Rules of the Road: When Does Travel Time Become Paid Time?

It is alarming to see how many companies have inconsistent travel time policies for their non-exempt employees or no travel time policy at all. These same companies have varying definitions of what is considered “worked” or “paid” time.  How do you define compensable time in the following scenarios?

An Employee Who:

• • Reports to the main company location and then travels in a company-provided vehicle to drive to the work site
  • Drives directly to the job site from his/her home
  • Drives between client locations throughout the normal business day
  • Travels out of town for training or to attend company-sponsored events
  • Travels out of town to visit with clients

Are you On or Off the DOL Clock?

According to the DOL, all hours worked must be paid. Depending on the circumstances, the following may be considered hours worked: waiting time, on-call time, rest/meal period, sleeping time, lectures, meetings, training, travel time, home-to-work travel, home-to-work on a special one-day assignment in another city, travel all in a day’s work, and travel away from home community.  An employee must receive compensation any time they are “engaged and waiting” to work. Examples include: driving from the primary location to the work site, driving between work sites, eating lunch while continuing to answer phones, and waiting at the airport to board a plane during standard business hours. Time spent by an employee “waiting to be engaged” is not considered work or paid time, including: traveling to/from home to the main location of business when on-call without any restrictions to go about personal matters as long as the employee can be reached via message, and waiting to board an airplane outside of standard business hours. Knowing the rules surrounding work time helps to determine when travel time becomes paid time.

Time spent away from the main location of the business is considered travel time. The DOL indicated that a typical problem in the Construction Industry is that employers fail to pay employees for travel from the shop (main location of business) to the work site. Based on my observations, this problem is not limited to the construction industry. Currently, the DOL has not provided guidance on how much an employee has to be paid for travel time, other than at least minimum wage must be paid for hours worked. Keep in mind that if you pay an employee at two different rates in the same work week (one rate for time spent working on the job vs. time spent traveling), the regular rate of pay (used for calculating overtime) will need to be calculated. As you can tell, this can be a slippery slope, so let’s walk through a few scenarios:

Scenario #1

John Green reports to the shop (main location of business) every day before going to the job site. Every day he arrives at least 15 minutes before his 6:00 a.m. start time so he can read over the work order for the day and gather any additional supplies needed for the job. He takes his personal vehicle to the job site. So he can drive directly to his son’s sporting event immediately after he is finished working at 3:30 p.m. John typically takes a half-hour lunch each day; however, sometimes, he will eat his lunch as he waits for the delivery truck to arrive with more materials. John’s pay should include:

• All time worked (including travel time) between 6:00 a.m. and 3:30 p.m.
• The time he waits for the delivery truck, even if it is during his regular lunchtime.
• 15 minutes or so that he arrives early to prepare for the day.
• Any time that is more than his usual travel home, since he is leaving directly from the work site to the sporting event.
• All travel/work time in excess of 40 hours for the week as overtime.

Scenario #2

Stan Smith’s employer asked if he wanted to attend a company-sponsored event that was out of state, to which he accepted. The conference was on Monday and Tuesday from 8:00 a.m. to 5:00 p.m. and Wednesday from 8:00 a.m. to 12:00 p.m. His flight to the event was Sunday evening at 7:00 p.m., and the flight home was on Wednesday at 3:00 p.m. He was invited to a networking event Monday evening, and while it was not mandatory, he was highly encouraged to attend. Stan’s pay will need to include:

• Sunday’s travel time during standard working hours, 8:00 a.m. to 5:00 p.m.
• Time spent at the conference on Monday, Tuesday, and Wednesday.
• Time spent at the networking event on Monday evening because it was not voluntary and was job-related.
• All travel time on Wednesday during standard working hours, including travel time from the airport to his home (less his regular travel time from the main location of the business to his home).
• All travel/work time in excess of 40 hours for the week as overtime.

Do you need to dust off your old travel time policy?  Find out what other policies you may need to spruce up in our on-demand webinar titled HR/Payroll Fall Cleaning.