When nonexempt employees have to travel as part of their employment, whether from job site to job site throughout the day or across the country on a multi-day trip, federal and state wage and hour laws indicate that the employer may have to compensate the employee for some or all of the time spent traveling.  Federal regulations establish the baseline rules for travel time pay.  State regulations generally follow the federal rules, but in a few cases have stricter requirements.

Usually, employers do not have to pay employees for commuting from home to their regular workplace.  However, in California and Washington, if an employer requires employees to use employer-provided transportation such as a bus to get to work, employers must pay employees for the commute time.

Following are some examples of how an employer should pay nonexempt employees who are required to travel in the course of their employment with notes for differences in California, Oregon and Washington law where applicable.

Example 1
If an employee reports to his or her regular workplace and is then required to travel to another site to work for the day, travel time to the assigned workplace must be paid.  If the employee must return to his or her regular workplace at the end of the day, the employer must pay for the time spent returning to the regular workplace.  However, if the employee goes home from the assigned workplace instead of returning to the regular workplace, the employer does not have to compensate the employee for the time spent traveling home from the assigned workplace.

Example 2
If an employee has gone home after completing his or her regularly scheduled shift and is subsequently called out at night to travel a substantial distance to perform an emergency job for one of the employer’s customers, all time spent traveling is working time.  The federal regulations do not define, the term “substantial distance,” but for employers in Oregon, the state regulations define it as 30 miles or more.

Example 3
When an employee is required to report to a work site other than the regular site, and goes directly to that site without first going to the regular site, the employer must pay the employee travel time for any time in excess of the employee's normal commute time to and from the regular workplace.

Example 4
An employee whose regular work schedule is 8 am to 5 pm, Monday through Friday, works until 3 pm on Friday at his regular workplace in San Francisco.  The employee then goes to the airport, flies to Portland and arrives at a hotel in Portland at 8 pm.  He stays at the hotel overnight to attend a mandatory training session from 8 am to 3 pm on Saturday.  After the training session, the employee immediately travels to the airport and flies home.  He arrives at the San Francisco airport at 6:30 pm and returns home.

Under federal law, the employee would be paid only for the travel time that cuts across the hours of his regular shift whether on workdays or nonworkdays.  In other words, since the employee’s regular shift is from 8 am to 5 pm, he will be paid for any travel time that occurs between those hours on any day of the week including Saturday and Sunday.  In this case, the employee would receive travel time pay from 3 pm to 5 pm on both Friday and Saturday.

California regulations differ from the federal regulations in that they require the employer to pay for travel time whether or not it cuts across the employee’s scheduled hours.  Therefore, in this case the employee would receive travel pay for the time on Friday from 3 pm to 8 pm and on Saturday from 3 pm to 6:30 pm.

Compensation for Travel Time
Because traveling does not require the employee to employ his or her skills, pay for travel time may be at a rate of pay that is less than the employee's normal rate of pay.  In fact, the employer may pay the employee as little as minimum wage for time spent traveling.  The employee must be informed of the travel rate prior to beginning travel.  If the employee performs work while traveling, for example writing a report while on the airplane to the work site, the employee must be compensated at his or her regular rate of pay instead of the lower rate.

According to the regulations, the employer does not have to pay for time spent taking a break from travel in order to eat, sleep, sightsee or engage in other purely personal activities.

Paying Overtime for Travel Time
Since travel time is work time, overtime may be due for some travel.  If travel time and work time together exceed 40 hours in a workweek (or 8 hours in a workday in California), the employee must receive travel pay at overtime at the weighted average of his or her normal pay rate and the travel time rate, if any.  For example, an employee’s normal wage is $10 per hour and his travel wage is $6.90.  In one workweek, the employee performs 35 hours of work and 10 hours of travel.  Of the 10 hours spent traveling, 5 are overtime hours paid at one and one-half times the weighted average rate.  The hourly rate that the employer must pay for the 5 hours is $11.56.  This formula for determining the rate is as follows:
     35 hours of work X $10 (normal wage) = $350
     10 hours of work X $6.90 (travel wage) = $69
     Total for all hours worked is $419.
     $419 / 45 hours = $9.31 (average hourly rate for all hours worked)
     $9.31 / 2 = $4.66 (overtime premium for time and one-half)
     $6.90 + $4.66 = 11.56 (hourly rate for overtime hours spent traveling where
                                        time and one-half is owed)

If the employee is performing his or her normal job duties instead of traveling when the overtime is due, then the premium should be added to the employee's normal hourly rate instead of to the travel rate.  In this case the time and one-half rate would be $14.66 per hour ($10 + $4.66).

For California employees who work double time, the double time rate would be:
     $6.90 + $9.31 = $16.21 (travel rate plus the average rate if the double time is
                                          travel time)
     $10 + 9.31 = $19.31 (normal rate plus the average rate if the double time is
                                      normal work time)

Expense Reimbursements
Finally, in California, according to Labor Code §2802, employers must reimburse employees for all necessary expenses or losses incurred as a direct consequence of carrying out their duties.  In the case of an employee using his or her own personal vehicle to travel, this might include the appropriate mileage reimbursement or gas and maintenance in connection with the travel.

Questions?
If you have questions about travel time pay, feel free to contact HRCentral at info@hrcentral.com.