Employee Travel Pay: When and How to Compensate Employees Correctly
Written February 23, 2019
Categories: Employment Management
When and How to Compensate Employees Correctly
Many employers have travel policies in place that govern employees when representing their firm while on business travel. These policies govern employee conduct, expenses, reimbursement practices, travel advances, budgetary guidelines, etc. However, there is less clarity regarding how employees are paid when they travel for work. The rules for exempt, or salaried, employees are fairly straightforward. Issues like overtime and pay for non-standard work days are not relevant, because their pay is at a regular set amount regardless of how many hours they work or on what days.
The rules are not so simple or easily defined for non-exempt, hourly, employees. In fact, there is growing uncertainty among employers regarding when and how to pay hourly employees who travel for work related purposes. In recent years there has been a marked increase in the need for skills-based employee training to be extended to hourly staff members. The rapid growth of new technologies in printing has created particular demand for workers to regularly update their skills through a variety of means, but especially off-site training and conferences. The fact that most production and pre-press employees remain on hourly wage scales presents employers with questions about their legal obligations to compensate such staff when working away from the primary worksite.
The Fair Labor Standards Act (FLSA) has a complex set of conditional rules for when and how non-exempt employees should be paid. The issue of pay for travel is particularly sticky and is addressed at both the federal and, in many cases, the state level as well. The remedy is often based on the specifics of the situation and depends on the purpose of the travel, where the employer is located and the type of work being performed. A key question to ask when evaluating these circumstances is: Is the travel for the employer’s or the employee’s benefit? Any travel benefiting the employer must be compensated within certain specific conditions.
Travel for Training
If the travel is for training, there are four criteria that must be applied to determine if compensation is required. A negative response to any one of these means the employer is required to compensate the employee.
- The training is outside normal hours.
- The training is voluntary.
- The training is not job-related
- No work is performed during the training time.
Travel from Home to Work
Most employers are aware that travel by an employee to or from that individual’s home does not count as work time. This is true even if the employer has multiple job sites with different commuting times and distances from the employee’s home. Included in this is work mandated travel to a training site within the local area in which the employer is located. The only exception occurs when the employee is required to first report to a primary employer-dictated site to receive instructions or equipment before proceeding to the actual job site at which the work will be performed. In that case, travel from the primary site to the job site must be compensated.
One Day Travel
Travel to another city during the course of a single day requires a detailed accounting of the employee’s activities during that day in order to accurately compensate him/her under the FLSA. For purposes of federal law, the airport, train station or bus depot from or to which the employee is traveling is treated as a work site. Under these rules, travel between one of these places and the employee’s home is not counted as time worked. However, any other travel during the course of the day, so long as it is to or from the designated destination, must be counted as hours worked. This includes time spent in a rental care as well as a taxi, bus or other means of public transportation to the destination upon arriving in the city to which the employee is traveling.
Example: A printer in Richmond, VA sends a pressman to Printing Industries of America in Warrendale, PA for a one day training seminar. He leaves home at 6:00 AM and arrives at the airport 30 minutes later for a 8:00 AM flight. Upon arriving at the airport in Pittsburgh, the employee takes a taxi to the Printing Industries of America headquarters to attend his 10:00 AM seminar. The training lasts until 4:00 PM with at 30 minute break for lunch at 12:30 PM included. At the conclusion of the training, there is a short reception for the attendees to mingle and talk. The pressman leaves Printing Industries of America's headquarters at 4:30 PM and takes a taxi back to the Pittsburgh airport to catch a 6:00 PM flight and arrives back at the Richmond airport at 7:00 PM.
The compensable time over the course of the day in this example begins when the pressman arrives at the airport in Richmond and continues through the travel in the taxi to Printing Industries' headquarters until the break for lunch at 12:30 PM. Work time resumes at the conclusion of the lunch break and continues until the end of the training seminar at 4:00 PM. Attendance at the reception afterwards is not required to be compensated because it is not clearly to the employer’s benefit. Work time resumes when the pressman begins his taxi ride back to the Pittsburgh airport and concludes upon arriving at the airport in Richmond.
Editor’s Note: If an employee chooses to drive to a training site in another city (e.g. Washington, D.C. to Baltimore, MD) or more than one employee is on a trip as in the example above on they choose to carpool to the travel depot, the employee who is driving must be paid for time spent driving. This qualifies as work time.
Travel for work requiring an overnight stay requires a different set of standards for employers. In these situations, compensation for travel is dictated by applying the normal hours of the employee’s work day to any travel days in question, including non-standard workdays (e.g. weekend days).
Example: A printer in Louisville, KY sends a pre-press technician whose normal working hours are Monday through Friday from 9:00 AM to 6:00 PM., to Printing Industries of America for a three day training seminar beginning on a Monday at 9:00 AM. She leaves home on the prior Sunday at 11:00 AM and arrives at the airport one hour later for a 1:30 PM flight. Upon arriving at the airport in Pittsburgh at 3:00 PM, the employee rents a car and drives to her hotel arriving one hour later. The training begins each day at 9:00 AM and lasts until 5:00 PM with at 60 minute break for lunch at noon. The employee leaves Printing Industries of America's headquarters at 5:00 PM each day and drives back to her hotel in Pittsburgh. On the last day, the training ends at 3:00 PM. The employee leaves Printing Industries' headquarters and drives one hour to the Pittsburgh airport to catch a 6:00 PM flight and arrives back at the Louisville airport at 7:30 PM.
In this case, the first day for which the employee should be compensated is the Sunday during which her travel begins. Since travel from her home starting at 11:00 AM, which falls within his normal work hours, that is when the “clock” starts. The remainder of her travel on that day is also compensable time because it also falls within her normal working hours. Travel from her hotel to Printing Industries on each of the succeeding three days does not count as paid time because it falls outside of her normal work hours. However, the hours of the training session and time spent driving back to her hotel, fall within her normal hours of work. On the last day, time spent traveling to the Pittsburgh airport falls within her normal working hours, but the flight back to Louisville does not. Therefore, the time of that flight need not be counted as compensable time.
The employee who travels overnight in this example is being paid for a non-standard work day, Sunday, thus there is also the chance the she will qualify for overtime pay for the week in question depending on the way the work week is defined by the employer. Overnight travel that spills into a weekend must be carefully measured to ensure that the hourly employee is paid at the correct rate. For example, if the employer defines the work week Sunday through Saturday and an employee travels for work over the course of a weekend, the time paid for working on a Saturday may qualify for overtime pay if the employee’s total hours worked exceeds 40 hours. However, the time worked on the following Sunday would count toward the next work week and would not count as overtime. By contrast, if the work week is defined as Monday through Sunday and the same travel parameters applied, the employee would be eligible for overtime pay for both Saturday and Sunday.
As is often the case many state laws go beyond the federal statute and can further complicate matters for employers when determining what travel time is compensable. Many states seek to either expand the time for which a non-exempt employee is eligible for pay while traveling, or to more narrowly define the circumstances under which an employer will be required to pay employees for time spent traveling.
The following states specifically or indirectly reference pay for travel or work performed away from the primary job site in their labor laws:
- District of Columbia
- New Jersey
- North Dakota
If your firm is located in one of these states, please seek the advice of legal counsel before crafting a travel pay policy to ensure full compliance with the law.
Training hourly employees away from the worksite is an employment reality that is unlikely to change for the printing industry in the near future. Therefore, it is imperative that employers clearly define when and where they prefer their hourly employees to be trained. It is also important to accurately track employee hours of work during such employer mandated travel to ensure the employees are compensated fairly and legally and to avoid unnecessary expense.
Travel time is defined as time spent en-route from home to work and return, or from one work location to another by any viable means of transportation while not performing any type of recognized work as required by the company. Travel time is divided into the following four categories:
- Home to Work: Ordinary home-to-work travel by employees – that is, the kind involved in reporting to work at the start of the day and returning home at day’s end – does not count as hours worked.
- Travel as Part of the Job: Time spent travel as part of an employee’s daily work activities, such as travel from job site to job site during the work day, must be counted as hours worked.
- Home to Work on One Day Assignments: When employees who normally work at one location or in a territory are given a special one-day assignment that requires them to travel to another city/territory, all the travel time outside the regular work day to get there and back, counts as time worked. The only time that can be excluded are meal periods and the time spent traveling between the worker’s home and point of departure – for example, an airport or rail station.This home-to-depot time falls into the standard home-to-work travel exemption.
- Travel Away from Home Overnight: Travel by an employee who will be away from home overnight is work time only during those periods that coincide with the employee’s regular working hours even if travel occurs on a non-working day. Travel outside regular working hours as a passenger on a plane or other type of public transportation will be compensated at straight time for the actual hours traveled. Usual waiting time that precedes the travel time provided by a common carrier will be approved at 2 hours for domestic travel and 3 hours for international travel at the straight time rate.(Time spent traveling from home to the public transportation hub will not be compensable.)
- If an employee drives him/herself rather than use available public transportation for travel away from home, hours worked shall be the lesser of the time spent driving or the time that would have been spent on public transportation during regular working hours.