WHEN IS PRE-EMPLOYMENT TRAINING COMPENSABLE?

            Pre-employment training is a generally not covered by the FLSA, and thus not compensable.  Depending on the structure of such a program, its participants may not even considered “employees”, and thus may not be covered by the FLSA.  That determination will depend on all the circumstances surrounding the individual’s “training.”

            The United States Department of Labor issued a six-part test that was later adopted by the courts in analyzing pre-employment training cases. 

            If all six of the following criteria apply, the trainees are not employees within the meaning of the FLSA:

  1. The training, even though it includes actual operation in the employer’s facilities, is similar to training that would be given in a vocational school (this means the training is “fungible,” or interchangeable, and can be used by the employee in another position with another employer);
  2. The training is for the benefit of the trainee;
  3. The trainees do not displace regular employees but work under close observation;
  4. The employer that provides the training derives no immediate advantage from the trainees’ activities and at least on occasion, its operation may actually be impeded;
  5. The trainees are not necessarily entitled to a job at the completion of the training period; and
  6. Both the employer and the trainees have an understanding that the trainees are not entitled to wages for the time spent in training.

The most crucial part of this test involves balancing the benefit to the trainee against any advantage to the employer.  When an employer is clearly gaining an economic advantage from the efforts of its “trainees,” they will likely be deemed employees entitled to compensation for their “training time.”  Nevertheless, when all the criteria are met, the number of hours spent in training is not an issue. 

 

 

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