Do Companies Have to Pay Travel Time?
The federal Fair Labor Standards Act establishes specific guidelines for when, whether and how employers have to pay employees, Some states have enacted additional protections as well. In most cases, you'll have to pay your employees for travel time, though you're not required to pay them for their drive to and from work.
Two classes of workers are exempt from the FLSA -- independent contractors and exempt employees. Exempt employees are salaried employees who make more than $455 per week, as of the date of publication. They must also work in a professional, supervisory or administrative capacity, and are not subject to many of the rules in the FLSA. A salaried construction worker, for example, is not an exempt employee. Independent contractors are people you hire to complete a specific task but who have broad discretion over how they complete it. You can't control the working hours of independent contractors and can only give broad directions about how you want the work done. A secretary is not an independent contractor, but a programmer you temporarily hire to fix your computer might be.
When employees travel during normal working hours, you have to pay them for their travel time. An employee who flies to an out-of-town meeting or who travels to another work site must be compensated for this travel. You'll also have to pay overtime rates if your employee exceeds 40 hours of work per week, including any time spent in travel. Exempt employees do not have to be paid overtime.
When an employee travels overnight, you're required only to compensate her for travel time that occurs during the normal workday. You must also compensate her for any time spent working, but you don't have to pay for sleeping time or dinners. For example, if your employee normally works 9-to-5 and spends eight hours traveling, four of which occur during normal working hours, you'll probably only have to pay for those four hours. However, you will also have to pay for all hours she spends working on your business-related tasks such as working lunches, attending conferences and meeting clients.
There's no legal requirement that employers pay for employee travel expenses such as lodging and transportation, although they must still pay hourly wages for time spent traveling. You can't force an employee to cover a travel expense, but you can fire her if she won't travel. If, however, your employee has a contract requiring payment, you'll have to cover all items specifically mentioned in the contract, even if the price seems high. Further, if you don't pay your employee's travel expenses, the costs of working for you could be prohibitively high if she has to regularly travel.