Human Resource Blog

Travel Time

I’m a manager for a division of a construction company in Iowa. The question is: Should our employees be paid hourly wage to travel to a job site and return to the office they are driving a company vehicle both ways? Currently they are paid for the time to go to the job site and only the driver is paid for the return trip and then only if he is pulling equipment not just driving the truck. Also I have been told that these wages are treated diffrently for tax reasons and are non-taxable. Is that correct?

This complex issue is not addressed under Iowa law. Assuming that your company has revenue of more than $500,000 per  year, or does business across state lines (such as buying products from out-of-state-vendors) then the federal Fair Labor Standards Act would apply.

This is a complex issue under the FLSA. Normally, an employee driving a company vehicle from home to a job site is not entitled to payment for that time. However, an employee driving a company vehicle from the office to the job site (or back) usually must be paid for that time, especially if he is transporting passengers, tools or materials to or from the job site. A passenger who must help unload the truck when it arrives at the office must be compensated for the entire ride. However, if the passenger is being transported merely as a courtesy (for example, if his car is in the shop and he would ordinarily be free to drive his own car to the job site) then usually he is not entitled to payment for the time spent riding.

If the employees are required to stop by the office to receive assignments or instructions for the day before beginning work, or to pick up tools or materials, then usually they must all be paid for the travel time to the jobsite.

The good news is that the Wage and Hour Division of the US Department of Labor, which enforces this law, has an eLaws Advisor on this topic. This online questionnaire will walk you through the process to determine if this should be considered “hours worked.” It’s at http://www.dol.gov/elaws/esa/flsa/hoursworked/default.asp

It is fairly common for highly paid workers such as carpenters to be paid at a lower rate for driving. As long as they are paid at least the prevailing rate and/or minimum wage, it should not be a problem. It’s not entirely clear why this employer feels that such income is not taxable, and it’s not clear that the IRS would agree.