Do You Have to Pay Employees for Training?

If you require a period of training -- whether it be a few hours or a few weeks -- before employees begin work, then you will have to address the issue of pay. According to the law, employees for whom training is mandatory must be paid for the work (read: training) that they perform. However, independent contractors do not have to be paid for training.

The reason why most employers would prefer not to pay for training is obviously to save money. You're paying an employee to be trained for a job, and not to actually perform the job, even if they are tagging along after seasoned employees or managers. However, your goal as a business owner is to have happy, responsible and productive employees, which won't happen if you aren't compensating them for their efforts.

First, you must determine whether your staff is made up of employees or contractors. A contractor is someone who often works for more than one company and who is not bound by set hours or responsibilities. Their pay is usually commission-based rather than hourly or salary, and they are not bound to your company by the same rules as are employees.

As mentioned above, an individual who is classified as an employee must be compensated for training at minimum wage or above. A contractor can be expected to complete training without compensation, which is an option you can consider. However, keep in mind that contractors will be drawn to jobs for which training is paid, which might leave you with less-than-desirable candidates.

Once you have classified the individuals working for you, you'll have to determine the amount of compensation for training, if any. Generally speaking, employers offer a lower pay rate for training than they do when the employee actually starts working, sometimes as little as half. For contractors, some employers guarantee a set payment during training, after which their compensation is earned on a solely commission basis. You will have to decide which is more important to you -- the happiness of your employees/contractors or the amount of money in the bank. Obviously, an employee or contractor who is paid well will be more likely to continue their employment with you.

You also have to consider the length of employee training. Nobody -- contractor or not -- is going to last through two months of unpaid training. You have to remember that all of your employees must pay their bills. It might not be a big deal to require two hours -- or even one day -- of unpaid training for a contractor, but anything more is certainly stretching it.

And finally, you should also consider the type of training involved. If you are requiring a lot of physical or mental effort during the training period, it is best to pay more. If, however, training consists of watching videos or listening to lectures, you can get away with paying less.