MNJTP Frequently Asked Questions
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 incentive, the
MNJTP authorizes community colleges to issue debt on behalf of
employers that are creating new jobs and/or expanding operations in
Michigan for the purpose of funding a variety of training and
employee development needs for those new positions.
Q: How does this program work?
A: Eligible employers contact their community college and submit an
application. Community colleges then work with employers creating
new jobs to indentify training needs and calculate the needed
financial support to fund training. Preliminary agreements are used
to “set the clock”, lock in the date from which new employees can be
counted for the project and training expenses may be reimbursed. It
is preliminary in nature and either the college or the employer can
decide not to proceed. Final agreements need approval by the
community college board of trustees, but require no review or
approval from the State. The community colleges then raise capital
by either issuing debt in the form of bonds (by themselves or in a
group issuance administered by the Michigan Municipal Bond
Authority, or by using the colleges’ reserves or operating funds to self-fund projects. It is up to each college to determine the best
approach and financing mechanism to raise the training funds.
Finally, the colleges administer the training funds and ensure
employer needs are being met.
Q: How is the debt repaid?
A: Community colleges issue debt on behalf of employers. Employers
then repay the debt by a diversion of withholding taxes generated by
the wages earned by the new employees. Funds available through the
MNJTP are dependent upon training needs and projected withholding
tax revenue available to repay the debt.
Q: What are the benefits to participating employers?
A: Employers pay the cost of training for new employees with dollars
that would otherwise have been paid to the state for withholding
taxes. The MNJTP allows employers to take a credit and send those
dollars to the community colleges to retire the debt funding the
training program. If an employer hires the number of new employees
and pays the wages it certified to the college, the program costs
the employer nothing. However, should the employer not hire the
number they certify, or leave Michigan before the debt is retired
through normal withholding diversion, the employer would still be
liable for meeting the terms of the contract (participating
employers do assume the risk of repayment through a diversion of
withholding taxes).
Q: What type of training services and program costs can be funded
using the MNJTP?
A: A wide range of training can be offered, from highly
specialized/customized training to basic skills instruction; MNJTP
funds can be used for the following:
• 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;
• Administrative expenses for the new jobs training program;
• 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: Can the MNJTP pay for OJT?
A: No, OJT is not included as an allowable expense under the MNJTP.
Q: What happens if an employee resigns?
A: MNJTP funds follow the positions 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.