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Paying your employees for travel time… Do I have to?

commutingAs a business owner or a decision maker, you may have thought about “How do I compensate my employees for travel time?” You may have even said… “Do I even have to pay an employee for travel time?”

The Federal law is very clear about minimum pay, but not about the hours that employees must be paid. Here are some things to consider regarding paying employees for travel time and a few ways to cut those costs:

Travel to and from a fixed place of work.

You are not required to pay employees for commuting time to and from your office each day.

Travel to and from a different job site each day.

You are not required to pay employees for travel time between their homes and a different job site each day (such as a technician who works at one location one day and a different location the next) unless your company has a contract, custom, or practice of doing so.

To cut costs:

If your firm voluntarily pays employees for commuting time, put it in writing and state specifically that payment for commuting time is a “taxable allowance” (which may be much less costly than the employee’s normal hourly rate), not “compensation” for hours worked. This frees you from paying all employees for all hours traveled to and from various job sites.

Travel to and from a designated meeting place.

Employees required to report to a meeting place before going to the work site must be paid for travel time between that place and the work site. For example, carpenters required to report to a tool shed to pick up tools must be paid for travel time from the tool shed to the job site (but not travel time from home to the tool shed).

To cut costs:

Let employees take tools and supplies home. Or, assign a crew leader to pick up tools and supplies (regularly inventory items and consider a return-and-responsibility policy to prevent theft or loss.)

It is always important for businesses to have a clear understanding of what is required and what is optional when compensation law comes into play.