FORTUNE Small Business: | |
Overtime: Should driving time be paid?
State statutes may determine what's legal and if employers need to pay up.
(FORTUNE Small Business) -- Dear FSB: I was reading your article Overtime Bomb and I have a question: We're a paving contractor company that does jobs throughout Southern California. Every day our drivers go to and from various jobsites and we pay them straight time for the travel portion. They receive time-and-a-half for the time over 8 hours a day and/or over 40 hours a week while on the job site; however the drive time does not count for OT - so, a driver can get paid for 50 hours straight-time only. We have done this for 20 years. I have never questioned or been questioned on whether it is legal or not. Is it?
- Tim, Los Angeles, Calif.
Dear Tim: Labor laws differ from state to state. Some count travel time - such as the flight to and from a business meeting required by the employer - as work hours that accumulate toward overtime pay, while others do not. So should your drivers receive overtime compensation for time on the road?
Since you are in California, the answer is yes, they should.
"Sorry to tell your reader, but what he is doing is not legal," said Kate McGuire of the California Department of Industrial Relations. "According to the California Labor Code, the drive time is part and parcel of hours worked."
Under California law, employees are entitled to overtime for hours accrued when going from one work location to another.
There are also some industry-specific requirements. For on-site occupations in the construction, drilling, logging and mining industries, hours worked also means "the time during which the employee is subject to the control of the employer, and that includes all the time the employee is ready to work, whether or not they are required to do so," according to McGuire.
Workers at California-based Pacific Pavingstone, which installs driveways, decks, and patios, basically clock in when they go to a job and clock out when they leave, said Terry Morrill, the company founder. All time in-between, including the drive from one site to another, is calculated together.
"I don't think that as an employer you can say when you're doing this task we'll pay you regular hours only," Morrill said.
And don't forget the federal rules (where federal and state labor laws co-exist, the more stringent applies). The Fair Labor Standards Act (FLSA) lays out certain conditions under which an employer must pay overtime. Several factors affect compliance, said Mara Kent, an associate professor at Thomas M. Cooley Law School in Lansing, Mich. Are your drivers exempt from FLSA coverage? What constitutes "hours worked" for their industry? What was the "drive time"? Was it between required locations or was it to and from the first and last location of the day?
Failure to pay overtime exposes an employer to a host of responses by the aggrieved employee, from bringing administrative action to filing a lawsuit for the unpaid wages, according to Rebecca Eisen, a partner in San Francisco law firm Morgan Lewis.
Consult an in-state employment and labor attorney or industry association to make sure you are complying with both federal and state laws.
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