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HR Insights with Ali: Calculating Pay for Employee Training and Meetings

Posted on 12/6/2017 by Ali Oromchian, Esq.
When a new employee is starting a job, they are often required to train for that position. This leaves employers asking themselves two important questions: (1) Am I required to pay an employee for time spent training? And (2) If so, how much?

Generally speaking, the Fair Labor Standards Act (FLSA) requires that employees be compensated for all training time, unless ALL four of the following standards are met:

1. The training is voluntary.
2. The training takes place outside of normal work hours.
3. The training is not directly related to the performance of the employee’s job.
4. No work is performed during the training.

Unless all four of these are met, you must compensate the employee for those hours worked. In addition, you will need to compensate your employee for overtime if the time spent in training leads to the employee working more than 40 hours that week. The same four rules above also apply to meetings - meaning that if the meeting is related to the job or is involuntary, the employee will need to be paid for that time.

You are able to pay the employee a reduced rate for training time, but you cannot go below the federal (and state, if applicable) minimum wage rate. If you have a policy for paying employees at a reduced rate for time spent in training and meetings, it is advisable that this policy be clearly stated and that the hours spent earning this reduced rate are clearly recorded as such.

In addition, you should also note that if the employee is entitled to overtime pay as a result of time spent in training/meetings, the overtime rate cannot be calculated using only the reduced “meeting and training” rate of pay. Instead, you must use a “blended” rate of pay for calculating the overtime rate. While blended overtime rate calculations can sometimes be quite intricate, the general rule is that an employee must be paid at a rate of not less than 1.5 times the weighted average of all non-overtime rates that contributed to that workweek. For assistance with this calculation, contact your employment law attorney or HR professional.

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