It’s a common situation. You send some employees to required continuing education courses after work. Others attend classes simply to learn more about your business or industry. Are the employees entitled to pay for the time they spend in class? Probably not, according to a recent U.S. Depart- ment of Labor opinion. But you might still find yourself responsible for the extra time in certain situations. We’ll show you how to tell when you must pay for training time.
Employees Attend Licensing Classes
The question before the Labor Department involved a company that employs a number of state-licensed insurance agents. To maintain their licenses, the employees had to pass an exam and attend up to 90 hours a year of classroom instruction. All classes were scheduled outside regular working hours. Employees who did not meet the continuing education license requirements could continue working for the company but not in the same position.
The HR Management & Compliance Report: How To Comply with California Wage & Hour Law, explains everything you need to know to stay in compliance with the state’s complex and ever-changing rules, laws, and regulations in this area. Coverage on bonuses, meal and rest breaks, overtime, alternative workweeks, final paychecks, and more.
Four Criteria
The company asked the Labor Department whether it had to compensate workers for the training time, and the agency issued an opinion letter saying it did not.Federal law generally governs when you need to pay for training. The basic rule is that time spent at lectures or employer-sponsored training does count as time worked for pay purposes. This rule applies unless all four of the following conditions are met:
- Attendance is outside the employee’s regular working hours;
- Attendance is voluntary;
- The course is not directly related to the employee’s job (see the special exception to this rule below);
- The employee does not perform any productive work during the training session.
Important Exception
In this case, the employer met all but the third condition because the training was directly related to the employees’ jobs. Ordinarily that would mean the employees were entitled to be paid. But a special exception applies when the training is offered by an independent school or continuing education provider as it was with the insurance courses. In such cases, the time can be unpaid even if it’s related to the workers’ jobs. And the exception also covers situations when you provide the training yourself, as long as it’s essentially the same as a course offered by an outside institution.The Labor Department also concluded that the insurance agents’ attendance at the classes was voluntary. This was because: 1) the state rather than the employer imposed the training requirement; 2) the training would be useful even if the employee went to work for someone else; and 3) an employee could continue working for the insurance company even if they did not attend the training sessions.
Additional Rules
Federal regulations also make clear that you don’t have to pay for training time if an employee decides to take an after-hours course to improve their job skills and possibly advance to an upgraded position. And you’re usually not obligated to pay for supplemental instruction for an apprentice hired under the terms of a written apprenticeship agreement or program.