Two new DOL opinion letters on non-compensable work under the Fair Labor Standards Act (FLSA), both of which favor management, were recently issued by the U.S. Department of Labor’s Wage and Hour Division.
Two compensation matters were addressed in FLSA 2018-20 and FLSA 2018-22:
- Whether employers must compensate employees for their participation in wellness activities, and
- Whether companies can forgo compensating volunteers even though they continue to pay for expenses associated with volunteering.
In looking at these two opinions, companies may now want to consult with their employment defense attorney to consider reclassifying some activities or positions as non-compensable so long as participation is voluntary.
Employers can reevaluate whether the time employees spend at wellness activities is considered non-compensable work.
To qualify as such, FLSA 2018-20 sets forth the following criteria:
- Employees’ participation in such activities is voluntary,
- The activities benefit the employees, not the employers directly,
- Employees are able to use that time solely for their own purpose and are relieved of their work duties.
If all these elements are met, the employee’s time spent at wellness activities is non-compensable because the employee is sufficiently considered “off-duty” under 29 C.F.R. §785.16. (FLSA 2018-20).
It is important to note that employers may still need to consider the possibility of paying for such time if employers receive some sort of indirect benefit from their employees’ participation in wellness activities because the opinion in FLSA 2018-20 is silent on the effect of indirect benefits on compensable work. A qualified employment defense attorney can assist an employer in making this and related determinations.
In response to FLSA 2018-22, companies and organizations can reevaluate the classification of short-term employees as volunteers if they do not receive compensation for the services but still receive compensation for expenses related to incidentals.
To qualify as a volunteer, FSLA 2018-22 maintains that the person cannot receive compensation for their services and, in doing so, not be coerced financially through any means. At the same time, the company or organization can still provide compensation to cover expenses associated with their volunteering services such as “travel, lodging, meals, and other expenses incidental to volunteering.” (FLSA 2018-22)
Regarding both wellness and volunteer activities, the key to recognizing participation in the activity as non-compensable paid time is in the voluntary nature of the activities.
Just as wellness activities are meant to benefit employees rather than the employers, volunteer activities such as the one discussed in FLSA 2018-22 benefit individuals professionally in terms of the experience and recognition for being selected for such a position. It is important to note that whereas employees must be relieved of their duties during wellness activities as mentioned in FLSA 2018-20, a volunteer is not necessarily “off-duty” as indicated in FLSA 2018-22.
In the case of a Grader as described in FLSA 2018-22, there is some level of responsibility associated with grading examinations for the company. Even though this could be considered “on-duty,” the volunteer freely and willingly engages in this activity for the professional recognition and growth.
Keeping in mind the differences between wellness and volunteer activities, companies may now be able to reevaluate a variety of activities that fall under wellness programs or professional development to determine whether any qualify as non-compensable time, whether it is considered “on” or “off” duty. A qualified employment defense attorney can assist an employer in evaluating the implications of FLSA 2018-20 and FLSA 2018-22.
What this Means for Employment Defense Law Firms and EPLI Panel Counsel
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This article is provided for educational purposes only. Information is believed to be accurate but is not guaranteed and is not to be interpreted as legal advice or an opinion in regard to any topic discussed. The article should not be used as a substitute for legal advice from a licensed attorney in your state. Every situation is different, and circumstances vary widely depending on the governing state law, policy provisions, and related considerations.
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