Travel time compensation: What employers need to know to stay compliant
The key to staying compliant with the Fair Labor Standards Act (FLSA) guidelines for employee travel time is dependent on whether the employees are engaged in travel as a part of the employer’s principal activity or for the convenience of the employer. Travel time that is determined to be work time is subject to both the minimum wage and overtime pay requirements under the FLSA.
The Portal-to-Portal Act
The Portal-to-Portal Act found in the FLSA provides that traveling or commuting to and from the location where work is performed at the beginning and at the end of the workday is not work time and is therefore not compensable (29 USC §§251 to 262). However, other travel time associated with an individual’s performance of his or her job is paid work time. In other words, the employee’s normal commute to and from the worksite is not compensable under the FLSA. This rule applies regardless of whether the employee works from a fixed location or at different worksites.
Commuting also includes the time employees spend walking from the parking lot to the worksite. (Dillon v. Northern States Power Co., 22 Wage & Hour Cas. (BNA) 1187 (8th Cir. 1976)). If an employee must report to a central meeting site to pick up equipment, supplies, itineraries, instructions, or coworkers, work time starts at that location (29 C.F.R. §785.35; see Marshall v. R&M Erectors Inc., 429 F. Supp. 771 (D. Del. 1977)).
Using an employer’s vehicle
Employees who drive a company vehicle or a vehicle provided by the employer do not need to be compensated for commute time if all of the following conditions are met:
- Driving the employer’s vehicle between the employee’s home and the worksite is strictly voluntary and not a condition of employment
- The vehicle involved is the type of vehicle that would normally be used for commuting
- The employee incurs no costs for driving the employer’s vehicle or parking it at home, and
- The worksites are within the normal commuting area of the employer’s establishment.
However, if the employee driver is required to pick up fellow employees before proceeding to work, the time spent driving is considered working time.
Where an employee drives an employer’s vehicle and performs activities that are incidental to the use of such vehicle for commuting, such time would not be considered hours worked if the travel is within the normal commuting range for the employer’s business. Also, the use of the employer’s vehicle must be by mutual agreement between the employer and the employee or the employee’s representative.
Travel time during the workday
The key to identifying whether travel time during the employee’s workday is compensable is determining whether the employees are engaged in travel as part of the employer’s principal activity.
If the travel time, before or after the workday, is not for the benefit of the employer or part of the employee’s principal activity, the travel time does not need to be compensated.
Out of town and overnight travel
The Department of Labor (DOL) takes the position that traveling out of town for a one-day period is compensable work time if the travel was performed for the employer’s benefit and at the employer’s request.
However, the DOL also takes the position that all travel time out of town is not necessarily compensable. The DOL specifically permits the employer to exclude the travel time between the employee’s home and the airport or railroad station as “home-to-work” travel time.
Another complicated issue in determining compensable working time is overnight travel. The DOL’s regulations provide that travel time is compensable work time when it occurs during the employee’s regular working hours (29 C.F.R. §785.39). This is true whether the employee actually performs work or not, as the employee is simply substituting travel for other work duties. (Boll v. Federal Reserve Bank of St. Louis, 365 F. Supp. 637 (E.D. Mo. 1973)). Moreover, if the travel occurs during normal working hours on non-working days (Saturday or Sunday for an employee who works Monday to Friday), the time is compensable.
Because of enforcement difficulties, the DOL does not count as working time overnight travel that occurs outside of regular working hours and is spent on an airplane, train, boat, bus, or car (29 C.F.R. §785.39). Therefore, it is advantageous to most employers to have their nonexempt employees travel after working hours. However, employees who perform work while traveling must be compensated (29 C.F.R. §785.41).
Travel time and remote work
Work from home arrangements and hybrid teleworking schedules raised many questions for both employers and employees during the pandemic. The DOL has stated in an opinion letter that for an employee who chooses to split their workday between teleworking and working in the office, with sufficient time in between to perform personal tasks, time spent traveling between home and work is not compensable as worksite-to-worksite travel (DOL Opinion Letter FLSA2020-19 (Dec. 31, 2020)).
However, the opinion letter also states that travel time, even in a teleworking setting, must be counted as hours worked when it is part of an employee’s principal activity, such as travel from worksite to worksite during the workday. The continuous workday doctrine requires compensation for the period between the commencement and completion on the same workday of an employee’s principal activity or activities.
In other words, an employee is generally not considered to be on duty, and the continuous workday doctrine does not apply, until they have performed their first principal work activity of the day – the first task that is integral and indispensable to the duties that they were hired to perform. Unlike ordinary commuting time, travel that is part of an employee’s principal activity, such as travel between different worksites between the start and the end of the workday, is considered part of the day’s work and is compensable (29 CFR § 785.38).
The only time travel during the workday is not considered compensable (other than a regular commute) is if the employee is completely relieved of their work duties and is free to use the time for their own personal purposes (29 CFR § 785.16). The opinion letter also states that when an employee arranges for their workday to be divided into a block worked at home and a block worked at the office, separated by a block reserved for the employee to use for her own purposes, the reserved time is not compensable, even if the employee uses some of that time to travel between home and office.
Remote worksites and 7th Circuit opinion
The DOL issued another opinion that clarifies compensable travel time for employees working on a job at a remote worksite (DOL Opinion Letter FLSA2020-19 (Nov. 3, 2020)). In the facts presented, the job site is a few hours away from the employer’s principal place of business. The employer provides hotel accommodations and stipends for meals during the job and directs the employees to use their personal vehicles to travel to the job site at the beginning and end of the job. The DOL considered three scenarios:
- For the employees who do as directed, their travel time is compensable if it cuts across normal work hours, even if they are traveling on a nonwork day.
- Some of the employees choose to travel to the employer’s place of business and ride as passengers in a company truck to the job site at the beginning and end of the job. The employer may count as compensable worktime either the amount of time accrued during a trip in the company truck or the time the employees actually take to travel to the remote job site.
- Some of the employees choose to commute to the job site every day. Their travel to and from the job site at the beginning and end of the job is compensable if it cuts across normal work hours, but intervening trips home and back to the job site are not compensable.
The 7th Circuit, covering Illinois, Indiana, and Wisconsin, issued a ruling on the compensability of travel time during remote assignments. (see Walters v. Pro. Lab. Grp., LLC, 120 F.4th 546). Typically, under federal law, travel time is not compensable for normal travel from home to work (29 C.F.R. Section 785.35). However, any travel that keeps an employee away from home overnight is travel away from home, which is considered working time when it cuts across the employee’s workday (29 C.F.R. Section 785.39).
The employer in the Walters lawsuit matched its employees with temporary work at client sites, which required the employees to travel to remote sites and work on assignments for days or weeks at a time before the employees were able to return home. The employer did not compensate the employees for the time they spent traveling to and from assignments during normal working hours.
The 7th Circuit ruled that this violated the FLSA and that the employees working away from home overnight are entitled to compensation for travel time that occurs during their regular working hours, and the travel time must also be counted toward overtime pay calculations. The court justified its ruling by stating that since the employees did not both leave and return home on the same days during these remote assignments, their travel did not count as an ordinary commute.
It further held that when the employer matches its employees with temporary work at client job sites, requiring the employees to travel to remote sites and work on assignments for days or weeks at a time before returning home, that travel cuts across their workday, meaning it occurs during their normal working hours. In this case, the employees are entitled to compensation, even travel on nonworking days is compensable so long as it occurs during what would otherwise be considered the employees’ normal working hours.
This decision is an important reminder that different FLSA rules apply to travel time compensation when overnight stays are required.
Key takeaways
- An employee’s ordinary commute between home and work and vice versa, is typically not counted as working time and is therefore not compensable.
- To be compensable, travel time during the workday must be a part of the employer’s principal activity.
- While overnight travel outside of regular working hours is not compensable, unless the employee performs work during those hours.
- Travel to and from remote worksites is compensable if it cuts across the employees’ working hours.
