Training and Travel Pay

Continuing education is a valuable employment perk, but you still have to follow state and federal wage laws.

Training and Travel Pay

Continuing education is important—training programs and seminars keep your team’s knowledge up to date and their skills sharp. In addition, providing opportunities for your staff to take part in continuing education improves employee engagement and retention and, in health care, may be necessary to maintain licensure. The question for practice owners and managers is, “If I’m paying for an educational program as well as the employee’s housing, food and travel, do I also have to compensate the employee for time spent in training and traveling to and from events?” The answer, in virtually all cases, is yes.

There’s a Rule for That

We have the Fair Labor Standards Act (FLSA) to thank for the legislation surrounding training and seminar compensation. The Wage and Hour Division of the U.S. Department of Labor (DOL) enforces the FLSA. In addition, some states have even stricter rules (e.g., California and New York) than the DOL. This article will only address the federal laws, but owners and managers should familiarize themselves with their states’ laws as well.

According to the FLSA, time spent at a training/CE event is not compensable only if ALL FOUR criteria below are true.

1. The seminar must happen outside of normal work hours. This means “work hours” not “work days.” If your office is usually open from 9 a.m. to 4 p.m. then most, if not all, hours your employees spend at a seminar are compensable, right off the bat. Even if the training is on a weekend.

2. Attendance must be voluntary. Did you initiate or offer the opportunity to attend this event? If your employee felt you said or implied anything that led them to believe you wanted them to attend an event for any job-related reason, you are obligated to compensate them for their time at the event.

3. The employee must perform NO productive work during the seminar. No matter how exotic the destination, nor how excited your employees are to attend, if they are working, you have to pay.

4. The seminar is NOT job related. Will your employees learn information, techniques or skills they can use to complete their jobs? If the event will educate or train the employee in any way related to their position with your facility, then the hours are compensable.

As you probably noticed, rule No. 4 is the clincher. Unless you’re sending your team on a whitewater rafting getaway, where the only education is how to pitch a tent or start a camp fire, federal law mandates that you compensate your employee(s) for training time.

An easy way to think of it is the “Butt in the Chair” rule. Your employees must be compensated for any hours spent sitting (or even standing) in any meeting, CE or class that you required or instigated. For hourly employees, this does not include time spent eating, relaxing, talking, shopping or sleeping. But it does mean all time spent in training.

For employees who are exempt salaried, you cannot deduct time for any days spent in training or traveling to and from the event, with one exception: continuing education to maintain licensure.

If your employee attends a continuing medical education training event to maintain state licensure, without which they would not be able to continue working, then you do not have to pay for that time. But be careful—if you require that the employee attend a specific CE event at a specific time (e.g., Friday at 3 p.m., rather than Monday, to better fit your patient schedule), then the hours spent in training are compensable.

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What About Travel Time?

As we discussed above, employees must be compensated for time spent in a training program or session. But what about time spent traveling to and from the event? First, there is the car vs. plane rule. Travel time incurred when an employee drives him or herself to an event is always compensable, even if the drive time occurs outside of normal working hours. You may deduct their normal commute time from home to the office off each leg of the trip.

For planes, trains, buses or other mass-transit travel, the rules depend once again on an employee’s normal work hours. If travel to or from a training event cuts across normal work hours, and the employee is a passenger, then those hours are compensable. This includes time spent riding as a passenger in a car driven by another employee.

Consider this example: Your medical assistant Jay normally works from 8 a.m. to 5 p.m., and today you’re sending him to an out-of-town event. His plane leaves at 3 p.m. and arrives at 6 p.m. Since this cuts across his normal schedule for two hours, he is entitled to two hours of travel pay. (We will address travel pay vs. work pay below.) This is true even if Jay is traveling on a Saturday or Sunday, days when your clinic is closed. Conversely, if his flight is from 6 p.m. to 9 p.m., you are not required to compensate him for that time, unless he is actively working.

If you have an employee who actually performs work while traveling (answering emails or figuring out next month’s schedule, for instance), then that time is compensable as time worked. This is true whether or not the work is performed during normal work hours or days. When traveling between time zones, the time from the point of departure (each way) is used.

Differential Rates of Pay

While training and travel time must be compensated in accordance with the criteria above, you do have the option of setting a different, lower rate of pay for that time, so long as it is at least the minimum wage required in your state (and/or city). This is called a differential rate of pay or non-production pay.

If you choose to use a differential rate, this policy and the differential rate must be presented to and acknowledged by your employees prior to the event. I recommend including this information in your employee handbook.

For hourly employees, overtime rules still apply. All hours your employees spend in training or traveling to and from educational events are subject to the usual state and federal 40-hours-per-week rule for overtime pay.

If you’ve used a differential rate for compensable travel and/or seminar time, so that the employee earned a lower rate for time spent in training, you would use a weighted average to calculate the appropriate overtime rate for that week.

Given how complex seminar and travel pay rules can be, you may be realizing right about now that every practice, clinic or medical spa you know of is getting something wrong. In the hundreds of employee handbooks I’ve reviewed over the last decade, 90% of them have illegal policies regarding seminar and travel compensation. That’s why I recommend that practice owners and managers have their handbooks periodically reviewed and corrected by an expert in HR and employment law. These rules are very clear, and no in-house policy negates them.

Paul Edwards is the CEO and co-founder of CEDR HR Solutions, a provider of individually customized employee handbooks and HR services for healthcare employers of all specialties. He is an HR expert with 25 years of management experience and the author of the blog HR Base Camp. Contact him at 602.476.1418, pauledwards@cedrsolutions.com.

Photo copyright Getty Images.

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