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May08

Unpaid Training for New Hire

My call center is located in the state of Virginia, I would like to know if instead of paying non-exempt new hires an hourly rate during their initial training , the company could pay them a bonus after a sucessful completion of training. Training could range from 2-4 weeks in length and the bonus could range from $400-$600. Can this be done legally?

No, this is not lawful. Both the federal and Virginia minimum wage laws require that employers pay workers for all hours worked. Time spent in mandatory training is hours worked. Especially if the training is on the employers premises, and job-related, it is always paid work time.  Because you are a call center, you probably receive and make calls to other states, which means you are subject to the federal employment laws, including the FLSA or Fair Labor Standards Act as well as Virginia employment laws.

 

There are additional issues with this situation. The wages you are offering are too low, and they are not paid soon enough. The federal minimum wage is currently $6.55 per hour. Assuming that these employees are training 40 hours per week, you must pay them at least $6.55 x 40 hours = $260 per week. Under the FLSA, wages are due on the employees regular payday. Under Virginia law, hourly employees must be paid at least twice per month. So waiting 4 weeks to pay the employees is not legal.

 

Presumably, you are proposing that any individual who does not successfully complete the training would not be paid at all, even if he or she worked 3 or 4 weeks. This is completely illegal under both Virginia and federal law. To quote our favorite U.S. Department of Labor Advisor, *Not paying employees means they are working for free. Working for free is slavery. It was outlawed in the U.S. in the 1800s.*

 

To put it another way, you are asking employees to work for nothing for 2 to 4 weeks. This is illegal under both federal and Virginia law, even if the employee agrees. If the law did permit this, you could ask/require that employees work for nothing all the time.

 

The danger, of course, is that an employee would file a wage claim with the Virginia Department of Labor and Industry, or the U.S. Department of Labor. This would result in an expensive lawsuit, and the company paying back wages, interest, fines and penalties.

 

A better option would be to pay employees the minimum wage while they are training, and offer a bonus of $100 or more for completion of the training program. If you are having a high percentage of new hires who do not successfully complete training, there are 3 solutions: 1) Improve the selection process 2) Improve the working conditions 3) Improve the training process, or make it easier.   

 

Another option would be just accepting that many new hires are not sufficiently motivated to complete the training, and that this is a normal cost of doing business in your industry.  

 

Read more about this at: http://www.dol.gov/esa/whd/regs/compliance/whdfs22.pdf 

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This entry was posted on Friday, May 8th, 2009 at 10:44 am and is filed under
Employment Training.
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8 Responses to “Unpaid Training for New Hire”

  1. LChua Says:

    Is this legal in any state? You call out Virginia, but are there other states where it may be legal, like Colorado, Texas, Florida? Thank you.

  2. Caitlin Says:

    Hi LChua! Unpaid training is prohibited under the federal minimum wage law, the FLSA or Fair Labor Standards Act. So if the company has more than $500,000 in revenue annually, this is not lawful in any state.
    Even for smaller companies, unpaid training would be unlawful in Colorado, Texas or Florida under their state minimum wage laws. However, 5 states do not have minimum wage laws, and such training MIGHT be legal in Mississippi, Alabama, Louisiana, Tennessee or South Carolina. HTH, and thanks for reading the blogs!~ Caitlin

  3. Susie Deslaurier Says:

    Looks like these guys have plenty of outsourcing opportunities available.

  4. Caitlin Says:

    Thanks for reading, Susie!~ Caitlin

  5. Jerome Higgins Says:

    I was hired by a company, worked for 2 weeks and was terminated because of a dirty urine. The position was an entry level sales position for a company that sells [deleted, a cell phone.] I was told that I would receive a training bonus but that receiving that bonus would be contingent upon completing the training and, as I was reminded recently when I called to claim my check, completing 5 sales. I completed 2 sales during my time employed by them and successfully completed the training before I received the results of my drug test. I have been told that the sales are still being confirmed. I have not received any money from [employer name deleted.] It has been three weeks since I was terminated. What should be my next course of action?

  6. Caitlin Says:

    Hi Jerome! You are not going to like this answer, but somebody has to say this. Our suggestion is that you get help for your drug problem, and then look for another job.

    You were not fired for *dirty urine.* You were fired for using illegal drugs. When drug use interferes with your professional, social or personal life, by definition you have a drug problem. As Craig Ferguson would say, help is very close to the front of the phone book.

    As far as we can tell, the employer does not owe you the bonus. It was contingent upon you making 5 sales, and you only made two.

    The employer probably does owe you at least the minimum wage for all hours worked. You should file a wage complaint with your state department of Labor, or with the U.S. Department of Labor at http://www.dol.gov. HTH, and thanks for reading the blogs!~ Caitlin

  7. Jerome Higgins Says:

    I appreciate your concern but, my occasional marijuana use aside, my concern is that the training bonus and the commission for the sales was the only compensation I was offered. I accepted the position knowing that I would not be paid but assuming that I would be able to collect the bonus. I was confident enough in my ability to sell the product not to be overly concerned about the training period. Because of my “dirty urine” I was unable to even meet the minimum requirements for the bonus. I will definitely file a complaint but what happens at that point?

  8. Caitlin Says:

    Hi Jerome! The DOL will investigate and if they find you are owed wages, force the employer to pay. If necessary, the DOL will sue the employer for you. Unfortunately, that could take up to 18 months.
    Sometimes if you simply mention that you would prefer not to involve the DOL, the employee will decide to cut you a check. Again, you are owed only the minimum wage for hours spent in training. HTH, and thanks for reading the blogs!~Caitlin

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