Fall 2010Sounds pretty simple; your employee works "A" hours a day at "B" dollars per hour, and at the end of a stated period you pay the employee "C." Pretty simple. It doesn't get much more difficult than that, you say. But wait! Your employee is now asking to be paid for a cab ride to the airport after work to catch a plane for a business trip out of town, for the time spent driving to a conference, and for time spent waiting at a loading dock. Are you required to pay travel pay? This article provides employers with some general guidelines to follow to avoid potential wage claims or other state or federal administrative action.
You are sending a nonexempt1 employee to an off-site conference and wonder whether the time spent traveling is compensable work time. The general rule is that travel from home to work and from work back home is not compensable. The only compensable work time will be the time spent at the actual off-site conference because the employer requires the attendance.
But the training is to last for two days and will require an overnight stay away from home. In such a case, the time the employee spends traveling will be considered compensable work time. So if the employee normally works from 9 a.m. to 5 p.m. Monday through Friday and spends time traveling for employment-related purposes during this period, this would be compensable work time. This would include travel during the same hours of nonwork days, such as a Saturday, Sunday, or holiday. So far, so good. But wait, let's take our example a step further.
The off-site conference will take place in Seattle, beginning on Friday morning at 8 a.m. and ending on Sunday afternoon at 3 p.m. The employee will travel by train, leaving Portland on Thursday evening at 4:20 p.m. and arriving in Seattle at 8:45 p.m. The employee began work at 9 a.m. on Thursday morning. Upon arrival in Seattle, the employee takes 30 minutes to retrieve bags and another 15 minutes traveling by taxi to the hotel. Under this scenario the employee has worked a total of 12.5 hours on Thursday.
On Friday, your employee attends the first day of training, beginning at 8 a.m. As part of the training, a lunch and keynote speaker is provided for all participants. You expect and require that the employee attend all sessions of the training. The first day of training concludes at 5 p.m. You have made arrangements for your employee to host a dinner from 6 p.m. until 9 p.m. for one of your most important clients on Friday night. What constitutes compensable work time? It should come as no surprise that attending the conference is compensable, but what you may have missed is the requirement that your employee's attendance at the lunch and keynote address also constitutes compensable work time because you have an expectation and requirement that the employee attend the lunch. Finally, the time spent hosting the dinner for the client that evening, including travel time between the hotel and the restaurant is also compensable. Thus, the total compensable time on Friday is nine hours for the conference, three hours for hosting the dinner, and 30 minutes for travel between the hotel and the restaurant, for a total of 12.5 hours again.
On Saturday, your employee attends the conference from 8 a.m. until 2 p.m. and then has the remainder of the day for shopping or participation in a conference-sponsored trip on Lake Washington. You don't require your employee to participate in the trip, and the employee chooses to do other things. The total compensable work time on Saturday would be six hours for attendance at the conference plus an additional two hours to cover the employee's normal work hours, for a total of eight hours. But that seems counterintuitive because the employee spent free time doing his or her own thing. But because the employee is spending time away from home overnight, he is entitled to receive compensation for his regular working hours.
On Sunday, your employee attends the morning closing session of the conference from 8 a.m. until 12 p.m. The employee then returns to Portland by train and arrives home at 4:30 p.m. The total compensable work time on Sunday is four hours attendance at the conference, plus four and a half hours for travel time, for a total of eight and a half hours of compensable work time on Sunday.
The attendance by your employee at the conference in Seattle has generated a total of 25.5 hours of compensable work time over your regular or expected compensable work time for the week (4.5 hours on Thursday, 4.5 hours on Friday, 8 hours on Saturday and 8.5 hours on Sunday). Given the total hours of compensable work time it is also probable that your employee has worked overtime hours, but that is not the focus of this article.
What at first blush seems to be a very straightforward process of A times B equals C is not so simple after all. Knowing and applying the wage and hour regulations under the FLSA or Oregon law can be daunting at times. Employers are cautioned to be careful and err in favor of the employee. It is better to overcompensate an employee for a few hours of time than to answer and defend a wage and hour complaint.
Employers have seen an increase in the administrative actions by state and federal agencies to enforce wage and hour regulations over the past few years. State and federal administrative agencies aggressively pursue wage and hour violations on behalf of employees. Employer beware.
1"Nonexempt" is defined as an employee subject to the payment of both minimum wage and overtime pay under the Fair Labor Standards Act ("FLSA") or the state wage and hour laws.