Calculating Travel Time for Employees

Is calculating travel time a dreaded part of your job as payroll personnel? If the answer is yes, you are not alone! Calculating travel time for employees can cause headache – especially if you do not know exactly what type of travel time your organization should pay for. The threat of hour and wage violations on your company’s record may be enough to send you over the roof. To help, we have compiled a list of the most common travel solutions and how they apply in terms of federal travel time rules for employees.

Pay Rates

It is considered to be okay to pay your employees a different pay rate during travel time, as long as the wage you pay does not dip below minimum wage. It is important that this change in pay is clearly communicated and documented before they begin traveling.

Overtime

Paid travel hours need to be counted by employers – even when calculating overtime pay during a workweek.

Mileage Reimbursement

Mileage reimbursement is not required as it is optional for employers. However, if you (the employer) pay your employee mileage reimbursement for his vehicle’s wear and tear, you will also need to pay travel time on his paycheck. The IRS recommends a rate of 53.5 cents per business mile driven.

Overnight Travel Pay

When an employee travels overnight for company business, work hours that are considered normal work hours are typically considered compensable. This means that regardless of the time of day the employee travels, hours that are compensable are considered their normal work hours.

If an employee travels to a destination during non-working hours, compensation may also apply, unless he is traveling as a passenger.

Traveling Between Worksites

Employees who must travel from worksites in order to accomplish work should be paid for their time. This is typical for employees who work in maintenance or perform services.

Traveling Out of Town and Back in One Day

If an employee travels out of town, to another city and back, the travel time should count as work hours. Employers are not required, however, to pay the time the employee would typically need to commute to work from home, so that amount of time may be deducted.