Last week, the United States District Court for the Middle District of North Carolina affirmed the dismissal of wage claims arising out of unpaid trainings employees were required to complete prior to their first day of work. In that case, entitled Wade v. JMJ Enterprises, LLC, the plaintiff alleged she was required to undergo pre-employment CPR, first aid, medication management, and seizure management trainings, and that she was not paid for her time spent completing those trainings. The defendants, JMJ, operated a residential mental health company and three different group homes, and explained that, to receive funding from the state of North Carolina, it was required to have all employees complete these training certifications prior to working in the homes. Importantly, the trainings were not specific to the functions related to JMJ’s business and were instead transferable to other healthcare businesses. JMJ argued that the pre-employment training time was not compensable because the workers did not become employees unless and until they completed these voluntary, state-mandated training requirements related to all similar healthcare providers.
In its prior order, the Court noted that when a training program most greatly benefits the trainee, it is not covered by the FLSA. Transferability of the training is particularly relevant when balancing who—employer or trainee—benefits most from the training. Ultimately, the Court found that the state-mandated trainings that were required before the workers could start employment with JMJ’s group homes mostly benefited the employees because those trainings were transferrable to other businesses. JMJ had hired employees who did not need to attend any pre-employment trainings because they already had these necessary certifications. Relying on legal precedent holding that such trainings do not require compensation, the Wade Court dismissed the plaintiff’s pre-employment unpaid training wage claims, ruling that the time employee’s spent completing state-required, pre-employment trainings was not compensable under the FLSA.
Determining whether to compensate workers for the time they spend completing pre-employment trainings and obtaining relevant certifications for the job can involve a complex legal analysis with significant implications. FLSA claims for unpaid wages can involve liquidated (double) damages along with recovery of the plaintiff’s attorneys’ fees. The United States Department of Labor has published guidance on these training wage issues, which states that trainees must be compensated for training time unless the following six criteria are met:
- The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school;
- The training is for the benefit of the trainees or students;
- The trainees or students do not displace regular employees, but work under close supervision;
- The employer that provides the training receives no immediate advantage from the activities of the trainees or students and, on occasion, his operations may even be impeded;
- The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and
- The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.
