Understanding Training and Travel Pay Rules for Non-exempt Employees
Are you taking your team to any seminars or CE events this year? Compensating non-exempt employees for training and travel is a tricky subject, and many healthcare practice owners and managers don’t realize you cannot create your own rules.
Federal law governs every aspect of when non-exempt employees must be paid for training and travel. To make matters more difficult, some states have passed their own laws imposing even stricter requirements (especially California, Connecticut, D.C., and Wisconsin). But even though there’s a rule for just about every training and travel situation you can think of, most employers with CE or travel pay policies in their employee handbooks are in violation of at least one area.
How Much Do You Know About Training Compensation?
Here’s a little self-test to check your current understanding of training pay. Which of the following sounds correct when it comes to paying a non-exempt employee for a training or CE event you’ve suggested?
a. The employee is not paid if training is voluntary or mutually beneficial
b. The employee is not paid if training falls on a day the employee does not normally work
c. Training pay is at the employer’s discretion, and the employee will be notified of whether they will be paid
“The Policy 8 out of 10 Employers Get Wrong”
For continuing education (CE) credits, seminar attendance, conferences, or company trips, it’s helpful to remember two rules of thumb before getting into details:
1. The “Butt in the Chair” rule: Employers must pay for ALL hours non-exempt employees spend in mandatory trainings or meetings, regardless of the day of the week and their normal work hours.
2. The “Planes, Trains & Automobiles” rule: Employers must pay for ALL hours non-exempt employees are traveling to and from a seminar if it crosses across their normal work hours. NOTE: We did not say days, we said hours.
Our expert HR advisors here at CEDR see endless variations of noncompliant policies when clients first come to us—and they’re not just unlawful, they can also serve as evidence against you in an employee claim or lawsuit. Think of it as a written “confession” of wrongdoing for a plaintiff’s attorney. They’ll love it… you won’t. Here are some specifics about the rules that apply.
Uncle Sam Wants YOU to Pay for Seminar Time
Odds are that non-exempt employees will need to be paid for attending work-related seminars or training, per the federal Fair Labor Standards Act, or FLSA. In order for time spent at a seminar to NOT be compensable, ALL of the following must be TRUE.
(Again, please note that in some states, your rules are even stricter.)
1. Attendance must be outside of normal work hours.
Note: this does not say normal work “days”
2. Attendance is voluntary.
Note: The word “voluntary” will not stand up if an employee can show the employer initiated the opportunity and led to believe that training is related to their job
3. The event is not directly related to the job and does not benefit the employer by helping the employee to do a better job.
4. The employee performs NO productive work during this period.
We should note here that some positions require CE credits in order to maintain licensure. Employers are required to pay for training you send employees to, and this still applies even if the event incidentally also earns the employee CE credit needed to maintain licensure. However, if the employee is attending CE courses needed for their license on their own volition, without any employer requirement, then the time is NOT compensable, even if you elect to pay for the course.
A distinction is also made for time spent in training that the law requires the employer to provide—such as for OSHA or HIPAA—as opposed to training that the law requires the employee to obtain. Training that must be provided by the employer must be paid.
Also, keep in mind that time spent at seminars is subject to overtime pay when applicable.
What About Travel Pay?
The rules regarding travel pay are a bit simpler. An employee is paid for any work-related travel during their normal work hours, no matter the day of the week or the method of transportation. However, unless they’re flying the plane themselves OR simultaneously doing work for your practice, non-exempt employees do not need to be paid if plane travel falls outside normal work hours on any day.
Driving is a different story. Employees are almost always paid for their own work-related driving time, on any day or at any time of day, with the exception of their normal commute. Otherwise, all self-driving time is subject to compensation. (If you offer to fly the employee to the location, but they insist on driving instead, you only pay for what their flight time would have been.)
Don’t Forget the Details: A Few Helpful Hints
Note that these compensation guidelines apply to non-exempt employees only. Exempt employees receive their normal salary whether they’re working in your office or elsewhere, and deductions for travel or job-related training are not allowed.
One permissible way to reduce training and travel costs is to introduce a pay differential, and thereby pay your non-exempt employees at a lower rate for non-production work like training and travel. But beware:
1. This needs to be set up in writing well in advance of any trips.
2. This should be part of your employee handbook, and employees should be notified in advance of any differential rates.
3. The differential rate may never fall under your state’s minimum wage.
Be a Safe Traveler: Compensate When Required
As HR experts, we cannot stress enough the importance of properly paying for training and travel time. Employees these days are very aware of their legal rights (and how to Google them)—yet we often see medical and dental practices adopt or self-write policies that don’t comply with the FSLA. While few employers intend to break the law, good intentions aren’t a useful defense!
If this article has brought up questions for you, please ask an expert. The best way to ensure you are not breaking federal or state laws is to request a free evaluation of your employee handbook by CEDR’s in-house attorneys and HR experts. We will report directly back to you on strengths and liabilities in your current policies.
This evaluation is currently complimentary! Simply email a digital copy of your handbook to firstname.lastname@example.org or call 866-414-6056. You can also fill out the “free audit” form on this page, and we’ll have one of our employment law experts in touch with you right away.
Friendly Disclaimer: This information is general in nature and is not intended to provide legal advice or replace counsel about a specific HIPAA compliance issue with a specialized attorney. This material is meant to provide information that is believed to be current as of the date of this post.
Questions? Owners and managers at independent healthcare practices are welcome to email email@example.com or call 866-414-6056. We can help!