Labor & Employment Law Daily Wrap Up, WAGE HOUR—CLASS ACTIONS—M.D.N.C.: Group home workers not entitled to pay for pre-work training, but advance other claims, (Apr 7, 2025)

By Marjorie Johnson, J.D.

The preemployment state-mandated training for health-related duties such as CPR, first aid, and seizure management, “most greatly benefits” the trainee, who could use the necessary certifications elsewhere.

A company that operates three group homes for clients that are unable to care themselves won’t face trial on a former employee’s FLSA and North Carolina Wage and Hour Act (NCWHA) collective and class claims alleging staff members were entitled to compensation for time spent undergoing state-mandated training on CPR, first aid, medication management, blood-borne pathogens, and seizure management—which occurred prior to the first day of work—since the training did not solely benefit and relate to the employer and could be used by the employees elsewhere. However, a federal district court in North Carolina rejected the employer’s bid for summary judgment on the employees’ claims alleging they were entitled to compensation for time spent at recertification training and mandatory meetings as well as for unpaid overtime (Wade v. JMJ Enterprises, LLC, No. 1:21-cv-00506-LCB-JLW (M.D.N.C. Apr. 1, 2025)).

State-mandated training. The employer is a residential mental health company that operates three group homes that provide care for clients with special needs that are unable to care for themselves. To receive state funding, the employer can only employ staff who are certified in CPR, first aid, medication management, blood-borne pathogens, and seizure management. The company therefore requires such training before anyone can start working at its group homes. It also requires current employees to undergo yearly recertification training.

Pay procedure. The employer pays its staff monthly by utilizing a “chrontek” system that requires workers to call into a phone line to clock in and out of work. If any adjustments needed to be made, employees are expected to have those changes written down on a time correction sheet located at each group home. Qualified professionals are then in charge of making corrections from the time correction sheet to employee’s hours.

Collective and class action. The named-plaintiff brought this collective and class action on behalf of herself and similarly situated others alleging her employer and its owner engaged in several violations of the FLSA and the NCWHA. At issue here were her claims that the employer failed to compensate staff for overtime worked, as well as time associated with attending mandatory training, recertification training, and mandatory meetings. The court previously granted her motion to conditionally certify a FLSA collective action and granted in part her motion to certify a Rule 23 class as to her state law claims (finding that her overtime claim was preempted by FLSA but allowing the other claims to proceed).

Preemployment training. At the outset, the court granted the employer’s bid for summary judgment on the issue of whether it violated the FLSA by failing to pay an hourly wage for state-mandated training sessions held prior to the first day of work in the group homes. In considering this issue, the court noted that the “[w]hen a training program ‘most greatly benefits’ the trainee it is not covered by the FLSA,” and “[t]he Fourth Circuit ‘specifically recognize[s] the importance of transferability of the training received when balancing who—employer or trainee—benefitted most from the training.’” Here, the employer did not receive the principal benefit of the employees’ state-mandated preemployment training since they could use the trainings elsewhere. Indeed, the employer hired staff who did not need to attend preemployment training since they already had the necessary certifications.

Recertification training. However, a triable issue existed as to whether the employer violated the FLSA by failing to pay current employees for hours spent in their yearly recertification training. While the owner claimed they were paid for recertifications, long-term employees testified that the cost of the trainings were deducted from their paychecks. Thus, because the parties disputed whether the employer actually paid the employees for recertification the court did not consider whether attendance was voluntary or directly related to the employees’ job, or whether they performed any productive work during the training.

Mandatory meetings. A triable issue also existed as to whether the employer failed to pay the employees for time spent in mandatory meetings. While the owner testified that she informed her employees “that they had to pay their staff for any mandatory meeting,” staff members testified to the contrary, stating that they were not compensated for the hours they spent attending mandatory meetings.

Unpaid overtime. The employer also failed in its bid for summary judgment on the employees’ overtime claims since the lack of adequate records of the hours worked and the owner’s own testimony that she had been made aware of instances of uncompensated overtime created triable issues for a jury. Though the employer argued that the employees failed to put forth actual evidence of their overtime hours worked, the owner testified in her deposition that they were unable to find the logs of employee time adjustments. As such, the court declined to penalize the employees “for their inability to give precise numbers on the amount of overtime they earned as the full records of Plaintiffs time were unable to be produced in this case.”

Failure to pay wages due. Triable issues also existed as to whether the employer violated § 95-25.6 of the NCWHA, commonly known as the “payday statute,” by not paying all wages due “on the regular payday.” The employees alleged that paychecks had taken longer than one month before they were received, which the owner confirmed. The employees also claimed they clocked in more hours than were reflected on their paystubs and at time they were unable to receive their paystubs. Finally, a genuine dispute also existed as to whether improper reductions were taken from their paychecks and whether they were paid for trainings.

The case is No. 1:21-cv-00506-LCB-JLW.

Judge: Biggs, L.

Attorneys: Nicole K. Haynes (Gardner Skelton PLLC) for Tiffany Wade. Angela Newell Gray (Gray Newell Thomas, LLP) for JMJ Enterprises, LLC.

Companies: JMJ Enterprises, LLC

Cases: WageHour ClassActions WorkingTime Overtime StateLawClaims NorthCarolinaNews