Travel Time Pay for Exempt Employees & Nonexempt

Travel time is a consideration for employees who have to report to work in-person. Travel for work varies from the daily commutes to the office or long-distance plane rides to attend work conferences.

In 2022, time employees spend in one-way commutes is 26 minutes on average. Based on statistics, 58% of employees are willing to take business trips worldwide, while 61% of companies in the United States expect an increase in business travel budgets in 2024.

With travel as a factor in the corporate world, it is best to know the details on compensation for travel time.

In this article, we will discuss travel time pay, its indications for exempt and non-exempt employees, types of travel time and the compensable ones, and some frequently asked questions.

What is travel time pay?

Travel time pay is the compensation given to employees who travel for work-related purposes outside the normal hours of commute.

Although it is a basic concept in the industry, there are workers who are entitled to travel time compensation and those who are not. There are also paid travel times and there are non-paid ones.

The Fair Labor Standards Act (FLSA) requires companies to pay non-exempt workers for their work-related travels, while exempt employees are not mandatorily paid additional compensation for travel time in work.

To simplify critical salary arrangements like travel time pay, consultants from Salary.com can help you with salary structure building. They assist in making competitive pay models, salary ranges, and cost estimations to cater to employee compensation.

Travel time pay for exempt employees

Exempt employees, who receive fixed salaries rather than overtime pay and minimum wage, are not entitled to get travel time compensation. These workers hold executive, administrative, professional, computer, and outside sales positions.

Employers are not legally required to provide additional compensation for these employees when they travel for work, although some companies choose to give extra pay to those who do extensive travels.

To attract and retain exempt employees, such as executive talents, you need to establish a robust executive compensation package that will motivate their leadership performance, profit increase, and company success. Salary.com’s compensation experts will help you do that.

Travel time pay for non-exempt employees

Non-exempt employees, or hourly employees, get paid minimum wage and overtime pay. Unlike exempt employees, companies pay non-exempt employees for travel time.

Travel time pay for non-exempt employees varies from state to state in the US. Here are some of them with their own added regulations:

• California. Travel time compensation includes any time longer than the usual daily commute of employees and overnight out-of-town trips. The rates set by employers must not be lower than the minimum wage rates.

• Oregon. There are 4 types of work-related travel time: overnight travels, special one-day assignments, travels between worksites, and portal-to-portal travels or work-to-home and home-to-work.

• Maryland. Compensation for travel time in Maryland includes trips during employee's regular working hours, emergency cases, and travel from one job location to another.

Types of travel time

To align which travel is compensated or not, we first need to classify different types of travel time. Here is a list of them:

• Home to work commutes. When an employee travels from their homes to work and vice versa before and after the regular working hours.

• Special one-day assignment. When an employee who works in a fixed location travels to another place for a special one-day assignment and returns home the same day.

• All in a day’s work. When an employee’s travel is part of their main responsibility at work, such as going between job sites.

• Away from home. When an employee travels for work overnight that keeps them away from home.

When is travel time compensable?

Not every travel time is work time. This means that there are travel times that get paid and those that are not.

It is important to know the grounds for compensated travel time to anticipate the budgeting needs of the company. Salary.com’s experts in workplace planning will help you align the long-term financial forecasts of your organization and achieve goals based on the composition of your workforce.

According to the Fair Labor Standards Act, when an employee travels from work to home and home to work before and after normal work hours, it is not compensable since the time spent on the travel is not considered work time.

So, what are travel times that are compensable for non-exempt employees? Well, here is a list of them:

• Traveling as part of a day’s work.

  Criteria: Employee must be engaged in work while traveling, on regular working hours, or outside normal hours of work.

  Example: Employee A had to travel to pick up some materials for work during normal work hours.

• Traveling that needs overnight stay away from home.

  Criteria: Employee works on regular or non-working days like weekends and holidays.

  Example: Employee B had to travel to another city to attend a meeting on Saturday and had to spend the night away from home.

• Traveling in and out of the city for a special one-day assignment.

  Criteria: Employee must go to another location for work-related activities and must return home the same day.

  Turn Your Pay Into Profit

  Turn your pay system into a growth engine.

  Boost ROI

  Example: Employee C, who is designated in Los Angeles, needs to go to San Francisco to do a special task assigned by his manager.

FAQs

Here are some common questions about travel time pay for exempt employees and non-exempt:

Is travel time billable hours?

Yes, there are compensable travel time. These are when you travel as part of the day’s work, travel that needs overnight stay away from home, and travel for a special one-day assignment in and out of the city.

Do companies have to pay employees for travel time?

Yes. Companies must pay the time employees spend on travel as long it meets the criteria for compensable travels set by the Wages and the Fair Labor Standards Act. However, commuting from home to work and vice versa is not a paid time of travel.

Why is commute time not paid?

Normal commuting time when traveling from work to home and vice versa is not paid since the time an employee spends traveling occurs before and after the workday, which is not included in the work schedule.