Should Employers Pay for Travel Expenses for Non Exempt Employees

A popular topic in Human Resources with Employers is to pay or not to pay for travel expenses for Non Exempt Employees. What is the proper procedure and industry standard?

Employers are often confused as to whether they must pay nonexempt employees for time traveling to, and attendance time at, a work-related function.

Certain types of employees, who are classified as exempt employees (on salary), are not entitled to overtime pay as guaranteed by the Fair Labor Standards Act (FLSA). If an employee is classified as exempt (vs. non-exempt) their employer is not required to pay them overtime pay.

With the exception of travel from home to work and back, most travel time is considered work time.

You must pay nonexempt (hourly) employees for any time they are permitted to work or required to be there.

If you require nonexempt employees to attend a conference away from their typical work place, you must pay them for the travel time to and from the conference, minus the time of their usual commute. If air travel is required, you must pay them (subtracting their usual commute time) from the time they leave their house until they reach their destination, or until they no longer perform work (they have checked into the hotel). If they are free to do what they choose your obligation to pay ends. If they go straight to the conference, you continue to pay.

Because traveling does not require the employee to employ his/her skills, pay for travel time can be at a rate of pay less than the employee’s normal rate of pay. You can pay the employee as little as the minimum wage. The lowest hourly wage an employer may pay a nonexempt employee, currently $8.00 per hour, for travel pay. Travel time is counted as work time and overtime pay may be due for travel.

Unless you are specifically classified as an “exempt” worker, your employer must pay you overtime wages for any hours you work over 40 hours in a workweek. The employer must pay overtime wages at a rate of at least one and one-half times (150%) your regular hourly rate.

If travel time pay is less than the employee’s normal earnings, explain this difference to all employees in advance, make it part of your personnel policy. You must reimburse the employee for all out-of-pocket travel expenses.


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