When Must Nonexempt Employees
Be Paid for Travel Time?
The Fair Labor Standards Act (FLSA) regulations require employers to pay for travel time in some circumstances. Generally, time spent traveling is compensable, unless it is normal home-to-work commute time, or when travel requires an overnight stay and the time spent traveling as a passenger falls outside of the employee’s normal work hours. When pay is required, the time spent traveling is considered hours worked and must be included when determining overtime pay obligations.
- Home-to-work commute: Not Compensable
- Travel to different worksites during the workday: Compensable
- Travel to a different city, returning the same day: Compensable
- Travel that requires an overnight stay:
- During regular work hours: Compensable
- Outside of regular work hours: Not Compensable
- Driving that is required by the employer: Compensable
Home-to-Work Travel
Normal commuting time to an employee’s regular worksite is not treated as hours worked under the FLSA.
Home-to-Work on a Special One-Day Assignment in Another City
When an employee must travel out of town for work but returns home the same day, all the time spent traveling during the day is compensable, regardless of the employee’s regular work hours. However, an employer may deduct the time the employee would have spent commuting to his or her regular work location.
All in a Day’s Work
Time spent traveling to and from different worksites during the day is work time and must be paid.
Travel Away From Home
When travel requires an overnight stay, any time traveling as a passenger that falls within the employee’s normal work hours is compensable, regardless of what day of the week the travel takes place. Time spent traveling to an airport terminal or train station is considered commute time and is not treated as hours worked, but the time spent waiting at the terminal until arrival at the destination is compensable when it falls during normal work hours.
For example, if Meg normally works Monday through Friday, 8:30 a.m. to 5 p.m., and she is required to travel by plane on a Sunday for business in another state, her travel time on Sunday between 8:30 a.m. and 5 p.m. is compensable.
So, if Meg arrives at the airport on Sunday at 3 p.m. and at her destination at 8 p.m., the employer is required to pay her only from 3 p.m. to 5 p.m., the hours that correspond with her normally scheduled work hours.
Alternatively, if Meg drives herself or others at the direction of the employer rather than traveling as a passenger, all the time spent driving is compensable work time, regardless of Meg’s normal work hours.
Driving at the Direction of the Employer
When employees are required to drive themselves or others, all driving time is compensable. However, when an employee is traveling to an overnight stay and has the option to use public transportation (i.e., airplane, train, bus, etc.) but chooses to drive his or her own vehicle instead, the employer can either choose to pay for all time spent traveling or pay only the travel time that occurs during normal work hours, regardless of what day of the week the employee travels (CFR 785.40). If an employee volunteers to drive others in his or her own vehicle to the overnight stay, an employee’s time could be unpaid for those travel hours outside the normal work hours.
Work Performed While Traveling
An employee must be paid for any time he or she is performing work. This includes time spent working during travel as a passenger that would otherwise be non-compensable.
For example, Meg normally works Monday through Friday, 8:30 a.m. to 5 p.m. She arrives at the airport on Sunday at 3 p.m. and at her destination at 8 p.m. Generally, the employer is required to pay her only from 3 p.m. to 5 p.m.; however, if Meg works on a presentation during her flight until 6:30 p.m., her employer would need to pay her from 3 p.m. to 6:30 p.m.
Some states have travel-time laws that are more generous than the federal FLSA, so familiarize yourself with those regulations before making internal policies.
Source: SHRM
Exception Allowing First Dollar Coverage Of Telehealth Under QHDHP Ends 12/31/24
To be eligible to contribute to an HSA, an individual must have coverage under a qualified high deductible health plan (QHDHP) and no other coverage. Under a QHDHP, with the exception of covered preventive services, plan benefits (i.e., payments from the plan for medical care) do not begin until the deductible has been met. In 2020, spurred by the COVID pandemic, the CARES Act allowed QHDHPs to cover telehealth on a first dollar or pre-deductible basis through the end of 2021. This relief was extended several times, allowing QHDHPs first dollar coverage of telehealth until 12/31/2024. The telehealth relief was permissive, meaning health plans could cover telehealth pre-deductible, but were not required to do so.
Without Congressional action, this exception will end 12/31/2024. Beginning 1/1/2025, to maintain HSA compatibility and QHDHP status, health plan participants must require participants to pay fair market value for telehealth services until the applicable deductible has been met. Employers who are currently providing first-dollar coverage for telehealth need to eliminate this provision from their plans as of 1/1/2025. Employers may also want to begin communicating this change to participants who may have come to expect telehealth on a pre-deductible basis.
If telehealth services are currently provided by the QHDHP, this change should not be difficult for the plan’s carrier or third-party administrator to implement. However, for employers who use a third-party independent of the QHDHP carrier or TPA (such as Teladoc), coordination of telehealth pre-deductible costs with the QHDHP may be more difficult. In this case, the employer will need to work with their QHDHP plan carrier or TPA to see if the third-party telehealth services can be processed through the QHDHP. If not, the employer will need to terminate the independently provided telehealth plan.
At this point, it is unlikely that Congress will take any action on this issue by the end of the year. It is possible that Congress will act after the first of year and extend the telehealth QHDHP relief (and make the extension retroactive to 1/1/2025). However, for now, employers that are providing telehealth on a first dollar basis must take action to end first dollar telehealth services beginning 1/1/2025. Moreton will update employers if this relief is renewed in 2025.
