Extending travel time pay for hourly employees is a must if your team members are on the road during regular work hours or are on a special assignment for your business.
What you’ll learn
What you’ll learn
Updated: August 29, 2025
Key takeaways
- When paid travel time surpasses 40 hours in a given work week, you will also need to adjust the pay rate for overtime hours
- Be sure to understand the difference between compensable and non-compensable travel time and to track these hours accurately
- Understand the difference between salary pay and hourly pay, as these rules are chiefly for hourly employees
- Some states have travel time rules that are stricter than federal rules, so it is important to understand your local and national laws regarding employee travel time
If your business needs to know how to pay for travel time and wants complete information on the topic, this comprehensive guide will explain what counts and what doesn’t under the Federal Labor Standards Act (FLSA). Plus, you’ll get the details on how to determine labor cost calculations, overtime pay, rest periods, on-call time, and other key elements related to travel pay to ensure your compliance and fair pay for work time.
Why does travel time pay for hourly employees matter for employers
As a general rule, you do not have to pay workers for home-to-work travel or regular commuting, but you will likely need to pay for job-related travel during a regular work day, such as to another work site, to a client’s location, or if someone has to make any other trip related to a work assignment.
Compensable time for employee travel has financial and legal implications. At the federal level, the Department of Labor’s Fair Labor Standards Act governs travel time pay for non-exempt employees and requires payment for hourly employees traveling for work. Many states also have specific laws on travel time pay. If you are in violation, you can face back wages, fines, and even legal action.
In addition, some businesses opt to offer shift differential pay for work-related travel.
Commuting vs. compensable time: Know the difference
Commuting time is not compensable time (though most workers likely wish it were). Your employees’ day-to-day commute is their responsibility and does not come with a legal obligation for bonuses or reimbursements.
On the other hand, compensable time consists of work-related employee travel time during regular work hours, and pay for team members who perform work tasks while traveling.
Recognizing what counts as compensable travel time goes a long way toward creating clear workplace policies and offering accurate pay.
When travel during work hours must be paid
Here are the most common situations where travel during work hours must be paid:
- Employee travel time that occurs during normal work hours, including travel from site to site
- Employees who attend off-site meetings, training, or special assignments
- Pay for team members who are performing work tasks, for example answering emails or completing reports, while traveling
Your employees should also have an easy way of tracking travel time, such as an online time tracking tool, a spreadsheet tool, or payroll software.
How to calculate travel wages (without guesswork)
These tips will help your organization accurately calculate travel wages for team members who are eligible:
- First, you must determine what travel time qualifies as compensable work time as stated by the FLSA and state laws.
- Calculate total employee travel hours, including waiting time.
- Add in overtime hours, if applicable.
- Apply hourly rates, including regular hourly rate and overtime rate if needed.
- Consider federal and state laws, particularly if your company pays employees more for travel time or if your state requires specific payments.
For example, if one of your hourly employees is required to travel to another company site for 10 hours, putting them at 42 hours for the week, you would pay them regular pay for the first 40 hours (including the first 8 hours of travel) and overtime for the last two hours.
Pro tip on travel time
“When determining whether an employee’s travel is compensable or not, ask yourself one simple question: ‘Is the trip primarily for the benefit of the business, and outside the employee’s normal daily travel?’. If the answer is yes (and the trip isn’t a commute), then there’s a good chance that the travel is work-related.”
— David Kindness, CPA
When travel time doesn’t need to be paid
Not all travel time needs to be paid. Commuting within the normal commuting area, personal detours, and non-working downtime on trips are all activities that can go unpaid. For example, if an employee drives to a restaurant for lunch, that time is not work-related and is not compensable.
In addition, your team members should be responsible for tracking the time they’ve spent trekking around so they can be paid accurately.
Out-of-town trips and special assignments: What’s covered?
When you move into overtime trips, the calculations get a little trickier.
If your hourly employees are traveling overnight for work purposes, getting from point A to point B during regular working hours is generally considered compensable work time. However, the time those workers spend outside of their regular working hours is not typically compensable, unless the employee is performing work tasks, such as responding to work emails, during that time.
Further, employees who are required to travel on a non-work day must also be compensated for those hours.
For example, if one of your team members who normally works from 8 a.m. to 5 p.m. on weekdays is required to travel for a weekend conference, that worker should be paid for the hours they spend at the conference but not for non-conference hours.
What does “engaged to wait” really mean?
Engaged to wait is not related to wedding bells; rather, it means that one of your employees is waiting to do work.
This means:
- The worker can’t use the time for personal purposes.
- The waiting period is part of their job.
- They are required to be on-site or on a work trip.
This could mean one of your workers is standing by while a piece of equipment is fixed, for example. The takeaway? Pay is required for employees who are engaged in waiting.
Portal-to-portal: A rule every employer should know
Simply put, the Portal-to-Portal Act is a provision of the Fair Labor Standards Act that refers to the time employees spend commuting to and from the workplace. By excluding most activities that take place before or after the workday, it was designed to further define and limit the costs of travel time for employers.
Moving on, let’s find out more about how overtime works in the world of work-related travel.
Handling the overtime: When travel pushes hours over 40
For non-exempt employees, work-related travel time counts towards a 40-hour work week. If one of your hourly team members takes on more than 40 hours in a given week due to travel, your business must pay them overtime for any hours above and beyond 40.
For instance, if one of your team members works 45 hours this week due to travel or other work commitments, they will need to be paid for 40 hours at regular pay, plus five hours at 1.5 times that regular pay.
If your business wants to save money on payroll, it should pay attention to employee travel costs and the possibility of overtime.
State rules that go beyond federal law
Several states go beyond federal law in crafting rules for employee travel time:
- In California, travel time must be paid at least the minimum wage or the employee’s regular hourly rate. When businesses require workers to use their transportation, that is considered compensable time. Businesses must pay employees when they are “under the control of the employer” and when they are on call.
- In Illinois, same-day out-of-town travel is considered compensable, as is using employer-provided transportation and emergency work. Overnight travel away from home is considered work time, as is time spent working outside of the office.
- In Maryland, hourly workers must be paid for travel to and from job sites, including waiting time.
- In Oregon, if you require employees to report to a different work site that is 30 miles or more away, you must pay for that travel time.
It’s important to stay up to date on the laws of your state. Similarly, laws can change annually, so make sure you pay attention to any travel time rules and regulations in every state where you do business.
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Best practices for tracking travel time like a pro
A few best practices can make it easy for your HR and finance teams, as well as employees, to keep track of these hours:
- Offer a mobile app: An app makes it easy to track time, distance, and other key metrics. It can also be more convenient and efficient than logging in on a computer.
- Schedule training: Make sure all of your team members are educated on the ins and outs of tracking when it comes to travel time, including needed manager approvals, deadlines, and issue resolution processes.
- Communicate, communicate, communicate: Finally, make sure everyone knows your company’s policy, as well as state and federal rules, and update team members as needed.
The more organized you are on the travel time front, the more compliant your organization will be – and the easier payroll will be.
Put understanding travel time pay on your to-do list
Sometimes employees need to go offsite as part of the work they perform for your company. Being able to trust staffers who trek from location to location or even overnight also comes with the responsibility of compensating them for time beyond their regularly scheduled commute.
Knowing the rules for when compensation is owed (and when it isn’t) makes good business sense for employers who have workers spending time on the road during their workday. If you have payroll-related questions and are wondering how OnPay fits into the equation, give us a try for 30 days and see why thousands of small businesses rely on what we offer!
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Jon Davis is the Sr. Content Marketing Manager at OnPay. He has over 15 years of experience writing for small and growing businesses. Jon lives and works in Atlanta.