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Everything you need to know about how, when, and where to pay your employees for travel time.
No matter where we work, we’re always on the move. From a regular commute to flying around the world for a big meeting, many of us travel in some way as part of our jobs. But we’re not necessarily entitled to be paid every time we step out the door on the way to the office.
When it comes to travel time pay, there can be lots of confusion around an employer’s obligations and what employees are legally entitled to. If you’re running a service-based business where your teams are paid hourly but are also often on the go while also on the clock, it’s crucial for you to be completely clear on how you view travel time pay and have the right tools to accurately track and manage it.
At its most basic, travel time pay is payment legally required for the time an employee spends traveling to perform professional activities requested by an employer. It's most commonly applicable to businesses that work with teams that are paid hourly, but it's also relevant for salaried employees in certain situations.
Legal frameworks in the U.S., Canada, and the United Kingdom each have their own payment schemes to compensate workers for time spent in work-related traveling. But here are specific definitions of what can be considered as “work travel.”
Typically, it refers to time spent traveling to and from customer locations and does not include home-to-work travel. The only cases when commuting from home might be counted as paid time is in emergency situations, such as when the employer requests the employee to visit a job location or execute certain work-related tasks outside of their regular work hours.
Travel time is not the same as break or meal time. The US Department of Labor states that any rest period less than 20 minutes, or a longer period where the employee isn’t fully relieved of duties, must be paid. If the employee needs to travel during a full break or lunch period for work they’ve been requested to do by their employer, then it is considered travel time and they must be paid for it. To clear up any possible confusion, you’ll want to have a separate policy in place covering lunch breaks and rest periods.
Only non-exempt employees are entitled to get paid for hours spent in traveling. This includes both hourly and salaried employees.
As a rule of thumb, exempt employees are not entitled to payment for work-related travel. In the case of the U.S., under the Fair Labor Standards Act (FLSA) this includes executive, administrative, professional, computer, and outside sales employees.
Travel time pay rates differ between countries and within the different states in the U.S. In some places, travel rates have to be the same as the rates for regular working hours, or have to be at least the minimum wage rates. However, travel rates can also represent a percentage of the normal pay rates.
Time spent in transportation from one work location to another is generally considered as time that should be paid to employees. With some specific exceptions, time spent in traveling from home to the job location and back is not paid. This is true even in cases when the employee uses an employer-provided vehicle for commuting home and to work.
Paid travel time for non-exempt employees can include the following activities:
Driving between job sites
Conducting work activities on a flight, bus, or train
Completing work-related tasks such as visiting institutions or collecting gear
Attending workshops, conferences, and events at the request of the employer
Collecting work tools from another location before the start of the workday at the job location
As for non-exempt overnight travel pay, employers are obliged to pay employees as they would for a normal working day, even if the trip falls on the weekend. The payment should be in addition to covering the travel expenses. The employee is considered on duty since the purpose of the trip is work-related. The usual time used for home-to-work travel (commuting) can be deducted from the total travel hours, since it is not counted as paid work time.
Typically, travel time pay for non-exempt employees is obligatory, applying to both salaried and hourly employees. Exempt employees are considered those providing professional or managerial work.
While time spent in traveling is often clearly included in the logged hours or as overtime for non-exempt salaried employees, the case with hourly employees can be more contentious. Despite that, employees working on an hourly basis should also receive financial compensation for time spent in work-related travel.
For employers working with hourly staff, drive time falls in the category of indirect labor costs. It’s important to know the cases in which such payments are due to make sure you’re following the laws in your location.
A variety of professionals and specialists can be entitled to work-related travel pay, such as:
Construction contractors - landscaping, maintenance, plumbing, electricity, HVAC, and many more
Medical care specialists - nurses, home care professionals, etc.
Service specialists - professional cleaners, caretakers, etc.
The U.S. Department of Labor defines what constitutes travel time, as set in the Fair Labor Standards Act. The specific non-exempt employee travel policies, however, vary based on the state you’re in. In many cases, the state has additional rules regarding travel time pay. When there are both federal and state regulations, it’s advised that employers follow the ones that are more beneficial for the employees.
A couple of states have their own additional regulations:
California considers compensable travel time any time which is longer than the usual daily commute of the employee. This applies to overnight out-of-town trips as well. Travel time has to be paid at the agreed regular fixed rates or overtime rates. Employers can set different rates for travel time prior to starting of the job execution, and they cannot be lower than the minimum wage rates.
Oregon legislation classifies four types of work travel time: portal-to-portal travel, travel between worksites, travel on special one-day assignments, and overnight travel. In general, travel time pay is due for all kinds, except for portal-to-portal travel (work-to-home and home-to-work).
In New Jersey, the Wage and Hour Laws include a fair payment for travel time. When an employee is required to travel between job locations to complete their work, the pay rate is the same as for regular working hours.
The definition of paid travel time in Maryland is similar to the federal one. It includes trips during regular working hours, traveling from one job location to another, and emergency cases home-to-work and back travel.
Nevada law states that any time that qualifies as work travel time should be paid at minimum wage rates, at the least. Any training requested by the employer must be paid as well, as it is considered as work time.
In Canada, travel time can be counted as paid work in certain situations. They include cases when an employee:
Uses a company vehicle home at the employer’s request
Transports supplies or other employees to or from job locations
Has to travel to a different than the usual location for work
Has to travel between different locations to execute regular work
The guiding principles when evaluating whether travel time has to be paid or not are:
Travel is inherent for the work
The work is commissioned and controlled by the employer
The employee is in charge of work tools or vehicles
As in the U.S., commuting to and from the usual work location is not considered as paid travel time.
The legislative framework in the United Kingdom is similar to those in Canada and the U.S. It is also harmonized with the legislation of the European Union, and more specifically, with the Working Time Directive and a 2015 decision of the European Court of Justice.
Paid time for which the minimum wage is due under UK laws includes any travels in connection with work. Transportation from one work location to another is also counted in the paid hours. However, travel time pay is not needed for commuting to and from the employee’s home.
One of the biggest challenges that business owners face in relation to travel time pay is how to calculate it, so that paychecks are fair, efficient and perfectly calculated.
Most employers don’t cover commuting between employees’ homes and work location, as it’s not legally required, but other instances of work travel have to be added to the employees' timesheets and paid in accordance with applicable laws and the company’s policies.
Hubstaff is a time tracking tool that helps companies easily and automatically track their employees’ hours and locations while they’re on the move. You can monitor deep insights into how much time employees actually spend on the road while on the job. Keep on top of how long your teams spend on the road by recording drive time to jobs with Hubstaff’s GPS time tracking feature.
Even easier, set up geofences for automatic start-and-stop time tracking based on physical job location, so you’ll know not only how long it took your teams to get to work sites but also exactly when they arrived and left.
To make time tracking and invoicing easier, Hubstaff offers additional features like setting different pay rates for travel hours and for work hours. It can also help you deal with the intricacies of overtime pay, as well as plan your employees’ routing and scheduling to optimize travel time and make sure everyone can focus on doing work that really matters.
Important Notice: The information in this article is general in nature and you should consider whether the information is appropriate to your needs. Legal and other matters referred to in this article are of a general nature only and are based on Hubstaff’s interpretation of laws existing at the time and should not be relied on in place of professional advice. Hubstaff is not responsible for the content of any site owned by a third party that may be linked to this article and no warranty is made by us concerning the suitability, accuracy or timeliness of the content of any site that may be linked to this article. Hubstaff disclaims all liability (except for any liability which by law cannot be excluded) for any error, inaccuracy, or omission from the information contained in this article and any loss or damage suffered by any person directly or indirectly through relying on this information.
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