When Must I Pay Employees for Travel Time?
Travel Time vs. Commuting Time
In general, your business should pay employees for the time they spend traveling for work-related activities. You don't have to pay employees for travel that is incidental to the employee's duties and time spent commuting (traveling between home and work). Travel time can include both local trips and travel away from home.
Travel vs. Commuting Time
Commuting is going back and forth to work. Everyone (at least everyone who doesn't work at home) commutes to a job. Commuting time is personal time, not business time. The IRS does not allow businesses to deduct commuting time as a business expense, and employees should not be paid for the commuting time.
The Department of Labor (DOL) discusses employees who drive employer-provided vehicles. The DOL considers the time spent in home-to-work travel by an employee in an employer-provided vehicle, or in activities performed by an employee that are incidental to the use of the vehicle for commuting, generally is not "hours worked" and, therefore, does not have to be paid.
Here's a possible rule of thumb: If your business authorizes a trip by an employee, no matter how the employee travels (car, train, bus, etc.) you should pay for the employee's travel time.
Travel time for hourly and salaried employees may be counted differently. Pay to employees for local travel time is only applicable to non-exempt (hourly) employees, not to exempt (professional or managerial) employees. Exempt employees are paid for their expertise by the job, not by the hour.
Different Types of Travel Time:
Home to Work Travel, as explained above, is commuting time, not work time, and it's not paid.
Travel on Special One Day Assignment in Another City. The DOL says "the 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 spend commuting.
Sara works in an office in your company, but you send her to another city on a special assignment. She leaves from her home, goes to the city, and comes back home the same day. She spends 3 hours traveling (1 1/2 hours each way) from home to the other city. She would normally spend 30 minutes total driving from her home to work and back, so you could deduct the 30 minutes and pay her for 2 1/2 hours of travel time.
Travel That's Part of the Employee's Normal Work. Time an employee spends traveling is part of the job. You must count this time as work time. The time the employee spends going to the first job site, and home from the last job site, is commuting time and isn't paid.
An LPN (licensed professional nurse) works for a nursing facility and travels between the two locations of this facility, providing care for patients at both locations. Her daily travel time between these locations must be included in her pay because she is not commuting. But she can't count the time driving from home to the first location or the time back home from the last location.
Travel Away from Home. If travel includes an overnight stay it is travel time. The DOL doesn't include travel away from home outside regular hours as a passenger on an airplane, train, boat, bus, or car as work time. But you must count hours worked on regular working days and work hours on nonworking days (weekends and holidays).
If an employee travels from Cleveland to Pittsburgh 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.
Incidental vs. Work Travel: Paid or Not Paid?
- An employee drives to work from his home every day. You ask him to stop on his way and pick up bagels for the staff meeting. This driving time is not paid. Time commuting to work is never paid time; the time to stop for the bagels is "incidental" to the commuting and is not part of the employee's job.
- You ask an employee to drive to a store on work time to get bagels for the office meeting. If the employee makes this trip during normal work hours, he or she should be paid.
Also, you might want to contact an employment attorney to discuss these issues.
Paying for Travel Expenses
In addition to paying employees for travel time, you should pay their expenses for travel. The Department of Labor doesn't require reimbursement for travel expenses, but it makes sense to pay employees if you require them to travel. Your business can deduct employee travel expenses as a business expense. If employees mix business and personal travel, you need to sort out the part that is business-related and pay only these expenses.
State Regulations on Paying for Employee Travel
Check with your state labor department to see if there are any rules which might override the federal rules. Contact the nearest local office of the U.S. Department of Labor for information on specific instances of travel time that affect your business.
Internal Revenue Service. "Publication 535 (2019): Business Expenses," Page 5. Accessed May 26, 2020.
Internal Revenue Service. "Travel & Entertainment Expenses," Page 3. Accessed May 26, 2020.
U.S. Department of Labor. "Travel Time." Accessed May 26, 2020.
Electronic Code of Federal Regulations. "Travel Time." Accessed May 26, 2020.
U.S. Office of Personnel Management. "Fact Sheet: Hours of Work for Travel." Accessed May 26, 2020.
U.S. Department of Labor. "Fact Sheet #17D: Exemption for Professional Employees Under the Fair Labor Standards Act (FLSA)," Pages 1-3. Accessed May 26, 2020.
U.S. Department of Labor. "Fact Sheet #22: Hours Worked Under the Fair Labor Standards Act (FLSA)." Accessed May 26, 2020.
U.S. Department of Labor. "Opinion Letter FLSA 2018," Page 2. Accessed May 26, 2020.
U.S. Department of Labor. "Reimbursed Travel Expense Payments," Page 1. Accessed May 26, 2020.
Internal Revenue Service. "Topic No. 511 Business Travel Expenses." Accessed May 26, 2020.