Okla. Admin. Code § 612:10-7-230

Current through Vol. 42, No. 7, December 16, 2024

Section 612:10-7-230 - Self-employment programs

(a) Self-employment is not a vocational goal itself but a method of achieving employment. Self-employment programs may be divided into Contract Labor and Self-Employment.

(1) Contract Labor. Employment is contract labor when the client has a contract or on-going business with a company or person to provide a specific product or service for a fee. The service or product is produced to meet the vendor's specifications and needs. The purchasing company often supervises the work.

(2) Self-Employment. In Self-Employment, the client owns, manages and operates a business selling goods or services for the purpose of making a profit. Self-Employment ranges from sole proprietorships and independent contractors to multi-employee companies and independent franchise operations.

(A) The client must have the proper skills and managerial ability to succeed in the trade or occupation for which the services are provided; and

(B) The client must have adequate resources available for the proper maintenance and upkeep of the required tools, equipment, and stocks. The client is responsible for the maintenance and repair of any tools, equipment, and stocks.

(b) Agency Role. The role of the VR Agency is not to serve as the sole funding source for self-employment endeavors. Other funding resources must be researched and utilized when available. DRS may participate in partially funding small business start-up or the retention of an existing client owned and operated business but does not have a capital or loan program for the establishment businesses. These investment resources must come from other sources. DRS will assist the client in making informed decisions, reduce or eliminate the barriers created by the disability(ies), training regarding small business development/self-employment, and assisting the individual in identifying possible funding resources.

(c) DRS will not assist with services to maintain or expand an existing self-employment business. However, services can be offered which might address changes brought on by a disabling condition that limits or interferes with a person's ability to continue to operate their business independently. These services might include but are not limited to such things as AT assessment for changes in worksite or job tasks; recommendations for purchase of adaptive equipment; worksite or vehicle modifications that are needed for a person to continue operating their business; or training in the use of required adaptive equipment or techniques. Before consideration will be given to assisting with an existing business the client must provide copies of the most recent two years of profit and loss statements and/or tax returns showing business profitability. DRS will not support businesses that have failed to demonstrate profit sufficient to support the individual financially.

(d) When to Consider Self-employment. The counselor may consider self-employment when all of the following guidelines have been met.

(1) The income derived from a self-employment plan is to be the primary source of support.

(2) Is the client's informed choice consistent with their unique strengths, resources, priorities, concerns, abilities, capabilities and interests.

(3) When a client expresses interest in self-employment, the individual will be required to participate in a vocational assessment with focus on self-employment potential. The assessment will include a self-evaluation completed by the client.

(4) The counselor will document, as appropriate, in the comprehensive assessment that the client has the academic, communication and managerial skills to manage their own business and the resources to demonstrate a likelihood of success.

(e) Once it has been determined by DRS that self-employment is a feasible goal, an IPE will be written to further assist the self-employment concept and the client is sent to training for developing a business plan.

(f) Certain individuals may require on-going supports or services for a business plan to be successful. The counselor will assist the individual in identifying and securing these support services. DRS cannot be responsible for funding these supports following successful employment outcomes.

(g) Clients who are receiving SSI/SSDI will be referred to a DRS Benefits Planner to review how profits from selfemployment will affect their benefits prior to the completion of an Individualized Plan for Employment.

(h) The agency may provide some financial assistance toward self-employment plans that have met the requirements as specified in policy. The counselor will determine the client's financial status and any required financial participation by the client. The client's contribution may come from personal resources, property, loans, PASS plan funds or small business start-up grants from other assistance programs. A client who is receiving SSI/SSDI must submit a Plan to Achieve Selfsufficiency to SSA for review and consideration before any DRS funds can be expended toward a self-employment start up business.

(i) Any required client financial participation is applied to the cost of planned services.

(j) The agency's contribution to a self-employment plan will not exceed $5,000 without supervisory approval.

(k) The Agency will consider three-tiers of support for self-employment.

(1) Tier 1 is for self-employment plans that are considered low cost, simple and considered low risk. These cases will be limited to DRS financial contribution up to $5,000. DRS will cover 100% of costs minus any required client financial contributions. In Tier 1 cases the client is required to provide the Basic Business Plan which includes the following items:

(A) Business feasibility study.

(B) Monthly personal and living expenses worksheet.

(C) Business start-up expenses worksheet.

(D) Projected monthly case flow worksheet showing business profits versus cost of operations.

(2) Tier 2 is for self-employment businesses with anticipated costs from $5,000 up to $10,000. In these cases the client is responsible for providing 25% of the anticipated costs. Client contribution can come in many forms including the use of existing equipment or home/office space which the client owns: bank loans; PASS Plans, or any other Agency approved financial contribution. All IPE's included in Tier 2 with planned expenses over $5,000 must be reviewed and approved by the Programs Manager. In Tier 2 self-employment cases the client is required to provide the Comprehensive Business Plan that includes:

(A) Detailed description of the proposed business.

(B) Market research.

(C) Sales Plan.

(D) Management Plan.

(E) Business License and City Zoning regulations.

(F) Supporting documents will include:

(i) List of identified vendors.

(ii) Items requested to be paid by DRS.

(iii) Items and resources provided by client.

(iv) Credit Report.

(v) Copy of the client's last two years of tax returns if they were required to file.

(vi) A 100 form completed and signed by the client to be submitted to the Oklahoma Tax Commission for disclosure of tax information.

(3) Tier 3 self-employment cases are those with an anticipated cost which exceeds $10,000. Tier 3 cases will require the same supporting documentation as Tier 2. In Tier 3 the client will be required to contribute a minimum of 50% of the anticipated costs exceeding $10,000. All Tier 3 self-employment cases require review and approval by the Field Coordinator.

(4) Tier 2 and Tier 3 self-employment proposals will be required to have their Business Plan reviewed and approved by Agency designated staff and/or Review Panels.

(l) Items that the agency will not approve for funding include:

(1) Construction or purchase of real estate.

(2) Businesses that are speculative in nature such as stocks, bonds or other investments or considered speculative by the Better Business Bureau.

(3) Businesses that are organized as not for profit.

(4) Businesses organized as hobbies.

(5) Purchase of vehicles including farming, ranching and construction vehicles.

(6) Refinancing of existing debt.

(7) Business plans that are not developed as the primary source of support.

(8) A business endeavor that does not have an agency approved business plan.

(9) Any business activity related to the Marijuana business including the production, distribution and/or sale of marijuana products.

(10) DRS will not assist with the purchase of a franchise business or any type of pyramid business arrangement.

(11) The purchase of domestic animals or livestock.

(m) Purchases and support services. All Agency purchases for a plan with a goal of self-employment will be in accordance with established purchasing policy regarding the competitive bid process and referrals to the State Office Purchasing Unit. Any requests for assistance with maintenance or transportation will be required to meet established policy guidelines for these support services.

(n) The counselor will continue to be available for technical assistance upon completion of approved purchases. Counselor will review with client every 3 months the progress of the business. This will include copies of the businesses profit and loss statements and record of business performed. The purpose of these reviews is to determine if the involvement in selfemployment is allowing the client to substantially increase his/her earnings to achieve self-employment success and be able to meet on-going financial obligations of the business. Should the business not be showing an increase in the income of the client, the counselor will review, with the client, the client's business plans to try to increase the business income. If necessary, the client may be referred to the small business development center or similar program for technical assistance in making changes in business operation to achieve a business profit.

(o) As stated in the IPE, this case would be agreed upon as a successful closure if the business is stable after 90 days and has met the specified level of performance. At the time of case closure, title for all goods purchased by the agency will be released to the client.

(p) As stated on the IPE the Counselor will discuss with the client at time of successful case closure that the client will be expected to furnish the Agency with income verification for the first year after successful case closure for reporting purposes as required under WIOA. This income verification can come in the form of self-employment worksheets signed and attested to by program participants or other approved Agency forms of verification.

Okla. Admin. Code § 612:10-7-230

Added at 10 Ok Reg 4633, eff 9-1-93 (emergency); Added at 11 Ok Reg 2449, eff 7-1-94; Amended at 13 Ok Reg 1817, eff 4-3-96 (emergency); Amended at 14 Ok Reg 1432, eff 7-1-97; Amended at 24 Ok Reg 1652, eff 7-1-07; Amended at 27 Ok Reg 1589, eff 7-1-10

Amended by Oklahoma Register, Volume 39, Issue 24, September 1, 2022, eff. 9/11/2022

Amended by Oklahoma Register, Volume 41, Issue 22, August 1, 2024, eff. 8/11/2024