Professional Service Agreement

Compensability of Time Spent in Employer-Sponsored Community Service Program

March 18, 2019

The U.S. Department of Labor (DOL) has issued an opinion letter addressing compliance under the Fair Labor Standards Act (FLSA) regarding the compensability of time spent by employees participating in an employer-sponsored community service program. The employer that submitted the inquiry to the DOL provides its employees with an optional community service program. Under the program, employees engage in certain volunteer activities that the employer sponsors or the employees themselves select. The employer compensates employees for the time they spend on volunteer activities during working hours or while they are required to be on the employer’s premises. In addition, employees spend many hours on volunteer activities outside normal working hours. At the end of the year, the employer provides a discretionary bonus to the team of employees that provided the greatest community impact. In reviewing this employer’s program, the DOL found that the time spent in the volunteer program was not hours worked under the FLSA. This finding was based on the fact that the employer: did not require participation in the program; did not control or direct the volunteer work; did not create any adverse consequences for failing to participate in the program; and did not guarantee bonuses to participating employees but rather disbursed bonuses on a discretionary basis to the most successful community service team. The DOL also found that the employer could use a mobile application to track participating employees’ time spent in the volunteer program. However, if the application was used to direct or control employees’ activities or to give instructions, then the time spent using the application would become compensable hours under the FLSA. SESCO has a long history of ensuring that employers are compliant with federal and state wage and hour requirements. If employers have any questions or concerns about their pay practices, we recommend they contact us to ensure compliance.