Compliance - What You Need to Know About Compensating Employee Travel

It’s a question I get all the time: If an employee travels for work, what hours does the company have to pay for? The Fair Labor Standards Act (FLSA) guides all rules relating to employee pay. While there are state laws that are more generous toward employees and must be followed, the laws regarding travel are generally those mandated at the federal level. So let’s take a look at how you can easily decipher what you need to know about compensating employee travel.

What You Need to Know About Compensating Employee Travel

The first step is to determine who is exempt from the overtime regulations under the FLSA. An employee being paid a salary does not necessarily mean they are exempt from overtime. They must meet one of the 5 strict characteristics under the law.

The FLSA is clear in the requirement to pay for travel, although a bit odd. The law states that you must pay an employee for any time that falls within their normal workday – regardless of the day of the week. So, for example, if an employee works 8:30 – 5, and takes a 4pm flight on a Sunday, you would only need to pay for 1 hour – from 4-5pm. For the full regulations, see the FLSA.

If an employee is working at another location, but not overnight, some travel time could be required. The employer is required to pay for travel time but may deduct the amount of time the employee would have normally travelled that day to get to their regular work location. If your employee goes to other locations during the day, then all time must be paid as time worked.

When the employee is out of town for a period of time, the only time that must be paid is that which is during the employee’s normal workday and/or they are actually working. For example, if a non-exempt employee is at a trade show until 10pm, they must be paid for all hours. However, if the show is over at 4:30 and they are free to explore the city they are in, they need not be paid.

Most importantly – keep track of all time spent by your non-exempt staff. Issues regarding proper pay tend to surface years later and without valid documentation the Department of Labor is most likely to take the word of your employee.

This is a very tricky area of law, and this article is not legal advice. It is provided to give context to the conversation and help you determine if issues exist in your organization that require further review. Please consider the laws for your state, and seek legal counsel when making final decisions.

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