Travel Time Pay for Hourly Employees (2024 Update)

When it comes to travel time pay for hourly employees, things can get confusing for both employers and employees. If you run a business where your workers are paid by the hour but also have to travel for work, it’s important to understand what your obligations are and what your employees are legally entitled to.

Exempt employees don’t have to worry about this issue as much because they get a fixed amount of money in every paycheck, regardless of their travel time. However, for non-exempt employees, there are rules set by the government that say employers must pay them for the time they spend traveling.

In this post, we’ll go over everything you need to know about paying your hourly employees for travel time so your business can stay compliant.

What is Travel Time Pay?

Travel time pay refers to the money that employers are required to give their employees for the time they spend traveling to and from customer locations. It doesn’t include the regular travel from home to work.

In some emergency situations or when the employer asks the employee to do work-related tasks outside of their normal hours, the time spent commuting from home may be considered as paid time.

Travel Time Pay vs Break or Meal Time Pay

It’s important to note that travel time is different from break or meal time. According to the US Department of Labor, any break less than 20 minutes or longer breaks where the employee still has work duties must be paid.

If an employee is asked by their employer to travel during a full break or lunch period, that travel time is considered work-related and should be paid.

To avoid any confusion, it’s a good idea to have a separate policy in place that explains how lunch breaks and rest periods are handled in terms of pay.

Who is Entitled to Receive Travel Time Pay?

It’s important to understand that only certain employees, known as non-exempt employees, have the right to be paid for the time they spend traveling for work. This includes both hourly and salaried employees who fall into the non-exempt category.

On the other hand, there are employees called exempt employees who are not entitled to payment for work-related travel. In the United States, the Fair Labor Standards Act (FLSA) identifies different types of exempt employees, like executives, administrative staff, professionals, computer workers, and outside salespeople.

These exempt employees don’t get paid specifically for their travel time since they receive a fixed salary regardless of their travel obligations.

When Do You Have to Pay Hourly Employees for Travel Time?

Here are three common situations regarding paid work travel, but please note that these examples may not cover all possible scenarios.

Local Travel

If an employee’s job requires them to travel within their regular work hours, they must be paid for that time. This includes situations where they are engaged in work or waiting while traveling, even if it’s outside their normal work hours. However, employees who are on breaks or have enough time to do personal things are not eligible for payment during those periods.

Local Travel Example

Let’s say Rebecca is a personal assistant who drives her client, Steve, around town to run errands. If this travel is part of her job duties and occurs during her work hours, Sandra must be paid for that time.

Special One-day Assignment to Another City

If employees have to make a one-day trip to another city for work-related activities like conferences, classes, meetings, or similar events, you must pay them for the travel time to and from that city. However, you can deduct the time they would normally spend on their regular commute.

Some businesses choose to pay for the entire commuting time, but it’s not mandatory.

Special One-day Assignment to Another City Example

Let’s say Sheila works in your office and you send her to a conference. She travels from her home to the conference location and returns on the same day. The roundtrip takes her two and a half hours, while her regular daily commute is only 30 minutes.

In this case, you can deduct the 30-minute commute and pay her for two hours of travel time.

Overnight Travel

If a non-exempt employee travels away from home and stays overnight, you must count the hours they work on regular working days as well as work hours on non-working days (like weekends or holidays). However, you are not required to pay them for travel time that falls outside their regular work hours, unless they are working during that travel time (e.g., answering work emails or doing research on a work trip).

It’s important to note that these are general guidelines, and specific rules may vary depending on the location and applicable laws. You should familiarize themselves with the regulations in their jurisdiction to ensure compliance with travel time payment requirements.

How to Calculate Work Travel Time

One of the big challenges for business owners is figuring out how to calculate travel time pay accurately. It’s important to make sure that employees’ paychecks are fair and calculated correctly.

While you usually don’t have to pay for the time employees spend commuting between their homes and the workplace, other instances of work-related travel need to be accounted for. This includes adding the travel time to employees timesheets and paying them according to the law and company policies.

How Homebase Can Help Calculate Work Travel Time

Homebase is a time tracking tool that can make tracking travel time and managing employee hours much easier. It automatically tracks employees’ hours and locations while they’re on the move.

This means you can keep track of how much time your employees spend traveling for work. Homebase’s GPS time tracking feature lets you record drive time to different job locations.

GPS Time Tracking with Homebase

To make things even simpler, you can set up GPS Geofencing with Homebase. This allows for automatic tracking of when employees start and stop working based on their physical job location. With this feature, you’ll not only know how long it took employees to get to work sites but also precisely when they arrived and left.

Homebase also has features to streamline time tracking and invoicing. You can set different pay rates for travel hours and regular work hours, helping you streamline payroll. It also helps you handle overtime pay and helps you to plan employee routes and schedules to optimize travel time.

Travel Time Pay Rate Law by State

In some states, travel time pay rates must be the same as the rates for regular working hours, or they need to meet the minimum wage requirements at least. However, in other cases, travel rates might be calculated as a percentage of the employee’s normal pay rate.

California

In California, any travel time that exceeds an employee’s regular daily commute is considered compensable and must be paid at the agreed regular or overtime rates. Employers can set different rates for travel time, but they cannot be lower than the minimum wage.

New York

In New York, the minimum wage regulations cover work-related travel. Employees must be paid for travel time if it is part of their job duties.

Oregon

Oregon has different classifications for work travel time: portal-to-portal travel, travel between worksites, travel on special one-day assignments, and overnight travel. Generally, travel time pay is required for all types except for portal-to-portal travel (home-to-work and work-to-home).

New Jersey

In New Jersey, the Wage and Hour Laws ensure fair payment for travel time. When employees are required to travel between job locations as part of their work, they must be paid at the same rate as regular working hours.

Maryland

In Maryland, paid travel time is defined similarly to federal regulations. It includes travel during regular working hours, travel between job locations, and home-to-work and back travel in emergency cases.

Nevada

Nevada law states that any travel time considered as work should be paid at least at minimum wage rates. Additionally, any training requested by the employer must also be paid as it is considered work time.

Remember, these are general explanations, and specific regulations may vary. It’s essential for employers and employees to familiarize themselves with the specific laws in their state to ensure compliance with travel time pay requirements.

To make sure your business is following the rules, it’s important for them to understand the specific regulations about travel time pay in their area. Likewise, employees should be aware of their rights regarding travel time pay to ensure they receive fair compensation for the time they spend traveling for work.

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Travel Time Pay FAQs

How Do You Pay Travel Time for Employees?

The method of paying travel time for employees depends on various factors, including the applicable laws and company policies. Here are a few common approaches:

Paying at Regular or Overtime Rates

In many cases, travel time is paid at the same rate as regular working hours. However, if employees exceed their normal work hours or if the travel time falls under overtime criteria, it should be compensated at the appropriate overtime rate.

Different Rates for Travel Time

Some employers choose to set specific rates for travel time, separate from regular working hours. These rates may be negotiated or agreed upon before the start of job execution, but they should not be lower than the minimum wage rates

Lump Sum or Flat Rate

In certain situations, employers may opt to provide a fixed amount as a lump sum or flat rate to cover travel time. This can simplify calculations and ensure consistent payments.

What is Travel Time Pay?

Travel time pay refers to the compensation that employees receive for the time spent traveling for work-related purposes. It encompasses the hours spent traveling to and from job sites, client locations, meetings, or other work-related destinations.

While travel time pay regulations can vary by jurisdiction, it typically applies to situations where employees are required to travel beyond their regular commute. The purpose of travel time pay is to ensure that employees are fairly compensated for the time and effort spent on work-related travel.

It’s important for employers to understand the specific laws and regulations in their jurisdiction to ensure compliance with travel time pay requirements.

How Do You Pay Travel Time for Hourly Employees?

Paying travel time for hourly employees involves considering various factors, such as the specific laws in your jurisdiction and your company’s policies. Here are some common practices:

Calculate Actual Hours

One approach is to track and pay hourly employees for the actual time spent traveling. This includes the time spent commuting between job sites or client locations. Employees should be compensated at their regular hourly rate for these travel hours.

Paying at Overtime Rates

If the travel time causes hourly employees to exceed their regular working hours or if it falls under overtime criteria based on applicable laws, it should be compensated at the appropriate overtime rate.

Set Flat Rates

Some employers choose to establish fixed flat rates for travel time. This means paying a predetermined amount for each trip or assignment, regardless of the actual hours traveled.

How Do You Pay Non-Exempt Employees for Travel Time?

Paying non-exempt employees for travel time requires careful consideration of legal requirements and company policies. Here are some common practices:

Compensate Actual Travel Hours

One approach is to track and pay non-exempt employees for the actual time they spend traveling. This includes the time spent commuting between job sites, client locations, or other work-related destinations. Employees should be compensated at their regular hourly rate for these travel hours.

Apply Overtime Rates

If the travel time causes non-exempt employees to exceed their regular working hours or qualifies for overtime based on applicable laws, it should be compensated at the appropriate overtime rate.

Establish Flat Rates or Lump Sum Payments

Employers may choose to establish fixed flat rates or provide lump sum payments for travel time. This involves paying a predetermined amount for each trip or assignment, regardless of the actual hours traveled. However, it’s important to ensure that these rates comply with legal requirements, such as meeting or exceeding minimum wage rates.

Do Employers Have To Pay Hourly Employees for Travel Time?

The requirement to pay hourly employees for travel time depends on various factors, including the specific laws in your jurisdiction and the nature of the travel. Here are some general guidelines:

Regular Commute

In most cases, employers are not obligated to pay hourly employees for their regular commute from home to the workplace and vice versa. This is considered ordinary home-to-work travel and is typically not considered compensable travel time.

Work-related Travel

However, when hourly employees are required to travel for work-related purposes, such as going to client locations or job sites, the travel time may need to be compensated. If the travel time exceeds the employee’s regular commute or falls under specific criteria outlined in labor laws, employers may be required to pay hourly employees for that travel time.

It’s important to note that travel time pay regulations can vary by jurisdiction, so it is advisable to consult the labor laws in your specific location and seek legal advice to ensure compliance.

Additionally, establishing clear travel time policies and communicating them effectively to employees can help avoid confusion and promote fair compensation practices.

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