By CEDR HR Solutions

The world is cautiously beginning to make travel plans again. So, it wasn't too surprising that the most recent AmSpa Q&A featured a question about compensating employees for on-the-road training from the AmSpa Community.

Specifically, a member of the AmSpa Community asked CEDR HR Solutions CEO and founder Paul Edwards:

What are the best practices for compensating staff when sending them out for training? For instance, if the training is out of town, does the employer cover travel, lodging and food costs? Do we also pay them hourly or at a flat rate, or does it count as an educational perk as part of the role?

Fortunately, the answers to these questions are pretty easy as federal and state law lays out the parameters for compensating employees for continuing education quite clearly. The video from the Q&A addresses this question directly from 19:33-25:48, but, for those who would rather read, here are some highlights from that conversation below.

Do I Have to Pay for Training?

All hourly, non-exempt employees must be compensated for time they spend in work-related training. Those hours spent training are considered working hours. Because of that, all employees need to keep track of their working hours during the trip.

Please keep in mind, some employers mistakenly believe all salaried employees are exempt. That is untrue. Exempt employees must meet very specific criteria. Usually, though not always, in a small medical practice, only the doctor whose name is on the shingle and, perhaps, the office manager will be exempt. Everyone else must always be compensated for all time spent in training.

It's also important to remember that hours spent training and traveling are not immune to overtime laws. If an employee works more than forty hours in one week, or 8 hours in a day if your business is in Alaska or California, they must be paid at an overtime rate for those additional hours. This includes training time.

Is There Any Case in Which I Don't Have to Pay for Travel and Training?

The answer is yes, but it almost never happens. In order for a non-exempt, hourly employee to travel for training and not have the hours count as times worked, the event would have to meet all four of these criteria:

1. All of the training has to take place outside of regular work hours

2. The event must be voluntary

3. The employee must perform no productive work during this period

4. The event must not be directly related to their job

As you can see, it's almost impossible to imagine a situation where all four of these criteria apply. Most seminars take place during normal business hours. As for the fourth criteria, it's really difficult to imagine an employee going to a professional conference not directly related to their job.

Far more complicated is the definition of "voluntary." Even if you say the event is voluntary, but your employee feels the training is mandatory or encouraged, you may still be legally responsible for those travel expenses. Here's how this situation might happen:

Let's say that you send an E-Blast to all your employees about a seminar and stress that it's completely voluntary. When an employee named Marissa reads the email and learns other members of the team are signing up for the training, she remembers her performance evaluation in which you asked her to be more of a team player. Marissa is likely to feel if she says no to the event, you will think she isn't being a team player. In that case, Marissa might believe the event is mandatory, or at least has some bearing on how you view her performance, no matter how you frame the issue.

Suffice it to say, it's very rare that a situation that meets all four of these criteria actually occurs. Because of the federal criteria established by the Fair Labor Standards Act, plan on compensating all non-exempt employees for their training.

What Expenses Do I Have to Pay for Specifically?

The employer must pay for all expenses directly related to the training. This includes the cost of the seminar, food, plane tickets, gas, lodging, as well as an hourly rate for any travel time that overlaps with normal business hours. The employer does have some control over certain aspects of the trip. For example, the employee may choose the hotel and provide a set per diem for food. However, any expenses directly related to the seminar must be covered by the employer.

When is My Employee On the Clock During a Business Trip?

Any time you are directing the activity of your employee during that trip, they are considered "on the clock." So, for example, during the seminar itself, the employee should be paid. If, after the seminar, you require your employees to attend a lunch in which you discuss the seminar, the employee should be paid for that time as well since you are directing their activity.

The employee is not paid for any time that is their own during their trip. For example, they are not compensated while they are sleeping, having dinner or sightseeing. However, if a non-exempt employee's activity is directed in any way by their employer, they must receive compensation.

When Do I Have to Pay for Travel Time?

If an employee is traveling during the normal hours they usually work (and, chances are, they will be since most commercial flights overlap with business hours) then you will need to pay your employees for their travel time. Let's say you have a specialist contractor who works from 11-2 at your practice, and she takes a short flight to a seminar that lasts from 10-12:45. In that particular case, you will need to pay that specialist from 11-12:45 since that is the time she spent traveling that overlaps with her normal schedule. Even though the employee is traveling from 10-11 am, you don't have to pay her because she does not normally work those hours.

An employee driving themself, however, creates an exception. If the employee drives to the conference, the act of driving itself is considered work, and you must pay them for the time spent behind the wheel whether it is during their normal work hours or not.

This travel compensation applies to every American employer since it is covered by federal law. However, your own state may have additional stipulations. For example, in California, all time spent traveling for work must be compensated whether the employee is normally on the clock during that time or not.

Can I Pay My Employees Less per Hour for Training?

Yes, as long as the employee is notified about the lower pay rate prior to agreeing to the training, you can pay your employee a differential wage during travel. For example, if you have a highly compensated employee who gets 50 dollars an hour, you may pay them 18 or 20 for directed activities during their business trip. However, it is very important that your employee knows about this lower rate before they attend training. The federal Fair Labor Standards Act requires that all employees understand their rate of compensation before they begin working at that particular rate.

What Should I Do Before My Employee Travels?

If you plan on paying a differential pay rate for training, you must let the employee know before they agree to the trip. Other than that, the following are not legal requirements, but we do recommend these best practices to protect your business and provide clear expectations for your employees.

1. Send your employee a document about the upcoming trip outlining their compensation.

2. Remind your employee that they are a representative of your company while on their trip.

3. Make sure that your employee understands that, while they are being compensated for their time they are subject to all the same policies as their employee manual. For example, if your employee manual states that an employee can't be impaired while working, that employee should not be drinking alcohol on the plane. Any harassment policies that apply in your practice apply during training events as well.

4. Ask the employee to sign the document and place it in the employee's file. It's best to do so with electronic HR software because of the additional legal protections of the electronic timestamp. You can use CEDR's free HR Vault with unlimited storage for this process. If you don't, it's best to use some sort of electronic HR software that has timestamping capabilities for an additional layer of safety.

General Road Rules

In general, remember, all seminar time is paid as well as any travel time that overlaps with the employee's normal schedule. As an employer, you will need to cover all necessary expenses associated with the event including any airfare, the hotel and food, although, food can be a per diem arrangement for simplicity's sake. Don't forget, if you're directing the employee's activities in any way, they are "on the clock" and must be compensated. When your employees are in training and on the road, all overtime laws still apply.

Ready or not, the "aftertimes" are coming and out-of-town training is making a return. As you begin making travel arrangements for the continuing education of your staff, you might consider joining HR Base Camp to help with your HR needs if you haven't done so already. HR Base Camp is a private group where you can post questions and get advice from over 9k professionals in your field. If you are feeling overwhelmed by the HR challenges that the reopening is creating for small practices, consider speaking with CEDR about how a membership might work for your practice.

CEDR HR Solutions believes that better workplaces make better lives. CEDR provides custom, legally compliant employee handbooks, expert human resources support and powerful team management software to owners of more than 2,000 dental, medical and wellness businesses across all 50 states. Its expert advisors work directly with business owners to find workable, compliant solutions to HR and team management issues. Because when you improve your workplace, you improve your life.