As we reported earlier, after a hiatus during the Obama Administration, opinion letters are back and the United States Department of Labor (DOL) recently issued six new ones.
Opinion letters are official, written opinions from the Wage and Hour Division (WHD) on “how a particular law applies in specific circumstances presented by the person or entity requesting the letter.” The DOL encourages the public to submit requests for opinion letters; however, the request must state that the opinion is not sought by a party in a WHD investigation or for use in any litigation that was initiated prior to the submission of the request.
The Facts about Paying for Wellness
One of the newly issued opinion letters addresses whether the FLSA requires an employer to compensate an employee for time spent voluntarily participating in certain wellness activities, biometric screenings, and benefits fairs. The fact pattern presented to the DOL was as follows:
An employer makes available to its employees opportunities to participate in “biometric screenings,” which test, among other things, cholesterol levels, blood pressure, and nicotine usage. The employer does not require the screening, and it is entirely the employee’s choice to participate. The screenings are in no way related to the employee’s job duties; however, the employee may be screened both during and outside of regular work hours. An employee’s participation in the screening could decrease the employee’s health insurance deductibles.
An employee may also participate in other “wellness activities” to decrease his or her monthly insurance premiums, including (1) attending in-person health education classes; (2) using the employer-provided gym; (3) participating in telephonic and online health education classes facilitated by the employer; (4) participating in Weight Watchers; and (5) voluntarily engaging in a fitness activity. As with the biometric screening, the employer does not require anyone to engage in those wellness activities, and the activities are not related to the employee’s job.
Lastly, the employer allows employees to attend benefits fairs on such topics as financial planning, employer-provided benefits, or college attendance opportunities. Those fairs are not part of an employee’s orientation, are open to all employees, are not related to the employee’s job duties, and are entirely optional.
The DOL’s Opinion
The FLSA requires employers to compensate employees for their work, but does not explicitly define “compensable work.” That said, in reaching its ultimate conclusion, the DOL relies on the U.S. Supreme Court’s 1944 determination in Armour & Co. v. Wantock that the compensability of an employee’s time depends on “whether it is spent predominantly for the employer’s benefit or for the employee’s.” The DOL also relies upon separate regulations relieving employers of their obligation to compensate an employee for “off duty” time, i.e., “periods during which an employee is completely relieved from duty and which are long enough to enable him to use the time effectively for his own purposes.”
Considering all of those factors, the DOL opined that “an employee’s voluntary participation in biometric screenings, wellness activities, and benefits fairs predominantly benefits the employee.” It reached that conclusion, in part, because the activities (1) provide financial benefit to only the employee, (2) help the employee make decisions about matters unrelated to his or her job; (3) are wholly optional; and (4) are not required in conjunction with any job-related duty. As such, the DOL concluded that engaging in those activities does not constitute compensable worktime under the FLSA.
The DOL specifically concluded that participation in those activities was not compensable even during normal work hours, because the activities constitute non-compensable “off duty” time, provided the employee may use the time engaging in those activities “effectively for his or her own purposes.”
Employer wellness programs are all the rage. The DOL’s recent opinion offers clear guidance to employers on how to structure a wellness program in a manner that does not require the employer to pay employees for using the program:
- Make available financial benefits personal to the employee (not to the company);
- Provide information that employees need to make decisions related to their lives—not their jobs; and
- Make it voluntary.