"Wellness Activities" Are Not Working Time Says DOL

“A nickel ain’t worth a dime anymore.”

--Yogi Berra

The modern trend for large employers is to offer wellness incentives to workers. The idea being that the employer will pay for certain tests or programs to encourage workers to monitor health conditions and adopt healthy practices. These tests and programs focus on education and prevention and may include: wellness plans; screening tests for cholesterol, nicotine, blood sugar and blood pressure; discounts for gym memberships, etc. Often the employer sponsored healthcare provider will offer some kind of financial incentive for workers to “voluntarily” give up health care data in return for discounts, rebates and other incentives, which then may be sold in the commercial market place. There is often a gimmick like a lottery “prize” offered for the participation. (If you don’t want to be spammed after your contact information is sold, perhaps you shouldn’t participate, or at least don’t give out your correct cell or home phone number!)  

It has never been clear whether such activities are all nonworking time. Of course, if the employer won’t pay for this time, then employees are less likely to attend these activities. For example, if the employer has a health fair, do employees get paid under the Fair Labor Standards Act (“FLSA”) for attendance at the health fair, and for listening to any pitch that is made by the health providers there? The answer, like many wage and hour issues, is that it “depends.”

Since DOL has just started issuing Wage & Hour Opinion Letters once again, this modern development is one that was deemed ripe for some DOL guidance. In an opinion letter issued by DOL on August 28, 2018, an employer formally asked whether the time its employees spent on these various activities are compensable time under the FLSA. The activities included biometric screening, an events fair, and the following wellness activities:

(1) attending an in-person health education class and lecture (e.g., nutrition or diabetes management); (2) taking an employer-facilitated gym class or using the employer-provided gym; (3) participating in telephonic health coaching and online health education classes through an outside vendor facilitated by the employer; (4) participating in Weight Watchers; and (5) voluntarily engaging in a fitness activity (e.g., going to personal gym, exercising outdoors, participating in a Fitbit challenge).

https://www.dol.gov/whd/opinion/FLSA/2018/2018_08_28_20_FLSA.pdf. The employees could receive a discount on their monthly insurance premium for participating.

In response to this request, DOL advised that employers do not have to compensate employees for these kinds of activities in the ordinary course of employment provided that they do not pressure, coerce or “require” employees to participate in the activities. The activities are deemed to be for the benefit of the workers and constitute off duty time where they are completely relieved of their job duties, provide that they last for more than 20 minutes.

As with most compensatory time issues, the DOL analyzed whether the health initiatives primarily benefited the employee or the employer. DOL could have analyzed the issue from the stand point of what benefits accrue to the employer from these kinds of wellness programs – things such as reduced absenteeism, lower employer medical costs or premiums due to a healthier employee population, etc. However, instead, the Trump Administration approached the issue differently, saying the employer derived no direct financial benefit from these activities. DOL turned the benefit analysis around and said the employees benefited greatly by making better life decisions and reducing their co-pays and insurance premium. DOL also determined that the wellness activities were ostensibly voluntary, albeit the workplace reality is that participation is often financially incentivized and even sometimes participation is coerced. DOL ignored the implied coercion that comes with the payment of financial incentives to do something. And DOL also applied its off duty “break time” rules to the activities (which are not really employee breaks), suggesting they qualify as such if they exceed 20 minutes or more.  

Other than this DOL letter, there is little prior guidance on wellness activities from working time perspective. If employers want to avoid liability and disputes, they need to carefully examine the factual circumstances of this DOL opinion letter, and then craft a wellness plan that mirrors it. The closer in details that an employer’s wellness plan is to the circumstances set forth in this opinion letter, the more likely the employer will be successful in asserting that it relied upon the opinion of the DOL. And such reliance, if reasonable, can be a defense under the Portal-to-Portal Act to any FLSA back wage liability.

Accordingly, the upshot is if employers don’t coerce or “require” employee participation in wellness programs, then the time spent therein is likely not working time under the FLSA or other federal wage and hour laws (like the Service Contract Act or the Davis-Bacon Act). At least, so sayeth the US DOL. Of course, just because something is deemed nonworking time under federal law, does not preempt any state from interpreting its own wage and hour laws differently.