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3 Things to Consider When Offering an Employer-Sponsored Wellness Plan or Activity

By Procopio Attorney Amber Gardina-Quintanilla

Corporate wellness programs such as smoking cessation, weight loss, and fitness activities can be great ways to build employee morale, improve the overall fitness of employees, and cut costs associated with health problems that can be caused by inactivity. However, an employer that implements these programs poorly could face liability for a range of problems, from personal injury to privacy violations. Keeping three simple guidelines in mind can help your employees stay healthy while reducing liability risks for employers.

1. Participation Should Truly be Voluntary

Employers typically are not liable for injuries suffered by employees at recreational or voluntary fitness events, even when those events are offered exclusively to employees. However, it is not enough for you to label your wellness program as “voluntary.” If participation is encouraged strongly enough, or if an employee reasonably believes that failure to participate can affect their performance review, courts are unlikely to view the program as voluntary.

Take, for instance, the case of the woman who broke her finger playing softball on her law firm’s recreational team. She claimed she was drafted for the team in order for it to meet the league’s quota for minimum number of women per team. She argued that she felt pressured to join the team because her supervisor, who asked her to join, was also the team’s coach. The court found she had a reasonable belief that participation in the team was actually mandatory, and held the firm liable for her medical bills.

From sporting teams to lunchtime yoga classes, employers will only avoid liability for injuries if the activities are truly voluntary. The best practice is to simply offer the option to participate or not, without encouragement either way. It is very important to also require participating employees to sign a waiver acknowledging the voluntary nature of the activity and the fact that injuries will not be covered by workers’ compensation.

2. Avoid Wage and Hour Liabilities

In addition to facing liability for injuries at recreational fitness activities, employers can face wage and hour claims from employees who can prove that they were required to participate. If employees can even show that their participation was strongly encouraged or tied to workplace advantages (such as face time with the boss or a key client), their time spent at the activity can be considered “on the clock.”

In a recurring recreational fitness activity such as the employer-sponsored softball team in the example above, where employees met not only to play games but also to practice, the claim for unpaid wages could be significant. Not only would the employer have to reimburse the employee for the time spent at the activity, it may also have to pay additional overtime and penalties. Thus, employers should reinforce in writing the voluntary nature of these activities, hold them away from the worksite, and ensure your employees refrain from discussing business during the activity. Employers should also adopt an “off the clock” policy prohibiting employees from working without recording their time. The policy should require employees to accurately report any and all time that they work – even if it is away from the workplace during typical business hours (and/or during a softball game).

3. Make Programs Accessible to All Employees

Employers should always be aware of policies and practices that could be seen as discriminatory, paying particular attention to potential disability discrimination claims when offering wellness programs and activities to employees. The Americans with Disabilities Act (ADA) and Fair Employment and Housing Act (FEHA) both prohibit employers from discriminating on the basis of mental or physical disability. Accordingly, participation in employer wellness programs and activities should be available to all employees, regardless of ability, and accommodations for disabilities should be made as necessary.

Wellness programs must also meet a number of ADA requirements, including restrictions on financial incentives that may be offered to increase participation, notice requirements when collecting medical information, and confidentiality and security requirements for health information that is collected. Even when health information is properly collected, it may not be used to discriminate against employees in consideration for raises, bonuses, promotions, and other terms and conditions of employment.

In addition to considering implications of workers’ compensation laws, wage and hour laws, and discrimination laws, employers also need to consider whether their programs comply with the Health Insurance Portability and Accountability Act and Genetic Information Nondisclosure Act. Working with legal counsel can ensure programs and activities are developed and implemented in the manner required to minimize liability. With these guidelines, employers can implement corporate wellness programs that help improve the overall health of employees while not harming the employers’ financial health.


Amber Gardina-Quintanilla is an attorney in Procopio's Labor and Employment Law and Sports and Active Lifestyle Practice Groups. She has defended employers in individual and class-wide litigation involving claims under the California Labor Code, Title VII, Age Discrimination in Employment Act, Americans with Disability Act, Fair Employment and Housing Act, Equal Pay Act, Fair Labor Standards Act, California Family Rights Act, and Family Medical Leave Act.  She also provides employers with advice on a wide range of employment issues including disciplinary action, terminations, accommodations, and compliance with wage and hour laws. She uses her litigation experience to help employers find solutions that work for their business needs and are most likely to avoid future litigation.