travel time pay for hourly employees australia

• Commuting Time

Commuting Time and Travel Reimbursement

What is commuting?

Commuting refers to a worker's travel from home to work and then back home. Commuting is one of the primary activities, attached to a job, but not necessarily part of it. Travel, to and from work to home, takes our most productive time and is one of the difficult things to manage. With overcrowding of cities, commuting time has constantly increased. Workers spend time and/or money to reach their workplace; therefore saving both time and money is a usual concern for these workers.

Is commuting time paid?

Normal commuting time is not hours of work and thus not paid. However, if a worker is ordered to perform substantial work during traveling/commuting, this will be considered his work and duly paid. If an employer restricts an employee's ability to use his commuting time, as he himself would have desired, especially when that employee is traveling through an employer provided transport, such time has to be paid for by the employer. If an employer does not want to pay for commuting time, he must clearly tell his employees not to perform office related work, like using blackberry to respond to official email messages, during commuting hours. Commuting to work in a company owned vehicle does not make a worker eligible for compensation. However, if a worker performs some work, during this time, which is related to his principal work activity, he has to be paid. Similarly, if a worker is transporting other employees to or from the work site (as a driver) or have to pick up supplies or equipment to or from work; these activities are part of working hours and thus paid activities.

What are the international examples in Commuting?

Commuting time is also a measure of how long it takes workers to reach their workplace and then back home. This commute could be by foot, car, bicycle, bus or train. According to a study, world average commuting time is 80 minutes. Thailand is considered to have the longest commuting in the world while Malawi has shortest commuting time. A 2007 Gallup Survey (in USA), indicated that in a typical day, workers' average round trip commute takes 46 minutes. This means that average commuting time is more than 150 hours a year which is also double than average two working weeks of vacation time (80 hours). Similarly, according to UK Office of National Statistics (2011), 75% of the workers take around 1 hour for a round trip from home to work. However, commuting time is much longer for those living in London. 

What about road rage during daily commutes?

According to a survey by Career Builder (USA), 58% of employees experience road rage while traveling to and from work. Incidents of road rage are more common among workers with longer commutes. Road rage is associated with long commutes and running late. If you plan ahead by taking some extra time to reach office and request flexible work arrangements e.g., starting your work at off-peak hours, you can avoid road rage.

What is the alternative to long commutes?

In order to avoid long commutes, two alternatives of staggered hours and compressed workweeks have been used worldwide. Under Staggered Hours schemes, also called block-working arrangements, different starting and finishing times are fixed for different categories of workers. Once, these times have been determined by employer and employees, these can't be changed. These schemes are a way of easing problems of traffic congestion and overcrowded/overburdened public transport system during peak hours. If workers are allowed different starting and finishing times: there will be lesser traffic congestion thereby decreasing commuting time; there will be more rational usage of public transport system; and workers will feel less stress. Staggered Hours schemes are used widely in European countries like Italy, Sweden and Slovenia.

As for the Compressed Workweek Schemes (CWWs), the same number of (weekly) working hours is scheduled over fewer days thereby resulting in longer working days. For example, a 40 hour work week is usually worked at 8 hours a day and 5 days a week. These 40 hours can also be worked over 4 days (instead of 5); however daily working hours will increase to 10 hours a day. Now if that worker has completed 40 hours in 4 days, he can take 3 days of rest. Compressed Workweeks (CWWs) can also consist of higher than usual number of consecutive working days. In some industries like Oil and Gas industries, workweeks of longer duration i.e. longer than 5 days are introduced followed by the same number of rest days. For example, in Oil and Gas industries in Africa and Middle East, period of 21, 28 or 35 working days are followed by corresponding periods of rest. These schemes are used when there is long distance between workplace and workers' homes. In order to avoid these long commutes, e.g. European workers working in Middle East, CWWs are used. Incidence of CWWs is rather small when compared with staggered hours schemes. A study conducted in India shows that 18 of the 56 firms surveyed during the process have CWWs and these arrangements cover less than 15% of an organizations workforce. 

What is telework or working from home?

Teleworking or Telecommuting is the redesigning of work where workers work away from the workplace for a period of time. Some teleworkers workers work only from home/satellite office while others alternate between home and workplace e.g., working three days from home in a normal week. Telework is the work without any direct supervision. Teleworkers can either be employees or self-employed people.

Workers perform this work mainly through extensive use of information and telecommunication technologies. Telecommuting also supports green economy initiatives by reducing commuter traffic, pollution emissions. A survey by Society for Human Resource Management (SHRM) indicated that 40% or more of employers now offer telecommuting and 17% of the workers now telecommute either part or whole of the week. Figures in 2008 show that in the United States and European Union, around 16% of employees telecommuted for either part or all of their week.

What are the advantages or disadvantages of telework?

The Economist reported a 2008 study in US showed that 33 million Americans have jobs that can be done from home. If these workers started to telecommute, oil imports would drop by a quarter. This telecommuting would save so many hours that each worker could take an extra 25 days of holiday per year.

Advantages of Telework for Employers

       i.         Less workspace is required and other company costs are reduced (these costs are reduced by a half when workers telecommute)

     ii.         Teleworkers don't involve relocation expenses

    iii.         Cheap and high quality labor is employed through telework

    iv.         Lower expenses on office space and utilities

      v.         Employee morale/job satisfaction increases, although employees may be working longer hours

    vi.         Reduced absenteeism

   vii.         Increased productivity

Advantages of Telework for Employees

       i.         Monetary savings (commuting, office clothing, etc.)

     ii.         Reduced stress as there is no commuting involved

    iii.         Increased flexibility to balance work and family demands

    iv.         Increased control over work

      v.         Greater ability to participate in the labor force

Disadvantages for Employers

       i.         Delay of work due to communication lapses

     ii.         No monitoring system

    iii.         Cost of appropriate home office

    iv.         Company liability in case of an accident (workers compensation issues)

Disadvantages for Employees

       i.         Less social interaction and as a result career stagnation

     ii.         Exclusion from office decisions

    iii.         Family interference during working hours

    iv.         Workspace is taken away from living space

How common is the telework in the international labor market?

According to a special report from World At Work on Telework in USA (2011), the total teleworkers (employee+contract teleworkers) who work at least one day a month from home is 26.2 million in USA. Another study in US by Rane (2011) also observed that larger businesses are more likely to offer telework option to their employees. A report by Lister (2011) on telework in Canada also pointed out that 40% of jobs in Canada are compatible with telework, however only a meager 11% indicated that they worked from home.

In UK, around 13% of workforce is engaged in telework however most of these are self-employed. In the European countries, Scandinavians have the highest percentage of teleworkers, bordering on 70-80%.

A 2008 study about Japan indicates that 15% of Japanese workers are teleworking more than 8 hours in a week. Similarly, 12.6% of Australian workers are teleworking more than 8 hours in a week. Moreover, most of the software developers in India are employed as teleworkers.

(Statistics quoted here are taken from Deloitte Access Economics report on Telework)

What are different types of teleworkers?

Telework is the work done from a remote location, either as an employee or contract worker/self employed person. This definition describes two fundamental types of teleworkers i.e., employee teleworkers (working with the organization on full or part time basis) and  self employed contract workers (engaged with an organization as independent contractor or on self employed basis).

According to the Deloitte report, telework may be implemented in one of the many ways.

Hot desking .....worker is working most of time from remote location but also spends some time at main office. No permanent desk is assigned to the employee

Hoteling .....similar to hot desking however workspace is reserved.

Telework centre .....workstations or other office facilities are provided for use by workers from different organizations. It has been abandoned with the advent of high speed broadband and smart phones

Mobile Teleworkers ..... who work on the move and extensively use their smart phones.

Day Extenders ......who work from home during evenings or weekends on ad hoc basis

What are the characteristics of teleworkers?

According to a World at Work report (although focusing on US but its findings can be generalized), most of the teleworkers today are males, around 40 years and have college degrees. A good percentage even has post graduate degrees. Similarly, this report finds that home is still the most common place for telework although hotels and satellite centers are also gaining ground. 

• Staggered hours schemes
• Compressed workweeks
• Working time in the twenty-first century
• Flexibilizing Employment: An Overview
• Telecommuting: The Legal Landscape and Best Practices For Employers
• Best Practices of Telecommuting
• "Telework 2011" A WorldatWork Special Report
• Next Generation Telework: A Literature Review by Deloitte Access Economics
• Road Rage Common for Workers During Daily Commute

Travelling for work: expenses, reimbursements, and allowances

27 May 2022

By Katrina Sullivan

Not everyone enjoys commuting to work in the mornings, but for some employees, travelling for work is an inescapable part of their job. We’re not just talking about people like airline attendants or taxi drivers, for whom travelling is the very essence of their role , but also employees such as salespeople who are required to attend face-to-face meetings, area managers who visit numerous stores or sites, and vets or doctors who make house calls.

If you have employees who are required to travel away from their primary place of employment for work-related purposes, you must be suitably compensating them for such work.

In this article, we explain what travelling for work entails and the importance of getting expenses, reimbursements, and allowances right every time. So, let’s get into it.

If you have employees who are travelling for work as a required part of their duties, it’s important that you clearly outline how the travel expenses will be paid. Some examples include:

• the business provides the employee with the property they can use for work-related travel purposes such as a company car, a fuel card, or vouchers;
• the business bears the travel expenses by booking and paying for transport, accommodation, and meals in advance;
• the employee bears the travel expenses and is later reimbursed that amount by the business; or
• the employee is provided with a travel allowance or lump sum payment to cover the anticipated costs of travel.

Whichever method you choose for your business, it needs to be communicated to your employees. If an employee is allocated company property like a motor vehicle or fuel card, you should also think about whether the employee is permitted to utilise it for reasonable personal use or whether it should be strictly confined to authorised business use.

Reimbursements

If you’re required to reimburse your employees under their relevant award or enterprise agreement or work on a system of reimbursement of expenses incurred by an employee while undertaking work for the business, read on! You need to make sure you advise your employees to obtain and keep receipts for all expenses which should be produced to the business before the reimbursement will be made.

We also recommend that you implement a policy outlining what’ll be considered reasonable and unreasonable expenses or requiring that expenses be approved in advance by the business if you prefer.

Nearly every modern award , and some enterprise agreements, contain some form of vehicle or travelling allowance intended to compensate employees for the inconvenience of out-of-pocket expenses of travel. This is commonly expressed as a per-kilometre rate so you should require such employees to keep a detailed logbook of their work-related travel including recording the odometer at the start and end of each journey to ensure you’re paying them the correct allowance.

For salaried employees, you may wish to incorporate a vehicle allowance into the annualised salary amount. This’ll require an estimate of the kilometres the employee is expected to travel during the year, which may not always be easy to calculate. If in doubt, round up and round up again – the last thing you want is an underpayment claim when we’re only talking about a matter of cents per kilometre travelled.

Travelling time

Employees should usually be paid for time spent travelling for work-related purposes, as it’s part of their duties as much as answering phones, writing reports, or providing customer service.

Time spent getting to and from work doesn’t normally need to be compensated; the costs of this travel are borne by the employees themselves. There are exceptions to this under some awards or enterprise agreements, such as if the employee is being temporarily relocated from their primary place of work. Check the relevant award or agreement before deciding whether to pay for such travel.

Keeping track of travel expenses, reimbursements, and allowances can be tricky, but you can’t afford to get it wrong. For more information about how to manage travel for work, please reach out to our experts via our 24/7 Telephone Advisory Service .

Katrina Sullivan is a Workplace Relations Advisor at FCB and HR Assured. She provides specialised advice and support to multiple clients regarding a wide range of workplace and employment matters. She is particularly interested in the areas of industrial law policy development and employment dispute management.

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What obligations does an employer have to employees who travel for work?

Every day millions of Australians travel to and from work. The law has accepted that this is generally the employee’s responsibility, mainly because the employer does not have control of that environment.

However, when an employee is required to travel for work, that is a different matter.

A typical example of an employee who travels for work is a salesperson who is required to get out of the office to market and sell the goods or services of their employer.

Ensuring that the workplace is safe

It is important for all employers to know that they have obligations under occupational health and safety laws, which require an employer to provide a safe workplace to employees. Failure to provide a safe workplace can result in hefty fines and even criminal prosecution of an employer.

When you send an employee out of the office to do work, the workplace becomes wherever they travel for that work. You have an obligation to take all reasonable steps to ensure that that workplace is safe.

Accommodation and modes of transport must both be safe for employees

One such step might be to ensure that the mode of transport itself is safe, that for example travel by road includes regular breaks and that the transportation is suitable.

Obviously if a salesperson is travelling hundreds of kilometres, the employer needs to ensure that the vehicle provided is modern, safe and roadworthy.

The employer’s obligations might also extend to ensuring that accommodation is adequate and not in a dangerous part of town, particularly for an employee who is travelling alone.

Importance of adequate communications and keeping track of employees

Adequate communications are another important safety factor. For example, a reasonable step for an employer today might be to ensure that a travelling staff member has a hands-free phone system in any vehicle they are using.

Similarly, staff travelling in remote regional locations where mobile coverage is inadequate may require a satellite phone or long-range UHF radio.

An employer has an obligation to keep track of their staff member, even if that person is a senior member of staff and has a high level of autonomy. To ensure that staff member’s safety, the employer should have a well-documented system to ensure that contact is maintained with that employee and their safety ensured.

Remote work increases importance of robust work systems and comprehensive training

An employee out of the office travelling cannot be directly supervised. But this simply emphasises the importance of a well-documented system of work and appropriate training.

For example, that system of work might include directions to workers on what to do if they are faced with bullying or harassment by third parties. A worker should know that they do not have to subject themselves to highly stressful work situations or abuse on behalf of an employer to the detriment of their own health.

Management of risks even more vital when staff members travel overseas

All of these factors become even more important when an employer has an employee travelling overseas. It is the responsibility of the employer to understand and then train their staff member on all of the additional risk factors that exist in the other country.

Local customs and laws, dress codes, different law enforcement, extreme climate, potential exposure to toxins and disease are all part of the increased risks which an employer needs to ensure are taken into account to protect their staff.

Even something as simple as road travel can have deadly consequences when combined with poor medical facilities. Being prepared to incur the additional expense of hiring local drivers in good vehicles, combined with establishing a medical evacuation plan, would be reasonable steps for an employer to take for staff undertaking international travel.

For more information please see Can the boss force you to return to the office?

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Travel travesty: Employer forced to pay employee travel time

A recent decision of the Federal Court regarding payment for travel time could impact employers with similar terms in their enterprise agreements, particularly where workers are situated on large sites.

Despite travel time to and from work usually not considered to be ‘time worked’, in this case the Court rejected the employer’s interpretation of its enterprise agreement and found the employer was required to pay its employees for their bus travel from the site perimeter, up to the worksite where they commenced physical work.

The case is a timely reminder for employers to ensure that each clause of your enterprise agreement is drafted carefully to reflect the employer’s actual intentions, in order to avoid exposure for underpayments.

In this case, a union-backed class action was pursued by workers, in which they claimed that they should be paid for a 20-minute bus trip from their worksite to the security gates at the end of each shift. The worksite was the site of the Wheatstone Project, which is a large area stretching over 10 square kilometres in Western Australia.

The applicable enterprise agreement stated in relation to working hours: “ An Employee’s Project Working Hours shall start at the Employee’s prestart and finish at the inside of the Site Employee access gates ”.

The employer argued that travel time should be to the worksite itself, and not the site perimeter. However, the Federal Court ultimately determined that working hours included the time taken by the worker to reach the site access gates.

The Federal Court’s reasoning included:

• the enterprise agreement wording had expressed affirmatively when project working hours would start and finish;
• although the employer attempted to rely on an assertion that common law employees were not compensated for time travelling to and from work, this did not override the express terms of the enterprise agreement;
• the workers were dependent on their employer to arrange transport to get from their accommodation to work and back again, given the remote location of the site;
• the employer’s argument that wages are not payable unless ‘earned by a service’ was not consistent, as workers could be paid for journey time if recalled to a job or could be paid for being on standby.

The employer was therefore liable to pay travel time for the 20-minute bus trip since working hours included up until the workers arrived inside of the site access gates.

Lessons for employers:

This case highlights the need for careful drafting of enterprise agreements, as the unintended consequences of drafting errors can be significant, particularly where the clause concerned impacts the majority of employees on every shift.

Employers operating on large worksites on which workers are required to travel a considerable distance from the perimeter of the worksite to the place at which work is commenced (eg employees working at airports) should review applicable enterprise agreements and current practices to ensure they are compliant.

It is also advisable that employers seek assistance in drafting enterprise agreements to avoid costly disputes.

Case study: Sheehan v Thiess Pty Ltd [2019] FCA 1762 (1 November 2019)

This article was produced by HR Legal. It is intended to provide general information only in summary format on legal issues. It does not constitute legal advice, and should not be relied on as such.

Georgie Chapman

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{{item.title}}, my essentials, ask for help, contact edconnect, directory a to z, how to guides, salary and benefits, clause 19: travelling compensation and excess travelling time.

19.1 Travelling Compensation

19.1.1 Any authorised official travel and associated expenses, properly and reasonably incurred by an employee required to perform duty at a location other than their normal headquarters must be met by the Department.

19.1.2 The Secretary must require employees to obtain an authorisation for all official travel prior to incurring any travel expense.

19.1.3 Where available at a particular centre or location, the overnight accommodation to be occupied by employees who travel on official business must be the middle of the range standard, referred to generally as three star or three diamond standard of accommodation.

19.1.4 Where payment of a proportionate amount of an allowance applies in terms of this clause, the amount payable is the appropriate proportion of the daily rate. Any fraction of an hour must be rounded off to the nearest half-hour.

19.1.5 The Department will elect whether to pay the accommodation directly or whether an employee should pay the accommodation and be compensated in accordance with this clause. Where practicable, employees must obtain prior approval when making their own arrangements for overnight accommodation.

19.1.6 Subject to subclause 19.1.14 of this clause, an employee who is required by the Secretary to work from a temporary work location must be compensated for accommodation, meal and incidental expenses properly and reasonably incurred during the time actually spent away from the employee's residence in order to perform the work.

19.1.7 If meals are provided by the Government at the temporary work location, the employee is not entitled to claim the meal allowance.

19.1.8 For the first 35 days, the payment is:

(i) where the Department elects to pay the accommodation provider the employee receives:

(a) the appropriate meal allowance in accordance with Item 1 in Table 2 of Schedule 2, Part B; and

(b) incidentals as set out in Item 4 in Table 2 of Schedule 2, Part B; and

(c) actual meal expenses properly and reasonably incurred (excluding morning and afternoon teas) for any residual part day travel;

(ii) where the Department elects not to pay the accommodation provider the employee must elect to receive either:

(a) the appropriate rate of allowance specified in Item 3 in Table 2 of Schedule 2, Part B and actual meal expenses properly and reasonably incurred (excluding morning and afternoon teas) for any residual part day travel; OR

(b) in lieu of subparagraph (a) of this paragraph, payment of the actual expenses properly and reasonably incurred for the whole trip on official business (excluding morning and afternoon teas) together with an incidental expenses allowance set out in Item 3 in Table 2 of Schedule 2, Part B.

19.1.9 Payment of the appropriate allowance for an absence of less than 24 hours may be made only where the employee satisfies the Secretary that, despite the period of absence being of less than 24 hours duration, expenditure for accommodation and three meals has been incurred.

19.1.10 Where an employee is unable to so satisfy the Secretary, the allowance payable for part days of travel is limited to the expenses incurred during such part day travel.

19.1.11 After the first 35 days - If an employee is required by the Secretary to work in the same temporary work location for more than 35 days, the employee must be paid the appropriate rate of allowance as specified at Item 3 in Table 2 of Schedule 2, Part B.

19.1.12 Long term arrangements - As an alternative to the provisions after the first 35 days set out in subclause 19.1.11 of this clause, the Department could make alternative arrangements for meeting the additional living expenses, properly and reasonably incurred by an employee working from a temporary work location.

19.1.13 The return of an employee to their home at weekends, on rostered days off or during short periods of leave while working from a temporary work location does not constitute a break in the temporary work arrangement.

19.1.14 This clause does not apply to employees who have initiated working at another location.

19.2 Excess Travelling Time

19.2.1 A permanent or long-term temporary employee directed by the Secretary to travel on official business outside the usual hours of duty is entitled to apply and to be compensated for such time either by:

(i) payment calculated in accordance with the provisions contained in this subclause; or

(ii) if it is operationally convenient, by taking equivalent time off in lieu to be granted for excess time spent in travelling on official business.

19.2.2 Compensation under paragraphs 19.2.1(i) or 19.2.1(ii) of this clause is subject to the following conditions:

(i) on a non-working day - all time spent travelling on official business;

(ii) on a working day - subject to the provisions of subclause 19.2.5 of this clause, all additional time spent travelling before or after the employee's normal hours of duty;

(iii) period for which compensation is being sought is more than a quarter of an hour on any one day.

19.2.3 No compensation for travelling time is to be given in respect of travel between 11.00 pm on any one day and 7.30 am on the following day where the employee has travelled overnight and sleeping facilities have been provided for the employee.

19.2.4 Compensation for travelling time is to be granted only in respect of the time that might reasonably have been taken by the use of the most practical and economic means of transport.

19.2.5 Compensation for excess travelling time excludes the following:

(i) time normally taken for the periodic journey from home to headquarters and return;

(ii) any periods of excess travel of less than 30 minutes on any one day;

(iii) travel to new headquarters on permanent transfer, if special leave has been granted for the day or days on which travel is to be undertaken;

(iv) time from 11.00 pm on one day to 7.30 am on the following day if sleeping facilities have been provided;

(v) travel not undertaken by the most practical available route;

(vi) working on board ship where meals and accommodation are provided;

(vii) travel overseas.

19.2.6 Waiting Time

When a permanent or long-term temporary employee is required to wait for transport in order to commence a journey to another location or to return to headquarters and such time is outside the normal hours of duty, such waiting time is treated and compensated in the same manner as travelling time.

19.2.7 Payment

Payment for travelling time calculated according to subclauses 19.2.1 and 19.2.3 of this clause is at the employee’s ordinary rate of pay on an hourly basis calculated as follows:

19.2.8 The rate of payment for travel or waiting time on a non-working day is the same as that applying to a working day.

19.2.9 Time off in lieu or payment for excess travelling time or waiting time will not be granted or made for more than eight hours in any period of 24 consecutive hours.

19.2.10 Meal Allowances

A permanent or long-term temporary employee who is authorised by the Secretary to undertake a one-day journey on official business which does not require the employee to obtain overnight accommodation is paid the following allowances as described at Item 1 in Table 2 of Schedule 2, Part B:

(i) breakfast when required to commence travel at or before 6.00 am and at least one hour before the prescribed starting time;

(ii) an evening meal when required to travel until or beyond 6.30 pm; and

(iii) lunch when required to travel a total distance on the day of at least 100 kilometres and, as a result, is located at a distance of at least 50 kilometres from the employee’s normal headquarters at the time of taking the normal lunch break.

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Travel Time Pay for Hourly Employees (2024 Update)

By Andrea Nazarian

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.

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.

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 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).

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.

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 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.

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.

Remember:  This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.

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Rules of the road: Travel time pay for hourly employees

When to pay nonexempt workers for travel locally or on overnight trips baffles many employers. Mistakes can spark anything from mild complaints to class-action lawsuits—a black eye for you either way.

The Fair Labor Standards Act (FLSA) has rules on travel time pay for hourly employees. The best way to decipher them is using a case study.

Home-to-work travel

Let’s say Robert Smith is a nonexempt employee who sometimes travels for work. It’s clear that you don’t need to pay for his commute to work; the Portal-to-Portal Act of 1947 covers that.

But suppose you ask Robert to pick up some company documents along the way to work. In that case, you’d pay him from the time he picks up the documents. The law says that if the travel is for the company’s benefit, it is compensable. If it is purely commuting, it’s not.

Working at different locations

The U.S. Department of Labor says travel time spent by employees as part of their principal activity, such as travel among job sites during the workday, is considered “work time” and must be paid.

For example, say Robert reports to headquarters before making his rounds to visit other company locations. In that case, the commute to headquarters is commuting time, but all travel from headquarters until his last stop is paid time.

Time from the last stop to home is unpaid commuting time. Any travel that is a regular part of the employee’s job is paid time.

Out-of-town day trips

Generally, time spent traveling to and returning from the other city is work time. You can exclude the employee’s regular commuting time and meal breaks.

For example, say Robert drives to the airport and takes a 6 am flight to a seminar in Chicago. He arrives at 8:30 am and takes a cab to the seminar. The seminar runs from 9 to 5, with an hour lunch break. After the seminar, he chats with friends for an hour before taking a cab back to the airport. He flies back to his base city and drives home. Which hours count as “compensable” time?

You don’t have to pay Robert for his trip to the airport; that’s commuting time. But you do have to pay him from the time he arrives at the airport through his flight, cab ride and during the Chicago seminar. (You don’t have to pay for his lunch period.)

Do you pay for Robert’s chatting time with friends? If there are no other flights home until later, yes. But if Robert simply opts for a later flight to swap stories with his buddies, the answer is “No.” The cab back to the Chicago airport and the flight home are paid time. The drive home from the airport is considered unpaid commuting time. Final tip: Make sure nonexempt employees understand when they will be paid before they travel. Spell out the rules clearly in your employee policies.

Know the FLSA rules for rest periods, on-call time, training and more

In addition to travel time, employers face many other questions about what counts as “compensable time” under the FLSA. Here are answers to some of the stickier issues:

ON-CALL TIME. Employees required to remain on call on the employer’s premises are considered working while on call. Employees required to remain on call at home (or who can leave a message where they can be reached) are considered not working (in most cases) while on call.

WAITING TIME. Employees are paid for waiting time when they are “engaged to wait.” Employees fall under that definition if they’re required to be at a work site while waiting to perform work.

REST AND MEAL PERIODS. You typically must pay employees for short rest periods, usually 20 minutes or less. You generally don’t need to pay employees for bona fide meal periods (typically 30 minutes or more).

Employees must be completely relieved from duty during unpaid breaks and meal periods. Example: If you require your assistant to eat lunch at her desk in case a call comes in, she must be paid because she hasn’t been fully relieved of her duties.

Note: Many states set their own rest-break and meal-break laws. For more information on state break requirements, see www.dol.gov/general/topic/workhours/breaks .

SLEEPING TIME. Employees required to be on duty for less than 24 hours are considered “working,” even if they’re permitted to sleep. Employees required to be on duty for 24 hours or more may agree with their employer to exclude from hours worked any scheduled sleeping periods of eight hours or less.

TRAINING PROGRAMS AND MEETINGS. You don’t have to pay employees for time spent at training programs, lectures or similar activities as long as they meet the following four criteria: (1) The event is outside normal hours. (2) It’s voluntary. (3) It’s not job-related. (4) No work is performed during that time.

Source: Adapted from DOL Fact Sheet No. 22 .

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Travel Time

Time spent traveling during normal work hours is considered compensable work time. Time spent in home-to-work travel by an employee in an employer-provided vehicle, or in activities performed by an employee that are incidental to the use of the vehicle for commuting, generally is not "hours worked" and, therefore, does not have to be paid. This provision applies only if the travel is within the normal commuting area for the employer's business and the use of the vehicle is subject to an agreement between the employer and the employee or the employee's representative.

Webpages on this Topic

Handy Reference Guide to the Fair Labor Standards Act - Answers many questions about the FLSA and gives information about certain occupations that are exempt from the Act.

Coverage Under the Fair Labor Standards Act (FLSA) Fact Sheet - General information about who is covered by the FLSA.

Wage and Hour Division: District Office Locations - Addresses and phone numbers for Department of Labor district Wage and Hour Division offices.

State Labor Offices/State Laws - Links to state departments of labor contacts. Individual states' laws and regulations may vary greatly. Please consult your state department of labor for this information.

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Allowances, penalty rates and other payments

Employees may be entitled to a higher pay rate for working at particular times of the day or on certain days of the week.

On this page:

Penalty rates, allowances or other entitlements, stand downs and pay during severe weather or natural disasters, tools and resources, related information.

Some employees may be entitled to a higher pay rate for working at particular times of the day or on certain days of the week. This may include:

• working on a weekend or public holiday
• working late at night or early in the morning
• working extra hours.

Find out more on our Penalty rates and Overtime pay pages. 

Employees may also be entitled to an allowance or other entitlements where they:

• need to wear special clothing at work
• work in a workplace that damages or dirties their clothes or footwear
• use their own vehicle for work
• spend time travelling for work.

Find out more on our Allowances and Uniforms, vehicle and travel entitlements pages.

Use our Pay and Conditions Tool  to calculate penalty rates and allowances in your industry.

The specific penalty rates or allowances that an employee needs to be paid depends on the award, agreement or other industrial instrument that applies. There can be other workplace arrangements in place that affect this including salary arrangements, employment contracts or individual flexibility arrangements (IFAs).

Employees need to be paid at least the amounts that they’re entitled to under the applicable award, regardless of the workplace instrument or arrangement in place.

There are limited circumstances where an employer can stop paying an employee or an employee’s pay and entitlements can be reduced. This includes:

• where an employee has been stood down because there is no useful work for an employee due to events beyond the control of the employer
• events such as severe and inclement weather where it is unreasonable or unsafe to continue work, or
• when a natural disaster affects a business.

Find out more at:

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When Must I Pay Employees for Travel Time?

Travel Time vs. Commuting Time

Image by Jo Zixuan Zhou © The Balance 2020 

In general, your business should pay employees for the time they spend traveling for work-related activities. You don't have to pay employees for travel that is incidental to the employee's duties and time spent  commuting  (traveling between home and work). Travel time can include both local trips and travel away from home. 

Travel vs. Commuting Time 

Commuting is going back and forth to work. Everyone (at least everyone who doesn't work at home) commutes to a job. Commuting time is personal time, not business time. The IRS does not allow businesses to deduct commuting time as a business expense, and employees should not be paid for the commuting time.     

The Department of Labor (DOL) discusses employees who drive employer-provided vehicles. The DOL considers the time spent in home-to-work travel by an employee in an employer-provided vehicle, or in activities performed by an employee that are incidental to the use of the vehicle for commuting, generally is not "hours worked" and, therefore, does not have to be paid.  

Here's a possible rule of thumb: If your business authorizes a trip by an employee, no matter how the employee travels (car, train, bus, etc.) you should pay for the employee's travel time. 

Travel time for hourly and salaried employees may be counted differently. Pay to employees for local travel time is only applicable to non-exempt (hourly) employees, not to exempt (professional or managerial) employees.     Exempt employees are paid for their expertise by the job, not by the hour.  

Different Types of Travel Time:

Home to Work Travel , as explained above, is commuting time, not work time, and it's not paid.

Travel on Special One Day Assignment in Another City. The DOL says "the time spent in traveling to and return from the other city is work time," but they note that you may deduct the time the employee would spend commuting.

Sara works in an office in your company, but you send her to another city on a special assignment. She leaves from her home, goes to the city, and comes back home the same day. She spends 3 hours traveling (1 1/2 hours each way) from home to the other city. She would normally spend 30 minutes total driving from her home to work and back, so you could deduct the 30 minutes and pay her for 2 1/2 hours of travel time.

Travel That's Part of the Employee's Normal Work. Time an employee spends traveling is part of the job. You must count this time as work time. The time the employee spends going to the first job site, and home from the last job site, is commuting time and isn't paid.  

An LPN (licensed professional nurse) works for a nursing facility and travels between the two locations of this facility, providing care for patients at both locations. Her daily travel time between these locations must be included in her pay because she is not commuting. But she can't count the time driving from home to the first location or the time back home from the last location.

Travel Away from Home. If travel includes an overnight stay it is travel time. The DOL doesn't include travel away from home outside regular hours as a passenger on an airplane, train, boat, bus, or car as work time. But you must count hours worked on regular working days and work hours on nonworking days (weekends and holidays).  

If an employee travels from Cleveland to Pittsburgh for a two-day seminar at the direction of your company, you must pay for the hours the employee would have worked in a normal workday for each of those days, even if they were on Saturday or Sunday.

Incidental vs. Work Travel: Paid or Not Paid?

• An employee drives to work from his home every day. You ask him to stop on his way and pick up bagels for the staff meeting. This driving time is not paid. Time commuting to work is never paid time; the time to stop for the bagels is "incidental" to the commuting and is not part of the employee's job. 
• You ask an employee to drive to a store on work time to get bagels for the office meeting. If the employee makes this trip during normal work hours, he or she should be paid. 

Also, you might want to contact an employment attorney to discuss these issues. 

Paying for Travel Expenses

In addition to paying employees for travel time, you should pay their expenses for travel. The Department of Labor doesn't require reimbursement for travel expenses, but it makes sense to pay employees if you require them to travel.   Your business can deduct employee travel expenses as a business expense.   If employees mix business and personal travel, you need to sort out the part that is business-related and pay only these expenses. 

State Regulations on Paying for Employee Travel

Check with your state labor department to see if there are any rules which might override the federal rules. Contact the nearest local office of the U.S. Department of Labor for information on specific instances of travel time that affect your business.

Internal Revenue Service. " Publication 535 (2019): Business Expenses ," Page 5. Accessed May 26, 2020.

Internal Revenue Service. " Travel & Entertainment Expenses ," Page 3. Accessed May 26, 2020.

U.S. Department of Labor. " Travel Time ." Accessed May 26, 2020.

Electronic Code of Federal Regulations. " Travel Time ." Accessed May 26, 2020.

U.S. Office of Personnel Management. " Fact Sheet: Hours of Work for Travel ." Accessed May 26, 2020.

U.S. Department of Labor. " Fact Sheet #17D: Exemption for Professional Employees Under the Fair Labor Standards Act (FLSA) ," Pages 1-3. Accessed May 26, 2020.

U.S. Department of Labor. " Fact Sheet #22: Hours Worked Under the Fair Labor Standards Act (FLSA) ." Accessed May 26, 2020.

U.S. Department of Labor. " Opinion Letter FLSA 2018 ," Page 2. Accessed May 26, 2020.

U.S. Department of Labor. " Reimbursed Travel Expense Payments ," Page 1. Accessed May 26, 2020.

Internal Revenue Service. " Topic No. 511 Business Travel Expenses ." Accessed May 26, 2020.

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When Do Employers Have to Pay Employees for Travel Time?

Deanna deBara

For some small businesses, traveling to meet clients, make sales, and manage day-to-day activities is a must. For others, traveling is valuable for attending conferences, participating in networking events, or undergoing specialized training.

But if it's your employees doing the traveling, do you need to pay them for that time? Whatever your preferences are as a small business owner, the  legal  answer is: that depends.

Let's explore when you need to provide travel time pay for hourly employees, which employees are entitled to that pay, and, if they are entitled, how much you'll need to pay them. 

Who Is Entitled to Travel Pay?

All  non-exempt employees  are entitled to travel pay during normal work hours and when they are actively working outside of those hours. They aren't entitled to travel pay for doing their typical commute, according to the  Fair Labor Standards Act  (FLSA).

Non-exempt employees are typically paid an  hourly wage  and are paid less than $684 per week or $35,568 per year. 

These rules don't apply to exempt employees, and therefore it's up to you whether you want to pay them to travel.

What's more—your state may have some extra rules, so make sure to check your state's Department of Labor or Wage and Hour Division website.

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

But when, exactly, are these employees paid to travel? Compensable work time needs to be paid when employees travel:

• Locally: You need to pay employees when they travel locally as part of their regular duties (for example, from your office to a supply store). And if that travel happens outside of the employee's regular workday hours (even if they're only waiting to travel, like sitting at a bus stop or train station)? You still need to pay.
• Between worksites: Employees get travel pay when traveling between worksites. For example, a courier who transports materials between different job sites must be paid for the time spent traveling. Similarly, plumbers who travel between customers' homes are eligible for travel pay.
• For special one-day assignments: You must provide travel pay for hourly employees who travel out of town, even if they return home at the end of the workday—though you can deduct the employee's normal commute time from the total payment. For example, let's say an employee spends a total of two hours traveling to and from a work conference (which takes place during normal working hours). Because her typical daily commute takes 30 minutes, you would only need to pay for 1.5 hours of traveling (in addition to regular hourly wages).
• Overnight: Employees traveling overnight are due travel pay during their regular working hours and any time they spend working outside of those regular hours (for example, participating in late-night conference calls while on a train). You also need to pay employees for traveling during their regular working hours, even on non-working days, like weekends, holidays, or their normal days off.

Bonus tip : The best way to track travel time for your employees? Time tracking software like  Hourly . Workers clock in right from their phones, and the platform automatically tracks their location, hours and what project they're working on—which you can see in real-time. Another perk? You can run payroll with the click of a button.

How Much Do You Have to Pay Employees for Travel Time?

Employees traveling for work need to be paid at least the minimum wage, but they can be paid more or less than their normal pay rate.  

If you want to pay a different rate than an employee's hourly wage, you'll need to:

• Tell the employee they will be paid a different rate before they begin their trip.
• Make sure the hourly rate for travel pay doesn't cause the employee's total pay for all workable hours to  fall below minimum wage  (state, local or federal—whichever is highest) or result in incorrect overtime pay.
• Ensure that you're not violating their employment contract.

This gives you the flexibility to offer a higher rate of pay as an incentive for traveling outside of regular business hours—or, if you decide to pay less than their typical rate (but still minimum wage or above!), it can help make sure that paying for travel won't interrupt your cash flow or cause other financial concerns for your company.

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When Do You NOT Have to Provide Travel Time Pay for Hourly Employees?

Exempt employees—like outside salespeople, executives, managers, administrators, and even IT personnel—aren't entitled to travel pay. And non-exempt workers? They're  not eligible for travel pay  when they are:

• Commuting: An employee's commute—the time spent driving from their home to work (and from work to home)—doesn't qualify as travel time. This also includes the time spent driving from accommodations/lodging (like a hotel) to a work location, like a client's office or conference center.
• On break or during personal time : Non-exempt employees aren't entitled to travel pay during breaks (including meal periods and time spent sleeping) or when they can spend their time how they see fit. In other words, you don't need to pay for traveling during the time an employee can go shopping, sightseeing, or out to eat.
• Away from work and not working : Employees on overnight travel or business trips don't need to be paid outside of regular working hours  unless  they're working during that time period. For example, an employee who regularly works 9 a.m. to 5 p.m. Monday through Friday only needs to be paid for traveling on a Saturday if they travel during their normal working hours (i.e., 9 a.m. to 5 p.m.)—unless they're working  outside  of those hours too (like answering customer support emails or counting inventory).
• A passenger: You don't need to pay for travel when an employee is a passenger (in any sort of vehicle) and isn't doing work outside of regular work hours. The only exceptions occur when you  require  an employee to drive the vehicle or be actively engaged in working (like riding to a job site while handling customer calls or riding as a passenger in a client's vehicle).
• Choosing to drive themselves : If you offer to pay for an employee's travel method (like airfare, a bus ticket, or a train ticket) and the employee requests to drive instead, the employee is only entitled to travel pay while driving during their regular work hours. In other words, if an employee requests to drive themselves vs. taking public transit, you don't need to pay for travel outside of the employee's regular shift.

In other words, a non-exempt employee  isn't entitled to travel pay  unless they are driving, traveling during their normal working hours, or actively working while traveling.

Does Travel Time Count Towards Overtime?

Yes, travel time counts toward overtime, and you'd owe them 1.5 times their regular rate for any hours worked over 40 while they're traveling.

What if your pay rate for traveling is different from an employee's regular wages? Then it gets a little more complicated. 

In that case, you need to use the weighted average of the two overtime rates to get their final pay. Here's an example: 

Let's imagine one of your employees is pulling a 40-hour week at the office. Their rate? $15 per hour. So that gives them $600 for their regular workweek (that's 40 hours multiplied by $15 per hour). Now, during that same week, they also spent 8 hours traveling as overtime, for which you're paying them $11.25 per hour. This gives them an extra $90 (which is 8 hours multiplied by $11.25 per hour).

Add these together, and their total straight-time pay for the week is $690.

Now, to figure out their average rate for the week (including travel time and regular office time), you need to divide this total pay by their total hours worked. In this case, it's 48 hours in total (40 regular hours plus 8 overtime hours). So, $690 divided by 48 hours gives you a weighted average rate of $14.375 per hour.

But they've already been paid for all 48 hours at their respective rates, right? For the 8 hours of overtime, what you owe them is an extra half of that weighted average rate. That's what we call the "overtime premium." Half of $14.375 is about $7.19. So, the overtime pay would be 8 hours (overtime) times $7.19, which comes out to $57.52.

To get their final paycheck, you add this overtime pay to their straight-time pay. So, $690 (straight-time pay) plus $57.52 (overtime pay) equals $747.52. As a business owner, using the weighted average method to calculate the overtime rate, you'd be paying out $747.52 for this employee's week of work, including their overtime.

Additionally, if you pay for travel time that isn't  required  to be paid (like commuting), you  can't count them as hours worked  for overtime purposes.

Travel Time Pay Best Practices

Handling travel pay can be complex and difficult at first. But it doesn't have to be! Use these best practices to simplify paying your employees for working on the go.

Create a Travel Policy

If your small business sends employees to different locations, you need to establish a written travel policy—and include it in your employee handbook. 

Your travel policy should outline which situations result in compensable travel time (like attending conferences or visiting different job sites), as well as any exclusions where employees won't be compensated (like an employee's regular commute or traveling as a passenger on non-working days).

If you pay a different hourly rate for time spent traveling, make sure to include it in your policy. Then, have employees sign the policy to acknowledge they understand it and agree to its terms—and then add the signed document to their employee file.

Track Hours Traveled

As a small business owner, you need to track employee travel time to follow  labor laws  and make sure their paychecks are accurate. 

Though you can ask employees to record and document the time they spend traveling—which can help you make sure your records are accurate—the responsibility for doing so is ultimately on you.

Pay for or Reimburse Travel Expenses

The U.S. Department of Labor (DOL) doesn't require you to pay for your employee's travel expenses.

Still, if you're sending your employees out of town, you  should  pay for the cost of travel—like tickets and lodging. 

If you don't, your employees are almost guaranteed to get frustrated that they have to pay for expenses out of pocket—and that frustration could lead to issues with employee engagement and retention.

When writing your travel policy, outline which travel expenses your company covers. If you expect employees to front some or all of the travel expenses, detail your procedure for requesting reimbursement and how to track expenses (like mileage or airfare).

You might also want to provide some form of  per diem  or stipend that helps employees pay for small travel expenses, like food. 

This can either be an allowance per meal period (like $15 for breakfast, $20 for lunch, and $40 for dinner) or a specific amount that the employee can use throughout the trip (like $50 per day or $150 for the weekend). Have your employees save and submit their receipts to avoid taxation. You can also consider a company card to lessen the burden on your team's bank account.

Check With Your State's Laws

In addition to federal law, some state laws apply additional regulations to travel time. This means rules can vary based on the state you operate in. For example,  compensable work time  in California includes riding as a passenger in a vehicle when traveling for work.

But which set of employment laws should you follow? You should apply the set of rules that provide the highest payment to your employees. So, if your state regulations specify that certain activities qualify as compensable—even if the FLSA does not—you need to pay for time spent traveling.

(For guidance about your state's specific laws and guidelines, contact your  state's Department of Labor  and local  Wage and Hour Division .)

FAQs About Travel Time Pay for Hourly Employees

Do remote/hybrid workers qualify for travel pay.

A  remote or hybrid worker  qualifies for travel pay when you require them to travel to your place of business or another venue (like a conference hall, training facility, or client location) and they:

• Live far away from the regular worksite (requiring an overnight stay or significant travel time)
• Are only expected to work on-site by request or on a day they're not normally required to be on-site

However, remote/hybrid workers  aren't  entitled to travel pay when:

• Your policy specifies that both an employee's home/remote office and your office are considered primary work locations
• They are expected to work on-location on certain days
• The time spent traveling to the office is considered an employee's commute (even if they are a remote or hybrid worker)

Do employees who drive/travel as part of their job qualify for travel pay?

The  FLSA requires  you to pay employees their regular hourly wages when they are driving or traveling as part of their job responsibilities. For example, bus or delivery drivers should be paid their regular wages while on the job.

Compensating Your Employees for Traveling Doesn't Need to Be Difficult

Traveling for business can take a toll—both on the road and off. Paying travel time for hourly employees can incentivize them to hit the road when necessary and make up for the time they spend away from their families and lives. 

Once you've determined which employees qualify for travel time pay, implement a clear travel policy (that adheres to state and federal law) and use management tools (like  Hourly !) to maintain accurate records and compensate your employees for time spent traveling.

Will a Minimum Wage Increase Affect Your Paycheck?

Is a Payroll Gross-Up Good for Attracting New Employees?

Mandatory Overtime: Can You Force Employees to Work Overtime?

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Travel Time Pay for Construction Workers: A Quick Guide

• Published : May 20, 2022

Nic De Bonis

• May 20, 2022

Employee Time Tracking

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Most construction workers are paid by the hour, but what are the rules for travel time pay for construction workers? Once construction workers clock in at the beginning of the day, they need to be compensated for their time.

Does The Fair Labor Standards Act Address Travel Time Pay for Construction Workers?

In the Fair Labor Standards Act (FLSA), the Department Of Labor explicitly states that time spent by an employee in travel as part of their principal activity, such as travel from job site to job site during the workday, is work time and must be counted as hours worked.

In simple terms, the FLSA requires that employees be paid for all hours worked. This includes any time spent working at the job site as well as any time spent traveling to and from the job site if the travel is considered part of the job. 

Time spent traveling will further be included in work time when it comes to required breaks. If an employee is entitled to a break after four hours of working and travel four hours to a work site, they would immediately need to have a break upon arrival.

Note that no law set by the Department Of Labor requires employers to pay employees for their home-to-work travel (normal commuting). So, an employee’s commute from their home to their regular job location would not be factored in. However, if the employee is sent to a new remote job site further away on a temporary basis, the employee will need to be compensated.

Is Travel Time Pay For Hourly Employees Subject To Standard Wage And Hour Laws?

In most states, employers have the flexibility to determine how much they pay for travel time. In other words, an employer can pay a different hourly rate for travel time as it pays for all other working hours. If you decide to pay a different rate:

• Make sure that you notify the employee of the separate rate in advance of the travel.
• Make sure the rate is sufficient to cover the minimum wage for all compensable hours.
• Make sure you check your local state regulations to double check your state doesn’t require the same rate to be paid (see next section).

Paying a different rate for travel time impacts the regular rate of pay for overtime purposes making it much more complicated to calculate weekly overtime pay . Employers that decide to use a different hourly rate over travel time should consult their accountant/hr advisor on how to calculate overtime pay for employees working at two or more rates.

What Are the State Regulations for Travel Time Pay for Construction Workers?

State laws and regulations related to travel time pay can vary widely. Some states have specific laws that address the issue of travel time pay for construction workers, while other states have no such laws.

Travel time is considered to be any travel time over the regular commute. Travel time must be paid at regular rates or overtime rates, but employers can set different rates for travel prior to the start of a job. It cannot be lower than the minimum wage.

Regular work hour trips, site-to-site trips, and emergency home-to-work and work-to-home travel are all included in paid time.

An employee must be compensated for their travel time at the same rate as their regular wages.

A minimum wage must be paid for travel time.

Work travel time can be paid at minimum wage rates.

There are four types of travel: between worksites, portal-to-portal, one-day, and overnight. Travel pay is not due for portal-to-portal travel (regular commutes).

It’s important to know the compliance laws in your state—and it’s worth it to check with your board of labor in advance if you have questions about these regulations. In general, most employers will need to pay out employees at their regular rate for any business travel that is done during their work hours.

Do I Need Reimburse Employees For Mileage?

If your employees are using their own vehicles for driving between job sites, it’s typically expected that an employee is reimbursed for the miles driven. According to the  IRS , the standard mileage reimbursement rate is 62.5 cents per mile driven for business in 2022.

There’s actually no federal requirement for mileage reimbursement,  but there are different requirements for travel time based on state. The exception is if the costs of mileage would bring the employee under minimum wage—then the employee needs to be brought up to minimum wage. 

There are only three states that require that companies reimburse their employees for mileage : California, Massachusetts, and Illinois. Still, because it’s standard for the industry, it’s often necessary to remain competitive.

Check out this guide on employee mileage reimbursement for more information.

How To Accurately Track Travel Time Pay

Tracking travel time between each job site is really difficult. If you’re relying on an honor system you’re probably overpaying and could be saving thousands of dollars.

The good news is that there is a better way. Construction companies are increasingly rolling out GPS time clock apps across their team of construction workers to accurately track driving routes, travel time, and mileage. These apps are easy to adopt for construction workers , they simply need to tap to clock in and tap to clock out.

There are many benefits to using a GPS time clock app :

• Travel routes, time, and mileage is automatically captured , always accurate and transparent. No more guessing or wondering if employees are inflating the numbers.
• See where your employees are in real-time. Dispatch the employees who are closest to a site and save on travel and mileage. Not only do you save money, but you increase your response time and client satisfaction.
• Easily produce reports for client reimbursements. If clients are paying for travel time, you have a complete paper trail.
• Identify inefficient uses of time. You can see where your employees go and what routes they take. Review your employee travel to identify areas of potential improvement.
• Review your reports when making new bids. Know exactly how much you usually spend on travel, so you can factor it into your costs. Avoid underbidding on a project by underestimating your travel and labor costs.
• Built-in overtime and break compliance . Overtime pay such as time and a half is automatically calculated based on your state’s rules ensuring compliance.

Improving your revenue is about having the right data. With Workyard, you’ll be able to track travel time for your workers with ease—and make sure that your payroll is accurate.

Track Travel Time Pay for Construction Workers With Workyard

Workyard has been built specifically for tracking travel time, mileage, and routes for construction workers. With Workyard everything is automated, employees simply have to clock in and it will take care of the rest.

Start a free trial and discover why Workyard is the leading construction time tracking software trusted by thousands of construction and field services companies.

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Automatically Track Employee Travel Time With Workyard

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DOL Explains When Employees Must Be Paid for Travel Time

Jul 6, 2018

Eighty years ago the Fair Labor Standards Act (FLSA) established federal minimum wage and overtime requirements for hourly employees. The law’s basic tenet seems straightforward: Employers must pay employees for their “work.” Yet for many employers, compliance with the FLSA on issues such as employee travel time continues to be problematic because the FLSA does not really explain when an employee is at “work.”

The FLSA and Portal-to-Portal Act

The Supreme Court initially explained that “work” time means when an employee’s activities are controlled or required primarily for the benefit of the employer. Congress subsequently added some specifics to the Supreme Court’s expansive definition. The Portal-to-Portal Act, an amendment to the FLSA, provides that employee work time does not include:

(1) Travel to and from the actual place of performance of the principal activity the employee is employed to perform; or

(2) Activities that are undertaken before or after the employee’s principal work activity.

Three Scenarios and DOL’s Opinion Letter FLSA 2018-18

Recently, the U.S. Department of Labor (DOL) issued an opinion letter in response to a company’s questions about travel time pay for a group of hourly employees who repair, inspect and test construction cranes. The employees do not have a fixed work location; they travel to various customer locations each day. They usually work eight to twelve hour days servicing cranes, and generally start work at around 7:00 a.m. Depending on the availability of parts and other factors, the employees may need to stay in a hotel overnight and return in the morning to complete a job. Employees are provided company vehicles that may be used for both work and personal matters.

Three travel time scenarios were considered by the DOL:

(1) Employee travel time from home to the company’s office, using a company vehicle, to obtain a job itinerary and then continue on to various customer locations. Travel time from home to office varies from 15 minutes to an hour, depending on where the employee lives.

(2) Employee travel time from home directly to a customer location; and

(3) Employee travel time by plane on a Sunday from home to an out-of-state destination for a company training that begins at 8:00 a.m. on Monday. The training continues through Friday, with return travel home on Friday after class, or occasionally on Saturday, depending on flight availability.

The first two scenarios involve common commutes to and from work. Under the Portal-to-Portal Act, employees do not need to be paid for time spent commuting between home and work. This generally holds true, even when the employee travels directly from home to different job sites, unless the commute time involved is extraordinary. Once the employee has arrived at the job, however, FLSA regulations require payment for all travel time between job sites during the day. Use of a company-provided vehicle within the normal commuting area typically does not convert the employee’s ordinary commute into compensable work time.

Scenario three implicated how to account for employee travel time away from home, both on the weekend and overnight. Travel away from home is clearly worktime when it cuts across the employee’s usual work day; the employee is simply substituting travel for usual job duties. This also includes travel time on Saturday and Sunday that corresponds to the employee’s normal working hours on other days of the week. The DOL also noted that an employee must be paid for all time the employee is actually required to work while on travel, irrespective of whether or not it falls within the employee’s regular work day.

What Does this Mean to You?

Calculating employee travel time can pose a significant challenge for many employers. There are multiple factors you must take into account, even when an employee is traveling within his home territory. There are no bright lines to establish when an employee has strayed outside his normal commuting area, converting what would have been an unpaid commute into time on the clock. The FLSA requires employers to maintain accurate time records for employees; a failure to do so can result in significant statutory damages and attorneys’ fees.

If you find yourself facing such employee travel circumstances as described here, the employment law attorneys at Bean, Kinney & Korman can assist in evaluating your company’s particular environment and help craft a reasonable solution that will address the situation.

• R. Douglas Taylor, Jr.

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Travel time pay.

Q&A:   Under the FLSA, when must nonexempt employees be paid for travel time? https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/cms_014392.aspx  Employment Law:   DOL Says Not All Employee Travel During the Workday Is Compensable - Jan 2021 https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/not-all-employee-travel-time-is-compensable-.aspx  State/Local Update:   Driving Company Vehicle Didn't Make Commuting Time Compensable - May 2018 https://www.shrm.org/resourcesandtools/legal-and-compliance/state-and-local-updates/pages/driving-company-vehicle-did-not-make-commuting-time-compensable.aspx  ​​​​​​​ Sample Policy :  Travel Policy Nonexempt Employees: https://www.shrm.org/resourcesandtools/tools-and-samples/policies/pages/travel-policy-nonexempt-employees.aspx 

Q&A:   In California, what rules apply when determining what constitutes hours worked? (See Travel Time) https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/californiahoursofwork.aspx ​​​​​​​ Sample Policy :  California Travel Pay   https://www.shrm.org/resourcesandtools/tools-and-samples/policies/pages/california-travel-pay-policy.aspx  ​​​​​​​ ​​​​​​​

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