Ask HR: What Are the Risks and Rewards of Tuition Reimbursement Programs?

​SHRM President and Chief Executive Officer Johnny C. Taylor, Jr., SHRM-SCP, is answering HR questions as part of a series for USA Today.

Do you have an HR or work-related question you'd like him to answer? Submit it here. 

I am a parent of a high school senior who plans on attending college in the fall. My son works part time at a local retailer that offers tuition reimbursement. Are there any pitfalls to avoid or restrictions to consider for this type of program? —Carter 

Johnny C. Taylor, Jr.: Retail and service employers have been hit hard over the past few years as they've struggled to attract and retain workers. Many are turning to tuition payment programs as a recruitment tool. There are some restrictions and requirements to factor into your son's decision to participate in such programs. It is a benefit worth considering, especially if your son expects to continue working there.

Tuition reimbursement can be a win-win for employees and employers alike. With college tuition being a significant financial investment, tuition assistance programs can offset some of the cost. For employers, it is a compelling incentive for enhancing recruitment and retention. As companies support employees' pursuit of their educational goals, they also support the communities where they do business.

Companies can design an educational assistance program to pay for employees' educational expenses or offer student loan repayment assistance benefits. If the program meets specific requirements, the amount paid by the employer is tax-deductible for the company and not considered taxable income for the employee. Under this type of program, employers can provide up to $5,250 annually in tax-advantaged educational expenses; however, they are not obligated to offer the full amount.

Here are a few key questions to ask to help understand the details of the employer's program:

• Does the program require employees to remain with the company for any specific period? If so, is the employee required to pay back any portion of the aid should they leave early?
• What is the maximum amount of tuition assistance offered per year?
• Does the employer require you to first apply for federal financial aid, which potentially reduces their investment costs and the employee's financial needs?

For employers, investing in students and communities will ultimately provide a bigger benefit than simply drawing applicants to their door. For employees looking to attend college, this is an opportunity to reduce their tuition burden and maximize their employment benefits. Under the right circumstances, tuition payment programs can mutually benefit both parties.
 

I work in construction and wear safety equipment on job sites. Usually, it isn't a lot and takes little time. On occasion, I may need specialty equipment to perform my job in certain circumstances. It tends to take longer to be fitted properly. I generally clock in before gearing up, but my supervisor said we should clock in when we are ready to work. Should my time gearing up count toward my shift? —Geraldine 

Johnny C. Taylor, Jr.: It depends. Putting on uniforms and protective gear is a preliminary workday activity. If a preliminary activity is required to perform the principal activities of your job, then your employer should compensate you for the time. Although specific circumstances may vary, if employees are required by the employer, by law, or by the nature of the work to change clothes on the employer's premises, the activity is generally deemed integral to the principal activity, resulting in "hours worked." 

The question is whether you can perform your job without your standard work equipment. If so, the time gearing up would not count toward your hours worked. If not, the time spent on it should factor into your hours worked. The same holds true for your specialty equipment. If you cannot safely perform your job function without it, putting on your specialty gear is considered part of your job's principal activity.

Verify with your employer what equipment is considered essential to performing your job. Employers should be able to verify all preparatory activities designated "on the clock" and preliminary to the principal activities of a given job.

I hope this clears up any confusion. Stay safe.