Workplace Wellness and the Fair Labor Standards Act

There have been questions lately about completion of incentivized wellness activities “off the clock” and what, if any, Fair Labor Standards Act (FLSA) issues might arise.  One sample question is whether a participatory biometric screen, HRA and coaching program that must be completed off the clock to earn a premium reduction violates any FLSA requirement.  First, it is important to remember that compliance is often a matter of “degree,” particularly in the workplace wellness context where the amount of financial incentives may seem to cross the compliance line for some and not for others.  So, even with all the facts, definitive answers are difficult to give.  It all depends on what a factfinder, such as a judge or jury, might think.

Second, the question about FLSA compliance is critical and yet often overshadowed by the ACA, HIPAA, ADA and GINA.  The FLSA requires employers to pay for all hours worked, including overtime.  One recent case that dealt with this area of the FLSA involved employee trainings.  In Wicke v. L&C Insulation, Inc., 2014 WL 2957434 (July 1, 2014), the plaintiffs (insulation installers) sued their employer under the FLSA and Wisconsin law for failing to pay them overtime for time spent at “mandatory” trainings.  The court noted that “trainings are considered compensable work unless all four of the following criteria are met:

  1. Attendance at the trainings is outside of the employee’s regular working hours;
  2. Attendance is in fact voluntary;
  3. The course is not directly related to the employee’s job; and
  4. The employee performs no productive work during the course.

Wicke, 2013 WL 2957434, * 8 (citing 29 CFR s. 785.27).  Thus, all four of the above criteria must be met for the employer to avoid having to pay workers for attending a training.  In the Wicke case, the plaintiff employees argued that the trainings were mandatory.  The court stated that an activity is not voluntary in fact “if the employee is given to understand or led to believe that his present working conditions or the continuance of his employment would be adversely affected by nonattendance.”  Id.

So, let’s return to that question about the premium reduction incentive for attending a biometric screen, HRA and coaching program off the clock. If the employee believes that not attending the program will adversely affect his or her present working conditions (which arguably includes benefits), the employee may perceive the program as involuntary.  The amount of the premium reduction will likely play into whether the employee believes attendance is voluntary.  A large premium reduction may seem more impossible to pass up than a small premium reduction.

This issue raises the larger question of the value of financial incentives, particularly if those incentives are imposed in a top-down manner without adequate research and preparation for the wellness program.  Successful workplace wellness programs, with or without financial incentives, will obtain employee and leadership buy-in before ever being launched.  Obtaining that buy-in and up front understanding of employee needs and desires will minimize the risk violating wellness laws such as the FLSA.

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