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Compensation for travel time for business-related reasons

Compensation for travel time for business-related reasons

By Christina Catenacci LL.B., Editor, HRinfodesk.com---Canadian Payroll and Employment Law News, June 2011

In one of our recent polls, we asked how employers compensate their employees for business-related travel time. Is the travel time to and from those cities, or, to and from customers' place of business, part of the calculation in employees' hours of work, including overtime? According to the results of the poll, out of the total of 337 respondents, most of the respondents pay travelling employees the regular rate. In fact, 68.55% (231) of respondents pay this rate. On the other hand, about 26.71% (90) pay the employee who travels for business-related reasons nothing at all. There were low percentages of employers who reported paying the minimum wage 0.89% (3) or a special reduced rate 3.86% (13) when the employee travels for business-related purposes. This tells me that some of the 26.71% (90) who pay employees nothing at all for travels for business-related purposes may be violating the law.

So what is required under the law?

Generally speaking, throughout Canada, employment/labour standards statutes do not specifically deal with travel time. That is, employees are not entitled to wages for commuting to and from work. If the employee uses her or his own vehicle to get to and from work, even if the employer pays for expenses of the vehicle, the driver is not considered to be “working”, but is considered to be commuting. Therefore, wages would not be earned for the trip to work.

However, there are occasions when the time an employee spends getting to and from the workplace is considered to be work - in this situation, an employee would be paid wages for “working”.

What are these occasions? Travel time would be included in the hours of work calculation in these circumstances:

  • Where the employee is acting on instructions from the employer and is providing a service to the employer when travelling to and from a workplace (for instance, bringing employer-provided services, tools, equipment, materials, supplies, and in some cases, other employees, to the workplace)
  • Where the employee spends time travelling during the working day, going from one workplace to another.

That said, when an employee reports to a different place at the beginning of the shift or work schedule, the employee is not paid travel time, except if the place is far away from the normal workplace. Some factors in this consideration include:

  • The nature of the work

  • The industry in which the work is being performed

  • Whether the distance is reasonable

When employers are required to pay for the travel time, the employees do not need to be paid at the same rate as other work; however, the employees must be paid at a rate at least equal to minimum wage.

Is travel time subject to overtime?

In one word, yes; it is considered to be work and if performed in an overtime situation (for example, after the eight hour of work), it must be paid at the applicable overtime rate of pay.

We received one comment expressing concern because the question did not specify whether the employee was travelling inside or outside regular working hours:

Your poll does not make it clear as to whether the travel time is within regular working hours or outside regular hours. Inside regular working hours - paid regular rate; outside regular working hours (and is part of that position's normal job description) - paid nothing extra - part of the job

Your results will have no meaning.

The question could have been framed as a two-part inquiry, such as, “What do you pay employees when they travel during work hours, and outside of regular hours?” Even if travelling inside or outside working hours… the answer would still be, it depends. It is not as straightforward as the comment implies.

Let's take an example: a job requires the employee to travel to different job sites throughout the city during a normal working day. The employee would not be entitled to wages for the time spent traveling to the first job site or returning home from the last, unless the distance is considered unreasonable. The employee would be entitled to wages for the time spent travelling from one job site to another during the day because the employee is “working”.

But what if the employee is asked to work at a different branch out of town for a week? In this case, the employee would be entitled to wages for all travel time from home and back again. However, if an employee works Tuesday to Friday at the downtown office, and Saturday at the satellite office in the suburbs, regardless of the location, the employee is not entitled to wages for the trip to and from the workplace or the satellite office.

Have you heard of a “marshalling point”? It means that some employers designate a point to which employees must report and from which they must be taken to the job site. If the employer provides a vehicle to an employee to pick up whatever employees show up at the marshalling point at the designated time, both driver and passengers are considered to be commuting, and wages are not earned during the trip. The situation is considered a convenience.

However, if the employer provides a vehicle to an employee to drive employees to work, and part of the employee's job is to ensure that all employees are present and accounted for before leaving the marshalling point, the driver is considered to be providing a service to the employer and considered to be “working” - this employee is entitled to wages. Employees who are passengers are also “working” and earning wages because reporting to the marshalling point is reporting to a place designated by the employer. This arrangement is different from one where employees' voluntarily assemble and/or car pool to catch a ride to work.



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