TRAVEL TIME

Steven Cesare, Ph.D.

A business owner from Michigan called me the other day to talk about a request she just received from one of her long-time field employees. Like many non-exempt employees attempting to survive in these dire economic conditions, the employee asked the business owner if she would allow him to drive his personal vehicle to/from the job sites every day, instead of coming into the yard each morning, thereby enabling him to receive 67 cents per mile as a paycheck supplement.

As a capitalist, I routinely remind business owners that they can spend their money anyway they want. After all, it is their money. That said, sometimes we disagree on the actual application because their benevolence, compassion, and charity, may conflict with company business goals, may establish a precedent complicating long-term decision making, and may subtly erode the company culture. In this situation, despite her predisposed generosity, we agreed to not accept the employee’s request.

That discussion prompted this overview of the legal guidelines related to employee travel, timekeeping, and compensation. Within that context, it is always important for business owners to verify the relationship between state and federal laws to prevent potential mistaken application.

First, by way of background, while there is no federal law requiring employers to pay their employees a mileage reimbursement for using their personal vehicle while conducting company business, almost all companies do so, as a fair business practice to attract and retain employees. Parenthetically, as of this writing, there are only three states (e.g., California, Illinois, and Massachusetts) that do require businesses to reimburse employee for such mileage.

Also, the IRS mileage reimbursement rates are optional. Most businesses use them as a guideline for appropriate compensation for using a personal vehicle for business purposes. In most cases, companies have the discretion to reimburse at a rate different from the IRS standard, to account for local cost of living.

Home-to-Work Travel: This commuting time to and from work is non-compensable time. However, if a business asks a non-exempt employee to make a stop during that commute, the company must pay the employee for all the time once that stop is made, as well as a mileage reimbursement for all miles traveled from the location to the office if the employee is using a personal vehicle, since that stop during the commute is for the benefit of the company.

In some cases, a non-exempt employee may be required to report to the first job site of the day at a location that exceeds his/her normal commute distance to work. Though a gray area in many cases, it is common for employers to reimburse the employee for excess mileage, beyond the normal commuting distance, if the employee is using a personal vehicle. That said, the employee is usually not paid for excessive commuting time; compensable time typically begins once the non-exempt employee reaches the job site.

Working at Different Locations: 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; with the adjoining mileage reimbursement in effect if that travel involves the employee’s personal vehicle.

Out-of-Town Day Trips: Generally speaking, time spent traveling to and returning from another city is work time, though companies can exclude the employee’s regular commuting time and meal breaks.

For example, if a company sends a non-exempt employee to an out-of-town conference, the company does not have to pay the employee for his/her trip to the airport (i.e., commuting time). However, the company does have to pay the employee from the time s/he arrives at the airport through the flight, Uber ride to the hotel, and all time attending the actual conference, excluding any after-hours social events and the employee’s daily meal period while at the conference. Regarding the return, the Uber trip to the airport, all time associated with the actual flight and baggage claim are compensable. The drive home from the airport is considered unpaid commuting time.

A thorough travel policy (e., commuting, different locations, out-of-town trips) supported by detailed timekeeping and reimbursement considerations are strongly recommended to prevent misinterpretation.

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