Des Moines, Iowa ? Across the country, thousands of laid-off workers — many of them from smaller firms in thinly-populated states — stand to lose job-retraining opportunities because of a little-noticed change in the way the government pays for such programs.

The new Labor Department rules, adopted earlier this year, bar the longtime practice under which states “bundled” small groups of laid-off workers from separate companies to reach the threshold of 50 employees needed to obtain training dollars.

The rule change could make it more difficult for workers who lose jobs at small companies to get training help. Thinly-populated states like Iowa will be hardest hit, since many people there work at smaller companies.

“This is going to have a profound effect,” said Ted Harms, a program coordinator with Iowa Workforce Development, a state agency. “You know, we’re not California or Illinois. We’re not even Minnesota.”

Jim Hirsch, division director for workforce development at the North Dakota Department of Commerce, said: “I’m very worried about it, what this change could mean.”

The changes are expected to affect Kansas, but officials with the Kansas Department of Commerce did not immediately have figures on how the changes may affect the state.

The so-called national emergency grants have been used to help workers at shuttered manufacturing plants learn new skills — on computers, in health care or in trades such as welding. The department dispensed $614 million in such grants from 2000 to 2002.

Labor Department officials said the change was meant to make the confusing rules governing the grants simpler and more consistent.

“We have finite resources, so we need to be more efficient and effective in how we administer these monies so people get the training they need,” said Mason Bishop, deputy assistant secretary for employment and training.

Worker advocates said the Bush administration was sending mixed signals, especially since President Bush had been emphasizing retraining as a way to restore lost jobs and has proposed to double the number of Americans who get such help from the government.

“In this kind of economy, they should be bending over backwards to help the states,” said Jane McDonald-Pines, a policy analyst with the AFL-CIO in Washington. “Even small layoffs can have a significant effect, especially in a small community.”

When a company closes down or lays off workers, only about one-third typically apply for retraining — meaning the new dictate is most likely to affect workers at companies with 150 or fewer employees.

“That’s most of the companies in Iowa,” said Chris Jensen, a regional coordinator with the Iowa state retraining agency.

Labor Department officials said the emergency grants should be used for just that — emergencies. Most layoffs, especially smaller ones, should be covered by the base federal appropriations that are made to state workforce agencies, they said.

Those appropriations increased slightly in the current fiscal year, to $1.78 billion from $1.16 billion the previous year. But for the next fiscal year, Bush has asked for just $1.1 billion.

Funding varies by state, depending on a state’s unemployment rate, among other things. In Iowa, funding has declined by $670,000 since the 2001-02 budget year.

“It seems like it’s getting a lot tighter from every direction,” said Kathy Weibel, a coordinator with the Iowa retraining agency.

David Hollars, executive director of the Centralina Workforce Development Board in Charlotte, N.C., which recently used bundling to land a $1.5 million emergency grant, said he is afraid the Labor Department will give emergency grants only to workers from big companies, because it gives “more bang for their political buck.”

“Everyone wants to take credit for helping when there are 300, 400 job losses,” Hollars said. “You get the local congressman out there, that’s big press.”