The U.S. Department of Labor says that training without pay is a violation of the Fair Labor Standards Act. There are six criteria that all must be met to allow an exception to unpaid training laws. Any of the six criteria not met by the employer requires payment for all training conducted.
The criteria for payment exceptions from the Department of Labor are: training must be similar to technical school training; the employee cannot be guaranteed a job at the end; the employer cannot gain benefit from the training; the trainee benefits from the training; the trainee understands there is no pay for training; training does not displace or use regular employees. Any of these criteria that is not met requires compensation for training.
Trainees are entitled to compensation for training in all other circumstances. There is an agreed to wage for the trainee. All applicable taxes are withheld from the trainee's pay. Bookkeepers separate payment to trainees from payroll using training account funds. All FLSA guidelines for wages and overtime apply to the trainees during training. Companies face harsh penalties from the Department of Labor for violating payment guidelines outlined in the FLSA.
Employees are protected from unpaid labor. The FLSA states that employees must be compensated for all work done to benefit the company. Trainees are members of a labor force. Unless exempted, they will be compensated for all work. This prevents companies from using trainees to benefit the company without wages. Without such protection, companies would hire trainees for free to reduce labor costs and boost profits artificially.
The Department of Labor investigates FLSA and training wage claims. An employee who believes she was entitled pay for training may file a grievance with the DOL. The employer will be responsible for any back wages due a trainee. The DOL enforces financial penalties against companies who violate the FLSA training statues. The company must prove the trainee was not entitled wages during training periods.