When does an Employee’s Time on the Road Become Compensable?

In travel expense management, the focus is generally and correctly on distance. How far employees drive vehicles is key to determining the reimbursable expense. But what about time? When would – or should – organizations reimburse travel time for employees?

One the basics of travel expense management holds that employees need not reimbursed for their travel between work and home. But even that seemingly elementary principle has been challenged. In California, a group of technicians for sued Konica Minolta Business Systems, claiming they should be paid for the time and reimbursed for the mileage required to drive their personal vehicles from home to their first assignment of the day and home again from the last one.

A judge ruled in favor of the employer, but the case highlights the need for vigilance – and policies – in these situations. Winning in court is one thing, but the associated costs (in money and morale) require employers to get out ahead of these situations before they become a time and financial drain.

So what kinds of situations demand attention? Here are a few:

• An employee must drive to a remote work site. Should there be compensation for the time required that is in excess of a typical commute?
• An employee is required to attend an offsite meeting, conference or convention. Should he or she be paid during the travel portion of the trip?
• What about the time beyond a typical commute required to reach the airport for a business trip? And what if there are airline delays that require more time to be spent there?
• The trip requires an overnight stay. What are the rules around that?

Under federal law, travel time during normal working hours is counted as hours worked. But outside those hours, the time is not compensable unless someone is working at the same time they are traveling. There are exceptions. In California, travel time during “off” hours can be compensable.

Employment law attorneys advise employers to take the following steps to avoid potentially costly problems:

• Schedule employee travel in such a way that it avoids or at least reduces overtime.
• Establish a lower pay rate for travel. This is allowed as long as the employee is notified in advance and as long as the rate doesn’t fall below minimum wage.
• Set travel policies and make sure employees understand them. This extends to the pre-employment process. Explaining these employee travel policies and the reasons for them to employees before their first day will avoid some of the inevitable pushback from those who feel treated unfairly.

In maintaining adherence to policies, never underestimate the value of good tools that keep the focus on fair and consistent application of best practices. In mileage reimbursement, utilizing an electronic approval system like SureMileage by Company Mileage helps focus everyone involved on the equitable reimbursement of expenses to be incurred rather than the fraught-filled exercise of verifying employee claims based on odometer readings and little else.

Travel expense management has to about more than paying the bills. That takes time, tools and thought to make your expense report processes consistent, fair and smart.