Under Temporary Assistance for Needy Families (TANF), states face steadily increasing work participation requirements. The TANF structure presents one new option: the ability to use TANF funds for community service employment in wage-paying, publicly funded jobs designed to provide work for individuals and to address unmet community needs. A program of community service employment can offer a set of distinct advantages over the usage of unpaid work experience programs in return for receipt of TANF assistance. Among the advantages of a community service employment approach are the following: (1) programmatically, a job paying wages will seem, and be more like work, than will a slot in a work-for-welfare program; (2) fiscally, both the individual and the state would benefit, because individuals earning a wage will qualify for the federal Earned Income Tax Credit; and (3) in some circumstances, community service employment could function as an alternative to welfare, rather than just as the terms under which a family received welfare. A state considering a wage-based approach faces numerous choices: how wage-based positions should be used; whether wage-based positions would primarily be in state or local government; what the appropriate contribution is by the organization that receives an employee; and whether waged positions should primarily be viewed as training slots or as providing employment opportunities of the last resort for persons unable to attain unsubsidized employment. (YLB)