Published on 2012/09/13

Employees Should Pay For Training, But Not Always From Their Pockets

While employers may well be on the hook financially for an employee’s ongoing learning and development, there are other ways that employees can pay the company back for their continuing education.

Nearly anyone putting together a professional development program will quickly realize that there are many costs involved, and that they form an investment of time, energy, and eventual learning. With all of the costs involved in such programs why should a company provide it and who should pay the cost? This is a hypothesis that companies should provide training and development opportunities and that employees should be required to make some form of payment.

Before we can move into the above topic, we need to have a few common understandings established. When reference is made to professional development or training, this is not necessarily just tuition assistance pertaining to a degree program. There are also seminars, lectures, courses, webinars, and/or conferences that are being considered for attendance. Secondly, the Fair Labor Standards Act (FLSA)—or whatever your applicable laws and regulations are—cannot be forgotten. Even if we could put aside FLSA for a theoretical discussion, it will remain when the discussion is over and thus needs to be understood. Part 785 of the FLSA Code of Federal Regulations states that there are three criteria to be considered for counting lectures, meetings, training programs, and similar activities in relation to payment of an employee’s time. These items include:

  1. Attendance is outside of the employee’s regular working hours;
  2. Attendance is in fact voluntary; the course, lecture, or meeting is not directly related to the employee’s job;
  3. The employee does not perform any productive work during such attendance.

We must also consider what payment is. While at first blush we might think of this as the currency needed for registration or expenses, we will challenge that initial assumption below.

With common terminology established, we can return to the theoretical questions of why professional development should occur, and who should pay for it? I’m a firm believer in the benefit of well planned development opportunities. We live in a rapidly changing world, with new technology and concepts becoming available at such a speed as to make development not an optional resource but an ever present need. Participating in such an opportunity is a valuable investment in and of itself. The time of networking before, during, and after a training session also contains value, as new connections are made that can lead to tight networks of experts to rely on and learn with. If the investment of development is not made regularly, a company will have static expertise in the presence of a changing world, quickly leading to stale knowledge that is not marketable. Therefore, development is a necessity to remain a viable presence within a given industry.

Once we have a common agreement on a company employing professional development to retain viable marketable skills, we can consider who should pay for the investment. FLSA is a factor in our consideration and a decision tree can help with our choices.

Does the professional development occur during the regular work hours of an employee?

  1. No – move to the next area of consideration.
  2. Yes – the company assumes financial responsibility.

Is attendance voluntary?

  1. Yes – move to the next area of consideration.
  2. No – the development opportunity is required, or it has been “given to understand or led to believe that present working conditions or the continuance of employment would be adversely affected by nonattendance.” When required, the company must pay.

Is the development opportunity directly related to the employee’s job?

  1. No – move to the next area of consideration.
  2. Yes – the opportunity will “make the employee handle the job more effectively” and the company must assume cost.

Does the employee perform any productive work during such attendance?

  1. No – no financial consideration has to be made.
  2. Yes – the employee leaves with a product during the development opportunity and the company must pay for the time.

Working through FLSA allows us to examine what the law requires. Next we consider if an employee paying for training and development opportunities make the training more valuable for the employee and company. If the employee is putting forth the cost for training, would they be more engaged and therefore gain more expertise than if the company is paying? Perhaps, but the prohibitive cost of a seminar would most likely limit what one person could afford to attend, as well as create imbalanced development within a company.

Re-defining Payment

Take the word pay and consider it from a different angle. If the company pays for the development opportunity, time, and miscellaneous associated costs, the employee still needs to view this as something they will be expected to “pay” for. However, pay doesn’t have to involve financial payment.

Payment, as a return on investment, could instead be an established expectation in the forms of returning from training and sharing what was learned. Setting up a series of Lunch and Learns allows for information to be shared. This or other methods of dispersing information spreads and compounds the investment, and make the payment of the employee one of learning the material well enough to present to others. Another payment might be writing an article or providing input into a manual or set of specifications for a product or process. Utilize the expertise of an individual who is highly trained to mentor one or two individuals, sharing the training with them, and then expecting that protégés in turn train and mentor someone else; creating a long term process of growth investment and realization. If focused on a new product or process, utilize the training of the individual in a leadership or advisory role within a project team.

There are many methods that can be used for payment, when we take a slightly different view of what payment is. The company is making a financial investment in the employee with an expectation of a return on the investment. It is fine that they provide payment and expect a return, and depending on the circumstances may be a legal requirement. However, an employee should pay for training by using the investment that the company made to re-invest it back into people making up the company. The actual return is not one of currency changing hands. Instead the investment is grown by sharing the information and increasing productivity.

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Readers Comments

Tina Nunez 2012/09/13 at 3:22 pm

I ahve one major concern with this idea… and that is that employees may be good students, but good students are not necessarily good teachers. If you’re looking for the employee to relay all the information they learned in their professional development back to their co-workers, I think it’s a lost cause.

I love the idea of non-traditional “payment” for continuing education opportunities, but I don’t think having employees teach is the way to go…

Jessica 2012/09/13 at 5:13 pm

Hi Tina,
You are absolutely right – sometimes employees are not good at teaching! Or at least getting up in front and presenting. So, there are a couple of considerations that could still be useful and still carry the weight of accountability. One is that this is a stretching and growth opportunity for them. Perhaps they aren’t talented or comfortable with presenting, but need to be. An audience of peers might be a great target audience to start with. If this really is not a skill that is needed, then continue to think out of the box. Perhaps it’s a paper, an article, a weekly group e-mail, a podcast, or a few minutes in a staff meeting. Teaching in and of itself is in this scenario a tool to instill accountability, and build the investment that the company has made.

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