Time Is Money: A Quick Wage-Hour Tip on … Training Time

As the COVID-19 Public Health Emergency has come to an end, employees are heading back to conferences in droves and resuming their usual training activities. While employers big and small understand they must compensate employees for all time worked under the Fair Labor Standards Act (“FLSA”) as well as state and local wage and hour laws, whether attendance at such conferences and other training time constitutes hours worked for non-exempt employees remains a murky area for employers.

Four-Factor Test

Generally, training programs, lectures, meetings, and similar activities are compensable hours worked unless all four of the following factors are true:

• Attendance is outside of the employee’s regular working hours;

• Attendance is voluntary;

• The training is not directly related to the employee’s job; and

• The employee does not perform any productive work during the training.

See 29 C.F.R. 785.27.

While these factors may not seem complicated at first blush, applying some of them can often lead to questions. When is attendance at training “voluntary?” What type of training is “directly related to” the employee’s job? Given that these questions are coming up again as more employees resume their training activities, now is an opportune time for employers to review the requirements on paying for training time. The Wage and Hour Division of the U.S. Department of Labor (“WHD”) has issued several opinion letters over the years on the compensability of training time that provide employers with helpful guidance. Opinion Letter FLSA 2020-15 (the “Opinion Letter”) provides the WHD’s latest guidance in this area by analyzing six scenarios involving voluntary training.

Regular Working Hours

An employee’s regular working hours are hours when the employee usually works, rather than an employer’s business hours. The Opinion Letter reminds employers that if the training occurs on a day when the employee typically does not work, then such training does not occur during an employee’s regular working hours. The Opinion Letter describes three scenarios where the training time occurs during an employee’s regular working hours. In all three scenarios, the WHD finds that the training time is compensable. This holds true even when (i) the course is not directly related to the employee’s job and (ii) the employee voluntarily decides to take the course because all four of the factors listed above must be satisfied.

Voluntary Training

The FLSA regulations supply further insight on the “voluntary” nature of training. Training that an employer requires an employee to attend is not voluntary. Furthermore, training is not voluntary “if the employee is given to understand or led to believe that his present working conditions or the continuance of his employment would be adversely affected by nonattendance.”  29 C.F.R. 785.28.

Training That Is Directly Related to An Employee’s Job

Whether training is directly related to an employee’s job is one of the toughest factors to analyze. Under the regulations, “training is directly related to the employee’s job if it is designed to make the employee handle his job more effectively as distinguished from training him for another job, or to a new or additional skill.” 29 C.F.R. 785.29. Training is not directly related to an employee’s job if it is designed to prepare an employee for advancement through upgrading the employee to a higher skill and not intended to make the employee more efficient in his or her current job, even if the training incidentally improves the employee’s skill in performing his or her current job. Id.

Exceptions

Two exceptions exist for training that is related to an employee’s job where an employer does not have to pay for training time. First, if employees attend a school, college, or independent trade school after hours based on their own initiative, then the time worked is not hours worked even if the courses are related to the employee’s job. See 29 CFR § 785.30. A second special situation exists where “an employer may establish for the benefit of his employees a program of instruction which corresponds to courses offered by independent bona fide institutions of learning. Voluntary attendance by an employee at such courses outside of working hours would not be hours worked even if they are directly related to his job, or paid for by the employer.” 29 CFR § 785.31. Notably, for both exceptions, the training time must occur outside an employee’s regular working hours.

The Opinion Letter describes several examples analyzing this second exception. In one scenario, a nurse voluntarily takes a webinar outside of the nurse’s working hours that is directly related to the nurse’s job. The WHD presumes that the webinar corresponds to courses offered by independent bona fide institutions of learning because it counts toward satisfying a professional licensing requirement. The WHD advises that the training time is not compensable because the training (i) is voluntary, (ii) occurs outside of working hours, and (iii) corresponds to courses offered by independent bona fide institutions of learning. Notably, the WHD clarifies that this would be true regardless of whether the employer or a third-party offered the webinar.

In another scenario, an accounting clerk voluntarily takes a webinar outside of regular working hours that is directly related to his or her job, but the webinar does not satisfy any continuing education requirement. The WHD advises that the information presented is insufficient to determine whether the training time is compensable because it is unclear whether the webinar corresponds to a course offered by an independent bona fide institution of learning. The WHD explains that for this exception to apply the training must not be tailored to a particular employer and it must provide information that would further employment with any employer. The WHD also reminds employers that training need not satisfy a continuing education or professional licensing requirement to meet this exception.

In a final scenario, a nurse voluntarily attends a weekend conference where continuing education credits are available and some, but not all of the conference sessions directly relate to the nurse’s job. The nurse does not normally work on the weekend, and she does not perform any productive work during the conference. The WHD determines that the training conference falls within the exception described in 29 CFR § 785.31. Because attendance at the conference is voluntary, occurs outside the nurse’s regular working hours, and provides courses that appear to correspond to courses offered by independent bona fide institutions of learning, the employer need not treat the time as hours worked. Further, the employer can treat the travel time to the conference as non-compensable personal travel time.

Takeaways

If an employer determines that any one of the four factors set forth above is not satisfied, the employer should compensate the employee for the training time and factor the training time into overtime calculations. If employees may attend work-related conferences or other training programs during their regular working hours, an employer should treat such attendance as compensable even when attendance is neither mandatory nor directly related to the job.

To the extent an employer does not want to compensate employees for training time, the employer should take affirmative steps to satisfy the four factors. For example, employers should communicate to employees that attendance is completely voluntary, that employees may perform no work during the meeting or program, and that it must occur outside of work hours. The employer will also need to prepare to prove that the training is not directly related to the employee’s job.

Finally, when employees are traveling to attend such events, employers should also brush up on compensability of travel time. You can find a helpful summary on travel time pay in our Time Is Money: A Quick Wage-Hour Tip on … Travel Time Pay blog post here.