In accordance with the Fair Labor Stands Act (the “FLSA”) there are certain circumstances where employers are required to pay for travel time. Generally, employers do not have to compensate employees for travel that is merely incidental to the employee’s duties, such as the normal home-to-work commute, or when the travel required includes an overnight stay and the employee’s time spent traveling falls outside of the employee’s normal working hours. This article aims to help employers decipher when compensation for travel is required.
Travel Time vs. Commuting Time
Commuting time is considered to be the employee’s normal commuting time from their home to their regular worksite. This time is considered to be personal time and not part of the employee’s daily working hours. The IRS does not permit businesses to deduct commuting time as a business expense and thus, employees should not be compensated for their time spent commuting from home-to-work or from work-to-home.
However, travel time is considered the time spent by an employee traveling during their workday for the purpose of performing their work duties. Travel time for exempt and non-exempt employees may be counted differently. For example, employers will need to compensate non-exempt (hourly) employees for local travel time, but exempt (salaried) employees are not required to be paid for that time. Exempt employees are compensated for their expertise, not by the hour.
Different Types of Travel Time
Employers should note that there are different types of travel where they may be required to pay employees for that time.
Travel on Special One Day Assignment in Another City. This type of travel occurs when an employee is required to travel out of town for their work but then returns home that same day. Regardless of the employee’s regular working hours, all of the employee’s time spent traveling during that day is compensable. However, the Department of Labor (the “DOL”) does permit employers to deduct the time the employee would have spent if they were commuting to their regular workplace. For example, you send your employee on a special assignment in another city. On that particular day she leaves from her home, travels to the city and performs her work, and then travels back home that same day. She spends a total of 3 hours traveling (1 ½ hours each way) from her home to the other city. Normally, she would only spend a total of 30 minutes commuting from her home to the office. Thus, you may deduct the 30 minutes from her travel time and only compensate her for the 2 ½ hours of travel time.
Travel Which is Part of the Employee’s Normal Workday. This type of travel is the employee’s time spent traveling to and from different worksites throughout their day as part of their job duties. Employers are required to compensate employees for this time. However, the time spent traveling from the employee’s home to the first worksite and the time spent traveling home from the last worksite is considered commuting time and the employee does not need to be compensated for this time. For example, you require your employee to travel to 3 job sites throughout his day. His daily travel time between those locations must be included in his pay because he is not commuting. However, he cannot count the time spent driving from his home to the first job site or the time spent traveling back home from the last job site, as that time is considered to be his commute.
Travel Away From Home. This type of travel includes an overnight stay, and any time spent by the employee traveling during their normal working hours is compensable, regardless of what day of the week the travel takes place. However, the DOL does not include travel time away from home that is outside the employee’s regular hours when the employee is a passenger (on a plane, train, boat, bus or car) as compensable time. It should be noted that the time spent traveling to the airport or train station is categorized as commute time and does not need to be treated as hours worked, but the time spent waiting at the terminal until arrival at the destination is characterized as compensable time when it falls during normal work hours, regardless of what day of the week the travel takes place. For example, if an employee travels from New York City to Philadelphia for a 3 day conference at your direction, the employee must be paid for the hours the employee would have worked in a normal workday for each of those days, even if they were on a Saturday or Sunday.
Required Driving at the Direction of the Employer. If an employee is required to drive themselves or others, all of their driving time is deemed compensable. However, if the employee is traveling to an overnight stay and has the option to take public transportation but instead chooses to drive their own car, the employer has the choice whether to pay the employee for all of their time spent traveling or to only pay the employee for the travel time that occurs during their normal work hours, regardless of what day of the week the employee travels.
Work Performed During Travel Time. It is clear that employees must be paid for any time they have spent performing work. This includes the time spent working during travel when the employee is a passenger that would otherwise be non-compensable. For example, your employee’s normal work hours are from 9 a.m. to 5 p.m. Monday through Friday. The employee arrives at the airport on Sunday at 2 p.m. and arrives at her destination at 7 p.m. Generally, you would only be required to compensate that employee from 3 p.m. to 5 p.m. However, if the employee is working during the flight until 6:30 p.m., you are required to pay them from 3 p.m. to 6:30 p.m.
Incidental vs. Work Travel: When does this need to be paid?
Here is an easy example to determine when travel time is incidental travel time (does not require compensation) or work travel time (does require compensation). If you ask an employee to pick up breakfast for a meeting on her way into work, that time is considered to be incidental travel and does not require you to compensate her for the extra time to pick up the breakfast. As time spent commuting is not paid time, the time spent to stop to pick up the breakfast is merely “incidental” to the commuting and is not a part of the employee’s job. However, if that employee has already arrived at work and now you ask them to pick up breakfast for the meeting, that time spent picking up breakfast is considered to be work travel time and requires you to pay the employee. Since the time spent picking up the breakfast occurred during normal work hours, the employee should be paid.
Contact PMP if you have any questions regarding compensable time for employee travel.