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Employees' Voluntary Participation in Wellness Activities Is Not Compensable Under the FLSA
Practical Law Legal Update w-016-4765 (Approx. 4 pages)
Employees' Voluntary Participation in Wellness Activities Is Not Compensable Under the FLSA
by Practical Law Employee Benefits & Executive Compensation
| Published on 05 Sep 2018 • USA (National/Federal) |
The Department of Labor (DOL) has concluded in an opinion letter that an employee's voluntary participation in certain wellness-related activities, biometric screenings, and benefits fairs was not compensable worktime under the Fair Labor Standards Act (FLSA).
The DOL has concluded that the Fair Labor Standards Act (FLSA) does not require compensation for time that an employee spends voluntarily participating in wellness-related activities, biometric screenings, and benefits fairs, as described in an opinion letter addressing these activities (FLSA 2018-20 (Aug. 28, 2018); see Practice Note, Wellness Programs: Fair Labor Standards Act (FLSA)).
Background
The DOL's opinion letter involved voluntary participation by employees in biometric screenings, specified wellness activities, and benefits fairs. The employer that requested the letter represented that it received no direct financial benefit from employee participation in any of the three arrangements.
Biometric Screenings
The employer permitted its employees to voluntarily participate in biometric screenings that:
- Occurred both during and outside of regular work hours.
- Measured employees' cholesterol levels, blood pressure, nicotine usage, and other indicators.
- Were not required by the employer and were unrelated to the employees' jobs.
Employee participation in the screening could decrease an employee's deductibles for health insurance coverage.
Wellness-Related Activities
Employees could also reduce their monthly health insurance premiums by participating in the following wellness-related activities:
- Attending in-person health education classes and lectures (for example, nutrition or diabetes management).
- Taking an employer-facilitated gym class or using the employer-provided gym.
- Participating in telephonic health coaching and online health education classes using an outside vendor facilitated by the employer.
- Participating in Weight Watchers.
- Voluntarily engaging in fitness activities (for example, going to the employee's personal gym, exercising outdoors, or participating in a Fitbit challenge).
As with the biometric screenings, these wellness activities were not required and did not directly relate to an employee's job.
Benefits Fairs
Employees could also choose to attend a benefits fair to learn about topics that included employer-provided benefits, financial planning, or college attendance opportunities. The benefit fairs were:
- Not part of new employee orientation.
- Open to all employees and entirely optional.
- Unrelated to the employees' job duties.
DOL Analysis Under the FLSA
According to the DOL, the wellness-related activities, biometric screenings, and benefits activities at issue in the letter:
- Provided direct financial benefit only to the employees.
- Assisted the employees in making informed decisions concerning matters unrelated to their jobs.
Participation in the activities was entirely optional for the employees, and was not required by the employer. The employer also did not require employees to perform any job-related duties while they participated in the activities.
The DOL noted that although the FLSA does not expressly define what is compensable work, the Supreme Court has concluded that whether an employee's time is compensable depends on whether the time is spent predominantly for the benefit of the employer or the employee. Citing caselaw authority, the DOL concluded that because the activities described by the employer predominantly benefitted the employee, they were not compensable worktime under the FLSA.
In addition, the DOL concluded that the wellness activities, biometric screenings, and benefits fairs were noncompensable off-duty time under its regulations (29 C.F.R. § 785.16). The DOL reasoned that the employer relieved the employees of all job duties during the time it allowed them to voluntarily participate in the activities. The employer also limited how much time employees could spend participating in the three activities. The DOL assumed, however, that the time allowed was sufficient for the employees to use effectively for their own purposes.
As a result, the DOL determined that the FLSA did not require the employees to be compensated for time they spent voluntarily participating in biometric screenings, wellness activities, and benefits fairs as described in the letter.
The DOL noted, however, that work breaks lasting up to 20 minutes are generally compensable, regardless of how an employee chooses to spend the break. Therefore, an employer that lets all employees take a daily 20-minute break must compensate them for the break even if an employee used the break to participate in the wellness activities, biometric screenings, and benefits fairs at issue in FLSA 2018-20.
Practical Impact
The DOL's letter, by its terms, is limited to the facts presented by the employer in requesting the opinion. As a result, employers should be cautious about applying the DOL's conclusions regarding wellness programs and related activities that differ from those addressed in the letter – particularly wellness programs that are not voluntary. For more information about wellness programs, including other compliance contexts in which a program's voluntariness is an important consideration, see the Practice Notes: