By: Cris S. Ortiz, CPA, CGMA Finance Director, G4S Guam & Micronesia

1. Guam Registered Apprenticeship ProgramTax Credit(An Employer’s Perspective: G4S Case Study)November 16, 2017 By: Cris S. Ortiz, CPA, CGMA Finance Director, G4S Guam & Micronesia

2. Agenda 1. Background of GRAP 2. Reasons Why G4S Participated 3. The Application Process 4. Once in the Program (Things To Do… & Not to Do) 5. Why We Continue to Participate 6. G4S Statistics - GRAP 7. Challenges & Ways to Improve the Program

3. G4S Guam & Micronesia – Who We Are (G4S Global) • G4S is the world's leading global, integrated security company specializing in the delivery of security and related services to customers across six continents, active in 100 countries* and over 585,000* employees globally. • We specialize in outsourced business processes and facilities in sectors where security and safety risks are considered a strategic threat. • From risk assessment to delivery, we work in partnership with governments, businesses and other organizations to provide integrated solutions to security challenges • We protect rock stars and sports stars, people and property, including some of the world’s most important buildings and events • From advising on stadium building plans to crowd control and ensuring event tickets are not forged; • From delivering pay packets to ensuring ATMs have enough cash to meet your shopping needs; • From delivering cash to bank branches and retail outlets to managing the flow of cash for central banks and major retailers; • From ensuring travelers have a safe and pleasant experience in ports and airports around the world to secure detention and escorting of people who are not lawfully entitled to remain in a country; • In more ways than you might realize, G4S is securing your world. • * Includes 44,000 employees in businesses in 15 countries that are being sold or exited. (http://www.g4s.com/en/Who%20we%20are/)

4. G4S Guam & Micronesia – Who We Are G4S in the Marianas Since 2004, G4S established its' presence in the Marianas through the acquisition of certain services of three of Guam's largest security providers: Securewest International and Armored Express Services and Pacific Security Alarm. In 2008, G4S established the company "Document Solutions", which services the document management, shredding, imaging and storage needs of the Marianas business community. Early 2010, G4S established the company "Care and Justice Solutions", which primarily provides government justice and community safety solutions. With this level of combined operational experience and expertise, comprised of 800+ employees covering Guam and Saipan, G4S is simply The 1st choice in quality business and government support services. (http://www.gu.g4s.com/en-GU/Who%20We%20Are/History/)

5. GRAP (Guam Registered Apprenticeship Program) • The Program • Enabling Statutes: Guam Public Law 28-142, codified as 22 GCA § 44101-44114 and Guam Public Law 32-181, Chapter 12 Section 34. • Administered by Guam Department of Labor: • Ms. Phyllis Topasna (phyllis.topasna@dol.guam.gov) Tel: 300-4572 • Provides tax credit incentives to eligible businesses that employ apprentices who are duly enrolled and registered in the program. • Eligible businesses are entitled to tax credits against their gross receipts tax liability equal to fifty percent (50%) of the eligible training costs paid or incurred by the business

6. GRAP (Guam Registered Apprenticeship Program) • Is It Only About the Tax Incentive? • Reduce shortage of highly skilled workers in the • island. – The “99.99%” H2 visa denials of 2016 for the Region. • Continuing challenge with USCIS approvals in 2017. • Encourage employers to hire and train apprentices in highly skilled trades & occupations. – Creating workforce capacity • Apprentices paying income taxes and participate in the economy. – ”Multiplier “effect to economy and “value creation” to the apprentice. • Employer’s Journeymen developing and improving their mentoring & leadership skills. – Trainers become better mentor/leaders. • Reinvestment by employer of savings into workforce development, incentives or help in working capital requirements and capital expenditures . – Savings mean more financial capacity to expand and spend on those that improve the employer’s business.

7. G4S – Why Did We Participate • Introduction to the Program via GCA and GDOL workshops about GRAP in 2008. • Challenges in hiring and availability of skilled workforce for our Systems Solutions business segment. • Need to bridge or close the gap on workers’ skills and credentials. • GRT abatement incentive – 50% of eligible training costs (apprentice wages+, journeymen OJT wages+, training costs & PPE). • G4S’ commitment to participate in programs that benefit the community. • Dec. 18, 2009: Approval of G4S Security Systems business unit as sponsor/participant. • Jan. 18, 2013: Approval of G4S Secure Solutions business unit as sponsor/participant.

8. G4S – The Application Process • How to Apply – Eligibility • Business should be duly enrolled and registered under GRAP with the Department of Labor. • The apprentice’s occupation should be on the GRAP Demand Occupations Listing which is compiled by the Director of the Department of Labor and approved by the Governor and the Legislature of Guam. • The business must not be a beneficiary of a Qualifying Certificate issued by Guam Economic Development and Commerce Authority. • Residency verification of apprentice as a resident of Guam – Not < 3 years • Verification of US Citizenship or permanent resident – I-9 Form • Signed apprenticeship employment contract.

9. G4S – The Application Process • How to Apply – Application • Standards of Apprenticeship – developed by the employer/sponsor in cooperation with GDOL. • Apply for GRAP Participation (GRAP Form 1) • Note: 5 or more Apprentices on training – employer/sponsor shall adopt & register with DOL a written Affirmative Action Plan and Selection Procedure in accordance with Title 29 CFR Part 30.

10. G4S – Things to Do… Once in the Program • Do’s • Assign staff or department to: • a. Manage & monitor compliance with the program requirements and eligibility. • b. Compile data pertaining to eligible costs. • c. Prepare GRAP Forms. • d. Prepare DRT GRT Forms to include approved/certified GRAP tax credit. • e. Monitor effectiveness of training/program within the organization. • f. Apply for annual renewal. • Track Eligible Costs – Manual vs. Computerized system or Hybrid • (Goal is to efficiently account and substantiate eligible costs that will be basis for submission • to DOL and calculation of tax credit.) • GRAP Form 2 – submit monthly to DOL (Determination or certification within 60 calendar days). • Supporting documents: invoices detailing the articles/services, payroll records and attestation of costs. • Application for Annual Renewal – to continue as participant/sponsor to the program.

11. G4S – GRAP Form 1 (Application for GRAP Tax Credit)

12. G4S – GRAP Form 2 – Application for GRAP Tax Credit (Page 1/3)

13. G4S – GRAP Form 2 – Application for GRAP Tax Credit (Page 2/3)

14. G4S – GRAP Form 2 – Application for GRAP Tax Credit (Page 3/3)

15. G4S – GRT Form 1 (Page 1)

16. G4S – GRT Form 1 (Page 2)

17. G4S – GRT Form E Note: Only if you have certain GRT exemptions or deductions (see GRT Form 1 Column B).

18. G4S – Dept of Rev & Tax – Form GRAP Note: Included as part of the GRT filing that indicates amount of tax being abated and if there are any unused tax credits, the form also indicates the amount carried over to next month (line item 9). Approved/Certified copy of the GRAP Form 2 needs to be attached when filing with Rev & Tax. If filing with unused tax credits, the approved GRAP Form 2 supporting the unused tax credit amounts needs to be included as part of the filing.

19. G4S – GRAP Tax Credit Submission, Approval & Actual Abatement

20. G4S – Of Course the Don’ts • Don'ts • Noncompliance on Program requirements, eligibility, standards of apprenticeship & selection procedures. • Failure to properly track eligible training costs and failure to substantiate or produce supporting documents or evidence as required by GDOL. • Improper submission of GRAP Form 2 – may result in denial or delay of certification on tax credits requested. • Improper application of approved tax abatement in GRT Form. • G4S’ Rule of Thumb Regarding GRAP • “When in doubt…. contact Ms. Phyllis Topasna.” • (phyllis.topasna@dol.guam.gov) Tel: 300-4572

21. G4S – Why We Continue to Participate • G4S, as any other company, strategically aims for growth… To have capacity to realized that growth, our organization needs a stable source of skilled workforce in highly specialized areas of our operations and also support services. • G4S’ commitment in investing in Our People – The savings can be allocated to reinvesting into staff development & training, and employee incentives. • Succession “Training the Next Leaders” – training provided by the Journeymen enables them to improve their leadership and mentoring skills. • Encouraging young apprentices to improve themselves, personally & professionally, and be contributors to society. • Tax abatement provides financial capacity to expand business and improve bottomline. • G4S’ commitment to participating in programs that benefit the Region and the population. • “A growing economy benefits the community (government, business & the people), i.e., • equates to more opportunities.” • Apprenticeship works!

22. G4S – Why We Continue to Participate • Almost $1 Million of tax credit certified & approved by GDOL since G4S started submitting claims to-date. ** 2017 count is lower due to several apprentices moving to Journeyworker positions or other companies.

23. G4S – Challenges & Ways to Improve the Program • Scheduling – balance between work/training vs. schooling schedule. (for departments/occupations were staffing levels are required at certain hours of the day). • Tax abatement only for GRT– possibly expanding the type of tax abated (i.e. income taxes, payroll taxes or real property taxes) may increase participation into the program and provides full, immediate utilization of the tax credit. • Sunset provision in the statute – due to geographical uniqueness of Guam and the small population, the challenge of maintaining a stable source of skilled workforce will always be concern. The expiration of the program can be extended to a longer period, to provide employer-participants some assurance on the continuity of the program. Or better yet, the Guam Legislature to make the program permanent.

24. G4S – Why Other Employers Should Participate • Things to Consider • “Cost vs. Benefit” consideration – • the benefits realized from the program • outweighs total cost. • Developing and improving workforce capacity for your company & the region – more highly skilled employees and potential hires equates to better quality of services & products provided to clients/ customers. • GDOL and USDOL is always available to assist interested employers & facilitate participation into the program. • “The Big Picture”, i.e., Benefits to the community – Apprentices become “contributors” & “assets” to the community; Businesses are incentivized and have financial capacity to grow/expand thru these incentives.

25. G4S – Acknowledgment • Dr. Shirley “Sam” Mabini, GDOL Director • Ms. Phyllis Topasna, GRAP Administrator • G4S Guam GRAP Administrators • All Employers, Journeyworkers & Apprentices • participating in the Program

26. THANK YOU