We are frequently contacted by employers with questions regarding various employment issues. The following are some questions we have received regarding travel time, together with some responses. Realize that many employment issues are fact specific. The following questions and answers are not intended to be comprehensive but to give the reader some ways to think about the issues and some citations for further research. We strongly recommend that you consult with legal counsel about your specific situation.
Q. When do I have to pay my employees' travel time?
A. Whether an employer needs to pay an employee for travel time depends on several factors. Commuting (i.e., traveling from home to the usual work site, which is often a company’s headquarters or a particular client) is not considered paid travel time. Most other travel time during a work day may be considered work time, including travel to a different client or work site on a temporary basis or travel between clients or work sites. Generally, travel time longer than the employee’s normal commute to and from her regular work site is considered compensable. Employees who experience a change in work site location must be compensated for any actual (driving) travel time in excess of the time normally required to report to their regular work site.
The California Department of Labor Standards Enforcement (“DLSE”) explains how to measure travel time compensation for employees with alternative work sites: “The travel time is measured by the difference between the time it normally takes the employee to travel from her home to the assigned work place and the time it takes the employee to travel from home to the distant work site. This could calculate to no commute time if, for instance, the travel time is less from the employee’s home to the distant work site than the normal commute travel time by the employee.” (Cadell, Dept. of Industrial Relations (April 2003) Opinion Letter No.2003.04.22, Travel Time Pay for Employee with Alternative Work sites at p. 2.)
This statement from the DLSE is predicated on the court’s decision in Morillion v. Royal Packing (2000) 22 Cal. 4th 575. In this case, the court held that it was necessary to “distinguish between travel that the employer specifically compels and controls…and an ordinary commute that employees take on their own.” (Id. at p. 587.) The court concluded that farm workers who were required to meet at a designated departure point at a certain time to ride the employer’s buses to work were under the control of the employer and entitled to be compensated for that time. The court also noted that “this conclusion should not be considered as holding that all travel time to and from work, rather than compulsory travel time as defined above is compensable. Therefore, while the time plaintiffs spent traveling on Royal’s buses to and from the fields is compensable as ‘hours worked’ under subdivision 2(G), the time plaintiffs spent commuting from home to the departure points and back again is not.” (Id. at pp. 587-588.) The time employees spent commuting from home to the employer bus departure points and back was not compensable because it was normal commute travel time.
The conclusion in Morillion was that “compulsory travel time is compensable as ‘hours worked.’ (Id. at p. 575.) That said, “the level of the employer’s control over its employees, rather than the mere fact the employer requires the employees’ activity, is determinative.” (Id. at p. 587.) The Morillion court noted that the employees “were foreclosed from numerous activities in which they might otherwise engage if they were permitted to travel to the [work site] by their own transportation… [The employer] determin[ed] when, where and how [its employees] must travel.” (Id. at pp. 586-587.)
Therefore, for example, if an employer required an employee to leave one job site and travel directly to a different job site, this would be considered compensable as hours worked. It is compulsory travel time, thus subjecting the employee to the employer’s control.
Q. What if my employee has a break between two shifts at different locations? What do I pay?
A. During a work day, if the employee is relieved from duty long enough to engage in purely personal pursuits (i.e., on her own time, not under the control of the employer or not “on call” or not available for work), only the time necessary to make the trip between clients must be paid.
For example, assume an employee provides services for two different clients, and the drive between them is 30 minutes. She typically provides services for Client A from 9 am to 11 am. Her drive from home to Client A is not compensable. She then has time off and is to report to Client B at 4 pm. Assuming the employee is not “on call” during this five hour “gap time” but truly has her own free time, certainly not all the five hours of time are “hours worked.” However, the 30 minutes to travel between Client A and Client B are “hours worked.” In other words, those 30 minutes should be paid.
Q. How long does a break between shifts have to be so I don’t have to pay for travel time and the break?
There does not seem to be a “bright line” test on the amount of time long enough “to engage in purely personal pursuits” or not be under the “control” of the employer (another phrase used is whether the time off is not “unduly restrictive” to the employee pursuing her own interests). The issues to consider, as mentioned, are whether the employee is free from employer control (then no compensation) and the distance to the second client (employer only to pay the time necessary for the actual drive time between clients).
In Mendiola v. CPS Security Solutions, Inc., et al. (2015) 60 Cal. 4th 833, the court identified various factors in regards to determining an employer’s control during “on call” time. These factors were: “(1) whether there was an on-premises living requirement; (2) whether there were excessive geographical restrictions on employee’s movements; (3) whether the frequency of calls was unduly restrictive; (4) whether a fixed time limit for response was unduly restrictive; (5) whether the on-call employee could easily trade on-call responsibilities; (6) whether use of a pager could ease restrictions; and (7) whether the employee had actually engaged in personal activities during call-in time… Courts have also taken into account whether the ‘[o]n-call waiting time…is spent primarily for the benefit of the employer and its business.” (Id. at p. 841.) If an employee between shifts is subject to the control of the employer, the hours must be compensated in addition to the travel time discussed above.
However, additional issues are raised by the "break between shifts" scenario, as this work schedule may constitute a “split shift.” The Department of Industrial Relation’s Wage Orders define a split shift as “a work schedule, which is interrupted by non-paid, non-working periods established by the employer, other than bona fide rest or meal periods.” (e.g. Wage Order 15 Section 2(N); other Wage Orders have similar provisions.) Accordingly, “[w]hen an employee works a split shift, one (1) hour’s pay at the minimum wage shall be paid in addition to the minimum wage for that workday….” (Wage Order 15 Section 4(C).)
The DLSE has taken the position that any break in excess of one hour between shifts should be treated as a split shift (Cadell, Dept. of Industrial Relations (December 2002) Opinion Letter No.2002.12.11, Hours worked – Split Shift at pp. 1-2.) However, split shift premiums (i.e., the additional one hour) are owed only in situations where an employee’s total compensation for all hours worked is less than minimum wage for all hours worked plus one additional hour of minimum wage (i.e., the split shift premium). This generally only occurs when an employee is paid at or near minimum wage.
In Aleman v. Airtouch Cellular (2012) 209 Cal. App. 4th 556, the court addressed split shifts and Wage Order 4. The court relied on a Rutter Group’s Practice Guides as well as a federal district court case to establish that the intention of this Wage Order Section is for the protection of minimum wages:
“No published California case has previously addressed this direct issue. However, although obviously not binding, a well-respected treatise (Chin et al., Cal. Practice Guide: Employment Litigation (The Rutter Group 2011)) has embraced the same interpretation of Wage Order 4, subdivison 4(C). The Rutter guide explains the provision as follows: ‘[A]n employee earning the minimum wage who works eight hours on a split shift is entitled to receive nine times the minimum hourly wage.’ (Citation) ‘This provision also applies to employees paid more than the minimum wage. However, such employees are only entitled to the difference between what they actually earned and what they would have earned had they been paid the minimum wage for their entire shift plus an extra hour.’ (Citation).” (Id. at pp. 575-576.)
The court in Aleman concluded that no shift pay was owed because the employee’s pay when he or she worked split shifts was greater than the minimum wage for all hours worked plus one additional hour.
The “split shift” rule raises a couple more issues. First, as a general rule, employees are entitled to a one hour premium when their shift “gap” is more than one hour and their total compensation for all hours worked is less than minimum wage for all hours worked plus the premium hour. However, whether it applies to your employees depends on their rate of pay. The formula is set forth above for you to determine. Second, the additional split shift hour should not be counted towards overtime hours. The DLSE explained in section 46.7.3 of its June 2002 Manual that split shift premium pays, although paid to employees in hourly increments as required under Wage Orders, do not constitute “hours worked” for purposes of calculating whether overtime is owed.
In summary, there is no explicit requirement or statute that specifies a length of time between shifts which alleviates the obligation of an employer to pay for this break time. Practically speaking, the split shift “one hour” distinction made by the DLSE seems like a good place (time) to draw the line. If the time off is more than an hour, then only actual driving time between clients might be paid (plus the premium, if applicable). If the time off is less than an hour, then the issue seems to be whether there is really “time off” between clients (or whether that “time off” “is unduly restrictive” and not truly the “employee’s time off); if not, then the entire time and driving time might be compensable “hours worked.” Remember, the standard is whether the gap time (whatever the amount of time) gives the employee complete freedom to do as he or she pleases or whether that employee is really working or under the control of the employer, which could also occur because the time is so restricted that, in effect (or constructively), the employee will be deemed working.
Q. Can I pay my employees less than their regular hourly rate for travel time?
Yes; however, as discussed above, when travel time constitutes hours worked, an employer must always pay at least minimum wage to its employees for all hours worked (see generally Wage Orders’ Section 4 and also 29 USC § 206.)
(Note: California differs from federal law in complying with minimum wage requirements. Under federal law, an employer is compliant with its minimum wage obligation if the total compensation for a workweek, when divided by the total number of hours worked in the workweek equaled an hourly wage equal at or above minimum wage. However, this averaging permitted by federal law violates California law. California law requires the payment of minimum wage for each hour or fractional hour worked regardless of how well paid the employees were for their other hours. As a California employer, you may not average wages over any period to determine whether an employee has been paid minimum wage. See Armenta v. Osmose, Inc. (2005) 135 Cal. App. 4th 314, Gonzales v. Downtown LA Motors (2013) 215 Cal. App. 4th 36, Blueford v. Safeway, Inc. (2013) 216 Cal. App. 4th 864, and Labor Code § 226.2.)
Realize that this practice of paying your employees less than their regular hourly rate (but still minimum wage) for travel time will have a few other implications.
- This could trigger a split shift premium depending on the total compensation your employee receives during that particular pay period. See above.
- This could alter the employee’s pay stubs. California employers are required to accurately itemize all applicable hourly rates in effect during a pay period and the corresponding number of hours worked at each hourly rate by the employee on their employees’ pay stubs. See Labor Code § 226.
- This could affect the calculation for the employee’s regular hourly rate and regular overtime rate. (See Huntington Memorial Hospital v. Superior Court (2005) 131 Cal. App. 4th 893.)
Q. Whose responsibility is it to keep track of travel time?
A. Ultimately, the buck stops with the employer to keep track of not just travel time but all hours worked for all employees, excluding exempt employees. Labor Code § 226 and Labor Code § 1198.5 require that every employer maintain and preserve payroll or other records containing a number of items, including all hours worked by their employees (see also 29 CFR 516.2(a).) If the travel time in question is compensable, as discussed above, it is the employer’s responsibility to keep track of those hours.
Q. Can I use Google Maps to calculate employee travel time?
A. Employers may use online mapping services to calculate employee travel time, especially in cases where an employee fails to provide a record of the time actually traveled, but the employer is always obligated to compensate employees for actual time and miles traveled as opposed to the ideal/optimal time and miles traveled. Remember, California and federal law requires that employers track how many hours their employees work. If there were a dispute between an employer and an employee with regards to hours worked and travel time, where the employer uses an online mapping service to calculate the ideal travel time and the employee uses a record of his or her actual miles driven, the courts would probably side with the employee. (See below.)
Q. If I pay travel time to my employees, do I also have to pay for each mile they drive during their hours worked?
A. If the employee is driving a personal vehicle, yes. California Labor Code Section 2802(a) requires reimbursement for work-related use of a personal vehicle. Labor Code Section 2802 states that “[a]n employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.” Subdivision (c) of Section 2802 defines “necessary expenditures or losses” to include “all reasonable costs.”
When an employee is required to use his or her personal vehicle for work-related activities, the employer must reimburse the employee for expenses related to the use of the vehicle. (As mentioned, this does not include use of a personal vehicle to commute between home and work.)
A common practice to reimburse employees is the mileage reimbursement method. This method requires employees to keep track of mileage for work-related vehicle use. The employer then multiplies the number of miles by the current Internal Revenue Service (IRS) mileage reimbursement rate to calculate the amount owed to the employee. This rate takes into account factors such as depreciation, maintenance and repairs, and actual fuel costs. In Gattuso v. Harte-Hanks Shoppers, Inc. (2007) 42 Cal. 4th 554, the California Supreme Court outlined three possible methods for paying for automobile expenses, with mileage reimbursement being one (the other two are the lump sum method—an sum agreed to between employer and employee believed to fairly cover use of the employee’s vehicle—and the actual expenses method—actual automobile expenses incurred by the use of the vehicle for business). In Gattuso, the court stated:
“[A]n employer may also use the mileage reimbursement method.
When an employer uses the mileage reimbursement method to determine the amount of reimbursement due under section 2802 for work-required use of an employee’s own automobile, the employee need only keep a record of the number of miles driven to perform job duties. The employee submits that information to the employer, who then multiplies the work-required miles driven by a predetermined amount that approximates the per-mile cost of owning and operating an automobile. [T]he federal Internal Revenue Service (IRS) has calculated an automobile mileage rate for federal income tax purposes, based on national average expenses for fuel, maintenance, repair, depreciation, and insurance, and this IRS mileage rate is also widely used and accepted by private business employers for calculating reimbursable employee automobile expenses….
Because a mileage rate used in the mileage reimbursement method is merely an approximation of actual expenses, the mileage reimbursement method is inherently less accurate than the actual expense method. Because section 2802 requires the employer to fully reimburse the employee for all expenses actually and necessarily incurred, both parties here agree that if an employer uses the mileage reimbursement method, the employee must be permitted to challenge the resulting reimbursement payment.” (Id. at p. 569.)
An important point to note from this case is this: “If the employee can show that the reimbursement amount that the employer has paid is less than the actual expenses that the employee has necessarily incurred for work-required automobile use (as calculated using the actual expense method), the employer must make up the difference.” (Gatusso v. Harte-Hanks Shoppers, Inc., supra, 42 Cal. 4th at p. 569.) In cases where an employee can demonstrate the actual expenses incurred for work-required personal automobile use is less than the amount compensated by the employer, the employer must pay the difference. This is similar to the concept discussed above, where an employer using an online mapping service for calculating travel time would likely have to compensate his or her employee for the actual travel time as recorded by the employee if there were a discrepancy between the two figures.
Travel time is a complicated issue that has many different conclusions depending on the circumstances surrounding it. If one of your questions was not answered above, or if you need clarification on one of these points, please do not hesitate to contact us.
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