DOL Opinion Letter FLSA2018-20 (Aug. 28, 2018)
The DOL’s Wage and Hour Division has released an opinion letter addressing whether the federal Fair Labor Standards Act (FLSA) requires an employer to compensate its employees for time spent participating in the employer’s wellness program. The FLSA requires employers to compensate employees for any time spent predominantly for the employer’s benefit, but it requires no compensation for “off duty” time, which is defined as time during which employees are completely relieved from duty for a period long enough for them to use the time effectively for their own purposes. (DOL regulations address the principles involved in determining what constitutes working time and apply those principles to various situations, including “off duty” time, but they do not specifically address wellness activities.) The letter considers three components of the employer’s program: benefit fairs, biometric screenings, and certain other wellness activities. Each component was represented by the employer as being voluntary and unrelated to employees’ job duties. However, employees could reduce their health insurance deductibles by participating in the biometric testing. And other activities—for example, classes, a weight-loss program, and fitness activities—could result in decreased monthly insurance premiums. None of the activities provided the employer with a direct financial benefit.
The letter concludes that the FLSA does not require the employer to compensate employees for time participating in the specified wellness activities. First, the activities are not compensable worktime because participation predominantly benefits employees—participation is optional; job-related duties do not have to be performed while participating; only employees derive a direct financial benefit from their participation; and participation helps employees with decisions unrelated to their jobs. Second, time spent on the specified wellness activities is noncompensable “off duty” time, so long as employees who are relieved of their job duties to participate in the wellness program are allowed enough time to use the time effectively for their own purposes. The letter notes that its conclusions do not depend on whether the activities are on the employee’s worksite or during regular working hours. A footnote cautions, however, that if employees choose to participate in wellness activities during breaks of up to 20 minutes (which are ordinarily compensable, regardless of how employees spend the time), their use of the break time for wellness will not make the breaks noncompensable.
EBIA Comment: This letter offers important insights into how the DOL analyzes the FLSA status of wellness program activities. And it is particularly useful because it addresses so many of the activities commonly included in employer-sponsored wellness programs. The letter does not mention health-risk assessments, but it gives no reason to believe that such assessments would be evaluated using different standards. Nor does the letter mention the regulation concerning “attendance at lectures, meetings, training programs, and similar activities,” perhaps because that regulation applies only to attendance outside of regular working hours, and the employer requesting the letter indicated that the activities could also occur during working hours. Finally, we note that this letter accepts, without explanation, that rewarding wellness program participation with lower health plan deductibles and premiums would not make participation in the wellness activities involuntary. However, the conclusion may be different when analyzing wellness program voluntariness under other federal laws (e.g., ADA and GINA) (see our Checkpoint article). For more information, see EBIA’s Consumer-Driven Health Care manual at Section VI.I.3 (“Does the FLSA Apply to Wellness and Disease-Management Programs?”).
Contributing Authors: EBIA Staff.