Paying Nonexempt Employees on Business Trip

With the Department of Labor's increased scrutiny of employers' pay practices, it is essential that employers accurately calculate employees' hours worked, particularly when a nonexempt employee goes on a work-related business trip.

Work time. Nonexempt employees must be paid for all hours worked, including time spent working outside the office for business trips and meetings. Work time is defined as work directly assigned as well as work that is not directly requested by the employer. Thus, if the nonexempt employee voluntarily works extra hours in the hotel without the employer's knowledge or consent, the employee still must be paid for that time.

Breaks. Nonexempt employees must be paid for rest or meal periods lasting 20 minutes or less. Break periods that exceed 20 minutes need not be compensated. While on a business trip, unless the employee is completely relieved from duty to eat regular meals, he or she must be paid.

Overtime and paid time off (PTO). Employers must include time worked on the business trip when calculating overtime. During workweeks when a nonexempt employee has taken PTO, overtime pay is based only on the actual hours worked. Therefore, in a single workweek if the employee used eight hours of PTO and also worked 40 hours on the business trip, he or she would be compensated for 48 hours at straight-time pay, and no overtime pay would be required.

Time spent waiting. A nonexempt employee may be eligible for pay when he or she spends time waiting while on the business trip, depending on the circumstances. For example, if the nonexempt employee is "on-call" but free to wander around the hotel or handle personal tasks, then it usually is not compensable time. However, if the employer requires the employee to remain at a particular meeting room with constraints on the employee's freedom, this likely will be compensable time.

Travel pay. When traveling for a business trip, compensable travel pay is determined by various factors. For a one-day assignment, all travel time is considered compensable if the nonexempt employee travels to a location in another city. However, the employer can deduct the employee's normal commuting time to his or her regular work site from that time, as well as any bona fide meal periods. For business trips that involve overnight stays, travel time is counted when it corresponds with the employee's normal workday hours regardless of the day of the week. Time spent as a passenger on a train, boat, airplane, bus or automobile that falls outside regular working hours is not compensable. For example, if Robert normally works Monday through Friday, 8 a.m. to 5 p.m., and is required to travel on Sunday for business in another city, his travel time on Sunday between 8 a.m. and 5 p.m. is compensable. On a trip involving an overnight stay, his flight departs at 6 a.m. and arrives at 12 noon Robert then rents a car and drives to the hotel, which takes one hour and 20 minutes. Robert would be entitled to five hours and 20 minutes of travel time (8 a.m. to 1:20 p.m.). Once Robert is checked into the hotel until the start of the meeting on Monday, the remaining time is not compensable.

SESCO Management Consultants is available to assist with your questions about employees' compensation. You may contact us by phone at 423-764-4127 or by email at sesco@sescomgt.com .