Massachusetts Court Breaks with Department of Labor Regarding When Employers Have to Pay for Training Time and . . . Invites Appeal?

The Department of Labor publishes regulations intended to be applied to wage-and-hour issues arising under the Fair Labor Standards Act. Massachusetts courts generally find these regulations helpful and follow them when applying the Massachusetts Wage Act.

For example, the Department of Labor has published regulations regarding whether training hours for employees are to be considered hours worked for purposes of the FLSA. According to those regulations, employers do not need to pay employees for time spent at attendance at lectures, meetings, training programs, and similar activities if: (a) attendance is outside regular working hours, (b) attendance is voluntary, (c) the course, lecture, or meeting is not directly related to the employee’s job, and (d) the employee does not perform productive work during such attendance. 29 CFR § 785.27.

In short, if attendance at the meeting is required, it must be paid. If attendance is during working hours, it must be paid. If the course is directly related to the job, it must be paid. If the employee performs productive work during the meeting, it must be paid. Easy, right? Yes, but not so much anymore.

Massachusetts Court Breaks with Department of Labor on Paying Employees for Training Time.

Plaintiffs Robin Miller, Richard Grey, and Stan Alemaskin worked for Citizens Financial Group as licensed bankers, spending considerable amounts of time outside regular working hours studying for licensing exams. Citizens informed the Licensed Bankers that they were required to obtain certain licenses and that doing so was a condition of their employment. Citizens expected Licensed Bankers to prepare for licensing exams on their own time and did not compensate them for time spent studying. Individuals who obtained the licenses were not limited to using them at Citizens, but could use them elsewhere for other employers.

Plaintiffs brought suit under the FLSA, Massachusetts law, and Pennsylvania law, claiming that their employer was required to compensated them for time spent preparing for the licensing exams.

The Court analyzed the DOL factors and determined that the training time at issue was outside regular working hours (factor 1) and that the employees did not perform productive work during the sessions (factor 4). These facts cut in favor of the employer.

The Court held that the third factor supported the plaintiffs because the time was spent relative to the plaintiffs’ current position, and not in order for them to advance/be promoted. In doing so, the Court determined the ultimate question to be: whether the training is for the employee’s current position or for the employee’s advancement. Thus, factor three only supports employers if the training time relates to an employee’s promotion/advancement and not her current position.

Finally, the Court determined that the attendance at the trainings was mandatory and not voluntary.

In sum, Citizens failed to satisfy each factor of the DOL test, meaning that according to the DOL regulation, it violated the law when it did not pay the plaintiffs for the training time at issue.

But the Court held the opposite. How? Well, the Court felt compelled to follow two First Circuit cases that provide for something called the “precondition test” to be used when analyzing whether time spent on outside classwork should be compensated. According to this test, employers, like Citizens, do not need to compensate employees for study time if it’s (a) condition of employment, (b) the condition was communicated at the time of the job offer, and (c) the employees perform no productive work during the training that directly benefited their employer.

Here, Citizens did require the training and it did communicate that at the beginning of employment. As a result, the Court dismissed the claims against Citizens.

There is language in the opinion that suggests it would be limited to situations where an employer promoted employees into a position at issue before they completed certain training under the condition that they would participate in the training and obtain certain licenses.

The Court did provide plaintiffs a lifeline, stating: “[t]he validity of the First Circuit test, however, may be ripe for reconsideration.” Time will tell if plaintiffs follow that guidance and appeal this decision.