Do your employees travel for work? Exempt employees generally are not entitled to additional compensation for travel time, but some employers may be unsure about how to pay hourly employees for their travel.
Travel time employers must pay for
Travel from one worksite to another
If an employee must travel to meet with clients, run errands instructed by an employer, or complete tasks in different locations, it counts as paid time.
Same-day travel to another city
The DOL states “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 normally spend commuting.
Reimbursement for overnight travel can be a bit confusing as there are a few exceptions to take into consideration.
- Employers must pay for hours worked or traveled which fall within the employees regular working hours.
Example: If the employee’s normal shift is from 9 am to 5 pm, they must be paid for that full day when they are traveling, minus lunch breaks.
- Employers must pay for hours worked or traveled outside of business hours.Example: If an employee travels from Georgia to Florida 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.
- Employers do not need to pay for time spent traveling outside of regular working hours if the employee is a passenger.
Example: If the employee works 9 am to 5 pm and is currently traveling as a passenger before or after those hours.
Overtime pay for travel
Employers must count paid travel time when calculating overtime hours for a workweek
Travel time for which employers do not have to pay
Travel to and from home
The time spent in home-to-work travel by an employee is not considered by the DOL as “hours worked” and, therefore, does not need to be paid.
There is one exception to this rule. If an hourly employee has been called back to work after their workday has ended, their travel back to work may be counted as hours worked.
Optional travel time reimbursement
Per Diem travel costs
Per diem is an optional daily allowance given to employees to cover travel-related business expenses. If you decide to provide a per diem, travel time still needs to be paid.
Mileage reimbursement is optional but usually recommended. The current standard IRS rate is 57.5 cents per mile. Employers are still responsible for travel time pay whether they reimburse for mileage or not.
It is important to note that some states have travel reimbursement rules which differ from federal rules, so companies should check their state laws before finalizing a travel reimbursement policy.