Do You Get Paid for Onboarding?

February 10, 2023
Do You Get Paid for Onboarding?

The hiring process is a costly but necessary venture. Businesses of all sizes need to keep their positions filled in order to maintain productivity. Not hiring is often more costly than hiring, despite the fact that it can cost employers thousands per new employee. One question employers and employees alike may wonder is, "Do you get paid for onboarding?" In a word, "Yes." Generally, employers should plan to budget money to pay their newest team members for onboarding activities. The U.S. federal government would consider many of them to fall under the Fair Labor Standards Act. That's because most onboarding processes involve training and other mandatory activities as a condition of employment. Here we’ll take a closer look at what employee onboarding tasks are paid and which ones might be excluded.

Are employers required to pay employees during the onboarding stage?

Most onboarding processes are required tasks that take place during the business day. These activities prepare new hires to become full-fledged workers. This being the case, yes, employers are required to pay new employees during new hire orientation and onboarding. However, some activities are completely voluntary. In that scenario, new employees should not expect to be paid. For instance, an employer may hold a company-wide dinner to celebrate new employees after they complete orientation. This event is not mandatory, is open to all employees, and has nothing to do with work. All organizational members are invited to attend, but it is voluntary. In this situation, the employer would not likely be required to pay employees for extra hours. But employees would be receiving alternative compensation in the form of a free meal. A good rule of thumb to follow is whether or not an action is mandated by the employer. If it is, then financial compensation for time spent should be an expectation.

When do you get paid for onboarding time and tasks?

As an employee, you can expect to be paid for many of the activities you must participate in before actually starting your job. For example, for the following types of activities, a new employee would typically be paid:

  • In-person and online training.
  • Filling out certain types of new hire paperwork.
  • Time spent shadowing veteran employees as a form of training.
  • Pre-onboarding orientation.
  • In-person and online lectures.
  • Pre-employment “working interviews” (e.g. test-driving to see if the job is a good fit).

For the most part, hiring managers should budget to pay a new hire for completing tasks they wouldn't normally be expected to perform on their own time. However, this might not include those that are part of the application process, outside the scope of a normal workday.

What employee onboarding activities are not considered paid time?

Certain phases of being hired are not considered to be paid time. For example, the application, interview, background check, drug testing, and certain other pre-employment activities are not compensable. Even after an employee is hired, there are several common activities that occur during the onboarding process but do not constitute paid time. Examples include:

  • Certain events that take place outside normal business hours.
  • Voluntary events for employees.
  • Events that are not job-related.

Employers sponsoring events that meet the above criteria typically won't have to pay participating employees since they can choose not to attend. Not so with events taking place during employees' work hours. So in terms of time spent on onboarding, employers would not have to pay new hires for an after-hours welcoming party in their honor. Nor would other team members who attend the party be paid for time spent at the event.

Hiring managers should consider paid vs. non-paid activities and let new employees know the difference

To ensure there is no confusion and everyone is on the same page, hiring managers and HR professionals should clearly communicate the policies. Clue new employees in to the subject of compensation, expectations, and voluntary events at the start of the onboarding process. Understanding what they will and won’t be paid to do can help get them off to a good, positive start. Want to learn more about employee onboarding and other important HR and business management topics? Visit TriNet daily to help further your pursuit of business success.

This communication is for informational purposes only; it is not legal, tax or accounting advice; and is not an offer to sell, buy or procure insurance.

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