What You Need to Know About Reimbursing Employees for Mandated Training

It’s important to understand when you must reimburse employees for training-related expenses. A recent California Court of Appeal case involving Los Angeles police officers highlights the issue of mandatory training and what must be paid for, especially in situations where, by law, the job requires a particular type of training, certificate or license (In Re Acknowledgment Cases, 192 Cal. Rptr. 3d 337 (2015)).

Labor Code section 2802 requires an employer to reimburse employees for “all necessary expenditures incurred as a direct consequence of the discharge of their duties.” How does this legal obligation apply when required training is involved?

LAPD Officers Who Quit Were Required To Pay Back Training Costs

The City of Los Angeles requires all newly hired police officers to attend and graduate from the Los Angeles Police Academy.

In an effort to reduce the number of new officers leaving the Los Angeles Police Department (LAPD) in the first few years of employment to work at other law enforcement agencies, the city changed its administrative code to require any police officer who left the LAPD within five years of graduation from the academy to reimburse the city for a prorated amount of the cost of the academy training.

Police officers were required to sign an agreement stating that they intended to maintain employment with the LAPD for at least five years and would reimburse the LAPD for training costs if they left before then to work at a different law enforcement agency.

The city successfully sued 40 former LAPD officers for violating the agreement.

The officers appealed, claiming that:

  • The LAPD requires all officers to attend its specific academy;
  • The cost of the academy is a necessary expenditure incurred as a direct consequence of discharging the officers’ duties;
  • The academy cost should be paid for by the LAPD; and
  • Any reimbursement requirement is unlawful.

The officers argued that the agreement to repay the training costs violated Labor Code section 2802, which, as mentioned, requires an employer to reimburse an employee for necessary expenditures or losses incurred as a direct consequence of the discharge of his or her duties.

The appellate court agreed with the officers, ruling that agreement to repay training costs was void.

Required by Law vs. Required by the Employer

The central issue in the case was whether the training was required by law or by the LAPD. The court noted that Labor Code section 2802 doesn’t specifically address training costs and looked to interpretations from the California Division of Labor Standards Enforcement (DLSE).

The DLSE has distinguished between training costs required by law, such as a license required by the state, versus employer-required training.

According to the DLSE:

  • There is generally no requirement that an employer pay for training leading to licensure or the cost of licensure for an employee.
  • If the license is required by the state or locality as a result of public policy, the employee bears the cost of licensing.
  • If the license is not actually required by statute or ordinance but the employer requires the training and/or licensing simply as a requirement of employment, the employer must reimburse for the cost (DLSE Opinion Letter No. 1994.11.17; DLSE Enforcement Manual section 29.2.3.4).

The court agreed with the DLSE’s analysis because the broad purpose of Labor Code section 2802 is to require an employer to bear all costs associated with conducting its business and incurred by employees while performing their duties for the benefit of the business.

Employer Set Testing Standards Beyond State Requirements

The city argued that because police officer training is mandated by law, the city was not obligated to pay for the expense.

A POST (Peace Officers Standards and Training) certificate is required by California law before anyone can exercise the powers of a peace officer in the state. Basic POST certification standards are set by the POST commission, not individual police agencies. POST training and certification is not exclusively available only through a police agency or only after being accepted as a recruit; it can be obtained by any POST approved institution, such as a community college.

The court agreed with the city that basic POST certification training is not employer-mandated but required by law and is an expense that the individual officer is responsible for.

However, local agencies may set standards that exceed POST standards, as was the situation in this case. The LAPD required 420 hours of “department required” training meant to address challenges specific to the City of Los Angeles, in addition to 644 hours of basic POST training.

The court held that this additional training was “not required by statute or public policy but rather is instituted purely to satisfy the needs of the city ….” It is, therefore, an expense the city must pay for.

Labor Code section 2802 prohibits the city from requiring recruits to reimburse it for the costs of training in excess of that required for basic POST certification and any agreement requiring reimbursement was void.

In this particular case, the court didn’t allow the city to try to apportion the costs because the entire agreement was void under the Labor Code. The provision of Labor Code section 2802 cannot be altered or waived by a private agreement (Labor Code section 2804).

Conclusion

This decision could apply to other employees, such as real-estate agents, cosmetologists, registered nurses, attorneys and so forth, who must obtain statutorily required licenses. You are not required to reimburse employees for the cost of the basic training required to obtain such licenses. But if you require specialized training in addition to the licensing requirements, you will need to reimburse the employee for those expenses.

Best Practices

  • Reimburse employees for any expenses associated with employer mandated training, this may include such reasonable expenses as the cost of mandatory courses, required course materials, travel, meals and lodging.
  • Don’t forget that you also must pay the employee for the time spent in training that is related to the employee’s job. For more information regarding when training time counts as hours worked, see Education and Training Time.
  • Labels don’t matter. Simply because you call training “voluntary” doesn’t mean it is and doesn’t mean you won’t have to pay for expenses and time.
  • Even off-site training or training outside of regular working hours might require compensation and reimbursement of expenses.

You are not required to pay for continuing education courses that are mandated by law to maintain a license, such as a real-estate license. However, many employers choose to pay for such courses as a retention tool. Communicate your policy to employees and enforce it consistently.

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