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Paying employees for time spent renewing credentials

RegSenseMeeting and Training Time as Working TimeWage and HourAssociate Benefits & CompensationAgency PublicationCompliance DocsHuman ResourcesEnglishFocus AreaUSA

Employees have to be paid for attending most training programs, but do they have to be paid for maintaining a license or certificate? The Fair Labor Standards Act requires that employees be paid for time spent in meetings, training sessions, or similar programs unless four criteria have been met:

  • Attendance is outside of regular working hours,
  • Attendance is voluntary,
  • The session is not directly related to the employee's job, and
  • The employee does not perform any productive work during attendance.

If any one of those criteria is missing, the time spent is compensable. For example, an employee who takes an online course at home in the evening must be paid for that time if the course is required. The fact that the employee chose to take the course after hours doesn't meet the “voluntary attendance” requirement.

Some jobs require employees to hold a license or certificate, and they may have to renew that license or take education courses to maintain the certification. If those courses are not specifically required by the employer, does the employee's time have to be paid?

Regulations cannot cover every situation, so there is no simple answer. If the license or certificate is required by law or by the entity that issued the credential, an employee's efforts to maintain that credential would be related to the job. Also, the courses would not be voluntary. Therefore, it may seem that the time must be paid. However, you do not control the employee's time or compel the employee to take the course, and that can affect the answer.

Who benefits?

To evaluate whether time spent maintaining a credential must be paid, ask yourself who primarily benefits from the training. Related questions include whether the training is specific to the job (so you benefit) or if the credential could be used to obtain other employment (so the employee benefits), and whether you asked the employee to obtain the credential.

For example, a forklift operator must receive training under the Occupational Safety and Health Administration regulations, and the training must cover hazards specific to the workplace. Since the training is required to qualify the individual for the position and is specific to the job, the time spent in training must be paid.

Conversely, you might hire an emergency medical technician (EMT) and expect applicants to already have an EMT certification (and to maintain that certification throughout employment). In that case, you might not have to pay for time the employee spends maintaining the certification. You derive some benefit from the employee's efforts (if the certification lapses, you'd have to hire a replacement), but the employee also derives some benefit. The individual remains employed, or could use the certification to find other employment.

No single evaluation fits every situation, but a general best practice is to pay for training time unless you can show that:

  • The employee is the primary beneficiary and you are an incidental beneficiary;
  • The credential belongs to the employee and can be used for other employment, such as a commercial driver's license;
  • You expect applicants to possess the credential as a condition of hire, contrasted with allowing a new hire to earn the credential while on the job; and
  • The individual obtains and maintains the credential as a professional certification, such as an EMT or certified public accountant (CPA).

These are common considerations, but they are not written into law. A state labor agency could decide that you are a substantial beneficiary of the employee's efforts and expect you to pay for time employees spend maintaining a credential. Even if these criteria have been met, another best practice is to contact your state labor agency for an opinion on whether time spent maintaining a specific credential should be paid. Obtaining an opinion from a state agency should help demonstrate your good-faith efforts to ensure that employees were not improperly denied wages for their time.

Course fees

Even if you have to pay for the employee's time spent renewing the credential, you might still make the employee pay for the course itself. Quite a few states clarify that if a license or certification belongs to the employee and is not exclusive to one employer as a condition of employment, the employee can be required to pay any course fees required to obtain or maintain that credential.

['Wage and Hour']
['Meeting and Training Time as Working Time']
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