Employer Did Not Have to Compensate Employees for Training Required as Condition of Hire

Robert A. Dubault

Generally, employers must pay their employees for time spent in meetings and training programs. But what happens when the employer makes certain training a precondition of employment, yet allows employees who have not completed the training to begin employment and complete the training within a reasonable time after hire? That was the issue in Chao v. Tradesmen International, Inc., No. 00-4434 (6th Cir. Nov. 15, 2002), where the employer established completion of a general 10-hour OSHA training course as a hiring criteria for its field employees. Applicants were informed during their initial interview that the training had to be completed before they were hired or within 60 days after starting work. The training was conducted after work hours and employees performed no work for Tradesmen during the training. Employees who did not meet the training requirement were terminated. The U.S. Department of Labor sued Tradesmen, claiming that employees who completed the training after beginning work should have been compensated for the time spent in training.

Under the DOL's regulations, time spent in meetings, lectures and training is not compensable if:

  1. Attendance is outside the employee's regular work hours;
  2. Attendance is, in fact, voluntary;
  3. The course, lecture or meeting is not directly related to the employee's job; and
  4. The employee does not perform any productive work while attending.

All four criteria must be satisfied for the time not to be compensable. The parties in Tradesmen agreed that the OSHA training course satisfied the first, third and fourth criteria of the DOL's test. At issue was whether the employee's attendance was "voluntary" given that his employment would be terminated if the training was not completed. The DOL argued that the attendance was not voluntary under its regulations because it was required by the employer and because the employee's employment could be adversely affected by nonattendance.

The Sixth Circuit disagreed with the DOL. It reasoned that the training was not related to the employees' existing job duties, but rather was a precondition to employment that the employer informed employees about and tolerantly allowed them to complete after being hired. According to the court, Tradesmen should not be penalized for allowing the employees to earn income when it easily could have withheld the job offer pending completion of the training. The court did note, however, that it might have reached a different conclusion if the employees had been unaware of the training requirement until after they were hired.

For more information, contact Rob Dubault at rdubault@wnj.com or call him directly at 231.727.2638.