Author: David Lavi, Esq.
July 11, 2023

Following a period of reduced work-related travel caused by the pandemic, numerous employers are now arranging out-of-town sales meetings, conferences, and training sessions for their employees. In this regard, it is essential to understand the regulations governing the compensation of California employees for such work-related travel.

Non-exempt employees must be compensated for employer-mandated travel time

Employees who fall under the exemption from overtime rules, including executives, professionals, and high-level administrators, receive a fixed salary that is at least twice the state hourly minimum wage, regardless of the duration required to fulfill their responsibilities. It’s important to note that these employees are not eligible for additional compensation when traveling for business purposes.

As per the applicable state wage orders, non-exempt employees, regardless of their method of payment (hourly or salary), have the right to receive payment for all “hours worked,” which encompasses “the time during which an employee is subject to the control of an employer.” Importantly, this also includes compensation for time spent on travel that is mandated by the employer.

Guidelines provided by the DLSE regarding the compensation of work-related travel.

In 2002, the California Division of Labor Standards Enforcement (DLSE) released opinion letter 2002.02.21, which later became part of the agency’s enforcement manual. The letter examined the legality of an employer policy stating that “Time spent traveling as a passenger on a plane, train, bus, car, or taxicab to a business destination outside [an employee’s] normal business hours is not considered to be paid time.” The DLSE determined that this policy violated California law, even if it potentially complied with less stringent federal wage regulations.

“Under state law, if an employer requires an employee to attend an out-of-town business meeting, training session, or any other event, the employer cannot disclaim an obligation to pay for the employee’s time in getting to and from the location of that event. Time spent driving, or as a passenger on an airplane, train, bus, taxi cab or car, or other mode of transport, in traveling to and from this out-of-town event, and time spent waiting to purchase a ticket, check baggage, or get on board, is, under such circumstances, time spent carrying out the employer’s directives, and thus, can only be characterized as time in which the employee is subject to the employer’s control. Such compelled travel time therefore constitutes compensable ‘hours worked.’”

As per the DLSE, it is important to note that not every hour an employee spends on employer-mandated travel is eligible for compensation. The DLSE states that “[t]ime spent taking a break from travel in order to eat a meal, sleep, or engage in purely personal activities unrelated to travel or necessary travel connections (such as sightseeing by extending a stay in a city before or after a conference) is not considered compensable.”

An employer has the authority to establish a lower rate of compensation for travel before it takes place.

As per the DLSE, an employer is permitted, through a policy or contract, to “establish a distinct rate for travel prior to the commencement of work, as long as no pay rate falls below the state minimum wage. According to state regulations, the requirement to pay at least the minimum wage applies to each individual hour, or portion thereof, wor

If you believe you are owed wages from your employer, contact our firm at E&L, LLP, to discuss your matter.

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