WHD Issues More Opinion Letters: One Addresses Whether Wellness Activities Constitute Compensable Time
On August 28, 2018, the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) released six opinion letters—four involving the Fair Labor Standards Act (FLSA) and two involving the Family and Medical Leave Act (FMLA). The four wage-and-hour opinion letters address the following topics:
- FLSA2018-20: Whether time spent voluntarily by an employee participating in wellness activities, biometric screenings, and benefit fairs constituted compensable time.
- FLSA2018-21: Whether an entity that sells a technology platform that processes credit card payments for online and retail merchants constitutes a retail or service establishment eligible for the section 7(i) exemption from overtime.
- FLSA2018-22: Whether examination graders who grade credentialing examinations administered by a nonprofit entity qualify as volunteers.
- FLSA2018-23: Whether food service operations that are functionally integrated with the operations of a motion picture theater are a single establishment for purposes of the motion theatre exemption from overtime in section 13(b)(27).
This article discusses Opinion Letter FLSA 2018-20 on the compensability of time employees spend on wellness activities.
Opinion Letter FLSA2018-20 is timely in that more and more employers are providing various wellness incentives as part of their medical insurance plans to promote healthier lifestyles and choices. Participation in such activities may result in lower health insurance deductibles, premiums, or both. The opinion letter describes examples of biometric screening tests to include testing for “cholesterol levels, blood pressure, and nicotine usage.” Wellness activities noted in the opinion letter include, but are not limited to, attendance at a health education class on topics such as nutrition or diabetes, participation in an employer-sponsored gym class or use of an employer-provided gym, and participation in a weight-loss program. Opinion Letter FLSA2018-20 also notes that attendance at benefits fairs would educate employees about various benefits the employer provides, continuing education opportunities, and financial planning options.
The WHD reiterated that its analysis was only of activities in which participation was strictly voluntary: it was up to the employee to decide whether to participate or in which activity they may want to participate; none of these activities were related to an employee’s orientation or job duties; and the employer did not derive a financial benefit if an employee participated in any activity.
Opinion Letter FLSA2018-20 briefly noted that the determination of whether time is compensable turns on whether the time is spent performing duties that benefit the employer or the employee. Relying on FLSA regulations, it further noted that compensable time did not include the time during which an employee is off duty or completely relieved of work responsibilities and able to use such time for his or her own purposes.
In light of the facts that participation was purely voluntary; an employee, if anyone, benefitted financially from participation; and participation enabled an employee to make better decisions about non-work-related matters, the WHD found that such wellness activities predominantly benefit an employee. Consequently, it concluded that participation in such activities did not constitute compensable time under the FLSA.
It also concluded that participation in these activities constitutes noncompensable off-duty time, as described in the regulations, because the employer is relieving an employee of his or her work responsibilities while participating in these wellness activities. In doing so, the letter notes that there is no indication that the employer restricts the amount of time for an employee’s participation, and it assumes that the time increment is sufficiently long to enable an employee to use it for his or her own purposes.
Finally, Opinion Letter FLSA2018-20 states that its conclusion is the “same regardless of whether the activities occur on-site or during regular work hours.”
Because opinion letters are fact-specific, before relying on the opinion letter, employers will want to verify that their wellness programs are comparable to the facts described in FLSA2018-20. For example, if participation in certain activities is mandatory or job related, then such time may be compensable. Similarly, if an employer restricts the amount of time an employee may engage in such activities during regular work hours, then it could convert such time to compensable work time. Nonetheless, Opinion Letter FLSA2018-20 is helpful guidance for employers and employees in differentiating among various circumstances when time spent on a variety of wellness activities can be excluded from an employee’s compensable time.