No, You Don’t Have To Pay Employees During Their Yoga Classes: The FLSA and Wellness Programs
It’s no secret that the cost of healthcare in the United States is rapidly rising. Many employers are trying to reduce these costs for their employees by offering wellness programs that lower insurance premiums.
Participating in wellness programs is often free-of-charge to employees, but those employees do have to give up something: time. This necessarily raises the question of whether or not employees have to be paid for that time under the Fair Labor Standards Act (FLSA).
On August 28, 2018, the Department of Labor’s Wage and Hour Division (DOL) took the position that employers do not have to pay employees for time spent attending voluntary wellness program activities. In response to a question from an employer, the DOL issued an Opinion Letter stating that the FLSA does not require compensation for time spent attending biometric screening, benefits fairs, and wellness activities such as health education, employer-facilitated gym class, or participating in Weight Watchers.
The DOL determined that the employee did not need to be paid because the wellness activities described in the letter were predominantly for the benefit of the employee. The employee received a direct financial benefit in the form of reduced insurance premiums, and the activities “helped the employee make more informed decisions about matters unrelated to his or her job.” In contrast, the employer did not receive any direct financial benefit from its employees participating in the wellness activities.
It is important to note two aspects of the wellness program discussed by the DOL that, if changed, might alter this outcome. First, the employee received the financial benefit from participating in the wellness activities. If an employee does not receive a reduction in insurance premiums and the employer receives a reduction in its share of insurance costs, the DOL might reach a different result. Second, the wellness activities were voluntary. If an employer hosts wellness activities during the work day and requires that its employees attend, the employer would have to pay employees for that time.
Employers should also note that wellness programs aren’t an exception to the rule that employees should be paid for rest breaks. For example, if an employee participates in an on-site health class during his or her regular 15-minute break, the employee should still be paid for that time.
The DOL’s position in this Opinion Letter makes sense. It makes it easier for employers to provide wellness program benefits to their employees and encourages behavior that reduces healthcare costs. Employers would likely be reluctant to provide employees with wellness programs if it also meant paying employees during their yoga classes.
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.