary authority: EDD WSD23-08 and EDD’s current Active Directives list.
Check result: WSD23-08 remains active. California permits Local Boards to use stipends and incentive payments when supported by written local policy, tied to allowable program purposes, and adequately documented. The directive does not establish one statewide dollar cap. Stipends and incentives are not substitutes for wages when the facts establish an employment relationship or paid work that is subject to wage-and-hour requirements. This AI-assisted brief does not receive human legal or compliance review. Official sources control.
WDB decision strip
| STATUS | ACTION | PRIMARY OWNER | CURRENT TIMING | IMPACT |
|---|---|---|---|---|
| FINAL · ACTIVE | SET LOCAL PAYMENT CONTROLS | Program + Fiscal Leadership | Before stipends or incentives are issued | Participant payments · Youth · Supportive design · Allowable costs |
The bottom line
Stipends and incentives can be useful program tools, but they need a defined purpose, objective payment criteria, documentation, and fiscal controls before money is promised to participants. Local policy should distinguish compensation, supportive services, stipends, and incentive payments so the payment type matches the activity and funding authority.
Stipends and incentives can support participation and achievement—but only when a Local Board defines the purpose, conditions, and documentation before paying them
WSD23-08 gives California Local Boards a statewide framework for using stipends and incentive payments in WIOA-funded programs. The directive provides flexibility rather than a statewide dollar cap, but that flexibility comes with a core expectation: payments must be tied to program purposes, governed by written policy, documented, and clearly distinguished from wages.
At a glance
Issued
May 23, 2024
Local control
Written policy required
Statewide cap
None established
Core rule
Not a substitute for wages
Executive takeaway
The directive recognizes two different tools. A stipend generally supports participation by offsetting costs or burdens associated with an allowable activity. An incentive rewards achievement of a defined program milestone. Neither should be used to disguise compensation for productive work that should legally be paid as wages.
Design the policy before issuing payments
| Policy element | Why it matters |
|---|---|
| Eligible participants and activities | Defines who may receive payments and under what program authority. |
| Amount or calculation method | Creates consistency and helps demonstrate reasonableness. |
| Milestone or triggering event | Shows why the payment was earned or needed. |
| Required documentation | Connects the payment to the participant record, service, and funding source. |
| Internal controls | Reduces duplicate, unsupported, or inconsistent payments. |
What Local Boards should watch
- Wage substitution: If the participant is performing work for an employer, analyze wage-and-hour requirements rather than labeling the payment a stipend.
- Arbitrary amounts: The absence of a state cap does not eliminate the requirement that costs be reasonable and allowable.
- Weak case documentation: CalJOBS and fiscal records should show the service, milestone, need, approval, and payment.
- Inconsistent provider practices: Subrecipients should operate from the same Board-approved parameters rather than inventing separate rules.
No statewide dollar cap does not mean unlimited discretion. Local policies still need to satisfy WIOA, Uniform Guidance, applicable program rules, and basic standards of reasonableness and internal control.
Implementation checklist
- Review or adopt a written stipend/incentive policy.
- Separate incentives from stipends and from wages in policy language and accounting.
- Define approval authority and documentation standards.
- Train program, fiscal, and provider staff together so case-management and payment records match.
- Periodically sample payments for consistency and supporting evidence.
Source basis
Primary source: EDD WSD23-08 — Stipends and Incentive Payments
Interpretation note: Examples of internal controls are practical recommendations. EDD’s directive, WIOA program rules, and applicable labor law determine allowability.