The state has a 4.2 percent unemployment rate, plus a 4.4 percent growth rate as of October.

Still, a state department is hard at work improving the economy and preparing it for a possible downturn. That's the Department of Employment, Rehabilitation and Training.

Terry Johnson has been director since December 2005. He oversaw the building of the department's new headquarters, at 2800 E. St. Louis Avenue. This office brings together managers and staff members who were previously scattered throughout Las Vegas.

DETR handles unemployment, but because of Nevada's job-seeker market, it concentrates heavily on workforce development. Does your company need plumbers or phone operators? DETR can probably help.

The full list of DETR's divisions are at www.detr.state.nv.us, including research and analysis, the equal rights commission and Nevada JobConnect.

Johnson was Nevada's labor commissioner for five years before he took the helm at DETR. He started working for the state in 1996 as the assistant business advocate with the Department of Business and Industry. Currently, he is chairman of Nevada's Public Employee's Benefits Program Board, on the state's Employee-Management Committee and a member of numerous other organizations.

At DETR, he manages a budget of $154 million and a staff of nearly 800.

Johnson talks with In Business Las Vegas about training the workforce and some of the crucial issues in the labor market today.

Q: Tell me about this new building. Why was it built, and what does it mean to the department?

A: This building is meant to bring together our resources from all around the valley. We had people spread out everywhere, and it was determined that we could better serve the citizens from a centralized location, for our administration especially. To save taxpayer money - rather than rent all those different spots - this better serves all those very same taxpayers out of one location. We built new buildings, and we're glad to have it here. It's a very unique design, energy efficient. It received the LEED designation for energy efficiency.

I've been following a lot of discussion about the need for construction workers in the valley. Do you think the construction industry should be worried about the labor force?

I don't think so. It appears like when there are projects that were derailed or stopped the cost of materials has had more an impact than the shortage of qualified workers. Not that that's not a concern. I don't think it's the overarching concern.

I think we still have some workers in the pipeline. I think we need to avail ourselves to different sources of employment that in some cases we may not have considered. Our department does a lot in training disabled persons to be in a position to contribute more to the workforce. We have a veteran population that is very strong here, with an Air Force base nearby. We have people who moved here and thought that it would be great to sit around and play slots all day, and come to find out they want to reenter the workforce, and they bring some experience to the table as well.

What about skilled workers? Are there enough to do these construction projects on the Strip, like CityCenter or Echelon Place?

I think there is definitely a need for more skilled workers. Prior to coming to this department I served as the state's Labor Commissioner for five years. There was a concern with training persons in the construction trades, especially.

I think the supply is definitely a challenge for the businesses out there, but I think they can alleviate those challenges as well by tapping out to some resources that they had not considered, that I just described. And they can maintain the workforce they have by ensuring they treat their employees equitably and that their work environments are free of harassment and discrimination. That can ensure they accommodate persons who have a disability.

We do have some programs in place that will help employers train their existing workforce. In fact a lot of employers don't even realize that in state law there's actually a fund from taxes payed by employers in the state for training their existing workforce. (It's called the Career Enhancement Program.)

We customize some job training programs specifically to certain sectors. In other instances we have made awards to employers so they can train their existing workforces.

In lean, competitive times often companies don't have the financial structure to lend to training and development.

What are some of the most requested training programs?

It depends on the areas. We obviously have a lot in the construction industry, but we also have persons who want specialized training done, maybe some manufacturing companies.

Other times we have companies that are looking to relocate to Nevada. In terms of this state's economic development, it will only develop and diversify as strongly as its workforce. So if we have a company looking to relocate to Nevada, and they have a unique product line or unique manufacturing process, we can (develop programs) using resources of the state.

We've got some new things on that front in terms of making those dollars available. It's not very old legislation that allows for that. We just started kicking that off here within the last year or so. The legislation has been there, but there were just some different thoughts about how best to implement it, so within the last year and half or so that we started talking with the business community, making some dollars available.

We gave them to companies that were fast in their growth, or they were diversifying in a particular level. We have certain criteria that we attach to it, and we have companies that apply and receive some dollars.

Illegal immigration is another hot topic this year. How does your office work with that?

I guess it depends on the division. The one that's very specific to immigration in terms of its applicability is the unemployment insurance program. We are precluded by law from bestowing unemployment benefits to persons who are not eligible.

So they really have to keep track of who's legal or not?

Yes, and it follows logically that someone cannot receive unemployment insurance benefits if they are not eligible to work in the country in the first place.

Is it hard for the department to find out who's legal?

I don't think so. I think the fraud that occurs in the unemployment insurance program - which costs the program about $4.8 million a year - arises not from persons who are not authorized to receive it because of residency status. These are persons who didn't meet the criteria or who created an alter ego.

In terms of illegal immigration and its impact on the workforce, that is going to be an issue for the foreseeable future. It affects society on so many different levels in terms of wages paid and in terms of the rights of persons to be protected in the workplace. The key thing is that we also don't want our good Nevada businesses to be placed at a competitive disadvantage because they've got to compete against a firm that is paying substandard wages to undocumented workers.

I'm just hopeful the President and Congress are able to reach some resolution on that. It's going to impact not just Nevada's economy - and Southern Nevada especially - but the country as a whole.

The studies indicate that undocumented workers tend to gravitate primarily to two industries: the construction industry and the service industry. It just so happens that in Nevada those are some of our top industries. That need for workers balanced with the need to treat them equitably is going to be a consideration for quite some time.

I don't know the degree to which the Nevada Legislature will pick up the question of immigration this year. I know there were some bill draft requests that were submitted on the topic. We look forward to working with the Legislature on some solutions.

Do you have an opinion on what could work?

I think enforcement is going to be the key, because that really is the cornerstone of it. You have employers who employ undocumented workers. It's a violation of federal law, and it sometimes has impact in terms of wage deflation - persons being paid less. It is imperative that the employer community be held accountable.

You have employers on the one hand paying their worker's comp insurance, paying their unemployment insurance, paying all the taxes, abiding by all the rules, and they're competing against someone who doesn't pay worker's comp because they picked up somebody standing out in front of a nursery or home repair store.

From what you've seen looking at the valley, and Nevada as a whole: Is the illegal worker situation a bad problem?

I think so, I think it is a problem because of the fact that undocumented workers gravitate to certain industries, and the industries they gravitate to are the predominant industries in Nevada. Unless we become the aerospace capital of the world or the accounting capital of the world, for the foreseeable future our economy will be driven by those sectors.

Do you have any idea how many illegal workers are in the state?

We don't, and it's hard to keep track of that obviously because of their status. I think the research indicates roughly about 10 percent of the population here in the state are undocumented persons. So if you figure a half to two-thirds of those persons are employed somewhere, consistent with the rest of the economy, you could get into the low hundreds of thousands pretty easily.

Let's talk about unemployment insurance fraud. I know you're doing some new things to fight against that. Tell me about those.

Sure. We just received a federal grant, about $80,000, to do some increased fraud detection with regards to unemployment insurance. We're going to use that grant to develop some software that's going to enable us to track that type of activity.

Also, in 2005 the Nevada Legislature passed legislation called SUTA (State Unemployment Tax Avoidance) Dumping legislation that would crack down on employers who move their employees from one payroll to another in order to avoid paying higher rates for unemployment insurance rates.

It's very important because as a state we want to maintain the solvency of that unemployment insurance trust fund. It's roughly $600 to $650 million right now. For every dollar or so that a person collects in unemployment insurance benefits, it results in about $2.50 in Nevada economy (because of a multiplier effect).

This will help in the event of an economic downturn such as recessions we had in '81-'82, then again in '91-'92. Or after Sept. 11, you saw 15,000, 20,000, 25,000 people lose their jobs in one fell swoop. Had our unemployment insurance trust fund not been solvent, we would have really, really suffered even more than we did as a state.

We want to make sure that persons don't draw from that fund who shouldn't be doing so and that businesses who are supposed to contribute to that trust fund do without cheating and engaging in fraudulent activities.

It's to their benefit as well. When the unemployment occurs, you need for those persons to have dollars in their hands in order to go and buy clothes continually, groceries continually, pay their bills continually. There will be fewer bankruptcies, hopefully.

Are you looking to get that trust fund up to a certain amount?

We've actually decided to hold steady the rate that employers pay. It's an average rate now of 1.38 percent of their anticipated weekly payroll. With the projected increases in employment, with more taxes being paid, it's still going to result in some modest growth in the trust fund. We'd probably go to about $700 million plus.

The key is that in good times - and Nevada is enjoying good times, with about 4.2 percent unemployment statewide, and our job growth is about five times the national average - we want to build that fund up. So that we don't have to raise taxes on businesses in order to sustain that unemployment insurance trust fund. It's that countercyclical funding we engage in to keep that trust fund balanced.

How often do people commit some kind of unemployment insurance fraud? Is that a bad problem?

I don't think it is as a widespread problem in Nevada as other states. I think we do pretty well overall because we've got such a strong economy and the number of persons who legitimately want to work can work. No matter how many opportunities you create for persons there are always going to be bad apples in the bunch who want something for nothing.

I think a combination of the federal grant and SUTA legislation will enable us to have a pretty good grip on it so that employers and businesses can rest assured we're doing everything we can to make sure they compete in a fair and open environment.

You're ramping up efforts to hire veterans through your Hire Vets First program. Why now?

I think our economy in Nevada is such that veterans represent a vast amount of resources that could aid in our civilian economy. They bring skill sets that could be directly applicable to the civilian economy; they have a sense of discipline and organization. They are equipped with those mental tools and mental resources that could have application in the civilian economy.

It goes back to our desire to increase the awareness of the labor supply that's already here in terms of veterans, seniors, homemakers re-entering the workforce and the student population.

That's another element in increasing awareness among employers that they may have not considered. If they look at the benefits that veterans bring to the table, and when they become more cognizant of that fact and the background they have, I think they're going to want to hire vets.

You think about companies not hiring veterans in the Vietnam era. Do you think there's still prejudice out there?

I think there may have been political considerations at that time. The thing that I worry about in today's world in terms of potential discrimination is that we have two active theaters around the world now: Afghanistan and Iraq. We have personnel returning from those locales with some disabilities. They left here with four limbs, they came back with three or two.

We want to not only increase the awareness of the availability of that veteran's pool, but also let it be known that persons can still perform jobs with reasonable accommodations in some places, but they can still perform jobs. Once upon a time you could just hang out a "help wanted" sign and that was the degree to which you did your recruitment.

Employers have got to engage a little more for the talent that they want.

Tell me about your partnership with the Equal Employment Opportunity Commission office that just moved into Las Vegas.

Sure. EEOC just recently located here to Nevada. They looked at Nevada and saw some opportunities in terms of workplace discrimination and sexual harassment, especially in the workplace. They saw Nevada as obviously the fast-growing state that it is.

We welcome their presence. We look forward to working with them. They have some tools and resources that we could avail ourselves of. We have some tools and resources that we could supply them with. I think there will be a uniquely symbiotic relationship that will help everybody.

The other benefit to it is there are laws, including discrimination laws, that we have at the state level that do not exist at the federal level.

Such as?

The state of Nevada has afforded greater rights and protections to, for example, persons based on sexual orientation. The federal government does not do that.

Also, the EEOC does not enforce and investigate claims of discrimination in housing. Our Equal Rights Commission does. The commission can work with some nonprofits out there who are actively involved in this area, and also regulatory agencies at the state level, such as the mortgage lending division, the housing division. This ensures persons are not denied the chance to live where they want to live, and they also are not denied opportunities for financing or insurance because of their ethnic background or sex or religion.

Having the EEOC here is going to benefit the citizens of Nevada on those two fronts, enabling us to work closer in partnership as opposed to shipping information from here to L.A. or here to San Francisco. Having them here will help expedite those cases. It will benefit secondarily by letting us focus on some of those other areas we have jurisdiction over, where previously we were stretched in terms of human resources.

Do you think there will be more claims, now that claims can go through the system faster?

If there are more instances of discrimination out there, than hopefully it should result in more persons getting their cases heard. The last thing I want is for Nevada citizens to feel discouraged that they're being harassed in the workplace, if there's sexual harassment or threats of termination for not going out on a date with the supervisor.

The last thing I want them to fear is it's going to take six months, nine months to get that claim. There was a time when those cases would take two years, three years to adjudicate. Now we count them in months as opposed to years. Having the EEOC will further strengthen that.

The other thing I think we do that sets us apart and that we'll have more of an opportunity to do with that partnership is that we can now spend even more time educating employers about the state's discrimination laws. We would much rather educate than litigate, because the litigation costs everybody time. Everybody's got to hire attorneys. We've backlogged the court system.

That one-two punch between us doing some investigation and handing off cases to the EEOC for litigation leaves us more time for education. I think that will benefit the business community.

You were talking about relying on the unemployment insurance trust fund if some kind of a downtown happens. Does this office prepare for a terrorist attack or a natural disaster or something else bad to happen?

We do. We do prepare in terms of having an IT infrastructure in place and alternative locations. If there were a natural or terrorist disaster we won't lose everything in one fell swoop. In terms of this building, we have the capacity to immediately add more staff.

There was a time after 9-11 when people popped up some tents, and it was just crazy. I was Labor Commissioner at the time, and it was crazy on that front too. But here we have a facility where if we need to double in size for persons to handle those unemployed persons or respond to the business community, not only can we go out and set up the tents and carry the laptops out, but we have a facility here so we can automatically double the number of people, just like that.

Tell me about your priorities for the Legislature.

We look forward to working with them on what we anticipate to be some discussions on immigration and its impact on the workforce. I think that's something we're going to have to address sooner rather than later for the fairness of all employees, for the fairness of all businesses.

We're looking at ways to streamline the agency's operations so that we don't get bogged down in bureaucracy. One thing I've learned in my experience with labor laws is a lot of them are very old. A lot of this country's and this state's labor laws go back to the 1930s, the Depression Era. And they haven't been adjusted and modified over time. We want to look for ways that businesses can spend more time growing and less time dealing with the bureaucracy.

Can you give me example of some law that just needs to go away?

I don't know about go away, but there are some things we can do better.

In terms of the hearing process, making sure it's streamlined and efficient and even using technology to better enable persons to participate remotely through video conferencing.

Obviously, we will continue to use the Web as a resource for businesses and for employees. Gone are the days where you go down and stand in line at the unemployment office. Now you can just go online and file your claim and have that process available to you 24/7.

What's important to know about the workforce in the rest of the state?

I think Northern Nevada perhaps has a more diverse economy than Southern Nevada. They were not hit as hard after 9-11. That's probably the biggest distinguishing factor between Northern Nevada and Southern Nevada in terms of resiliency. They were able to bounce back, and their workforce economy recovered a lot quicker than we did in Southern Nevada.

I think in Southern Nevada we still have the challenges in making sure the workforce is skilled in accordance with the needs of the business community. That's where we need to constantly be in dialogue with the business community to ensure the system we have in place is reflective of their needs. It does no one any good for us to be training groups of persons in Category X and the business community is projecting double-digit increases in needs in Category Y.

Being able to engage the business community, being able to respond to their needs will be very crucial. That's where our role in implementing the federal Workforce Investment Act is important. It requires us to solicit the active participation of the business community as to what they project are going to be high-growth needs and industries, and skill sets they will demand of their employees.

The ability to think and write analytically is important to just about every employer I've heard express a critical need. They want good communication skills. They want persons who are flexible. The days are gone where you stand in a factory from 8 to 5 and make the same widget all day. For employers to be competitive today they need a workforce that is efficient, flexible and adaptable to the demands that arise over the course of the day. We try to tailor our training programs so that employers and employees can get that value.

Since you've taken office here in December 2005, what's been your proudest accomplishment?

I think getting the state more active in engaging the business community and workforce investment, and impressing upon them the need for everyone to think about workforce investment now while the times are good. If and when the economy starts to constrict, we have the infrastructure in place to respond to it, not just through our fund but through training employees.

People just don't always elevate workforce development to the level that it needs to be. I think we have made great strides to increase awareness with the local Workforce Investment Boards and the local business community. We've made available these training program dollars back to the businesses that funded them in the first place.

I think we've come a long way in this first year on that front. Obviously, (another accomplishment was) streamlining our service delivery here in this location, in the state's most populous region.

Anything else you want to add?

I think it's going to be a dynamic 2007 as we all get around the table and talk about what kind of a workforce we need to carry this state forward. We'll talk about how to address the myriad of other issues out there in terms of fraud and undocumented workers, in terms of maintaining the solvency of our trust fund.

We look forward to working with the business community, especially your readers and your viewing audience on coming together. Government and business really can do good things together, and we've shown that with the programs we've instituted so far.