The laws governing employee time tracking are not always clearly defined. Things like overtime and meal breaks are managed differently state by state. However, every employer covered by the Fair Labor Standards Act is obliged to keep records for their employees, including the hours worked each day and the total hours worked per week. What kind of data must be collected and what role does data...
There are many factors dictating whether or not an employee must be compensated for travel hours during a business trip in the USA. These factors include legislation, terms of contract and labor agreements. While it may seem unfair that workers are not routinely compensated for traveling time on business trips they are undertaking at the behest of the company, it is often the norm. This can have a tough impact on the payslips of employees who are required to travel for work frequently, especially abroad since travel times can last many hours. It also disproportionately affects higher earners, since those in more senior positions are often the ones required to attend conferences and meetings with clients to represent their company.
In recent years, several other countries have experienced court rulings deeming business travel time to count as working time. While the US has much more relaxed labor laws than many of their European counterparts, it is important to be aware of the differences in working time regulations if you are running a company that operates in multiple countries.
Regulating work time on business trips
In the USA, the remuneration of travel times for business trips is regulated individually. If you have a generous employer, they are likely to consider travel time on business trips to be working time and compensate you as such: i.e. the entire business trip is considered to be working time. However, these agreements usually have to be negotiated separately. If one is applying for a job that is known to have high levels of work travel time, it is recommended to negotiate the terms of business trips and legally enshrine them in the individuals‘ working contract from the very beginning to avoid any confusion. In some companies, working time during business trips is already outlined in labor agreements and collective agreements and may apply accordingly to all or only certain employees.
However, there are many instances when no legal rules apply to whether or not travel times are considered working time and whether these periods should be compensated, and by how much. In practice, the case is usually that the only hours which count as working time are the same hours the employee would normally work, e.g. 9 am to 5 pm. This means that if a business trip flight lasts three hours and begins at 7 am, the employee would be compensated for the final hour of 9-10 am since this falls within their normal working hours, but the first two hours are unpaid. However, if your work superiors request that you spend the flight doing work (e.g. preparing presentation slides or corresponding via e-mail), then those hours can be considered overtime.
There are certain exceptions to these rules if a worker’s activity consistsof a significant amount travel time (i.e. a primary obligation), such as truck drivers or traveling salespeople. Companies may also have differing policies for domestic and foreign travel.
Fair Labor Standards Act (FLSA)
Another factor which may impact remuneration for an employee during business travel time is whether or not they are covered the FLSA. FLSA governs the wages are overtime regulations for employees that are paid hourly in the US. According to FLSA, the time taken traveling to and from work does not count as travel time. This means that if you are going on a business trip, the time taken traveling to the airport does not count as work time, since in the eyes of the FLSA, you are traveling to work. However, time spent waiting for the plane, flying on the plane and traveling to the hotel/meeting place once you have arrived does count as working time, since arriving at the airport initially is considered your arrival at work.
FLSA dictates that the legal working week consists of 40 hours over seven days. Anything over this is considered overtime and must be compensated at a payment rate of time-and-a-half. Trips made for business often result in overtime being incurred, and employees must be compensated for this. This rule does not apply to those not covered by FLSA, i.e. salaried professional or executive employees earning in excess of $455 per week.
Two case studies
Case study 1:
A delivery service driver has a contractually stipulated working time of 6 am to 2:30 pm daily. At 6a m, they pick up their service vehicle from the company garage and drive to the central warehouse, where the vehicle is loaded with goods from 6:30 am. After the final delivery at 2:30 pm, the driver drives back to the company premises, where they cannot park their vehicle until 4 pm due to heavy traffic at the parking lot. In this case, the total working time from 6 am to 4 pm could be considered working time, since the employee would not be able to carry out their work duties without the travel time. It can, therefore, be considered the main obligation.
Case study 2:
An insurance company employee is sent out to meet with a client who, due to unforeseen circumstances, is unable to come to the insurance company office. Meeting clients outside the office is generally outside of the employee’s remit. The employee’s usual work hours are between 8 am and 5 pm. The client meeting lasts from 4 pm to 5:30 pm, and then the employee drives straight home without first returning to work.
In this instance, only the 30 minutes spent meeting the customer count as work overtime. The return journey is not considered working time since the employee is returning home instead of back to work. If the employee’s manager had contacted them and requested that they return to the office to work late and write an additional report about the meeting, then the drive back to the office would have been considered working time, and been compensated accordingly.
Click here for important legal disclaimers.