Transfer Tax

By Thomas L. Boyer

Unless employees are exempt under the federal Fair Labor Standards Act they are entitled to premium pay, generally time and one-half, for hours worked in excess of 40 in a workweek. The most common exemptions apply to executives, administrators and outside sales personnel.

A common question is whether non-exempt employees need to be compensated for training and meeting time. Generally, employees must be paid for time spent attending training programs, meetings and other similar activities unless 4 criteria are met:

1. Attendance occurs outside of an employee’s regular working hours,

2. Attendance is voluntary,

3. The training or meeting is not directly related to an employee’s job, and

4. The employee does not perform productive work while attending the training or meeting.

Determining whether “attendance occurs outside of an employee’s regular working hours” is usually easy since most employees work a regular work schedule. This determination can be more difficult for employees with variable work schedules.

If attendance or training is clearly a free choice by the employee, it is voluntary. In my experience, the most likely dispute concerning voluntary attendance is whether an employee would be at a disadvantage at work by not attending the training or meeting. If employees would not be as successful in their jobs or promotions would be more difficult to obtain if they did not attend the training or meeting, attendance is probably not voluntary.

The third criterion alone causes most training to be compensable. If the training is “directly related to the employee’s job,” the employee needs to be paid for the time spent attending it. Training is “directly related to the employee’s job” if the purpose of the training is to improve the employee’s performance in the current job. This would be true no matter when the training occurred and whether or not attendance was voluntary. However, if attendance is not during working hours and is voluntary, but the purpose of the training is to qualify for a new job or obtain an additional skill, then the training or meetings are not usually compensable. Also, if the training helps the employee in the current job but is of general benefit to the employee, such as physical fitness, there would be no compensation.

The fourth criterion is that employees attending training or meetings cannot be performing other work while attending the training or meetings. If the employee is checking sales figures while listening to the speaker, most likely compensation to the attendee has to be paid.


For further information regarding these matters, please contact Mr. Boyer at 248.740.5666 or via email.

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