The other day, one of our members called the Member Action Center to ask if they had to pay employees for travel time during the work day.
The short answer is yes. The U.S. Department of Labor regards travel that’s part of an employee’s job duties to count against the 40-hour work week. You can read the DOL’s fact sheet here.
Pay attention to the section entitled “Travel That is All in a Day’s Work.” It states: “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.”
The regulations do leave room for paying a lower rate of compensation for travel time: Federal law only requires employers to pay overtime-eligible employees at least minimum wage for time spent in work-related travel and to keep track of those hours for overtime purposes. The law does not state that employees need to be paid the same rate for travel time.
Got a question? Contact Stefanie Riehl at the Member Action Center: 1-800-499-4419 or firstname.lastname@example.org…
That said, paying a lower wage rate for travel is not considered a best practice because:
- It can affect employee morale. If you are going to change how you compensate employees, you should notify them well in advance and do so in writing.
- It’s difficult to track the time. Not only does it add complexity to time keeping and payroll, it also raises questions about what constitutes travel time. If an employee is a passenger in a company van, but is checking work email or corresponding with the office, it would be considered work time and would have to be paid at the employee’s normal rate.
- Calculating overtime becomes more difficult. A non-exempt employee must be paid overtime for anything more than 40 hours worked during a week. Paying employees two different hourly rates during a workweek would require you to recalculate their regular rate and the overtime rate.
The information in this article is provided for informational purposes only, specific to New Jersey-based employers. The article does not constitute legal advice, nor has it been written or reviewed by an attorney.