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G2 Leader Fall 2024Everything 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 often on the go while also on the clock, you must be completely clear on how you view travel time pay and have the right tools to track and manage it accurately.
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.
According to Westlaw, the Portal-to-Portal Act states that employers are not required to pay for the time employees spend on activities occurring before or after performing the principal activities they are employed.
Understanding different travel types in employee compensation is essential for crafting appropriate internal policies.
Involves commuting between different work-related locations within the same general area.
Compensation may depend on factors such as distance traveled and company policies.
Generally, regular commuting time from home to the primary workplace is not compensable.
Requires employees to travel for a specific project, meeting, or event.
Guidelines should address compensation for travel time and time spent at the destination.
Rates or methods of compensation may be specified based on the nature of the assignment.
Involves more extensive compensation considerations.
Encompasses travel time, time spent at the destination, and accommodations.
Policies should address various aspects of compensation for overnight stays, ensuring fairness and compliance.
Employers need to establish transparent policies that address the nuances of each travel type, ensuring that employees are fairly compensated for their time and efforts.
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 are emergencies, such as when the employer requests the employee to visit a job location or execute specific work-related tasks outside the employee’s normal work hours.
Travel time is different from break or meal time. The US Department of Labor states that any rest period less than 20 minutes, or a more extended period where the employee isn’t fully relieved of duties, must be paid. If the employee needs to travel during a complete 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 a separate policy covering lunch breaks and rest periods.
Only non-exempt employees are entitled to get paid for hours spent 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 those for regular working hours or at least the minimum wage rates. However, travel rates can also represent a percentage of the standard 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 traveling from home to the job location and back is not paid. This is true even when the employee uses an employer-provided vehicle to commute home and work.
Paid travel time for non-exempt employees can include the following activities:
Driving to a different job site
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
Ordering work tools from another location before the start of the workday at the job location
As for non-exempt overnight travel pay, employers must pay employees as they would for a typical 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 for home-to-work travel (commuting) can be deducted from the total travel hours since it is not counted as paid work time.
Travel time pay for non-exempt employees is typically obligatory, applying to both salaried and hourly employees. Exempt employees are considered those providing professional or managerial work.
While time spent 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, hourly employees should also receive financial compensation for time spent on work-related travel.
For employers working with hourly staff, drive time falls under indirect labor costs. It’s essential to know the cases in which such payments are due to ensure you follow 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.
The State Labor Offices and the Wage and Hour Division Local Offices are the best sources for information on the rules of each state and region regarding travel time pay.
A couple of states have their own additional regulations:
California considers compensable travel time any time longer than the employee's usual daily commute. This applies to overnight out-of-town trips as well. Travel time must be paid at the agreed regular fixed or overtime rates. Employers can set different rates for travel time before starting the job execution, and they cannot be lower than the minimum wage rates.
In New York, the regulations for paying the minimum wage include work-related travel. The wage has to be paid for travel time when traveling is part of the employee's duties.
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 employees must travel between job locations to complete their work, the pay rate is the same as 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 also be paid, as it is considered 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 in 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 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 business owners face concerning travel time pay is calculating it so that paychecks are fair, efficient, and perfectly calculated.
Most employers don’t cover commuting between employees’ homes and work locations, as it’s not legally required. Still, other work travel instances must be added to the employees' timesheets and paid following applicable laws and the company’s policies.
Hubstaff is a time tracking tool that helps companies quickly and automatically track their employees' hours and locations while moving. You can monitor deep insights into how much time employees 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.
It's even easier to set up geofences for automatic start-and-stop time tracking based on physical job location, so you’ll know how long it took your teams to get to work sites and exactly when they arrived and left.
Hubstaff offers additional features like setting different pay rates for travel and work hours to make time tracking and invoicing easier. It can also help you deal with the intricacies of overtime pay, plan your employees’ routing and scheduling to optimize travel time, and ensure everyone can focus on doing work that really matters.
Creating travel time pay policies for remote and mobile workforces requires a careful approach to ensure fairness and compliance. Defining compensable travel time becomes crucial in remote work, where the boundaries between personal and professional space blur.
Employers may need to establish clear guidelines distinguishing between regular commutes and work-related travel for remote employees. This could involve outlining expectations for compensating travel time when employees must attend virtual meetings, conferences, or training sessions.
Additionally, policies may need to address situations where remote teams must travel to a physical office or other work-related locations, ensuring that such travel time is appropriately compensated.
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.
Use Hubstaff to pay your team for the work they do in the air and on the road.