April Interview: Wayne Leiser on… If Computers Could Talk!Q: The US Department of Labor has rules for employers on the topic of travel pay. But, what is the definition of travel pay in the legal context?

A: Title 29, Part 785 of the Code of Federal Regulations defines Travel pay in this manner:

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. 

The easiest way to think of the travel time regulations is to remember that basically, any travel on company business that cuts across the normal workday is compensable time worked, regardless of whether such travel occurs on a day the employee is normally scheduled for work.

Q: So, travel time is generally not “worked time”?

A:  That is correct, in general.  The principles which apply in determining whether time spent in travel is compensable time depends upon the kind of travel involved. Home to work travel, travel to lectures, meetings or training programs, travel away from the home community are all types of travel covered by the Fair Labor Standards Act (FLSA).

Q:  When is travel time considered hours of work for pay purposes?

A: 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.  Think of a cleaning service, a plumber, landscapers or roofers as examples.

Q: What about employers with a labor union? Can travel pay be a point of negotiation for the labor contract?

A: Yes, travel pay is usually a provision covered in a Collective Bargaining Agreement (CBA).  The CBA can be as simple as referring to the employer’s travel policy and procedure or detailed out in the CBA covering items such as travel location, subsistence, legitimate expenses, transportation, parking allowances etc.

Q: We are talking about the federal wage and hour laws, do certain states also have specific travel pay laws that must also be followed?

A: There are specific states that have rules that differ from the Federal Wage and Hour Laws.  The best place to research for specific state information would be your state site such as http://www.myflorida.com for Florida employers.

Q:  Under the Fair Labor Standards Act, each job must be properly classified as exempt or non-exempt for overtime purposes. Are there distinctions between travel pay for the exempt jobs versus the non-exempt jobs?

A: Yes, and the distinction would be in calculating overtime, if applicable, for those employees who travel that are hourly non-exempt.  Especially when traveling to work on a Special One Day Assignment vs. Travel away from the employee’s home community (overnight).

Q: When overtime is calculated for non-exempt employees, is travel time added into the calculation?

A: The travel time should be paid at the employee’s regular rate of pay; however, it is permissible to have a wage agreement where employees are paid at a lower rate (at least minimum wage) for compensable travel time and other types of non-productive work time, as noted in 29 C.F.R. 778.318(b). However, any such agreement should be clearly expressed in a written wage agreement signed by the employee, and the time so distinguished must be carefully and exactly recorded. Additionally, if such work results in overtime hours, the overtime pay must be calculated according to the weighted average method of computing overtime pay, as provided in 29 C.F.R. 778.115. Due to the complexity of the overtime calculation method necessary and the recordkeeping involved, any company attempting this should have the agreement prepared with the assistance of an attorney experienced in this area of the law.

Q: Can you give me an example of a typical work situation where travel pay is due to the employee in their pay?

A: Let’s consider a business such as a Plumbing Company.  Normal travel from home to work is not work time. However, there may be instances when travel from home to work is work time. For example, if an employee who has gone home after completing his or her day’s work is subsequently called out at night to travel a substantial distance to perform an emergency job for one of his or her employer’s customers, all time spent on such travel is working time. However, where an employee is given prior notice, as for example, he or she is told on Friday that he or she will be required to work at a customer’s place of business on Saturday, it will not be considered as an emergency call outside his or her regular working hours.

Q: Is there a time frame to pay travel time? Does it have to be paid in the normal pay cycle or not?

A: As with all wages, travel pay should be paid with the next regular pay cycle.  If an employee is required by the company to submit specific paperwork or time records and the employee does not do so in a timely manner, then the recommendation would be for the company to estimate the amount due the employee and true up wages in the next pay cycle.

Q: What are the penalties for not following the law?

A: The FLSA allows the Department of Labor (“Department”) or an employee to recover back wages and an equal amount in liquidated damages where minimum wage and overtime violations exist. Generally, a 2-year statute of limitations applies to the recovery of back wages and liquidated damages. A 3-year statute of limitations applies in cases involving willful violations.

Remedies may be recovered through administrative procedures, litigation, and/or criminal prosecution.

Administrative procedures:

  • The Department is authorized to supervise the payment of unpaid minimum wages and/ or unpaid overtime compensation owed to any employee(s).
  • In lieu of litigation, the Department may seek back wages and liquidated damages, through settlements with employers.
  • Civil money penalties may be assessed for child labor violations and for repeat and/or willful violations of FLSA minimum wage or overtime requirements.
    • Employers who willfully or repeatedly violate minimum wage or overtime pay requirements are subject to civil money penalties for each violation.
    • Employers who violate the child labor provisions of the FLSA may be subject to civil money penalties. These penalties may be increased for each violation that results in the death or serious injury of an employee who is a minor and may be doubled if the violation was determined to be willful or repeated.
    • For current penalty amounts, see https://www.dol.gov/whd/flsa/index.htm#cmp.

Litigation procedures:

  • The Department may file suit on behalf of employees for back wages, an equal amount of liquidated damages, and civil money penalties where appropriate.
  • The Department may seek a U.S. District Court injunction to restrain violations of the law, including the unlawful withholding of proper minimum wage and overtime pay, failure to keep proper records and retaliation against employees who file complaints and/or cooperate with the Department.
  • The Department may seek an order for payment of civil money penalties from a U.S. Department of Labor Administrative Law Judge where appropriate.
  • An employee may file a private suit to recover back wages, an equal amount of liquidated damages, plus attorney’s fees and court costs. In such a case, the Department will not seek the same back wages and liquidated damages on that employee’s behalf.
  • The FLSA provides that DOL may seek a U.S. District Court order to prevent the shipment of the affected goods.

Criminal prosecution:

  • Employers who have willfully violated the law may be subject to criminal penalties, including fines and imprisonment.

Q: What resources (websites and books) would you recommend for company owners, executives and employees to learn more about this topic?

A:  I have added links throughout my answers but, the best resource is always the Department of Labor website. www.DOL.Gov. You can search by Topic, Agency, Fast Facts (travel is briefly covered in Fact Sheet #22), or even Opinion Letters the Agency has given.

The Handy Reference Guide to the Fair Labor Standards Act is available online and in a PDF version that provides a good overview of the law and a great place to start.  https://www.dol.gov/whd/regs/compliance/hrg.htm

For employers who may want some in-depth reading, they can read the Field Operators Handbook for Wage and Hour Investigators www.DOL.Gov/FOH/FOH_CG31.PDF, Chapter 31 covers Travel pay in detail.

Susan T. Howard, SPHR, is the owner of Employers Resources Plus, based in Bradenton, FL. With Employers Resources Plus small businesses have the human resources “Resources” when you need them. You can contact her at http://employersresourcesplus.com/.