Remembering Shay Litvak Our Co-Founder and CTO

November 1979 - September 2023

When Do Employers Have to Pay Employees for Travel Time?

Travel Time Pay for Hourly EmployeesTravel Time Pay for Hourly Employees
min read
August 21, 2023

For some small businesses, traveling to meet clients, make sales, and manage day-to-day activities is a must. For others, traveling is valuable for attending conferences, participating in networking events, or undergoing specialized training.

But if it's your employees doing the traveling, do you need to pay them for that time? Whatever your preferences are as a small business owner, the legal answer is: that depends.

Let's explore when you need to provide travel time pay for hourly employees, which employees are entitled to that pay, and, if they are entitled, how much you'll need to pay them. 

Who Is Entitled to Travel Pay?

All non-exempt employees are entitled to travel pay during normal work hours and when they are actively working outside of those hours. They aren't entitled to travel pay for doing their typical commute, according to the Fair Labor Standards Act (FLSA).

Non-exempt employees are typically paid an hourly wage and are paid less than $684 per week or $35,568 per year. 

These rules don't apply to exempt employees, and therefore it's up to you whether you want to pay them to travel.

What's more—your state may have some extra rules, so make sure to check your state's Department of Labor or Wage and Hour Division website.

When Do You Have to Provide Travel Time Pay for Hourly Employees?

But when, exactly, are these employees paid to travel? Compensable work time needs to be paid when employees travel:

  • Locally: You need to pay employees when they travel locally as part of their regular duties (for example, from your office to a supply store). And if that travel happens outside of the employee's regular workday hours (even if they're only waiting to travel, like sitting at a bus stop or train station)? You still need to pay.
  • Between worksites: Employees get travel pay when traveling between worksites. For example, a courier who transports materials between different job sites must be paid for the time spent traveling. Similarly, plumbers who travel between customers' homes are eligible for travel pay.
  • For special one-day assignments: You must provide travel pay for hourly employees who travel out of town, even if they return home at the end of the workday—though you can deduct the employee's normal commute time from the total payment. For example, let's say an employee spends a total of two hours traveling to and from a work conference (which takes place during normal working hours). Because her typical daily commute takes 30 minutes, you would only need to pay for 1.5 hours of traveling (in addition to regular hourly wages).
  • Overnight: Employees traveling overnight are due travel pay during their regular working hours and any time they spend working outside of those regular hours (for example, participating in late-night conference calls while on a train). You also need to pay employees for traveling during their regular working hours, even on non-working days, like weekends, holidays, or their normal days off.

Bonus tip: The best way to track travel time for your employees? Time tracking software like Hourly. Workers clock in right from their phones, and the platform automatically tracks their location, hours and what project they're working on—which you can see in real-time. Another perk? You can run payroll with the click of a button.

How Much Do You Have to Pay Employees for Travel Time?

Employees traveling for work need to be paid at least the minimum wage, but they can be paid more or less than their normal pay rate.  

If you want to pay a different rate than an employee's hourly wage, you'll need to:

  • Tell the employee they will be paid a different rate before they begin their trip.
  • Make sure the hourly rate for travel pay doesn't cause the employee's total pay for all workable hours to fall below minimum wage (state, local or federal—whichever is highest) or result in incorrect overtime pay.
  • Ensure that you're not violating their employment contract.

This gives you the flexibility to offer a higher rate of pay as an incentive for traveling outside of regular business hours—or, if you decide to pay less than their typical rate (but still minimum wage or above!), it can help make sure that paying for travel won't interrupt your cash flow or cause other financial concerns for your company.

When Do You NOT Have to Provide Travel Time Pay for Hourly Employees?

Exempt employees—like outside salespeople, executives, managers, administrators, and even IT personnel—aren't entitled to travel pay. And non-exempt workers? They're not eligible for travel pay when they are:

  • Commuting: An employee's commute—the time spent driving from their home to work (and from work to home)—doesn't qualify as travel time. This also includes the time spent driving from accommodations/lodging (like a hotel) to a work location, like a client's office or conference center.
  • On break or during personal time: Non-exempt employees aren't entitled to travel pay during breaks (including meal periods and time spent sleeping) or when they can spend their time how they see fit. In other words, you don't need to pay for traveling during the time an employee can go shopping, sightseeing, or out to eat.
  • Away from work and not working: Employees on overnight travel or business trips don't need to be paid outside of regular working hours unless they're working during that time period. For example, an employee who regularly works 9 a.m. to 5 p.m. Monday through Friday only needs to be paid for traveling on a Saturday if they travel during their normal working hours (i.e., 9 a.m. to 5 p.m.)—unless they're working outside of those hours too (like answering customer support emails or counting inventory).
  • A passenger: You don't need to pay for travel when an employee is a passenger (in any sort of vehicle) and isn't doing work outside of regular work hours. The only exceptions occur when you require an employee to drive the vehicle or be actively engaged in working (like riding to a job site while handling customer calls or riding as a passenger in a client's vehicle).
  • Choosing to drive themselves: If you offer to pay for an employee's travel method (like airfare, a bus ticket, or a train ticket) and the employee requests to drive instead, the employee is only entitled to travel pay while driving during their regular work hours. In other words, if an employee requests to drive themselves vs. taking public transit, you don't need to pay for travel outside of the employee's regular shift.

In other words, a non-exempt employee isn't entitled to travel pay unless they are driving, traveling during their normal working hours, or actively working while traveling.

Does Travel Time Count Towards Overtime?

Yes, travel time counts toward overtime, and you'd owe them 1.5 times their regular rate for any hours worked over 40 while they're traveling.

What if your pay rate for traveling is different from an employee's regular wages? Then it gets a little more complicated. 

In that case, you need to use the weighted average of the two overtime rates to get their final pay. Here's an example: 

Let's imagine one of your employees is pulling a 40-hour week at the office. Their rate? $15 per hour. So that gives them $600 for their regular workweek (that's 40 hours multiplied by $15 per hour). Now, during that same week, they also spent 8 hours traveling as overtime, for which you're paying them $11.25 per hour. This gives them an extra $90 (which is 8 hours multiplied by $11.25 per hour).

Add these together, and their total straight-time pay for the week is $690.

Now, to figure out their average rate for the week (including travel time and regular office time), you need to divide this total pay by their total hours worked. In this case, it's 48 hours in total (40 regular hours plus 8 overtime hours). So, $690 divided by 48 hours gives you a weighted average rate of $14.375 per hour.

But they've already been paid for all 48 hours at their respective rates, right? For the 8 hours of overtime, what you owe them is an extra half of that weighted average rate. That's what we call the "overtime premium." Half of $14.375 is about $7.19. So, the overtime pay would be 8 hours (overtime) times $7.19, which comes out to $57.52.

To get their final paycheck, you add this overtime pay to their straight-time pay. So, $690 (straight-time pay) plus $57.52 (overtime pay) equals $747.52. As a business owner, using the weighted average method to calculate the overtime rate, you'd be paying out $747.52 for this employee's week of work, including their overtime.

Additionally, if you pay for travel time that isn't required to be paid (like commuting), you can't count them as hours worked for overtime purposes.

Travel Time Pay Best Practices

Handling travel pay can be complex and difficult at first. But it doesn't have to be! Use these best practices to simplify paying your employees for working on the go.

Create a Travel Policy

If your small business sends employees to different locations, you need to establish a written travel policy—and include it in your employee handbook. 

Your travel policy should outline which situations result in compensable travel time (like attending conferences or visiting different job sites), as well as any exclusions where employees won't be compensated (like an employee's regular commute or traveling as a passenger on non-working days).

If you pay a different hourly rate for time spent traveling, make sure to include it in your policy. Then, have employees sign the policy to acknowledge they understand it and agree to its terms—and then add the signed document to their employee file.

Track Hours Traveled

As a small business owner, you need to track employee travel time to follow labor laws and make sure their paychecks are accurate. 

Though you can ask employees to record and document the time they spend traveling—which can help you make sure your records are accurate—the responsibility for doing so is ultimately on you.

Pay for or Reimburse Travel Expenses

The U.S. Department of Labor (DOL) doesn't require you to pay for your employee's travel expenses.

Still, if you're sending your employees out of town, you should pay for the cost of travel—like tickets and lodging. 

If you don't, your employees are almost guaranteed to get frustrated that they have to pay for expenses out of pocket—and that frustration could lead to issues with employee engagement and retention.

When writing your travel policy, outline which travel expenses your company covers. If you expect employees to front some or all of the travel expenses, detail your procedure for requesting reimbursement and how to track expenses (like mileage or airfare).

You might also want to provide some form of per diem or stipend that helps employees pay for small travel expenses, like food. 

This can either be an allowance per meal period (like $15 for breakfast, $20 for lunch, and $40 for dinner) or a specific amount that the employee can use throughout the trip (like $50 per day or $150 for the weekend). Have your employees save and submit their receipts to avoid taxation. You can also consider a company card to lessen the burden on your team's bank account.

Check With Your State's Laws

In addition to federal law, some state laws apply additional regulations to travel time. This means rules can vary based on the state you operate in. For example, compensable work time in California includes riding as a passenger in a vehicle when traveling for work.

But which set of employment laws should you follow? You should apply the set of rules that provide the highest payment to your employees. So, if your state regulations specify that certain activities qualify as compensable—even if the FLSA does not—you need to pay for time spent traveling.

(For guidance about your state's specific laws and guidelines, contact your state's Department of Labor and local Wage and Hour Division.)

FAQs About Travel Time Pay for Hourly Employees

Do remote/hybrid workers qualify for travel pay?

remote or hybrid worker qualifies for travel pay when you require them to travel to your place of business or another venue (like a conference hall, training facility, or client location) and they:

  • Live far away from the regular worksite (requiring an overnight stay or significant travel time)
  • Are only expected to work on-site by request or on a day they're not normally required to be on-site

However, remote/hybrid workers aren't entitled to travel pay when:

  • Your policy specifies that both an employee's home/remote office and your office are considered primary work locations
  • They are expected to work on-location on certain days
  • The time spent traveling to the office is considered an employee's commute (even if they are a remote or hybrid worker)

Do employees who drive/travel as part of their job qualify for travel pay?

The FLSA requires you to pay employees their regular hourly wages when they are driving or traveling as part of their job responsibilities. For example, bus or delivery drivers should be paid their regular wages while on the job.

Compensating Your Employees for Traveling Doesn't Need to Be Difficult

Traveling for business can take a toll—both on the road and off. Paying travel time for hourly employees can incentivize them to hit the road when necessary and make up for the time they spend away from their families and lives. 

Once you've determined which employees qualify for travel time pay, implement a clear travel policy (that adheres to state and federal law) and use management tools (like Hourly!) to maintain accurate records and compensate your employees for time spent traveling.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.