������Ƶ

For years, leaders in career pathways, work-based learning, and apprenticeship have wrestled with their own versions of the same question: how do we better align the public funding to support these efforts at scale? Education, workforce, economic development, and human services systems contribute their own resources, but too often those investments operate in parallel rather than in partnership. The result is a familiar challenge: fragmented funding, fragmented accountability, and fragmented experiences for learners and workers. 

Braiding and blending funds have become a tired refrain; it’s a necessary but insufficient strategy. Even the most skilled program leaders struggle to figure out how to braid their way to long-term sustainability, especially in today’s funding climate. Yet amid all of these conversations about the need for more and more creative public investment, one question has remained surprisingly quiet: what and how should employers contribute?

It’s an uncomfortable but increasingly necessary question for the world of work-based learning. Across the country, states are setting ambitious goals to expand work-based learning opportunities to more young people, but many are struggling to recruit enough employers to make those goals a reality. In some communities, employers are treated as scarce volunteers whose participation must be carefully cultivated. In others, employers pay fees to intermediary organizations that operate apprenticeship and other work-based learning programs. The field can’t decide if employers are benefactors or clients. We often describe a desired future state where employers are “co-developers” in talent development, but the field has never fully grappled with what this means and whether or not that implies they should also be “co-investors”. 

When the field tiptoes toward this question, the conversation typically begins and ends with international examples. The United Kingdom’s and Switzerland’s employer-led are frequent reference points. We invoke them as evidence that employers can be partners and even investors in talent development systems, but then we quickly move on, declaring ruefully that such models are just not possible in the U.S. 

But the truth is that such models already exist here. You probably have just never heard of them. Many U.S. states do collect revenue from employers to support workforce development. In fact, in our quick analysis, at least 18 states collect contributions from employers that are dedicated to funding workforce development, often for training for currently employed workers. Some of these levies have been on the books for decades. Two states have not just one, but two employer-financed funding streams. In all but one of these states, employer contributions are collected alongside their payments for unemployment insurance (UI) for their workers. 

The 18 states that we found had employer assessments for workforce development are a diverse group in size, region, and politics, as well as the amount they collect from employers. For example:   

• California employers pay an annual contribution equal to 0.1 percent of the first $7,000 of wages of each employee to the Employment Training Fund, which is collected with employers’ payments into the UI system. Annual revenues, which totaled , are distributed by a with representation from business, private sector labor organizations, and the public. The funds are used to for the costs of skills training for incumbent employees and new hires who were previously unemployed. Funding is tied to employment and wage outcomes, with employers receiving performance-based reimbursement only after trainees are hired into jobs that meet set wage thresholds and retention goals.
• UI taxes are typically experience-rated, meaning employers whose former workers draw more in benefits pay higher rates. But some benefits can’t be charged back to any one employer, such as when layoffs follow a natural disaster or when benefits are paid out by mistake. Louisiana recoups these costs through an assessment spread across all employers, and it channels a portion of the revenue into its . The amount available depends on the health of the state’s UI trust fund; no funds were allocated during the pandemic, for example, when unemployment caused the UI trust fund to dip below $750 million. Approximately $25.5 million was for the program in 2025. Funds are used to upgrade the job skills of existing employees, with an emphasis placed “on preventing job loss caused by obsolete skills, technological change, or national or global competition; retaining jobs; and creating jobs in labor demand occupations.” 
• Mississippi collects from employers an annual workforce development contribution equal to 0.20 percent of the first $14,000 of each employee’s wages, in addition to what employers contribute for UI. The revenue is split among three funds. The , which receives about $22 million annually, supports non-credit skills training delivered by community colleges, chiefly for incumbent and newly hired workers, but individuals in correctional institutions nearing release and high school seniors may also participate. The , which receives about $5 million per year, pays training and related costs associated with job creation and job retention, reskilling projects delivered by higher education institutions, one-stop centers, and other providers who apply on behalf of an employer. Apprenticeships and subsidized on-the-job training are eligible activities. The third fund pays the costs of the state workforce development board’s activities and projects it approves; in recent years, it has awarded with these monies. Two of these funds switch on and off with labor market conditions: the Workforce Enhancement Training contribution is suspended when unemployment averages above 5.5 percent, and the Mississippi Works contribution is collected only when the state’s UI trust fund is healthy.
• In Rhode Island, employers pay a Job Development Fund equal to 0.21 percent of their UI-taxable payroll. The state workforce development board used the fund to finance $14.6 million in programs in 2024. They include , which supports sector-based job training, , which funds partnerships of schools, youth-serving organizations, employers, and others to implement work-based learning and career exploration programs, , and .

These state skills funds receive relatively little attention, and it’s often hard to tell how the money is governed and spent. There’s also a basic timing problem. When the federal government funds job training, it usually spends more during recessions. These state funds work the opposite way. Because they come from assessments on employer payrolls and are linked to the UI system (or, in one state, a tax on business income), they rise and fall with the economy: flush with money during good times, but at risk of running dry during downturns–or being shut off altogether, as in Louisiana and Mississippi, just when workers need them most. This potential volatility makes it difficult to consider using these funds as a reliable foundation for broader talent development strategies.

Two other issues stand out. Many of these state funds focus on workers who already have jobs. That’s an important group, particularly if upskilling workers to higher-wage jobs is what’s emphasized, but incumbent workers are not usually at the center of conversations about career pathways. And it’s not clear whether states are connecting this money to their broader talent development goals. But, could they be? 

Together, these investments raise important questions: What can we learn from states that have already created mechanisms for employers to help finance workforce development? And are there creative ways to think more deeply about what opportunities these structures offer for creating more co-ownership of talent development systems, including career pathways? 

As we look to the future, these questions may become even more important as AI and other technological shifts reshape our economy and labor market. The challenge ahead may not simply be finding new funding to keep pace with rapid change. It may be dramatically rethinking the structure of the talent development system itself, including how the costs, benefits, and risks–the terms of ownership–are shared differently.