Compensable Time: Definition, FLSA Rules & FAQs
As an employer, understanding what counts as compensable time under the Fair Labor Standards Act (FLSA) is important. These rules determine when employees must be paid, including overtime.
In 2024, the Wage and Hour Division recovered over $273 million in back pay and damages for nearly 152,000 workers, often because employers did not pay for all the hours employees worked.
Knowing what qualifies as compensable time helps ensure legal compliance and prevent these costly errors. In this article, we discuss compensable time meaning, share important labor rules for employers, and answer common questions related to the topic.
What is compensable time?
Compensable time is time an employee must be paid for, including any time spent on duty doing physical or mental exertion at the employer’s location or assigned workplace. For example, stocking shelves or attending required training is paid, while a meal break with no work duties is not.
The U.S. Department of Labor calls such periods "hours worked." Employers must pay at least the minimum wage for this time, and overtime pay at 1.5 times the regular rate for any hours over 40 in a workweek.
Speaking of minimum wage, Salary.com's Compensation Software provides the insights you need to track the latest pay rates across states, cities, counties, and even local jurisdictions.
What is compensable vs non-compensable?
The difference between compensable and non-compensable time is that compensable time includes hours when employees must be compensated under labor laws. On the other hand, non-compensable time refers to periods when employees do not need to be paid.
For example, time spent in required safety training programs during regular hours is counted as compensable hours worked, and the corresponding hours are paid. But a 30-minute lunch break with no work duties is not counted as hours worked and is non-compensable.
| Compensable Time | Non-Compensable Time |
|---|---|
| Walking, riding, or traveling between the actual place of performance of principal activities and any other job site. (See 29 U.S.C § 254(a)) | Time spent traveling between home and work. (See 29 U.S.C § 254(a)) |
| Activities before or after the regular work shift if integral and indispensable to principal activities. (See Steiner v. Mitchell, 350 U.S. 247, 256 (1956)) | Time spent waiting to don or doff PPE before the first principal activity of the day. (See IBP, Inc. v. Alvarez, 546 U.S. 21, 40–42 (2005)) |
| First principal activity of the day and any waiting time after that until the last principal activity ends. (See IBP, Inc. v. Alvarez, 546 U.S. 21, 37 (2005)) | Changing clothes or showering as a convenience to the employee. (See 29 CFR § 785.24) |
| Preparation of equipment or changing clothes necessary to perform principal activities. (See Steiner v. Mitchell, 350 U.S. 247, 256 (1956)) | Clocking/checking in and out or waiting time in line to do so. (See 29 CFR § 785.24) |
| Oiling, greasing, cleaning, or performing machine maintenance at the start of the normal workday. (See 29 CFR §§ 785.24 & 790.8(b)(1)) | Activities explicitly excluded by a collective bargaining agreement. (See 29 CFR § 785) |
Classification of job duties affects whether certain assigned tasks are paid, like training sessions or travel time. Compensation Planning Software includes a job matching feature that helps define roles clearly and supports fair pay for time worked.
What's generally considered compensable time?
To give you a full understanding of what compensable working time is, here are examples of what constitutes compensable time under the FLSA:
Unrequested employee’s workday: If an employee voluntarily continues working (e.g., staying late), the time is still compensable.
Engaged waiting time: If the employee is expected to wait while ready to work (e.g., fireman playing checkers), it is paid.
On-call on employer’s premises: On-call time at the workplace must be paid.
Short rest breaks: Breaks of 20 minutes or less are paid.
Meal periods while working: If duties are performed while eating (e.g., answering phones), time must be paid.
Sleeping (shift under 24 hours): Sleeping time is compensable. For example, a caregiver on a 12-hour night shift sleeps during quiet hours but is still paid for the full shift.
Sleeping (shift 24+ hours): Up to 8 hours of sleep can be unpaid if the employee gets an uninterrupted night’s sleep, agrees to the arrangement, it occurs during the employee’s scheduled shift, and provided adequate sleeping facilities.
Job-related training: Paid unless it meets all four criteria for exclusion (see below).
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Work travel during the day: Travel is paid for if travel is involved as part of the employee's job or if it happens during compensable hours, even on weekends.
Job site to job site travel is paid.
One-day special assignment in another city: Most of the travel time is paid.
Travel during work hours, even on weekends, is paid.
What's generally not considered compensable time?
Now, what falls outside working time and is generally not paid includes:
Non engaged waiting time: If such employee is free to use the time for personal activities (e.g., waiting for a call at home), it is not compensable.
On-call at home (with freedom): Usually not paid unless restrictions are significant. For example, if the employee must stay within a short distance from work and respond immediately, the time may be compensable.
Bona fide meal periods (30+ minutes): Not paid if completely relieved from duty. For example, if a worker is eating regular meals during a 45-minute lunch break with no job duties, that time is unpaid.
Ordinary home-to-work travel: Not paid. For example, time spent commuting from home to the office each morning is not compensable.
Travel away from home community (after hours): If traveling as a passenger outside regular working hours, time is not paid unless particular circumstances make it compensable.
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As mentioned, lectures/trainings are unpaid only if all four conditions apply:
Outside normal working hours
Voluntary
Not job related
No work performed during the session
Compensable time: FLSA and other rules to consider
As noted above, compensable time includes hours an employee must be paid for when the employee is required to be on duty or perform work-related tasks. The Fair Labor Standards Act of 1938 (FLSA) defines what counts as paid work time. It sets wage rules and requires non-exempt employees to receive one and one half times their regular pay for overtime hours beyond 40 in a week.
The FLSA also explains what kinds of time count as paid. Short breaks of 20 minutes or less are usually paid for. Meal breaks over 30 minutes are not paid unless the employee works during the break. Even if a business is not fully covered by the FLSA, an employee may still be covered if their work involves interstate commerce.
The confusion around what qualifies as paid time raises many concerns. In response, the Portal-to-Portal Act of 1947 was introduced to clarify which activities are compensable, especially those performed before or after the main job responsibilities.
The act, which amended the FLSA, says employers do not have to pay for some work-related activities before or after the main job, like walking to a workstation or changing clothes, unless those tasks are part of the job. Once the main work begins, the time until the shift ends is usually paid.
According to the Portal-to-Portal Act, only certain activities count as paid work time.
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Principal activities are tasks that are a main part of the job or required to do the job properly.
Example: If someone at a chemical plant does electrical work, that task is paid because it is part of the employee's principal activity.
Example: Putting on required safety gear, like a full body suit, is also paid because it is a such principal activity that is necessary for the job.
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Preliminary and postliminary activities happen before or after the main job tasks. These are not usually paid, unless they are required and necessary.
Example: Walking to the work area is not paid for.
But if the employer requires employees to join a stretch-and-flex session before starting work, that time is paid for.
FAQs
How is compensable time paid?
Compensable time is paid based on the employee’s regular rate and must follow federal, applicable state, and local wage laws. For non-exempt employees under the FLSA, hours worked up to 40 in a week must be paid at least the federal minimum wage.
Also, employers must compensate employees at 1.5 times their regular rate for hours worked over 40 a week if they are eligible for overtime pay.
Besides knowing what counts as compensable time, it is also important to provide fair and consistent pay. Salary.com's Pay Equity Reporting Toolkit helps review your pay practices and support internal pay fairness.
What employees does compensable time apply to?
Compensable time rules mainly apply to non-exempt employees under the FLSA. The FLSA requires organizations to pay employees at least the minimum wage for all hours worked and overtime compensation for any hours over 40 in a week. These employees are usually hourly workers.
Is travel time compensable under FLSA?
It depends. The FLSA has specific rules for when travel time is paid for non-exempt employees. Normal travel from home to work is not paid for. But travel during the normal workday, like going between job sites, is paid. The same applies to rest and meal periods—short rest periods are paid, but meal breaks are not if the employee is completely off duty.
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