Through this guidance, the U.S. Departments of Labor and Education (Departments) delineate the process for negotiating levels of performance, as required by section 116(b)(3)(A)(iv) of the Workforce Innovation and Opportunity Act (WIOA). This guidance also provides explanation of the two instances in which a state may be sanctioned for performance failure or for failure to report (section 116(f) of WIOA). Section 116 of WIOA, its implementing regulations, and this guidance govern how the Departments will determine when it is necessary to sanction a state, which is statutorily required by WIOA.