Overtime: Include travel time pay when calculating worker's regular rate.
Do you have employees who are paid a set amount of money for their time spent travelling from one work location to another during the day? If so, recognize that such travel-time payment typically must be included in the employee's "hours worked" for calculating overtime payments for each week.
Failing to include the amount when calculating the week's regular hourly pay may mean big liability later for unpaid overtime.
Recent case: A group of bus drivers sued, claiming that they had not received the appropriate overtime pay under the Fair Labor Standards Act. The FLSA requires employers to calculate workers' regular rate of pay for the week, and then pay them 1.5 times that rate for overtime hours.
The drivers often drove a bus route during their morning shift and then were paid a set amount for their travel time to the beginning of their afternoon route at another location. The drivers believed that their regular rate of pay should include that travel-time payment, thus increasing the base on which overtime pay would be calculated. The court agreed. (Estorga et al. v. Santa Clara Valley Transportation Authority, ND CA)
Final note: Calculating the regular rate of pay can be tricky. Beyond unique problems like travel pay, there are also special considerations in other industries such as health care. Get expert help if you are at all unsure about what to include in your overtime calculations.
Remember, if you make a mistake for one worker, he or she could bring a class-action suit on behalf of all similarly situated workers, substantially raising the cost of your error.
Rules of the road: When to pay for travel time
If a nonexempt employee travels on company business outside of regular work hours, is that...
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