WSD25-03 gives California Local Boards more room to use Transitional Jobs and higher OJT reimbursement during PY 2026 and PY 2027. The waiver is useful only if local policy distinguishes the two tools, sets conditions for using the higher flexibility, and documents why the intervention fits the participant and employer.
Source + trust record
Source checked as of September 18, 2026. Primary authority: EDD Active Directives · WSD25-03.
Check result: WSD25-03 remains active California guidance implementing the approved PY 2026 and PY 2027 waivers for Transitional Jobs and On-the-Job Training. The waiver provides added flexibility but does not make the maximum use automatic; WIOA eligibility, allowable-cost, worker-protection, documentation, employer, and local-policy requirements still apply. 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 WAIVER GUIDANCE | UPDATE LOCAL USE RULES | Program + Fiscal + Employer Services | PY 2026 and PY 2027 | Transitional Jobs · OJT · Adult/DW funds · Small employers |
The bottom line
“Up to” is authority, not a default local rate.
California’s approved waiver lets Local Areas use up to 30% of combined Adult and Dislocated Worker funds for Transitional Jobs and allows up to 90% OJT wage reimbursement for qualifying employers with 50 or fewer employees. Neither maximum is required. Local policy should define when the added flexibility produces better participant outcomes, supports employer need, and remains a prudent use of formula funds.
Two tools for different problems
| Transitional Jobs | On-the-Job Training | |
|---|---|---|
| Primary purpose | Time-limited subsidized employment for eligible people with barriers, chronic unemployment, or inconsistent work history. | Train a participant for a specific job after hire while reimbursing part of the employer’s extraordinary training cost. |
| Waiver flexibility | Up to 30% of combined Adult/DW funds instead of the 10% statutory baseline. | Up to 90% wage reimbursement for qualifying employers with 50 or fewer employees. |
| Employment relationship | Bridge toward unsubsidized employment. | Participant is hired into the job and trained to proficiency. |
| Main local control | Participant need, worksite quality, duration, wage/subsidy, supports, transition strategy. | Employer eligibility, reimbursement rate, training plan, duration, wage, competency, retention. |
When to use the higher OJT reimbursement
- Confirm employer size. Apply the 50-or-fewer criterion consistently.
- Require a real training plan. OJT is not a general wage subsidy.
- Set a reimbursement methodology. Decide what factors justify 90%, a lower rate, or no OJT.
- Check worker protections and employer history.
- Connect payment to training progress and continued employment.
When Transitional Jobs add value
- The participant has a documented employment barrier or weak work history that a subsidized work experience can address.
- The worksite provides meaningful supervision, learning, and a credible connection to future employment.
- The duration, wage, subsidy, supportive services, and case-management plan are explicit.
- The transition to unsubsidized employment is designed from the start.
- Program and fiscal leadership can see the cumulative Adult/DW share committed to Transitional Jobs.
Operational considerations for WDBs
- Update local OJT and Transitional Jobs policies for the PY 2026–27 waiver.
- Train employer-services and career-planning staff on the difference between the two tools.
- Add a documented justification when the maximum waiver flexibility is used.
- Align contracts, agreements, fiscal coding, and monitoring with the updated local policy.
- Track outcomes separately so leadership can tell whether the flexibility is producing value.
Watch out
- Do not automatically set every small-business OJT at 90%.
- Do not treat Transitional Jobs as ordinary subsidized staffing.
- Do not assume the waiver removed unrelated WIOA eligibility, allowable-cost, worker-protection, documentation, or employer requirements.
- Do not lose sight of the total Adult/DW funding exposure when expanding Transitional Jobs.
Source authority
Primary source: EDD WSD25-03 — WIOA Waiver Guidance: Transitional Jobs and On-the-Job Training.
Status: EDD lists WSD25-03 as active guidance implementing California’s approved PY 2026–27 waiver. Local-use recommendations above do not add requirements beyond the waiver, WIOA, and applicable local policy. Status checked September 16, 2026.
Response
[…] has already translated federal waiver authority into local flexibility through guidance such as WSD25-03 and WSD25-04. Those directives are the local operating layer; TEGL 05-25 explains the broader […]