Paying for Employee Travel Time? Consider These Factors

When is travel time considered work time? Employers need to consider several factors when deciding when and if to pay for travel time. In this article we will explore what the Department of Labor (DOL) considers as “hours worked” when a non-exempt employee is traveling. With any policy, you must meet the legal requirements, but some employers may be more generous in this area in order to retain and attract employees, so please always consider how this impacts your company culture and how your practices reflect your values toward employees.

It used to be that few people understood the difference between “exempt” and “non-exempt” classified workers, but with the recent proposed changes (that are currently on hold), most business owners are familiar with the terms (see www.dol.gov for more info). Non-exempt employees are typically paid hourly, and must be paid overtime (1.5 times their regular rate) for any hours worked over 40. So when is travel time counted as “hours worked”?

There are exceptions but generally, travel to and from work is not considered “work time.” Employers should make sure when hiring an employee that will be regularly working in multiple locations or job sites that this is made clear in the job description.

The job description should also list other requirements related to travel such as physically being able to sit for long periods and having a valid driver’s license. An employee can be hired to work in Cadillac one week, Traverse City the next week or a different location every day. The travel between the work location and home is not considered paid time.

When determining what is paid travel time during the work day, think of an imaginary time clock at every location and job site. Once that employee “punches in” for the day all travel is compensable time and counts toward overtime until the employee “punches out.” Let’s use the employee that was hired to work in multiple locations above for real life examples of travel time conundrums.

  1. An employee is scheduled to work in Cadillac today and normally commutes without pay. This morning, his boss asked him to pick up a file in TC (close to his home) and take it with him to Cadillac. The employee is now “punching in” in TC and the travel to Cadillac is now paid time.
  2. The employee is given the option of commuting in their personal vehicle to a job site in Alden or meeting at the TC headquarters and riding as a group in the company vehicle. The employee chooses to go to TC (closer to home and saves on gas) and while waiting to leave loads the vehicle. The employee has now “punched in” in TC and the travel to Alden is now paid time. (In this situation another labor law comes in to play. The employee is “engaged to wait” according to the FLSA and is entitled to pay.)

 

In both examples, the travel time is considered “hours worked” and the employee must be paid for the travel time each way.

Overnight travel can be even trickier. In general, travel that occurs during normal work hours is counted as “time worked,” even if it occurs on days the employee doesn’t normally work (like a weekend). If the employee is a passenger (car, plane, etc.) hours spent traveling outside normal work hours do not count as “hours worked.” To keep things simple, many employers will choose to pay employees regardless of their passenger status.

While the above outlines the legal requirements for non-exempt employees, that doesn’t necessarily mean employers can’t do more. When considering how your organization will handle travel time, it is important also to think about the message these policies communicate to employees. If the values and budget allow, recognizing travel time and reimbursing for expenses (such as mileage or meals) may encourage travel by easing the burden on the employee.

Most importantly, review your travel policies and procedures regularly to ensure legal compliance. There are no laws that require private employers to reimburse employees for travel expenses such as mileage or meals. However, when trying to recruit and retain great employees these policies can go the extra mile in keeping them engaged and well-traveled! Whatever you decide, it is important that each non-exempt employee be treated the same way with regard to travel pay and expenses.

Check out the DOL’s Fact Sheets for information on labor laws in an abbreviated and easy to read format. https://www.dol.gov/whd/fact-sheets-index.htm

Michelle Baldwin, SPHR, CSP-SHRM, is an HR professional with Human Resource Partners in Traverse City. She works with organizations across multiple industries to improve employee performance and communication; Michelle@h-r-partners.com.

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