There may be instances where non-exempt employees are required to travel for business. This is a common practice in the fashion industry where regular trips to factories throughout the world are a regular part of the business. Non-exempt employees traveling for business can create serious wage and hour implications that, if not addressed properly, can lead to unaccounted for compensable time and overtime liability.
Numerous questions are raised: What constitutes compensable time? How do I track hours? What about travel time? Thankfully, the United States Department of Labor (“DOL”) has provided some guidance to help employers and non-exempt employees determine what constitutes compensable time when traveling out of town for business.
The threshold question is whether the Fair Labor Standards Act (“FLSA”) covers work performed outside of the U.S. The general rule is that the FLSA does not apply to employees who perform work outside of the U.S. 9 U.S.C. § 213(f). However, there is a critical exception. According to the DOL, if an employee works any part of a workweek in the U.S., then the FLSA applies for that workweek. See DOL Wage & Hour Opinion Letter #1563 WH-510 (Jun. 29, 1981). So, if non-exempt employee John Doe works for one hour in the U.S. on a Monday, and then spends the rest of the week working outside of the U.S., the FLSA attaches. However, if John Doe works the entire next week outside of the U.S. (i.e. week 2), then the FLSA would not apply.
The next inquiry is how to treat travel time. The general rule is that an employee must be paid for any travel time that occurs during the employee’s “normal work day.” For example, if a non-exempt employee’s normal work day is 9:00 a.m. to 5:00 p.m. Monday through Friday, any travel that takes place during the hours of 9:00 a.m. to 5:00 p.m. any day of the week (including Saturday and Sunday), must be paid. However, time spent traveling outside of that time frame need not be paid. 29 C.F.R. 785.39
It is critical that non-exempt employees who travel for business maintain accurate time records, including the hours spent traveling, to allow the employer to determine the portion of travel time that is compensable. Furthermore, depending on where the employee is traveling and potential restrictions on web access, employees should be provided with hardcopy timesheets that they can complete during the course of their business travel.