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Payroll & Taxes

Determining Drive and Travel Time Compensation for Employees

FrankCrum
by FrankCrum on December 9, 2013


employee drive and travel timeIn the previous blog posts in my wage and hour fundamentals series, I talked about exempt vs. non-exempt employees and how you can accurately determine hours worked for employees. Now let’s talk about calculating drive and travel time compensation.

There are various circumstances that determine whether time spent driving/traveling is considered hours worked. There are federal guidelines for calculating employee drive and travel time, but keep in mind some states have more specific laws than others which address this issue. Whether travel time constitutes hours worked depends upon the nature of the travel, the nature of the employee’s work and the connection between the two.

When Should Employers Pay Employees for Drive and Travel Time?

  • An employee’s normal commute to and from work is not work time.

  • Once at the first worksite, travel between worksites throughout the day is work time.

  • If employees must arrive at the “home base” or the “main office” prior to going to the first worksite, the clock starts when they arrive at the meeting location. So the time traveling from the office to the first worksite is considered work time.

  • If employees drive from home to a location other than the usual worksite, travel time minus the normal commute is hours worked, e.g. if their normal commute is 20 minutes and the worksite is an hour away, 40 minutes of the drive time is compensable work time.

  • Except for the normal commute to and from work, any travel during a non-exempt employee's normal working hours is time worked. Employees are not required to make up time because they traveled during their normal schedule (driving or otherwise).

  • Regardless of the time of day or day of the week, any time (other than the normal commute) that an employee is the driver of a vehicle is time worked.

  • Time spent as a passenger in a car, plane, train, etc. outside the employee's normal working hours is not time worked unless the employee performs work while riding.

  • Meal periods are excluded for both drivers and passengers. If an employee stops for breakfast, lunch or dinner this time is not included as time worked. It is treated as a regular lunch period.

Overtime Drive and Travel Pay

Any drive/travel time that is considered work time is compensable and must be included in the total hours worked for the week for overtime purposes. If you choose to pay for travel time above what is required (i.e. that is not actual hours worked), you should have a written acknowledgement with employees that explains that while you are choosing to pay them for certain non-compensable travel time, those hours will not be included as hours worked for overtime purposes.

While all work time must be paid, it does not have to be paid at the same rate – it must only be at least minimum wage. Therefore, to help with the expense of overtime, some employers may choose to pay drive/travel time at a lower rate. When 2 different pay rates are used in a week in which overtime is worked, the rate is a ‘blended rate’ to determine the amount of overtime due. The minimum requirement for any work by non-exempt employees is that they make at least minimum wage. Therefore, the below example applies to any circumstance where different pay rates are used for different work. It is not specific to travel time.

EXAMPLE:
Bob worked 48 hours in one week. He spent 39 hours at the worksites @ $15/hr and 9 hours driving between worksites @ $8/hr.

Overtime is always one and one half the “regular rate.” The regular rate is total money earned divided by total hours worked.

39 x 15 = $585
9 x 8 = $72
585 + 72 = $657

657 divided by 48 = $13.69 (this is the regular rate for this workweek)
Now the $657 covers the straight time (the “time”) for all 48 hours, so Bob is now due the additional “one half” for the 8 hours of OT.

13.69 x .05 = $6.85
6.85 x 8 = $54.80 (this is the amount of OT due for this workweek)
657 + 54.80 = $711.80 (total gross wages for this week)

If you have specific questions on determining employee drive and travel time for your business or are interested in ways that FrankCrum can help you with HR and wage and hour issues you’re currently facing, please contact us. We’re here for you!

Don’t forget to check back soon for our next post in this series on calculating pay deductions for exempt and non-exempt employees…

FrankCrum
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