CEDR Two Minute Trainer: Employee Travel and Seminar Wages

For MANDATORY CE, seminars, or company trips, remember two rules:

The “Butt in the Chair” Rule

When you HAVE to pay for employee’s time in training: Employers must pay for all hours employees’ butts are in chairs attending mandatory trainings or meetings, regardless of the day of the week and the employees’ normal work hours (excluding meals or long breaks). There is no getting around it: You cannot make an agreement with your employees or establish a policy that exempts you from this requirement. PLUS, if their time spent in mandatory training puts them over forty hours in a week, then, in most states, you must pay them overtime. (California and a few other states have more strict daily overtime rules as well).

What time DOESN’T have to be paid: Time spent entirely outside normal working hours that is purely voluntary AND not directly related to work need not be compensated. A training program is considered directly related to the job if it’s designed to help the employee handle their job more effectively. If any of these things are true (it occurs during work hours, is not purely voluntary, or is designed to help the employee be more effective at their jobs), then their time must be compensated, as well as the cost of attendance.

NOTE: An employee’s voluntary attendance at training or school to maintain their license or advance their career to a different position, when outside the workplace and after work hours, is not compensable work time, even if related to the present job. See below for more details.

PRACTICE TIP: You may be able to apply a different or lower pay rate. Compensation for travel and training that requires different or lesser duties than the employee’s normal duties may be paid at a different rate of pay, as long as you notify the employee in advance and such pay is AT LEAST minimum wage.

Travel Pay Rule

“Do I have to pay for this, too?” Yes! If an employee’s travel time to or from a mandatory training or meeting cuts across their normal work hours, then those hours are compensable and subject to overtime. This is true regardless of the day of the week. For example, if your normal business hours are 8 am to 5 pm, and the employee travels to an out of town event leaving at 3 pm and arriving at 6 pm, the employee is entitled to two (2) hours of travel pay. This is true EVEN IF the travel is on Saturday, and EVEN IF your business is only open Monday through Friday.

PRACTICE TIP: Get your timing right. Travel time that does not cut across normal work hours is not compensable, so putting the employees from the above example on a plane, train, or bus after 5 pm means no travel pay is required. (California does not allow this rule – all travel for work must be compensated.)

CAUTIONARY NOTES: Make sure you understand how to calculate the overtime rate of pay using a weighted average for different rates of pay. Also, you must pay their reasonable expenses for mandatory travel and training.

CE for State Required Licensing

Who foots the bill for state required licensing? You, or your Employees?

If certain non-exempt employees must attend continuing educational events to maintain state or federal certification, you are not required to pay for the expenses, time, or travel unless you require them to attend a specific event at a specific time. It’s a good idea to communicate this at the time of hiring. For Associate Doctors, Physical Therapists and other professionals, they are exempt from these rules, and you do not have to pay for their time spent in CE.

Still think you can get around it? “But it’s optional.” Be careful about trying to get out of these requirements by implying a seminar or CE is “optional” or “strongly encouraged but not required” attendance, when in fact, it is required. The DOL is onto you – in most cases, it won’t accept your assertion at face value.

“But it’s for their benefit.” The other tendency is to say, “Well, what I am doing is picking up all their expenses so they can improve themselves, therefore I don’t have to pay hourly.” Nothing could be further from the truth. The law is the law, and when training benefits your business and takes an employee’s time, you have to pay for it.

In Summation

Since we opened our doors in 2006, we’ve seen policies in countless employee handbooks that have been borrowed, rewritten, and misinterpreted until they no longer even remotely resemble the original policy. For example, employers often believe that “outside normal working hours” means that since the business is closed on Friday, Saturday, and Sunday, that means any seminars that are held on those days are subject to the employer’s discretion and the employee is not required to be paid. A second and significant issue is how calling an event “voluntary” affects the requirement for pay. Many employers believe they can make all seminars voluntary, going off the idea that “employees want to improve their skills and invest in their futures,” with the end result that the employer is relieved of having to pay their employees an hourly wage.

However, in order for the travel and the time at the seminar to NOT be compensable, ALL of the following must be true:

  1. Training is outside of regular/normal working hours
  2. The event is voluntary (NOTE: “voluntary” will not stand up if the employee can show or is led to believe that the training is critical to their job)
  3. The employee performs no productive work during this period
  4. The event is not directly job related

In addition, remember:

Wage and Hour – All of the compensatory time, including travel, must be added to the hours for that pay week, and if overtime occurs, you must pay it.
Differential Rate of Pay – You can establish, in advance, a different rate of pay for travel time or time spent in training/seminars and then use the weighted average to determine a base rate of pay for any overtime that occurs.

Call CEDR’s Solution Center with questions at (866) 414-6056 or by email at solutioncenter@cedrsolutions.com. If you’ve gotten lost navigating the rules for training and seminar pay, call us. It’s a tough route to follow. We’ll put you back on the right track.

That’s all for now. Enjoy your productive, prosperous, and lawsuit free workday.

Apr 22, 2015

Friendly Disclaimer: This information is general in nature and is not intended to provide legal advice or replace individual guidance about a specific issue with an attorney or HR expert. The information on this page is general human resources guidance based on applicable local, state and/or federal U.S. employment law that is believed to be current as of the date of publication. Note that CEDR is not a law firm, and as the law is always changing, you should consult with a qualified attorney or HR expert who is familiar with all of the facts of your situation before making a decision about any human resources or employment law matter.

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