On May 2, 2014, the U.S. Court of Appeals for the Eighth Circuit held that time spent by accountants attending a continuing professional education training course was not compensable because the accountants were not employed at the time of the training and because the skills learned at the training could be used at other jobs. In Petroski v. H&R Block Enterprises, LLC, a class of accountants sought compensation for time spent attending a continuing professional education course that H&R Block required in order to be considered for employment or rehire. The mandatory continuing education course included information relating to tax laws and preparation, but also information about H&R Block’s internal procedures. The court held that the time spent attending the course was not compensable because the accountants were not employees at the time of the training. Rather, they were taking a course that was required to even be considered for employment or rehire. Critical to the court’s decision was the fact that the accountants did not perform any productive work that benefited H&R Block or its clients; that the accountants did not displace current employees by attending the training; most of the skills learned during the training were transferable to other employers; and H&R Block did not benefit from the training until and unless the accountant was hired. The Court also found that the six criteria used by the U.S. Department of Labor to determine whether training time is compensable supported its conclusion that the training was not compensable. These are: (1) whether the training is similar to that given in a vocational school; (2) whether the training is for the benefit of the trainees; (3) whether the trainees displace regular workers; (4) whether the employer derives an immediate advantage from the activities of the trainees; (5) whether the trainees are entitled to a job at the conclusion of the training period; and (6) whether the employer and the trainees understand that the trainees are not entitled to wages for the time spent in training. This decision shows that similar policies on training and certifications of non-employees can be non-compensable, but employers must be cautious in not taking the decision too far. The compensability of training time is the subject of extensive litigation and is often very fact specific. Employers are advised to carefully analyze whether their particular training requirements are compensable.
