Paying Employees for On-Call Time and Travel Time

By Katherine Muniz
June 7, 2016

If you have on-call employees or employees traveling for the business, quick question — how do you pay them? If you’re unsure of the answer or questioning whether your existing arrangement is legally compliant, look to federal law to define the basis on which employees are and aren’t entitled to pay.

Are employees waiting to be given work entitled to pay?

Generally, as outlined under federal law, you must pay your employees for any of their time that you control and that benefits you, including periods of inactivity when employees are waiting for work.

“All on-call time is not hours worked,” says Attorney Jonathan A. Paul of The Tech Law Group, P.C. “The distinction between compensable and non-compensable waiting time under the FLSA is drawn this way: a worker who is ‘engaged to be waiting’ is entitled to compensation, while a worker who is ‘waiting to be engaged’ is not. A critical issue in determining whether an employee should receive compensation for idle time is whether the employee can use time effectively for his or her own purposes.”

Take the following examples in which employees are entitled to pay:

  • A stenographer who reads a book while waiting for dictation
  • A factory worker who talks to his fellow employees while waiting for machinery to be repaired
  • A messenger who works a crossword puzzle while awaiting assignments

“Where an employee must be paid for “waiting time” depends upon the specific facts involved,” says Attorney Michael A. Semaine. “Where a cashier reads a book while waiting for a customer to check out, the employer has engaged the cashier to wait, rather than the cashier waiting to be engaged.”

Are employees who are physically on-call entitled to pay?

Aside from “wait time,” another aspect of being on-call is physically being on-call.

“Where an employee is required to remain on the employer’s premises or in a specific location, the employee is considered to be “working” and the employee must be paid for the time on-call,” says Semaine. “However, if the employee can stay at home or some other place of the employee’s choosing, that employee is typically considered to be off the clock.”

According to Paul, important aspects in deciding the compensability of on-call or waiting time are the volume of calls, whether the employee has to stay on the employer’s property and the regularity of interruption by work calls. He suggests employers use the U.S. Department of Labor’s FLSA Hours Worked Advisor to determine how the law is applied to their work environment.

Are employees entitled to pay when they travel for work?

When considering whether it is your employer’s obligation to pay non-exempt employees for travel time, the answer will depend on the situation and circumstance.

Typically, commuting time is not compensated. However, says Attorney Colleen McCarthy of Ferruzzo & Ferruzzo LLP, “Once an employee starts working, the time she spends traveling throughout the day, from worksite to worksite or worksite to customer site, must be paid.”

Traveling to a location for work, but not at work: “If an employee reports to a location other than the normal job sites, for example, if she is attending a seminar, the employee must be compensated for the time-traveling from the employee’s home to the seminar location, minus the time the employee would spend traveling to the normal job site,” says McCarthy. “For example, if the employee’s normal commute time is 30 minutes, but she is attending a seminar that is 45 minutes away from her home, she would be paid 15 minutes of travel time each way.”

Traveling to a meeting place: In the code outlining labor in the United States, (29 CFR 785.38), “Where an employee is required to report at a meeting place to receive instructions or to perform other work there, or to pick up and to carry tools, the travel from the designated place to the workplace is part of the day’s work, and must be counted as hours worked regardless of contract, custom, or practice.”

Out-of-town trips which are overnight or multi-day trips: Labor and employment attorney  Thomas Wassel, partner of the New York law firm Cullen and Dykman, provides the following scenario to illustrate the rules in which travel time is and is not compensable for trips. We thank him for his assistance. “Let’s assume the employee’s normal shift is 9 AM to 5 PM, Monday to Friday. Here are some of the details

  • While the employee is traveling, all hours between 9 AM and 5 PM are considered working time. If the trip includes days which are normally nonworking (such as weekends or holidays), those days are also considered working time during the trip. For example, if the employee travels off-site Friday and returns on Monday, the employee must be paid for Friday, Saturday, Sunday, and Monday.
  • If the employee actually performs work on the trip outside the 9 to 5 period (such as attending evening meetings or other functions), that’s also working time.
  • Travel time during the 9 to 5 period is considered working time, but outside that period, time spent as a passenger on an airplane, train, boat, bus, or automobile is not considered working time. Of course, if the employee actually works while a passenger (such as preparing reports on a laptop while on a plane), that is working time no matter when it happens.
  • Meal periods of 30 minutes or more, where the employee is relieved of all duties, do not count as working time (either while traveling or at the main office).

Employers are allowed to set different hourly rates for different types of work, so there is nothing preventing an employer from paying a lower rate for non-working travel time, as long as it at least the minimum wage.”

As you have learned, federal law entitles employees to just pay in situations that they have little control over for the purposes of their work. Whether it’s traveling out of town, waiting for work on-premises, or regularly being interrupted by professional calls on personal time, the law recognizes that any extension of professional responsibilities, however limited, should be compensated fairly.

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