A common way for employers to boost employee morale and promote team building is to host non-work related recreational activities, such as sports teams and bowling events. While most employers are mindful of the potential for workers’ compensation and negligence liabilities for injuries occurring during these events, the overwhelming majority of employers do not know that, under federal law, some employees may actually be entitled to be paid for their time spent participating in these events.
The obligation to pay employees for attendance at these kinds of events applies only to non-exempt employees (that is, those eligible for overtime pay). Exempt employees do not need to be paid extra for time spent participating in these events.
As far as non-exempt employees are concerned, an employer’s obligation to pay them for attendance at a recreational activity depends on (1) when the event is scheduled and (2) whether attendance is voluntary. Specifically:
- Activities scheduled during the regular work day will almost always be compensable.
- Even if scheduled after hours, these activities will still be compensable “work” for any non-exempt employees required to attend.
- Activities scheduled outside of regular working hours that are entirely voluntary will not be compensable. Attendance, however, is not truly voluntarily if the employee is led to believe that nonattendance would somehow adversely affect his employment. For example, if attendance is “strongly encouraged” or an employer makes note of an employee’s failure to participate in a performance evaluation, attendance is compensable time.