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Well, Well, Well: DOL Soothes Wellness Program FLSA Anxieties and Provides Guidance on No Fault Attendance Policies

As Published in the October, 2018 Issue of the PELRAS Newsletter

Published on: Tue 9th Oct, 2018 By: Joshua C. Hausman

Many employers have adopted wellness programs to incentivize healthy habits on the part of their employees. While the individual benefits to improving one’s health are obvious, employers can also benefit in the form of lower health care costs and a healthier, more productive workforce. Although these wellness programs can take several forms, most offer incentives or rewards to employees who participate in wellness-related activities. Since both employers and employees derive benefits from these activities, a simple question has left some employers feeling ill: am I required to compensate my employees for their time spent participating in our wellness program?

Fortunately, the Department of Labor has administered a dose of medicine which should cure what ails anxious employers. In a recent opinion letter, the Wage and Hour Division (“WHD”) took the position that time spent by employees voluntarily participating in wellness activities as part of a wellness program was not compensable time under the Fair Labor Standards Act (“FLSA”) because such activities predominately benefit the employee, and not his or her employer. Under the facts presented in the opinion letter, employees could voluntarily participate in activities such as biometric screenings, health education classes, fitness classes, health coaching, participating in Weight Watchers, and physical fitness activities. Employees received no direct financial benefit from participation in these programs, but could potentially reduce their monthly insurance premiums through such participation. The employer also did not require employees to perform any job-related duties while engaging in these wellness activities.

Under these circumstances, the WHD opined that time spent by employees participating in wellness activities was not compensable time under the FLSA. Although opinion letters are advisory only, employers should breathe a little easier knowing the Department of Labor’s position on the issue. Notably, the WHD emphasized that work breaks of up to twenty (20) minutes in length are ordinarily compensable regardless of whether an employee spends that break participating in wellness activities, so current practices in regards to compensation for short work breaks should not be affected.

The Department of Labor also recently addressed whether no-fault attendance policies that freeze points accrued by an employee for unexcused tardiness or absences for the duration of an employee’s leave under the Family and Medical Leave Act (“FMLA”) violates the FMLA. In the opinion of the WHD, such policies are not prohibited by the FMLA as long as employees absent on other forms of leave, such as workers’ compensation leave, receive the same treatment under the attendance policy as those on FMLA leave. This question was addressed by the WHD because under the FMLA, employers are prohibited from interfering, restraining, or denying the exercise of FMLA rights, and are further prohibited from discriminating or retaliating against employees who have exercised those rights.

Under these type of no fault attendance policies, the employer assesses points against employees for unexcused absences or tardiness, and once a certain number of points is reached, the employee is terminated, with no points assessed for absences under the Family and Medical Leave Act (“FMLA”), vacation leave, or other forms of excused absences. In the example used in the WHD Opinion Letter, points remained on an employee’s record for twelve (12) months, which did not include periods of FMLA leave. As such, an employee returning from FMLA leave would have the same number of points under the attendance policy as when their FMLA leave began.

The WHD made clear that while employees cannot be assessed additional points under no-fault policies for periods of FMLA leave, the FMLA does not entitle employees to additional employment benefits not provided to others on similar forms of leave. Because the no-fault attendance policy addressed in the WHD Opinion Letter froze points for unauthorized absences for all employees on equivalent forms of leave, the WHD concluded that it did not violate the FMLA to freeze points for employees on FMLA leave. Critically, of course, if an employer treats those on FMLA leave differently under its no-fault policy than it does employees on equivalent forms of leave, such as workers’ compensation leave, then the employer may be in violation of the FMLA. Of course, employers should contact legal counsel with questions pertaining to the Family and Medical Leave Act and application of absenteeism policies.