If your organization requires employees to travel for work, you must understand how and when to compensate them for their travel time. This is not so much an issue for exempt employees, who receive the same amount each pay period no matter what. However, federal and state rules require employers to pay for non-exempt employee travel time.
You must pay hourly employees for their work-related travel time in specific situations. A non-exempt employee:
- Makes less than $684 per week or $35,568 per year.
- Earns at least the federal minimum wage of $7.25 per hour.
- Is entitled to overtime pay at 1.5x their hourly rate for time worked beyond 40 hours per week.
Note that non-exempt employees usually earn an hourly wage but may be salaried. Check out our blog post on exempt and non-exempt employees for a refresher and to ensure you’re correctly classifying employees.
Below, we’ll cover the basic rules of eligible travel time pay.
What is NOT considered compensable work travel?
First, let’s look at when you do not have to pay for employee travel time.
There is an essential difference between travel and commuting time. Employers do NOT have to pay employees for their regular commute between home and work. The daily commute is a normal part of employment, and the Department of Labor (DOL) does not consider it work time. This applies whether the employee works at the same location or a different worksite each day.
The DOL also does not consider the employee’s time spent as a passenger on a plane, train, boat, bus, or automobile as compensable work time, unless they are working – more on that below.
When do you have to pay employees for travel time?
Below are three common scenarios, but they don’t encompass all possible situations of paid work travel.
Employers must pay non-exempt employees for:
- Local travel during their regular work hours that is part of their duties.
- All hours engaged in work or “engaged to wait” while traveling, even if outside the employee’s regular work hours.
You do not need to pay employees who are relieved from duty for breaks or long enough periods where they can use the time for personal reasons.
For example, Sandra is a personal care aide and must drive her client, Mr. Johnson, around town for errands. Sandra brings him to the mall to pick up gifts for his grandkids, stops at the bank, and then takes him grocery shopping. This is all eligible travel time for which Sandra must be paid.
If you have employees who commute to multiple worksites, you must pay for their travel time. The return trip to the original worksite is compensable, but not the commute home. Whether from the second worksite or original location, their commute home is considered ordinary home-to-work travel.
Special One-day Assignment in Another City
Employers are on the hook for one-day trips to another city that go above and beyond the employee’s usual commute. Perhaps you have team members attend:
- Local conferences
- Other work-related activities
You must pay an hourly employee for their travel time to and from the city, but you can deduct the time they would spend on their typical commute. You are only responsible for additional time. Some businesses choose to pay staff members for their entire commuting time to simplify the process, but this is not required.
For example, Brad works in your office, but you send him to a conference for networking purposes. He travels from his home to the conference location and returns the same day. He travels two and a half hours roundtrip for the event. Brad’s normal daily commute is 30 minutes roundtrip, so you could deduct this and pay him for two hours of travel time.
Is your non-exempt employee traveling away from home and overnight? You must count any hours they worked on regular working days and work hours on non-working days (i.e., weekends or holidays).
You do not need to pay the employee for travel time outside their regular work hours. The exception here is that if the employee spends that travel time working, they must be paid (e.g., answering emails or performing research during a work trip flight).
Additional Tips for Managing Employee Travel Time
Recording Time Worked
Create an employee travel time policy and easy template that workers can use to track their work time. Ensure that all non-exempt employees record their time worked while traveling and that all travel time is recorded in the workweek that it occurred. Your policy should tell employees when and how to submit their work travel timesheets.
Now you know when you must provide hourly employees with travel time pay, but what about the travel expenses?
Typically, employers should pay for a team member’s travel expenses – while not required, it is best practice. You can deduct their travel expenses as a business expense. Create another policy on travel expenses, which should outline what qualifies as business expenses and what does not. Inform employees that they should keep their personal expenses separate.
State Regulations on Paid Employee Travel
As we mentioned earlier, there are federal and state rules on paying employees for their travel time. Refer to your state labor department to determine if your local laws override the federal regulations.
Our HR specialists will be happy to answer your questions about a particular employee travel scenario or about your state’s laws about employee travel time pay. Contact us at 603-818-4131 or email@example.com today!
The information on this website, including its newsletters, is not, nor is it intended to be legal advice. You should contact an attorney or HR specialist for advice on your individual situation.