Required Wage Increases Could Be Temporarily Suspended

More employers are no longer using the Department of Veterans Affairs (VA) Montgomery GI Bill On-the-job training program for veterans because of the financial cost. For employers, it means paying out more money than necessary in order to secure a solid employee.

Under the Montgomery GI Bill On-the-job Training Program, the VA enters into agreements with employers whereas employers pay veterans the same wages as other employees during their job training. Additionally, employers give veterans raises every 6 months lasting up to 2 years. At the same time, the veterans collect a stipend from the VA which decreases at the same rate as their wages increase from their employer. In the end, the veteran has a stable income.

A new bill proposing to eliminate the guaranteed wage increases is in the House. Opponents of the bill say veterans will end up receiving less money due to the declining VA stipend. The reality is employers are not willing to pay the increases resulting in veterans making less money. The VA’s payments will also cease as employers will no longer meet the VA’s program qualifications. Beyond gaining what is hoped to be an exceptional employee, there is no advantage for the employer to participate in the program.

The changes to the program will be temporary and are designed to help those employers hit hard from the down economy but still interested in participating in the Montgomery GI Bill On-the-job Training Program. It is hoped once the economy recovers the program will resume as designed.

A provisional stoppage of the pay raise requirement could seal an agreement but that is only possible if the VA benefits do not decrease after 6 months. The bill is currently stalled in the house because of budgetary concerns and this agreement may only add to those problems. New allowance amounts will most likely increase the amount of employers participating in the program which will cause the VA to pay out more stipends.

Whatever happens, it is hoped the end result will benefit the veterans. While employers everywhere are certainly feeling the strain from the economy, trading off pay increases for high quality employees might be a solution.

Learn more about a bill that would eliminate veteran on-the-job payments.