Calculating Travel Time Pay for Workers

Calculating travel time pay for workers is not clear-cut and depends on many factors. The easiest way to think of the travel time regulations is to remember that basically, any travel on company business that cuts across the normal workday is compensable time worked, regardless of whether such travel occurs on a day the employee is normally scheduled for work.

Factors to Consider for Travel Time Pay

The wage and hour regulation states that whether time spent in travel must be considered working time depends upon the kind of travel involved.

1. The general rule is that “normal travel from home to work is not work time“. That means that the normal commute from home to work and vice-versa is not compensable. However, home to work travel and back again that falls outside of the regular hours may be compensable hours worked. For example, if the worker is called back to work somewhere on an emergency basis for one of the employer’s customers and must travel a “substantial” distance, the travel time would be compensable. The regulation does not provide that all such travel time is compensable; the decision would presumably be made on a case-by-case basis. Similarly, a special temporary assignment in another city would involve compensable travel time, but the employer could disregard the time corresponding to the normal home-to-work commute and the time spent on meals.
2. Time spent traveling between worksites during a workday is compensable. For example, if a worker reports to the main office to start the day and is then told to report to another job site, all time spent traveling to that worksite and back again to the main office will be paid. Some workers normally report to a number of jobsites each day as part of their duties; all such time is compensable. If the worker does not have to report back to the main office after finishing at the last jobsite, but instead returns directly home, the time spent returning home is not compensable.
3. Many questions arise concerning travel to other locations involving overnight stays; travel away from home is clearly work time when it cuts across the employee’s workday. The employee is simply substituting travel for other duties.” However, if the employee travels as a passenger outside normal working hours, the time is not compensable. An employee who serves as a driver or a pilot for other employees would be paid for the entire travel time. This same rule applies even in the case of travel on days not normally worked. For instance, if the normal hours are 8 am to 5 pm from Monday through Friday, and the employee must perform job-related travel on Sunday from 3 pm to 7 pm, the employer would need to pay only for the time from 3 to 5 pm. Similarly, work performed while traveling must be counted as hours worked.  According to a DOL wage-hour opinion letter issued on September 21, 2004, travel between an out-of-town worksite and the employee’s home that the employee undertakes for his or her own personal convenience, i.e., voluntarily, is not compensable.
4. Which state’s overtime pay takes precedence? The majority of states follow the federal guideline of over 40 hours/week, however some states have greater OT rules (Alaska, California, Nevada, Colorado).  Overtime would be based on the worked-in state, regardless of where the employer is based.
5. Per diem allowances: Per diem pay refers to a daily allowance or payment given to employees to cover expenses incurred while traveling for work. These expenses typically include meals, lodging, and other incidental costs. Per diem pay is usually a fixed amount determined by the employer or based on government regulations, and it’s meant to reimburse employees for their expenses rather than to directly compensate them for their work. Expense receipts in a per diem arrangement are not required.

The topic of compensation for a worker that travels is complex. It’s important for employers and employees to be aware of the specific laws and regulations governing overtime pay in the relevant jurisdiction, as these can vary from one location to another. Additionally, companies may have their own policies and procedures for calculating and managing overtime pay, which employees should be familiar with.

Where to Get Help

Achilles Group provides expert guidance to employers on compliance with Texas labor laws, including clear advice on overtime pay regulations, ensuring that businesses understand and adhere to the state’s requirements while managing employee work hours and compensation effectively.

If you are not already a client of Achilles Group and would like to learn how to gain expert guidance from compliance to leadership development for your business, please contact us.