Creating Your Own Talent Pool—Legal Issues for Employee Training

The debate rages on—are employers having trouble filling empty positions because of the lack of talent, or because employers are unwilling to either "grow their own," or provide training programs to cultivate the potential seedlings?

Whatever the reason, should you decide to implement your own employee training program, here are some legal tips for HR to do so. I am presuming that this training program would both be a) a stepping stone to a job and b) a vehicle through which new employees could contribute to the employer’s bottom line (hopefully sooner rather than later). For this reason, the training program being discussed here would not satisfy the requirements of an unpaid internship, leading to the first tip:

1. Trainees need to be paid. However, trainees only need to be paid the required minimum wage for your state (currently $7.25 under federal law; states vary—pay the higher one if different from the federal standard).

2. Trainees are entitled to overtime pay. Even if the program is a stepping stone to an exempt position, in almost all cases, trainees are going to be entitled to overtime wages if they work over 40 hours in one workweek (counting any time spent in a course-room or seminar-type setting). For this reason, ensure that trainees are keeping track of all time spent in the training program.

3. Define outside study requirements, if any. Be sure to define any outside study or research required, or clearly specify when it is not. While trainees may use their own time to study their field if they want to do so on their own without compensation, any required outside study as part of the training program may be determined to be "working time" that counts towards their 40-hours per week. Employers could consider, however, having a 30-hour/week training program, with five hours for trainee research and study as they see fit. Not everyone will take advantage of the opportunity and those who do are demonstrating initiative and drive (as well as enhancing their training education) that might make the five hours of wages worth it in the long run. In this case, be sure to tell the trainees how you will confirm that the five hours was indeed spent on job-related-study, and follow up.

4. Trainees are your employees and are entitled to state-mandated benefits. While you can likely carve trainees out of other company provided benefits, trainees need to be covered on your workers’ compensation and unemployment insurance policies. Ensure that your employee handbook defines trainees and specifies the benefits to which they are entitled.

5. Trainee recruiting should be similar to your employee recruiting, with similar requirements, taking into consideration the training being offered. Trainees can be (and should be) subjected to background checks, reference checks and other similar requirements as your other employees. After all, the point of the training program is to develop individuals who will eventually work for you. If anything is an absolute screening-out factor, be sure to check it before admitting applicants to the training program. However, keep in mind that this is a training program and you may want to relax any skills, abilities, or experience-related requirements.

6. Trainees should receive your employee handbook and related policies. Trainees are employees. Provide them with copies of your handbook, your harassment policies, your computer use policies and any other policies provided to your "regular" employees.

7. Trainees are employed at will. Since trainees are employees, you need to ensure they know they are employed at will (especially in states where such declarations need to be made affirmatively). Use offer letters that spell out the terms and conditions of employment for trainees, as you would for other employees. If a job is only guaranteed if certain criteria are met (or if the employer may refuse a job based on performance in the training program or other factors), you should say so, giving the employer discretion to account for changing times, needs and economics.

8. Identify entitlement to commissions/bonuses. If regular employees in the positions for which the trainees are being trained are entitled to commissions and/or bonuses, clearly define (in writing) any entitlement to commissions or bonuses for the trainees. Know that most states permit employers to define such entitlement as they wish, however, the trainee should be advised of the arrangement before he or she starts the training program.

9. Have trainees sign confidentiality/restrictive covenant agreements. If the trainees have access to company confidential information, company client information, company clients, technical data, etc., ensure that they sign any applicable confidentiality, non-solicitation, and/or non-competition agreements. Consider how you will treat trainees who refuse job offers at the end of the training program, but who accept a job with a competitor of yours that does not offer a similar program.

10. Restrict trainee blogging and Tweeting about the training program. Ensure that you have policies in place that will prevent trainees from blogging or tweeting about the training program, or from entering the program for some other purpose other than job skill development and job acquisition.

By following these and similar provisions that treat your trainees like your employees, employers can attempt to create their own educated and knowledgeable workforce, trained in their company culture and taught to handle situations in the ways preferred by the company. By remembering that they are trainees, however, you can also ensure to implement other necessary protections.