DoD SkillBridge: FLSA and OFCCP

DoD SkillBridge has been reviewed by the DOL and OFCCP

DoD SkillBridge is a Congressionally authorized program, administered by the Department of Defense (DoD) in partnership with employers who activate the program, which allows Active Duty members of the U.S. Armed Forces to participate in full time internships/training with industry within their final 180 days of Active Duty service. Servicemembers gain valuable skills which allow them to transition to the workforce more successfully, and participating employers gain access to highly skilled and motivated individuals who are eligible for direct hire after their military service is completed. DoD SkillBridge is considered fulfillment of official military duties for the participant.

DoD SkillBridge participants receive full military pay, allowances and benefits        

The governing law for DoD SkillBridge is 10 U.S.C. §1143(e), and the Department of Defense Instruction is DoDI 1322.29. Each of the military services have their own specific military instruction as well. A key factor of the law and instructions for DoD SkillBridge is that the participating servicemember may not receive any compensation from the host employer for work performed. Instead, the DoD SkillBridge period is considered fulfillment of official military duties for the participant and, as such, servicemembers continue to receive their full military pay, allowances and benefits during the period of training as compensation for the work performed.

DoD SkillBridge is a program which clearly benefits transitioning servicemembers, and also provides a benefit to participating employers, but none of the Department of Defense guidance do not provide employers clarity on the status of DoD SkillBridge participants in relation to their employer requirements under the Fair Labor Standards Act (FLSA) and other related laws.

Another regular concern is whether participation as a host employer triggers compliance requirements for federal contractors subject to regulation by the U.S. Office of Federal Contract Compliance Programs (OFCCP) for employers who would not otherwise fall under such regulations.

To help employers better understand their risk when engaging as a DoD SkillBridge host employer, the Department of Labor has issued two opinion letters which provide clarity to these questions.

Department of Labor Wage and Hour Division Review

DOL Wage and Hour found DoD SkillBridge compliant with FLSA, DBA, SCA and CWHSSA        

The DOL Wage and Hour Division evaluated DoD SkillBridge and it's interaction with various labor related laws with the following conclusions:

• Fair Labor Standards Act (FLSA): Wage and Hour reviewed DoD SkillBridge and analyzed it against the seven factors of the "primary beneficiary test" (DOL Fact Sheet #47) with a determination that those factors point to the service member being an intern, not an employee of the host company, when SkillBridge training is conducted in compliance with the test factors.
• Davis Bacon Act (DBA): DBA establishes minimum wage requirements for laborers and mechanics employed by certain Federal construction contracts. DBA has limitations on impairing or superseding otherwise federally established wage rates, and because the DoD continues to pay wages and benefits as established by Federal law while the servicemember participates in SkillBridge, Wage and Hour concluded that DBA does not apply.
• Service Contract Act (SCA): SCA establishes minimum compensation standards for service employees under certain contracts. Wage and Hour determined that based on the explicit prohibition in SkillBridge for employers to provide compensation, the SCA's requirements do not apply.
• Contract Work Hours and Safety Standards Act (CWHSSA): CWHSSA protects most laborers, mechanics and certain other class of employees working greater than 40 hours per week (overtime). Because DoD SkillBridge regulations and guidance explicitly limit participants to working no greater than 40 hours per work week, Wage and Hour determined that CWHSSA does not apply to SkillBridge participants.

Department of Labor U.S. Office of Federal Contract Compliance Programs Review

OFCCP found that DoD SkillBridge does not establish a Federal Contractor status        

The U.S. Office of Federal Contract Compliance Programs (OFCCP) evaluated DoD SkillBridge and it's interaction with Federal contractor laws and requirements with the following conclusions:

• OFCCP analyzed whether businesses participating in DoD SkillBridge as a host employer or training organization are considered Federal contractors based solely on their participation in the program under multiple relevant statutes and executive orders. OFCCP determined that SkillBridge partnership with the Department of Defense does not reflect a contractual arrangement, but more closely resembles a cooperative agreement between the parties. OFCCP determined that it does not have jurisdictional authority over cooperative agreements, and therefore employer participation in DoD SkillBridge, in and of itself, is insufficient to make the employer a federal contractor.

Your employer responsibilities compliance take-away

Each of the decision factors listed above are predicated on the host training employer fully complying with the laws, rules and regulations as established for DoD SkillBridge participants. Deviation from the requirements (i.e.; violating the factors of the "primary beneficiary test", allowing a SkillBridge participant to work greater than 40 hours in a work week, paying compensation/wages of any kind, etc.) may nullify the findings of these opinion letters and establish an employer/employee relationship in which the employer becomes responsible for all labor and compensation laws as they would any other employee.

The opinion letters issued by Wage and Hour and OFCCP are instructive, but not legally binding, and therefore provide persuasive evidence of compliance and clarity for participating employers, but each employer must still ensure that they fully understand any other Federal, state or local laws, ordinances or regulations which may affect or impact them and carefully consider these requirements when considering participation in the DoD SkillBridge program.

Chris Thorne, SHRM-SCP holds the SHRM California HR Law Credential and is the owner of Chris Thorne Consulting which is committed to providing industry best practice solutions to veteran engagement and retention. Chris Thorne Consulting is an approved SHRM and HRCI Re-Certification and PDC Provider. Chris is a SHRM Certification Ambassador, non-profit President and Board member and a 30 year U.S. Navy Veteran.

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