The Fair Labor Standards Act (FLSA) is a federal law that prescribes standards for the basic minimum wage and overtime pay. Chapters and members need to be familiar with this law to ensure collectively bargained provisions and employment practices
The Fair Labor Standards Act (FLSA) is a federal law that prescribes standards for the basic minimum wage and overtime pay. Chapters and Members need to be familiar with this law to ensure collectively bargained provisions and employment practices are in conformity with its requirements. FLSA issues most frequently arise in the context of compensation for travel and training.
This paper reviews the principles which apply in determining whether time spent in travel is compensable time. While many collective bargaining agreements provide for compensation for travel time, most do not necessarily align with the FLSA requirements or the agreement fails to clearly define what travel time payments apply. Therefore, contractors need to take that extra step of identifying all travel time that is deemed compensable by the FLSA and ensure that compensable travel time is included when calculating overtime for their employees in a work week
A contractor might think that as long as they follow the provisions set out under the collective bargaining agreement for the payment of wages, then it need not worry about laws such as the Fair Labor Standards Act ("FLSA"). However, a working knowledge of the FLSA is still important.
The FLSA regulates the hours worked by and wages paid to workers, including minimum wage and overtime payments. In most cases the requirements of the collective bargaining agreement will exceed those required by the FLSA. However, the FLSA provisions relating to travel time, when it is considered “working time” and therefore paid time, will impact the number of hours an employee will work in a week. In addition, if travel time is considered working time, it may result in the requirement of a payment of calculation of overtime in a way not clearly set out in the collective bargaining agreement.
The FLSA categorizes workers into exempt and nonexempt workers. Generally most employees subject to a collective bargaining agreement are considered non-exempt hourly employees. It is also important to note that state laws include other requirements that may be more or less stringent than the FLSA. Therefore, it is imperative that contractors consult with their own legal counsel when establishing payroll policies.
The FLSA requires employers to pay nonexempt employees time and one-half for all time worked in excess of 40 hours in one workweek. The FLSA uses a single workweek as its standard, for example, Monday through Sunday, and does not permit the averaging of hours over more than one week to determine whether an hourly employee is entitled to overtime. Therefore, if any hourly employee works more than 40 hours in any one week, then that nonexempt employee must be paid time and one-half for work over the 40 hours in the week.
How do you determine the amount of hours worked by your employees for purposes of the FLSA? The Department of Labor (DOL) has adopted a broad definition of "hours worked" through the FLSA regulations.
In a nutshell, while there are many exceptions, “hours worked” is defined as anything being done by an employee for the benefit of an employer and for which the employer gets a benefit. This time can include waiting time and travel time.
By way of example, if an employer requires an employee to be at a site of employment at a certain time to meet a subcontractor, that time waiting to meet the subcontractor could be considered "hours worked" even though the employee cannot or does not do any work until the subcontractor arrives. The employee in this situation is “engaged to wait” and must be paid for this time. What happens if the employee has to wait for two hours for the sub to arrive? Is this work time? If the answer is yes, a contractor must include the two additional hours of “work” in the total hours worked during the workweek and this could put the employee into overtime.
The principles which apply in determining whether time spent in travel is compensable time depends upon the kind of travel involved. If an employee travels at your direction, then generally that time is "hours worked." Below are a few examples from the DOL Regulations to help you in determining when you must pay for travel time:
The 1996 statute provides that the use of an employer’s vehicle for commuting by an employee, and the activities performed by an employee that are incidental to the use of such vehicle for commuting, will not be considered work if the use of such vehicle for travel is within the normal commuting area for the employer’s business and the use of the employer’s vehicle for commuting time is subject to an agreement on the part of the employer and the employee or representative of such employee.
As noted above, however, travel can be compensable if your employee is required to report to a different location in excess of the ordinary commuting time to an employee's usual place of employment. Thus, whether in their own car or in a company vehicle, if you require your employees to report to a job site that is farther away from home than the employee's usual place of employment, then you could be required to pay the employee for the additional travel time and you must calculate this time for overtime purposes under the FLSA. Additionally, if you require an employee to report to your shop to pick up tools or receive instruction before reporting to a job site, the time the employee spends traveling from the shop to the job site is compensable travel time. Likewise, so is the time spent at the end of the day traveling back to the shop if required to, for instance, drop off tools.
While many collective bargaining agreements provide for compensation for travel time, most do not necessarily align with the FLSA requirements or the agreement fails to clearly define what travel time payments apply. Therefore, contractors need to take that extra step of identifying all travel time that is deemed compensable by the FLSA and ensure that compensable travel time is included when calculating overtime for their employees in a work week. Finally, it should be noted that if a contractor is working on a Davis-Bacon job, they may be required to pay the prevailing wage for compensable travel time under the FLSA even though the collective bargaining agreement may require a lesser travel time payment.
For additional information, visit the DOL Wage and Hour Division website: www.wagehour.dol.govor call the DOL toll-free information and helpline, available from 8 a.m. to 5 p.m. in your time zone, 1-866-4USWAGE (1 866 487-9243)
CONTENT REVIEWED: 2/2021
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