Should You Pay for NATE Certification?
Although North American Technician Excellence (NATE) certification is not required by law for HVAC contractors and their employees, it is considered to be a vital credential for technicians and others working within the HVAC industry. Consumers and commercial customers alike frequently seek out companies that employ NATE certified technicians. As a result, many companies pay for their technicians to obtain this vital certification, along with other related credentials. If your company does not provide such training, you may be conducting business in a manner that is penny wise but pound foolish.
Tax Benefits for Employers and Employees
Providing training programs for NATE and other industry related certification represents a significant expense for many small business owners. However, such programs may qualify for IRS tax breaks as business related expenses – which can significantly reduce the financial bite.
Training benefits may also be provided to employees without requiring them to declare the value of training benefits as income. The IRS places dollar limits on the amount of assistance that can be excluded from declaration as employee wages. As of 2016, the limit was $5,250 annually. There are no such limits placed on employers for providing such benefits.
NATE Certification Basics and Costs
NATE certification is available from entry level (Ready-to-Work) to senior level (HVAC Efficiency Analyst). Specialized NATE certifications for professionals with at least two years of industry related experience are also available in the following areas, according to the NATE website:
Professional NATE SPECIALIZED CERTIFICATIONS
·Air Conditioning (AC) (Service exam also available in Spanish)
·Air Distribution (AD)
·Heat Pumps (Air-to-Air) (HP) (Service exam also available in Spanish)
·Gas Heating (GS) (Service exam also available in Spanish)
·Oil Heating (OL)
·Hydronics Gas (HG) (service only)
·Hydronics Oil (HO) (service only)
·Light Commercial Refrigeration (LC) (service only)
·Commercial Refrigeration (RC) (service only)
·HVAC Efficiency Analyst (Senior Level) (EA)
·Ground Source Heat Pump Loop Installer
·HVAC Performance Verifier (for HERS Raters)
·Industry Competency Exams (ICE)
Obtaining each of these certifications require individuals to earn a passing grade on a rigorous examination. Fees associated with study and testing range from a few hundred dollars for a single certification to thousands of dollars for multiple certifications. These fees vary widely according to a number of variables, including the location where training and testing take place. However, expenses may be reduced somewhat if their expenses exceed 2% of an individual’s gross adjusted income – expenses over this amount may be deductible on Schedule A of their federal income tax returns.
Despite the expense and time involved, conscientious (or ambitious) technicians are often willing to pay out-of-pocket to obtain NATE and related industry certification, including study costs and materials. They recognize that industry-related certification makes them more valuable in the HVAC labor market. By contrast, employers who do not provide NATE or other industry related training and certification benefits risk losing employees to savvy competitors who are willing to foot the bill for their workers to obtain relevant certification.
The Fair Labor Standards Act and “Hours Worked”
Providing NATE training and certification for your workers represents a potentially significant expense for your company. In addition, the “hours worked” provision of the Fair Labor Standards Act may increase the up-front expenses associated with providing such training. This provision not only covers time spent performing the duties of a job, but also required lectures, meetings, seminars and training sessions. Under certain circumstances, travel time and related expenses associated with obtaining training and certification away from your company’s location are also covered by the provision.
Because of this provision, you may be required to pay your employees’ wages for the time they spend training to obtain NATE certification, whether or not you provide training and testing for the certification. To be exempt from paying wages under the “hours worked” provision, all of the following conditions must be met.
- Events must occur outside regular working hours
- Attendance must strictly voluntary
- Instruction cannot be directly related to an employee’s current job
- No productive work can be performed during instruction sessions
Bottom Line Benefits
Given this costs involved, you may come to the conclusion that it’s simply too expensive to provide NATE or other certification training or reimbursing employees who obtain their own NATE certification. However, skimping on providing NATE and other related certification for your workers can adversely affect your company’s bottom line through employee turnover and lost consumer and commercial contracts.
On the other hand, the investment you make in providing NATE and other related certification can provide substantial dividends in reducing employee turnover and boosting your company’s contracts. And as a bonus – you may even qualify for a break from Uncle Sam.
Disclaimer: This article includes a general discussion about industry related certification and training, along with potential financial and tax benefits. It is not intended to provide legal or financial advice. Please consult with an attorney, a certified public accountant (CPA) or both with specific questions relating to employer provided industry training and certification pertaining to your company and its employees.
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