Travel Time Pay Is Required For Nonexempt Employees

Many California employers are not aware that they are required to pay nonexempt (meaning “hourly”) employees for time traveling to, and attending, work-related functions such as conferences, seminars, and trainings. Although travel time from home to work and back is usually not compensable, most other travel time that is required for work is considered work time that must be paid. For example, if you require nonexempt employees to attend a conference away from their typical work place, you must pay them for the travel time to and from the conference, minus the time of their usual commute.

If air travel is required, you must pay them (subtracting their usual commute time) from the time they leave their house until they reach their destination, or until they no longer perform work (for example, when they have checked into the hotel). This means you must pay them for their time traveling to the airport, waiting at the airport, and the time they spend on the plane. If they are free to do what they choose — sightsee, meet with friends, etc. — your obligation to pay ends. If they go straight to the conference, you continue to pay.

Because traveling does not require the employee to employ his or her skills, pay for travel time can be at a rate of pay less than the employee’s normal rate of pay. You can pay the employee as little as the minimum wage for travel pay. Travel time is counted as work time and therefore overtime pay rules apply. Nonexempt employees must keep an accurate record of their time when traveling to make sure overtime is properly calculated. Nonexempt employees must also take meal and rest breaks when traveling, and should document their meal break times as well.

If you will pay travel time at a rate that is less than the employee’s normal hourly rate, you should state this in writing to all affected employees in advance of the travel.

A real world example

Suppose an employee lives and works in Santa Monica, and her normal commute to the office is just 10 minutes. Now suppose she works eight hours at her regular work place in Santa Monica, and then travels to LAX for a flight to Oakland. The employee then stays at a hotel in Oakland. The next day, she works seven hours manning the employer’s booth at a conference before heading back to the Oakland airport for her flight to LAX, and then returns home to Santa Monica.

Under these circumstances, the employee must receive her normal rate of pay for the first eight-hour period in Santa Monica. Travel pay begins when she leaves the work place to go to the airport, minus the amount of her regular 10-minute commute. Her travel pay ends when she arrives at the hotel in Oakland. The employee receives her normal seven hours of pay while at the conference in Oakland. When the employee leaves the conference for the Oakland airport, travel pay begins. It ends when she arrives back at her home in Santa Monica, minus the usual 10 minutes of her normal commute.

These rules do not apply to exempt employees

The above rules apply to travel pay for nonexempt (hourly) employees, and not to exempt employees who earn a salary. Exempt employees may be required to work long hours and have to travel for work without any additional compensation.

Different rules might apply when traveling outside of California

If your employee is traveling out of California, it is possible that the laws of the state where he or she is traveling to might apply. This is important because nearly every state in the country has more lax labor laws than California, in which case you may not need to pay for time spent traveling in that state. However, whether or not the laws of another state will apply is dependent on a variety of factors. When in doubt, consult with knowledgeable employment law counsel.

In addition to paying for time spent traveling, remember that employers must reimburse employees for expenses incurred as part of their job, such as mileage, hotel costs, and meals—whether they are exempt or nonexempt.

Employer Action Items:

• Accurate record keeping is crucial when calculating travel pay. Make sure that your nonexempt employees keep track of all their time traveling –when travel time starts and ends, and when their normal work duties begin and end. They should also track the start and end times of meal breaks. When employees travel to a different time zone, it is a best practice to require them to track all hours based on California time to avoid payroll errors.

• Communicate with nonexempt employees about travel pay obligations. If you will pay a different rate for travel time, this must be communicated in advance prior to the travel. It is a best practice to have a written travel time policy that you distribute to your employees.