Employment Law Advisory for September 5, 2012: Sometimes It Pays to Sit Around (Part I): Are Your Employees On The Clock When They Are Traveling?

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Wage and hour laws present employers with a never-ending maze of obligations and potential pitfalls. Both state and federal law generally obligates employers to compensate non-exempt employees for all hours they work. Although this basic rule appears benign and non-controversial on its face, disputes regarding whether employees are entitled to be paid for time spent engaged in certain activities are increasingly common, and recent court cases demonstrate that employers sometimes do not credit employees for all time that is considered “hours worked” under the law. Confusion over the calculation of hours worked often arises when employees spend time traveling. 

Rules regarding payment for travel time vary from state to state, and payment obligations are often dependent upon whether the employee was traveling in the course of commuting to and from work, or in the course of performing his or her job duties. 

In general, time spent by employees traveling to and from work is not counted as time worked and is not compensable. The rules contain an exception relating to travel at the beginning or end of a work day, however.  If an employee travels to a site other than his normal work site at the beginning of the work day, or travels home from a site other than his regular work site at the end of the work day, travel time is compensable to the extent that it exceeds the employee's normal commute time.  In other words, if the employee usually spends 30 minutes driving to the employer’s office, but instead drives 30 minutes to a customer site on a particular day, the time spent driving to the customer site would not be compensable because it would not have been compensable if the employee had come to work at the office as usual.  Time spent driving from the customer site back to the office at the end of the meeting would be compensable, however, and the employee would be entitled to compensation for the time in excess of his normal commute if he had spent more than 30 minutes driving from his home to the customer site.  In addition, time spent traveling to or from a work site on transportation provided by the employer is compensable if the employer requires employees to meet at a particular location and utilize the employer’s transportation to or from the work site. 

Subject to the “coming and going” rules described above, California law requires employers to pay non-exempt employees for all time that they spend traveling in the course of performing their job duties.  Travel time includes time spent driving or riding as a passenger in a plane or train, as well as time spent purchasing tickets, checking baggage, boarding, etc., but not time spent sleeping, resting in a hotel room, or engaged to personal pursuits like sightseeing.  Unlike California, many other states excuse employers from paying employees for time spent as a passenger unless the employee is actually performing his or her job duties while traveling. When an employee has gone home from work after completing a shift and is called to a customer site to perform additional work thereafter, federal authorities indicate that the time spent by the employee in traveling to and from the customer site is compensable, but the law is uncertain with respect to time spent traveling back to the employer’s place of business. 

Although employers must pay non-exempt employees for time spent traveling on company business, they can pay them at a special, lower hourly rate if they inform the employees in advance (preferably in writing) that they will do so.  The rate used to pay employees for travel time cannot fall below the minimum wage.  Employers are wise to consider the potentially detrimental effect upon morale that may result if non-exempt employees are required to spend a substantial amount of time traveling at pay rates significantly below their normal rate. In some instances, the financial savings realized by the employer may be more than offset by the loss of goodwill and morale among affected employees. 

Calculation of hours worked is a seemingly basic step in the payroll process. Many mistakes result from misunderstanding the rules relating to travel time, however. Whether travel time should be treated as compensable hours worked can be a complex question that must be answered on a case-by-case basis rather than by mechanically applying a set of rigid rules. 

If you have any questions about travel time or any other issue relating to employment law, please contact one of our attorneys:

Daniel F. Pyne III
Richard M. Noack
Ernest M. Malaspina
Karen Reinhold
Erik P. Khoobyarian
Shirley Jackson